Clerk got $200K in overtime pay
WEST CHESTER >> An internal audit conducted by the Chester County Controller’s Office determined that an accounts clerk in the county Recorder of Deeds Office was given a work schedule that included built-in extra hours that allowed her to collect more than $209,000 in overtime over a 17-year period, according to a report.
That overtime ranged from $11,738 in 2003 to a high of $14,276 in 2008, and $13,424 in 2018, the last full calendar year the bookkeeper worked, according to the report, which has been posted to the county controller’s website. The schedule that the employee was given by the current and past recorders allowed her to come in an hour or so before the office opened and stay after it had closed, and then claim an average of 1½ extra hours each day.
The overtime was either paid at a “straight time” rate, or the standard “time-anda-half” rate paid for those hours worked beyond the county’s standard 35-hour workweek, the report stated. The clerk also used vacation and personal time as hours worked for the purposes of calculating overtime, meaning she was able to claim the extra income even in weeks where she did not work the normal 35 or 40 hours, the report found.
The extra hours were added to the employee’s schedule in order to allow her to reconcile the office’s cash accounts. She closed out the daily cash drawers at the end of the day, preparing for the next’s day’s work, then came in as much as an hour before the office opened to set up the drawers for that day’s business.
Her schedule was set, the report noted, despite other county departments — including Row Offices such as the county Treasurer, Clerk of Courts, or Prothonotary — performing the same functions without having an accounts clerk working with builtin overtime. The cash reconciliation tasks were completed within a regular workday.
“As a result of these observations, internal audit finds (the clerk’s) overtime pay to be unnecessary and in some instances the result of an inaccurate reporting of hours,” the report states.
Both Rick Lougherty, the current county recorder, and Ryan Costello, the former county commissioner and U.S. congressman who served in that position from 2008 to 2011, denied any wrongdoing in paying the overtime.
In a statement, Lougherty, who will leave the post in January after opting not to run for re-election, called the clerk “integral to making the office run in accordance with our legal and financial obligations.
“We feel her financial duties typically require more hours than the county norm,” he said. “Her reporting to the state, municipalities and school districts is more involved and requires a high level of expertise. We are different than many row offices in these ways.”
In addition to the practice of paying automatic overtime, the auditors determined that beginning in 2009, the clerk was paid for that overtime not out of the Recorder of Deed’s general budget funds, but from fees collected by those users of the office’s services.
Those fees, known as Act 8 funds, were nominally meant to be used for records improvement within the Recorder’s Office. The auditors determined that the use of such funds was “an attempt to circumvent the county overtime freeze put in place on Dec. 5, 2008,” as the nation’s financial crisis was having a negative impact on county finances.
“It remains Internal Audit’s position that the Act 8 Funds should be used ‘to support development and improvement of office records management,” and not for any salary, overtime and corresponding benefits for a bookkeeper to perform daily reconciliation tasks,” the report states. About $66,900 in Act 8 Funds were used for her overtime from 2009 to 2019.
In an interview, Chester County Controller Margaret Reif said the overtime payments represented a “waste of taxpayer” funds, as well as improper use of user fees. She called the examination of the Recorder’s Office a proper function of her office’s mission to be the watchdog for the county’s taxpayers and noted that since her staff began looking into the situation, the Recorder’s Office has stopped paying the clerk’s overtime out of Act 8 funds, although the practice of having the clerk come in early and leave late had continued even after the auditors called attention to it.
“We have been in conversations with the Recorder of Deeds, and we are trying to find a reasonable solution to the situation,” she said earlier this month. “So far, no luck. But once I brought it to their attention, they did stop taking the money out of Act 8 funds.
“The objective is to make taxpayers whole. Essentially that money that was being used should have been used for something else,” Reif said. “In the same position, no one else needs overtime to complete this responsibility. It is not done anywhere else.”
She said the examination of practices in the Recorder’s Office came as the result of an anonymous complaint that came to her office in July in the form of a letter that made a host of accusations about the way that office was being run under Lougherty. The auditor’s report found that many of the complaints were either outdated, out of the controller’s jurisdiction, or unable to be substantiated. But Reif said the fact that the “whistleblower” felt compelled to report what he or she felt were problems was “a good thing” for the county.
“I remember when I first came into office I wondered whether anyone used the (Controller’s waste, fraud, and abuse) tip line. Now we can’t keep up. It’s a good thing. People now understand we are following through on their concerns.”
The employee at issue was not named in the audit, and was not identified by Lougherty or Costello in their statements about the controller’s findings. However, MediaNews Group was able to independently identify the employee, who is an account clerk who started her employment with the Recorder’s Office in 2003, and who was paid a base salary of $65,678 in 2019.
Attempts to reach the clerk were unsuccessful. She ended her employment with the county as of Friday, Dec. 13, after having submitted her resignation following the election of Democrat Chris Pielli to the recorder of deed’s position in November. The auditor’s report was first published on Dec. 3.
Because she has not been charged with a crime, and because she was unreachable for comment, the Daily Local News is withholding her name. The “whistleblower’s” letter identified her one of Lougherty’s “favorite special people.”
In an email to MediaNews Group, Costello defended the practice of having a clerk work extra time to reconcile financial accounts, the basis for the clerk’s overtime.
“I do not know how other offices function in terms of reconciliation, but it is a critical office function to reconcile accounts following close of business hours, and prior to opening the office for business in the morning, which necessarily requires working outside of normal office hours,” he said.
He also said that he had acted within his purview as recorder in using the Act 8 funds to pay the overtime. The statute setting up the fees, even though it specifies that they should be spent on records improvement, allows each Recorder of Deeds to determine how to spend the funds.
“The statute clearly establishes that the recorder can utilize Act 8 funds, at the express direction of the recorder, to pay for overtime in this instance,” he said. “Not only is the statute clear, but I then received written approval from (then Controller Val DiGiorgio), then advised (human resources), finance and the auditors, all of whom were aware and assented, which I thought was prudent given the overtime freeze.
“My decision irrefutably saved the county money. So I not only acted lawfully, but did so with transparency, obtained approvals that actually weren’t required, and saved the county money, all so that everything was clear, express, lawful, and above board,” he said.
Lougherty, who took over the office from Costello, said that the overtime was, indeed, necessary.
“I understand the concern,” he said in a statement. “However, Pennsylvania is a race-to-the-courthouse state, which means the Recorder of Deeds office must be prepared to record real estate documents from open to close, our accounts are swept daily by the state and we manage more than $106 million dollars in real estate transfer taxes and fees associated with our legal responsibilities. It is a unique Row Office and its functions do not directly compare to others.”
It will now be up to Pielli, who was elected to the office after sharply criticizing Lougherty’s work practices in office, to determine how to proceed with the reconciliation schedule in the future.
“I am concerned and disappointed about the serious findings that have been cited in the controller’s recent report,” he said. “In fairness to Mr. Lougherty, I have been informed that he has addressed some but not all of the matters cited in the report. Since he is still the recorder I will defer to him as to what further action he may seek while he remains in office and hope that it would lead to a fair and appropriate disposition of all outstanding issues.
“For the record, I have worked with this office as an attorney on many occasions and I have always been impressed with their professionalism and their service,” Pielli said. “There are good, hardworking folks in this office who are dedicated to making it the best recording outfit in the state. Their efforts have earned them a stellar reputation that is well deserved.”