Review: College raises for 7 defied state order

Plans to pay with private funds, spokesman says

A state review has found Northwest Arkansas Community College gave seven employees more than $9,800 in raises this year in violation of a state directive, the college said Friday.

The Arkansas Department of Finance and Administration originally had been scrutinizing a list of pay changes for 33 employees of the college to determine whether $227,000 in pay raises were improperly given.

By Oct. 13, the state made a tentative finding in which it had whittled the list of possibly invalid raises to 17. This occurred after officials from the Bentonville-based college met with the state agency and provided more documentation.

On Friday afternoon, the college issued “a joint release of information” from the college and the Finance Department saying the final review reduced the invalid raise list to seven college employees. The official who headed the department’s review of the pay changes, Kay Barnhill Terry, couldn’t be reachedfor comment.

Mark F. Scott, a college spokesman, said Friday that campus officials are still working to prevent the employees in question from having to refund the money. It is still pursuing its earlier plan to reimburse the state using privately raised foundation money.

“We’ve been given permission by the state to pay using alternate funds - private funds,” Scott said, reiterating the college’s stance that the employees shouldn’t suffer financially because of the college’s mistakes. “We’re still investigating the best way to do that.”

The college also will work with the Finance Department’s office of personnel management and the Arkansas Department of Higher Education on some of its job descriptions, he said.

The pay issue at the college arose after May 26 and June 9 memoranda from the Finance Department suspended most types of pay increases. The memos were addressed to all state agencies and entities that employ public workers.

In the memos, Director Richard Weiss cited the economy as a reason for suspending raises at least until after the first two quarters of fiscal 2011, which began July 1 and run through June 30, 2011. Suspended raises included salary increases, longevity bonuses and “differentials” based on education degrees or certification earned while on the job.

The college has an annual operating budget of roughly $40 million with 24 pay periods.

The college pay raises in question were given during seven pay periods between July 1, the start of the fiscal year, and Oct. 15, Scott said, adding this is how the $9,809.66 in overpayments was calculated.

Of the seven pay raises determined invalid out of the 17 that remained under the state’s microscope, all were paid to classified employees.

Four involved “additional duty” pay given to the workers; two involved employees who were moved to different job titles without a corresponding change in jobduties; and one was an employee found to have been “misclassified according to job title,” according to information Scott provided Friday and an Oct. 12 agency memorandum to the college.

Classified employees are subject to the state’s classified pay scale, which entails more detailed job levels and pay steps.

Non-classified employees are subject to line-item maximum levels outlined by law, though exceptions are sometimes allowed. They are more likely to be found in high-level administrative or faculty positions.

The final review found the remaining 10 raises under scrutiny to be valid, though seven of them also will require the college to consult the Higher Education Department to determine whether they closely match job-classification titles to the corresponding job duties, Scott said.

The three valid raises with correct title-to-duty matches involved one classified employee who earlier lacked documentation that the salary increase accompanied a change in job duty and two non-classified employees whom the state had earlier tagged as “misclassified according to job title.”

The seven valid raises that will undergo another job description review by education officials were all given to non-classified employees and totaled $15,367.44, Scott said. They included $1,592.02 in raises given to the college’sJim Hall, a 19-year veteran employee.

Hall was part of a meeting held Thursday in Little Rock with Terry’s office concerning the state’s final decision on the pay raises, Scott said, as was Gina Miller, the college’s vice president for administration.

Hall, the college’s executive director of community and government relations, has said he regularly workswith the Legislature in Little Rock, and with the cities, and chambers of commerce on the college’s behalf. He couldn’t be reached for comment Friday.

On Oct. 12, Scott said the college had asked the state for clarification on increases for the non-classified employees, a subject that also had come up in an Oct. 7 attorney general’s opinion.

The opinion questioned whether Weiss has the authority to restrict raises granted to non-classified public university and college employees. Such legal opinions aren’t binding.

Unlike state agencies or departments, the schools typically rely on tuition and student fees as heavily as they rely on state appropriations for their core, day-to-day operating budgets. The colleges also sometimes use privately raised funds to supplement compensation packages when recruiting high-level administrators and faculty.

Northwest Arkansas, Pages 9 on 10/23/2010

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