The outgoing comptroller also pointed out that these incentivized retirements cause the agency to lose experienced people.
At a time when the government is promoting a new window of incentivized retirement, the outgoing comptroller Yesmín Valdivieso raised a flag about the recurring action of the government agencies of replacing the experience of these employees with contracts that turn out more costly for the people.
She affirmed that over the course of the 10 years as head of the Office of the Comptroller of Puerto Rico she has pointed out this error on multiple occasions, the impact of which has not been calculated by any agency.
“It worries me a lot. The reality is that the government was a monster with more than 400,000 employees, at the highest point there was. The truth is that if what we want is to lower government spending, it cannot be through payroll, because you are letting go of the people who know and no succession plans are made in the agencies and, those who remain, cannot necessarily do the work of those who leave, and suddenly you start to see companies contracted to do the work that at the time was done by agency employees,” she summarized, emphasizing that “contracting always turns out more expensive.”
Since August 3, the government has been promoting an incentivized retirement through Act 80 of 2020.
Governor Wanda Vázquez announced, at the time of affixing her signature, that there are “some 9,452 active participants of Act 447” who would qualify for that incentivized retirement, who “represent a payroll of $342,277,000, plus around $60 million in fringe benefits… If all of them retire under this law that I authorize, with 50% of their current salary, that would represent a savings for the government of $171,138,000.”
Calculations provided by the Retirement System establish that from 2017 until so far this year, 6,016 teachers had retired, of whom 740 have completed the procedures this 2020. From the Retirement System of Government Employees and the Judiciary, meanwhile, there were 8,245 pensioners, of whom 1,001 are from this 2020.
The comptroller stipulated that due to the lack of staff the Office of the Comptroller also faces, she has not been able to carry out an investigation that stipulates how many of these retired employees have been replaced by contract and how much it has cost the government.
However, the example she used to dramatize the problem created by the retirement of employees was an audit report presented on April 14, 2016 of the Administration of Mental Health and Anti-Addiction Services (Assmca).
Valdivieso explained that due to Special Act 7 Declaring a State of Fiscal Emergency and Establishing a Comprehensive Fiscal Stabilization Plan, approved under the administration of Luis Fortuño, all of the billing personnel of Assmca retired. As there was an order to freeze the positions of the retirees, those positions were not filled and the agency's billing to the health plans was halted for a year and a half. Once Governor Alejandro García Padilla arrived, she said, contracts were stipulated to take charge of this function.
According to the Comptroller's audit, the employees were replaced by people who charged up to $50 an hour in their contracts.
One of the examples given in the audit DA-16-29 indicates that “a Junior Officer of the corporation performed at ASSMCA functions similar to those of the regular position of billing and collection supervisor. The services were rendered at the Billing and Collections Office from May 2013 to June 2014, and for these ASSMCA paid $130,612 to the private corporation for 2,612.25 hours of service at a rate of $50 per hour. At the time of granting these contracts, ASSMCA had a position of this class vacant.”
Another example establishes that “a Junior Officer of the corporation performed at ASSMCA functions similar to those of the regular position of billing and collection officer. The services were rendered at the Billing and Collections Office from June 2013 to June 2014, and for these ASSMCA paid $101,125 to the private corporation for 2,022.50 hours of service at a rate of $50 per hour. At the time of granting these contracts, ASSMCA had 11 positions of this class vacant.”
“That contracting turned out more expensive than it would have been to keep the employees,” Valdivieso stipulated.
Likewise, the comptroller pointed out that these incentivized retirements cause the agency to lose experienced people. She said that she has seen it in the past at the Office of the Comptroller when, with the Pre-Retirement Act, in which she lost 48 employees.
She explained that it is not that she does not want to avoid the retirements, but it bothers her that the government itself drives the agency heads to subcontract services due to the freezing of the positions.
In the case of the Office of the Comptroller, however, employees cannot be contracted to do audits. It is prohibited by law.
“As I have been losing people, we have adjusted to doing the audits,” she pointed out.
She accepted that, for that reason, “I am embarrassed,” when now in August she managed to release an audit that was conducted on the Municipality of Orocovis in 2017.
“Even I myself feel bad, because suddenly I was not complying with the two years (of conducting audits of the municipalities),” she maintained.
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