Scathing state audit finds payroll, overtime, and benefits failures costing Maryland taxpa

MARYLAND (WBFF) — A new state audit is raising serious concerns about how Maryland manages employee payroll, overtime, and benefits — finding widespread failures that auditors say are costing taxpayers millions of dollars.

The report, released late last year, examines the Office of Personnel Services and Benefits (OPSB), the agency responsible for managing state employee pay and benefits. Auditors say weak oversight allowed improper payments, excessive overtime, and ongoing errors — many of which auditors say were flagged in previous reports, but never fully corrected.

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Among the most striking findings, overtime spending has surged by more than $100 million in just three years.

According to the audit, statewide overtime costs climbed from $231.3 million in 2021 to $342.6 million in 2024 — a 48% increase. Potentially contributing to the spike, investigators found that nearly 800 state employees consistently earned more in overtime than in their base salary. In one graph, auditors highlighted five state employees, who year after year, made roughly double their pay in overtime.

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The report also uncovered basic payroll failures, including, “numerous employees that did not complete timesheets and 915 employees who remained on the payroll after they separated from the State.” In one case, 23 employees were reportedly paid $135,000 after they had already left their jobs. In another, 130 employees were paid $740,000 dollars despite never submitting required timesheets.

Beyond payroll errors, auditors found the state also failed to properly manage employee health benefits. The audit identified more than 7,500 plan participants who did not pay their health care premiums in 2024 — resulting in roughly $5 million in unpaid premiums covered by taxpayers.

Taxpayer advocate David Williams of the Taxpayers Protection Alliance calls the findings deeply troubling.

This is alarming, because this is basic common sense and basic oversight that’s not being carried out by the state,” Williams said. “The biggest red flag for any agency is when you have an employee that’s making more in overtime than they’re making in their base salary. That should be addressed immediately. It’s not enough to just report the problem, there has to be action afterward.

In a written response included in the audit, state officials acknowledged that high levels of overtime are wasteful, but said the problem is driven largely by chronic staffing shortages at 24/7 facilities with mandatory staffing requirements. Officials also cautioned that the audit’s recommendations are expected to result in only “marginal improvements.”

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Williams says that explanation falls short, noting the audit comes as Maryland faces another billion-dollar budget deficit this year.

“The state is dropping the ball and is losing hundreds of millions of dollars that it absolutely needs,” he said, “Every dollar that goes towards excessive overtime is one dollar that could be going to help people within the state without having to raise taxes or ask for more money from taxpayers.”