The Prince George's County school system overpaid its employees by more than $1 million during the past two years because of payroll errors, forcing the system to take unusual steps to recover the money, according to an internal audit and school officials.
Hundreds of employees were affected by the errors, some of whom have since left the system. School officials have docked the paychecks of overpaid employees who are still on staff. They are seeking to recover the excess wages from former employees through billing and a collection agency.
The overpayments, mentioned briefly by the school system's outside auditor in a report made public in July, were documented in greater detail in an internal audit dated June 30. The Post obtained the internal audit through a public-records request.
In an interview Friday, interim schools chief Howard A. Burnett estimated that at least 90 percent of the overpayments would be recovered but said he did not know exactly how much has been returned to date.
"We're still in the middle of cleaning it up," said Burnett, who took office after former schools chief Andre J. Hornsby submitted his resignation in late May amid an unrelated ethics controversy.
"It's always troubling when you've overpaid," said school board Chairman Beatrice P. Tignor (Upper Marlboro). "The dollar amount is very troublesome."
The report from internal audit director Judy Jefferson estimated the total wage overpayments at $1,019,785 as of April 7. That sum reflected wages paid during the last two fiscal years.
The audit found that several problems contributed to the overpayments. Among them:
* Some employees were allowed to rack up "negative leave balances," meaning they were paid for time off beyond what they were owed.
* Some employees who had retired and then returned to active service under a special state program had salaries larger than allowed under law.
* Some were credited for hours they didn't work due to faulty personnel coding.
* Some were overpaid because of problems in calculating the term of their contract and monthly rate of pay.
In one example, the audit found 15 teachers had received payments based on calculations that they had worked full days, at a daily rate of $133. Their schools, however, had reported these per-diem teachers as working half-days, valued at $66.50.
"The [school] Board's financial position is negatively impacted when erroneous payments are issued," the audit concluded. "Additionally, the Board's reputation can suffer from not meeting the fiduciary responsibilities associated with public funds."
The audit found that 389 employees were overpaid a total of at least $471,640 during the fiscal year that ended June 30, 2004. The audit cautioned, though, that overpayment calculations for that year -- fiscal 2004 -- were still pending and therefore could grow.
In fiscal 2005, the audit found, there were 210 overpayments totaling $548,145. It was not clear exactly how many employees were overpaid during that year. The audit said that nearly half the fiscal 2005 overpayment was being collected through payroll deductions from current employees. The rest was being invoiced by the school system's assistant treasurer.
The audit also raised questions about the collection procedures. It found that one employee indicated in August 2004 a willingness to repay a $679 overpayment through biweekly installments. But no action was taken, and a bill for that overpayment was written off in December.
Despite such findings, the head of the school board's Finance, Audit and Budget Committee said he was confident that most of the money would be recovered. "We will get it back," said board member Robert O. Duncan (Laurel).
The audit underscored payroll troubles that bedeviled the school system after it switched in May 2003 to a new financial system relying on Oracle Corp. software. Hornsby took office in June 2003 and within days confronted numerous problems, including employees who complained that they were not getting paid. He spent much of his first year trying to fix bugs in the Oracle system.
The school system has had other troubles in its financial operations. An outside audit of its fiscal 2004 financial statements was more than nine months overdue, and that auditor, BDO Seidman LLP, found numerous weaknesses in internal controls in a report submitted to the school system and state in July.
Recently, Chief Financial Officer Wynette Wilkins was placed on administrative leave, according to Burnett. Veteran finance official James W. Beall was named acting chief financial officer. Burnett would not comment on the personnel move. Duncan said it was in the system's "best interest to bring some new leadership in there."
Wilkins did not respond to telephone messages left at a home number.