An investigation by City Auditor Stan Sewell found that several members of the city Human Resources Department got large raises without going through the property procedures.
He said Beverly Moultrie, who heads city HR, initially said procedures were followed, but it was later learned they were not.
Mr. Sewell said it took numerous calls, and notifying the mayor's office, before Ms. Moultrie would hand over information he was seeking.
The investigatory report says:
We received an anonymous Hotline complaint the City’s Chief Human Resources Officer had given promotions and raises without following established procedures.
The report specifically referenced the following positions:
• Deputy Chief Human Resources Officer
• Director of HRMS and Recruitment (new position)
• Director of Compensation (new position)
• Director of Operations (new position)
• Three Recruitment Coordinator positions (new positions)
In addition to policy violations, the complainant alleged certain individuals promoted lacked appropriate experience and qualifications, and received pay increases that were excessive.
We have limited our review to address technical policy violations and concerns about internal control activities. We did not attempt to determine if individuals were qualified and equitably compensated.
To address the complaint, we reviewed the City Charter, City Code, Employee Information Guide, made inquiries, conducted interviews and reviewed personnel/payroll records (electronic and paper).
Our review of information within the City’s Oracle system found the following recent personnel actions related to the above positions:
1. Deputy Chief Human Resources Officer (Shea Jefferson): Effective December 30, 2019 promoted to this GS 29 position with $28,425 pay increase to salary of $93,000.
2. Director of HR Operations (Deborah Guy): Effective December 31, 2019 promoted to this GS27 position with $16,650 pay increase to salary of $72,000. (Deputy Administrator positions are political appointments made directly by the department Administrator. Therefore, we eliminated this position from our detail review of records. Considering our findings related to the other positions, it is possible proper authorizations for setting the appointed individual’s salary were not obtained.)
Director HRMS & Employment Services (Serene Siener): Effective December 31, 2019 promoted to this GS27 position with $16,650 pay increase to salary of $72,000.
4. Director Compensation and Performance Management (Alicia Niehoff): Effective January 10, 2020 promoted to this GS27 position with $7,425 pay increase to salary of $72,000.
5. Recruiting Coordinator (Luisa Chamberlin): Effective January 31, 2020 promoted to this GS15 position with $2,072 pay increase to salary of $36,600.
6. Recruiting Coordinator (Alexander Threatt): Effective January 31, 2020 transferred to this GS15 position with no pay increase maintaining a salary of $37,771. 7.
Recruiting Coordinator (Joseph Sanders): Effective January 31, 2020 transferred to this GS15 position with no pay increase maintaining a salary of $37,771.
During a meeting on March 4, 2020, the Chief Human Resources Officer, Beverly Moultrie, acknowledged the positions in question were not advertised per the Employee Information Guide procedures for internal or external vacancies. She explained such advertisement was not required because there were no actual vacancies (the changes were all title changes with new job duties for existing staff)2 . Ms. Moultrie advised all three Director Positions were promotions with pay increases. Ms. Moultrie also advised that two of the three Recruiting Coordinator positions were lateral transfers with no pay change.
One of the Recruiting Coordinator positions was a promotion. Regardless of whether the positions should have been posted, Ms. Moultrie confirmed Position Action Request Forms (PARF) were required for all of the changes. She asserted those forms were properly completed and she would have the Director of HRMS and Employment Services, Serene Siener, send them to OIA when she returned to work in a day or two. Ms. Moultrie never produced the PARF documents as promised. Multiple requests were made after the above-mentioned meeting on March 4, 2020.
Ultimately, the documents were obtained on July 20, 2020 after arranging a meeting directly with Serene Siener (records keeper) to review personnel files. We have attached a timeline detailing our efforts to obtain the requested documentation, as well as a relevant excerpt from the City’s Charter.
After reviewing documentation and meeting with Ms. Siener, we noted none of the PARF documents had the required authorizing signatures from the Chief Financial Officer and the Chief Operating Officer (they only have Beverly Moultrie’s signature). Directions for Completion of the Position Action Request Form provides a detail of steps required for completing a PARF. The final direction is highlighted at the bottom stating “All required signatures must be obtained prior to processing of the form.”
In an email on February 27, 2020, Ms. Moultrie stated the Recruiting Coordinator “positions were established from vacancies that existed at the same level.” Section IV (E) (1) of the EIG states, “The Human Resources Department will prepare and publicize job announcements in order to bring notice of vacancies to as many qualified persons as possible.” [Emphasis Added] Section IV (E) provides additional mandated procedures such as notifying all City employees and allowing all City employees the opportunity to apply.
While the failure to obtain the required authorizing signatures on the PARF documents is significant, we were particularly concerned about how the changes could have been processed in the City’s computerized system without a properly completed document. Upon inquiry, we learned the Human Resources Department makes all pay rate changes.
