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Board responds, carefully, to pension spiking scandal

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Friday, Oct. 11, 2013, 12:01 a.m.
 

The former Greensburg Salem administrators who were allegedly responsible for spiking six former employees' pensions should be prosecuted, a Salem man told the school board.

“I think they should be punished to the full extent of the law ... no matter what the cost is,” Tom Ridella said during the school board meeting this week.

“It's the principle,” he added.

Administrators and directors carefully responded to Ridella's statements and others made by Salem resident Jim Barbe. Officials cited legal issues for limiting their remarks.

In August, the auditor general's office determined six former administrators had nearly $141,000 in ineligible income considered as part of their pension payments.

The current district administration told auditors that previous “senior administrators” forcibly ordered “subordinates to report the additional benefit payments as qualified earnings,” even though the subordinates told them that doing so was against state pension regulations, according to the audit.

District Superintendent Eileen Amato has said she will name the administrators who allegedly ordered the employees to include the ineligible income when she is legally allowed.

Auditors examined about 30,000 “pieces of paper” during their yearlong investigation, she said.

Three former administrators have appealed adjustments made to their pension payments by the state Public School Employees' Retirement System, agency spokeswoman Evelyn Tatkovski said. The three — former superintendent Tom Yarabinetz, business manager Tom Ferraro and middle school principal Lee Kirchner — received a combined $97,074 in overpayments through direct rollovers and in annuities, Tatkovski said.

Her agency has forwarded information about the adjustments to the state Education Department and the auditor general, the spokeswoman said.

Some people in the current administration knew about problems with the pension accounts before the audit, business manager James Meyer said at the meeting. He declined to elaborate.

Meyer and solicitor John Scales cautioned directors to choose their words carefully because investigations are under way by the pension agency and Education Department, and there may be future legal proceedings.

When Barbe asked whether directors believed the audit, Scales said, “It's too premature to ask that.”

The district has added measures to stop the spiking from happening again, board President Ron Mellinger said.

Everything that happened with the pensions will be made public eventually, he added.

School directors bear responsibility for the misuse of taxpayer money and other problems, Barbe said.

He pointed to a section of the audit in which the current administration said “the previous administration used the practice of presenting partial information to the board and public (such as changes in agreements or percentages rather than dollar amounts).”

Directors and others do not believe they disregarded their financial responsibilities in handling administrators' contracts, the current administration told auditors.

“Rather, they report that a culture of trust had been established in the district from working with the previous administration for so many year,” auditors said. “Because of this, they operated in good faith when negotiating agreements.”

Mellinger admitted the pension problem has not been good for the district.

“Obviously, it's a public relation mess, because we're talking to you about it, and everywhere I go out in public, I hear about it,” Mellinger said.

Bob Stiles is a staff writer for Trib Total Media. He can be reached at 724-836-6622 or bstiles@tribweb.com.

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