State audit finds UI payroll overpayments

The University of Iowa incorrectly made 304 payroll overpayments totaling $572,300 in 2009-10, and total payroll overpayments outstanding as of June 30, 2010, totaled $883,300, a state audit shows.

But the audit said it's important to note that as of the release of the audit report on July 13, $758,024 of the $833,300 in salary overpayments outstanding at June 30, 2010, has been collected. The outstanding overpayment balance of $125,276 has been transferred to the UI billing office for collection, according to the audit.

Overpayments generally occur when electronic forms reflecting changes in employment status are not submitted by the employing department to human resources on a timely basis, according to the audit.

State Auditor David Vaudt released audits Wednesday for the UI, Iowa State University and the University of Northern Iowa, for the fiscal year ended June 30, 2010.

UI officials should work with departments to ensure the proper electronic forms are submitted timely to help monitor the correct payment of salaries and wages and reduce overpayments, the audit states. When overpayments occur, the university should pursue refunds on a timely basis, the audit recommends.

UI officials, in a response included in the audit, concur with the audit recommendations. This past year the UI payroll department and accounting services reviewed overpayment record keeping and collection practices and determined responsibility for the collection activity should be moved to the university billing office, which was done March 1, 2011. The change improves accountability through improved segregation of duties and uses the collection expertise of the billing office, including the ability to engage outside collection agencies, UI officials said in the audit.

The UI pursues reimbursement of all salary overpayments immediately once it's known an overpayment occurred, officials said. Reimbursement is sought through full or partial recovery from final salary payments to terminated employees for earned vacation or sick leave balances; through future earnings from current employees; or by making calls or sending letters to collect overpayments from current and terminated employees.