Skip to content Skip to left sidebar Skip to right sidebar Skip to footer

Auditor calls out county for employee retirement plan

County Auditor and CPA Charles Steagall appeared at the Feb. 7 meeting of the Commercial, Industrial and Agricultural Committee to discuss a health benefits plan for retired county employees — a plan that he claims was unknown to the auditors before last month.
Existence of the plan came to light at the January meeting of the Budget Committee, during which Mayor Dan Eldridge proposed a retirement incentive that included six months of health insurance at no cost.
“This sparked an inquiry from staff about how this program would co-exist with the current health insurance benefits provided for retirees. This was the first indication to us that Washington County, Tenn., provided postretirement health insurance to its retirees,” reads a letter from Blackburn, Childers and Steagall addressed to Eldridge and commissioners serving as members of the Budget and CIA committees.
According to the letter, the requirement for this information to be included in the audit was effective for Washington County as of June 30, 2009.
The requirement was issued by the Governmental Accounting Standards Board, the independent organization that establishes and improves standards of accounting and financial reporting for state and local governments.
The new requirement is designed to provide more complete, reliable and decision-useful financial reporting regarding the costs and financial obligations governments incur when they provide postemployment benefits other than pensions. Health-care benefits are the most common form of OPEB.
In preparation for implementation of the requirement, according to the letter, the auditors spoke with employees and officials, and inspected the personnel manual during the audit of the 2007 fiscal year.
“We were informed there were no benefits for retirees and no such policy was included in the manual,” reads the letter.
During the CIA meeting, Steagall said the OPEB program is a long-term debt that should be reported as a liability and spread out over a 20-year period.
Steagall also strongly recommended the program be included in the county personnel handbook so all employees have access if eligible, or it could be considered discrimination.
Mayor Dan Eldridge said neither he nor County Attorney John Rambo was aware of the program, which is serving six retired county employees.
Washington County pays 25 percent of the premium for retirees until the person reaches age 65 on Medicare.
“It is not much of a benefit, when you consider the retiree is paying 75 percent of a high-cost premium,” Eldridge said.
However, Eldridge said, the retirees in the program will continue to receive the contribution from the county.
“Clearly, we would never make a change to them,” he said.
The question remains of how Washington County will move forward. County officials met Feb. 9 to discuss the issue.
“The office holders were asked if they recognized a value in the program, and the discussion ended with how to make it a better benefit,” said Eldridge, who is working on some ideas to take back to the county officials at the next meeting.
The letter indicates “a study needs to be performed as soon as possible to determine the amount of this liability so that all liabilities of the county are reflected.”