Overview
BRC did not have documented internal policies and procedures for reviewing, entering into, and finalizing its employee settlement agreements during the audit period.
We also noted that BRC did not have a documented process for its board of trustees’ review of employee settlements before approval. The bylaws of the BRC board of trustees require BRC’s president to keep the board “informed of all relevant matters.” However, BRC could not provide evidence that any of the 14 employee settlement agreements executed during the audit period were presented to its board of trustees for approval.
Additionally, we asked about the use of non-disclosure, non-disparagement, and similarly restrictive language as part of settlement agreements. We were informed that BRC does not use such language and that no internal policy exists. Subsequently, it was explained that non-disparagement language may be included at the request of the employee as it may be mutually beneficial to both parties. We found seven instances of restrictive language included in the employee settlement agreements that we reviewed.
The table below summarizes the years, amounts, funding sources, and types of restrictive language used (where applicable) within employee settlement agreements BRC entered into during the audit period.
| Were Allegations Specified in the Agreement? | Settlement Year | Amount | Method of Payment | Restrictive Language | Quoted Language |
|---|---|---|---|---|---|
| No* | 2020 | $2,500 | Settlements and Judgments Reserve Fund | No restrictive language identified | No restrictive language identified |
| No** | 2020 | $50,000 | Settlements and Judgments Reserve Fund | No restrictive language identified | No restrictive language identified |
| No** | 2021 | $30,000 | Settlements and Judgments Reserve Fund | Non-disclosure | “The former employee agrees not to disclose to any person, unless required by law, the terms of this Agreement, except to [their] attorneys, tax consultants, family members, medical personnel, financial planners, or counselors.” |
| No** | 2023 | $10,000 | Settlements and Judgments Reserve Fund | No restrictive language identified | No restrictive language identified |
| No** | 2023 | $4,000 | Settlements and Judgments Reserve Fund | No restrictive language identified | No restrictive language identified |
| No** | 2020 | $0 | No payment made | Non-disparagement | “The parties agree not to disparage each other.” |
| No** | 2020 | $0 | No payment made | Non-disclosure | “To the extent permitted by law, the Parties agree that all terms of this Agreement shall remain confidential. [Employee] further agrees not disclose to any person, unless required by law, the terms of this agreement.” |
| No** | 2020 | $0 | No payment made | Non-disclosure | “[Employee] further agrees not to disclose to any person, unless required by law, the terms of this Agreement.” |
| No ** | 2020 | $0 | No payment made | No restrictive language identified | No restrictive language identified |
| No** | 2020 | $0 | No payment made | Non-disclosure | “[Employee] further agrees not to disclose to any person, unless required by law, the terms of this Agreement. . . . Neither party acting on their own or through a third party, will disparage each other.” |
| No** | 2021 | $0 | No payment made | Non-disclosure, not for publication | “Parties agree not to disclose, divulge, or publish any information regarding the substance, terms, or existence of this agreement . . . to the extent required by law. . . . Neither party will disparage each other.” |
| No** | 2021 | $0 | No payment made | Non-disclosure, not for publication | “Parties agree not to disclose, divulge, or publish any information regarding the substance, terms, or existence of this agreement . . . to the extent required by law.” |
| No** | 2022 | $0 | No payment made | No restrictive language identified | No restrictive language identified |
| No† | 2023 | $0 | No payment made | No restrictive language identified | No restrictive language identified |
* This settlement was a grievance resolution and resulted in the removal of documentation from this employee’s personnel file.
** These settlements were related to employment action (e.g., termination, resignation, or dismissal from assignments).
† These settlements were related to sick and vacation leave.
The table below is a breakdown of the types of restrictive language identified within the documentation provided.
| Type of Restrictive Language | Count |
|---|---|
| No restrictive language identified | 7 |
| Non-disclosure | 4 |
| Non-disclosure, not for publication | 2 |
| Non-disparagement | 1 |
| Grand Total | 14 |
If BRC does not have a transparent and accountable process to handle employee settlement agreements, especially for those containing non-disclosure, non-disparagement, confidentiality, or similar clauses, then it cannot ensure that employee settlements are handled in an ethical, legal, or appropriate manner. If the BRC board of trustees does not ensure appropriate oversight regarding employee settlements, then the financial stability and reputation of BRC and its employees may be negatively impacted. Furthermore, public dollars could be abused to cover up harassment, discrimination, or other forms of misconduct, while protecting perpetrators of abuse in BRC’s employ, in reality or in appearance.
