DENVER – Denver cannot systematically track employee data to ensure there is no bias related to pay for all genders, races, or ethnicities, according to an audit out today from Denver Auditor Timothy M. O’Brien, CPA.
“Holding the city accountable through regular review of employment data is just one step city leaders should use to ensure equity and avoid bias based on race, ethnicity, or gender,” Auditor O’Brien said.
Our audit team intended to use data analysis to check for indications of bias in employees’ salaries and merit increases. However, when the team tried to do so, auditors found the data is not tracked in the city’s system of record, Workday, and city officials are unable to perform regular, healthy checkups on the equity of employee compensation.
According to Career Service rules for the city, pay factors used to determine salary are market conditions, related experience, previous work record, education or certification, internal equity, and level of responsibility. However, employees do not always have their information such as education and prior work history listed in Workday.
This data limitation means the city’s current time-consuming manual process of checking other personnel files does not allow for regular, comprehensive checks for potential biases.
Although demographic data shows employees working for the City and County of Denver generally closely match the demographics of the community they serve, it is still important to regularly confirm all employees are paid equitably according to Career Service rules and consistent application of pay methodologies.
“The best way to ensure consistency is to check the numbers,” Auditor O’Brien said. “Right now, the city isn’t doing that.”
We recommend the Office of Human Resources start requiring collection of employee data in Workday. This will allow for more regular data compilation and analysis.
The Office of Human Resources also needs to strengthen its review of how agencies allocate merit increases, the annual raises each qualified employee receives based on performance ratings. Our testing found a small percentage of employees in our sample were either over- or underpaid based on the performance rating they received.
Human Resources told us these instances could be due to the discretion allowed to agencies to deviate from merit increase methodologies or they could be connected to miscalculations.
We recommend that agencies submit their merit allocation methodology to Human Resources for review to verify these methodologies were applied consistently across all eligible agency employees.
“The City of Denver isn’t awarding merit increases this year due to budget shortfalls caused by the COVID-19 pandemic,” Auditor O’Brien said. “Now is a good opportunity for Human Resources to take the time to implement our recommendations before the next round of performance reviews and pay raises.”
The Office of Human Resources agreed to both of our recommendations.