SD lawmakers urge state policy on employee bonuses

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PIERRE(AP) — South Dakota should establish standards for the awarding of bonuses to state employees for outstanding work, a legislative panel suggested Wednesday.

Members of Legislature's government operations and audit committee said such a standard would help the state avoid situations such as one in which state health officials used federal grant money to pay $500 bonuses to 155 employees who worked to fight the swine flu threat two years ago.

A state audit found that the bonuses weren't permissible under federal rules because the state Health Department didn't have standards for handling bonuses consistently for all programs. Auditors recommended the department follow established policies in the future, but the agency did not have to repay the federal government for money used for the bonuses.

Sen. Jeff Haverly, R-Rapid City, said lawmakers questioned the Health Department bonuses because the agency proposed them at the end of the flu vaccination project, not as part of the original plan. A general state policy would give agencies guidance on how to handle such bonuses, he said.

State Personnel Commissioner Sandy Zinter said she will consider the lawmakers' suggestions, but that suggested bonuses are evaluated on a case-by-case basis because they are rarely given. She said the state does not have a formal process for handling requests for bonuses because such a plan would not address all situations that might arise. The Bureau of Personnel consults the governor's office when an agency proposes bonus payments, she added.

"I realize that's probably more vague than what you're looking for," Zinter told the lawmakers, describing the current process.

She said state agencies could avoid audit questions by including possible bonus payments in applications for federal grants.

Rep. Charles Turbiville, R-Deadwood, said the state should at least have a policy requiring agencies to consult with the Bureau of Personnel on proposed bonus payments.

"I support the bonuses, but I just think you need to have a policy stashed someplace in the event it happens again," Turbivlle told Zinter.

Zinter said the Health Department proposed the bonuses to employees who worked in the flu fight because those employees did a great job and South Dakota had the nation's highest vaccination rate for adults during the global outbreak of what was known as the H1N1 flu. South Dakota vaccinated 34.4 percent of its adults, or more than 260,000 people.

State Health Secretary Doneen Hollingsworth told the legislative committee in October that the bonuses were allowable under federal guidelines that applied to the $6.5 million federal grant South Dakota received to vaccinate people, conduct lab tests and take other steps to fight the H1N1 virus in 2009-2010. The U.S. Health and Human Services Department, which provided the grant, has not questioned the bonuses, she said.

A total of $77,000 was spent on the bonuses, with $69,500 coming from the federal grant and the rest from a state fund. The bonuses went to nurses, lab workers, field staff and administrators who worked many extra hours in the budget year that ended in June 2010.

Sen. Larry Tidemann, R-Brookings, who was chairman of the House Appropriations Committee at the time, said the Health Department notified him and the Senate appropriations chair that the bonuses might be paid. He said he replied that the bonuses would be acceptable, but that was before auditors questioned the spending.

Tidemann said other state agencies give employee bonuses to reward good work.

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