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Conservatively Speaking

State Senator Mary Lazich (R-New Berlin) represents parts of four counties: Milwaukee, Waukesha, Racine, and Walworth. Her Senate District 28 includes New Berlin, Franklin, Greendale, Hales Corners, Muskego, Waterford, Big Bend, the town of Vernon and parts of Greenfield, East Troy, and Mukwonago. Senator Lazich has been in the Legislature for more than a decade. She considers herself a tireless crusader for lower taxes, reduced spending and smaller government.

Audit: WHEFA Executive Director’s compensation

Audits


Once again, the nonpartisan Legislative Audit Bureau (LAB) has done an outstanding job uncovering questionable practices in state government, this time following a limited-scope review of the Wisconsin Health and Educational Facilities Authority (WHEFA).

Started during 1979, WHEFA’s primary function is to assist tax-exempt healthcare and certain educational institutions finance capital projects. Revenue bonds are issued on their behalf. 


WHEFA does not have taxing authority and does not receive state appropriations.  Governed by a seven-member board, WHEFA has four full-time employees that receive salaries and fringe benefits, funded by annual fees paid by borrowing institutions.

The LAB expressed concerns about the compensation of WHEFA’S Executive Director. State law restricts the salaries of its employees to specific executive salary groups that are outlined in state statutes. Under statutory limits, the Executive Director’s salary may not exceed the maximum for salary group 4 that is currently $116,001. The salaries of the three other WHEFA employees may not exceed the maximum for salary group 3 that is currently $107,407.

The Executive Director and other WHEFA employees are allowed to use unused vacation and sick leave by carrying the leave forward, receiving a cash payment for a portion of it, or depositing its cash value into the Wisconsin Deferred Compensation Program. While employees have opted to receive cash payment for unused leave, the LAB reports the cash value of the Executive Director’s unused leave has been deposited into his Wisconsin Deferred Compensation Program account.

The LAB discovered that during 2008, WHEFA deposited $19,600 in Executive Director Larry Nines’ deferred compensation account. That represents the cash value of an estimated 44 days of unused leave. Nines’ total compensation reported to the Wisconsin Retirement System was $135,612, an amount that is 16.9 percent greater than the salary limit for his position specified by state law.  Over the past 10 years, the LAB calculates that approximately $162,300 in payments for unused leave have been deposited into the Executive Director’s deferred compensation account.


Upon questioning the policy, The LAB was told by the WHEFA Board Chair that he believes the Executive Director’s compensation package complies with state law because WHEFA’s legal counsel advises the statutory limit addresses only salary, not overall compensation. The Board Chair also asserts that Nines’ compensation package was adopted in order to retain the expertise of staff.

The LAB counters, “However, the Board’s actions have had the effect of circumventing the statutory salary limit” and offers choices the Legislature may wish to contemplate about this issue.

The LAB writes, “If it agrees that the special expertise and experience of the Executive Director warrant a higher salary level, it could amend the Wisconsin statutes and assign the salary of the Executive Director to a higher-paying salary group. However, if it believes the current salary limit is reasonable in light of WHEFA’s staff size and responsibilities, it could direct the WHEFA Board to comply with the executive salary limit established” under state statutes.

I commend the LAB for another outstanding analysis that is of great benefit to lawmakers and the taxpayers they represent.

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