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Payroll problems continue to plague school district

By David Scharfenberg Daily Planet Staff
Friday August 02, 2002

The Berkeley Unified School District made at least six months of errors in calculating employees’ income tax withholdings, district officials said Thursday. 

The news came a day after the district confirmed that about 100 employees with direct deposit did not receive their checks on payday Wednesday. 

Associate Superintendent of Business Jerry Kurr said that starting in January, and possibly several months earlier, the district withheld too much in income taxes from employees’ paychecks because it failed to account for a tax cut approved by Congress and signed by President George W. Bush last year. 

“Now we’re taking the correct withholdings,” Kurr said, noting that the government will refund any excess withholdings when employees file their taxes next year. 

The amount improperly withheld varies according to an employee’s salary, and Kurr said it would be difficult to estimate the total number of dollars involved. 

This week’s problems follow an accidental double payment of some employees last year and countless stories of payroll mix-ups for individual employees, including Superintendent Michele Lawrence. 

Kurr also reported a one-time tax error with Wednesday’s payroll. In this case, the district did not withhold enough money for married employees. Affected workers may have received anywhere from $50 to $1,000 more than they should have, he said, depending on their salaries.  

In some cases, Kurr said, the excess withholdings from January to July, and the inadequate withholdings on Wednesday, may even themselves out, resulting in a negligible impact on employees’ taxes. 

Wednesday marked the first time the district ran a payroll through its new data processing system, Quintessential School Systems, installed July 1. 

In the months leading up to the $750,000 QSS conversion, district officials hailed the system as an answer to chronic payroll and accounting problems. 

But on Wednesday, in addition to the withholding problems, the system failed to read the “0” at the start of about 100 employees’ bank account numbers, preventing the delivery of paychecks. Those paychecks were set to hit employees’ accounts Thursday night, according to the district. 

Board of Education President Shirley Issel said she is not alarmed by this week’s QSS troubles. 

“If I’d heard this a year ago, I would have understood it as a symptom of a system that didn’t work,” Issel said.  

“I would just like people to give us a chance,” she continued, arguing that staff will iron out problems with the new system. “Let’s make judgments in six months.” 

At this point, Issel said, her biggest concern is the disruption to employees’ financial planning. 

But Don Abare, former data processing manager for the district, said the problems raise serious questions about the QSS system and the district’s ability to manage it. 

“If this had happened when I was data processing manager, I would have been fired,” he said.