A state audit released Friday revealed the Wisconsin Health and Educational Facilities Authority has been overpaying its executive director for the past 10 years.
According to the review by the Legislative Fiscal Bureau, WHEFA paid Executive Director Larry Nines $135,612 in 2008, $19,611 more than his salary cap of $116,001. The WHEFA Board also tried to increase compensation for Nines by providing him with 40 days of vacation each year.
The review also said WHEFA collected a surplus balance of $3.1 million, which is more than four times its annual operating expenses.
The executive director could circumvent a statutory salary limit because WHEFA paid him for unused leave by making annual deposits into the Wisconsin Deferred Compensation Program. The report made recommendations for WHEFA to monitor its surplus balance carefully and to work with the Department of Employee Trust Funds for reporting future earnings.
WHEFA is a public agency created by Wisconsin Statute but does not receive any state funding for its operations and has no taxing power. WHEFA provides access to low cost, private market capital for nonprofit health, education and research facilities.
WHEFA said in a statement it was pleased that its financial position was strong on the report and will accept the recommendations made. It added it respects the report’s recommendations related to staff compensation issues and will work with legislators to resolve these issues.
“We want to ensure our compensation policies follow all applicable legal and statutory requirements,” WHEFA said in the statement.
“He may deserve a higher salary, but it should have been handled legislatively,” Brian Mayhew, University of Wisconsin accounting professor, said in an e-mail to The Badger Herald. “The clear violation in this case is the over-reporting of income to the State Retirement System.”
The State Retirement System is a defined benefit plan that pays retirees based on their salary.
A state audit is done when it is requested by the legislative worker to see if actions comply with the standards applicable to the setting, said Mayhew. The audit for WHEFA was to see if it was operating within state statute guidelines.
