Time & Attendance Audit

Interim Report
December 19, 2019

Photo: Lawson’s Lake

Albany County Property

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Time & Attendance Audit

Interim Report
December 19, 2019

Albany County Department of Audit & Control

Michael F. Conners, II

Albany County Comptroller

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Introduction
The time & attendance audit began after informal conversations with several department heads in 2017
and 2018. Several individuals who had concerns regarding the validity of time and attendence records
were hesitant to be identified or chose not to seek whistleblower protections under Albany County
Resolution 22 of 1992 for fear of relatiation. One individual did agree to be interviewed extensively
and made allegations that the County Executive used county employees and resources to conduct the
2015 primary election and general election campaign.

The allegations of the whistleblower consisted of; filing false instruments, seldom show jobs, ghost
employees, and the use of county offices, automobliles and personnel for election purposes. We
believe that all of these allegations are real but do not opine upon them in this audit. Our counsel has
turned over information and tools designed and built for our audit by Berdon, LLP to the Albany
County District Attorney. We will be posting the emails of interest on our webpage in the next few
days.

Our audit of the Department of Human Resource would never have occurred if we did not get the
information from the whistleblower.

Members of the Albany County Comptroller’s audit team met with law enforcement officials,
communicated with several agencies at the federal, state and local levels and are cooperating with the
Albany County District Attorney’s Office, having turned over nearly one-thousand emails and
significant data for their analysis on criminality and the possibility of prosecution. This interim report
will also be turned over to the District Attorney by our ouside counsel Hinckley Allen.

During the last eighteen months, the Albany County Executive and his administration continously
blocked this investigation and audit, blocking cooperation of department heads and employees to be
interviewed for this audit. The County Executive’s disregard for the Albany County Charter powers
and duties enumerated in Article IV, section 403 for the Department of Audit and Control; raises
questions as to why the Executive and his team refused to cooperate with this audit/investigation.

3.

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Authority
Authority for the Department of Audit & Control is contained within Article IV of the Albany County
Charter. Excerpted below are the relevant sections for this audit.

Section 403. Powers and duties.

The Comptroller shall:

(a) Except as otherwise expressly provided in this Charter, have all the powers and perform all the
duties conferred or imposed upon a Comptroller under the County Law;
(b) Be the chief fiscal and auditing officer of the County and the chief administrative officer of the
Department of Audit and Control. The Comptroller shall organize the department into such
administrative units as may be required.

[Amended 8-8-2016 by L.L. No. 7-2016, approved 11-8-2016, effective 1-1-2017]

(c) Keep records of appropriations, funds and expenditures, and prescribe approved methods of
accounting for County officers and administrative units;
(d) Examine all requisitions for the encumbering of funds for expenditure of which the County is
responsible, and certify as to the availability of funds for such purposes;
(e) Audit and certify for payment all lawful claims or charges against the County or against funds
for which the County is responsible;
(f) Audit the financial records and accounts of all officers and employees charged with any duty
relating to County funds or funds for which the County is responsible;
(g) Procure statements from all depositories of County funds and funds for which the County is
responsible, and reconcile such statements with the County accounts, and consult with the
Commissioner of the Department of Management and Budget with respect to the designation of
a depository for County funds; [Amended 12-2-1996 by L.L. No. 7-1996, effective 1-1-1997]

Department of Management and Budget with respect to the designation of a depository for County
funds; [Amended 12-2-1996 by L.L. No. 7-1996, effective 1-1-1997]

(h) Submit to the County Legislature and County Executive annually, at the close of each fiscal
year, or as soon thereafter as practicable, but in no event later than March 15, Financial reports
in such form and detail and at such times as may be prescribed by the County Legislature; and
(i) Perform such additional and related duties as may be prescribed by local law or as may be
directed by the County Executive or the County Legislature.
[Amended 8-8-2016 by L.L. No. 7-2016, approved 11-8-2016, effective 1-1-2017]
(Copied from Albany County Charter on the County’s website pages 14 and 15)
https://ecode360.com/print/AL3660?guid=30960484&children=true 15/42

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Scope and Methodology

The Department of Audit and Control retained outside council to protect the duties, powers and
authority of the office. In view of what was discovered, council recommended retaining a forensic
auditor to ensure independence and to assist with any legal proceedings that may result from the audit.
The forensic auditors examined over twelve million records contained within the KRONOS system
from January 1, 2012 through July 21, 2019 to determine whether the internal procedures and controls
for Albany County employees’ time and attendance records are effective in preventing and/or
detecting wrongful or inaccurate clams for payment; assessing the risk of whether the current
use and operation of Albany County’s time and attendance system (KRONOS) allows for fraud,
waste and abuse by its users; and assessing the risk that Albany County time and attendance
records are inaccurate, incomplete, or incorrect. and records.