Authoritative Guidance
Section 5.09 of Title 815 of the Code of Massachusetts Regulations states the following:
(1) Responsibility of assigned attorney or staff person: Preparation of Reports. When litigation involving a monetary claim against the Commonwealth covered by these regulation terminates in a final Settlement or judgment with regard to such a claim, the agency attorney or staff person assigned to handle or monitor the claim shall do the following:
(a) Prepare a report indicating:
1. the principal amount of the settlement or judgment;
2. the amount of any attorney’s fee award;
3. the amount of any interest award or accrued, and whether the interest continues to accrue post-judgment;
4. a request for payment of the amount;
5. a description of the basis for the request, (e.g., Court order or settlement agreement); and
6. whether the assigned attorney desires to award the payment check to the claimant;
(b) Forward the report with a copy of the settlement or judgment just described to the General Counsel of the [Office of the Comptroller of the Commonwealth] within the time frames set forth in [Section 5.09(2) of Title 815 of the Code of Massachusetts Regulations]. . . .
(2) Time for preparation of reports. The report . . . shall be sent by the agency attorney to the General Counsel of the Comptroller:
(a) if based on a settlement agreement, within 15 days of signing of the final settlement papers; or
(b) if based on a judgment against the Commonwealth or any agency, within fifteen days of the Commonwealth’s decision not to appeal; or
(c) if based on a judgment against the Commonwealth or an agency, where the Commonwealth decides to take an appeal from the judgment, within fifteen days of any final order on appeal or in remand proceedings, if such remand proceedings are ordered.
We consider this to be a best practice, since this regulation outlines the procedures required by the Office of the Comptroller of the Commonwealth for executive branch state agencies.
The US Government Accountability Office’s Standards for Internal Control in the Federal Government, known as the Green Book, sets internal control standards for federal entities. The Green Book defines internal controls in the following way:
Internal control comprises the plans, methods, policies, and procedures used to fulfill the mission, strategic plan, goals, and objectives of the entity. Internal control serves as the first line of defense in safeguarding assets. In short, internal control helps managers achieve desired results through effective stewardship of public resources. . . . Management should design control activities to achieve objectives and respond to risks. . . . Management should implement control activities through policies.
While BRC is not required to follow this policy, we believe it to a be best practice.
Reasons for the Issue
BRC officials stated that, because of the infrequent use of employee settlement agreements and the detailed nature of the state’s policy, there is no need for BRC to have another in place. We were informed by BRC’s vice president of administration and finance that the president informs the board chair of potentially “significant settlements,” but we found that BRC has not defined a threshold for board approval of employee settlements. BRC’s assertion that it notifies the board chair of these settlements is self-reported, and we have not reviewed documentation that proves that this communication occurred.
Recommendations
- BRC should develop, document, and implement a policy related to employee settlement agreements.
- To help increase transparency and accountability, BRC should seek and obtain approval from its board of trustees before executing employee settlement agreements and any non-disclosure, non-disparagement, or similarly restrictive clauses in its agreements.
Auditee’s Response
Bristol Community College agrees that documenting a policy and procedures can help ensure consistent practices. To date we have relied on the Office of the Comptroller’s Policy on Settlements and Judgements that includes them signing off in addition to college legal counsel. The College will use that policy to create a Bristol policy. We hope for a system-wide policy to ensure consistency across the system in the handling of these matters.
For all cases handled by the Attorney General’s Office we followed the required settlement procedures of the Attorney General’s Office. This included seeking and securing approval from the Attorney General’s Office for all settlement amounts and terms.
For grievances by union members, we follow the terms of collective bargaining agreements, which in some cases expressly provide that grievance settlements must be non-precedential.
No restrictive language was identified after 2021. To the extent non-disclosure language remains in any agreements, we agree it should be eliminated.
Nine of the 14 agreements had no monetary value, and the others were not material, which is why they were not brought forward to the Board. The College agrees to inform the Board about future employee settlement agreements as requested. We will include guidelines in our policy to bring such matters to the Board’s attention.
Auditor’s Reply
Based on its response, BRC is taking measures to address our concerns regarding this matter. We recommend that BRC clearly define materiality in its policy so that there is a clear threshold for determining which agreements should be brought to the attention of its board of trustees. This will help avoid any ambiguity in the future and ensure consistent adherence to the process. As part of our post-audit review process, we will follow up on this matter in approximately six months.
| Date published: | March 26, 2025 |
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