The Press has learned that Jerusalem Township Trustee Rodney Graffis must repay the township $20,174.04 for health insurance reimbursements he illegally received for health insurance coverage, according to a 2007 state audit.
The report, released on Thursday by the Ohio State Auditor’s Office, stated Graffis was already getting health insurance coverage through his union.
Jerusalem Township reimburses township trustees for the out-of-pocket cost of health insurance premiums if they are denied or opt out of coverage from their primary employer, according to Emily Frazee, deputy press secretary with the auditor’s office. Auditors reviewed the documentation Graffis submitted for reimbursement and found that health insurance was part of his primary employer’s benefit package.
“A review of Mr. Graffis’ supporting documentation…showed that his health insurance premiums were part of his union benefit package and were paid by his employer,” states the report. “The township mistakenly believed they could reimburse Mr. Graffis for this amount.”
Trustee Joe Gray, former Trustee Floyd Tefft, and ex-fiscal officer Don Murray signed the warrants in 2007 that led to an overpayment to Graffis in the amount of $20,176.04, states the report. As a result, they are also liable if Graffis does not repay the township.
“…Because all township officers and the fiscal officer approved and signed the warrants resulting in improper payments, Murray, Gray, Tefft, and their bonding company, the Ohio Township Association Risk Management Authority,” are liable for the entire amount of $20,174.04, states the report, which was forwarded to the Lucas County Prosecutor, and the Ohio Attorney General.
Graffis and Gray did not return repeated calls from The Press for comment.
Murray, who is now fiscal officer of the Allen-Clay Joint Fire District, declined comment.
“I cannot comment on it since I have not seen the audit yet,” said Murray.
Julie Van Nest, who became fiscal officer after beating Murray in last November’s election, declined comment.
Trustee Joe Kiss, who was sworn into office this year, blamed Lucas County Assistant Prosecutor John Borell, the township’s attorney, for telling trustees that Graffis was eligible for the township reimbursements.
Kiss, and some residents at trustee meetings this year, repeatedly raised questions about the payments to Graffis and possible misuse of township funds. Borell even attended some of those meetings to allay their concerns.
“It is Borell’s fault,” Kiss told The Press last week. “Julie [Van Nest] and I signed four checks in 2008 for Graffis’ reimbursement. We did that based on what Borell said. It is his fault for not looking into this more completely.”
Borell, though, contends that the auditor’s office approved of the payments when he spoke to them several months ago.
“The auditor’s legal division told me personally there was not a problem with it. I was quite surprised when this initial finding came out. I relied on the auditor’s office when I gave my opinion to trustees several months ago. It puts everybody in an awkward position.”
Frazee stands by the report.
“Since we reviewed the documentation for this reimbursement that Graffis submitted, he was actually receiving insurance from his primary employer. He didn’t opt out of it, and he wasn’t denied coverage. It was something he was already getting. He really wasn’t eligible to receive reimbursement from the township for something he was already receiving from somewhere else. This money was inappropriately reimbursed, and Mr. Graffis is responsible for paying this back to Jerusalem Township,” said Frazee. “He has not repaid this, and Mr. Graffis contends that the reimbursement was appropriate.”
The auditor’s office will also review reimbursements Graffis received from the township this year, said Frazee.
When the auditor’s findings become final, and if the report is unchanged, Borell said “multiple” people will be liable, including Murray, trustees, former trustees, and the bonding company.
Van Nest and Kiss may also be held liable for signing this year’s reimbursement checks to Graffis.
The auditor may also have to look at previous years to determine how far back Graffis may have been improperly reimbursed, said Frazee.
Mark Losey, acting chief operating officer with the attorney general’s office, said the county prosecutor will get first crack at enforcing the auditor’s findings.
If the prosecutor declines the case, then the attorney general’s office will decide whether to pursue it.
“That decision will be based on several factors - the amount of available resources, whether there are similar cases in the pipeline ahead of it, and the dollar amount,” said Losey. “Twenty thousand dollars is significant. If local law enforcement declines to pursue it, we would definitely have to seriously consider it.”
Lucas County Prosecutor Julia Bates, not Borell, would decide whether to pursue the case, according to Borell.
The township has been engulfed in controversy since Kiss was sworn in as trustee earlier this year. Kiss, who campaigned on restoring fiscal stability to the township, immediately requested copies of township receipts, invoices, and credit card statements upon taking office. Murray, who refused to hand them over, froze the books and said that he had requested a state audit. Murray told the public that the audit was ongoing when he was asked for an update at subsequent trustee meetings. Weeks later, The Press contacted the auditor’s office and learned that Murray never requested a state audit. Soon afterwards, the state auditor conducted an audit of the township’s books.
“All community leaders in Ohio’s cities, townships and villages must keep a close eye on money they spend,” said Auditor of State Mary Taylor. “It is important to know and understand the laws and other restrictions on how public funds can be spent.”