© 2007 Tyler Morning Telegraph

One day's work as a janitor for select school districts in Texas - including Lindale and Kilgore - won federal retirement benefits for thousands of teachers from throughout the state, and proved to be a cash source for the districts hosting the "clean-for-a-day" crews.

More than 19,000 of those one-day employees could receive $2.2 billion in Social Security benefits "to which they may not be entitled," according to a federal report released Jan. 8. One government watchdog group termed the practice "legal but creepy."

The districts charged fees to teachers for a one-day work pro-gram that earned employees the extra government benefits, then spent much of the fee money on projects such as parking lots, a nurse's station, auditorium im-provements, a distance-learning center, and a school board conference room.

At least five districts, including Lindale, didn't have authorization to operate the programs, the report said.

The districts allowed retiring teachers from around the state to work, often as janitors, for a single day. The one-day work programs allowed the teachers to qualify for both state and federal retirement benefits.

Joe Fried of the watchdog group, Public Program Testing Organization, said Congress never intended to allow such "double-dipping." Indeed, Congress changed federal law in 2004 to end the practice.

It remains unclear whether retirees who participated in the one-day work programs - including 7,715 who worked for a single day in Lindale and Kilgore school districts - will lose any benefits as a result of the findings.

The report, published by the federal office that audits the Social Security Administration, found that school districts used the one-day program mainly to generate revenue. Fried said that hundreds of workers showing up for one day at a school campus could not possibly have served a legitimate employment purpose.

While the one-day workers were usually paid minimum wage, they paid fees to the school districts ranging from $100 to $750 per employee. Seven school districts collected about $7.4 million in fees, while paying the workers only about $900,000.

Lindale Independent School District hired 4,313 one-day workers and collected $1,335,205 in fees. It paid only $177,696 in wages.

Kilgore ISD hired 3,402 one-day workers, collected $1,289,215 and paid out $140,162.

As an example, the report shows an unnamed employee who previously worked for another school district paid a $250 fee to work on June 18, 2002 in Kilgore ISD. The employee was paid $41.20 in wages, from which $2.55 in Social Security taxes were withheld. The employee has since reached age 62 and is receiving spousal benefits of $288.80 per month - even though the employee's pension from the Teacher Retirement System of Texas already pays $2,177.50 monthly.

HOG WILD

The report looked at seven of the 15 districts in Texas that were alleged to operate one-day worker programs from 2001-04, then extrapolated the results. Inspectors estimate 19,212 people will receive $110 million in extra benefits annually, for a potential $2.2 billion over their lifetimes.

The spectacle of hundreds or thousands of teachers traveling across the state from one district to another for a single day of work as a janitor has its roots in decades-old agreements between the Social Security Administration and Texas school districts. Most districts opted out of Social Security in favor of the Teacher Retirement System, leaving only a handful of districts with jobs eligible for the federal benefits.

Those few districts had Section 218 agreements that stipulate what jobs are eligible for Social Security coverage. Generally, the agreements cover auxiliary employees: janitors, bus drivers, cafeteria staff.

That prompted Fried, who made the initial allegations about Social Security, to charge that districts had effectively hired "fake janitors" for a day.

Generally, federal law doesn't allow employees on a government pension to also earn Social Security, except when they work a second job that does qualify. But all that was required for proof of that second job was a pay stub from at least one day of work.

"Everyone went hog-wild crazy for this," Fried said. "They pushed too hard on a good thing."

When Congress tightened this loophole in 2004, it required employment for at least five years in the job that qualifies for Social Security. The U.S. General Accounting Office had said in a February 2003 report that studies had focused mainly on Texas and Georgia, and the extent of one-day worker programs nationwide was unknown. But it said the programs could be possible in about 2,300 state and local government retirement plans in other states.

FURTHER ACTION?

The Social Security Administration, responding in writing to the new audit report, was quick to point out that "while questionable from a public policy perspective," the one-day work programs were "legally supported."

But the report said some districts didn't have explicit authorization to do it. Lindale's Section 218 agreement applied only to part-time workers, and the report said none of the workers who came to Lindale could have been considered part-time because they worked only one day.

The SSA responded that it was up to the districts to determine whether positions were full-time. "In all of these cases, the employer paid the Social Security taxes," indicating a full-time status, the SSA said. It also said Congress knew how SSA was interpreting and applying the law.

"Based on the current law at the time, we were implementing it the way it was written," said SSA spokesman Mark Hinkle.

He said the agency will not review whether individual workers qualified for the one-day programs, as recommended by the audit report. Instead, SSA will look at whether the districts were authorized to have the programs under the Section 218 agreements.

Hinkle refused to speculate on what action SSA might take if the agreements were violated.

Meanwhile, the Texas Classroom Teachers Association, on its Web site, is telling its members that "no news is good news."

"We found that those teachers who took advantage of that (the one-day programs) at the time, it was OK to do so," said TCTA spokeswoman Kristina Tirooni. "There wasn't anything saying they couldn't do it."

Staff Writer Malena Ogles contributed to this report.

Mark Collette covers covers Tyler city government, planning and zoning and the Parks Board. He can be reached at 903.596.6303. e-mail: news@tylerpaper.com