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10-28-15 - 15-110 - Performance Audit - Citywide – Staffing Agency Vendor Contract Compliance - Adecco

Between FY 2010 and FY 2015, the City paid Adecco approximately $23.3 million to provide temporary staffing agency employees to help supplement the City’s workforce. As part of the contract, Adecco is required to comply with the terms that are detailed in the contract and RFB. However, based on the testing and review results of this audit there are several areas where Adecco is not following the contract and RFB terms. Adecco is not ensuring that the information on the invoices and periodic reports is always accurate. This has led to incorrect costs on invoices, and estimated over billings of $38,540. In addition, by not ensuring information on invoices and reports is accurate, Adecco hinders the City’s ability to perform proper reviews of the information. Adecco is not ensuring that approved request forms are received each time the City needs to obtain a staffing agency employee. This is a requirement that staffing agency vendors must follow when supplying staffing agency employees. Without verifying that appropriate City personnel have approved the acquisition of these employees it could cause unapproved costs to be incurred, and may ultimately require Adecco to refund the City for the unapproved costs. Finally, Adecco is not pulling staffing agency employees from positions after they have been at the City for more than two consecutive years. Adecco is also not making sure that employees who have worked at the City in any capacity for more than two consecutive years take at least a 90-day break before placing them at the City again. This could cause a potential liability for the City if staffing agency employees, who have been used at the City for a continuous two-year period, feel that they are due permanent City employee benefits. It is imperative that Adecco ensure all contract and RFB terms are being complied with, and that all information sent to the City is accurate and complete.

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Summary

Between fiscal year (FY) 2010 and FY 2015 the City of Albuquerque (City) paid Adecco Employment Services Incorporated (Adecco) approximately $23.3 million for staffing agency services. Of that, $8.2 million was paid during the 18-month audit testing period of July 1, 2013 through December 31, 2014. The most significant issue identified during testing was the net over billings of $514 (0.47%) on a sample of 24 invoices. If the error amount of $514 is extrapolated to the entire $8.2 million paid to Adecco during the 18-month period tested, it can be projected that Adecco over billed the City $38,540.

Adecco also had issues with not ensuring other information on the invoices, and information on the periodic reports is accurate. The City relies on the information from the invoices and reports to assess use and cost of staffing agency employees, and when information is not correct it can hinder the City’s monitoring process. Finally, issues were identified with Adecco filling positions that are not included on the approved contract; not removing staffing agency employees from City positions once they have worked for two continuous years; not ensuring that employees take at least a 90-day break after working at the City in any capacity for two continuous years, before placing them at the City again; and not ensuring that it receives the proper approved request forms from the City before sending staffing agency employees to fill City positions.

Recommendations

Adecco should:

  • Refund the City for over billings in the amount of $38,540.
  • Perform internal review of employee records for accuracy.
  • Send accurate information in a timely manner to the City.
  • Fill only positions included on the approved contract.
  • Ensure proper approved requests forms are received each time a position has been requested to be filled.
  • Remove any staffing agency employees who have been placed at the City for more than two continuous years.
  • Ensure staffing agency employees take at least a 90-day break after having worked at the City for more than two continuous years.

Adecco’s Corporate Legal is reviewing the request for a refund due to overbilling the City. Adecco agreed to implement all other recommendations.