North Dakota Auditor Disputes Payment to Former Workers’ Comp Director

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A new report says North Dakota’s former workers’ compensation director may have been ineligible for a $150,000 severance package because he resigned before the agency’s board of directors approved the payment.

North Dakota law does not allow severance payments to state employees who quit their jobs of their own accord, says the auditor’s report, was presented to the Legislature’s Audit and Fiscal Review Committee on Monday, October 20.

The report is intended to track whether the Workforce Safety and Insurance agency has adopted recommendations laid out in an October 2006 performance audit.

The first audit questioned spending decisions by Sandy Blunt, who was then Workforce Safety’s chief executive officer. Its disclosures prompted a criminal investigation and eventual charges against Blunt for allegedly misspending agency funds.

Blunt has pleaded not guilty to the two felony charges. His trial is scheduled to begin Dec. 15.

Blunt, in an August e-mail sent to WSI spokesman Mark Armstrong, said he had met with Robert Indvik, who was then chairman of the agency’s board of directors, and the board’s vice chairman, Mark Gjovig, to tell them he was resigning.

The meeting took place Dec. 6, 2007, the day the board voted to remove Blunt as Workforce Safety’s chief executive. The auditor’s report says the only meeting among the three took place before the board’s meeting began that morning.

Indvik’s and Gjovig’s recollections of the meeting differ, the follow-up audit report says. If Blunt resigned before the board met and approved his severance agreement, Blunt would not be due any severance pay, the report says.

North Dakota law says “no state employee … is entitled to severance pay upon termination of employment if the employee … quit employment voluntarily or resigned of the person’s own accord,” the auditor’s report says.

Attorney General Wayne Stenehjem has been asked for an opinion about whether the payment was an illegal gift, the report says.

Asked for comment on the report, Blunt said in an e-mail: “As for severance pay subterfuge presented in the performance audit, I appreciate the good old-fashioned belly laugh that the auditors so kindly provided me.”

In a formal response to the follow-up report, WSI officials said Blunt did not resign before the meeting, and said he even continued to act as the agency’s director a few hours after the board voted to replace him.

Blunt’s severance agreement covered his salary, medical insurance benefits and unused vacation time. It was worth $150,234, records show. Blunt was paid $127,848 after taxes were withheld.

Stenehjem earlier questioned whether Blunt’s severance package was justified, but said it was up to WSI’s directors to make that determination. At the time, documentation of Blunt’s alleged early resignation had not surfaced.

Blunt’s August e-mails to Armstrong began as a request for a copy of his personnel file. When it was given to him, Blunt sent another e-mail, asking why a status form listed the reason for his departure as “other,” instead of as a resignation.

“I verbally resigned to Chair Indvik on 12/06/07 with Vice Chair Gjovig as a witness,” Blunt wrote in an Aug. 11 e-mail to Armstrong.

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Received Id 1187470320 on Oct 19 2008 18:26