Columbus –Although Ohio law permits townships to pay employees cash in lieu of health insurance, Goshen Township (Clermont County) exceeded allowable amounts for such payments by nearly $12,000, according to an audit released today by Auditor of State Dave Yost.

Yost said the management intention of saving money on township expenditures by offering a cash incentive in lieu of more expensive benefits was a good one, but statutory, contract and policy limits must be complied with.

“The lesson here is, when you need help, ask for it,” Auditor Yost said. “What works in a small township might not work when you start growing into a big township, and sometimes you need the advice of attorneys and benefits consultants.”

Five employees were paid amounts in excess of what was allowable, ranging from as low as $227 to as high as $2,742 in 2009 and 2010. The total of all overpayments was $11,956. Under Ohio law, the township fiscal officer and trustees who signed checks, along with their bonding companies, are jointly liable for the findings. Township officials noted in a response to the audit that payment plans have been arranged.

The employees in question had opted not to receive the same health insurance benefits provided to other employees, and township policy allowed these employees to receive cash payments in amounts up to $4,000 instead of the health insurance benefit. However, Ohio law provides that, in addition to the limit adopted by the township, employees may not be paid more than 25 percent of the amount that would have been paid on the employee’s behalf for the health insurance benefit. In the case of each of the employees, payments were made up to the full amount of $4,000, when lower actual amounts applied.

The annual operating budget of Goshen Township is approximately $4.3 million.

A full copy of this performance audit may be accessed online.