Audit pans practice of rehiring retirees

The public calls it double dipping. State officials call it "post retirement re-employment."

Whatever the term, a legislative audit on state retirees returning to state employment has concluded that Utah's lax restrictions, coupled with the manipulation of state law's intent, has led to abusive practices.

The audit was requested by House Speaker Greg Curtis, R-Sandy, who is also co-chairman of the legislative committee that reviewed the report Wednesday.

The report found that while not rampant, the practice of "retiring" from an agency, then working part-time for six months there and resuming the same position at the end of that period, sometimes at a far higher salary, has occurred in three departments — Corrections, Public Safety and Alcoholic Beverage Control.

In some cases, departments bypassed the wait-time altogether, shuffling "retired" employees from one division to another.

State officials responding to the audit report largely defended the practice, saying it is legal and provides a way to retain valued employees.

"We have not been knowingly or intentionally violating the statute," said Utah Department of Corrections official Christine Mitchell, who apologized if they had.

Kenneth Wynn, director of the Utah Department of Alcoholic Beverage Control, also offered his regrets. "It was not our intent to manipulate the law," Wynn said.

The audit says state law requires that the retirement benefit be suspended and that the employer resume contributions unless exceptions are met, including: The retiree goes to work for another agency, the retiree is retired for at least six months and returns to the same agency, or the retiree is employed for fewer than 20 hours per week.

While the statute allows part-time or full-time work after that "six-month cooling-off period," auditors said it wasn't intended as a "bridge" to return to full-time work in the same department.

Examples of concerns raised in the audit include:

• Since 2000, 12 retirees returned to full-time positions at DABC after the six-month cooling-off period, the majority in their same job positions. At least one was hired at a higher-level position with a salary increase.

• Employees move freely between the Department of Corrections and the Board of Pardons. In early 2002, an employee left Corrections for a position with the Pardons Board, working there seven months. He then returned to Corrections for 23 days, retired and then immediately returned to his original job at the board. As a side note, Corrections observed it had "saved" $72,000 by encouraging this employee to retire. Because of the savings, the employee was given an $8,000 retirement incentive.