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Nevada trims contracts with current, former state workers

CARSON CITY — State agencies appear to have dramatically reduced their frequency of contracting with current and former employees since a law regulating the practice took effect in July 2011.

Documents obtained from the Administration Department show that agencies have entered into only 33 such contracts since the rules approved by the 2011 Legislature became effective.

That is a small number compared with the 250 such contracts reviewed by legislative auditors in a report released in December 2010 that covered the years 2008 and 2009.

The audit identified numerous potential concerns with the contracting process, including a case of one person seeking payment for 25 hours of work in one 24-hour day and another where a current state employee earned $62,590 as a contractor in fiscal years 2008 and 2009 while earning a state salary as well.

The audit showed that the Legislature was kept in the dark about much of the contract work by state employees because the Administration Department used a narrow definition of the term “consultant” and did not provide information to lawmakers sought from legislation passed in 2009.

The audit drove the 2011 changes to the contracting process.

Although state agencies can still enter into such contracts to fill specific needs, the process is more transparent. The Board of Examiners, made up of Gov. Brian Sandoval, Attorney General Catherine Cortez Masto and Secretary of State Ross Miller, must review and authorize such agreements at regular public meetings.

Such contracts can only be approved if certain circumstances are found to exist, such as situations where a short-term or unusual economic circumstance exists for an agency requiring such employment. Former employees who left state service within two years are covered by the contracting rules.

State Sen. Debbie Smith, D-Sparks, who sponsored the legislation, said the new rules appear to be achieving the goals of transparency and judicious use of state dollars.

“I do think it is working,” she said. “It does a good job of making sure we are utilizing the employees that we have.”

Smith said she is pleased the Sandoval administration worked with lawmakers to craft the necessary changes.

There are times when a former state worker’s expertise is necessary and valuable, but it is important for state agencies to train staff to take over duties when someone leaves, she said.

Geoffrey Lawrence, deputy policy director for the Nevada Policy Research Institute, a conservative think tank based in Las Vegas, welcomed the news that the contracting levels have dropped off.

“There was some obvious abuse before the new law was put into effect,” he said. “Essentially, if an employee could get friendly enough with his or her boss to convince them to agree to a contracting arrangement, the employee could be paid twice with taxpayer dollars for performing the same amount of work.”

The new accountability measures are helping to ensure that taxpayer resources aren’t wastefully showered on a few workers who figure out how to game the system, Lawrence said.

“Lawmakers should continue to remain vigilant, however, to ensure the problem has been solved, and not simply been swept under the rug by keeping new contract arrangements off the official books,” he said.

Since the rules took effect, agencies such as the Agency for Nuclear Projects, the Tourism Commission and the military office have contracted with current or former employees.

More than two dozen contracts have been formalized in the first 18 months of the law, all of which are put before the state Board of Examiners for review and approval. Another half dozen have been approved this year but a comprehensive report has not been generated.

The Board of Examiners has two requests on its Tuesday agenda.

Some contracts last only a few months; others can last as long as two years.

The contracts come from nearly every major state agency.

Joe Strolin, a former Nuclear Project Agency employee, was hired to continue its oversight of Yucca Mountain. The contract, entered into in fall 2011, is paying Strolin $50 an hour.

Dr. Blanche Bonnick, a former state employee, was contracted as a senior physician at the Rawson-Neal Psychiatric Hospital in Las Vegas in 2012. She was listed as earning just under $154 an hour, a rate identified as consistent with those providing similar services.

The Education Department in 2012 contracted with former administrator Gary Horton to help with distributive school account payments at a rate of $60 an hour.

The Public Utilities Commission in 2012 contracted with former employee Samuel Thompson as a fact-finder at a rate of $100 per hour.

The 2010 audit by the Legislative Counsel Bureau’s audit division found numerous concerns with current and former state employees being hired as contractors to work for state agencies, sometimes at a much higher rate of pay. Many of the contracts were not clearly disclosed by state agencies.

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

The attorney general’s office investigated some of the findings but did not take action against any employee.

Contact Capital Bureau reporter Sean Whaley at swhaley@reviewjournal.com or 775-687-3900. Follow him on Twitter @seanw801.

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