Today, University of Wisconsin System President Kevin P. Reilly charged his financial team and audit staff to immediately undertake a comprehensive review of the overpayments made to the Department of Employee Trust Funds (ETF) for UW employee health and retirement benefits.
UW System staff discovered that the university had overpaid health and retirement benefits in the process of reconciling UW payroll databases with corresponding benefits databases at the ETF offices. Information about these problems was shared with the Legislative Audit Bureau, and those errors were reported in the state’s Comprehensive Annual Financial Report, released yesterday.
“I am deeply troubled by these mistakes. After close consultation with the Board of Regents leadership, I have directed our Office of Operations Review and Audit to take immediate action. In addition to our own internal reviews, we will engage an independent external auditor with specialized expertise in complex information technology audits and the PeopleSoft platform. That independent auditor will conduct a comprehensive risk assessment of the Human Resource System. We will identify exactly why and how these significant errors occurred, we will validate that steps we have already taken are working, we will take any additional steps that need to be taken, and we will make absolutely sure that similar errors do not happen again,” said Reilly.
“Throughout this process, we will share information with key stakeholders. In February, the State Auditor is scheduled to discuss the annual financial report with the Board of Regents’ Business, Finance, and Audit Committee, where this topic also will be addressed. At subsequent meetings of the Board, we will invite our independent IT auditor to provide regular reports to the Regents. We will also share information about this process with Legislators and other State leaders. When a full analysis and final report is complete, that will be presented to the Regents in public and shared with the Legislature.”
ETF has already credited the UW System’s account for the full $17.5 million in overpayments made to the Wisconsin Retirement System. In addition, under the terms of ETF’s contracts for State Group Health insurance, we have thus far recovered $2.4 million of the $15.4 million in excess premiums for employee health benefits. UW System’s HRS Service Center in Madison has new procedures and new staff in place to reconcile UW payroll data with ETF benefits data.
“We are taking this matter very seriously, and I am confident that our corrective actions will resolve its root causes. I am nonetheless highly embarrassed and very disappointed by these errors and the resulting overpayments. I pledge to our Wisconsin taxpayers, Legislators, students, and staff that we will fix this problem so that it does not happen again.”
LAB staff also recommended that UW System review HRS security roles and permissions granted to individual staff authorized to use the system. LAB recommended that access to various parts of the system be more limited, and that the university adopt additional checks and balances to ensure the integrity of the payroll data. UW System agreed with those recommendations, and will implement them.