During a scheduled Zoom meeting on August 3, 2020, the COO and Deputy COO were provided a general overview of the promotions/raises given without appropriate signatures on PARF’s, as well as the delays in obtaining the documents. Our concern about the Human Resources Department circumventing internal controls to make those adjustments was also conveyed. Both advised they were unaware of the promotions/raises. Ms. Sullivan stated she was aware Ms. Moultrie was working on a reorganization within the department.
Conclusion: The Human Resources Department is responsible for initiating all pay changes in the City’s computerized system. They provide the primary internal control for the City to ensure pay increases are not made unless properly authorized. At the end of 2019 and beginning of 2020, the Chief Human Resources Officer promoted several staff, with significant raises. The position changes and pay increases were made without the proper authorizations and without following required procedures. Furthermore, the Position Action Request Forms did not have the authorizing signatures of the CFO and COO. This circumvention of procedures is significant because the Human Resources Department is the gatekeeper.
Administration should take immediate actions to have DIT limit the ability of Human Resources Department staff to modify any position or pay information for Human Resources staff. We recommend an office independent of the Department, such as Finance or the Mayor’s Office, make such changes.
Additional Considerations: Job Analysis Questionnaire (JAQ) forms were not completed for any of the changes we reviewed. In addition, we did not note written justification in the personnel files for any of the changes reviewed. Classification Process: Evaluation of New or Existing Positions requires detailed steps for evaluation of a new position.
Some key requirements are:
a) Completion of a Position Review Request Form and Organization Chart is to be submitted to the Compensation Division where a review of justification resulting in a recommendation shall occur prior to moving forward.
b) A completed JAQ and Job Description are to be submitted to the Compensation Division where a position evaluation and market assessment are to take place (classification, pay grade and salary change).
c) Submission of a PARF for processing. Section II E of the EIG states, “When a new position is established or duties of an existing position substantially change, the Department Head shall submit to the Human Resources Department a comprehensive Job Analysis Questionnaire….” Section III A 1 of the EIG states “When an appointing authority desires to adjust the personnel complement…or changes in job titles and/or grades, the requesting appointing authority must submit to the Chief Human Resources Officer or designee a Position Action Request Form showing...changes requested. Such requests must include written justification from the requesting appointing authority or designee for the complement change.”
The Recruiting Coordinator Class Specification was first posted to the web on March 4, 2020 with no class code. Individuals were promoted or transferred to these positions in January 2020. The Recruiting Coordinator position was not in the General Pay Plan – FY20 as of March 4, 2020.
Section II A of the EIG states, “The Human Resources Department will maintain a Classification Plan that provides a listing of employment positions in the City. The Classification Plan provides a complete inventory of all positions in the City’s service and an accurate description and specifications for each job classification.”
Additionally, Section II D of the EIG states “…the Human Resources Department shall be responsible for maintaining accurate job descriptions in the Classification Plan that reflect the duties that each employee performs… Job descriptions will be available on the City’s intranet.” It is understandable some employees may feel the system for promotions and raises is unfair when they become aware of substantial increases in pay for a limited number of employees within the Human Resources Department, implemented outside of standard policy, at a time when they have been advised equitable pay adjustments are pending implementation of a compensation study. Perceived inequities within an organization can be destructive to the work environment and employee morale.
Section IV I 2 of the EIG states, “A promotion is assigning an employee from one position to another that is classified in a higher salary range. Promotions in every case must involve a definite increase in duties and responsibilities and shall not be made merely for the purpose of affecting an increase in compensation.”
Section I, A of the EIG states, “The purpose of this Employee Information Guide is to establish a fair and uniform system of policies, procedures and expectations for all employees of the City.” [Emphasis Added]
To avoid such situations in the future, in addition to the digital restrictions discussed above, we recommend enhancements to the Employee Information Guide. Such revisions might include a requirement that documentation reviews for personnel changes be made by an office independent of Human Resources, when the changes are related to that department. To enhance the appearance of equity and to ensure fair opportunities for all City employees, a revision could require all newly created positions be posted.
We note Section IV E of the EIG states “The City of Chattanooga will make every effort to attract qualified applicants for every position….” It seems short-sighted to assume the best applicant for a newly created position could not possibly be outside of a single office. In furtherance of this overall objective, consideration should be given to a requirement that all postings be made public (elimination of internal only job postings).
Provisions could be made to allow for promotions in line with clearly defined and established progression plans. Ultimately, the Human Resources Department should set the example for compliance with all personnel policies and procedures.
The issues discussed in this memorandum are not the result of an audit performed in accordance with generally accepted government auditing standards. Had we performed such an audit, additional issues might have been reported.
The purpose of this memo is to provide those charged with governance information that may prove useful in fulfilling their oversight responsibilities in an effective manner.
Attachment cc: Anne Wilkins, Audit Committee Chair Daisy Madison, Chief Financial Officer Maura Sullivan, Chief Operations Officer Kerry Hayes, Chief of Staff Beverly Moultrie, Chief Human Resources Officer Phil Noblett, Chief Ethics Officer Gail Duffey, Payroll Supervisor HL57 H