Audit: 3 former G-C administrators overpaid by $650,000 over 9 years

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GREENFIELD — From 2010 to 2018, three former Greenfield-Central administrators were overpaid more than $650,000 combined, according to an audit filed by the Indiana State Board of Accounts.

The three top administrators — all of whom have either retired or resigned in the past 12 months — are Tony Zurwell, business manager; Christy Hilton, assistant superintendent; and Ann Vail, associate superintendent. Each of them was placed on a two-week paid leave in September 2018 when the district conducted an internal investigation on the matter. The school board and Superintendent Harold Olin did not reveal at the time why the top administrators were on leave. Zurwell abruptly retired.

The State Board of Accounts audit, filed on Friday, Oct. 18, states that Zurwell, Hilton and Vail had been overpaid for health insurance benefits from 2010 to 2018. In addition, insurance premiums for each employee were under-withheld. The state agency attributes those calculations to Zurwell, who had unsupervised control over such adjustments.

Over those nine years, each administrator received an additional $116,607 in compensation. Zurwell also under-withheld $95,031, and Hilton and Vail each under-withheld $103,489.

That adds up to $651,832 in additional compensation that the state board has requested Zurwell, Hilton and Vail pay back. They also owe the state $33,765 for special investigations costs.

The State Board of Accounts, which spent a year on an investigation that also involved the Indiana State Police, forwarded its findings to the Hancock County prosecutor and the Indiana attorney general’s office.

The inquiry began in late August 2018, when Olin “became suspicious and discovered an improper allocation of funds,” according to a statement released Friday by Greenfield-Central. Olin ordered an independent review by “an experienced school business official” and reported the issue to the State Board of Accounts.

According to the audit, the discrepancy in compensation was due to how health insurance had been calculated into each of the administrator’s salaries since 2010. Greenfield-Central administrators receive an “insurance credit” added to their bi-weekly pay for health insurance. They then use that credit to pay for their health insurance. The credit was calculated to be “equal to ‘all but $4,000 of the highest annual premium rate’ as additional compensation,” the audit states.

Zurwell, Hilton and Vail also had separate contracts that stated they “receive an amount equal to the annual cost of the family health insurance plan minus $4,000 … to purchase medical insurance offered by the Corporation.”

Each of the three contracts also had a provision that stated,” (the administrator) shall be entitled to receive the benefit established by the Board for all administrative/certificated employees of the Board. To the extent that benefits for other certificated employees duplicate a benefit provided pursuant to this Contract, the benefit provided by this Contract shall be the benefit provided to (the administrator).”

The audit stated that “beginning in November 2010, Zurwell made calculations for compensation, which not only added the cost of the family health insurance plan minus the $4,000, but also included the amount given to other administrators bi-weekly as an insurance credit. This, in effect, added insurance amounts as additional compensation twice (for Zurwell, Hilton and Vail).”

For example, in 2017, Zurwell’s salary amount in his contract was set at $154,378, but he was paid $176,236 — an over-payment of $21,858. From 2010 to 2018, Zurwell, Hilton and Vail were overpaid the same amount each year even though each person had a different base salary, the audit found.

Contracts for Zurwell, Hilton and Vail also stated that the “amount equal to the annual cost of the family health insurance plan minus $4,000” was meant to “purchase medical insurance.” Zurwell’s 2017 payroll deduction for his insurance coverage should have been $19,023, the audit found, but the actual deduction was only $4,000.

While Vail and Hilton each owe the district $103,489 for under-withholding insurance premiums, Zurwell only owes $95,031. That’s due to a smaller amount under-withheld in 2018 than the two others. Zurwell retired in late September 2018, the same day the Greenfield-Central School Board approved his paid leave. He had worked for the corporation for 13 years, overseeing finances, bank accounts and food services.

Vail retired in the spring after 24 years with Greenfield-Central. Hilton resigned last school year; she started working for Greenfield-Central in 1997 as a science teacher, according to her LinkedIn profile.

The state agency also stated there was “no effective oversight or review of the compensation calculated to be paid to Zurwell, Vail, and Hilton as calculated by Zurwell. … There was no documentation indicating that anyone had reviewed the calculations to ensure that the correct amounts were being paid and withheld.”

On Sept. 12, state officials discussed the audit with Vail and her attorney, David Hensel; as well as Hilton’s attorney, David Deal. Zurwell was not interviewed.

Hensel declined comment to the Daily Reporter on the audit, and Deal did not return a call before press time. A number listed for Zurwell was disconnected.

According to the official statement from Greenfield-Central Schools, after the district’s internal investigation concluded, officials “almost immediately … took corrective action to avoid similar issues.”

“The district instituted additional internal controls, implemented increased checks and balances, and simplified contracts to make them more transparent for all stakeholders,” according to the statement.

“There is regret this issue occurred on our watch,” Olin said. “We are confident that no school programming or staffing was adversely impacted by this matter. In fact, the district continues to expand student opportunities, instructional programs and the teacher workforce. We have maintained a strong financial footing, as recognized by the S&P’s AA+ rating that we received a few weeks ago.”

Olin, the school board and “select corporation staff members” cooperated with Indiana State Police and the board of accounts, according to the statement.

The Hancock County prosecutor’s office has been working with Indiana State Police over the past year, Prosecutor Brent Eaton said. He commended Olin’s quick thinking to notify the appropriate state agencies after conducting the internal investigation.

Eaton said it’s an active investigation, which the prosecutor’s office is “taking seriously.” He said the county will pursue criminal charges if the evidence warrants it and “see that justice ultimately is done.”