An internal audit found that the Louisville Metro Police did not properly monitor how the department spent overtime funds.
The audit was ordered in 2018 by the city council of Louisville, Ky., after the police department acknowledged $1.2 million in abuse of overtime funds from December of 2016 to 2018.
Three officers were convicted in early 2020 of faking overtime to boost pay and retirement benefits, getting a probation sentence and made to pay back the funds. Two of the officers told a judge that faking overtime pay was customary practice in the department.
No Standardized System
The audit found that internal controls for monitoring overtime pay was lacking, with inconsistent documentation and little guidelines. The department does not have a minimum guideline that is established and distributed across the department. Overtime is approved by the division, without standard systems of data collection. Because of the inconsistencies in the systems, inaccuracies in overtime reporting were overlooked and approved.
The audit suggested establishing and enforcing a minimum guideline that clarifies the process for clocking in and clocking out and fixing late reviews. The guidelines must also highlight the importance of reviewing overtime records for accuracy, paying close attention to the overtime reason and hours. The audit also recommended an annual training to review the time reporting guidelines.
Inconsisent Documentation
Some court overtime pay requests were also approved without documental approval from a Court Liaison Officer, and because of the ambiguity in form requirements, the need for approval was not clear. Forms could not be located, either because they were lost or never filed.
The audit recommends explicitly stating that officer approval is required for court overtime, and match the number of hours approved with the total amount of approved hours on forms.
High Overtime Monitoring
The audit found that a lack of a comprehensive process for reviewing overtime hours above the predetermined threshold. High overtime employees were not monitored closely, and civilian employees were excluded from the review. The department also failed to consider employee overtime across all earned codes, only looking at specific sections, and failed to identify high overtime employees.
The audit recommends reviewing all high overtime employees’ hours and accounting for overtime across earned codes.
LMPD agrees with the finding that its internal control system needs improvement, and has begun changing the system with a target implementation date of Oct. 1, 2020. 
Stephanie Liu is assistant editor at Internal Audit 360°