Pohnpei auditor recommends changes in PPA employee leave and allotment implementation

By Bill Jaynes

The Kaselehlie Press

January 16, 2019

Pohnpei—Pohnpei’s Office of the Public Auditor has released a performance audit of Pohnpei Port Authority allotment an annual leave applications and uses.  The audit cover the fiscal year that ended on September 30, 2017.

The Port Authority General Manager requested the audit.  The audit found that on several occasions the Port management had not followed its own published procedures.  It said that the result was both a heavier work load for finance employees and the creation of a lenient environment that could lead to systemic abuse.

It found that the “excess annual leave cash out” practices were not always in line with policy.  Apparently, the General Manager has discretionary authority to approve cash payments for unused accumulated leave in excess of 360 hours.  That authority is only for employees who have submitted a written request for leave far enough in advance of the days requested for management to make arrangements to cover their absence. The request for use of excess leave must be made within 60 days of the end of each calendar year.  In those cases, and if the leave is denied, the GM can authorize a cash payment in lieu of time off.

Auditor found one instance where six airport employees requested leave on overlapping dates.  The auditor speculated that the employees requested the overlapping dates, all of them during the Christmas holiday season so that management would be forced to deny the leave and instead issue a cash payment, which is what happened.  He said that the incident indicated lack of planning by responsible management to properly plan, coordinate and schedule employees’ use of excess annual leave hours to avoid disruption of daily operations.  It said the incident also occurred because the GM allowed it.

Auditors recommended that the GM should not entertain practices that are or may lead to non-compliance with PPA’s policies and procedures and should set a “tone at the top” by enforcing the policies.

Auditors pointed out another occasion in which a PPA Division head went on vacation without filling out a leave application.  The employee extended his vacation and then had his secretary fill a leave application form out for him.  The GM approved the leave application despite the policy and prudent management practices.

It said that additionally, Division heads were approving or disapproving leave applications despite the policy that only the GM has that authority.

The final finding of the audit had to do with payroll allotments which is a payroll deduction for which employees can apply in order to pay creditors.  As a sample, auditors selected the allotment records for 53 employees.  There were a total of 864 allotments or 53 employees.  Of those, 501 allotments were processed without completing change of allotment forms.  176 allotments were not dated by the Division of Finance.  123 allotments were missing the start date for the allotments.  26 allotments were issued with no allottee name on the allotment form.  26 allotments were processed without an approving signature.  Four times there was no employee signature.  Four times the allotment date was not clear, and on four occasions the amount of the allotment was missing.

Unlike at the Pohnpei State Government, PPA has no rule on the number of allotments an employee is allowed to have or on the frequency of changes or amendments to the allotments.  Auditors pointed out that such a policy can occupy employees’ time with volumes of transactions that may have contributed to the non-performance of certain documentation tasks.  They recommended that management should review the reasonableness of the policy in order to minimize the exposure to complications including unnecessary financial loss.

In his response to the requested audit, current General Manager Pius Roby agreed with all of the findings and vowed changes effective immediately.