Employee Separation Process

Without documented processes, the Department of Finance cannot ensure former city employees are paid accurately and in a timely manner for all unused time they have earned and are owed — nor can city leaders ensure payouts will be accurate if another system outage were to occur. Additionally, the city may experience increased financial losses for unreturned computers if it does not improve its inventory tracking and develop a cost-recovery policy.

FINDING 1 – The Department of Finance needs to strengthen processes to ensure former employees are paid promptly and accurately for all unused leave

• The Payroll Division does not have established timelines or sufficient data tracking to promptly issue all separation payouts, but delays may result in financial burdens for separated city employees.
• Following the late 2021 through early 2022 outage of the city’s timekeeping system, the Payroll Division cannot be sure that former employees had accurate leave balances. Uniformed employees of the Denver Police and Fire departments accrue leave defined by collective bargaining agreements, but the Payroll Division does not have the documentation to ensure the city’s system of record always has accurate leave balances.
• The Payroll Division does not have sufficient guidance for staff to conduct separation payouts for all city employees or a training program that supports staff and the division’s efforts to process consistent and accurate audits upon an employee’s separation from the city.
• The Controller’s Office did not update the city’s fiscal rules establishing an official time and attendance system of record in a timely manner.

FINDING 2 – The city does not have a policy for recovering the cost of unreturned computers

The city cannot reliably determine how often employees fail to return city-owned computers or calculate the associated financial loss. When devices are not recovered, the city incurs added costs to replace the unreturned computers and loses the chance to repurpose older devices.

1.1 Develop and document timelines – The Payroll Division should work with the Office of Human Resources and other city agencies, as needed, to develop and document formal policies, procedures, and timelines for processing separation tasks, including the maximum amount of time the following tasks should take:

• Supervisors’ initiation of separations in Workday.

• The Office of Human Resources’ review and approval of separations.

• The Payroll Division auditing separation payouts.

• Separation payouts being issued to former employees.

Agency Response: Agree, Implementation Date – Dec. 31, 2024

1.2 Review payout data accuracy – The Payroll Division should document and implement policies and procedures to periodically review separation payout data to ensure accuracy.

Agency Response: Agree, Implementation Date – Dec. 31, 2024

1.3 Monitor payout timeliness – After implementing recommendations 1.1 and 1.2, the Payroll Division should document and implement policies and procedures to monitor payout timeliness to identify areas for improvement in the separation payout process.

Agency Response: Agree, Implementation Date – Jan. 31, 2025

1.4 Review and correct leave balances – The Payroll Division should review leave balances for all employees who worked for the city during the Kronos outage to identify any inaccurate leave balances and correct employees’ leave balances. This should include compensating former employees for any unused and previously unpaid time. For any former employees who took more leave than they were owed, the division should determine and document how the Payroll Division plans to address any excess leave taken. This process, and any inaccurate balances and remediation efforts, should be documented.

Agency Response: Agree, Implementation Date – Feb. 28, 2025

1.5 Document a continuity-of-operations plan – The Payroll Division should finalize and document a continuity-of-operations plan for how the city will accurately record employees’ time, leave usage, and leave balances if the city’s time and attendance system of record is not available in the future. This plan should ensure all records of leave taken and leave balances are accurately recorded and available in any interim system.

Agency Response: Agree, Implementation Date – Jan. 31, 2025

1.6 Refine backup procedures – The Payroll Division should refine its current Workday backup procedures to include more sufficient detail such as who is responsible for carrying out the procedures and how staff should select a sample to review for ongoing accuracy.

Agency Response: Agree, Implementation Date – Dec. 31, 2024

1.7 Document uniformed employee leave types – The Payroll Division should formally document how uniformed employee leave types align between Telestaff and Workday — the city’s system of record — used to manage time tracking and absence management.

Agency Response: Agree, Implementation Date – Feb. 28, 2025

1.8 Align current practices with Fiscal Accountability Rules – The Payroll Division should align its current practices for tracking uniformed employee leave balances with the city’s Fiscal Accountability Rules establishing Workday as the authorized system to manage all time tracking and absence management.

Agency Response: Agree, Implementation Date – Dec. 31, 2024

1.9 Document procedures to identify differences in uniformed employee leave balances – The Payroll Division should document and implement policies and procedures to periodically identify differences in uniformed employee leave balances across Telestaff and Workday, and correct differences to ensure these systems are aligned for time tracking and absence management.

Agency Response: Agree, Implementation Date – Dec. 31, 2024

1.10 Document policies and procedures to ensure reliable data – After implementing recommendations 1.7, 1.8, and 1.9, the Payroll Division should develop a set of detailed and documented policies and procedures that define the process to ensure reliable data is used to conduct uniformed employee separation payouts.

Agency Response: Agree, Implementation Date – Jan. 31, 2025

1.11 Develop detailed separation payout procedures – The Payroll Division should develop and document detailed policies and procedures for conducting payout audits for career service and uniformed service employees.

Agency Response: Agree, Implementation Date – Jan. 31, 2025

1.12 Develop a training plan – The Payroll Division should develop and document a formal training plan for all payroll staff.

Agency Response: Agree, Implementation Date – Jan. 31, 2025

1.13 Clarify collective bargaining agreement payouts – The Payroll Division should document policies and procedures clarifying whether employees under collective bargaining agreements are paid out under the agreement in effect at the time of their separation or are entitled to be paid out for benefits in previous agreements.

Agency Response: Agree, Implementation Date – Jan. 31, 2025

1.14 Update the Fiscal Accountability Rules overview policy – The Controller’s Office should update the Fiscal Accountability Rules overview policy to include specific guidance on when Fiscal Accountability Rules should be changed following the adoption of new systems, tools, and processes.

Agency Response: Agree, Implementation Date – Dec. 31, 2024

1.15 Update Fiscal Accountability Rule 3.2 – The Controller’s Office should update Fiscal Accountability Rule 3.2 to accurately refer to Workday as the city’s authorized system of record.

Agency Response: Agree, Implementation Date – Dec. 30, 2024

2.1 Develop a policy to recoup unreturned computer costs – The Payroll Division should work with Technology Services and the City Attorney’s Office to develop and document a citywide policy to recoup the cost of unreturned city computers.

Agency Response: Agree, Implementation Date – Jan. 31, 2025

2.2 Update Fiscal Accountability Rule 4.2– As Technology Services finalizes the city’s new computer tracking system, the Department of Finance should work with Technology Services to align Fiscal Accountability Rule 4.2 to accurately reflect the city’s new computer tracking and management policy.

Agency Response: Agree, Implementation Date – Dec. 31, 2024