Island Lake misappropriated nearly $400,000 in pension funds
Nearly $400,000 misappropriated in Island Lake
ISLAND LAKE – The village of Island Lake does not have the nearly $400,000 needed to repay the police pension after three years of misappropriation, its auditor said.
State law requires that the village treasurer set aside the money levied for the village’s police pension, but over the past three years, part or all of the levy was spent on village expenses, including skyrocketing legal fees and settlements, according to a presentation made to the Village Board on Thursday evening.
The Village Board went into closed session following a three-and-a-half-hour-long meeting to discuss ways to recoup the money.
It does not have enough funds in the village’s main general fund to repay the missing money – or the interest the pension fund could have earned off that money, according to the auditor’s report.
The state law dealing with pension funds specifically points to the “village treasurer’s” responsibility, but village attorney David McArdle said the village does not have a treasurer.
The village president has been serving as the “treasurer pro temp,” which is not a recognized position, he said.
The $3,000 bond – a type of insurance employers buy to protect themselves against fraud or mistakes – the village has on its village president does not include any role as treasurer, but McArdle said after the meeting that he is looking into it.
The village also does not have a bond on its finance director as far as McArdle is aware, he said.
Finance Director John Little did not tell the past Village Board that the money was being diverted from the pension fund to pay bills, former Trustee Donna O’Malley said.
“When it comes down to making your payroll or paying into the option, which option do you take?” Little said in response to comments from past trustees.
“The obligation by law was that money was supposed to be directed to the pension fund,” former Trustee John Ponio said.
The Village Board also went into closed session to discuss the appointment of a treasurer, but the board had not come out of closed session by the time the Northwest Herald went to press.
A letter has also been sent to the two county treasurers that oversee the village’s levies directing that future levies are directly deposited into the police pension fund.