Ridgeway faulted by state comptroller for overpaying $237K in health insurance over 7 years

RIDGEWAY – The state comptroller has released an audit of the Town of Ridgeway that faults the Town Board and Town Supervisor for overpaying health insurance premiums by $236,885 over seven years.

Town Supervisor Brain Napoli said the Town Board agrees with the findings and will implement recommendations from the comptroller’s office to ensure no overpayments in the future.

“As Ridgeway taxpayers themselves, the Ridgeway Board is committed to using taxpayer funds efficiently and appropriately,” Napoli wrote in a Feb.19 letter to Melissa Myers, chief of municipal audits in Buffalo for the Office of the New York State Comptroller.

“In the future, we will be cognizant of these findings when updating, implementing, and monitoring policies,” Napoli wrote. “We appreciate the time and thorough efforts of the auditors that will assist the Town Board in the continued managing of the finances of the Town of Ridgeway.”

Napoli said the town’s work rules were updated in 2024 to begin the process of clearer and more definitive language regarding employee and elected official benefits. The state general municipal law allows towns to pay health insurance upon retirement to employees and elected officials, Napoli said. The town’s policies will be utilized in a proper way to administer those benefits, he said in his letter.

The comptroller’s office, in its report about Ridgeway, reviewed town health insurance payments since from Jan. 1, 2018 to Dec. 31, 2024.

The report (click here to see it) was filed March 13 and faulted town officials for the following:

Finding 1 – The comptroller’s office reviewed all health insurance premium payments paid by the Town for certain former officials totaling $198,102. “We determined the Supervisor approved payments of post-employment health insurance benefits for three former officials and their spouses totaling $179,325 that they were not eligible to receive,” the report states.

Finding 2 – The comptroller’s office reviewed health insurance premiums from January 2018 through December 2024 totaling $207,911 for one current Town Board member, the current Board member’s spouse and the Supervisor, to determine whether contributions were made in accordance with the Policies. “We determined the Supervisor did not ensure the Clerk collected health insurance premiums totaling $52,659 from one Board member who was required to contribute toward their health insurance premiums,” the report states.

Finding 3 – The comptroller’s office reviewed all disbursements made to individuals for reimbursement of health insurance premiums totaling $4,901 from January 1, 2018 through December 31, 2024. “We determined that the Board issued reimbursement checks totaling $4,901 to a former Clerk’s spouse for Medicare Part B health insurance premiums over 31 months, from April 2021 through November 2023, without documentation authorizing the payments,” the report states.

Audit Summary

The Town Board did not authorize or monitor health insurance benefits for current and former officials, according to the report.

“Due to the lack of controls and oversight of health insurance benefits, the Town 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,” the report states.

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 auditors stated.

Recommendations

The comptroller’s identified 14 recommendations for the Town Board and Town Supervisor:

1. Update the policy to provide clear guidance for who is eligible to receive post-employment benefits and require the Supervisor to develop procedures to help determine and verify eligibility for post-employment health insurance benefits.
2. Consult with the attorney for the Town to review the current post-employment health insurance benefits being provided by the Town, and, if appropriate, discontinue post-employment health insurance benefits for officials who are ineligible for such benefits.
3. Consult with the attorney for the Town to determine what action, if any, should be taken to recover the $179,325 in health insurance premium amounts paid by the Town that should not have been.
4. Review all health insurance invoices monthly to verify all officials, including former officials, are authorized and eligible to receive post-employment health insurance benefits.
5. Develop written procedures to ensure compliance with the Policy, including eligibility for post-employment health insurance benefits, and specify who is responsible for each part of the process.
6. Review and authorize post-employment health insurance benefits for eligible officials prior to enrollment.
7. Review the bookkeeper’s accrued sick leave conversion calculations for accuracy and verify the amounts are supported by leave records.
8. Update the current Policy to provide clear guidance on what contributions are required of elected officials when they choose to receive health insurance through the Town.
9. Consult with the attorney for the Town to determine what actions, if any, should be taken to collect the $52,659 in required health insurance premiums owed by the Board member.
10. Periodically review the Policy and make necessary updates to help ensure the Policy is clear and consistent with the Board’s intentions.
11. Review monthly health insurance invoices and payments, including officials’ health insurance premium contributions, to help ensure accuracy and compliance with the Policy.
12. Develop procedures to help ensure compliance with the Policy, including the collection of required health insurance premiums from officials, and specify who is responsible for each part of the process.
13. The Board should consult with the attorney for the Town to review the reimbursement payments made to the former Clerk’s spouse and determine what actions, if any, should be taken to recover the $4,901 in reimbursement payments.
14. The Supervisor should verify that all payments are adequately supported and made in accordance with the 2024 Policy before authorizing the payments.