The State Worker

Chronicling civil-service life for California state workers

April 23, 2013
The 'blanket' over California retired annuitants' executive pay

NOTEBOOK_use_this.jpgOur story in Sunday's Bee looked at how California's state government appoints retired annuitants to high-level, high-paying "career executive assignment" positions with virtually no oversight.

One aspect that the report doesn't address is how departments use "blanket funds" to pay for the 75 executive positions we reviewed. Paying CEAs with "blanket" money, at the very least, runs counter to the spirit of state policies intended to scrutinize and limit those high-level leadership and policy-making classifications.

"If you retire as a CEA and one of your friends wants to bring you back," said Norma Suave, a retired state human resources and labor relations officer, told The State Worker, "paying them under the blanket is a way of bringing you back in and paying you CEA pay."

Blanket funds are essentially a department's petty cash drawer for personnel expenses. "Under the blanket" pay goes to here-today-gone tomorrow employees such as expert witnesses for court cases, temp help and retired annuitants. Blanket funds commonly cover the cost of a full-time employee who transfers, fails probation and exercises their return rights after their old position has been filled.

Some departments have an appropriated line item in their budgets for temporary hires. The Franchise Tax Board, for example, gets blanket funding annually for seasonal hiring.

Some departments build their blanket funds from operational savings, such as budgeted-but-vacant positions. It's this sort of murky money-shifting into the blanket that concerns Department of Finance officials because some departments hoard vacancies as a way to build up their funding. The administration is working on measures to restrict that practice.

That flexibility means that retirees brought back under the blanket as CEAs, like all other employees paid with those funds, don't have to go through an examination or interview process. None of the usual civil service merit requirements apply to their rehiring. Generally, they are brought back because of their prior work in a department is known or because they come highly recommended.

Now hold that thought and consider the rules for retired annuitant CEAs. First, from Section 320 of the California Department of Human Resources' Classification and Pay Manual:

"Employment of a retired annuitant as a CEA is permitted only when filling established existing CEA position allocations."

Then this rule, from Section 400 of the same manual:

"A retired annuitant shall only be appointed to a CEA position if the position has been established by the State Personnel Board and the retired annuitant is to perform the approved duties of the CEA position. A retired annuitant should always be appointed to the class, be it CEA or civil service, that it appropriate to the duties to be performed."

In other words, when a retiree is appointed to a certified CEA job, he or she must assume an established position, and then the duties must match the title. A retired-annuitiant executive shouldn't be performing a staff services manager job, for example.

As our story points out, establishing a CEA position is an arduous task that requires approval by two bodies, the Department of Human Resources and the State Personnel Board.

There's no check on CEA retired annuitants, however. Departments can bring anyone back at that level who had the designation before they retired. And despite Brown's order to retain only retirees in "mission critical" positions, there's been no formal check on whether departments have followed through.

The state's experience with Brown's 2011 hiring freeze indicates that agencies apply a loose interpretations of "mission critical" to hiring. After the administration put a formal hiring exemption process in place, it rejected hundreds of hiring requests, including some to fill career executive positions.

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About The State Worker

Jon Ortiz The Author

Jon Ortiz launched The State Worker blog and a companion column in 2008 to cover state government from the perspective of California government employees. Every day he filters the news through a single question: "What does this mean for state workers?" Join Ortiz for updates and debate on state pay, benefits, pensions, contracts and jobs. Contact him at (916) 321-1043 and at jortiz@sacbee.com.

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