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February 3, 2017

Audit: 6-figure payouts made to outgoing state workers

The state made numerous six-figure payments to departing employees to avoid lawsuits or prevent them from speaking about their work for the state, according to a 2016 annual report from the state Auditors of Public Accounts to the General Assembly.

None of the payments were part of a settlement agreement or approved by the governor or attorney general, a violation of state law.

During the course of the audits, Auditor John Geragosian said, it was found that “large payments” were made to departing employees. Upon further investigation and after discussions with agency staff, auditors determined the payments, “many of which were in excess of $100,000,” were made to avoid litigation or as part of non-disparagement agreements.

Following a review of employment files, auditors learned that “certain payments” were made to employees that did not comply with state statutes that require authorization from the attorney general or the governor.

Geragosian said the statute is designed to protect the state’s interests by enabling independent scrutiny of similar payments and providing consistency among agencies.

“Departing state employees who are party to a non-disparagement or settlement agreement should not have their rights as a state or federal whistleblower undermined by such an agreement,” Geragosian wrote in his report.

He added that the General Assembly should consider requiring that any future agreements explicitly state that the former employee retain a right to whistleblower status.

Geragosian said the General Assembly should consider restricting payments related to non-disparagement agreements or those made by state agencies to departing employees to avoid litigation unless the payment is approved by the attorney general or the governor.

Geragosian also suggested the General Assembly consider restricting language in a non-disparagement or settlement agreement that “explicitly prohibits separating employees from the ability to exercise their rights under the state’s Whistleblower Act or similar federal law.”

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