Chalk up another infamous story about stimulus spending, this one about a few pieces of paper that could have saved taxpayers a whole bunch of money.
The Energy Department's Savannah River facility in South Carolina paid out a whopping $7.7 million in severance packages to 526 contract workers who had been hired temporarily under the American Recovery and Reinvestment Act when all that was needed was 60-day layoff notices.
An internal investigation by the Energy Department's inspector general concluded there was no reason to spend the money on golden parachutes -- which averaged about $14,600 per worker. The department knew for months the stimulus-funded jobs were coming to an end and had plenty of time to prepare the legally required layoff warnings.
Instead, the facility's managers wrote out the big checks and then offered a litany of excuses, none of which the inspector general found compelling. And the watchdog worries the same mistake could be made again as the government prepares for another round of budget-cutting next year forced by the 2011 debt deal between Congress and President Barack Obama.
"While we are sensitive to the impact that the transition has on employees, the need to ensure that taxpayer provided funds are spent prudently is especially important in these trying budgetary and economic times," the inspector general said. "In short, we are concerned that it may not have been reasonable or equitable to provide terminated employees in Savannah River with additional payments."
The facility in South Carolina handles nuclear and other energy research for DOE. It won money from the Recovery Act to bring aboard temporary hires to help clean up Cold War-era nuclear waste.
The projects were successful, and the 100th one supported by Recovery Act funds was recently completed, Energy spokesman Bill Taylor said.
"The Department is proud of the significant progress the Office of Environmental Management has made in accelerating the important cleanup work of Cold War legacy waste through successful execution of its Recovery Act mission," he said. "This work also enabled the program to create jobs, providing valuable work experience and training for the energy workforce of the future."
Once the projects were completed, officials knew the workforce would be reorganized and some employees would be let go.
Under a labor law known as the WARN Act, the workers were supposed to be given the 60 days notice, but instead Savannah opted for the payments. An official cited "security risks associated with high hazard work," but investigators found no evidence such concerns justified the payouts.
The Energy Department agreed with the inspector general's recommendations to review job-termination practices, and said it would evaluate the amount of notice - or lack there of - that employees were getting.
"The Department agrees with the Inspector General recommendations and is already taking steps to ensure the appropriate approvals are in place when dealing with future WARN Act type payments," Taylor said, referring to government regulations that covers employment.
The IG wanted to make sure other Energy Department sites around the nation didn't take up the same approach.
"The Savannah River approach, if adopted elsewhere or if considered precedent-setting, could materially impact upcoming restructuring efforts at other Department of Energy facilities," the IG said.
It's the latest in a series of road bumps for the Energy Department. The agency has become a political battleground over bankrupt energy companies like Solyndra and A123 Systems. Several GOP members of Congress have been vocal about their concern for certain energy projects, including Rep. Joe Barton and Senate candidate Pete Hoekstra. The Washington Guardian reported the Savannah River site was previously criticized by the IG for mistakes made while handling explosives.
At least there is a silver lining to this golden parachute tale: other sites didn't make the same mistake. The Hanford Site in Washington state gave employees plenty of notice their jobs were ending and didn't have to pay a cent, the inspector general found.