Submitted: August 4, 2017
Abigail M. LeGrow, Judge
Appellant's Appeal from the Merit Employee Relations
is an appeal from the Merit Employee Relations Board's
("the Board") decision concerning Petitioner's
termination under Merit Rule 12.1 for violation of the state
code of conduct and IT policies. The appeal presents two
primary issues: (i) whether the Board had substantial
evidence to find Patterson violated the state code of conduct
and IT policies when her employee ID and password were used
in connection with a scheme to defraud DMS of over $13, 000
in unauthorized overtime pay; and (ii) whether DMS had just
cause for terminating Patterson's employment under Merit
Rule 12.1 when DMS found she violated said policies.
Appellant Krystal Patterson was an accounting specialist with
the Division of Management Services ("DMS") until
she was terminated on September 4, 2015. As an accounting
specialist, Patterson entered timekeeping and payroll records
for the Department's employees into the Payroll/Human
Resources Statewide Technology ("PHRST") system.
Her termination followed an investigation into apparent
fraudulent authorization of overtime pay for two of
DMS, employee overtime first is authorized by an accounting
specialist and then is entered into PHRST through a
"special exceptions" report. Each accounting
specialist entering the special report has to sign it with
their initials. Then, a different accounting specialist
conducting a quality assurance review signs their initials on
the same day, or by Wednesday of the same week. Accounting
specialists cannot enter their own overtime.
June 18, 2015, Patterson's supervisor, a Fiscal
Administrative Officer, emailed DMS Controller Morton,
relaying that Patterson complained the overtime policy was
not being enforced fairly. Patterson and another accounting
specialist, Mandi Rosado, were denied authorization for
overtime because they did not have the necessary
documentation. Before complaining to the supervisor,
Patterson entered Rosado's payroll information without
overtime and it was checked by quality control.
Later, Patterson went into PHRST's system to discover
Rosado was paid overtime without the authorization. Patterson
then told quality control that she believed Rosado's
payroll records were changed after it was approved by quality
control. Controller Morton confirmed later that Rosado
received an additional $293.63 in unauthorized overtime
during that pay period.
Suspicious of these entries, Morton discovered that Christie
Kahn, another accounting specialist, received up to $1, 100
of unauthorized overtime during the same period. The only and
last modifications made to Rosado's and Kahn's
timekeeping records were made through Patterson's
electronic signature. Morton then launched a full
investigation of the DMS payroll for FY 2014 & 2015.
investigation revealed Kahn alone received $13, 000 in
unauthorized overtime payments. The unauthorized overtime
payments to Kahn and Rosado were made under Patterson's
electronic signature for almost eight months, although there
was no record Patterson received unauthorized overtime or
other financial gain. Patterson testified that she never gave
her password to anyone, never wrote it down, and changed it
according to IT policies.
of the key issues in the investigation centered around the
PHRST security system. The passwords each accounting
specialist uses to enter overtime into PHRST are changed
every 90 days. Anyone attempting to sign in has three
attempts before they are locked out by the system. This was
designed to prevent unauthorized users from guessing
passwords. The PHRST system cannot, however, identify which
computer is used to sign into the system.
Morton's investigation revealed Patterson's desk had
sticky notes with what appeared to be passwords on them.
Patterson testified that these passwords were for other email
accounts. One note, however, read "Phrst" with
"Jaelyn26" underneath. Patterson could not explain
why "Phrst" was on that sticky note or what it
meant. When asked what her last PHRST password was, Patterson
testified it was Jaelyn08. Jaelyn is the name of
Patterson's daughter; the numbers associated with
Jaelyn's date of birth all were used for various
passwords posted at Patterson's desk. In addition to
numerals, PHRST passwords require a special character.
Patterson testified that she "[thought] you have to use
a dollar sign" as the special character. Patterson's
desk contained at least one password that included a dollar
Based on these findings, DMS recommended Patterson's
termination. DMS sent Patterson a letter advising her of her
right to file a grievance and participate in a
pre-termination hearing. The letter stated the investigation
revealed unauthorized overtime for Rosado and Kahn which
"violated the public trust and reflected unfavorably ...