While it is understood by those of us who use payroll vendors that payroll errors are fairly common, I would like to reassure all residents of the Sequoia Healthcare District that board members and Chief Executive Officer Lee Michelson took every step necessary to correct and disclose a payroll error ("Sequoia Healthcare District corrects books,” Dec. 8, 2011) which occurred 18 months ago (not three years, as the Daily Journal reported). As president of the district board, I am sensitive to the fact also that all individuals interested and affected by an accounting error deserve an explanation. Finally, I view $16,000 as a large sum of money never to be trivialized when it comes to anyone’s budget, but especially one that impacts residents who have been so supportive of our district.
A year and a half ago the district’s paycheck-writing vendor converted some systems and moved the $400 the district pays to two employees to not participate in our health insurance plan (which would normally cost $1,200 per employee) out of an "in lieu” account and into their gross pay. They did so without notifying the staff. Last August, the same vendor informed us that we had to make up all of the in lieu payments that were supposedly missed (about $16,000, not $26,000 as reported in the article). The district obeyed this directive from the payroll vendor.
The error was easily missed by both the district and the employees because of direct deposit and the fact the employees never detected a change in pay because their gross pay never changed or was not reflected in their bank deposits. The error was recently discovered during our routine annual audit. The district immediately had the vendor straighten out the pay system, began deducting $400 per month from the two employees’ compensation and obtained their written agreement to pay back a lump sum should they cease district employment before the full amount is repaid. This information was in our district CEO’s staff report to the board of directors and was covered in our independent audit report, which validated every financial transaction the district has made over the past year. All this information was presented publicly at the board’s regular meeting.
The district board and staff remain good stewards of public funds. All five publicly-elected members of the board take their fiduciary responsibilities very seriously and would never allow the waste of the public’s money. In fact, the district has invested funds wisely and annually returns hundreds of thousands of dollars in earnings to district programs that are beneficial to all district residents — not just the indigent, as the Daily Journal reported. Consequently, while I am chagrined by the error, I am also happy to report that our taxpayers receive $1.20 to $1.30 in services for every dollar they pay in property tax.
Kim Griffin is the president of the Sequoia Healthcare District.