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HomeMy WebLinkAboutAudit Reports - Public - Teleworking Audit - 8/29/2022 Glendale Human Resources & Risk Management Teleworking Audit August 29, 2022 Independent Internal Audit Program 1 Independent Internal Audit Program Teleworking Audit Table of Contents Executive Summary 2 A. Introduction 3 B. Background 3 C. Objective 3 D. Key Outcomes 3 E. Audit Results and Recommendations 4 F. Process Improvement Opportunities 6 G. Audit Scope and Methodology 6 H. Data Reliability 7 2 Independent Internal Audit Program Teleworking Audit Executive Summary As part of our FY 2022 Audit Plan approved by the City Council, City of Glendale's Independent Internal Audit Program (IIAP) conducted a compliance/performance audit of the City's remote work options and its corresponding Telecommuting Policy. The audit was performed to evaluate compliance with policy and the utilization of teleworking across City departments. (For the purposes of this report, telecommuting, teleworking, and remote work are all used interchangeably). Audit Objectives: The main objective of this audit was to assess compliance with the Telecommuting section of HR Policy 201 – Employment. In addition, IIAP hoped to compare productivity levels of departments that utilized teleworking before, during, and after the initial onset of the COVID pandemic. Thirdly, IIAP attempted to determine if offering a telework option to current employees and job applicants affects retention/attraction rates, including possible benchmarking against other cities in the Valley. Audit Conclusions: Overall, the City’s teleworking program and policy is similar to other local municipalities. While utilization of the teleworking option is low across the City currently, today’s job market has demonstrated a need to offer the option of remote work to retain and attract good talent. As the initial push to telecommuting was necessary due to all the unknowns associated with the pandemic, the City should consider gathering feedback from staff on teleworking opinions, now that the option for remote work is more market driven than health related. This feedback may provide guidance on how job duties are determined and postings for open positions are written. Finding: IIAP noted that less than 5% of City staff currently utilize a regular, pre-approved telework schedule. However, only 62% of those participating had a fully approved form on file with Human Resources in compliance with policy. Description: IIAP (and HR) checked the personnel files of the 76 currently participating employees. Of the 76, only 47 (62%) had a fully executed form on file. For the remaining 29 forms that did not make it to HR, there was either no form at all (10 instances), or the form had been partially approved and was maintained in the respective department (19 instances). Overall, documentation and approvals across the City is inconsistent, and 38% of teleworking agreements were not in compliance with policy. Severity: Low 3 Independent Internal Audit Program Teleworking Audit A. Introduction The City of Glendale's Independent Internal Audit Program (IIAP) conducted a compliance/performance audit of the City's remote work options and its corresponding Telecommuting Policy. The audit was performed to evaluate compliance with policy and the utilization of teleworking across City departments. (For the purposes of this report, telecommuting, teleworking, and remote work are all used interchangeably). B. Background When the COVID pandemic hit in March of 2020, much of the nation's workforce shifted to working remotely. Where feasible based on job duties, 300+ City of Glendale employees also began to work remotely, either full-time or on a hybrid basis with some portion of their work schedule onsite at City facilities. Many years prior to the pandemic, the City implemented a Telecommuting Policy as a subsection of Human Resources (HR) Policy 201 - Employment. While HR Policy 201 was recently revised with an effective date of 02/01/2022, the Teleworking section has remained unchanged since at least the prior policy revision date of 07/01/2017. In response to the pandemic, City leadership took swift action to maintain business operations and lessen the spread of COVID where possible. This type of "emergency response" superseded HR 201 and its documentation requirements related to teleworking. Now that COVID vaccines are available and City employees have largely returned to working onsite, this audit will examine the City's current teleworking status and its compliance with policy. C. Objective The main objective of this audit was to assess compliance with the Telecommuting section of HR Policy 201 - Employment. Where possible (if sufficient data is available), IIAP would attempt to measure productivity levels of employees and/or departments, comparing working remotely full-time to working onsite full-time to working a hybrid schedule of some mix in between. In addition, IIAP would attempt to determine if offering a telework option to current employees and job applicants affects retention/attraction rates, including possible benchmarking against other cities in the Valley. D. Key Outcomes This audit indicated that departments are not consistently complying with telecommuting policy. Beyond the need to attain compliance, the main result of this review may depend on the feedback from a new staff survey on teleworking attitudes and utilization. With many vacancies across the City, offering and advertising the option of teleworking may result in higher retention/employee satisfaction, and attracting deeper applicant pools. 