Exhibit 1 – Verified Petition for an order Pursuant to C.P.L.R. Article 78 and Section 2308(b) and to
compel compliance with Albany County Comptroller demands for auditable records

Exhibit 2- Expert Report of Paul M. Ribaudo, CPA, CFE, CFF, CITP in support of verified petition to
compel compliance with request for audit records and subpoena

Exhibit 3 – Affidavit of Michael F. Conners, II in support of verified petition to compel compliance

with request for audit records and subpoena

Rules and Regulations for Albany County Employees

Contained in the Rules and Regulations for Albany County Employees, effective October 1, 1999
(Exhibit 4) is a statement of intent on page iii which reads; “The County of Albany provides substantial
benefits to its employees in addition to regular wages and salary.” It further states, “These Rules &
Regulations are binding on all County Departments and all regular employees as defined herein:”

Article II in the Albany County Employee Handbook clearly states that the requirement that county
employees, “arrive to, and depart from, their appointed work sites at designated times is central to
the efficient and effective delivery of necessary services to the public.”

Additionally, Article II, D points to the importance of maintaining accurate time and attendance
records as “key instruments of government accountability” and falsification of these records will not be
tolerated and may result in disciplinary actions.

In 1999, Albany County began using the KRONOS time and attendance system to ensure the accuracy
of time and attendance of Albany County employees. According to a March 1, 1999 memo from the
Director of the Albany County Department of Human Resources, “Elected officials are the only
employees exempt from using the KRONOS time and attendance system. All personnel are expected to
use the KRONOS system for time and attendance purposes.”

KRONOS time clocks are located throughout the County at various worksites. Employees are required
to use their individual KRONOS ID numbers either by “punching” in this number, or swiping their
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identification cards to record their time and attendance each day. All Albany County employees are
instructed in the use of the KRONOS system.

Every county department has payroll liaison(s) who are responsible for recording exceptions to the
employee’s individual recording of their time and attendance.

Payroll
Data from KRONOS is entered into Albany County’s integrated financial software system known as
MUNIS, which generates paychecks for all employees. The Albany County Department of Audit and
Control authorizes the release of funds for payroll each week and all checks issued by Albany County
are signed by the Albany County Comptroller. Access to KRONOS is essential to the certification of
payroll records.

The Department of Audit & Control certifies that funds are available for the payroll checks that bears
the Comptroller’s signature each week.

Obstruction of Audit
The Comptroller’s Office had access to review KRONOS data, including the ability to generate
“Timecard Audit Trail reports” without restriction, and had the ability to run these reports for all
Albany County employees, countywide, whether inside or outside the Department of Audit and
Control. This access was unrestricted as late as January 28, 2018.

In March 2018, the Department of Audit and Control found their access to time and attendance data in
KRONOS had become restricted to its own employees within the department. From March of 2018
through July of 2019 the Department of Audit and Control made numerous requests in writing and in
meetings to the Commissioner of Human Resources and the County Attorney to restore its full
KRONOS access. All requests were denied by the County Attorney and Commissioner of Human
Recourses for the stated reason that the Department of Audit and Control would gain access to private
health information.

In the Fall of 2018, the Department of Audit and Control contacted the KRONOS vendor, MM Hayes,
Co.Inc.to determine whether or not KRONOS records contained health information. In discussions
with this vendor it was determined that there was no health information stored in KRONOS and what
the Commissioner of Human Resources and County Attorney said was not true.

In addition, the Department of Audit and Control asked the vendor what information was available
from the KRONOS system that was being blocked. The vendor then provided a series of “ad hoc”
reports from Albany County payroll records as requested which demonstrated the depth of information
contained in KRONOS that was blocked from examination, but most importantly, indicated that
certain county employees were being paid for hours not actually worked. For example, one employee
was paid from more than one budget line – their approved budgetary line in the Department of Law
and also from a vacant, “Ghost Employee” budget line from the Public Defender’s Office, as pay type
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code “out of title” pay in order to avoid triggering overtime. These two lines were funneled into one
paycheck so these employees were receiving a “backdoor raise”, skirting the approval process of the
Legislature. This information led to our issuance of an audit engagement letter on October 3, 2018 and
a follow up on October 18, 2018 to the County Attorney demanding access to KRONOS.

Exhibit 3, tab #12

The County Attorney responded on October 19, 2018 stating that any KRONOS reports that were
requested in response to the audit would be provided by Human Resources and any “protected
information” would be redacted. The letter also stated that there and never been a change to the
Comptroller’s access to KRONOS.

Exhibit 3, tab # 13

Efforts by the Department of Audit and Control to independently run KRONOS time and attendance
records was repeatedly blocked.

