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California parks officials apparently used obscure payroll codes intended for emergencies such as wildfires and disasters like Hurricane Katrina to turn vacation time into overtime pay, the State Controller's Office testified Wednesday.

State managers are generally not allowed to earn overtime, and California's payroll system is designed to block them from receiving it, said John Hiber, chief operating officer with the Controller's Office, at a Senate oversight hearing. But the system has codes that managers can enter for overtime in rare cases such as Cal Fire employees fighting wildfires or emergency workers providing relief in natural disasters as they did in 2005 after Hurricane Katrina.

"It appears that because those codes exist that this wasn't picked up (and) that those codes were manipulated to allow this to occur," Hiber testified.

"Someone knew what he or she was doing," observed Sen. Mark Leno, D-San Francisco, chairman of the Senate Budget and Fiscal Review Committee.

"Correct, correct," Hiber said. "And there appears to be collusion here as well. So we're in the process of evaluating those codes as they were used and changing the procedures to eliminate this practice from occurring at all in the future."

The Bee reported last month that 56 Department of Parks and Recreation employees inappropriately sold unused vacation time back to the state for more than $271,000. Because the practice was unauthorized, employees submitted buyout requests on Post-It notes in 2011 rather than official forms, according to a department audit. The money was paid as overtime.

Hiber said the state has a decentralized payroll system that puts each department in charge of its employee compensation.

Three parks department executives were disciplined this month because they "manipulated the system" or gave "recklessly flawed advice," according to formal actions imposed by the department.


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