State audit shows ‘double dipping’; AG to look for criminal violations

By Cy Ryan

Wednesday, Dec. 8, 2010 | 2:30 p.m.

CARSON CITY – Some state workers are double dipping and the state Attorney General’s Office has been called to determine if criminal violations have taken place.

A legislative audit released Wednesday detailed a number of abuses involving existing state workers who were hired as a consultant by another agency and also cases where former state employees were put on a contract at excessive pay.

The audit shows 250 current or former state employees were hired as consultants by state agencies and were paid $11.6 million during fiscal 2008-2009. Of the total, 63 were existing state workers who gained those contracts.

Assemblywoman and Sen.-elect Sheila Leslie of Reno said there might be “criminal activity” and the attorney general should be called in to investigate. Her audit subcommittee agreed and voted to send the findings to the attorney general’s office.

Assemblyman Joseph Hogan, D-Las Vegas, said “Some of these things are a bit shocking.”

Legislative Auditor Eugene Allara said 23 contracts were examined and the examination “found eight employees either performed contractor activities during their regular state work hours or did not provide adequate documentation to verify contractor activities were performed on their own time.”

One example found an existing state worker, on contract with another agency, was paid for 25 hours in one day. Another used eight hours of family sick leave on a day and was paid for consulting services at a rate of $250 per hour for the same day at another agency.

The hourly rate paid was excessive in some cases, according to the audit.

One agency contracted with a former worker at a rate of $350 per hour versus the $65 per hour cost to the state as an employee. Another worker had a contract rate of $150 per hour compared to a $71 per hour cost to the state as an employee.

The audit said one current employee was paid $62,590 for psychological services in addition to her state salary for two years.

One individual under contract was paid $121 an hour compared to $60 an hour cost to the state as an employee. This person retired and returned to the same agency on contract and received $117,500 during a two-year period. He also was paid $25,150 by another agency during the same period.

“The state does not have adequate controls to prevent current employees from performing contractor activities during their state work hours,” Allara said.

There is a one-year cooling off period for former state employees before they can go back to work for the state.

State Administration Director Andrew Clinger agreed, saying consultant contracts “were out of hand.” He said he is naming a task force to tighten controls.

The 2009 Legislature approved a bill requiring that such contracts be approved by the Interim Finance Committee, but the audit found the finance committee received little information.

Mike Willden, director of the state Department of Health and Human Services, told the audit committee his office reviews every contract and he doesn’t think there is fraud. He said psychiatrists or psychologists are hired full-time for the state, but then contract for weekend work at another agency.

The state receives federal grants for a specific period of time. Willden said it was more effective “to hire contract workers than to employ a full-time state worker.”

Leslie, D-Reno, said the audit showed what many believed were abuses in the hiring of consultants. She said a bill is being prepared for the 2011 Legislature by Assemblywoman Debbie Smith, D-Sparks, to tighten the control over these contracts.

Clinger is to report back by March 8 on changes that have been made.