Posted on Wed, Dec. 06, 2006

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DOT audit shows state agency with money to burn

By CINDI ROSS SCOPPE

Associate Editor

I’M NOT GOING to pretend that the $75,000 secretary is the biggest abuse that auditors found at the Department of Transportation. It’s peanuts, actually.

But my eyes glaze over when I read page after page of examples that the Legislative Audit Council unearthed of state and federal laws that were ignored, of tens of millions of dollars squandered, of several times that much mismanaged. The figures don’t seem real, even for a budget wonk like me. And there are just too many examples of arrogant mismanagement to keep them all straight.

What is real and easy to understand — and emblematic of the larger problem — is an agency that keeps complaining that it can’t afford to patch the potholes while it so grossly overpays a few selected people.

The secretary didn’t actually make $75,000 — just like the “clerical specialist” cited in another part of the audit didn’t actually make $166,400. Neither worked full-time for a full year; that’s what taxpayers would have shelled out for their full-time service. And the secretary probably wasn’t even one person.

According to the audit, the Transportation Department paid an unnamed “engineering consulting firm” $35.95 per hour to provide secretarial staff while a state employee — who made $17.82 an hour — was on medical leave. Since the regular secretary was only out for three months, the replacement cost was only about $17,000, not $75,000.

That consulting firm — whose contract called for such services as “staff augmentation” and “assistance with future department programs” — also provided the state with the services of several former state employees:

• Taxpayers spent $120.07 per hour to procure the services of the agency’s former human resources director, who went to work for the consulting firm. Auditors couldn’t figure out how many hours she worked, and she only got to pocket a quarter of the money, but a full-time employee making that hourly rate would take home about $250,000 a year.

• Taxpayers spent the same $120.07-an-hour rate to procure the services of two recently retired state employees “to train less experienced staff and develop a process guide for the C-program.” Those employees had been making $55 an hour when they retired. No word on why they weren’t asked to perform such institutional-knowledge tasks before they retired.

The consulting firm’s project director reported directly to the executive director and was paid $10.42 more than the maximum $43 per hour that the agency’s rules allow for such consultants.

Auditors noted that the consulting firm charged 155 percent overhead and 9.5 percent profit margin, meaning the state paid “approximately twice as much as necessary” for these services. So they made the following “duh” recommendation: The agency “should hire temporary employees by the most cost-effective means, and avoid paying overhead costs.”

Unfortunately, other parts of the audit suggest that Transportation officials might not do any better if they bypassed the middleman.

Auditors found that 18 “temporary employees” were paid annualized salaries of $50,000 or more — and several of them worked enough hours to actually pull down $40,000, $50,000, even $100,000 a year.

Eleven temps who were classified as “clerical assistants” had hourly pay rates that worked out to the annualized equivalent of as much as $166,400. So you and I have been paying someone $80 an hour to perform “routine administrative support or clerical duties” and “follow detailed instructions and procedures to perform routine or repetitive duties of limited complexity”?

Transportation officials said several of the temps weren’t really “clerical assistants” and pledged to do better classifying them in the future, but the audit noted that “since there were no written position descriptions, there is no way to make that determination.” Not to worry. Executive Director Elizabeth Mabry assured us in her written response that “when SCDOT hires temporary employees, a highly qualified applicant is selected to fill the position.”

The audit doesn’t name any of these misclassified super-secretaries, but The Greenville News’ Tim Smith has provided several names that match up to the audit:

• Between his stints on the Transportation Commission, Bobby Jones was paid more than $111,000 in 2000-2004 — at a relatively paltry $26 per hour — to essentially serve as Ms. Mabry’s personal secretary. He sent congratulations on anniversaries and births, condolences, get-well wishes and flattering letters to legislators in Ms. Mabry's name.

• Mr. Jones’ daughter was hired in 1999 as a temp and remained in that status as recently as 2005, when she was being paid $50,457.

• Former lobbyist Fred Teeter Jr., a longtime friend and political ally of Transportation Commissioner Marion Carnell, was employed at an annual rate of $72,000 to perform “customer service liaison duties” in a district office. Officials said at the time that they expected his actual pay to be only about half that, as he was working 20 hours a week.

Auditors said these direct hires “give the appearance of favoritism,” which sort of goes without saying, although Ms. Mabry managed to deny it adamantly.

As for paying double for help through the consulting contract, the auditors said they “could not determine any reason that SCDOT would choose to hire employees” that way.

My theory — it’s easier to pick up the phone and ask your overpaid pal at the consulting firm to fill your needs; and when you’ve got no one to answer to, why not do the easy thing? — is bolstered by Ms. Mabry’s Freudian explanation. The services provided by the consulting firm temps, she wrote, “were advantageous to the agency and the staff.”

No mention of their being advantageous to the taxpayers.

Ms. Scoppe can be reached at cscoppe@thestate.com or at (803) 771-8571.