“Irrecoverable debt” to be written off by Aberdeenshire Council
Local authority officers had identified a loss of £273,728 that had built up over the last 14 years.
They discovered that the cash, which equates to just over £19,500 per year, was paid to employees between 2004 and 2018.
But the sum will be met from the council’s payroll overpayments provision account and will not impact the local authority’s current budget.
Members of the business services committee were asked to approve the move when they met this morning.
Council leader Gillian Owen said it was a “disappointing position” for the council to be in having to write-off the “not insignificant” debts, given its wider financial position.
“It’s quite disappointing if people are receiving pay that they are not entitled to and that they feel able to actually keep it,” she said.
“It’s not just a slap in the face to Aberdeenshire Council, it’s a slap in the face to residents because after all it is council tax money as well.”
But Ms Owen noted that council officers have done “everything in their power” to recover the historic debts.
The Conservative councillor also asked council chiefs for a report on overpayments over the last five years and the process taken to reduce them.
This will be presented to the committee at a later date.
Overpayments are usually caused by the late submission of paperwork advising of a change to an employee’s circumstances.
This includes a reduction of their working hours, taking sickness or maternity leave, or even leaving the job.
If possible, the council recovers some cash from an employee’s future salary payments.
But if a staff member has left the council, an invoice will be issued.
Around £160,000 of overpayments are identified annually.
Aberdeenshire Council paid its staff £479.8m last year.
Steps are being taken to reduce the risk of any future overpayments.
A new online portal has been rolled out that will give line managers access to employee HR and payroll data.
This will make it easier for council workers to keep on top of staff administration and reduce the amount of overpayments going forward.
Automated reminder emails have also been introduced to notify managers and employees of upcoming changes to contracts.
Under this feature, any payments would be suspended until the terms are confirmed.
Any future debt found to be irrecoverable each year will be recharged back to the service the employee was part of.
Head of finance, Mary Beattie, also offered councillors reassurance that the situation would continue to be monitored.
She said the council is “going through every single balance sheet line” and accounts would be looked at on a regular basis.