EAST CHICAGO | Manuel Montalvo, director for the East Chicago Public Library, is disputing a recommendation by state examiners that he reimburse the library $12,379 for travel, lodging, food and vehicle costs.
A State Board of Accounts audit of library expenditures for 2008 and 2009 states auditors could find no library business purpose for trips to Indianapolis; New York City; Madison, Wis.; and San Juan, Puerto Rico.
The audit also suggests that Montalvo repay the library $2,700 in fuel and vehicle maintenance costs that he received in addition to the $600 per month earmarked for those expenses in the employment contract for library director.
In its response to the audit, the library asked the state to reconsider its recommendations because none of the expenditures violated library policies, and all of the payments were approved by the library board of trustees.
"(The State Board of Accounts) found no case of misappropriation or fraud," Montalvo said Monday. "They didn't find one penny missing -- they just decided to disagree with the library board."
The trips were legitimate endeavors in the best interests of the library, according to the library's response, and vehicle-related costs accrued by the director for library business that exceed the stipend also are the library's responsibility.
The library's response did not answer questions regarding payments for dental, health and vision insurance for library trustees and some of their families, when state statute holds that library board members "shall serve without compensation."
Insurance premiums for trustees cost the library $59,754 in 2008, $61,928 in 2009 and, as of Sept. 30, $50,819 for 2010, the audit shows.
The library's comments regarding the examination were filed last week and are expected to be posted online in January along with the state's audit.
State-mandated property tax caps and reduced collection of taxes during the past four years have whittled the city library system's budget to $2.6 million for 2011 -- roughly half the money the libraries had to work with in 2006.
Despite the budget reductions, the library has not cut services or closed any branches, Montalvo said, and all of its policies, procedures and contracts currently are being reviewed for efficiency and compliance with state law.
"This deficit has been looming for years," Montalvo said. "And we've been preparing for it."