An audit of a Florida state government pension fund that was delayed last year while Gov. Jeb Bush (R) was seeking reelection has concluded that Florida overcharged the federal government by $517 million in contributions to the fund.
According to a draft report of the audit findings, federal officials have recommended that Florida repay the $517 million in excess contributions or accept reduced future federal contributions to the pension fund until the overcharge is made up.
The federal government contributes to state employees' pension funds to pay a share of pension costs of employees who administer joint federal-state programs such as Medicaid, the health insurance program for the poor. The Inspector General's Office of the Department of Health and Human Services audits the state funds to ensure that the federal government is not overcharged.
The Florida audit, which was delayed at least three times at the request of state officials as Bush prepared for what appeared to be a tough reelection fight, became one of several controversies swirling around HHS Inspector General Janet Rehnquist, the daughter of Chief Justice William H. Rehnquist. Janet Rehnquist, under fire from members of Congress for alleged professional misconduct, announced last week that she will leave the IG post June 1.
The Florida audit originally was to begin last April. But it was delayed at the request of Bush's chief of staff, Kathleen Shanahan, who spoke with Rehnquist, according to HHS officials. After at least two more delays at the request of Florida officials, the audit was begun in September, virtually ensuring that it would not be completed until after the November election, in which Bush won a second term.
Some Democratic critics have said that delays in starting the audit were designed to shield the Florida governor, President Bush's brother, from any embarrassing findings until after the election. HHS officials have said that the delays were not linked to Florida politics and that, even if the audit had begun in April, it would not have been completed until after the November election.
However, that assertion appeared to be undercut by documents Rehnquist made public last year in response to questions from Sens. Charles E. Grassley (R-Iowa) and Max Baucus (D-Mont.). One of the documents was an internal HHS e-mail that said that, before the initial delay in starting the audit, a draft report of the findings was expected by Sept. 30, more than a month before the Nov. 5 election.
The draft audit report, first reported yesterday by the Wall Street Journal and also obtained by The Washington Post, does not contain the kind of revelations likely to have changed the outcome of the gubernatorial election, which Bush won in a landslide. It said that the Florida Retirement System developed a surplus in the 1990s because of "exceptional" returns on its investments and that one measure state officials implemented to reduce the surplus resulted in the overcharge to the federal government.
Jill Bratina, Jeb Bush's press secretary, said state officials have been told they will receive a copy of the draft audit report by month's end and will then have 30 days to comment on it before a final report is issued.