Alcohol board officials reject recommendations on rehiring of 'retired' workers

Liquor control officials are divided over an audit that shows its staffers may be manipulating hiring policies by holding open slots to allow retired colleagues to reclaim their old jobs.

A legislative audit released earlier this month showed that 12 of 18 retirees in the Department of Alcoholic Beverage Control returned to the same job immediately after their six-month waiting period had expired. In addition, the department did not recruit for at least seven of the positions during the waiting periods, and when it did advertise, from 25 to 198 outsiders unsuccessfully applied.

Although auditors called on the department to reconsider its rehiring practices, liquor commission chair Larry Lunt said that responsibility rests elsewhere.

"If there's a problem that needs to be fixed," said Lunt, who oversees the department, "then it's up the Legislature to fix it."

Department Director Kenneth Wynn rejected the conclusions of the audit, during a meeting of the Alcoholic Beverage Control Commission last week, saying his agency has complied with all applicable state laws.

But commissioner Kathryn Balmforth questioned whether rehiring policies should be changed to stop workers from double-dipping -- collecting retirement benefits, along with salaries from their rehired positions.

"Retirement means retirement," she said. "Why can these employees come back, and collect what amounts to a huge pay raise?"

An audit of the state retirement system showed that the Department of Corrections had manipulated rehiring polices more than any other agency, allowing 35 retired correctional workers to be rehired. Two legislative committees are looking at the rehiring issue, but no proposals have surfaced.

At the liquor control agency, auditors disagreed with department claims that most rehired retirees earned only midrange salaries.

"We reviewed the rehires and found that almost half had no change in salary and one was rehired at a higher-level position with a salary increase," auditors noted in the report by the Office of the Utah Legislative Auditor General. "Only half of the rehired retirees were brought back at lower salaries, the other half were brought back at the same or a higher salary."

Auditors also discounted claims that rehiring retirees saves money given that the state doesn't have to pay insurance premiums and few if any training costs are incurred when retirees are rehired. Auditors countered that "the cost to the retirement system outweighs the savings to the department."

Director Wynn said that many of the employees were forced to retire after lawmakers ended a 20-year-old policy last year that had allowed state employees to trade eight hours of unused sick leave for a month of post-retirement medical benefits.

The Utah Public Employee Association sued to block elements of the legislation that ended the benefits over time. But in February, the Utah Supreme Court upheld lawmakers' right to phase out the benefits.

In 1995, legislators changed state law to allow Utah workers to retire and then apply for other jobs in state government. The retirees were expected to pursue jobs in different agencies after a six-month cooling off period.

Rehired retirees can earn as much as 170 percent of their pre-retirement salary, including a pension and a 401(k) contribution.