Audit: Health benefits given to the dead

ALBANY - Four Long Island school districts have spent almost $144,000 on health benefits for dead former employees and deceased spouses, State Comptroller Thomas DiNapoli said Wednesday.

Most of the money was disbursed in the Long Beach City School District, where a retiree who died in 1999, P.J. McCray, remained on the health insurance rolls for more than 11 years, state auditors said.

The district paid more than $99,000 in premiums for McCray after his death, only about $26,000 of which has been returned by the medical insurer, auditors said. Separately, Long Beach paid $3,173 for health benefits for a retiree's spouse who died in March, auditors said.

The overpayments were revealed in a statewide audit of 20 school districts that highlighted incomplete tracking of retirees after they left the district, DiNapoli said. Almost $238,000 was spent on health benefits for 28 deceased retirees or spouses in 10 districts across the state, the audit found.

"These districts did not have reliable ways to verify if retirees were dead or alive," DiNapoli said in a statement.

The audit found problems in three other Long Island school districts. Westbury doled out $20,319 for a retiree who died in October 2007. Smithtown spent almost $3,000 for two former employees who died in February and March. South Country paid $17,750 in health premiums for two retirees who died in January 2008 and last February, auditors said. All three districts recouped the money.

As for how the Long Beach error happened, "The district did not have as rigorous an internal control as possible to ensure that this would not happen," said Michael Conte, a Long Beach schools spokesman.

Officials with all four school districts said they agreed with the auditors' findings and are developing better procedures to monitor retirees and their spouses.

A call to Smithtown Superintendent Edward Ehmann was not returned. Westbury schools spokeswoman Colleen Bowler called the overpayments an “oversight” and a “rare case.” Bowler and Conte said the districts agreed with auditors’ findings and are developing more proactive procedures to monitor retirees and dependents.

Alan Phillips, South Country’s assistant superintendent for business, said his district’s $17,750 in overpayments were the result of “two individuals” who “had died and no one informed the district.” School officials contacted state health plan officials in September and “in October we were made whole,” said Phillips.

Auditors recommended that Long Beach, Smithtown, South Country and Westbury develop written policies for tracking retirees.
Conte said the district now uses an annual questionnaire/contact form in addition to the other methods to help ensure such an overpayment does not happen again in the future.

Six Long Island districts — Central Islip, Huntington, Lindenhurst, Massapequa, Port Washington and Sachem — did not have any dead retirees on the health care rolls during the period studied, July 1, 2008 to May 31, 2010.

With Jo Napolitano

and Patrick Whittle