Commissioners may have to repay wages
Overpayments stem from converting benefits to wages after 2016 election
Last updated 6/14/2023 at 8:39am
PASCO – Two former and three current Franklin County commissioners may have to return nearly $89,000 in wages following an audit of payroll practices for the board.
Commissioner Lowell "Brad" Peck may have to repay $47,000 that he was not legally entitled to receive, Franklin County Auditor Matt Beaton said. And former Commissioners Robert "Bob" Koch and Rick Miller are facing possible repayments of $20,000 and $21,000 each, respectively.
At issue is a 2016 post-election decision by Commissioners Peck, Miller and Koch to allow them to convert their own health and other benefits into additional pay.
While that's allowed under state law, elected officials have to wait a full election cycle to implement and accept the pay increase. So, under the law, Miller would not have been eligible for the pay raise until Jan. 1, 2019, and neither Peck nor Koch would not have been eligible until Jan. 1, 2021.
But commissioners began taking the extra money following their decision, Beaton said.
Calling the issue a "loss" rather than "fraud," Beaton notified the State Auditor's Office of the discrepancy more than a month ago.
The discrepancy was reported to the state as a loss, rather than fraud, because there was no obvious intent to violate payroll laws, Beaton said.
As a result, the State Auditor's Office will be taking a deeper look into the wages paid to Franklin County commissioners since 2016, spokeswoman Kathlee Cooper said Monday, May 23, from Olympia.
"We are aware of Mr. Beaton's concern," Cooper said. "We will make an evaluation ... it'll be part of the audit of the county, the regular accountability audit."
The issue came to light while Beaton was brushing up on payroll laws through unsolicited advice from the Municipal Research and Service Center.
In its Jan. 25 blog, "Elected Officials and Benefits Programs," the center provided background information on Revised Code of Washington 41.04.180, relating to converting health insurance and other benefits into payroll for a legislative body.
After reading the advice on the legal way to convert benefits into pay and researching Franklin County practices, Beaton found the discrepancy and reported it to the state for an independent review.
Cooper acknowledged that state auditors will be taking up the overpayment issue, but could not say specifically when that audit will get underway or be completed. She only acknowledged that it'll be "soon," with an expected finding issued before the end of the year.
That finding could range from no action to requiring the wages to be repaid.
In the report to made to the state, Beaton said his research found Peck, Miller and Koch approved the benefits-to-pay change after the 2016 election, but did not wait a full election cycle to implement and accept the "extra compensation," as required by state law.
Peck has since collected approximately $47,000 that was not legally allowed; Koch and Miller collected approximately $20,000 and $21,000, respectively, before leaving office, Beaton said in the report.
"Starting in 2016, Franklin County commissioners passed a post-election resolution enabling the conversion of excess healthcare benefits into cash that subsequently went to their salary," Beaton said. "In this case, VEBA (healthcare) benefits were allowed to be taken in cash, thus giving themselves a raise.
"The Franklin County commissioners increased their compensation by converting healthcare benefits to cash and continued to receive the increased compensation over the years."
Current Commissioners Clint Didier and Rocky Mullen are also caught up in the overpayment issue.
While they were not part of the decision-making process and have accepted offered benefits, they each received an estimated $334 in extra pay due to partial excess benefit distributions, Beaton said.
Their overpayments stem from the illegal conversion of benefits in 2016 by the Peck, Koch and Miller, he said, adding, "All commissioners will have to repay any unconstitutional compensation."
The review of county financial practices and a request for an independent state review are duties required of a county auditor.
"My job as auditor is to review policies and practices, past and present, to assure the county is spending the public's money legally," Beaton said. "In this case, the dates of their resolutions fall outside their constitutional authority to raise their own pay."
Beaton presented his findings not only to the state, but also to county commissioners during their April 18 meeting.
A week later, during the commissioners' April 25 meeting, county Chairman Didier expressed an interest in pursuing a resolution to the matter and collecting the overpayments from current and former commissioners.
Didier also called for all future payroll decisions to be reviewed by the county Prosecuting Attorney's Office, currently under the direction of elected county Prosecuting Attorney Shawn Sant.
In the meantime, the state is planning its review.
Cooper said the state will audit the county's payroll practices and conduct a financial risk assessment.
Because Beaton requested a "loss" audit and to a "fraud" investigation, Cooper said the agency won't likely refer any criminal charges.
"We will investigate, audit and write reports," she said, noting that should any actual fraud be uncovered, the agency could still refer charges for Sant to pursue.