Southwestern Michigan College President Dr. David Mathews is not taking the recently released report of the Auditor General lying down. In fact, he has doubled down in the case, with SMC filing suit against the OAG contending that reality is considerably different than the new report would indicate. Here is what Mathews and the Dowagiac school have to say about the matter:
Early this week, the Michigan Office of the Auditor General (OAG) released a report condemning Southwestern Michigan College (SMC) for not enrolling part-time students who work on campus into the teachers’ retirement system.
Of course, SMC does not enroll student workers into the teacher’s retirement system. This determination has been made based on direct guidance from the Office of Retirement Services (ORS) and common practice among other community colleges. It is also consistent with the state-and federal mandates that these workers NOT be enrolled in the unemployment insurance system or the social security withholding system.
Misrepresentation in the OAG’s report and questions from the media make it necessary for Southwestern Michigan College (SMC) to set straight the factual record in this matter, as follows:
- The College’s biweekly payroll reports released to the ORS since 2010 clearly disclosed to the ORS that SMC was not making retirement deductions or contributions for part-time student workers.
- The ORS was specifically advised in 2011 of the College’s practices regarding part time student workers. The ORS advised the College that it was acting in compliance with the retirement statute. This is documented in an affidavit from the former human resources director. With respect to the question of whether SMC officials were aware of our reporting practices, College officials were aware of the ORS’ prior advice detailed in that affidavit.
- ORS itself conducted an audit during the period from June to November 2016, which included ORS review of payroll data that reported employees for whom retirement contributions/deductions were not being made. Afterward, ORS issued no audit finding of noncompliance with the retirement act. This “clean audit” was further evidence to the College that it was in compliance with ORS guidance.
- Other Michigan community colleges have similarly excluded student workers from the teachers’ retirement system. During the audit interviews, the OAG was advised of this fact and rejected it. This fact did not match the OAG’s predetermined narrative.
- Every payroll record, financial report, e-mail, and conversation cited in the OAG’s report were voluntarily disclosed to the OAG by the College and its administrators. Nothing had to be subpoenaed. Given this and past reporting to the ORS, there is no basis for claims of fraud or concealment.
- The College has reviewed the OAG’s claim regarding potential liability and finds no basis for a total claim more than 25 times the amount of the claimed actual contribution amount. The OAG provided no responsible accounting to back up this intentionally inflammatory claim.
For all of the reasons above, the college has filed a lawsuit against the OAG in the Michigan Court of Appeals.
