YELLOW SHEET
Office of the State Auditor of Missouri
Claire McCaskill
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YELLOW SHEET Office of the State Auditor of Missouri |
June 2, 2004
Report No. 2004-44
The following report is our review of the General Assembly and Supporting Functions - Senate.
In early 2003, eligible Senate employees were offered a retirement incentive which provided that if an employee agreed to retire on or before June 30, 2003, the Senate would pay the difference between what that individual would pay in health insurance premiums as an active employee and what a retired employee would pay for the same insurance. This benefit would continue until the individual turned sixty-five. Four Senate employees decided to accept this offer and retire. The Senate Administrator developed the plan as a cost-savings measure and initially projected a net cost savings of $62,000 and $86,000 in the years ended June 30, 2004 and 2005, respectively.
Although the Senate will realize some cost savings as a result of this plan, it does not appear the Senate had legal authority to offer this plan to its employees. The employees of the Senate participate in the same retirement and health care plans that cover the majority of other state employees. The authority for providing retirement and health care benefits and related incentives for state employee is codified in the statutes. Since the Senate is bound by these statutes, this retirement incentive plan was not properly authorized by law.
In the 2003 legislative session, legislation was passed and signed into law that offered a retirement incentive to all eligible state employees retiring between February 1, 2003, and September 1, 2003. This approved retirement incentive limits the health insurance subsidy to only five years, or until the employee becomes Medicare-eligible. Therefore, the Senate will not be required to pay any health insurance subsidies from its appropriations for the four employees during the first five years of their retirement. However, the Senate will be obligated to continue paying health insurance subsidies for these employees after the initial five years until the employees turn sixty-five years of age.
This will result in the Senate paying additional subsidies for these four employees for periods ranging from one to ten years. We estimate the Senate will pay over $76,000 in additional health insurance subsidies for these employees from its appropriations in years subsequent to the initial five-year period.
Offering a retirement incentive to its employees that was not made available to other state workers raises questions of inequity. In addition, this action has committed Senate officials to pay these subsidies from future Senate appropriations.
The Senate has two groups of employees, Senate support staff and senators' personal staff. The Senate does not have written job descriptions to document the responsibilities and
qualifications for many Senate support staff employment positions. Neither the Senate support staff nor the senators' personal staff prepare time sheets reporting hours worked and leave taken. Additionally, the Senate has no personnel policy for senators' personal staff and has no centralized record of leave earned and taken by these employees.
During the audit period, the Senate did not maintain leave records for the Senate Administrator or the Secretary of the Senate. It was noted that when the former Senate Administrator resigned in February 2002, he requested he be paid for 336 hours of accumulated annual leave (the maximum allowable) and that over 3,700 hours of accumulated sick leave be reported on his behalf to the retirement system to be used in calculating his service credits. Because of the lack of leave records kept by the Senate, the auditors were unable to determine whether these accumulated leave balances were accurate and whether the related payment and amount of sick leave reported to the retirement system were appropriate.
Leave records for some support staff are not submitted to the Senate human resources officer in a timely manner. In addition, 22 Senate employees had leave balances exceeding the maximum allowed by a total of 2,036 hours. As a result, the Senate was not in compliance with its policy regarding accumulated annual leave limits. Similar conditions were noted in our prior report.
Also as noted in previous audits, during the four years ended June 30, 2003, the Senate sold fixed assets to senators, their staff, or other parties for approximately $30,000. The original acquisition cost of the items sold totaled at least $85,000, though this amount is understated because cost information was not readily available for some items sold. The audit reported that a three-year old Senate vehicle acquired for $26,000 was sold to a senator for $13,000. The Senate could provide no documentation of how the sales price was determined. In another instance, one outgoing senator was allowed to purchase three computers even though this number exceeded the amount allowed by existing policy.
Although changes have been made to reduce and limit the extent of such property sales, the auditors again recommended all used or surplus property be disposed of through State Surplus Property. It was further recommended that if any used property items are sold through the Senate Administrator's office, the sales should be properly documented and comply with existing policy.
The audit also includes some matters related to the Senate's lack of a written procurement policy and fixed asset records and procedures, which the Senate should consider and take appropriate corrective action.
Senate officials agreed to implement several of the auditor's recommendations.