Montgomery County is seeking repayment of about $100,000 in hazard pay after permitting employees improperly claimed COVID-19 hazard pay for ineligible work.
The county’s Office of the Inspector General released a report on Friday that detailed an investigation into the county’s Department of Permitting Services management allowing inspectors to receive the extra $10-per-hour differential pay for time they worked in the office and at home. The level of hazard pay is only for staff members working directly with and exposed to the public.
Rich Madaleno, the county’s chief administrative officer, said during a council meeting on Tuesday that the county is seeking repayment of the money, but did not say how.
“We are actively looking at whether or not we need to find outside assistance in order to do it,” he said.
He also declined to say what disciplinary actions have been taken in the department, citing confidentiality of personnel records.
Hazard pay was implemented in early April, when County Executive Marc Elrich negotiated with three labor unions to provide differential pay for employees who had to be in contact with the public as part of their job responsibilities.
Employees who had direct contact with the public were to be given an extra $10 per hour. Those working in an office, not near the public, could receive an additional $3 per hour.
More than $49 million has been spent in hazard pay in all county departments as of Sept. 26. The estimated total would be $72 million if the pay continued at that pace through the end of the year.
Permitting employees were found to be overpaid between March 29 and Aug. 29.
County Inspector General Megan Davey Limarzi told the council on Tuesday that about half of the inspectors consistently claimed 80 hours of front-facing time for each pay period.
The current and former acting DPS director and division chiefs were interviewed by OIG as part of the review.
“The investigation revealed that in April of 2020, the acting director of DPS and four of the five division chiefs collectively decided to allow inspectors to claim front-facing differential pay for their entire work day, contrary to county policy or guidance,” Limarzi said. “There was one division chief who was not part of that agreement, so not all inspectors were given this advantage and not all chiefs chose to misapply the pay differential.”
There are four division chiefs listed on the permitting website as of Wednesday. One person is listed as the chief of one division and acting chief of a second division.
The majority of the chiefs chose to allow the inspectors to claim the ineligible pay to not “nickel and dime” them, Lamarzi said, adding that two division chiefs used that exact phrase.
Another called it “nitpicking” inspectors about their time-keeping, she said.
“All of the division chiefs who had misapplied policy told us the exact same thing: It was a deliberate misapplication of the pay differential,” Limarzi said.
But Fariba Kassiri, deputy chief administrative officer, told the council on Tuesday that the preliminary review by the administration determined there was no deliberate action.
“In our view, this was an egregious mistake. It was not a deliberate action knowingly trying to deviate from the policy and guidance that was given from the second floor,” Kassiri said, adding that it was a “failure” of the previous acting director.
Hadi Mansouri, the previous acting director, declined to comment when contacted by Bethesda Beat Wednesday morning.
Madaleno said the administration has “not been able to find evidence of malicious intent in this.”
Elrich said in a statement on Tuesday afternoon that the acting director, who retired this year, used “poor judgement,” but did not benefit from the decision. His retirement was scheduled before the hazard pay was implemented.
“We don’t have any reason to suspect fraud, but if any fraud is identified, we will address it immediately,” he said.
All other county nonpublic safety departments will be investigated by an internal audit team until the end of November, Elrich said. Police, fire, sheriff and corrections departments will not be investigated since all staff members receive the same hourly differential.
Elrich continued: “I want to be clear — as soon as the current DPS director learned of this practice, she stopped it. … We have already conducted a preliminary review and confirmed that leadership in several larger departments understood the county policies issued in March, communicated those policies to their management teams, and believe their departments have acted consistent with county policies.”
The county expected to get reimbursement for hazard pay from the Federal Emergency Management Agency, but the county is only asking for reimbursement on public safety hazard pay until it does more internal reviews in other departments.
Several members of the County Council called for an independent investigation into the county’s hazard pay.
“I do not believe this should be internal,” Council President Sidney Katz said. “I believe there should be independent investigation, so we can make certain that all the concerns that have been discussed by Ms. Limarzi and by others are properly addressed.”
Council Member Andrew Friedson said the improper claims were an “egregious breach of trust” to be addressed through an independent investigation.
“Every single taxpayer dollar that was wrongfully paid out must be returned immediately,” he said. “That is not negotiable. It must happen and it must happen immediately.”
Friedson said DPS employees who “collectively decided to take advantage of a pandemic to defraud taxpayers and disparage the reputations of every single honest, hardworking county employee” must be held responsible.
Limarzi told the council that it would be difficult for an independent investigation since her office’s review also discovered that some of the permitting department’s inspection data were incomplete and inaccurate compared to what was posted on its public website, Data Montgomery.
Friedon questioned if the differential pay program was set up appropriately if there was no way to verify that money was spent properly.
“The idea that we can’t audit this with an outside auditor because we don’t have enough information to be able to determine whether it was done appropriately or not really raises much broader questions with the financial controls and the way this program was set up from the outset,” he said.
When asked why the council was not informed about the issue earlier, Madaleno said he learned of the report on Oct. 29 and the Office of the Inspector General asks that any unreleased reports remain confidential until they are released.
Limarzi said OIG received complaints about the permitting department in May and began an analysis in early June. The division chiefs were interviewed in September.
When asked whether she was investigating hazard pay in any other departments, Limarzi said she couldn’t confirm or deny any ongoing investigations.
Council Member Evan Glass said he expects the council will revisit the process to make sure that “malpractice does not fester” and that the council can learn of problems sooner.
“We’re in this situation because improper acts were taking place and a process, which is prescribed in the law, resulted in us not knowing about it for a while, and allowed for those actions to continue for a while,” he said. “We want to stop these actions.”
Briana Adhikusuma can be reached at briana.adhikusuma@moco360.media.