School Districts, Residents Bear Some Responsibility for Lyons Township Troubles

So who’s to blame for the problems at the Lyons Township School Treasurer’s Office?

We have a few thoughts, but first, here’s a primer for those unfamiliar with the situation:

The treasurer’s office is a small but important government agency that manages more than $200 million in taxpayer money on behalf of more than a dozen school districts in the west suburbs. Recently it came to light that the treasurer for the past two decades, a politically connected appointee named Robert G. Healy, who reports to an elected three-person board, improperly cashed out unused sick, vacation and personal days to the tune of more than $500,000. Not only is Healy accused of doing this without informing the board, it wasn’t clear how many off-days he was entitled to because he’d ordered his staff to stop keeping track of his comings and goings.

In addition, the BGA found Healy’s investment strategy severely lacking. He hired cronies to invest and monitor taxpayer money, and they in turn donated money to a campaign fund he runs.

The BGA also raised questions about whether investment advisors were charging higher-than-normal fees, and putting taxpayer money in investments that violated the agency’s own policies – as well as state law. (One investment in an international bond fund – which apparently was not allowed – lost about $200,000.)

Healy ended up resigning, as did one of the three elected trustees, and now the board pledges to crack down and get a handle on the finances, among other things verifying that no money is missing. The affiliated school districts, including Lyons Township High School District 204, are getting nervous. This is, after all, their money, and there’s a lot of it in the hands of the treasurer’s office.

So we ask again, who’s to blame for things getting this far afield?

Healy is an obvious target. He’s a political animal, with little formal training in the financial sector, and it seems mistakes were made on his watch, though he insists he acted appropriately.

But who was watching him? Not the board elected to manage the agency and follow the money. Members had little or no financial experience either, and they gave Healy virtual free rein.

Outside consultants – some still on the payroll – apparently didn’t notice any serious problems.

In some ways the participating school districts (and by extension the residents of those districts) are just as culpable as everyone else, if not more. It’s their money, and they haven’t been watching over it – except in District 101, an elementary system in Western Springs, where board member Marty Brown spotted irregularities and raised alarm bells with the BGA and others.

Getting back to District 204, the big dog in the western suburbs.

After the BGA and CBS2 published a story about the treasurer’s office troubles, Huffington Post republished it with a photo of Lyons Township High School. We then fielded a snippy voicemail from a district official who was apparently irked about the connection of possible scandal to the school.

Too bad, there already is a connection: District 204, like the treasurer’s office board and most of the other school systems, was asleep at the switch and didn’t do enough to keep tabs on taxpayer money.

Perhaps school districts should worry more about preventing future troubles and – God forbid, once in a while show up at the treasurer’s office board meetings – rather than worry about their perceived image.

Let’s hope there’s not any money missing, that bad accounting and questionable investment decisions are fixed and not repeated. And let’s hope the public officials and residents in Lyons Township learn something from this situation – that paying attention can pay dividends, in every sense of the word.

This blog post was written and reported by the BGA’s Robert Herguth. He can be reached at rherguth@bettergov.org, or (312) 821-9030.

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