Not Cease from Exploration

Saturday, August 14, 2010

NEIU #19

It's been widely reported that the State Auditor General is investigating the retirement incentives and payments being made to outgoing NEIU #19 Director Dr. Fred Rosetti. (story link HERE). This is good news for all of us. Why?

First, the system is working, although it is a bit lagged. While some checks and balances have failed (see below, re: Board), at least control has kicked in and this whole situation is being reviewed.

Second, no publicly funded educational institution these days has hundreds of thousands of dollars in excess cash laying around. Any amount saved as a result of this investigation can then be used to help the NEIU serve its educational constituents.

Third, this is our money. Yes, you can argue "but what about corporate fat-cats who get big payouts?", and there is some merit to that discussion. However in a publicly owned corporation, it's the shareholders who are ultimately screwed by excessive compensation, not taxpayers at large. For example, while it may bother me that BP pays out too much money to failed executives, I don't own any BP stock, so the situation doesn't impact me directly. However, as a property owner in Northeastern PA, I'm basically like that BP shareholders.

Fourth, there has been evidence presented over the years that not every public institution in NEPA has adequate controls in place to monitor time off taken (the public servant in Luzerne County who was also selling used cars...at the same time he was supposed to be working...comes to mind). That noted, there is more than enough precedent for taking a step back and making sure that Dr Rosetti really is entitled to that portion of his payout attributed to time off reimbursement.

Bottom Line: Every dime saved here can go into helping to make education better in NEPA. That's a good thing. There are some eye-opening revelations here as well though.

The NEIU Board - The NEIU Board, except for one member, apparently didn't take its oversight role very seriously. Kudos to Louise Brzuchalski (from Abington Heights) for actually providing an example of what Board members should be doing. Hopefully this whole episode will serve as a wake-up call to those serving on BofD's that, when you are dealing with large amounts of money, you have to take your fiduciary role a little more seriously.

Vacation Time Taken - Dr Rosetti was going to be paid for 319 unused vacation/sick days accumulated over 40 years of service. That's almost a year's time off, right? No, it's actually more than a year. There are about 270 business days in a year (Monday through Friday, excluding holidays), so Dr. Rosetti would actually be getting the equivalent of a year and a little less than a quarter's worth of pay for unused time-off. Note that these days were allowed to accumulate without limit in perpetuity for the life of Dr. Rosetti's contract. If you do the math, 319 days over 40 years means that, on average, Dr. Rosetti accumulated almost 8 unused days per year. Impossible? No. That's typically the amount of time off I don't take per year. The difference? I can't accumulate my time off in perpetuity over my employment. In fact I can't accumulate any unused time off. That brings me to my final point.

Time Off Earned - Dr Rosetti's contract allowed for 30 vacation days and 12 sick days per year, meaning that he had 42 days at his disposal every year for time off. In an average month there are about 23 working days (Monday through Friday, excluding holidays), so Dr Rosetti was given the equivalent of almost two working months vacation per year. Put another way, Dr Rosetti was given time off that was equivalent to about one sixth of his working time. This seems excessive, particularly when compared to the private sector. By way of that comparison, I have nearly 22 years of service with my employer and I earn 33 vacation days per year, plus one floating holiday. I receive no allotment for "sick" time. That's it. As previously noted, that time can't accumulate year to year. The rules that apply to my time off also apply to the time off of executives at my employer. While I personally think that it's okay to accumulate some time off year over year (that came in handy for a member of my family who is a teacher and had a major illness to content with), there should be some kind of cap that prevents the total accumulated from becoming excessive.

Let's see how this evolves over time.

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