In December of 2018, The Department of Audit and Control retained former Department of Justice
Chief Prosecutor of White-Collar Crime, Michael L. Koenig of Hinckley, Allen and Snyder, LLP to
assist with the restoration of unfettered access to the KRONOS system.

In June 2019, after a series of unsuccessful negotiations between Koenig and the County Attorney, the
Department of Audit and Control was forced to prepare an Article 78 lawsuit to compel compliance
with the Albany County Comptroller’s demand for auditable records pertinent to the time and
attendance audit. (Exhibit 1)

In response to notification of the looming lawsuit, the County Attorney agreed to restore unfettered
access to the KRONOS system, access that the County Attorney claimed was unchanged in his
October 19, 2018 letter.

As of the time of this report, the County Attorney has not allowed any county employee to be
interviewed by audit staff or by attorneys hired by the Department of Audit and Control in regards to
this audit.

Findings from Expert Report of Mr. Ribaudo

1. Systematic misuse of the time and attendance system by the Administration. After
reviewing 12.2 million payroll records during the audit period, forensic auditors found:
a. Many employees have had significant amount of their time and attendance entered
in to KRONOS by manual entry rather than employee punches/swipes. This is in
direct violation to Article II of the Albany County 1999 Employee Rules and
Regulations and the 1999 letter from the Department of Human Resources on the
introduction and use of KRONOS.
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b. Various departments have multiple Payroll Liaisons with read/write access to
KRONOS, who do not have a significant number of employees. (See page 25 of
Exhibit 2) For example, there were multiple departments that had ten or more
Payroll Liaisons with read/write access to KRONOS during at least one of the
years during the audit period. Additionally, there is no outlined policy, procedure,
or rationale for establishing which and how many Payroll Liaisons are granted
read/write access.
c. Payroll Liaisons have the ability to utilize their read/write KRONOS access to
enter their own time and attendance via manual entry as opposed to using the
employee punch/swipe devices. This access is a gateway to manipulate the payroll
system. In fact, forensic auditors identified at least 22 employees within the
Countywide Audit Trail Data who used their read/write access to KRONOS as
Payroll Liaisons to make 100 manual entries to their own time and attendance
during the analysis period.
d. Manual entries have been made by Payroll Liaisons who are not physically present
where the employee is working and not in the same department as the employee for
whom said time entry was made.
e. Out of Title Pay (OOT) has been used to compensate many employees over the
analysis period. Forensic auditors found 163 employees who were paid “OOT. In
some cases, this is routine and temporary, however multiple employees are being
paid from two different line items to hide additionally salary and raises from the
Legislature. Examples include: Investigator for the Department of Law who is paid
35 hours per week by this department and another 35 hours per week as a Chief
Criminal Investigator for the Public Defender’s Office. This essentially give him
two full time salaries. While being listed on two separate payroll categories and
Departments, this individual had his work hours entered by Payroll Liaisons by
employees of the Department of Human Resources. He was documented as
working by the Commissioner of this Department in over 600 entries. Other titles
paid in this manner include but are not limited to:
i. Ward Clerk/Administrative Aide - Albany County Nursing Home
ii. Deputy Legislative Counsel /Legislative Aide
iii. Shop Mechanic/Road Machinery - DPW
iv. Finance Clerk II/Account Clerk - Finance
v. County Attorney/Deputy County Attorney

f. Employees appear to have been punched/swiped in at worksites outside of their

home departments.
g. Failure to adhere to Rules and Regulations for Albany County Employees that is so
pervasive that it calls question into the accuracy of the payroll and whether or not
the hours paid for were actually worked.

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 h. Circumvention of the Civil Service minimum qualifications for positions. The
administration often did not contact Civil Service about positions for the select
employees. See citations below.
i. Use of “Ghost Employees” as a means of paying people connected to the
administration more than their stated salary. Check on the Department of Law 1st
deputy and several others. Unfilled budgeted positions were milked for additional
dollars for selected employees without this being transparently made available to
the public or County Legislature. There may be two employees in the majority
Office who were also part of this scheme.
j. Employees were placed in Civil Service titles of which they do not meet minimum
requirement or any requirements.

1. Civil Engineer II
2. Assistant Public Defender
3. Patient Relations Co-Coordinator, Albany County Nursing Home

Payroll Recommendations
Significant official updates need to be made to the Albany County Policies and Procedures manual,
especially regarding time, attendance and payroll procedures. The last manual published in 1999 is
shamefully obsolete.

Payroll authorization procedures need to be examined and official procedures for payroll approvals
should be standardized. It is reasonable that there are sometimes exceptions to payroll approval
procedures, but there should be documentation on those reasons that support such actions. There are
certain positions in the county where, due to the nature of the work, those employees may not be able
to manually punch. The true issue is the lack of supporting documentation that is affecting our payroll
records.

