Tony Zurwell, Christy Hilton and Ann Vail had all been asked to repay the funds they were overpaid. The AG’s office filed a civil lawsuit against Zurwell this month to reclaim over $240,000. Vail and Hilton have settled their cases, officials from the AG’s office said.
HANCOCK COUNTY — Indiana Attorney General Todd Rokita has filed a civil lawsuit in Hancock County Superior Court 1 to help officials with the Greenfield-Central School district collect overpaid funds from a former district administrator, Anthony Zurwell.
The lawsuit was filed Oct. 18 by the Attorney General’s (AG’s) office and states the office is exclusively charged with the responsibility and sovereign powers of recovering public funds and that Zurwell served as business manager for the school district at all relevant times during an audit period.
Officials with the school district have been in an lengthy ordeal with three former district administrators — Zurwell, Christy Hilton and Ann Vail, who were all asked to repay more than $651,000 that district officials say were overpaid over a nine-year period starting in 2010.
As for possible cases against the other two former administrators — Vail, a former associate superintendent, and Hilton, a former assistant superintendent — Rokita’s press secretary, Kelly Stevenson, said in an email to the Daily Reporter the attorney general’s office entered into settlements with the other two parties.
“As they settled their matters with us prior, they were not included in the lawsuit,” Stevenson said.
Details about those settlements were not shared. However, G-C superintendent Harold Olin told the Daily Reporter last year out of the blue the district had received $48,744 from the AG’s office May 11, 2022. He noted there were no other details provided with the money transfer.
Officials from the AG’s office told the Daily Reporter back in October 2021 they had been given an audit report issued by Indiana State Board of Accounts (SBOA) on the matter and were actively working to collect the amounts due to district.
Olin noted at that time the material loss was also reported to the district’s insurance carrier, and the district had received $105,000 from Cincinnati Insurance on Feb. 14, 2020. To date, the district has received $153,744 of the $651,832 in overpaid monies, but had not heard any word from the attorney general’s office until the Daily Reporter informed Olin of the new court filing earlier this week.
The lawsuit against Zurwell states that, during the audit period, an amount of $116,607.73 worth of contract over-payments was received by Zurwell in excess of the amounts he was entitled, and an amount of $95,031.05 worth of insurance premiums were under-withheld and thus improperly received by Zurwell.
The lawsuit further states as a direct and proximate result of the breach of Zurwell’s duties to the school, the school suffered a pecuniary loss in the amount of $211,638.78 and as a direct and proximate result of the breach of Zurwell’s duties to the school, the SBOA incurred additional audit costs in the amount of $33,765.06.
The state is asking for Zurwell to pay back a total of $245,403.84, the lawsuit says. Zurwell was given the summons surrounding the case with the nature of the suit against him stating a complaint to recover the public funds. The summons noted Zurwell had 20 days to respond or a judgment by default may be rendered against him.
Prosecutor Brent Eaton, who had been working with the Indiana State Police (ISP) on the case, said it had been about a year since his office had heard anything from the ISP on possible criminal charges, with the determination none would be filed. That sent the case to the attorney general’s office to try to find the school district some relief.
“It’s good when the government agencies all work together,” Eaton said. “I’m really glad to see movement on the civil side of this case.”
According to the SBOA’s audit, 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.
The inquiry began in late August 2018 when Olin “became suspicious and discovered an improper allocation of funds,” according to statements released at the time by Greenfield-Central. Olin ordered an immediate and 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 administrators’ 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).”
While reports said 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.
