Lawmakers to probe salary overpayments revealed by Hawaii News Now

HONOLULU (HawaiiNewsNow) – The State Senate will convene special hearings next month to look into millions of dollars of salary overpayments to state employees that were revealed in a Hawaii News Now investigation.

On Monday, Hawaii News Now reported that state records show taxpayers have overpaid hundreds of workers by more than $2 million and  hundreds of thousands of dollars more in salary overpayments have been written off as not collectable in recent years.

Many people who continue to work for the state owe the taxpayers thousands of dollars but haven't paid it back, according to state documents. The problem has persisted for so long that other people have retired from the state and even died while still owing state taxpayers money from the overpayments.

The State Senate has appointed a special committee on accountability to conduct hearings that will be chaired by State Sen. Donna Mercado Kim.

"It's one thing that we're making the over payments.  But another thing is are we recovering the money?  And if the people are still employed, I don't understand why we are not able to recover because if you are overpaid by the bank, then the bank can go back into your account and get the money back," Kim said Friday in her state capitol office.

"A great number of people still employed that owe thousands of dollars to the state because of overpayments. First of all, we have to see what's the problem and why it's happening," Kim said.

Kim said she will call representatives of some state departments to explain what they're doing to take care of the overpayment problem at the briefings, which will be held in March. She also plans to delve into whether legislators need to change state laws to make it easier to collect extra wages paid to employees.

Thursday, Kim introduced a resolution calling for State Auditor Marion Higa's office to investigate the salary overpayment problem.

"Some of it may never be collected, but the problem is we've never written it off," said Dean Seki, the acting state comptroller, who oversees the state payroll.  Seki, who has been with the state's Department of Accounting and General Services for 12 years, just took the department's top job on Feb. 1.

Seki said a lot of these overpayments happen because Hawaii's state workers still have to fill out old-fashioned paper forms for vacation or sick leave, and that process is not computerized.

If state employees decide at the last minute to take vacation time at the end of a pay period, often their paychecks have already been cut.

"You can't possibly do the paperwork to reflect that, so we end up paying the staff person for their salary and later on we have to go and collect it," Seki said.

But state records show some wage overpayments happened because an employ failed to show up for work, was terminated or retired, but personnel officials were not informed to stop their pay. Other employees go out on sick or vacation leave when they don't have any leave to cover their absence, but they are paid anyway.

The state said as of Dec. 31, 2011, it overpaid its employees $2 million in outstanding payments, some of them stretching back since 1994. The state recovered nearly $470,000 of that, according to a report filed at the end of last year, so there is still more than $1.5 million employees and former employees owe the state.  About 25 percent of the uncollected overpaid wages came from the last two years, with the balance from more than two years ago, Seki said.

"I think we try our best.  I mean it's not our goal to overpay our employees.  But mistakes happen.  And I think we try as much as possible to make sure that these mistakes don't get made," Seki said.

State law prohibits officials from collecting overpayments from its employees more than two years after the fact.

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