MCDONALD Pension misdirection costs village in penalties

The village received a refund from PERS and applied it to the correct fund.
By SHERRI L. SHAULIS
VINDICATOR TRUMBULL STAFF
McDONALD -- Paying toward three police officers' pensions in the wrong account cost the village more than $18,000 in penalties and interest.
Documents released Tuesday by state Auditor Betty Montgomery's office show that village officials failed to properly contribute to an employee retirement plan for the officers from June 28, 1995, through Jan. 21, 1998. Instead of making the contributions to the Ohio police and fire pension fund, the village paid about $44,000 into the Ohio Public Employees Retirement System.
The audit shows the village should have paid about $40,000 into the state's fire and pension fund. The state ordered the village to make the correction, and also assigned $18,516 in penalties and interest against the village, the audit says.
McDonald Treasurer Raymond Moadus and Finance Clerk Rocco Tondo, who are part-time employees of the village, were not available to comment, but officials from the state auditor's office confirmed the correct payments had been made and the fines were paid.
"Since the village had made erroneous contributions to Public Employees Retirement System for three full-time police officers, the village requested and received a refund [from PERS]," the state audit says.
Recommendation
The mistake will not affect the officers' pensions upon retirement. But the state auditor's office suggested village officials find a way to prevent a similar mistake from happening again.
"We recommend that the village establish policies and procedures that would provide assurance that the village's police officers are enrolled and contribute to the Ohio police and fire pension fund," the report says.
Sloppy bookkeeping also led to other late fees and penalties for the village, the audit noted. McDonald officials failed to make payments on the interest and principal for the 1995 note used for renovations of the water tower, as well as on a 1997 note for street improvements. The initial totals were $7,437 for the water tower and $29,000 for street improvements, the audit says, but since the payments were not made until Dec. 31, 2000, the village was forced to pay a total of $1,845 in late fees.
slshaulis@vindy.com