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First Posted: 3/25/2013
UNION TWP. — An early-retirement program at Northwest Area School District allowed a teacher to retire at the age of 40 and still be eligible for up to $424,700 in health insurance coverage until age 65, while a decision made by the school board without a public vote netted a superintendent $3,360 she should not have received, according to the state Auditor General’s Office.
The audit cites an early-retirement package negotiated into the teachers union contract that ran from Sept. 1, 2005 through Aug. 31, 2011. “That agreement stated that an employee with 10 years of service would be eligible for an early-retirement benefit,” including health insurance coverage to the age of 65.
“During our review we found the district has one retired teacher who exercised this option five years ago at the age of 40,” the report notes. The district is paying $21,235 per year for his family health insurance, a cost that could total $424,700 by the time the retiree turns 65. The report does not name the teacher.
“Providing such a benefit after only 10 years of service is a questionable use of taxpayer funds,” the report says.
While the audit report does not cite any illegality in the deal, it notes the district should “reevaluate the retirement benefit. The school board and union recently approved a new contract that eliminates the early retirement benefit.
The audit also contends the board approved a health benefit waiver for the former superintendent “which is in violation of the administrative contract.”
While the report doesn’t name the superintendent, it is clearly referring to Nancy Tkatch, who left the district on June 30, 2011 after the board declined to renew her contract. She is currently the administrative director at West Side Career and Technology Center.
According to the report, the district’s contract with Tkatch, running from July 1, 2007 to her departure in 2011, stated that if she declined district insurance coverage she was eligible for a “health benefit waiver” worth 25 percent of the monthly premium share the district would otherwise have spent.
Tkatch, who agreed to pay 25 percent of her health insurance premium when hired in 2004, sent a memo to the district dated Jan. 27, 2011 requesting “consideration of a 25 percent health benefit waiver payment,” according to the report.
At that point she was no longer insured through the district. She requested and received $3,360, one quarter of the $13,440 husband/wife benefit plan she was entitled to.
Neither incident referenced constituted a “finding,” the official term for noncompliance with state laws and procedures. In that regard, the the district was found in full compliance. But the two discrepancies were listed as “observations,” which are recommendations for corrective action to avoid a potential problem that didn’t rise to the level of noncompliance during the period audited, Dec. 17, 2009 through May 15, 2012.
The auditor general’s report cites two problems: First, the offer for the waiver payment expired Aug. 31, 2010; second, the board approved the payment in executive session, not at a public meeting.
The district has eliminated the waiver payment in the current contract.