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Wednesday, May 03, 2006

Ind. Gov't. - More on: State FSSA exec goes from public to private at twice the price

"State social-services official outsources job to himself, boosts salary" is the Louisville Courier Journal headline to a rewrite of yesterday's Fort Wayne Journal Gazette story (see yesterday's ILB entry here).

Here are the details of the financial maneuver:

The solution was to contract the work out to [Richard] Rhoad's one-person company, Allied Professional Services LLC. The deal calls for Allied to "support the financial functions of FSSA" and includes duties such as developing and administering a budget, monthly budget briefings and monthly financial reporting.

The three-year contract running through January is worth $540,000, or $180,000 per year.

On Jan. 13 [2006], Rhoad, as the agency's chief financial officer, entered into the contract with himself as president of Allied.

The net effect is Rhoad continues to be the social-services agency's top financial officer, Roob said. Rhoad works in Indianapolis three or four days a week and the rest of the time in Fort Wayne, where he is overseeing the agency's closure of the Fort Wayne State Developmental Center.

"This was not intended to pay him more money -- it's intended to pay him the expenses he has with us," [FSSA head Mitch] Roob said.

The State Ethics Commission reviewed and approved the contract, Roob said.

The applicable law here appears to be IC 4-2-6-11, which was amended this year by HEA 1397, SECTION 10 (pp. 13-14). Although the law at subsections (b) and (c) would appear to clearly prohibit this type of arrangement, subsection (e) and a new subsection (g) allow the law to waived by the ethics commission or the appointing authority. Also of interest here is Governor Daniel's Executive Order 05-12.

Posted by Marcia Oddi on May 3, 2006 06:11 AM
Posted to Indiana Government