EAST CHICAGO | Eight current and former Library Board trustees collectively owe the library $200,948 for insurance benefits to which they were not entitled, according to a state audit released Friday.
The supplemental report from the State Board of Accounts documents health, dental, vision and life insurance premiums for board members and their families paid in violation of state law during 2008, 2009 and 2010.
Indiana statute reads that, with the exception of the board treasurer, library trustees "shall serve without compensation," but some East Chicago board members and their families have received insurance benefits since 2000 despite a warning from state regulators in 2006 that the practice was illegal.
In requesting the reimbursement of the money to the library, the State Board of Accounts audit noted board members did not contribute toward the cost of insurance and the money was not included as a fringe benefit on the trustees' federal income tax forms.
Individual repayment amounts ranged from $642 from former trustee Diana Garcia-Burns to $52,636 sought from current Library Board President Clifton Johnson, according to the audit.
Johnson and current board member Hector Cavazos, whose bill for the past insurance coverage comes to $27,965, according to the audit, had retained attorneys as of Friday for representation with the state.
Former board members Marco Arredondo and Ricardo Garcia, with repayment requests of $13,153 and $5,585, respectively, have filed installment promissory notes with the office of the Indiana Attorney General, which functions as a collection agency for State Board of Accounts enforcement.
Chasidy Gomez, former board treasurer, has claimed an exemption from her audit-listed debt of $44,686 because state law specifically allows Library Board treasurers to be compensated for their service.
The audit also seeks repayment from former trustees Adolfo Velez of $31,673 and Gary McCracken of $24,604 for the insurance coverage.
Health, vision and dental benefits for trustees cost the library $59,754 in 2008, $61,928 in 2009 and more than $50,819 in 2010, according to the audit, with premiums ranging from $8,458 for single coverage to $18,679 for family coverage.
And during those years, additional costs of life insurance premiums for trustees ranged between $172 to $1,144 per board member.
Trustees continued to approve the payments for themselves in recent years on the advice of Carmen Fernandez, Library Board attorney from 2005 until last month, who claimed conflicting interpretations of state law by the State Board of Accounts and Indiana State Library left the legality of the matter up to the board.
State-mandated property tax caps and reduced tax collection have left the East Chicago libraries with a budget of $2.6 million for 2011 — roughly half the money available in 2006 — with a projected deficit of nearly $1 million by the end of this year.