Audit: NC Ferry Division hired workers' relatives

The State Auditor's report on the state Department of Transportation's Ferry Division did not support allegations that employees worked overtime just to increase their pay, approved their relatives' payroll and made questionable purchases.

The DOT had requested the audit last August over allegations from former director Harold "Buddy" Finch, who was fired after two months on the job.

A review of 59 employees found 13 cases, or 22 percent, in which an employee worked under or with a relative at the same location or during the same shift. Six employees, or 10 percent, didn't disclose their family ties when applying for their job.

In one case, an administrative assistant could have entered payroll hours for a relative but did not do so.

The audit found that no wrongdoing had occurred, but the risk "is realistic given the significant number of relatives working within the Ferry Division."

State policy states that no worker can supervise or have influence over a relative, and state DOT policy stipulates that relatives may not work in a situation where they would come in contact with each other.

The Ferry Division said it has since reassigned a few employees, asked current employees to list all their relatives working for the division and is monitoring the hiring process more closely. It has also limited the number of employees with access to payroll system.

The audit found that the Ferry Division didn't break down its budget properly for its different locations and smaller units. That left local managers without the information needed to run their operations according to budget, the report states.

The agency has started breaking down its budget for managers and requiring them to match up their actual spending with the planned budget monthly.

Ferry Division employees worked extensive overtime, but not with an intention to pad their pay, the audit found.

Employees earned $930,000 in scheduled overtime in the 2010-11 fiscal year – the equivalent of 40 full-time workers at an average salary of $23,000. Between January 2008 and October 2010, workers accumulated $1.4 million in unscheduled overtime.

The audit recommended changing workers' set schedule, which includes eight hours of overtime every two weeks. It also suggested creating a pool of temporary workers and reviewing ferry schedules.

The Ferry Division said it's also tightening requirement for spending, including getting at least three quotes for all purchases over $2,500. The division is also replacing its credit cards.