Auditors Discover ‘Conflict of Interest’, Overpayments at UConn Health
HARTFORD, CT — The University of Connecticut Health Center increased the salaries of employees who approved a consulting contract for the interim head of the center, rehired retired employees, and paid employees more than they should have been compensated under their contracts, according to the Auditors of Public Accounts.
Auditors found that UConn Health, which includes John Dempsey Hospital, the School of Medicine, the School of Dental Medicine, and related research laboratories, increased the salaries of employees who signed off on a $562,500 contract with a consulting company that employed UConn Health Center Chief Executive Officer Andrew Agwunobi in 2014.
“Having a person who also works for a consultant prepare and approve an annual performance evaluation and salary increases of UConn Health employees who authorized payments to that consultant created a risk that the UConn Health employees may have felt compelled to authorize those payments,” the auditors wrote.
In 2014, Agwunobi, who isn’t mentioned by name in the report, took over as interim executive vice president for Health Affairs. He had been a director with Berkeley Research Group, which had a consulting contract with UConn Health. Instead of ending the contract with the consulting company, UConn Health paid the consulting company $562,500 more for Agwunobi to take over the responsibilities of interim executive vice president.
“UConn Health did not adequately consider the potential conflict of interest,” the auditor’s noted in their report.
UConn Health officials didn’t disagree with the finding. However, they pointed out that the performance review for the employees who approved the increase in the consulting contract came “at the tail of the engagement when discussions were already underway to retain him as a full-time UConn Health employee.”
Also, UConn Health officials pointed out that “the raises approved by the consultant were within the range of raises for all eligible managerial employees at that time.”
The auditors also found that UConn Health employed 167 retired state employees between July 1, 2011, through June 30, 2016.
The auditors reviewed the records of eight of those employees and found all eight retirees were employed for more than two, 120-day periods and all eight retirees had hourly wages exceeding 75 percent of their pre-retirement salary or the minimum salary of a position different than their former job.
That would violate Gov. M. Jodi Rell’s Executive Order 27-A, which was reaffirmed by Gov. Dannel P. Malloy, limiting the rehire of retirees to no more than two, 120-day periods for any individual retiree. It also limited the pay to 75 percent of their pre-retirement salary.
“The violation places additional burdens on the state retirement system because it encourages employees to retire early for free health insurance and pension benefits while maintaining a reduced work schedule,” the auditor’s wrote. “The State Comptroller’s Office could not properly suspend the employees’ retirement benefits, because UConn Health incorrectly coded their re-employment in Core-CT.”
UConn Health officials said they don’t believe they have to comply with the executive order that limits a retiree’s rehire to two, 120-day periods.
“Such practice is permitted by University policy, which governs UConn Health in this area and reflects the University’s need to extend these appointments in certain circumstances including to address patient care needs,” UConn Health officials responded. “The applicable University policy also permits these 8 individuals to be paid hourly wages exceeding 75 percent of their pre-retirement salaries, and UConn Health notes that all 8 such individuals are unclassified employees and seven of the eight were re-employed prior to the date that Executive Order 27-A went into effect. The eighth employee in fact did have her salary reduced to 75 percent of her pre-retirement wage.”
The auditors disagree.
In their concluding note they pointed out that Rell’s executive order “does not exempt employees who retired from state service prior to July 1, 2009.”
Also in their conclusion, the auditors pointed out what they felt to be extraordinarily long periods of post-retirement employment.
The auditors also found that UConn Health paid employees more compensatory time than they were owed under their contracts, and they said, “UConn Health did not have adequate controls to enforce its policy on re-employment of these retirees after the transition to new management.”