(The Center Square) – New Orleans spent nearly $51 million on overtime, a cost that helped fuel the city’s recent budget crisis, according to a new review from the Louisiana Legislative Auditor.
The report comes after months of concern over New Orleans’ finances. The city’s cash crisis was tied to several problems, including unbudgeted overtime, weaker-than-expected revenue and questions about whether city officials gave clear warnings about the depth of the problem.
The report looked at city payroll spending from 2022 through 2025. It was done as part of state oversight connected to New Orleans’ approval to issue up to $125 million in short-term notes to help cover payroll-related costs.
The auditor did not allege fraud or say the payments were improper. But the report shows that overtime became a major and fast-growing expense for the city.
In 2025, New Orleans paid $409.9 million in gross earnings to 6,975 employees. That includes full-time, part-time, temporary and former employees who received payments during the year.
Of that total, $50.9 million was overtime.
That overtime figure is significant because the city’s budget crisis was partly tied to unbudgeted payroll costs. Overtime spending continued to rise without sufficient funds set aside to cover it. The 2025 cash crunch was also driven in part by the delay of about $120 million in expected FEMA funding tied to the Joint Infrastructure Recovery Request (JIRR) program.
From 2022 to 2025, total payroll grew by about 29%. Overtime grew much faster, rising about 80%, from $28.2 million to $50.9 million. Most of the overtime was concentrated in public safety.
The New Orleans Police Department accounted for 57% of city overtime, or about $29.1 million. The Fire Department accounted for 16%, or about $8.1 million, and the Health Department, including Emergency Medical Services, accounted for about $4.3 million.
Together, police, fire and health/EMS made up about 82% of all city overtime spending.
The auditor also flagged retention payments and terminal leave payouts as costs the city needs to better plan for.
In 2025, 301 employees received $1.63 million in retention payments. But the larger wave came in 2026, when employees became eligible for payments tied to three-year service requirements under programs created in 2022 and 2023.
As of Feb. 28, 792 employees had received $9.5 million in retention payments in 2026. Almost all of them — 789 — were police employees. Three were EMS employees.
The auditor recommended stronger overtime controls, improved payroll planning and coding, more rigorous timesheet reviews and regular reporting to city leaders and the City Council. It also called for better planning of retention bonuses and terminal leave payouts.
In its response, the Moreno administration said it has already started making changes.
“Many of the recommendations have already been implemented or are currently underway as part of our broader effort to bring greater discipline, transparency, and accountability to City operations,” the administrion said.
The administration said overtime spending fell 44% in the first quarter of 2026 compared with the same period in 2025. Overtime dropped from $18.3 million to $10.3 million.
The city also said Mardi Gras overtime fell by about $1.6 million, from $8.1 million in 2025 to $6.5 million in 2026.
“The administration said overtime spending has been significantly reduced through updated tracking and management.”
It said it revised the city’s overtime policy in January, required departments to submit 90-day projections, began monthly reporting to the City Council and launched a public overtime dashboard.
On retention payments, the Moreno administration said the prior administration “neglected to budget for or have available funds for the 2025 retention bonuses.”
