Audit reveals possible Labor Studies violations

The IU Division of Labor Studies has come under fire after the release of an audit which revealed that the division might have violated IU payroll procedures. The audit, conducted in August 2005, suggested that then-Labor Studies Director Charles Davis might have employed and paid two state legislators for work that wasn't done. \nIU Audit Service conducted the audit after it received a complaint from a faculty member regarding the paid service of two state legislators. The complaint stemmed from remarks Davis made regarding the reasons for their employment in a September 2004 DLS faculty and staff meeting.\nBoth legislators were employed to secure grants from the Incumbent Workers Training Board. Neither politician was interviewed or mentioned by name in the audit. Their employment was terminated Nov. 30, 2004, after it became clear that IU would not be receiving any more worker training grants.\nThe audit did not specifically find that the legislators were employed "solely because of the position as state legislators." Davis' description of the legislators' employment was too ambiguous to determine exactly what their jobs entailed, and therefore how much accountability they should have had and how much they should have been paid, according to the audit.\nHowever, comments Davis made at the staff meeting that were revealed in the audit implied that he hoped paying both legislators would help avoid losing $358,000 a year in state funds appropriated for the DLS. According to the audit, Davis made several comments about keeping the funds at that meeting that were recorded on tape and mentioned in the report. Since the legislators are not named in the report, their identities are replaced in quotes with "Legislator name." \n"It benefits us to have people who are close to us and friends of ours in the legislature ... We may have lost 60-some thousand, but that is better than losing a $358,000 in a line item," Davis said. "(Legislator name) sits on the Ways and Means Committee." \nThe audit found several instances of excessive or unnecessary payment to the legislators. The audit noted that reimbursement, especially for cell phone and travel costs, seemed disproportionate.\nDavis criticized the report in his rebuttal, calling it "an exercise in overzealousness." He refuted claims that he had mismanaged the employment of the two public officials, or that their employment was meant to influence the $358,000 line appropriation. \n"Neither I nor anyone in the Division (of Labor Services) ever discussed the special appropriation with the legislators whom we hired," Davis said in his rebuttal, included in the report. "As there was never any discussion of the special appropriation with either legislator, there is simply no basis for inferring that they were hired to influence the special appropriation." \nDavis went on to say that he ended both legislators' employment when it became clear they would not be able to get any more grants.\n"The decision to terminate the legislators, like the decision to hire them, was based on their ability to obtain (worker training) grants and not on their ability to assure the special appropriation," Davis said. "When it became apparent that they no longer had the ability to obtain the grants, I terminated them without regard to what might happen with respect to the special appropriation."\nDavis accepted responsibility for some mishandling of the employment of both politicians. However, he criticized the auditor for what he perceived as a bias against him in the tone of the report.\n"I accept the conclusion that my lack of oversight permitted violations of University policy," Davis said. "My concern is that the auditor's report goes far beyond these conclusions ... and threatens my reputation by making it appear that I was involved in willful impropriety." \nThe audit made several recommendations regarding changes in University policy, both in the employment of anyone in public office and in the management of funds in paying such employees. It also suggested that IU might owe $26,188 to the state of Indiana because the money was taken from training grants and used to pay one of the legislators.\nThese allegations are not the only problem facing the Division of Labor Studies. The DLS has until June 30 to find an academic home within a college in the IU system, or it will be closed, according to a March 7 Indiana Daily Student article. \nDLS students and faculty have been fighting the closure, pleading their case to University officials. \nThe Division of Labor Studies is based in Indianapolis at IU-Purdue University Indianapolis. The program "educates workers and future workers to strengthen the labor movement and provide a richer understanding of its functions in society," according to the DLS Web site. \nThe program offers both bachelor's and associate's degrees, as well as certificates and minors. DLS courses are offered at every IU campus except Columbus.