NorCo Controller Audit: About Half of $5 Million in Retention Bonuses Paid To Employees

Back in March, NorCo Council member John Brown wanted to know what happened to $5 million in retention bonuses, set aside by Council for Gracedale employees. By a 8-1 vote, Council tasked Controller Tara Zrinski with finding out how much money had been spent, and what was left. Brown was the sole dissenter, and that was because he wanted a report within 20 days. 

Council had the right to wonder what had happened. They, and not the Executive, control the purse strings. And it is they who directed that $5 million in federal pandemic funds be used to stop the bleeding of nursing home staff. They actually did so at the request of Executive Lamont McClure.

The $5 million in retention bonuses at Gracedale was part of a larger $15.5 million spending plan at Gracedale, passed in 2022 by County Council. The only Council member to vote against bonuses was John Brown. 

McClure had told Council that the administration would pay all employees at Gracedale an annual $2,500 bonus over a period of four years to bring in 54-60 additional nursing staff and enable the nursing home to provide the required nursing care needed at the facility.

"If you're a CNA [certified nurse's aid] within the sound of my voice, it would be a really good time to come to Gracedale," he said at the time, and repeated it several times. 

That was then. 

Early this year, on January 16, career service workers at Gracedale received an email from nursing home administrators informing them these bonuses were "temporary," were being stopped and that "the remainder has been used for caring for our residents." 

So what happened? 

At the time, I believed I had a partial answer. I speculated that retention bonuses set aside for some bargaining units may have been negotiated away in exchange for higher salaries. At that time, in response to a direct question from Council member Tom Giovanni, McClure said that the bonuses had ended, but that was only with respect to one of several bargaining units. I had no explanation for career service workers. We now know because Controller Tara Zrinski has finished her audit of this money. You can see her news release as well as the actual audit below. 

Zrinski's audit concludes that, of the $5 million approved for retention bonuses, only $2.36 million was actually paid to employees. The rest was used for operating expenses at the nursing home. Three bargaining units at Gracedale gave up the bonuses in exchange for higher pay. These agreements were unknowingly ratified by County Council. Had they known that the retention bonuses were ending. But there was no agreement with career service to end bonuses in exchange for higher pay. They just ended.

In her audit, Zrinski notes that since the money was commingled with other Gracedale funds, iit is impossible to state exactly how each dollar was spent. 

McClure told LV News that county council resolutions are generally mere suggestions, but he knows that it is Council, and not the Exec, that controls the purse strings. When bonuses ended for bargaining units, he could have been more clear. And he has provided no explanation for his decision to defy their will and prematurely terminate them for career service, who are nonunion.

He prides himself on transparency, but the way he handled this is a poor example.

Zrinski News Release

(Easton, PA) - The Northampton County Controller’s Office has released the results of its independent internal audit examining the use of American Rescue Plan Act (ARPA) funds for retention bonuses paid to employees at Gracedale, the county-owned nursing facility, as authorized by County Council Resolution #70-2022. The audit covered the period from 2022 through April 13, 2025, and focused on ensuring that the distribution of these funds complied with the resolution and relevant labor agreements.

 The audit found that a total of $2,360,891.18 in retention bonuses was paid out to all eligible union and Career Service employees at Gracedale during the review period. Specifically, $2,204,441.08 was disbursed from 2022 through 2024, and an additional $156,450.10 was paid in 2025.

 

“The audit found that, although $5 million was designated for retention bonuses in the County Council Resolution, only a portion of that money was paid out specifically to retention bonuses. The remainder of the ARPA funds, while allocated to Gracedale, could not be specifically tracked once transferred to Gracedale in 2023 and were commingled with other funds. The Controller’s Office could not determine the exact Gracedale expenses paid with those ARPA funds after they were combined with other Gracedale resources,” said Tara Zrinski, Northampton County Controller. “Because the management responsible for that decision is no longer in that position, we cannot determine why the money was not tracked in a more transparent manner.”

 

A sample of 40 employees was tested to verify the accuracy of retention bonus payments, and it was determined that each employee received the correct number and amount of retention bonus payments ($2,500 annually). Any variations were due to the timing of employment anniversaries or employment status changes. For example, some employees received part of their bonus in one year and the remainder in the next, depending on when they reached their employment anniversary. There was one instance where an employee received a $5,000 payment in 2024, which was a catch-up for a missed prior-year payment, not an overpayment.

 

The audit also confirmed that no retention bonuses were paid to per diem employees, the Gracedale Administrator, Director of Nursing, or Assistant Director of Nursing, in accordance with the County Council’s resolution. The payment of retention bonuses was governed by union contracts for the AFSCME and Steelworkers unions, which were amended to include or sunset retention bonus provisions. While there was no formal written policy for Career Service employees, the audit found that they received bonuses consistent with union terms.

 

“Our review confirmed that retention bonuses that were paid out were paid accurately and all eligible employee groups received payments according to the established rules, with only minor issues related to timing and administrative delays, which were quickly corrected. We also found that no ineligible personnel—such as per diem staff or senior administrators—received bonuses. Additionally, the County properly amended union contracts to reflect changes in the retention bonus program and affected career service employees were notified of the program’s end in a timely manner,” said Zrinski.

 

The retention bonus program ended at different times for different employee groups, depending on contract negotiations. Steelworkers’ bonuses ended on December 31, 2023, while AFSCME Residual Union employees remain eligible through December 31, 2025. AFSCME Gracedale Union employees hired in 2024 or earlier are eligible for 2025 payments. Career Service employees were notified in early 2025 that retention bonuses to them would cease due to the exhaustion of ARPA funds.

 

In summary, the audit determined that all ARPA funds designated for retention bonuses through the Council Resolution were transferred to the Gracedale fund by the end of 2023. These funds were not tracked separately from other county contributions once transferred and were fully expended on Gracedale operations. As a result, the Controller’s Office could not determine the exact Gracedale expenses paid with the ARPA funds after they were commingled with other resources.

 

“Without tracking of the balance of the $5,000,000 allocated to Gracedale retention bonuses by the County Council’s resolution, there is no way to specifically determine what that money was used for at Gracedale beside what was indicated by the previous management—operational expenses and the care of residents,” said Zrinski.

 

One final note, the audit found that for federal reporting purposes, the County was only required to report that ARPA funds were used to replace lost revenue, not required to track specific expenditures; thus, the decision not to track the retention bonus funds separately from other Gracedale resources was consistent with federal reporting requirements.

Final Report Gracedale $5 Million Retention Bonus by BernieOHare on Scribd