Cairo Association of Teachers - Newsletter

CAT Tracks for October 1, 2007 PAYCHECK ERRORS

Salary error not critical, Unit 7 district chief says

By Christine Walsh

TOLONO – A Unit 7 school board member is questioning a pay discrepancy of nearly $100,000 in the school district's budget for last year, caused by salaries being overpaid by mistake for the entire year.

The district's superintendent says the error is "nothing unique" and that the district is "moving on."

The Unit 7 school board approved its 2007-08 budget this week, but during a public hearing on the budget, board member Paul Lewis asked if an adjusting entry had been made to account for a pay discrepancy of nearly $100,000 in the 2006-07 school year.

According to an Aug. 6 Unity Education Association memo obtained by The News-Gazette, a majority of employees were paid incorrectly last year. The memo from then-President Deany Cheatum to union members indicates many workers were overpaid and that Superintendent Michael Shonk assured her that no one would be asked to repay anything.

Shonk told Lewis there was no need to adjust the budget because school boards are allowed to increase or decrease expenditures up to 10 percent beyond the original budget categories without a budget revision.

"How are we going to collect this?" Lewis asked of the about $92,000 that teachers were overpaid.

Shonk said the employees affected would not receive as much of a salary increase as they otherwise would have.

"That is a fairly large payment, and we have a fiduciary responsibility," Lewis said, questioning why employees could not be asked to return the money through a payment plan. "I don't see any options in here," he said, referring to the memo.

Lewis said he sent Shonk and the other school board members an e-mail on Aug. 7 requesting an audit with a breakdown of which employees were affected and how much each one was overpaid. He also asked for the issue to be resolved at an open school board meeting.

"I don't think it's a closed issue," Lewis said. "We haven't had a vote on it. I've not agreed to anything."

Shonk said the issue had been taken care of in an agreement outlined in letters from the district's attorney, Brian Braun, and auditor, Joe Daughetee.

"What are you wanting to do here?" Shonk asked. "It's been resolved. We're moving on."

Lewis said he was concerned about pension liability for any workers who were near retirement age and how much of the overpayment was now uncollectible. He also wanted to know whether the district was complying with the Sarbanes-Oxley Act of 2002, a federal law that regulates the auditing of publicly held corporations.

Shonk responded that only one of the employees who was overpaid is now retired. He said that Braun had addressed IRS law in his letter.

"Do you think there's a better way?" Shonk asked Lewis.

Shonk said Friday that he budgeted a total amount for salaries this year and that there was nothing over budget.

He explained that the letters from Braun and Daughetee came after he had contacted each about his agreement with the Unity Education Association to reduce the affected employees' pay increases over a two-year period.

"We all needed to get on the same page," Shonk said, adding that he requested the letters so that he would have something on file. "We all figured that was the fair way to handle it. Whether 100 percent of people agree with that or not, you resolve it and you move on."

Shonk said the money might be recovered through the district keeping part of what it expected to pay out this year.

"Whether it's a wash or not depends on the interest rate," he said. "It kind of corrects itself. This is not a major problem at all."

Shonk said the mistake was the result of setting up payroll from incorrent salary schedules.

"People make mistakes all the time," Shonk said. "Every school district has their problems. This is nothing unique to this district."