The New York State comptroller's office has told the Massapequa Water District to change the way it provides life insurance coverage for administrators.
The agency said the district should be providing only group coverage, not individual policies.
District board of commissioners chairman Thomas Hand said Saturday that "the Massapequa board has followed the guidelines set forth by the comptroller and we've taken action" last week to switch the four administrators with individual policies to a group term policy. He added the board was pleased that was the only issue raised in the audit.
The audit for 2013, released last week, said state laws provide the authority for a board of commissioners of a water district to provide officers and employees with group life insurance as a benefit. "There is no similar authority for a water district to provide individual life insurance policies for its officers or employees" outside of a union collective bargaining agreement.
The report noted the district has individual employment agreements with four administrators stipulating the district will pay premiums for an individual universal life insurance policy. Each has $100,000 in coverage.
If an administrator retires after 20 years, or upon reaching 55 with a minimum of five years of service, the district transfers ownership of the policy to the individual. Then the individual can continue making payments or redeem the policy.
District officials have told the state transferring ownership to the individuals would not be an option with a group policy, according to the audit. The state agency instructed the board to submit a plan for complying with the law within 90 days.