State Is Taking Advantage of Ghost Jobs on Payroll, Audit Finds

State agencies are exploiting loopholes to keep so-called ghost employees on the government payroll and are spending the unused salaries, a new audit suggests.

Republican lawmakers said Tuesday that the report by the Bureau of State Audits vindicates their contention that “phantom jobs” continue to haunt state payrolls. For several years, GOP lawmakers have been pushing for such jobs to be eliminated and for hundreds of millions of dollars in unspent salaries to be redirected to the general fund.

In one finding of the state audit, a review of five large agencies in the 2000-01 fiscal year, vacancies beyond normal attrition totaled 2,400 jobs with combined salaries of $116 million.

Senate Republican Leader Jim Brulte of Rancho Cucamonga said he may sponsor legislation to ensure that state agencies receive salary money, even for budgeted positions, only when the positions are filled.

“It conforms with what we’ve been saying, that the Davis administration was playing a shell game with vacant positions to create a bureaucratic slush fund,” Brulte said. “Frankly, I find it offensive.”

Finance Director Tim Gage said the Davis administration has eliminated 6,600 vacant positions and cut 5% from agencies’ salary allocations to account for unfilled jobs. Most of the unspent money is used for overtime or temporary workers to staff the unfilled spots, he said.

“It is overtime for the correctional officers who supervise our prisons, and for contract nurses who provide health care to children and services to the mentally ill,” Gage said in a statement.

The audit said that existing laws fail to address the reasons that certain positions remain empty for long periods of time.

In some cases, the audit said, unspent salaries are used for authorized purposes that have not been fully funded, including covering salaries for hard-to-fill jobs and giving overtime and merit pay to some employees.

The practice of keeping phantom employees dates to the recession of the early 1990s, when agency officials began using unspent salaries to help balance their diminished budgets.

In 2000, lawmakers made it tougher for agency officials to avoid eliminating positions as they empty, but departments have continued to circumvent the law and preserve the vacant slots, according to the audit.

An analysis of 50 large state departments found that agencies held open vacant slots by moving employees among positions to make them appear filled. The number of employee transfers rose 53% the year after the Legislature cut the amount of time a position could remain vacant before being abolished, from nine months to six.

An audit of five specific departments found that the Department of Industrial Relations, for example, moved one employee 10 times within 16 months to save six empty positions from elimination.

The same study found that at least 89% of the transactions from July 1, 1999, to June 30, 2001, were performed to save vacant positions, according to the audit. Not only did staff acknowledge in many cases that they were shifting employees among positions to preserve vacant slots, but they also acknowledged spending significant time and resources on the task.

The Employment Development Department reported spending 1,840 hours--the equivalent of one employee--during the last fiscal year to monitor and preserve empty positions.

State Auditor Elaine M. Howle recommended that the Department of Finance issue an explicit policy prohibiting agencies from shifting employees among positions to preserve vacant slots and also directing agencies to track and annually report the uses of unspent salaries.

Finance officials have yet to establish an ongoing monitoring program, the audit concluded, nor does a method exist to provide the Legislature with an up-to-date, reliable count of vacancies.