• Rehired employees told auditors the retire/rehire practice is sometimes used as an incentive program. In one case, an employee was given the options of taking a promotion or retiring and returning at a lower salary. The employee chose to retire because his annual compensation went from $77,000 to an estimated $133,000 with salary and retirement pay. Corrections since 1995 has allowed 35 employees to bypass post-retirement restrictions and receive salary and retirement benefits concurrently.

The result, the audit said, is an increase in "overall costs."

State agency officials by and large strongly disagreed with the report's conclusions, pointing out there was little if any legislative history to establish lawmakers' intent regarding the restrictions.

DABC head Wynn said auditors were attempting to "divine" lawmakers' intent, while Daniel D. Anderson, legal counsel for the Utah Retirement System, questioned the "tenor" of the report.

"The report emphasizes the worst-case scenarios without giving any context or balance. Not every rehired retiree is an abusive case," Anderson wrote.

Others said the practice assists state agencies in keeping valued employees.

"Without the retire-rehire policy that allows staff to retire if they change divi- sions within the department, most of these employees would leave our departments at 20 years, at a great loss to the state," wrote Scott Carver, Corrections executive director.

Also at issue were the auditors' conclusions that such practices lead to increased costs — costs that agency officials say aren't clearly defined.

Curtis questioned state retirement officials whether this practice on its face benefits the public or employee morale. "It it a good policy? I'm concerned about a morale issue," Curtis said.

The audit subcommittee voted to send the audit for further discussion to two legislative retirement committees.

The audit report said legislators should consider extending the "cooling-off period" from six months to 12 months, or eliminating the ability to return to the same department without suspension of retirement benefits.

Readers can view the audit at www.le.utah.gov/audit/newaudit.htm.

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Contributing: Geoff Fattah

E-mail: amyjoi@desnews.com