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Audit finds public double dipping a plenty in Wisconsin

By   /   December 14, 2012  /   1 Comment

By Ryan Ekvall | Wisconsin Reporter

MADISON — Thousands of Wisconsin public employees have padded their wallets by retiring, collecting pension payments and then coming back to work for the government.

And it appears the workers pulled in a combined millions of dollars more, compliments the taxpayer.

The practice, known colloquially as “double dipping,” is the subject of an audit conducted by the nonpartisan Legislative Audit Bureau.

Audit finds thousands of cases of double-dipping among Wisconsin’s public sector.

The audit, released Friday, found state agencies hired 2,783 public employees after they had retired between 2007 and 2011. Local governments and schools hired 2,599 Wisconsin Retirement System annuitants from January 2011 through March 2012. And “28 state agencies directly paid $1.7 million to 266 individuals who terminated employment from January 2007 through December 2011, began receiving a WRS annuity, and then contracted to provide goods and services at some point through June 2012.”

Twelve of those contractors were paid $25,000 or more in addition to collecting their pensions.

The thousands of known double-dippers could be just the tip of the iceberg.

According to the audit bureau, the audit looked only at retirees from within a limited time frame, so there may be many thousands more double-dippers in Wisconsin than reported.

The audit uncovered oversight and accountability problems within the Department of Employee Trust Funds that makes tracking double-dippers difficult.

“ETF does not have access to payroll systems that would allow it to systematically monitor all employers and employees. Therefore, it initiates investigations only when it believes that pension laws may have been violated,” the auditors wrote.

A potential mitigating factor is local governments reported that the expected duration of employment was 12 months or less for 46.8 percent of the 918 retired employees.  School districts reported that the expected duration of employment for 39.3 percent of the 1,681 annuitants they hired was 12 months or less.

The Madison Metropolitan School District, one of the largest districts in the state, did not respond to the survey. But 82 percent of local and state governments did respond, including Milwaukee Public Schools and the City of Madison, two of the largest public employers in the state.

The state-commissioned sanctioned watchers don’t appear to be doing much watching. ETF conducted 19 audits in roughly three years. Only four cases ended in the conclusion that “good faith terminations” had not occurred.

Pension laws state that public employees may be rehired with the same agency or another governmental agency after a 30-day separation period and receive their pensions in addition to paychecks. Abuses of these so-called “good faith terminations” are difficult to prove.

“For example, individuals may indicate in their resignation letters that they desire to return to work, and their employers may subsequently hire them after the 30-day separation period,” the auditors find.

“In these situations involving unenforceable agreements, ETF determines there is insufficient information to conclude that good-faith terminations did not occur.”

Contact Ryan Ekvall at rekvall@wisconsinreporter.com

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Ryan Ekvall

  • Jack Lohman

    I have good friends of both the Leftie and Rightie variety, but most have little patience when it comes to taxpayer ripoffs. In Wisconsin we have a Government Accountability Board. They should be given the authority and power to investigate and establish rules for employment. Sorry Scott.