Overview
During our review of CTR’s Settlements and Judgments Access data, we identified 5 settlements, totaling $352,769, that were not included as part of the lists provided by 2 out of the 21 agencies under review. The 2 agencies were MassArt and RCC.
The audit team sent follow-up emails to the 2 agencies, asking for clarification and requesting that documents for these state employee settlement agreements be provided to us for review. We also identified an additional 7 employee settlement agreements during our review of personnel files that were excluded from Massport’s list provided to us, 2 of which were non-monetary, and 5 of which had a combined monetary value totaling $139,845.
| Agency | Number of Settlements Excluded from Agency Lists or Not Willingly Provided to Us | Dollar Value of Excluded Settlements |
|---|---|---|
| MassArt | 3 | 287,032 |
| Massport | 7 | 139,845 |
| RCC | 2 | 65,737 |
| Grand Total | 12 | $ 492,614 |
Based on the results of our review of CTR’s Settlements and Judgments Access data and of Massport personnel files, there could potentially be more state employee settlements that were not self-reported to OSA.
Authoritative Guidance
GOV’s Executive Department Settlement Policy established the following requirement regarding record retention:
For any matter that is settled, other than settlements of labor grievances or affirmative litigation, the settling agency shall, subject to the applicable records retention period, maintain a complete file consisting of: (i) the underlying claim or complaint; (ii) the settlement agreement; (iii) any settlement recommendation memoranda and attachments; (d) all documentation submitted or received from the Office of the Comptroller under 815 CMR 5.00 et seq., and the Comptroller’s Settlements and Judgments Policy; (iv) documentation of all required approvals; and (v) documentation of payment of the claim.
Each executive office shall track settlements entered by the office and its agencies, other than settlements of labor grievances and affirmative litigation, including: (i) the claimant’s name; (ii) the date of settlement; (iii) the amount of settlement; (iv) the office or agency at issue; and (v) the type of claim. The tracker maintained by each executive office shall be treated as a public record.
Section 12 of Chapter 11 of the General Laws states:
The department of the state auditor shall audit the accounts, programs, activities and functions directly related to the aforementioned accounts of all departments, offices, commissions, institutions and activities of the commonwealth, including those of districts and authorities created by the general court and including those of the income tax division of the department of revenue and, for such purposes, the authorized officers and employees of the department of the state auditor shall have access to such accounts at reasonable times and the department may require the production of books, documents, vouchers and other records relating to any matter within the scope of an audit conducted under this section or section 13, except tax returns.
In June 2020, the state of Montana issued a performance audit titled “State Employee Settlements: Trends, Transparency, and Administration.” In this audit, a recommendation is given, stating the following:
- Defining what constitutes a state employee settlement and what should be considered when determining the cost of a state employee settlement, and
- Requiring reporting of state employee settlements in the State Accounting, Budgeting, and Human Resource System, including defining what information should be reported.
While Massachusetts state agencies do not need to follow Montana’s policies, we believe them to be best practices.
Reasons for Issue
RCC informed us that 1 of the 2 settlements assigned to it had a Human Resources Compensation Management System ID that was not associated with anyone in its payroll system during the period. According to CTR, it is possible that RCC recorded the employee ID incorrectly when it submitted the form, or CTR may have input the ID incorrectly when entering it into the Settlements and Judgments Access database. RCC did not respond to our request for the second settlement.
MassArt explained that it did not include 2 settlements in its list as there were no underlying complaints. Payment was due to the terms and conditions of its NUP handbook. According to the agency, there was no payment for the third settlement record, and it was unsure why the record appeared within CTR’s data. All agencies were made aware of the findings on July 30, 2025. At the tail end of this audit, on January 14, 2026, MassArt ultimately did reconcile its records to reflect that CTR’s data was indeed correct for the third settlement record.
Massport told us that the agreements identified did not fall within the scope of our audit because the agreements were considered severance agreements, separation agreements, and compromise agreements. However, we noted that Massport refers to these agreements as “settlement agreements” within the terms of the documents, and, therefore, Massport improperly withheld them from us according to Massport’s own definition of these agreements.
We found that there is an inconsistency in the understanding, whether intentional or unintentional, of what constitutes an employee settlement agreement.
Recommendation
Agencies should develop policies and procedures to ensure that state employee settlements are accurately recorded and tracked internally and that all information is accurately reported to CTR, in addition to the Comptroller performing periodic reviews to ensure the accuracy of the reported information so that only payments related to settlements and judgments are included in this database.
Auditee’s Response: MassArt
The OSA wrote asking that MassArt share the information for . . . additional settlement matters..
