Auditor: Numbers down, costs up

Louisiana’s executive branch employees decreased by nearly 16 percent over the past eight years, but the annual rates of pay increased, according to a report released Monday by the Legislative Auditor’s Office.

In addition, expenditures related to retirement and other benefits increased $238 million from fiscal year 2005 to fiscal year 2011 based on the report.

The Legislative Auditor’s Office looked at annual rates of pay and staff reductions since fiscal year 2005 in executive branch agencies across state government. Employee numbers decreased 6,832 to 36,461, excluding higher education.

The annual rate of pay increased from $1.49 billion in fiscal year 2005 to a high of $1.9 billion in fiscal year 2009. Since then the rate of pay has steadily decreased to $1.7 billion for fiscal year 2012.

The auditor’s office released a similar report last year. The new report goes further and looks at the reasons for job reductions, why payroll is increasing and what’s contributing to state costs going up.

Legislative Auditor Daryl Purpera said the report shows a continued decrease in the number of state employees as a result of cutbacks during Gov. Bobby Jindal’s administration.

“But at the same time when you reduce the payroll some of the (state) costs go up,” Purpera said.

“It’s going to cost us in unemployment insurance. It’s going to cost us from a retirement perspective. It’s going to cost in less (pension) contributions by employees. ... It’s going to cost us in compensated absences — 300 hours in reimbursement due at the current rate of pay,” Purpera said. “There’s a lot of cost, things to consider. You just don’t take people off the payroll without cost.”

Purpera said his office is looking at putting a number on the overall cost.

For instance, Purpera said fewer state employees on the payroll means the state contribution to the unfunded accrued liability of the Louisiana State Employees Retirement System goes up.

When a person retires earlier than projected, the actuarial calculation has to be revised to reflect fewer people contributing to the system, Purpera said. That also drives the state contribution up, he said.

The costs of the state health insurance could also be affected, Purpera said.

The 133-page report, overseen by audit office executive Nicole Edmonson, also shows that employees laid off received $5.7 million in unemployment benefits between 2005 and 2011 and $2.3 million from the Supplemental Nutrition Assistance Program (the new food stamps) in fiscal years 2011 and 2012.

State spending for professional services increased by $106 million — 45.6 percent — from fiscal year 2005 to fiscal year 2011, according to the report.

Edmonson said the same ratio of employees to supervisors persisted as the number of employees declined.

“Although the headcount is going down, the ratio of supervisors to staff is in the same ballpark — four to one,” Edmonson said.