Hays County removes payroll duty from treasurer

HAYS COUNTY — “In light of some information that has been presented to me, I think it is in the best interest of the Hays County governmental body to remove the processes of payroll from the Hays County Treasurer and place them in the Budget Office,” said Hays County Treasurer Daphne Tenorio after the commissioners court was made aware of hundreds of payroll errors.

In a May 22 letter to the court, County Auditor Marisol Villareal-Alonzo identified 237 payroll processing errors, 223 incorrect calculations of manual timesheets, untimely payroll disbursements and deficiencies in the payroll controls and review process.

“After an increase of payroll calculation and payroll system entry errors and an increase in employee complaints to the Hays County Auditor’s Office, I am bringing the following payroll processing errors to your attention and am requesting that a thorough review of the payroll and payroll disbursement process be performed,” Villareal-Alonzo detailed in her letter. “To validate payroll expenditures, the Auditor’s Office examines the payroll records processed by the Hays County Treasurer’s Office on a semi-monthly and monthly basis. The objectives of the review were to verify the mathematical accuracy of the payroll reports and timesheets, determine whether payroll disbursements were processed in a timely manner with proper approvals, to identify any payroll errors that have not been corrected and to review the payroll process and controls.”

Of the 460 total errors, there were 237 payroll errors, which consisted of payroll changes being miscalculated and payroll system entry errors (i.e. incorrect seniority, incorrect medical plan selected, W-4 entered incorrectly); 223 untimely payroll error corrections that are still pending; untimely payroll disbursements; and deficiencies in the payroll controls and review process.

Further, there has been inconsistent access to payroll records by the Auditor’s Office.

“From January 2023 through May 15, 2023, the scope of the review has been limited due to inconsistent access to payroll records,” the Auditor’s Office said. “During this period, the Hays County Auditor’s Office has identified the following deficiencies in the payroll process and identified 273 payroll corrections that are still pending after the May 15, 2023, payroll.”

In light of these errors, Tenorio relinquished control of payroll processes from her office and into the hands of the Budget Office, including three positions — two payroll managers and the treasury manager, who handles all of the hand calculations for timesheets.

“Statutorily, I have to keep track of all money that comes, reconciliations, I review payroll before it’s disbursed, disburse electronic transfers, anything that has to do with money has to come through me. All the reporting will stay statutorily with me,” Tenorio told the court on May 23. “Anything that has to do with any disbursements of any funds stays with me. Additionally, in order to pay out payroll, I will be required to review any documents to make sure I am comfortable with the payouts.”

Hays County Commissioners Court called a special meeting to address the issue on Tuesday, May 30. Several public comments were critical of the court for calling the meeting. Citizens pointed out a lack of notice to such an important agenda item, given that the meeting was scheduled on a Friday before a holiday weekend.

John Hatch, chairman of the Hays County Democratic Party, said, “It seems there is a pattern of the commissioners court to place items on an agenda prior to a weekend.”

Anna Juarez, of San Marcos, said, “I, too, just want to add the sense of shock I felt when I heard the news about there being an emergency related to the Treasurer’s Office and the fact that none of the other commissioners were notified. I’m concerned about the lack of transparency, the lack of communication: what came up on Friday afternoon before Memorial Day? What was it that was such an emergency? I certainly hope that is clarified today. Because there is a pattern of submitting last minute agenda items, I’d urge you to stop that. A democracy depends on transparency. We cannot be a democratic country without transparency. Please, be more transparent as you proceed. I’d also like to second the request for an audit prior to Ms. Tenorio’s candidacy and election.”

A special meeting of the court can be called by the judge or three commissioners. This item was brought by three commissioners — Debbie Ingalsbe, Lon Shell and Walt Smith. It requires 72 hours of notice. There was 24 hours more than was legally required to give notice, said commissioner Shell. “There is such a thing as an emergency meeting that can be done in a few hours. This is a special meeting because there was not a meeting scheduled,” he said. “Because of quorum issues, I’m not able to communicate with other court members prior to [the meeting]. I’d rather not be here, to be honest with you. If it wasn’t important, I would not have asked for this item.”

“The reason for that item being placed on an agenda on a Friday, which is perfectly legal, was because I received an email from our district attorney regarding members of the treasurer’s office. At that time, my job is to address the issue. We talked about that Friday, but did not talk about the specifics. There wasn’t anything personal about that. It is a task. I’ve lost confidence for the Treasurer’s Office to handle payroll,” he continued.

Budget Officer Vickie Dorsett did allow previous staff that worked in payroll to assist with this payroll period.

“There were more than 200 payroll changes. It was not the most peaceful transfer of duties between offices, but that was due to the nature of payroll processes,” Dorsett said. “It was a fast and swift move that day. Moving forward, we outlined duties and processes the treasurer would need to release those duties and personnel files. I would like for the court to clarify what the actual disbursement would be for the Budget Office.”

There was a question of who the custodian of personnel files is. Historically, the Treasurer’s Office was the keeper of those files.

“I have no problem with the removal of the employee files from the Treasurer’s Office,” Tenorio told the court. “Walking into my office on Tuesday, seeing my staff upset and having the locks changed did surprise us. We’ve done everything possible to make sure this is a smooth transition. There has been a good working relationship. There’s no desire to keep payroll in treasury. We look forward to moving on. There is no ill will or bad judgements or anxieties. What happened Tuesday was upsetting to our staff and we’ve moved forward and we look forward to continuing to do so … My hope is to remove the liability of payroll from my office.”

“We processed payroll knowing full well there were errors. There are always errors. The reporting of errors did not start until my administration started,” she said. “I don’t really want to go hashing into the last meeting. I’m here to move forward.”

County Judge Ruben Becerra said, “We have full support and confidence in [the Budget Office]. Our treasurer was pushing for a forensic audit. I don’t want to use the word ‘witch hunt.’ This is unprofessional … Besides a dog and pony show, I’m disappointed that the commissioners called this meeting. It was not an emergency and there was not a need for a special meeting … No files have been destroyed, there was no loss of money and our treasurer is not under investigation.”

“I will not hold hostage the payroll of the employees of Hays County,” Tenorio said. “The idea that I would hold up the payroll for Hays County is absurd … I’ve been sworn in to uphold the laws of this county. I am fully vested in this process and I am fully vested in this position … The removal of the payroll from this office is a blessing.”

Shell made a motion that the maintenance and management of personnel files be moved to Human Resources, that the county create access for departments to perform key duties and that the Hays County Budget Office have access and authority to receive information necessary in order to do payroll.

The motion passed 4-1, with Becerra dissenting.