County experiences hundreds of payroll errors
Over 270 payroll errors for Hays County employees were identified in recent months, with some speculating that turnover in the Hays County Treasurer’s Office is to blame.
In two separate meetings of the Hays County Commissioners Court in May Hays County employees and county commissioners raised concerns about the status of operations in many county offices. These concerns resulted in the transferring of responsibilities for payroll from the county Treasurer’s Office to the Hays County Budget Office, as the result of a unanimous vote during the last regular meeting of the court on May 23. A special meeting was then called for May 30 regarding the payroll transfer and other associated issues.
Hays County Treasurer Daphne Tenorio seemed to be in support of the transfer, in light of concerns. She did, however, clarify that not all treasurer-related responsibilities would be removed from her purview.
“Anything to do with any disbursement of any funds stays with me. Additionally, in order for me to pay out your payroll, I will be required to review every single piece of document to make sure that I am comfortable with the payouts,” she said.
While it is still unclear what exactly led to the payroll errors occurring, Hays County Auditor Marisol Villareal- Alonzo said possible lapses in the onboarding and training processes for recent hires might be to blame.
“As we know, when transitions occur, there is more room for error,” she said. “We provided training to the Treasurer's Office. We assisted with the calculations for payroll. I don’t know what happened, but communication started to dwindle.”
“That is where we’re at today,” Villareal-Alonzo continued. “We have pending 273 payroll errors that after May 15, we have to ensure that they get corrected.”
Villareal-Alonzo read aloud at the May 23 meeting a letter she had written to the Hays County Commissioners.
“From January 2023 through May 15, 2023, the scope of the review has been limited due to inconsistent access to payroll records,” Villareal-Alonzo said. “Payroll processing errors consist of when the data entry performed by payroll managers into [the] New World [program] have incorrect values. For example, an employee fills out a W4, that W4 may be entered incorrectly into New World and would be considered a payroll error. What will happen is an employee’s withholdings will be affected.”
Vi l l a real- Alonzo listed the mistakes that were found, ranging from double withholdings, overtime for employees that do not receive overtime and tax deduction issues. Villareal- Alonzo stated in her letter to the court that for the Feb. 28 payroll, eight errors were identified before processing and zero were identified after; for the March 15 payroll, 48 errors were identified before processing and three were identified after; for the March 31 payroll, eight errors were identified before processing and three were identified after; for April 15 payroll, 10 errors were identified before processing and 20 were identified after; for April 30 payroll, 34 errors were identified before processing and 11 were identified after; and for the May 15 payroll, 21 errors were identified before processing and 18 were identified after.
Villareal-Alonzo emphasized that she felt many mistakes were due to the newness of the employees in the Treasurer’s Office.
“The other deficiency that we are seeing is that the errors are happening because of the lack of experience in the Treasurer’s Office, the lack of experience in supervisory review,” Villareal-Alonzo said.
Tenorio seemed to agree to an extent, blaming the errors that can naturally occur in any turnover process as well as a lack of policies, procedures and education.
“Let me tell you fundamentally how payroll works,” she explained. “Payroll is designed currently in its system right now to have errors. Period. You have been paying ahead of time, and we process. Let’s say payroll is due the 15th, so we’re actually processing minimally two days earlier. Minimally, in order to get direct deposits done. In that time period you could have an employee quit, you could have an employee add additional time hours. You’re going to have an error.”
“There is a good way to build in adequate time to process payroll and that is by paying a one-time payment so that we are no longer paying ahead of time, but we are paying for time worked,” she continued. “Were there errors? Absolutely. This was the very first time our payroll managers had done the payroll process by themselves.”
According to Tenorio, the payrolls submitted on Jan. 13, Jan. 31 and Feb. 15 were done by the previous treasurer’s staff. The Hays County website states Tenorio’s term began Jan. 1.
“They were welltrained and still had errors,” Tenorio said of the previous staffers. “As of the 15th, one of the payroll managers was transferred over to the sheriff's office. Feb. 28, March 15, March 31 and April 15 — the payroll manager that was in place was the payroll manager hired by the last treasurer. April 30 and April 15, those were payrolls that were done by people who were just hired. One of whom had only been here since February and one of whom had only been here three weeks.”
“We are working on getting the errors corrected,” Tenorio said. “However, when you have no direction on how to correct it, it’s very difficult.”
Tenorio said she is still confident her office will get where they need to be.
“I have no doubt in my mind that we will get there,” she concluded. “I have no doubt in my mind that the payroll will process properly.”
Hays County Commissioners did not seem to share her confidence, expressing their own concerns that the situation had not been properly addressed nor remedied.
Hays County Commissioner for Precinct 3, Lon Shell, recommended a process be put into place to ensure these errors are corrected and do not occur again.
“Errors happen and we understand that,” Shell said. “My concern is that we don’t seem to be correcting the errors or putting in place a process that will help us correct those errors as we move forward.”
“I… have lost confidence in the ability of the treasurer’s office to handle payroll. I don’t believe that cooperation has happened since last week [at the meeting on May 23],” he added.
Hays County Commissioner for Precinct 4, Walt Smith, said he was concerned about the probability of this occurring again and what that would mean for county employees.
“I’m very concerned that we ensure that it doesn’t happen again in two weeks or in a week, whenever payroll happens,” he said. Smith said he is also very concerned about federal tax withholdings not being contributed to and the implications that has on county processes.
The special meeting on May 30 saw another transfer take place: that of the employee personnel files from the Treasurer's Office to the Hays County Human Resources Office.
Hays County Human Resources Director Shari Miller said her staff was ready to assume those tasks.
“Oftentimes, I would go into the Treasurer’s Office and ask permission to look at the file, to either stand there at the work counter and look at it and make copies of what I needed copies of,” Miller said. “We, for a long time in HR, maintained a duplicate file of the personnel record, which was ridiculous. The files were right next door.”
Tenorio said she agreed that the files should be moved.
“I have no idea why they were in that office in the first place, and I’ve questioned that since day one. I have no problem with the removal of the employee files from the Treasurer’s Office,” she explained.
This was finalized in a motion from Commissioner Shell: “The third part of my motion is that the Hays County Budget Office under the Hays County Budget Officer shall have the authority to prepare W2s and 1099s as needed, and 1095’s as well. The last statement is the auditor shall retain the receipt of all auditing payroll and all financial activities of the county including transfers for the purpose of investment pursuant to Hays County’s investment policy, and that to the auditor’s question from earlier, the auditor shall prepare any remaining investment reports from 2022.”
Shell later revised his motion to add and alter the following: employment verifications are to be directed to the Human Resources department, W2s and 1095s will be completed by the Budget Office, 1099s will be completed by the Auditor and the Auditor may further define the process for co-signing. The motion was approved by a vote of four to one, with Judge Becerra casting the dissenting vote.
The county is still looking into how its payroll errors occurred. Shell mentioned he received an email from the district attorney the week of May 23 about ongoing investigations into members of the treasurer’s office. Assistant District Attorney Gregg Cox said they were not legally able to comment on the status of “a pending investigation.”