4 Independent Internal Audit Program Teleworking Audit E. Audit Results and Recommendations Finding: IIAP noted that less than five percent of City staff currently utilize a regular, pre-approved telework schedule. However, only 62% of those participating had a fully approved form on file with Human Resources in compliance with policy. Condition When the COVID pandemic hit in March of 2020, the City quickly shifted as many employees as possible to a remote working environment. In July of 2020, as many organizations across the state (including Glendale) had employees returning to onsite work with staggered/hybrid schedules, the City distributed a teleworking survey to staff who were impacted by the Emergency Stay at Home Order, as well as their supervisors and department directors. The survey had 18 questions relating to their overall experience with the City's telecommuting program, touching on productivity, communication, technology, and work-life balance, while also allowing for open comments/feedback/suggestions. Unfortunately, the City was not consistently measuring/tracking departmental or individual employee productivity statistics prior to COVID. Some departments may have been tracking transactional data or capacity utilization, but it is uncertain how or if those measures impacted actionable changes to operations. With the City currently going through its Balanced Scorecard Tier II initiative, developing consistently reliable and measurable data is still a work in progress. While some new metrics are in place, it is not possible to consistently measure and compare productivity for the time before, during, or after the main phase of the COVID pandemic. Therefore, the survey responses from staff and supervisors – albeit anecdotal – are the only available way to gauge employees' perspective on teleworking. Overall, the survey responses were positive with respect to the City's emergency telework implementation. For the employees who telecommuted, and for their supervisors, both groups considered productivity and communication to be the same or improved as compared to the pre-COVID work environment. When it came to work-life balance, the responses from employees were overwhelmingly positive, with many hoping that large- scale teleworking (generally 2 - 3 days per week) would be an available option moving forward. Many of the comments pointed to higher productivity by eliminating their commute, money saved on gas/vehicle wear and tear, increased benefit to the environment and air quality, and how offering a telecommuting option could improve both employee retention and new talent acquisition. Criteria Per HR-201, "Regular Status employees who have successfully completed their probationary period and who have not been the subject of any disciplinary action during the past twelve (12) months may apply to participate in the Telecommuting program by completing the "Telecommuting Agreement" form and submitting to their supervisor and 5 Independent Internal Audit Program Teleworking Audit department director for approval. All telecommuting agreements must also be reviewed by Human Resources & Risk Management." The form has signature lines for the employee, their supervisor/manager, the department director, and the City Manager's Office. While there is no signature line for HR, approved forms should be sent to them for inclusion in each participating employee's personnel file. IIAP asked all department directors, including the City Manager's Office, to provide a list of their employees that participate in regularly scheduled teleworking. Of the City's 20 departments, 12 (60%) do not utilize teleworking regularly. All departments indicated that if an employee's duties allow, they might be permitted to telecommute on an as needed basis, such as when a contractor is coming to their house for repairs/service. But overall, less than 5% of City employees telework routinely. The remaining eight departments that do utilize teleworking (City Clerk, Public Affairs, IT, Budget & Finance, Development Services, HR, Organizational Performance, and Community Services) had 76 employees currently participating. Cause The sudden need to telecommute for many employees when the pandemic hit was a dramatic change to how the City conducts business. As the public health crisis ebbed and flowed, some departments and staff members returned to more onsite work, while others preferred to work remotely for a variety of personal reasons. The inconsistent application of “necessary” versus “voluntary” teleworking across the organization likely contributed to lower compliance with policy. Effect Of the 76 employees currently utilizing a set teleworking schedule, only 47 (62%) had a fully executed form on file. For the remaining 29 forms that did not make it to HR, there was either no form at all (10 instances), or the form had been partially approved and was maintained in the respective department (19 instances). Overall, documentation and approvals across the City was inconsistent, and 38% of teleworking agreements were not in compliance with policy. Recommendation While the total number of affected City employees is low, IIAP recommends that all departments who utilize regular teleworking schedules ensure that each participating employee has a fully approved Telecommuting Agreement form on file with HR to comply with policy. Management’s Response Concur. By December 31, 2022, Human Resources will develop a process for proactively obtaining teleworking forms every year, similar to the way they obtain information on outside employment. 