Commissioners move payroll duties to budget office
Hays County officials transferred responsibilities for payroll from the County Treasurer’s Office to the Budget Office, as the result of a unanimous vote during the last regular meeting of the Hays County Commissioners Court.
In light of questions regarding the transfer of payroll responsibilities and other associated issues, the court called and held a special meeting Tuesday, immediately following the Memorial Day holiday.
Hays County Commissioners Court Judge Ruben Becerra was attending an emergency management conference in Fort Worth, but was part of the meeting by way of a video streaming connection. During Tuesday’s meeting, he expressed his frustration concerning the scheduling of the special meeting at a time when it was general knowledge that he would be out of the county.
According to court officials, the special meeting was necessary to clarify information from the May 23 regular meeting as well as actions and information that became available after the conclusion of the meeting.
On May 23, several employees spoke during the public comment portion of the meeting, detailing some of their payroll-related problems and the impacts these have had on their day to day finances.
Hays County Auditor Marisol Villareal-Alonzo and Hays County Treasurer Daphne Tenorio each addressed the commissioners to present their perspectives as to what they saw as the root causes for these payroll problems.
May 23 Meeting
Becerra opened the agenda item related to the transfer of payroll responsibilities with a statement that he said made clear the gravity of the issue at hand.
“We are a court of record. We are forever going to have this meeting on the camera and locked down forevermore,” Becerra said.
After lengthy discussion, Tenorio said she was in favor of moving the payroll duties from her office.
“In light of some information that has been presented to me, I think it is in the best interest of the Hays County government body to remove the processes of payroll from the Hays County Treasurer and place them in the custody of the Auditor’s Office,” Tenorio said. “That would be two payroll manager positions as well as one timekeeper position.”
Hays County Commissioner Precinct-3 Lon Shell said he liked the idea, but he recommended moving those positions to the Budget Office.
Tenorio said she wanted to clarify what duties would still remain under her authority.
“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,” Tenorio said.
Hays County Budget Officer Vickie Dorsett asked that there could be some changes included to the duties of the positions that she would be inheriting.
“I’m asking for four. For a payroll administrator and then a restructure of the three positions,” Dorsett said.
Villareal-Alonzo has held her position as Hays County Auditor since 2016. Her staff includes First Assistant Auditor Stephanie Hunt and Payroll Auditor Laura Nava, who has processed payroll since 2009.
“As we know, when transitions occur, there is more room for error,” Villareal-Alonzo 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. If Laura [Nava] was not involved in the process then the errors increased. That is where we’re at today. We have pending 273 payroll errors that after May 15, we have to ensure that they get corrected.”
Villareal-Alonzo then read aloud 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 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.”
Though some parts of auditing are time-consuming, they must be done correctly in order to ensure accurate pay checks, she noted.
Villareal-Alonzo drew the court’s attention to the handwritten timesheets that were submitted by the Hays County Sheriff's Office.
“Manual time-sheets– they are cumbersome to calculate, but we have to ensure that what we’re paying out [to] the individuals is accurate, so we have to take the time to review the timesheets,” Villareal-Alonzo said.
Becerra said he thought that it would be beneficial for every department to use timecard technology instead of handwriting for efficiency's sake, and because the auditor had mentioned the amount of time it takes to process these.
“Certain department heads and elected officials don’t want their individual department using the unified punching in system. … I don’t know what it’s going to take, but I believe that that’s just one of those spaces where we need to support our elected officials–treasurer, IT, auditor’s office, etc., and say, ‘Enough of you guys thinking you can run things your way with little notebooks to timekeep.’ No. Use the punch-in system that the county has authorized if you want to be paid. That seems like one of those low-hanging fruit pieces,” Becerra said.
Villareal-Alonzo said she had a meeting with the Treasurer’s Office in which they discussed the importance of controls. She said she left feeling satisfied that they were on the same page.
Villareal-Alonzo also listed the mistakes that were found, ranging from double withholdings, overtime for employees that do not receive overtime and tax deduction issues.
Villareal-Alonzo said 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. When we had our meeting on April 13 we explained that it was important that we have evidence of supervisory review,” Villareal-Alonzo said.
County treasurer Daphne Tenorio then had her chance to speak.
“Let me state that this is just as frustrating for me as it is to anybody else. We took office January 13. Let me tell you fundamentally how payroll works. 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,” Tenorio said. “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.”
Tenorio said she blamed lack of policies and procedures as well as a lack of education for the errors.
“Were there errors? Absolutely. This was the very first time our payroll managers had done the payroll process by themselves. Additionally, the payrolls that were done Jan. 13, Jan. 31 [and] Feb. 15 were payrolls that were done by the previous treasurer’s staff. They were welltrained and still had errors. 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. However, when you have no direction on how to correct it, it’s very difficult,” Tenorio said.
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 period not mentioned by Tenorio on May 15 payroll 21 errors were identified before processing and 18 were identified after. According to the Hays County website, Tenorio’s term began Jan. 1, 2023.
Tenorio said that she is confident that her office will get where they need to be.
“I have no doubt in my mind that we will get there. I have no doubt in my mind that the payroll will process properly,” Tenorio said.
Hays County Commissioner Precinct-3 Lon Shell recommended that a process be put into place to ensure that 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.”
Hays County Commissioner Precinct-4 Walt Smith said he was concerned about the probability of this occurring again in the next pay cycle and what that would mean for county employees.
