Leslie W. Merritt, Jr., CPA, CFP
State Auditor / STATE OF NORTH CAROLINA
Office of the State Auditor / 2 S. Salisbury Street
20601 MailServiceCenter
Raleigh, NC 27699-0601
Telephone: (919) 807-7500
Fax: (919) 807-7647
Internet
FOR IMMEDIATE RELEASE
For Additional Information Contact: Bill Styres, Performance Audit Division
Office: (919) 807-7580
State Agencies Paid Too Much for Temporary Staffing Services
RALEIGH, NC – January 6, 2009
Today, State Auditor Leslie Merrittreleased a performance audit on State agencies’ use of temporary staffing vendors. The audit found that five State agencies could have saved up to $3.5 million in administrative costs if an open and competitive bidding process to control the administrative mark-up rate was used. The audit also found that business and legal risks are not well managed, that written contracts are rarely used, and some state retirees that work for temporary staffing vendors do not comply with return to work laws.
The audit’s scope included temporary staffing services purchased from eight commercial vendors between July 1, 2005 and January 31, 2008 by the Department of Health and Human Services, Department of Transportation, Wildlife Resource Commission, State Treasurer and the Office of Information Technology Services. All five agencies agree with the findings and recommendations.
“Significant savings could be realized by using the State’s buying power to control administrative expenses. Issuing a statewide convenience contract(s) through a competitive bidding process could save North Carolina taxpayers significant money and reduce legal risks,” said State Auditor Leslie Merritt.
The audit found that retirees returning to work for the State through temporary staffing vendors are sometimes out of compliance with the State’s return-to-work laws. Unknowingly, the Retirement Systems Division paid approximately $633,000 in retirement payments to 27 retirees who were out of compliance with the State’s return-to-work laws.
“Agency managers and retirees that think that return-to-work laws do not apply to temporary staffing assignments are simply ill informed,” concluded Auditor Merritt.
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