Unanswered questions demand investigation of timecard fraud
Publication Date: Wednesday Apr 6, 1994

Unanswered questions demand investigation of timecard fraud

Evidence of additional cases of falsification of utility department timecards points to lax controls, possible discriminatory discipline

When two Palo Alto utility department workers were summarily fired and then charged by the district attorney late last year with falsifying time cards, city officials seemed to be taking appropriate, swift, tough action.

Now, new disclosures contained in internal memoranda obtained by the Weekly suggest that there were other cases as bad or worse than the ones currently being prosecuted, involving higher level employees, and that they led to neither termination nor prosecution.

The workers currently being prosecuted, a lower level electric utility crew supervisor who had worked for the city for 23 years and a non-management crew "lead," will soon go to trial in Santa Clara County Superior Court. They each face a possible prison term of up to three years in prison. Both have pleaded "not guilty."

The two were among a crew of workers who allegedly falsified their timecards by claiming they worked certain hours when they did not. The crew's action was brought to management's attention by a "whistleblower" within the department who also went to the press with the information.

The other members of the crew, all union members, were not charged by the district attorney nor fired by the city, apparently because it was believed they were reluctant co-conspirators pressured into committing the fraud by superiors. They also are cooperating with investigators and testifying against the two defendants.

As soon as news of the incident was reported in the press last August, City Manager June Fleming announced the firings and promised a thorough investigation to determine if the case was an isolated occurrence and to examine the adequacy of time card controls and systems. City Auditor Bill Vinson, who is independent of the city manager, also announced that he would conduct an audit of city time card practices.

The public was led to believe by city pronouncements that there was no reason to suspect that employee timecard fraud went any further than the single incident.

Documents now indicate otherwise. City personnel memos dated May 4, 1992 from Assistant Utility Director Bob Colyer to three electrical utility staff members, including the head of the electric utility and one other supervisor, detail charges that on several occasions they played golf while recording the time as working.

Two of the four were to be terminated, according to the memos, but they remain employed by the city today apparently with same positions and the same responsibilities they had previously.

City Manager June Fleming, City Attorney Ariel Calonne, and Utilities Director Ed Mrizek have all declined comment, citing personnel confidentiality concerns. The supervisors and workers who are the subjects of the memos also have chosen not to comment, and say they were instructed by superiors not to discuss the incidents. Two have denied ever receiving the memos.

The incidents raise a host of serious concerns:

First, the memos that have been obtained by the Weekly provide details of clear violations of both city policies and state law by mid-level and senior supervisors and managers in the utility department. For inexplicable reasons, the terminations contained in the memos never took place.

Second, interviews suggest that the City Manager's office was never informed of the 1992 incidents, raising questions as to whether and why the personnel and utility department chiefs chose not to inform their superiors of such a serious violation of city policy.

Third, City Auditor Vinson says he knew nothing about the 1992 incidents, despite it being known among all city managers that he was conducting an internal audit into potential timecard fraud.

Finally, the apparent failure of the city to follow its own policies of referring any cases of alleged time card falsification to the District Attorney's Office for prosecution raise questions of favoritism and selective and discriminatory discipline.

Palo Alto police say they have opened an investigation into the incidents described in the 1992 memos, and we trust the district attorney's office will as well. Whether these will clearly explain those cases remains to be seen. But the need for an audit of the utility department personnel records and time card practices is clearer than ever.

For privacy reasons, the city may not be able to release details of the cases described in the memos, but it should move promptly to investigate, correct any inappropriate actions taken, and then publicly release the nature of the problems found and the general actions taken.

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