Audit of the Hawai‘i State Hospital’s Implementation of the Hawai‘i Information Portal

from Hawaii State Auditor, January, 2024 (excerpts)

The Hawai‘i State Hospital transitioned to Hawaii Information Portal (HIP) in August of 2021, as part of the last group of State of Hawai‘i agencies to begin using the new system. In its preparation for that transition, the hospital decided that the Time and Leave Standard Operating Policies and Procedures (SOPPs) – most significantly, the employee entry of payable time and leave requests as well as the supervisor review and approval of both – could not be successfully implemented with its staff. The hospital created its own procedures, which are still undocumented and evolving, to process both pay and leave. Specifically, the hospital did not have confidence that its employees, which include both salaried workers as well as shift workers, could accurately input their own payable time and leave requests. The hospital was also concerned that supervisors would not provide a thorough and meaningful review of pay and leave requests.

Instead of following HIP’s SOPPs, the hospital created its own process, which requires as many as 11 employees – some of whom are part of the hospital’s Human Resources section while others come from other parts of the hospital – to input every hospital employee’s pay adjustments for each day the employee works as well as most employees’ leave requests. Not only does the process require handwritten daily rosters to be manually transcribed onto a Microsoft Excel spreadsheet before being entered into HIP, but it also prioritizes the inputting of payable time, occasionally resulting in employee leave being inputted late. The process is highly dependent – perhaps, entirely dependent – on the accuracy of those inputting every employee’s time and leave. That type of unfettered confidence in the group of clerical employees may increase the risk of overpayments and underpayments to employees….

We also found that the hospital’s process minimizes the role of supervisor oversight that ETS intended would serve as a “control” or safeguard to ensure the accuracy of entries. Furthermore, the hospital made this fundamental alteration without designing alternative controls or other types of checks to mitigate the increased risk of data entry errors or fraud.

The hospital’s modified process, which requires that every employee’s time and most employees’ leave be manually inputted before the end of the pay period, has also created a high-stress environment that we were told is contributing to staff turnover. According to the Human Resources (HR) Specialist, the cyclical nature of the payroll process has left her staff little time to address the issues that have persisted since the system’s rollout. “We cannot stop. We have to keep going,” the HR Specialist explained. In mid-October 2023, the HR Specialist left her position at the hospital….

The hospital has more than 740 positions of which 597 are filled, 379 in nursing. Employees at the hospital include those who work directly with patients (called “direct care” or “directs”) and those who do not (called “non-direct care” or “non-directs”). The hospital is a 24 hours a day, 7 days a week (24/7) facility, staffed through three eight-hour shifts each day. According to the hospital’s HR Specialist, roughly two-thirds of the employees at the hospital are direct care staff in the Nursing Services section and are engaged in 24/7 shift work. Non-direct staff, the other third of the hospital’s employees, generally work regular Monday through Friday schedules….

If an employee works more than 6 consecutive days without a 24-hour rest, the employee is entitled to additional overtime pay. Because the differential for stretches is triggered after an employee works more than six consecutive days, the differential can only be counted or determined retroactively. Determining nursing staff’s entitlement to stretches normally takes one member of the hospital’s HR staff two days to perform at the end of the pay period….

The hospital did not pursue the implementation of Kronos time capture technology, and it is unclear why, considering that the HR Specialist agreed it would be a “game changer.” Both the department and the division CIOs, who would have been involved in that decision, have since retired. According to the hospital’s former Associate Administrator of Administrative and Support Services, who was not a part of those discussions but was familiar with the decision-making, the hospital anticipated that the use of automated time clocks would be met by heavy resistance from its employee unions, so much so that it was decided to not pursue the matter with the unions themselves. …

“Absolutely necessary for the accurate reporting of time”

Since 2007, the Hawai‘i Health Systems Corporation’s (HHSC) East Hawai‘i Region’s 1,700 employees at its three hospitals (Hilo Medical Center, Hale Ho‘ola Hāmākua, and Ka‘u Hospital) have been clocking in and out of work using Kronos timeclocks. According to HHSC’s HR Analyst, the Kronos time and attendance system3 features “dozens and dozens” of pay codes or pay differentials associated with the agreements with the hospital system’s seven collective bargaining units (United Public Workers Bargaining Unit Nos. 1 and 10 and Hawai‘i Government Employees Association Bargaining Unit Nos. 2, 3, 4, 9, and 13), the same units that represent Hawai‘i State Hospital employees.

