But a legislative audit released Wednesday concluded the Department of Corrections has manipulated rehiring policies more than any other. Since state law changed to allow the practice, 35 Corrections workers have retired and been rehired in violation of guidelines. And Utah Retirement Systems, the state-created, privately managed pension fund, has allegedly been complicit in the abuse.

"We believe this practice violates legislative intent and can be costly to the system," said Audit Supervisor Maria Stahla.

The program encourages many state employees to retire earlier, increasing the state's retirement payouts. Jobs are held open in the meantime, leaving room for retirees who are expected to return. Rehired retirees can earn as much as 170 percent of their pre-retirement salary, including a pension and 401 (K) contribution. Most of the rehired workers are senior or executive-level workers, leading to complaints of favoritism and "double-dipping."

"It just doesn't seem right that somebody should be able to retire, draw state retirement and then get a job in the same department," said House Speaker Greg Curtis, who requested the audit. "That's not good policy."

Utah legislators changed state law in 1995 to allow Utah workers to "retire" and then apply for other state government jobs. The retirees were supposed to pursue jobs in different agencies after a six-month "cooling off" period.

Instead, rehiring practices have developed in Corrections, and, to a lesser degree, within the Department of Public Safety, Alcoholic Beverage Control and Valley Mental Health that allow senior staff to retire one day and return to the same job the next - with a significantly padded paycheck. Many of the retirees simply take part-time jobs in the same department for six months before returning to their full-time positions. In Corrections, 74 percent of the retirees were rehired in the department in less than a week.

Auditors found several egregious examples in Corrections, facilitated by the close relationship between the department and the Board of Pardons. In one case, a parole officer shifted from the Board of Pardons back to Corrections, where she retired after 16 days. Immediately after she retired, she was rehired by Pardons to the same position.

In the Department of Alcoholic Beverage Control, 12 of 18 retirees returned to the same job immediately after their six-month waiting period expired. Valley Mental Health allowed six senior employees to return.

Most state workers do not take advantage of the program.

Retirement Systems, Corrections and Beverage Control officials defended their practices. Much of their dispute with auditors hinges on the definition of "agency" in the law. URS has frequently approved re-hirings because departments defined their divisions as separate agencies.

URS Attorney Dan Andersen questioned the "tenor" of the audit. In a written response, Andersen said the "accusatory tone . . . inflates the severity of the problem, if a problem exists at all."

"The report emphasizes the worst case scenarios without giving any context or balance. Not every rehired retiree is an abuse case," Andersen added. "It is common for an employee to retire and then find out that, for a variety of financial and personal reasons, that retirement is not right for them."

Andersen defended URS' interpretation of the word "agency," noting no law in the country is as liberal as Utah's.

Ken Wynn, director of Alcoholic Beverage Control, said auditors should consider the one-time impact of legislation two years ago that encouraged workers to retire early to trade their unused sick leave for medical benefits.

And Corrections Director Scott Carver, himself a double-dipper, defended rehiring as a means of retaining experienced workers, who are eligible for retirement after 20 years of work.

"Most of these employees would leave our Department at 20 years at a great loss to the state," Carver wrote in his response.

North Ogden Republican Rep. Glenn Donnelson proposed legislation a year ago to extend the waiting period between retirement and rehiring from six months to a year. He will reintroduce the bill during the upcoming legislative session.

"We just don't want the system to be gamed," said Curtis. "Retirement is for retirement. It's not to enhance your income while you're working."

walsh@sltrib.com

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* MATT CANHAM contributed to this story.

By the numbers

* 3,209 state employees retired between Jan. 1, 1999 and June 30, 2006.

* 593 of those workers returned to work for state government.

* 46 of those violated post-retirement rules by returning to the same department, full-time, within six months.

Source: Legislative Auditor General