Audit Finds Change in Pay Schedule Could Cost State $50M

Sep 13, 2015

A legislative review of the state’s new employee pay schedule found the state will be paying an additional $50 million over the next ten years to salaried employees because of a computing error.

Legislative Auditor Aaron Allread before the Post Audits Subcommittee.
Credit Perry Bennett / West Virginia Legislative Photography

As West Virginia transitions to WV Oasis, a streamlined computer processing system that will be used by government agencies statewide, state employees are moving to a new pay schedule. Many agencies have already transitioned to the bi-weekly schedule, meaning instead of 24 paychecks per year, employees will receive 26.

But in the conversion process, Legislative Auditor Aaron Allred told the Post Audits Subcommittee some 24,000 salaried employees will actually receive an annual pay increase of between $200 and $400 because of a calculation error.

Over the next ten years, Allred said, the change will cost the state some $50 million in additional employee pay.

State Auditor Glen Gainer said by streamlining the payroll process, the state will see a larger savings than the money it will pay out from the computing error. The state’s consulting firm on the Oasis project estimates West Virginia agencies could save $4.5 million per year under the system.

“I believe those savings will be closer to $10 million per year,” Gainer to the committee Sunday.

Senate President Bill Cole, a member of the committee, was unhappy with the overpaying of employees, despite the savings predicted under the new system. Cole was adamant during the meeting about finding a way to pay employees their agreed to salaries under the new system.

Auditor Glen Gainer before the legislative Post Audits Subcommittee.
Credit Perry Bennett / West Virginia Legislative Photography

During the next few months, lawmakers will discuss their options on dealing with the pay schedule transitions. They could return to the 24-paycheck schedule, redefine the number of work days in a year in state code, or leave the system the same and pay the additional salaries, among other options.

The issue is expected to be taken up during the 2016 legislative session. Until then, Allred is recommending the state postpone the second wave of pay schedule changes which are planned for November.