Little Rock's School District has asked the Arkansas Teacher Retirement System to waive nearly $62,000 in interest charges assessed by the system after the district failed to pay more than $19,000 in contributions for an employee.
The system's trustees decided Oct. 7 to delay action until a December meeting on the request to waive the $61,928 interest charges in the matter of Sandra Ledbetter, who has worked for the Little Rock School District since 1991.
The district failed to pay contributions of $19,437 from 1995-2000 on Ledbetter's behalf into the retirement system.
Ledbetter is a multitier support system coordinator at Henderson Middle School, and her salary is $67,869 a year, School District spokeswoman Pamela Smith said Wednesday.
The Arkansas Teacher Retirement System is state government's largest such agency with more than $17 billion in investments and more than 100,000 working and retired members.
The district certified Ledbetter's salary and service for the years from 1995-2000, according to the system's staff report.
"It looks to be a simple error in their bookkeeping process," system Executive Director Clint Rhoden told the board last week.
Trustee Danny Knight of Sherwood said he doesn't understand how an auditor didn't catch the error.
Staff attorney Eric Walker said in an Aug. 13 letter to then-system general counsel Laura Gilson, while the School District wants a resolution of the matter, "the district still denies any negligent wrongdoing and further denies any fault as it relates to this matter."
In a Sept. 12 email to Gilson, Walker wrote Superintendent Michael Poore "has stated that he would like to buy back the years of Ms. Ledbetter ... if the interest can be waived."
Walker said he's spoken with Ledbetter's attorney, Greg Alagood, generally about this.
"They do not want to enter into any type of settlement agreement and ... are only interested in getting the 6 years," Walker wrote in his email to Gilson. "They are going to stand by on the issue."
Alagood last week declined to comment about the case. Ledbetter couldn't be reached for comment Friday.
According to the system's staff report, the system's three-member manifest injustice committee determined a manifest injustice occurred and Arkansas Code Annotated 24-7-205 (d) allows the system to correct an error in a member's record beyond the five-year look-back period.
"However, to correct Ms. Ledbetter's record, the employer contributions in the amount of $19,437.47 must be paid to ATRS," the system's staff report said. The system charged employers an equivalent of 12% of a member's salary in that six-year period, said system general counsel Martha Miller.
Arkansas Code Annotated 24-7-411 (a) requires the system to impose an interest penalty that ranges from 6% to 8% for the years in question.
"A large amount of interest ($61,928.53) has been assessed as a result of the 20 years that has passed since the initial unreported service," according to the system's staff.
Arkansas Code Annotated 24-7-411 (c) allows the board to waive interest if the employer delinquency wasn't the result of "intentional nondisclosure, fraud or misrepresentation and that under the circumstances the payment would be unduly penal or burdensome," the system's staff noted.
The system "has no evidence" the failure to report and remit the contributions was intentional. "Given that the initial failure to report the service occurred over 20 years, the amount of interest due could be considered unduly penal and burdensome."
NW News on 10/16/2019