6 Independent Internal Audit Program Teleworking Audit F. Process Improvement Opportunities As the City’s original teleworking survey was performed during the initial uncertainty surrounding the pandemic and nearly a year prior to widespread vaccine availability, the public health aspect likely had a strong influence in shaping employee responses. IIAP recommends conducting a new telework survey with questions similar to the first edition while de-emphasizing the public health aspect. Keeping the questions more related to job duties, productivity, communication, customer satisfaction, work-life balance, and role in retaining/hiring employees should provide better direction for City leadership in today's rapidly changing employment environment. City Council approved over 50 new FTE for FY23, and Glendale is currently experiencing staffing shortages across numerous departments. A new survey designed as suggested may provide actionable data to retain valued employees and give the City a competitive advantage by improving job postings to attract quality applicants from a deeper talent pool. A new survey may also give Glendale a clearer picture of how it compares to other cities in the local job market. IIAP reviewed the telework policies of eight other cities in the Valley: Avondale, Goodyear, Mesa, Peoria, Phoenix, Scottsdale, Surprise, and Tempe. Overall, Glendale's teleworking policy was similar to those of the comparison cities. Each policy had a unique requirement or two, but essentially covered the same topics. The policies, however, do not indicate the current availability to telecommute for job applicants. IIAP reviewed hundreds of current postings across all nine cities (including Glendale) where the ability to work remotely seemed probable. Only Scottsdale and Tempe indicated that a hybrid telecommuting arrangement may be possible for select positions. The remaining seven cities did not mention teleworking on any job postings, even for IT positions. If Glendale allows current employees in the same or similar positions to telecommute, then new postings for those job titles/duties may need to include the possibility of working remotely to attract a larger pool of applicants. G. Audit Scope and Methodology IIAP conducted a compliance/performance audit of the City's remote work options and its corresponding Telecommuting Policy. As there is no mechanism in MUNIS to identify which employees are currently teleworking, IIAP asked all City department directors (including the City Manager's Office) to provide a list of their employees who work remotely, whether full-time or on a hybrid schedule with onsite work. For those employees identified, IIAP reviewed documentation in the employee file to support their work arrangements. We conducted this compliance/performance audit in accordance with the Government Accountability Office (GAO)'s generally accepted government auditing standards as well as the Institute of Internal Auditors (IIA)'s international professional practices framework. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on the audit objective. The 7 Independent Internal Audit Program Teleworking Audit objective of this audit was to assess compliance with the Telecommuting section of HR Policy 201 – Employment. Where possible, IIAP attempted to determine if offering a telework option to current employees and job applicants affects retention/attraction rates, including possible benchmarking against other cities in the Valley. IIAP determined internal controls over the following areas were relevant to our objectives: • Determining an accurate population of employees that currently utilize a regular, scheduled teleworking arrangement; and, • Compliance with the approval and filing provisions in the Telecommuting section of HR Policy 201 – Employment. To accomplish our objective, IIAP performed the following activities: • Requested all departmental directors to provide a list of their staff currently on a set teleworking schedule; • Obtained and reviewed the teleworking agreement currently on file with HR; • Reviewed results from the City’s telecommuting survey conducted in July of 2020; • Reviewed telecommuting policies of other cities in the local job market for benchmarking purposes; • Reviewed job postings of the same cities to see if teleworking is an option; and, • Reviewed results of national surveys related to teleworking trends in the U.S. H. Data Reliability The primary data utilized for the work