Paid Too Little or Paid Too Much: Educators Get Whacked Either Way

There were two education-related snafu stories last week that made for an odd set of bookends. The first was from Springfield, Massachusetts, where it was reported by CBS TV Channel 3 (WSHM) that a payroll error over the past eight months meant that some 1,400 city teachers were overpaid a total of $1.2 million, or about $800 on average.

Springfield faces an $18 million school deficit in FY 2012, so naturally the city wants its money back. It is proposing a payback period of two to three years, which seems imminently fair.

Members of the School Committee are not happy with the situation and want to know why the payroll error took so long to be discovered, and why no one bothered to believe the teachers who have been calling school administrators and telling them that they were being overpaid. One would have thought that the city's finance officials - who also directly oversee school finances - would have also noticed the city's cash outflow was greater than projected months ago.

However, city officials point to the fact that the payroll glitch began when a new school teacher union contract started, so when teachers began complaining about overpayments, administrators assumed the pay deviations cited were just due to the new contract.                                                                                

On top of making a bad assumption and overlooking the signs of something being obviously wrong (just how often do folks normally complain about being overpaid?), it looks like there wasn't enough IT stress testing done on the school payroll system when the new union contract came into force.

In the other education-related story, the Chicago Tribune  ran a story last week about 280 student graduate assistants at the University of Illinois Urbana campus that have not had required Federal taxes withheld to cover the tuition waivers they received this academic year. The waivers are worth $10,204 for residents and $22,750 for non-resident grad students. 

As a result, a number of affected currently enrolled grad students will receive no pay, some for up to three months, to make up for the missing tax withholdings, the Tribune story states.

A university spokesperson said that "... the problem dated to a computer system switch in 2003, six years before the university discovered that no taxes over that span were withheld for the value of the graduate assistants' waivers..." and further, that:

 "At that time [2003], the university thought the problem was fixed but later learned that the change was only made at the Chicago and Springfield campuses, not in Urbana..."

A university spokesperson did promise at least that the University will pay any back taxes owed to the Internal Revenue Service from 2003 through the last academic year, so former (and current) grad students won't get a nasty letter from the IRS about missing taxes and penalties being owed.

The spokesperson noted that the university felt bad about the situation "... but these withholdings have to be made."

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