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Should $883,000 in overpayment prompt investigation into UI efficiency?

BY DI EDITORIAL STAFF | JULY 18, 2011 7:20 AM

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YES

Tuition for 131 in-state students; 7,358 copies of an American economic history textbook; three houses on Dodge Street.

These are all things that could be purchased for $883,000, the amount of money the University of Iowa overpaid its employees in fiscal 2010. At a time when the university needs to carefully control its purse strings, the overpayment is worrisome. It is insulting to cash-strapped students that the UI mishandled their steadily rising tuition, and the incident deserves broad, comprehensive reform to ensure it doesn't happen again.

The error was reportedly due to paperwork not being filed on time, and the amount of overpayment in most employees' cases was less than $2,000. The university today can't afford to make overspending errors.

The money isn't gone, though. The billing office is in charge of collection, and nearly $760,000 of the erroneous payments has been recovered. Even if the money is recovered, officials can't successfully plan and manage a budget in which almost $900,000 disappears. Cuts in state funding and flood renovation require the UI's finances to be managed wisely.

But the error raises questions about university funding in other areas. Is this problem limited to the payroll department? Or are there other sections of the university in which many minor overpayments add up to a serious loss?

Hopefully, the UI's bureaucracy is more efficient in other departments. The payroll department has a unique responsibility, because the employment status of the school's myriad faculty and staff is constantly changing. The proposed changes in efficiency cited to the DI by Iowa's deputy auditor should help minimize the effect of these errors in the future, but this is a bad sign, and more action must be taken to reduce waste and mishandling.

Attempting to improve efficiency in the payroll department and elsewhere is the right move. It isn't fair to deliver students tuition increases to pay for botched paperwork.

— Will Mattessich

NO

According to an audit, the UI overpaid its employees in fiscal 2010, primarily as a result of paperwork delays. But there's no cause for alarm, or a jaundiced approach to the entire messy bureaucracy (at least not over this issue): In response, the UI has taken steps to fix the perennial problem.

These steps range from immediate collection of the money — 86 percent was recovered within two months — to communicative and bureaucratic shifts to avert similar problems in the future.

With the payroll office handling both employee pay and overpayment issues and juggling undoubtedly frequent shifts in records, some room for human error is understandable. Iowa state Auditor Dave Vaudt told The Daily Iowan that overpayments typically result from a slow transfer of paperwork from hiring departments (leading, among other things, to paychecks for former employees). The sheer number of departments makes payroll's job a bit like herding cats: Waiting on paperwork from each one — and much of that paperwork unanticipated — can obviously lead to an accumulation and amplification of minor errors.

The 2010 overpayment total is higher than usual (although the average extra pay amounted to a mere $2,000), but the UI has responded by making changes.

If anything, the university's handling of the issue confirms my trust in the system. The UI is taking the reasonable step of making overpayment the responsibility of the billing office, a sensible shift that should lighten the burden of the payroll office. And both departments will be streamlined in the future, allowing for efficient communication about employee shifts and revisions.

With the university's rapid response, and a predicted swift recovery of the remaining $125,000, efficiency fanatics can put away the pitchforks; there's no need for further investigation.

Striving for perfection is good, to an extent, but it must be reined in when it results in needless reforms, revisions, and a bureaucratic witch-hunt.

— Shay O'Reilly


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