For additional context on August 22, 2025, MassArt responded: . . .
- For two of the matters, they were pursuant to the NUP Policy.
Auditor’s Reply: MassArt
MassArt indicates in its response that the 2 settlement payments were made pursuant to its NUP handbook. To clarify, these two items were included as part of this finding due to the fact that the list of employee settlement agreements provided by CTR included them, but the list of employee settlement agreements originally provided to us by MassArt did not include them. To resolve this matter, we suggest that MassArt work with CTR to ensure that employee settlement records related to MassArt within CTR’s Settlements and Judgments Access database are accurate.
Auditee’s Response: Massport
Finding No. 4 and the OSA’s Scope Limitations mischaracterize Massport’s response to the OSA’s Audit. There are two points of concern, both of which pertain to the adequacy of Massport’s response. First, the OSA states that Massport did not identify seven relevant agreements, but none of the referenced agreements were responsive to the specific audit requests as articulated by the OSA. Five were severance/separation agreements with payments based on employee years of service, not on the resolution of any claims filed against Massport, and the remaining two were made by Massport management and unions. (In fact, there was only one responsive severance/separation agreement that also settled a claim filed by an employee, and Massport identified that agreement and provided a copy of the employee’s complaint to the OSA.) To the extent that the OSA was dissatisfied with Massport’s responses to its requests, Massport respectfully submits that the fault lies neither in our record-keeping nor in our responsiveness, but rather in the ambiguity of the audit request terminology.
Second, the OSA issued a Scope Limitation with respect to Massport’s delivery of notices to individuals selected by the OSA for personnel file review, based on the Massachusetts Fair Information Practices Act (“FIPA”), [Chapter 66A of the General Laws], and its associated regulations. Massport believes that its FIPA notices were required by law, as well as consistent with Massport’s past practices and its commitment to fairness to its employees. In any event, the OSA was able to review the great majority of personnel files that it had selected (111 of 121 files) and the OSA’s Draft Final Report states that the OSA “determined that the data was sufficiently reliable for the purposes of its audit.”
Massport respectfully requests that the Final Report be revised to exclude Massport from Finding No. 4 and the associated Scope Limitations. Alternatively, we request that the Report include the following express acknowledgement of Massport’s positions:
(a) Massport’s omission of seven agreements from its initial audit response stems from a good-faith difference in the parties’ understanding of the scope of the OSA’s audit requests; and
(b) Massport’s issuance of FIPA notices to employees whose personnel files were selected for review by the OSA, and its temporary hold on the disclosure of the files of those employees who indicated an intention to object, is consistent with Massport’s understanding of its legal obligations and its past practices. Massport respects both the OSA’s authority and its employee’s privacy rights, and it has sought to honor both.
Auditor’s Reply: Massport
OSA and Massport disagree on what constitutes an employee settlement agreement. The agreements reviewed included language releasing parties from any current or future claims and included an agreement to withdraw grievances in addition to lump sum payments resulting from employment actions. We also saw multiple instances where Massport refers to the documents provided as a “compromise settlement agreement” or “settlement agreement” within the terms of the agreement itself; Massport referred to these agreements as settlement agreements when entering into them, regardless of how it seeks to characterize them now. Furthermore, in multiple settlement agreements found in personnel records but not disclosed to OSA by Massport, there were confidentiality clauses restricting employees’ rights to speak about the settlements and the circumstances surrounding them. Regarding Massport’s refusal to provide our audit team with all requested personnel files, as required under Section 12 of Chapter 11 of the General Laws, we refer to Other Matters.
Auditee’s Response: RCC
RCC acknowledges OSA’s observation that some legacy settlement documentation was missing due to turnover in senior leadership and prior [Human Resources (HR)] management deficiencies.
However, the current administration has implemented new record retention protocols, improved HR file controls, and cross-departmental compliance checks to prevent recurrence. RCC continues to strengthen its document management systems to ensure that all S&J payment documentation is maintained consistently with Comptroller regulations. Further, RCC has received training from [the Office of the General Counsel] related to the S&J Policy recently updated by the Comptroller’s Office.
Auditor’s Reply: RCC
We applaud RCC for taking steps to address the issue. We note that since the steps were taken after the scope of our audit, after the period January 1, 2019 through December 31, 2024, this does not change the finding of what existed during the audit period. However, we acknowledge RCC’s commitment to ensuring increased accountability with respect to retention protocols. We will follow up on this matter in approximately 6 months as part of our post-audit review process.
| Date published: | January 21, 2026 |
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