HANOVER TWP. — “Questionable administrator contract provisions” resulted in “costly payouts” worth 80 percent of one year’s salary for each of two retired administrators at Hanover Area School District, according to a performance audit report from the Pennsylvania Auditor General’s Office. Combined, the two received $159,430 in retirement bonuses.
The audit, a periodic review of ledgers to see if districts are complying with certain state laws and requirements, gave the district a clean bill of health on that front, but included an “observation” regarding confusing and conflicting contracts that led to hefty retirement bonuses for former Superintendent Anthony Podczasy and former Business Manager Joseph Kochuba.
In Podczasy’s case, the report notes that his contract, which ran from Feb. 2, 2009 through Feb 1, 2013, included a clause providing a retirement bonus of 80 percent annual pay after 30 years, but that the “management team compensation plan” for those years had no such bonus, except for two employees near retirement when the plan was enacted beginning July 1, 2009.
Podczasy’s final salary upon submitting his letter of intent to retire in October, 2012, was $104,500, making the retirement bonus $83,600.
In Kochuba’s case, the report notes that his contract, effective from July 1, 1986 through June 30, 1991, was never officially renewed by the board even though he worked until April 2010. Instead, the contract was updated “to include a termination clause and compensation in line with the management team compensation plan.”
But Kochuba’s contract included a clause promising that, if another employee got a fringe benefit increase that exceeded his own, his contract would “be automatically and correspondingly increased to the same or similar level,” the report says.
In January 2010, Kochuba “requested payment of 80 percent of his current salary upon retirement,” the report notes, basing the request on the 80 percent clause in Podczasy’s contract. Kochuba retired effective April 5, 2010, and four days later, “the superintendent signed a memo approving” the 80 percent retirement bonus.
Kochuba’s salary as of July 2009 was $94,787, and the retirement bonus was $75,830.
The auditor general’s report recommends the district “consider the taxpayer’s expectations that their money will be used for education of the district’s students when negotiating employee agreements,” make sure such agreements “are as transparent as possible,” and renew contracts “on a regular basis to eliminate confusion and/or unnecessary payouts.”
The report notes district management responded by saying the 80 percent bonus was “standard language” at the time Podczasy’s contract was drawn up and “will be discontinued going forward,” and that the new business manager had a dated contract.
Superintendent Andrew Kuhl said he was not yet on the job when the audit was finished and given to the district, but that the retirement bonus was eliminated. Neither he nor current Business Manager Tom Cipriano have any retirement incentive in their contracts, Kuhl said.
Cipriano had a three-year contract that recently expired, Kuhl said, and a new one is being negotiated.
“I’m very happy the board responded to the report the way they did,” Kuhl said. “Their commitment was that they would not allow a situation like this to occur in the future.”