“The thing that really sticks with me, that I find bothersome, is the fact that some of these errors on the front end were found, and there was an effort to try to correct them. There was an effort by our auditor's office to identify those,” Smith said. “I’m also very concerned that we ensure that it doesn’t happen again in two weeks or in a week, whenever payroll happens.”
Smith said he is also very concerned about federal tax withholdings not being contributed to and the implications that has on county processes.
May 30 Special Meeting
Tenorio said that she takes her duties seriously.
“I have taken an oath for my office. I have taken an oath to uphold the constitution, and I have self-bonded. I am vested in this position. I am vested as the treasurer, and I am vested as an elected official to serve the people and our employees,” Tenorio said.
Becerra said he was not happy about what was being said in the meeting nor that a special meeting, which he said is the same as an emergency meeting, was called, especially while he could not attend.
“The things I’ve heard so far from everyone are that this is some kind of stop-the-bleed meeting. We need to hurry up and meet, and all I’ve heard so far is fear-mongering,” Becerra said.
Becerra noted that Tenorio had been asking for a forensic audit from the beginning.
“I believe that this is–I don’t want to use the word witch hunt, but I believe that this is underhanded. I believe that this is tasteless, and I believe that this is unprofessional,” Becerra said, adding that the court should have done the forensic audit, as requested - swiftly.
“This forensic audit, which should also be a performance audit, there’s been nothing but foot dragging,” Becerra said.
Shell called on Dorsett to fill the court in on what progress, if any, had occurred since last week's meeting.
“I believe I did mention I had lost confidence, in the last meeting, I still 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,” Shell said.
Hays County Human Resources Director Shari Miller said she thought it would make sense for employee personnel files to be moved into the Human Resources Office, and 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.”
According to Miller, there are a large number of files because Hays County has kept every personnel record from all time.
Tenorio said she agreed that the files should be moved.
“First and foremost, I’d like to address the employee files. 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,” Tenorio said.
Shell clarified that part of his intent for calling the meeting was to have the court authorize the transfer of the personnel files.
Additionally, Tenorio maintained that payroll errors are nothing new.
“There’s always errors. We all know that there’s errors,” Tenorio said. “The recording of errors did not start until my administration.”
Tenorio said that she did not want to hash out what was discussed in the last meeting, but wanted to repeat one statement.
“If you had had [an] administration [audit] prior to me you would have seen errors too, and if you didn’t note on those reports, the people that ran those payrolls were actually hired by the predecessor,” Tenorio said.
After last week's meeting, files, staff and technology related to payroll were moved to the budget office. The transition on Tuesday was not a peaceful transition,” Hays County Budget Officer Vickie Dorsett said. “We had a good meeting on Wednesday. We clarified some things. I then received an email Thursday evening around 9 o’clock. I was still at the office processing payroll. That Ms. Tenorio was unable to view certain things that she felt that she needed and would be unable to process the ACH file which is why I brought up the 113041 in seeking legal opinion. I responded within 10 minutes because I had spoken with her assistant treasurer regarding access, making sure they had what they felt they needed to review. I didn’t hear back from Ms. Tenorio. I emailed her three times.” Dorsett said, adding that she was concerned after receiving the email that direct deposit would not be sent.
“I will make this perfectly clear to all of you: I will not hold hostage the payroll of the employees of Hays County. That is not going to happen. That is why I worked very hard to ensure that paper checks were available when they needed to be on the 30th. I made myself available to the sheriff's office, willing to meet them wherever I needed to, to ensure that they were able to pick up their checks. The idea that I would hold up the payroll for Hays County is absurd,” Tenorio said.
Smith pointed out that this is not a one time mistake.
“I think all of us can understand that have met a payroll that errors are going to occur. I agree with Ms. Tenorio. Those errors are going to occur. It’s just the scale. It’s not one error. It’s not two errors. It’s not 200 errors. It’s more than that. That’s what is concerning to me,” Smith said.
Smith spoke about information that the court has, that the public does not.
“Look, we've alluded to it. Multiple members of the court last week alluded to the fact that we, and we just discussed, an email that we got. I can promise you, no member of this court, or at least I didn’t want to take the action that we had–I felt like we needed to take last week,” Smith said. “The fact is that there are things that the public is not privy to that we are going to have to address.”
( Editor’s Note: The Daily Record did not have the opportunity to appropriately fact check the information Shell was referencing in his statement prior to the time of press Wednesday. Expect further updates in the future.)
Becerra reiterated that he felt the language in the court was inappropriate regarding the situation.
“As your county judge, starting my second term, I had numerous conversations with our treasurer’s predecessor, and we’ve had numerous conversations generally speaking with other functions of our government, and the number of errors that are being reported today that are happening under our current treasurer are not to be taken as alarming,” Becerra said.
Shell then discussed what caused him initial alarm.
“As of Thursday evening of last week, I having seen this statement that ‘We are unable to verify changes have been made according to the … one time change forms, without being able to review all files, I will be unable to approve the payroll process,’” Shell said. “I think I was fairly safe to believe that payroll processing was not going very smoothly and could be at risk, so I would want to address it as soon as possible.”
At this point in the meeting, Shell made a motion.
“The maintenance and management of personnel files shall be moved to human resources. The HR department shall develop policies for access to those files by department as needed to perform their core duties,” Shell said. “The second part of my motion is that the Hays County Budget Office under the Hays County Budget Officer shall have the authority to receive reports of time-keeping and paid leave from county offices and prepare payroll for timely disbursement by the County Treasurer.”
He added more to his motion for additional clarification.
“The third part of my motion is 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 said.
After some input from others in the court, Shell 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 Becerra casting the dissenting vote
