Keto did send in change forms for all six of these employees, according to the report, although sometimes the incorrect form was used, and she failed to “follow-up with the insurance provider to verify that the employees were removed.”
Beginning in October 2011, Keto began to cross out the names of these six employees from the monthly billings, but: “Again, there was a failure to follow-up and address the problem,” the report said. “It appears as if the health insurance provider simply ignored the names of employees who were crossed out” and continued to bill the city for their insurance.
In February 2012, then-City Manager Jered Ottenwess gave Keto a “stellar employee evaluation with an overall rating of ‘excellent’ job performance.” Two months later in April, when the late payment of premiums was discovered, as well as Keto’s failure to enroll several new employees in the city’s insurance plan, Ottenwess issued Keto a written reprimand.
When it was discovered that Keto “failed to properly enroll at least two employees and one retiree in the city’s health and benefits plans,” the report said, Ottenwess assigned the enrollment and status changes to City Clerk Jenifer Rajala.
From April 2012 to March, Rajala said she was unable to locate fully itemized billings, but the information that was available showed insurance payments were still being paid late and in amounts different than those billed.
In the report’s conclusions, Bakalarski said he found no evidence of “deliberate fraud, collusion, or personal gain from the overpayment,” and attributed the problem to incompetence: An absence of checks and balances, a lack of segregation of duties, “poor internal controls; the failure to administer the health insurance enrollment, status change, and billing/payment function with any accuracy, proper review, and follow-up; plus the lack of proper management oversight of an employee and the health insurance function.”