Ongoing Investigation of Revenue Department Mail Center Operations – Time Fraud

Audit Date: October 11, 2016
Audit Categories
  • Investigation
Controller: Alan Butkovitz
Audit Tags
  • Finance,
  • Mailroom,
  • Revenue


The latest investigation of the City’s Mail Center focuses on time fraud committed by employees

Executive Summary

Why the Controller’s Office Conducted this Investigation
The Controller’s Office developed information that operations in the Mail Center under the Department of Revenue (Revenue) were not efficient, were not providing appropriate services to other City of Philadelphia users of the center, and were wasting city resources on unnecessary
postage cost and excessive overtime. As a result of this information, an investigation was undertaken to substantiate or refute the information developed.

What the Controller’s Office Found
During the initial stages of the investigation, information was developed that raised serious concerns about the services of the Mail Center. As a result, a preliminary report was issued on February 2, 2016 to immediately address these concerns while the inquiry continued.
On April 27, 2016, a follow-up report was issued that addressed significant management issues and oversight of the Mail Center including a lack of written policies, management allowing virtually unlimited and excessive overtime with a coinciding reduction in productivity and serious security concerns.

This “Review of Time Fraud” report details the actions of employees who claimed overtime for periods when they were not in their work center, with the knowledge, concurrence and certification from their supervisors during a period of approximately eight weeks. By performing video surveillance and examining time records, we observed the following:

  • The Mail Center Supervisor knowingly certified 169 hours of overtime for 10 Mail Center employees that were not at the work site, resulting in overpayments in excess of $5,000.
  • The Supervisor claimed and certified 111 ½ hours of his own time when he was not observed at the work site, resulting in overpayments in excess of $3,800.
  • The Administrative Officer responsible for the Mail Center knowingly certified 26 hours of overtime for the Mail Center Supervisor and 9 ½ hours of subordinates when they did not work resulting in overpayments of approximately $1,100.
  • The Administrative Officer also, on four occasions, certified a total of six hours of his own overtime when he was not at a work site, resulting in overpayment of approximately $345 during the period reviewed.

The Controller’s Office Recommends the Revenue Commissioner

  • Take appropriate administrative actions to recover any paid overtime that was not earned.
  • Take available disciplinary actions as appropriate.
  • Institute appropriate and enhanced time monitoring systems as well as improve management oversight to preclude reoccurrence.