Finally, there are two issues regarding payroll liaisons that our office strongly suggests correcting. Any
payroll liaison should have a documented reason for why they would ever certify time and payment
approval for someone who does not repot to them, nor works under them in their department. Any
reasonable person would question how someone could approve time and payment information for an
employee who does not work for them. Finally, payroll liaisons should not be punching themselves in
and certifying their own time. This opens the door for payroll abuses that any comptroller would like to
avoid.

Whistleblower Complaint Findings

As a result of a conversation between the Albany County Comptroller and a Department Head of the
current administration it was mentioned that employees had been hired on the Albany County payroll
with the understanding that they would be working on the Albany County Executive’s 2015 re-election
campaign. It was further stated that their job would be a minimal show position and their primary
duties were to be coordination and administration of this campaign.
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Acting on this information, an investigation was initiated. The difficulties and actions necessary to
obtain the information is covered elsewhere in this audit document. The initial information shows
anomalies in time and attendance as traced by the KRONOS payroll tracking system by several
individuals, one of whom agreed to speak with the Comptroller in July of 2018 wanting to “clear their
conscience”. This individual worked on the campaign and was interviewed several times by members
of the audit team. They were afforded whistleblower protection based upon our findings.

Some of the job titles of people were purported to be working on the campaign included, but are not
limited to:

 Commissioner of Human Resources

 Chief Information Officer and current Counsel to the County Executive
 Director of Parks and Recreation
 Investigator (County Attorney)
 Deputy Elections Inspector
 Deputy Commissioner (General Services)
 Special Projects Coordinator (Sheriff’s Office)
 Commissioner of General Services
 Senior Policy Analyst (County Executive)
 Policy Analyst (County Executive)
 Clerk Typist III DPW

This interview led to the following allegations:

Several employees on the payroll at the time were entering their KRONOS ID numbers at time clocks
not at their assigned workplace or being punched in by a Payroll Liaison at another location.
Departments included DPW, Children, Youth and Families, County Executive and the Albany County
Sheriff’s Department.

A review of the “whistleblower’s” personal emails, which were voluntarily given to the Comptroller
documented a pattern of emails and text messages between the County Executive’s Campaign
Headquarters and employees who were communicating with the campaign staff and the whistleblower
who was admittedly on the clock during regular business hours.

It was also noted the principals in the campaign, were in positions of authority in Albany County
Government and the County Executive, were frequently updated by email during work hours. Topics
included the names of the County employees working on the campaign and how much effort was being
put in on the campaign. Emails exist between Campaign Chairs and Department Heads confirming the
employee was walking with the County Executive mentioning “Dan wants you to walk with him, etc.”.

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Email Exhibits to be posted on our website:
http://www.albanycounty.com/Government/Departments/CountyComptrollerDepartmentofAuditandCo
ntrol.aspx

After the Whistleblower’s email documentation was examined and the allegations seemed credible, a
more thorough process was undertaken.

Audit staff examined over 1,000 emails from the campaign and county employees involved in the
primary and general election provided by the whistleblower, and found emails which confirmed the
allegations of campaign work on county time. They fall into several groups, some which we are
attaching to this report.

Examples are broken into two groups.

 Emails that include the County Executive
 Emails occurring during a normal workday requesting and coordinating County Employees’
work on the campaign

Finding:

 There were many communications over several months between county employees and
campaign staff during normal working hours. After examining approximately 1,000 emails
between campaign Staff and county employees who were involved in campaign activities, it
can be concluded that sending and receiving emails during normal work hours was a normal
occurrence. In many cases, the County Executive, and several high ranking county employees
were copied on these emails.

Recommendation
Working on campaigns during regular work hours is prohibited and quite possibly a criminal act. The County
Legislature should adopt a policy that expressly forbids election work during regular business hours and County
wide elected officials should not accept campaign contributions from County employees.

Conclusion
The Albany County Charter empowers the Department of Audit and Control and the Albany County
Comptroller the duties and powers to audit County Departments. The level of obstruction during the
attempt to audit payroll records raises serious questions about what is being hidden. Our Interim
Report reveals numerous questionable decisions at the top levels of County Government creating a
special class of selected employees who do not have to follow the Rules & Regulations for Albany
County Employees, circumvents Legislative oversight on salaries and forces some employees to file
false documents.

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With the change of Comptrollers effective 1/1/2020, it is appropriate to reconsider the enumeration of
specific subpoena powers for the Department of Audit & Control. The County Attorney’s
acquiescence to our attorney’s threatened Article 78 leaves the legal issue still unsettled.

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