POPA issues opinion that doctor contracts flawed but are binding liabilities of the government

By Bill Jaynes

The Kaselehlie Press


October 31, 2020

Pohnpei—On  September 18, the Pohnpei Office of the Public Auditor (POPA) issued a Management Advisory that concluded, subject to further review and determination by the Pohnpei Attorney General, that the employment services contracts of doctors at Pohnpei Department of Health and Social Affairs (DoHSA) are binding obligations of the Pohnpei State Government. A POPA staff member sent the document to The Kaselehlie Press in the waning business hours of October 30.

Since the Management Advisory was issued nothing much has changed.  Several doctors at DoHSA have resigned and more have indicated their intention to do so.

The Acting Attorney General has never issued a legal opinion on the matter of what has come to be known as “Max Pay”, a term that is based on the law that defines maximum pay for public servants.

An informed source says that doctors are not public servants but professional contract employees remunerated under the terms of their contracts and not the “Max Pay” law which applies to public servants.

POPA disagrees and says that the contracts were “not in compliance with relevant legal frameworks”.  But they also noted that “the doctors’ employment services contracts were prepared, routed and signed-off by the responsible Pohnpei government officials involved, including the Attorney General.”  As such, POPA issued the opinion that Pohnpei seems to be on the hook for withheld payments. It said that opinion was subject to the legal opinion of the Acting Attorney General who has not weighed in on the matter.

POPA’s Management Advisory said that POPA was engaged to review and assess the 28 doctors’ salaries, including differentials paid during the first six month of the 2020 calendar year. During their review that

found that the sum of $606,000 was appropriated to finance the 28 doctors’ salaries for that period of time but the Government paid $710,000 for those salaries, approximately 17 percent above the approved budget.

It said that nearly $70,000 was spent to compensate the doctors for overtime hours during the six months reviewed.  The government paid more than $113,000 in standby differential although the DoHSA budget did not include that expense category.  More than $51,000 was spent for night differential which also was not included as an expense item in the DoHSA budget.  It said the total impact was $103,000 of additional costs to the Pohnpei Government during the six month period.

The management advisory said that POPA had found instances where doctors were receiving payments for both standby and overtime differentials. It found instances where doctors were receiving differential while on vacation and or sick leave.  It found that doctors were receiving payments for hours exceeding the most possible work hours available in a bi-weekly pay period and some were receiving overtime pay while not fully on the job for 40 hours in a work week.

POPA said that it found that some of the doctors’ employment contracts differentiated between the amounts appropriated and budgeted to fund their positions.  “Two doctors adjusted base salaries were budgeted at $57,744.00 each in the FY-2020. However, according to their employment services contracts, each doctor will be paid up to about $115,000 or approximately 99% over and above the budgets approved for their positions/salaries during the same year,” the management advisory said.

Just the same, it concluded that the contracts seemed to be legally binding whether or not they were appropriate.

A team working with the Department of Treasury and Administration submitted some new contracts for doctors with fixed negotiated salaries with no overtime and no differentials. An informed source says that the Executive Budget Review Committee reviewed and approved the renegotiated contracts but the Governor and the Director of DoHSA rejected them.

Meanwhile, some doctors have already resigned and others have mentioned their intentions to do so.

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