Wednesday, December 17, 2008

...and now, we have the Pennsylvania Auditor General calling for elimination of bonuses at Pennsylvania STRS and other state agencies!

From John Curry, December 17, 2008
Pennsylvania Auditor General Jack Wagner, Troubled at PSERS' Bonuses, Renews Call for Elimination of Bonuses in State Government
Dec. 16, 2008
HARRISBURG, Pa., Dec 16, 2008 /PRNewswire-USNewswire via COMTEX/ -- Auditor General Jack Wagner said today that he was appalled by the Public School Employees' Retirement System's decision to award $854,000 in bonuses to 21 employees following the system's $1.8 billion investment losses this year. Wagner called on the PSERS board of directors to try to recover the bonuses from employees, and he again urged the General Assembly to pass legislation explicitly banning all bonuses in state government.
Noting that he was the first statewide official to call for complete abolition of bonuses in state government more than two years ago, Wagner said, "It's unconscionable that PSERS would award bonuses at a time when our nation is facing its greatest economic crisis since the Great Depression, our state is facing a budget deficit of almost $2 billion this fiscal year, and Pennsylvanians are grappling with rising unemployment and soaring energy, health and education expenses.
"In the private sector, bonuses are intended as a reward to employees who meet or exceed their performance goals and their employer meets its profit targets. Regardless of the cause, a public pension system that lost $1.8 billion has no business awarding bonuses to employees."
The Department of the Auditor General audited PSERS in 2006 and found that the pension system, which has 225,000 active and 157,000 retired members, was performing well but it was only 85 percent fully funded.
In a 2007 audit, Wagner faulted the Pennsylvania Higher Education Assistance Agency, the state's leading provider of loans and grants for college students, for giving $7.5 million in bonuses to hundreds of employees over a three-year period.
Wagner said his department was reviewing the possibility of auditing PSERS' contracts to determine how the pension fund could legally obligate itself to pay bonuses to employees during a period when its investments were losing money.
"There is no place in state government for bonuses," Wagner said. "I once again urge the General Assembly to protect taxpayer dollars by passing legislation that forever bans bonuses in state government."
Auditor General Jack Wagner is responsible for ensuring that all state money is spent legally and properly. He is the commonwealth's elected independent fiscal watchdog, conducting financial audits, performance audits, and special investigations. The Department of the Auditor General conducts approximately 5,000 audits per year. To learn more about the Department of the Auditor General, taxpayers are encouraged to visit the department's website at SOURCE Pennsylvania Department of the Auditor General
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