July 30, 2014

Management of UW payroll to be examined

A legislative committee is scheduled to hold a hearing today (Tuesday) to discuss mismanagement at the University of Wisconsin payroll and benefit processing. The nonpartisan Legislative Audit Bureau (LAB) is being asked to conduct a comprehensive review after an audit released earlier this month found the UW had made over-payments in the last two years for health insurance premiums and retirement benefits totaling $33 million.

AUDIO: Cowles :31

Senator Robert Cowles (R-Allouez) is a co-chair of the legislative audit committee. “We’ve had a series of problems over the last decade where there’s been mismanagement. They’ve got a lot of fancy budget people over there. Let’s manage these monies carefully. There’s not enough there to waste.”

UW System President Kevin Reilly says he’s “troubled” and “embarrassed” by the mishap and he is going to hire an independent auditor to figure out how millions of taxpayer dollars were misspent.

Approximately $15.4 million was paid for health insurance of terminated employees. In addition, the audit revealed the UW overpaid employee retirement benefits by $17.5 million in 2011. After the audit found the errors, the state retirement system credited the UW for the retirement overpayment. However, the university has not recovered the over-payments of health insurance.

Cowles urges Reilly to “save his money” and let LAB do its job. “We have an independent audit bureau; he doesn’t need to pay someone. They caused the problem. It’s a little like the fox watching the hen house. He doesn’t need to do this.”

Cowles says the audit bureau will find the problems and make recommendations to rectify them. He says it’s possible the problem is much deeper than originally thought after reviewing a small sampling.

AUDIO: Vinehout 1:03

Kathleen Vinehout (D-Alma), who is on the audit committee, agrees. In 2006, an audit revealed the  state paid over $28 million on an integrated technology system that was never used. We look at that and then we look at what happened right now — and this was just a small sample. Lord only knows what we’ll find when we actually go in there and do an audit.”

They’ll look at the financial aspect as well as the management. The errors were part of the UW’s implementation of a new statewide human service computer network.

Vinehout wrote in her column last week, “One area that might be explored by committee members is the effect of Act 10 on the ability of managers to adequately supervise programming staff.”

Meanwhile, Steve Nass (R-Whitewater), the head of the Wisconsin Assembly Colleges Committee, said last week that this audit calls into question the performance of UW System Vice President Michael Morgan and he needs to go. Morgan is being considered as the university’s permanent vice president for administration and fiscal affairs.

NOTE: The co-chairs — Senator Robert Cowles and Representative Samantha Kerkman (R-Randall) — have scheduled a public hearing before the Joint Legislative Audit Committee on Tuesday, January 22 at 1:00 pm in Room 411 South of the State Capitol. At this hearing, the Committee will hear testimony on these concerns and discuss the parameters for the proposed audit.