Audit questions severance payments

Transportation department gave $147,300 too much to 3 top-level aides, report says

July 15, 2006|By GREG GARLAND | GREG GARLAND,SUN REPORTER

The Maryland Department of Transportation paid three senior-level employees $147,300 more in severance pay than its policies called for, including $65,000 to one person who spent only four months on the job, according to a report released yesterday by legislative auditors.

Another employee, who left under an ethical cloud, stayed on the payroll for more than a month after resigning and collected $13,000 more than she would have received if transportation officials had followed state regulations and normal agency policies, auditors found.

Transportation Secretary Robert L. Flanagan said the severance payments were within his discretion to authorize and were in the agency's best interests.

The employee paid $65,000 had been hired by the Glendening administration for a position in the Maryland Transit Administration two weeks before Gov. Robert L. Ehrlich Jr. took office in January 2003, Flanagan said.

"That person was terminated," Flanagan said. "We didn't think he was the right person for the job and made a change."

Flanagan said a "letter offer" by Robert L. Smith, then head of the MTA, had made a commitment to keep the new person on for a certain period of time.

Flanagan said he approved a severance payment of a half-year's salary to resolve the matter.

"We felt we were bound by an offer made by the prior MTA administrator," Flanagan said.

Pointing to state laws protecting the confidentiality of personnel files, transportation officials would not release a copy of the "letter offer" or provide details of the employment agreement. The letter is not mentioned in the audit.

Flanagan said that it is sometimes necessary to offer an employment agreement to lure people with expertise in specialized fields to take positions in state government.

The employee involved, who was not identified, would have been entitled to only $10,000 severance pay if the the department had followed normal rules, auditors wrote.

Auditors also said that the department "lacked documentation to substantiate" that Flanagan had approved the payment.

In a written response to auditors, department officials said that human resources policy allows the transportation secretary to authorize up to six months' severance pay for management employees who resign.

A second case highlighted by auditors involved the payment of $13,000 to an employee "for accumulated compensatory leave that exceeded the limit provided by state regulations."

The employee also received $32,700 in severance and compensation for unused vacation and personal leave, auditors wrote

The employee, Marsha Kaiser, had been the focus of a special audit in May 2005 that raised questions about her oversight of $3.3 million in consulting work done for the state by a company that employs her husband.

Auditors had written that the work was poorly documented and that her role in overseeing the work appeared to violate state ethics laws governing conflicts of interest.

Kaiser was not named in either of the audit reports but was identified by other sources and in a settlement of the ethics complaint with a reprimand.

She resigned effective July 15, 2005, but was allowed to stay on the state payroll until Aug. 26 because of compensatory time she had accrued, according to the audit.

State regulations generally limit the payment of unused compensatory leave to five days, auditors wrote, although the transportation secretary can authorize more "under extraordinary circumstances."

In its written response to auditors, department officials said: "The employee was allowed to remain on payroll using compensatory leave, which is at the Secretary's discretion."

They added that the department is drafting written policies and procedures to govern when an employee would qualify for additional paid compensatory time beyond five days.

In an interview, Flanagan did not refer to Kaiser by name but said he was trying to be fair to an employee who became swept up in an ethics dispute because of honest mistakes made by the department in hiring her.

"This person was hired under circumstances where it should have been apparent that she could not do the job without getting involved" with her husband's employer, Flanagan said.

greg.garland@baltsun.com

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