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Public benefit from state consulting deals unclear

Some $36,000 was spent in short-term consulting contracts to members of Gov. Mike Leavitt's cabinet who left office last year.

State Legislative Auditor General Wayne Welsh said those contracts were legal and "appear to be justifiable," but what public benefit resulted is impossible to determine because the work was not documented."The consulting contracts that we have reviewed were a reasonable method to manage ad-ministrative transitions within the organizations; however, the value that the state received from the contracts remains uncertain," Welsh said in an audit released last week.

Auditors were unable to answer the central question posed by lawmakers: Were the pay-outs severance packages disguised as contracts or real consulting fees?

"We were unable to determine if these contracts were indeed compensation for work done or rather a monetary reward for past service," Welsh said.

The audit also raised the specter of a ballooning taxpayer liability for severance payments as Leavitt has increased the number of nonmerit, political appointees.

If all of the 383 political appointees eligible for severance pay were fired today, the state would face a $2.4 million bill.

That maximum exposure is expected to reach $3.9 million by the end of Leavitt's current term, and more than $5.8 million by 2004, if the governor were to serve a third term.

"It is unlikely that as long as the current governor remains in office there will be many severance payments made," Welsh said. But, "since a new governor may choose to make many personnel changes, it is important to consider the state's potential future exposure, which grows over time as employees accrue additional years of service."

State human resource management director Karen Suzuki-Okabe said auditors' estimates of future severance-payment liability are inflated.

She said it was important to remember that severance programs are common practice.

The half-dozen former Leavitt cabinet members who received consulting contracts were ineligible for severance pay, and none of them received it, according to the audit.

But auditors "found it troublesome that typical procedures of contractors being required to submit invoices regarding services rendered were not always followed by departments when administering contracts with their former directors."

In fact, only two of the former cabinet members submitted invoices for the payments they received.