Audit Objective
Did the Town of Ridgeway (Town) Town Board (Board) authorize and monitor health insurance benefits for current and former officials?
Audit Period
January 1, 2023 – December 31, 2024.
We extended our audit period back to January 2018 to verify total health insurance costs paid by the Town for officials.
Understanding the Audit Area
As a general rule, a town may provide health insurance benefits to current and former town officials in accordance with New York State General Municipal Law (GML) Section 92-a. Collective bargaining agreements (CBAs), employee contracts, and/or town policies typically address these benefits, which generally outline eligibility, the amounts that an active or former official contribute to the cost of these benefits, and the length of time eligible individuals are entitled to receive the benefits.
To help minimize health insurance costs, it is important that the town board adopt clear written policies regarding the town’s health insurance benefits and officials develop written procedures designed to verify eligibility of health insurance benefits, along with ensuring costs associated with the health insurance benefit are paid in accordance with the town’s policies.
The Town paid $456,338 in health insurance premiums to provide benefits to officials, employees and their spouses and dependents from January 2023 through December 2024 and $704,440 in health insurance premiums over the seven-year period from January 2018 through December 2024 for officials covered under the “Town Work Rules Policy” (Policy).
Audit Summary
The Board did not authorize or monitor health insurance benefits for current and former officials. Due to the lack of controls and oversight of health insurance benefits, the Town Supervisor (Supervisor) did not ensure officials were eligible to receive post-employment health insurance benefits or paid all required health insurance premium contributions owed to the Town, and the Board did not have support to authorize health insurance premium reimbursements to a former official’s spouse. As a result, the Town incurred $236,885 more for health insurance premiums than it should have during the audit period. This amount accounts for approximately 34 percent of the Town’s total health insurance premiums over the seven-year period. When health insurance benefits are not provided in a manner consistent with Board-adopted
policies, it may result in unnecessary costs to taxpayers.
The Board did not:
- Develop a written policy that provided clear guidance to determine who was eligible to receive post-employment health insurance benefits and who was required to contribute toward health insurance premiums.
- Require the Supervisor to develop written procedures to help ensure compliance with the Board-adopted Policy, including verifying all officials were eligible to receive the health insurance benefits and all contributions for health insurance benefits were accurate and agreed with the Policy.
- Periodically review the Policy or make necessary updates to ensure the Policy was clear and consistent with the Board’s intentions.
The Supervisor did not:
- Ensure three former officials were eligible to receive post-employment health insurance benefits and paid $179,325 for health insurance benefits they were not authorized to receive.
- Collect health insurance premium contributions owed to the Town for one Board member totaling $52,659.
- Establish written procedures to ensure all officials receiving health insurance benefits met eligibility requirements and all contributions for health insurance premiums were accurate and agreed with the Policy.
- Review accrued, but unused sick leave calculations provided by the bookkeeper for accuracy or verify that the calculations were supported.
The Board and Supervisor did not:
- Review monthly health insurance invoices to verify eligibility of officials, accuracy of rates, or amounts to be paid by officials who were required to pay some or all the associated health insurance premiums.
- Monitor health insurance premium contributions or ensure health insurance benefits were provided in accordance with the Policy.
In addition, the Board inappropriately authorized health insurance reimbursements to the spouse of a former official totaling $4,901.
The report includes 14 recommendations that, if implemented, will improve the Town’s understanding of authorizing and monitoring health insurance benefits. Town officials agreed with our findings and indicated they plan to initiate corrective action.
We conducted this audit pursuant to Article V, Section 1 of the State Constitution and the Office of the New York State Comptroller’s authority as set forth in Article 3 of GML. Our methodology and standards are included in Appendix C.
The Board has the responsibility to initiate corrective action. A written corrective action plan (CAP) that addresses the findings and recommendations in this report should be prepared and provided to our office within 90 days, pursuant to Section 35 of GML. For more information on preparing and filing your CAP, please refer to our brochure, Responding to an OSC Audit Report, which you received with the draft audit report. We encourage the Board to make the CAP available for public review in the Town Clerk’s (Clerk) office.