Nevada Officials Moving Quickly To Address Concerns With State Employee Contracting

CARSON CITY – Secretary of State Ross Miller said today an audit released last week examining current and former state employees winning contracts with state agencies contained “alarming findings.”

Miller asked for a response from Department of Administration Director Andrew Clinger on how the findings are going to be addressed. He made his comments at the Board of Examiners meeting, which is the panel that approves contracts entered into by the state. The board is made up of the governor, attorney general and secretary of state.

Miller said he wants to make sure the issues raised in the audit, including some contracts with current and former state employees that appear to involve excessively high rates of pay, are adequately addressed.

Clinger said a working group is being assembled to review current policies and procedures and will meet for the first time tomorrow. Representatives from the Attorney General’s office, the state Purchasing Division, the executive branch Internal Audit Division and others, will meet to develop recommendations to curb any further abuses, he said.

Clinger said he would like to bring some changes to the Board of Examiners by February for its approval, “to help prevent these sorts of violations from happening in the future.”

After the meeting, Clinger said the contracts are reviewed either by his agency or other state agencies that contract directly for the work, but there are no rules in place to deal with the issues raised in the Legislative Counsel Bureau audit reviewed by lawmakers.

A lot of the employees are hired under employment contracts approved by the Board of Examiners, he said. Once these “master service” agreements are approved by the board, the agencies can then contract with people individually and so the details of the employment agreements with current or former state employees do not come back to the board for review, Clinger said.

Clinger said he believes that the issue of excessive hours and pay identified in the audit involves a very small number of current and former state employees, but said he was disappointed by the findings.

“I was disappointed from the standpoint of given where we’re at with the budget crisis, and given where we’re at with public perception, I think it hurts our credibility going into session,” he said.

There may be justification for some of the rates of pay identified in the audit, but Clinger said at first look, the $350 an hour being paid to one former employee seems excessive.

The audit of Nevada state agencies using current and former employees as contractors identified numerous potential concerns, including a case of one worker seeking payment for 25 hours of work in one 24-hour day and another where a former state worker is now earning $350 an hour as a contractor versus $65 an hour in his state job.

The audit also found an example of a current state employee earning $62,590 as a contractor in fiscal years 2008 and 2009 while earning a state salary as well.

At least eight examples were identified where state employees working as contractors either did the contract work during regular state work hours or could not provide documentation to show they did the work on their own time.

The Legislative Commission’s Audit Subcommittee voted to turn the audit over to Attorney General Catherine Cortez Masto for a review of possible criminal violations.

The audit identified 250 current and former employees providing services to the state. These employees were paid a total of $11.6 million during fiscal years 2008 and 2009, the years covered by the review.

Audio clips:

Secretary of State Ross Miller says state agencies must correct issues found in audit:

121410Miller :12 the cracks again.”

Administration Director Andrew Clinger says he is working to put safeguards in place:

121410Clinger1 :15 deal with those.”

Clinger says the audit has hurt the state’s credibility going into the 2011 legislative session:

121410Clinger2 :13 going into session.”