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HomeMy WebLinkAboutStaff report 10386 City of Palo Alto (ID # 10386) Policy and Services Committee Staff Report Report Type: Action Items Meeting Date: 6/11/2019 City of Palo Alto Page 1 Summary Title: Status Update of Audit for Disability and Workers Compensation Title: Staff Recommends the Policy and Services Committee Recommend the City Council Accept the Status Updates of the Audits on Recommendations From the 2016 Disability Rates and Workers' Compensation Audit From: City Manager Lead Department: Human Resources Recommendation Staff recommends that the Policy and Services Committee recommend that the City Council accept the Status Update of Audit Recommendations for the 2016 Disability Rates and Workers’ Compensation Audit. Background The City Auditor’s Office issued an audit with an objective to assess the effectiveness of activities to manage and minimize disability retirements and workers’ compensation claims. This audit included the review of processes to ensure employee safety, tracking and reporting activities, contract administration and efficiency of claim processing. As recommended in the audit, procedures and processes to improve claim monitoring have been implemented and there continues to be focus on timeliness of claim reporting and ensuring reliable reporting of performance data. Staff has continued to work on completing audit recommendations. Staff last reported on audit status to the Policy and Services Committee in October 2018. At that point, 10 out of 15 recommendations had been completed. Discussion The Status Update document is attached and provides an update of the status of the recommendations still in progress. Two of the recommendations involve employee and supervisor training being coordinated for later this year and the remaining two involve correcting CalPERS payroll reports in progress to be completed by end of August 2019. One recommendation has been determined to not be feasible or cost effective as it was City of Palo Alto Page 2 an improvement dependent on the ERP replacement that is no longer moving forward at this time. Attachments: • Attachment A: Disability Work Comp Audit update May 2019 v4 STATUS OF AUDIT RECOMMENDATIONS DISABILITY RATES AND WORKERS’ COMPENSATION – ISSUED 10/17/16 PAGE 1 The City Manager has agreed to take the following actions in response to the audit recommendations in this report. The City Manager will report progress on implementation six months after the Council accepts the audit report, and every six months thereafter until all recommendations have been implemented. Recommendation Responsible Department Original Response and Target Date Current Status (Complete, In Progress, or Not Started) Implementation Update and Expected Completion Date Finding 1: The City’s Injury and Illness Prevention Program (IIPP) is comprehensive but has lost its effectiveness due to the loss of its City Safety Officer. 1.3. HR review departmental procedures and safety requirements to ensure they align with the revised IIPP and City policy and procedures. Human Resources Concurrence: Agree Target Date: December 15, 2016 Action Plan: HR is in process of securing a safety specialist to conduct periodic inspections of City facilities for hazard assessment. This comprehensive evaluation will include determining if any corrections need to be completed, including updating or implementing work procedures. In Progress May 2019 Management Update: In progress: Trainer identified to present Supervisor safety training is no longer offering this course. HR will work with new City training vendor to find an alternate training resource. Expected Completion Date: October 25, 2019 September 2018 Management Update: Supervisor safety training presentation has been identified to train supervisors on effective injury and illness prevention strategies and conducting accident investigations. Expected Completion Date: January 31, 2019 January 2018 Management Update: Currently, the following components of an effective IIPP are ongoing: Accident Investigation: supervisors investigate all accidents, injuries and near-misses and make appropriate changes to minimize recurrence. Hazard Correction: Supervisors correct conditions that are discovered during their monthly inspections or after an injury or accident to prevent reoccurrence. Training: STATUS OF AUDIT RECOMMENDATIONS DISABILITY RATES AND WORKERS’ COMPENSATION – ISSUED 10/17/16 PAGE 2 Recommendation Responsible Department Original Response and Target Date Current Status (Complete, In Progress, or Not Started) Implementation Update and Expected Completion Date Supervisors are responsible for ensuring their employees are trained to perform work safely. Documentation: Safety training sign-in sheets and investigation reports are maintained. Communication: Employees know how to inform management about health and safety matters. Expected Completion Date: June 2018 1.5. HR identify industry-specific ergonomics and general wellness training opportunities to minimize common injuries, and coordinate with departments to ensure regular training is provided to employees. Human Resources Concurrence: Agree Target Date: September 16, 2016 Action Plan: HR will coordinate industry-specific ergonomic training, similar to training provided to Parks maintenance employees in 2010 and Library employees in 2014. We agree industry-specific ergonomic training serves as a reminder for example, that the best way to prevent back injuries is to develop habits that reduce the strain placed on the back. In Progress May 2019 Management Update: In progress: Human Resources is coordinating training sessions with Utilities Operations personnel to provide programming focused on BackSafe Fundamentals and injury prevention. Expected Completion Date: October 25, 2019 September 2018 Management Update: Due to training staffing changes, industry-specific ergonomic training has not been coordinated and will be scheduled in Spring 2019. Expected Completion Date: May 2019 January 2018 Management Update: Have identified trainer and in process of establishing contract and training dates. Using claim data for previous 5 years, have identified top 5 body parts injured with objective to train employees with highest exposure and focus on injury prevention. Expected Completion Date: May 2018 STATUS OF AUDIT RECOMMENDATIONS DISABILITY RATES AND WORKERS’ COMPENSATION – ISSUED 10/17/16 PAGE 3 Recommendation Responsible Department Original Response and Target Date Current Status (Complete, In Progress, or Not Started) Implementation Update and Expected Completion Date Finding 2: Injured employees’ benefit eligibility is not accurately and completely tracked and monitored, resulting in both overpayments and underpayments of workers’ compensation benefits. 