According to HHSC administrators, the integration of time capture along with programmed pay codes helps make the payroll process “black and white,” accounting for which staff are working where and when they are working. Such transparency has had multiple benefits for the region’s facilities. Since late arrivals and early departures of shifts are recorded by Kronos, overtime has been reduced. In addition, from a human resources standpoint, the system provides precise reporting that can help guide and support management decisions on staffing and increases transparency. Moreover, overtime and other time and attendance data automatically captured by time clocks are easily compiled and reported to management for analysis of costs and to auditors during their annual reviews.

While the benefits have been myriad, administrators point out that the implementation and recent upgrade of the Kronos (now known as Ultimate Kronos Group or UKG) system has been not without effort. For example, negotiations with the unions were described as “rough” but “a progression.” .…

…HR anticipated that a large volume of inaccurate time and leave submissions by employees – some of which HR believed would be some staff’s intentional attempts to inflate their pay – would likely overwhelm their supervisors’ ability to properly review them by the payroll deadlines….

“Because we did it manually, and we saw all the discrepancies – be it intentional or unintentional – there was not a level of trust that staff would be thoroughly honest,” said the hospital’s HR Specialist. “There is no evidence in the written material or training that would have supported [controlling errors].…Before HIP, we knew [employees] were doing stuff, but we couldn’t prove it.” …

The hospital’s concerns of a significant number of payroll errors upon project roll-out were realized

One of the reasons that HR staff resisted the adoption of the SOPPs was the concern about the inability or willingness of employees to enter time correctly. HR feared that the resulting errors would lead to a flood of payroll overpayments. Instead of following the SOPPs’ employee- and supervisor-centric model, the hospital created its own process, which requires as many as 11 employees to input every hospital employee’s payable time for each day the employee worked as well as most employees’ leave. The result upon rollout of the hospital’s modified HIP process: a flood of overpayments. …

In addition, the hospital’s longstanding problem with overpayments was magnified in the first few pay cycles under HIP, as the system caught up with pay adjustments and leave requests that should have been processed in previous pay periods – resulting in hundreds of inaccurate paychecks. The Department of Health’s (DOH) Director of the Office of Administrative Services (ASO) noted that hospital employees may not self-report when they are overpaid.

The hospital’s overpayments stand out in DOH’s monthly reports to the Department of Accounting and General Services, which include the amounts overpaid and how much has been collected. “It [monthly report] also shows those salary overpayments were not able to be collected and went through a process of ‘write off’ or went to a collection agency,” the ASO Director said. From January through April 2023, the hospital’s overpayments were approximately $46,000 and DOH had only recovered approximately $6,000….

The audit we wanted to do but couldn’t.

According to data provided to us by ETS, inaccurate or untimely leave calculations accounted for the vast majority of hospital employee paycheck overpayments, which then have to be recovered from affected employees. From January through April 2023, the hospital’s overpayments were roughly $46,000, nearly $40,000 of which was unrecovered as of May 2023. We had intended to examine data on overpayments to assess whether leave entries were being made in a timely fashion and, if not, the extent of untimely entries. Since the hospital lacked documentation, we designed our testing based on staff’s description of their process.

Although the hospital’s HIP data-entry staff explained to us how some of the paycheck errors occurred and provided supporting documentation for certain individual cases, we did not have sufficient evidence to determine whether these errors were anomalies or part of a systemic issue. Essentially, there was no consistent “system” for us to assess. The hospital lacks uniformly recognized and practiced policies and procedures related to HIP and no longer has centralized recordkeeping. As was described to us, “We’re not following any SOPPs [standard operating policies and procedures]; we’re trying to figure out how we can best report accurately.” We were also informed that overpayment errors generated at the hospital level are corrected at the departmental level by DOH’s Administrative Services Office….

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HNN: Following review of Hawaii State Hospital’s payroll, auditor calls system ‘chaotic’ (hawaiinewsnow.com)

2014: Hospital Crisis: How to Use Union Work Rules for Fun and Profit