performed in this audit was obtained directly from the City’s departmental directors and examination of staff personnel files. IIAP also used survey data from national teleworking surveys, the City’s prior teleworking survey given to staff, and examination of policies and job postings in the local employment market. The results from nationally administered surveys helped shape the verbiage in this report as summarized below. Ever since the COVID pandemic hit and much of the nation's workforce shifted to teleworking, many attempts at measuring the effects on employees and organizations have occurred. IIAP reviewed the results of many surveys offered over the last 2.5 years. In overly simplified terms, eligible employees prefer to have a hybrid work schedule, and employers prefer workers to be onsite. To summarize, some highlighted findings include: From Gallup poll - data collected May 26 - June 9, 2021; 9,915 U.S. adults 18+ employed full or part-time • 91% of workers in the U.S. with at least some remote work hope that ability persists after the pandemic • 54% of employees who work remotely at least some of the time would ideally like to split time working remotely with onsite - a hybrid arrangement 8 Independent Internal Audit Program Teleworking Audit • 30% of employees working remotely are extremely likely to seek another job if their organization eliminates remote work From PWC poll - data collected November 24 - December 5, 2020; 133 executives of mainly large U.S. companies ($1 billion+ annual revenues) Executives were asked how they felt about remote work at their company: • Great - we're better off giving up office space entirely - 13% • No turning back - many office employees will work remotely a significant amount of their time - 11% • Going with the flow - business performance not suffering; likely will increase the level of remote work - 32% • Prefer limited remote schedules but people like it, including future talent - 26% • Back to the office ASAP; organization best onsite and in-person - 17% From PwC poll - data collected November 24 - December 5, 2020; 1,200 U.S. office workers across numerous industries who work remotely on either full-time or hybrid basis Employees were asked if your employer allowed you to work remotely as you want to after COVID is no longer a concern, how often would you want to work remotely: • Not at all - 8% • 1 - 3 days per month - 10% • 1 day per week - 10% • 2 days per week - 19% • 3 days per week - 16% • 4 days per week - 10% • Every work day - 29% On April 28, 2022, the U.S. Office of Personnel Management (OPM) released results from its annual federal employee survey (292,520 responses). Findings include: • Employees who telework every day fell from 47% in 2020 to 36% in 2021 • Employees who do not telework at all rose from 28% in 2020 to 31% in 2021 • Overall job satisfaction index fell from 69% in 2020 to 64% in 2021 • Overall employee engagement index fell from 71% in 2020 to 70% in 2021 Although not specifically explained, OPM indicated that telework is positively related to higher index scores and that declines in telework could be linked to a decline in the satisfaction and engagement index scores. 9 Independent Internal Audit Program Teleworking Audit To summarize, organizations that were forced to utilize teleworking at the onset of COVID were for the most part able to maintain and sometimes improve productivity. The workforce has come to expect some degree of ability to work remotely, especially with recent graduates (who are accustomed to remote learning and doing most things online) joining the employment ranks. While many positions at the City cannot be performed via teleworking, offering the opportunity for remote work may help to retain current staff and attract new applicants to fill City vacancies, especially against competing municipalities that include it in their job postings. 10 Independent Internal Audit Program Teleworking Audit Appendices Appendix 1 Definitions of Audit Findings Rankings We assigned the risk rankings based on our professional judgment. A qualitative assessment of high, medium or low helps to prioritize implementation of corrective action as shown in the table below. High Critical control weaknesses that expose the City to a high degree of combined risks. Recommendations from high-risk findings should be implemented immediately (preferably within 3 months), to address areas with most significant impact or highest likelihood of loss, misappropriation or damage related to the City assets. Medium Represents less than critical weaknesses that expose the City to a moderate degree of combined risks. Recommendations arising from medium-risk findings should be implemented in a timely manner (preferably within 6 months), to address these risks and strengthen or enhance efficiency in internal controls on areas with moderate impact and likelihood of exposure. Low Represents a low level of risk or control weaknesses and the exposure is not likely to expose the City and its assets to significant losses. However, they should be addressed in order to improve efficiency and effectiveness of operations. Recommendations arising from low-risk findings should be implemented within 12 months.