2.1. HR continue working with ASD and CalPERS to address the disability leave benefits that were incorrectly reported as compensation to CalPERS. Human Resources Concurrence: Agree Target Date: February 2017 Action Plan: HR worked with Payroll to identify wage codes and required corrections needed to fix CalPERS payroll report. In Progress May 2019 Management Update: In progress: Consultant has been hired to work on CalPERS payroll reporting correction which requires SAP programming. Consultant’s expected start date is May 20, 2019 and expected to be completed by June 30, 2019. Testing is targeted for July 2019. Expected Completion Date: August 30, 2019 September 2018 Management Update: Implentation of new disability coding delayed due to priority FLSA project and Union contract implementation. Testing dates under review with ASD. Expected Completion Date: June 2019 January 2018 Management Update: SAP Functional has configured new disability coding to make correction to CalPERS report. Next steps include testing by Payroll and HR to move forward with correction which have been delayed due to other priority projects. Expected Completion Date: June 2018 2.4. HR work with ASD to ensure that the data necessary for disability leave management is captured through time reporting in SAP to support the process, including: Human Resources / Administrative Services Concurrence: Agree Target Date: February 2017 Action Plan: a. HR following up with ASD Payroll on feasibility to revise City payroll procedures; otherwise, will In Progress May 2019 Management Update: b.1) In progress: Consultant has been hired to work on CalPERS payroll reporting correction which requires SAP programming. Consultant’s expected start date is May 20, 2019 and expected to be STATUS OF AUDIT RECOMMENDATIONS DISABILITY RATES AND WORKERS’ COMPENSATION – ISSUED 10/17/16 PAGE 4 Recommendation Responsible Department Original Response and Target Date Current Status (Complete, In Progress, or Not Started) Implementation Update and Expected Completion Date a. Revising the City’s payroll procedures, Policies and Procedures 2-06/ASD, to provide clear instruction for reporting disability leave on SAP timecards. b. Configuring the SAP system to: • Track compensation reportable to CalPERS separately. • Track medical appointments that qualify as disability leave by creating a separate payroll code. • If feasible and cost- effective, limit the number of days each employee can code disability leave or modified duty on their timecard based on their position. include steps in City’s Workers Compensation policy. b. ASD and HR have determined how to code public safety temporary disability as “PERSable” and non-public safety temporary disability as “non- PERSable” by using different SAP codes. - A separate timecard code (7600) is being developed to track medical appointments. - Limiting the number of hours each employee can code disability leave can be accomplished when disability leave bucket is established; may not be feasible for modified duty and requires further review. completed by June 30, 2019. Testing is targeted for July 2019. Expected Completion Date: August 30, 2019 b.3) Closed: Not feasible or cost-effective at this time. There will be no new ERP system and over the next two years the proposed contract will be limited to only maintenance and limited update of the current system. However, if there is an opportunity in the future to develop new SAP coding for workers’ compensation tracking, HR will resume discussion with the SAP functional team. September 2018 Management Update: 50% complete b. 1. In Progress- SAP Functional has configured new disability coding to make correction to CalPERS report.Next steps include testing by Payroll and HR to move forward with correction which has been delayed due to other priority FLSA and Union contract implementation project. 3. Not started- HR discussed new process with SAP Functional to develop new SAP coding system for workers compensation tracking. At this time, determined not feasible in SAP. Instead, HR will review new HR ERP solution to look for improved coding process. Expected Completion Date: June 2019 STATUS OF AUDIT RECOMMENDATIONS DISABILITY RATES AND WORKERS’ COMPENSATION – ISSUED 10/17/16 PAGE 5 Recommendation Responsible Department Original Response and Target Date Current Status (Complete, In Progress, or Not Started) Implementation Update and Expected Completion Date January 2018 Management Update: 50% complete a. Completed- HR has drafted Timecard Disability and Modified Duty Coding guideline which will be attached to City’s Workers Compensation policy b. 1. In Progress- SAP Functional has configured new disability coding to make correction to CalPERS report.Next steps include testing by Payroll and HR to move forward with correction which has been delayed due to other priority projects. 2. Completed- New SAP payroll code has been created by ASD and tested by HR to track medical appointments separately from disability leave. An email communication was distributed to city staff on use of new code. 3. Not started- HR discussed new process with SAP Functional to develop new SAP coding system for workers compensation tracking. At this time, determined not feasible in SAP. Instead, HR will review new HR ERP solution to look for improved coding process Expected Completion Date: June 2018