The arrest on Aug. 14 of the former treasurer of an obscure government agency that manages money for school districts has reinforced the desire of Lyons Township High School officials to withdraw from the agency and manage its own money.
The Cook County State’s Attorney’s Office charged Robert Healy, the former treasurer of the Lyons Township Trustees of Schools, with stealing a little more than $1.5 million from his office over a 20 year period prior to resigning last year.
The Lyons Township schools treasurer’s office, based in LaGrange Park, manages money for 13 school districts including Lyons Township High School District 204, Brookfield, La Grange, and LaGrange Park District 102 and Lyons School District 103.
Other local school districts, such as Riverside Brookfield High School and Districts 94, 95 and 96, use the services of the Proviso Township school treasurer’s office.
According to prosecutors, Healy served as treasurer of the Lyons Township Trustees of Schools for 24 years until he resigned in September 2012. Prosecutors allege that Healy, who is 54 and lives in LaGrange Highlands, added unauthorized compensation to his paychecks from 1989 until April 2012, totaling $630,346.78.
Healy also allegedly made 105 unauthorized wire transfers out of the Lyons Township schools treasurer’s bank account to his own bank account, totaling $900,853.32 over a nine-year period ending in April 2011.
He faces up to 30 years in prison if convicted on all charges.
The township school treasurer’s office system dates from 1819, when Illinois’ first General Assembly created the Township Trustees of Schools, typically called TTO’s, system to manage schools. The system is now used only in Cook County.
There are three trustees who are elected, typically without opposition, in the townships that have the office to run the system. These trustees hire a treasurer and staff to invest and manage money and cut checks for school districts.
Typically the treasurer’s office will handle accounts receivable, payroll and investing cash reserves for the member school districts.
Lyons Township High School District 204 pays its own bills and payroll, but must — by law — have the Lyons Township school treasurer’s office invest its cash reserves. The school treasurer’s office pools the reserves from its member school districts and invests the funds in safe, short-term investments.
But District 204 officials want to manage their own money, and State Rep. Jim Durkin (R-Western Springs) has sponsored a bill to allow District 204 to opt out of the system. Although the bill passed the House of Representatives unanimously, it has stalled in the State Senate.
“This level of government serves no useful purpose for Lyons Township High School,” said Mark Pera, the president of the District 204 Board of Education. “Now I can’t speak for smaller districts, but as it relates to LT, this is a unit of local government that serves no useful purpose for us, and we are just better off managing our own money and running our office functions as opposed to having an outside entity doing it for us. We’re perfectly capable of doing it our self — both on the investment and the management office side.”
Pera hopes that Healy’s arrest may provide some momentum for the bill stalled in Springfield.
“It certainly buttresses our argument,” Pera said. “They do not provide any services to us other than the requirement that they have to control our money from an investment standpoint. They provide no office functions for us, and we should really like to get out of their jurisdiction.”
But Mike Thiessen, the president of the Lyons Township Trustees of Schools thinks that LTHS is being selfish and short-sighted in trying to withdraw.
He notes that if District 204 is allowed to leave, it will raise the costs for the other school districts remaining in the system.
“It will create additional overhead for the other districts that are under the TTO’s banner, and it’s a very self-serving piece of legislation,” Thiessen said. “It’s not to the benefit of smaller of smaller districts that feed into Lyons Township [High School].”
Thiessen, who was appointed to the township trustees board in 2012 and elected to a full four-year term in April, said that even a large district like LTHS benefits from economies of scale, because his office manages more than $200 million in funds.
“Managing your money is one thing; managing it effectively and efficiently is another thing,” Thiessen said. “Right now that office has pooled investments of over $200 million, so our fee schedule is based on $200 million of investments. If LT would to manage their investments themselves, their fees would clearly be higher.”
Thiessen said that having his office manage money for many school districts saves the districts money in the long run, because they do not have to hire people to do it themselves.
“It basically sets up and removes overhead from school districts,” Thiessen said. “So if you’ve got 13 school districts and, say, they each manage their own money. Let’s say they each needed one and a half people; that would be 20 people and we do it with eight.”
Thiessen said Healy was a criminal who got caught, and his example should not be used to discredit the whole township schools system.
“This was a criminal who conspired over a number of years to take money and that got beyond an accounting firm, it got beyond lawyers, it got beyond board members,” Thiessen said. “Thank God we caught it, but I think it’s a little late to try and armchair quarterback this thing when LT has been a member of this organization since it started.”
Thiessen said that his office has taken steps to add oversight and prevent future insider theft.
“We put in better business practices, we’ve changed our audit firm, we’ve changed checks and balances within the system,” Thiessen said. “We’ve set up a different wire transfer system so that we’re aware of wire transfers immediately, whether they’re authorized or unauthorized. We have more eyes looking at the books.
“The system’s better now and it’s been fixed. We’ll continually strive to make sure it never happens again, but this was a person that conspired to take money over a number of years and was successful at it.”
This story has has been changed to correct the date of Healy’s arrest. It occurred on Aug. 14.