Audit of Settlement Agreements and Confidentiality Clauses Across Multiple State Agencies - Department of Correction (January 28, 2025)

This is a state audit looking at how the Governor's Office, the Comptroller, and many executive branch agencies handled employee settlement agreements from 2010 through 2022.

“This audit was conducted on the Office of the Governor (GOV) and its subordinate agencies, as well as the Office of the Comptroller of the Commonwealth (CTR), for the period January 1, 2010 through December 31, 2022.”

Auditors checked whether agencies properly reported employee settlements involving money and whether agencies had rules for using confidentiality or nondisclosure language in those settlements.

“In this performance audit, we determined the following:”

The report says weak oversight can hide workplace problems, make it harder to see how tax dollars are spent, and leave employees vulnerable when they are already in difficult situations.

“Our audit identifies areas of financial, legal and ethical risks for the Commonwealth – when our fellow public servants are at their most vulnerable.”

As a taxpayer and resident, this matters because settlement payments can use public money, and the report says the public should be able to understand how that money is being used and whether government workplaces are being managed properly.

“This results in an inconsistent process that is not transparent to the citizens of the Commonwealth regarding how their public employees are treated or how their tax dollars are being spent.”

The auditor found missing policies, inconsistent reporting, incomplete records, and limited documentation, making it hard to know the full scope of settlement agreements and confidentiality clauses.

“As a result, we cannot determine whether the lists provided by any of the executive agencies included in this audit are complete.”

The report recommends formal policies, better central oversight, public reporting, stronger record retention, training, and limits on confidentiality language; the Governor's Office said it would take some steps, including a public settlement policy.

“The Office of the Governor will issue a public Executive Department Settlement Policy applicable to all executive department offices and agencies.”

The report is significant because it says more than 2,000 employee settlements cost over $40 million during the audit period, yet agencies lacked consistent rules and sometimes did not provide records auditors requested.

“Based on state employee settlement agreement lists provided to us by the executive offices and agencies listed in Appendix C, during the period of January 1, 2010 through December 31, 2022, the audited agencies entered into 2,029 state employee settlement agreements with a total cost in excess of $40,839,452.”

A settlement agreement is a written deal that resolves a claim or dispute, often instead of going to court; confidentiality language means wording that can limit what someone may say about the agreement or the facts behind it.

“For the sake of consistency in the audit, we defined a state employee settlement as a settlement resulting from a formal claim3 (union and non-union grievances, complaint, or lawsuit) against a state agency brought by a current or former employee.”