OIG Audit Finds Widespread CPD Mismanagement of Overtime

A report released by the City of Chicago Office of Inspector General (OIG) found that the Chicago Police Department’s (CPD) inefficient management of overtime has potentially created millions in wasteful spending, an unchecked culture of abuse of the overtime system, and exhibited insufficient safeguards for officer health, wellness, and performance.

OIG’s audit, which examined practices from 2014 through the first six months of 2016, found CPD’s operational controls do not adequately prevent unnecessary overtime, deter abuse of minimum time provisions, or ensure overtime is paid in compliance with policies and procedures. CPD management controls do not adequately prevent officer fatigue, control costs, or detect and prevent fraud, waste, and abuse. Furthermore, CPD Directives related to timekeeping do not reflect current practice, do not provide adequate detail to ensure consistent application of Department policies, and do not include policies to prevent excessive overtime, prevent officer fatigue, or control costs.

OIG recommends that CPD management set a “tone at the top” emphasizing the importance of accurate, verifiable timekeeping records, and establish the controls necessary to meet this goal. To address specific issues raised by this audit, CPD should implement an automated timekeeping system, provide supervisors the tools they need to monitor and assess overtime use, hold supervisors accountable for monitoring overtime, and ensure that Department directives are regularly reviewed and updated to reflect current practices.

CPD responded to issues raised in the report with plans to transition to an electronic swiping system, starting at CPD headquarters, by the end of 2017. The full transition to an electronic system for overtime and all other timekeeping purposes is slated for completion by mid-2019. Over the course of the next year, CPD will also begin a new process for more actively managing overtime use by holding supervisors accountable for overtime monitoring and spending.

Although CPD has an automated system to authorize, review, and approve other types of overtime, it still relies on manual processes for regular duty overtime. These processes are costly and lack fundamental controls typically provided by an automated system, including controls to ensure that data is accurate, complete, and backed up securely. Specifically,

  • CPD employs 61 timekeepers at a cost of $7.2 million annually, plus support staff, including an unknown number of sworn officers, who assist with timekeeping and data entry.
  • Compensatory time liability, totaling $266.8 million, is supported only by hard copy documentation which, if damaged or destroyed, could not be recreated.
  • OIG identified 6,727 overtime entries that either duplicated or overlapped other entries, resulting in potential overpayment of $1.1 million.
  • 99.4% of overtime entries, totaling $225.5 million, had either blank or generic Reason Codes, making it extremely difficult to analyze the basis for overtime pay.

In the audit, OIG found potential abuse of the minimum time provisions required by the Collective Bargaining Agreements (CBA) and CPD Directives. These provisions, intended to compensate an off-duty member for travel time to a work site, credit a member with a minimum of 3 hours overtime for as little as 15 minutes of actual work. Specifically,

  • Application of the minimum time provision was not limited to Court and Call Back categories, resulting in potential unwarranted overtime expenditures of $197,895.
  • The minimum time provision was inappropriately applied to CPD members answering or receiving phone calls or e-mails, resulting in unwarranted overtime expenditures of at least $36,334. The total overpayment could be as much as $1.2 million if the same rate of misuse exists among those overtime entries that we could not analyze because they lacked sufficient information.

OIG further identified potentially abusive practices for accruing excessive overtime, which CPD management acknowledges but has not adequately addressed. They are,

  • “Trolling”: actively pursuing situations that result in Extension of Tour overtime, such as: (a) volunteering for calls at or past the end of a shift notwithstanding the fact that fresh officers have already come on duty; (b) actively seeking a traffic, disorderly conduct, or other violation at the end of a shift; and (c) making an arrest at the end of a shift as a result of escalating a situation which would have been within the officer’s discretion to dismiss.
  • “Paper jumping”: requesting to be included on an arrest report despite having little or no involvement in the arrest, specifically for the purpose of earning overtime by being called to court.
  • “Lingering”: reporting to court and increasing overtime pay by staying longer than needed.
  • “DUI guys”: self-appointing as a DUI specialist and taking over DUI arrests initiated by other officers to earn overtime by appearing in court.

Additionally, CPD does not consistently record authorizations and approvals for overtime in its electronic system, making it difficult, if not impossible, for management to monitor whether overtime is authorized, approved, and processed in accordance with CPD policies. OIG analysis of data from January 1, 2014, through July 31, 2016, found that $27.6 million overtime entries lacked an electronic record of authorization and/or approval, almost $1 million appeared self-authorized or approved and almost $40 million was recorded in the system as authorized and/or approved by peers or subordinates of the member who earned the overtime, with more than 600 instances of two-way relationships in which CPD members approved each other’s overtime in a reciprocal manner.

The CPD Directive describing overtime compensation for various ranks has not been updated since 1994 and no longer reflects CPD practice or the provisions of the applicable CBAs. Due to a lack of adequate monitoring controls to assess and respond to trends in overtime and track secondary (off-duty) employment of sworn members, management cannot detect violations of its policy and cannot ensure that officers optimally meet the stressful demands of their job serving the public.

“CPD’s management of overtime speaks directly to how inefficient management can lead to wide scale waste and a culture of abuse,” said Inspector General Joe Ferguson. “Addressing the management issues identified in the audit may yield multiple benefits to residents, City Hall and taxpayers alike, including : (1) resolving the long-running debate about the necessary size of the sworn force; (2) identification of fiscal resources needed for the broader department reform efforts underway and that will continue under the terms of a consent decree in the future; and (3) better assure that officer workloads are managed to levels that assure their well-being and optimal service to the public.”

The full report can be found online at OIG’s website.

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