State: Paperwork lacking for $2M of med school exec bonuses

File Photo University of Massachusetts Medical School

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The University of Massachusetts Medical School (UMMS) lacked the necessary documentation to justify more than $2 million in bonuses to senior executives, according to a state report issued Thursday.

The state auditor’s office said deficiencies in the Worcester school’s paperwork between the 2010 and 2012 fiscal years include a lack of evidence of supervisor review or approval, changes to the amount of the bonuses by the school chancellor without explanation, and missing “scorecards”, which detail annual employee goals and the percentage of each goal achieved.

Nearly $370,000 of the questioned payouts are related to bonuses for Chancellor Dr. Michael Collins, while the remaining $1.68 million involves the incentive compensation program (ICP), a bonus plan established in 2009 and aimed at rewarding senior leadership for advancing the institution’s strategic priorities.

“UMMS could not provide the evidence necessary to assure the Office of the State Auditor that certain bonus payments were properly earned and calculated or that any payout changes were justifiable,” auditors wrote in a 21-page report.

UMMS spokesman Jim Fessenden said the medical school’s success has stemmed from sound business practices across all operations.

“In the auditor’s view, the regular, direct and active supervisor of ICP goals could have been more clearly documented in central files, and we have adjusted our practices to do so going forward,” Fessenden wrote in a statement.

The school lacked any written documentation in the 2010 and 2011 fiscal years indicating that Collins was eligible for bonuses, the auditor’s office said. Neither Collins’ employment contract nor other formal documents address the requirements for Collins’ bonus program, or how the bonus amounts were calculated (rather, they were authorized through an internal memo from former UMass President Jack Wilson).

UMass said Collins’ contract had not been finalized in time for the 2010 and 2011 fiscal years (he came to UMMS on an interim basis, which eventually turned into a permanent position), and that his contract outlined eligibility and bonus calculations in the 2012 and 2013 fiscal years.

Regarding the bonus plan for other senior employees, the audit found that scorecards authorizing bonus payments of $1.2 million lacked evidence of direct supervisory review or approval. In addition, scorecards authorizing more than $475,000 in bonus payments were missing, according to the state auditor’s office.

Meanwhile, Collins’ office adjusted more than $6,500 worth of bonus payments without any documentation explaining why.

UMMS told auditors there was a learning curve regarding documentation for the ICP program in its first year and that the busy and conflicting schedules of the workers involved made it difficult to ensure documentation was complete.

Nonetheless, the school pledged for the 2014 fiscal year to have employees and managers sign all scorecards at the beginning and end of each fiscal year and document any changes made by Collins’ office. And the school said its human resources department will be responsible for administering the bonus plan and maintaining all paperwork.