By SHARON SALYER
More than $53,000 in bonus money paid to the former chief executive and employees of Valley General Hospital in Monroe the past two years was unconstitutional, according to a report issued by the state auditor.
"Retroactively awarding additional compensation for services already rendered is an unnecessary and improper use of public funds," the report says.
Such payments could be characterized as "gifts of public funds," which are precluded in the state’s constitution, it adds.
Instead, the hospital should have established criteria for employees to earn a bonus, outlining performance measures that employees would be entitled to if they reached the goals, said Mindy Chambers, spokeswoman for state auditor Brian Sonntag.
"There was no fraud here, no deliberate intent to circumvent the law," she said. "They sincerely didn’t know they couldn’t do it. It’s our job to say, ‘No, you can’t do that. ’ "
Hospital officials told auditors that they understand the prohibition and will be sure it doesn’t happen again, she said.
At issue is $7,520 paid to former chief executive Eric Buckland, who left the hospital in September 1999 to accept a job as head of a hospital in rural Arizona.
In April 1999, the hospital’s board approved a resolution authorizing the bonus pay for Buckland’s "exemplary performance" in 1997. It was described as a "bonus" because the executive’s April 1998 performance evaluation was not completed until February 1999.
Although Buckland’s contract required a review of compensation during the annual evaluation, the contract did not require this review "to automatically result in additional compensation," the report says.
His base pay was $94,000 a year, hospital spokeswoman Martha Dankers said.
In the hospital’s response to the allegations, which are also part of the official report, it says use of the word bonus in explaining the payment to Buckland was "unfortunate and incorrect."
The board’s intent was to offer a retrospective adjustment and lump sum pay to his salary, the statement says.
Because of a delay in the evaluation process, the first- and second-year salary adjustments were combined at the end of the second year, it adds.
In addition, the report criticized $45,667 paid to hospital employees in June to recognize their contributions during the time when the hospital was without a chief executive.
Current hospital chief Mark Judy was hired in March but did not start work until Aug. 1. All employees received some extra pay, Dankers said, based on 15 cents per hour between Nov. 8 and June 17, when they decided to award the employees bonuses.
Full-time employees received $204, with part-time employees receiving $102 to $163, depending on the number of hours worked.
"The board really wanted to recognize every single employee," Dankers said of the bonus pay. But "we’ll certainly comply" with the auditor’s recommendations in the future.