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EDITORIAL: No good way to fix $700,000 TUSD mistake: Our view: But moving payroll out of human resources could avert similar errors(Arizona Daily Star, The (Tucson) (KRT) Via Thomson Dialog NewsEdge) Jun. 5--The discovery that employees received three months of free insurance benefits secures Tucson Unified School District's place in the Pantheon of Bureaucratic Ineptitude. The episode speaks to a system so large that one hand can go off on its own while the other hand doesn't even know it's gone. How the insurance mistake happened seems complicated -- but at its root it was a simple budgeting and accounting error. The upshot, however, is that the district spent some $700,000 to provide health, dental and vision insurance benefits to employees who thought they were paying for the coverage themselves -- and should have been. This leaves about 4,800 TUSD employees owing anywhere from $50 to $1,100 for insurance coverage they received from July through September 2005. The problem began three years ago, in July 2004, when the district switched its employee health coverage from PacifiCare, which used a July-to-June plan year, to United Healthcare, which used an October-to-September plan year. TUSD employees receive HMO health coverage for themselves and can pay extra to add family members or purchase vision or dental coverage. These premiums are divvied up between 20 pay periods and are taken out of paychecks as deductions, according to TUSD spokeswoman Chyrl Hill Lander. During the 2004-05 school year, the 4,800 TUSD employees who buy extra coverage should have been paying for 15 months of coverage to cover costs from July 2004 through October 2005, when the new company plan kicked in. Instead, payroll deductions were automatically based on 12 months of coverage, not 15 months, which means that TUSD gave three months of free additional coverage to those employees. The mistake wasn't discovered until July 2006 when a finance department employee noticed a red flag in the books. Employees in the human resources and finance departments figured out what had happened, and employees leaving the district after July 2006 had to repay the debt before they left. But it took until November 2006 for Superintendent Roger Pfeuffer to be notified that the district had shelled out about $700,000 it shouldn't have paid -- and that the district would have to get the money back. TUSD's problems with finances are not new. Many of these flare-ups are rooted in communications breakdowns between the administration and employees. Take, for example, the dust-up a few months ago over how TUSD spent $5 million earmarked by the Legislature for teacher raises. TUSD used the money to cover raises that already had been promised to teachers, so district teachers didn't get anything extra. The teachers understandably objected, as did legislators, but the Attorney General's Office decided in March that the money was not misspent. In years past, TUSD superintendents would magically fix budget crunches by increasing the state's financial contribution to the desegregation budget -- surprising taxpayers who had to foot the bill and bolstering the district's reputation for fiscal mismanagement. Taxpayers deserve to know how a district that is continually facing tight budgets managed to find $700,000 to pay these bills without anyone noticing. TUSD should move the payroll department out of human resources and into its finance department. That would help keep this kind of human error from repeating itself by keeping financial services under one umbrella. It's shocking that the health insurance account is not part of the annual so-called comprehensive audit the district undergoes -- the same audit the attorney general said was good enough to declare that TUSD did not misspend the teacher bonus-pay money. Any audit must cover all facets of the TUSD operation. The problem remains, however, of how to repay the debt. The district cannot, nor should it, just write off the blunder and eat the costs. The employees must pay for their coverage, even though it has long since been used. This creates a sticky situation, because employees did nothing wrong. Yet the fact remains that they received a service the district paid for. Asking employees to give back a personal day with pay -- one suggestion TUSD is considering -- is wrong because it charges one employee for another's debt. The district should allow workers to pay their tabs all at once or break up the payments throughout the next school year. It would not be fair for employees to suffer financially for TUSD's mistake -- but it's also unfair to ask taxpayers to provide free insurance. It's a no-win situation, and the taxpayers, employees, parents and children of TUSD deserve better. To see more of The Arizona Daily Star, or to subscribe to the newspaper, go to http://www.azstarnet.com. Copyright (c) 2007, The Arizona Daily Star, Tucson Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |