Audit finds Oakland paid $1.6M in excessive overtime pay over 6 years in several departments

OAKLAND, Calif. (KGO) -- As Oakland faces a massive budget crisis, an auditor has found the city has been overpaying some employees for overtime.

Acting on a tip, an investigation was launched into the Departments of Transportation and Public Works.

It discovered between January 2018 and May 2024 the city paid more than $1.6 million in excess overtime.

The reason behind it? The city used a different method to calculate overtime than is required by federal law.

MORE: Oakland faces major cuts across all city departments amid historic $129 million budget deficit

The report suggested it is possible excessive overtime pay happened in other city departments.

ABC7 News asked Oakland City Auditor Michael Houston about the findings.

"We concluded clearly a wasteful practice. We know that it has been in place for quite some time," Houston said. "We don't know when the problem started (or) if it was intentional or by accident."

Houston says he has reported the information to the city administration and more departments could be investigated.

MORE: Oakland councilmembers find $8M in excess funds to save fire stations, hint there's more money

Interim Oakland Mayor Kevin Jenkins was exasperated when asked about the findings.

"It's absolutely frustrating. It's $1.6 million that could go to supporting parks like this. That's $1.6 million that could go to supporting beautiful festivals that are going on this weekend--including Black Joy Parade. That's money that could be spent in other places that promote the good in Oakland," Jenkins said.

The City of Oakland faces a budget shortfall of $129 million this year. It'll face an additional $280 million shortfall in the next two years.

"At this time, the city is browning out fire stations, cuts to all type of services--some of them critical services. Employees have been impacted, there have been layoff notices, expenditure freezes," Houston said.

The Vice Chair of Oakland's Budget Advisory Commission also weighed in.

MORE: How police department plays large role in Oakland's budget deficit

"What we are learning from this report is the city continues to have issues with managing overtime, in addition to these two departments. We're also seeing that police overtime is significantly over budget. And that has been a continuing trend at a time when every single dollar matters. We really need to get to the bottom of this--how overtime is being accounted for across departments," said Mike Forbes, vice chair of the Budget Advisory Commission.

We asked the mayor what's going to happen next. What's being done to mitigate the excessive overtime spending?

He said he plans to sit down with the city auditor and city administrator to determine what to do next about the overpayments.

An investigation may continue into more departments.