Gov. Sandoval Directs Review Of State Agencies After Discovery Of Undisclosed Employee Settlements

By Sean Whaley
CARSON CITY – Gov. Brian Sandoval today asked for a statewide review of cash settlements with former state employees after Controller Kim Wallin uncovered three payments to former Department of Transportation workers that were not approved as required by state law.
One of the payments, to former NDOT employee Chris Sanseverino, totaled $150,000. The others were $22,500 paid to Brenda Hale and $10,000 paid to Dorothy Sewell. Reasons for the payments, authorized in 2010, have not yet been made public, but Sandoval was told the $150,000 payment was a settlement for three separate matters. Sanseverino also received a $25,000 settlement from NDOT in 2008.
The three payments were authorized by top officials with the Department of Transportation, but were never reviewed by the Nevada Transportation Board or the Nevada Board of Examiners.
The largest payment should have come to the Board of Examiners for review and approval because it exceeded a $75,000 threshold requiring action at a public meeting of the board.
“I want to be sure that this doesn’t happen again,” Sandoval said. “That absolutely under no circumstances would a settlement that exceeds that $75,000 threshold would not have a review process by the Board of Examiners.

Gov. Brian Sandoval said today he wants a comprehensive review of settlements with state employees/Photo: Sean Whaley, Nevada News Bureau

“I’d like to suggest that (state Budget Director Andrew Clinger) review the entire state government to ensure that there are no other settlement account funds that exist out there so there aren’t resolutions of matters that are going on without the approval of the Board of Examiners,” he said.
While prior settlements may not require board action now, Sandoval said he wants a report on any such agreements made in past years by all state agencies.
Wallin said the failure to keep taxpayers apprised of such cash settlements is a reason why the state’s Division of Internal Audits should be under the control of her office. The internal audit function is now under the Department of Administration. A bill making its way through the Legislature would transfer the function to Wallin’s control.
“If you’ve got audit reporting directly to the governor’s office, it’s kind of like the fox guarding the hen house,” she said. “We need to have checks and balances.”
The Board of Examiners, made up of Sandoval, Attorney General Catherine Cortez Masto and Secretary of State Ross Miller, was briefed on the NDOT contracts issue today. The board was told the payments were clearly not transparent.
A representative of the Transportation Department spoke briefly to the board on the issue, but NDOT Director Susan Martinovich was unable to attend the meeting.
Wallin also attended the meeting, and said another cash settlement of $12,000 has been identified by her office as being paid by the Nevada Division of Insurance to an employee in February of this year.
As a member of the Transportation Board of Directors, Wallin said she will ask Martinovich at the next meeting July 11 to provide information about all settlements entered into by the agency, including those with contractors.
“Besides going to the Board of Examiners and having strict procedures we also need to go and make sure that it is a clear and transparent process,” Wallin said.
Such employee settlements are not supposed to be confidential, but NDOT officials have said the agreements with the former employees are confidential, she said.
Masto, who also serves on the Transportation Board, said she will make a similar request of the agency.

Attorney General Catherine Cortez Masto said today she will seek a full accounting of NDOT settlements with former employees/ Photo: Sean Whaley, Nevada News Bureau

“One of the requests I will be making is that the department go through and pull all of those similar types of contracts that were entered into and bring those before the board so we are at least aware of how many are out there, what occurred, what dollar amount we are looking at,” she said.
Masto said her office will also be reviewing whether any such settlements can be ratified by the board after the fact.
Audio clips:
Gov. Brian Sandoval says he does not want such employee settlements to bypass review again:
051011Sandoval1 :15 Board of Examiners.”
Sandoval says he wants a review of all state agencies for information on any such settlements:
051011Sandoval2 :19 Board of Examiners.”
Attorney General Catherine Cortez Masto says she will ask the Transportation Department for a full accounting of such settlements:
051011Masto :22 have to investigate.”
State Controller Kim Wallin says such settlements must be fully disclosed to the public:
051011Wallin1 :19 agreements were confidential.”
Wallin says the internal audit agency should be under the control of her office:
051011Wallin2 :06 the hen house.”