By DEBRA HAIGHT
BCR Correspondent
DOWAGIAC – A nearly year old lawsuit Southwestern Michigan College filed against the Michigan Office of Auditor General on the issue of whether part-time student workers need to pay into the teacher retirement pension system is over.
The Michigan Court of Appeals officially granted the college’s motion to withdraw its appeal on Jan. 17. SMC had been appealing a Michigan Court of Claims 2018 ruling in favor of the Office of Audit General over the issue of whether the OAG had the authority to audit the college’s records related to part-time student workers and pension payments.
SMC announced their intention to withdraw from the case in early January after the enactment of two new state laws last year to handle the issue. The laws clarified that community colleges do not have to pay into the Michigan Public School Employees Retirement System for part-time student workers going forward but have to pay what they owe for the past.
The Office of Retirement Services audited community colleges last summer for contributions not made for the 2015-18 years. The ORS said SMC owed $257,569 including penalties and late fees and the college has paid that, SMC President David Mathews said last month. He noted Lake Michigan College has also already paid its past due amount of $116,922.
SMC had been at the center of the controversy over whether part-time student workers must pay into the Michigan Public School Employees Retirement System since 2017. The Office of Auditor General audited the college in 2017 and found that SMC failed to pay $388,600 from 2011-17 and could owe $10 million with interest and penalties.
SMC disputed the OAG’s findings including their authority to conduct an audit and sued the OAG in the Michigan Court of Claims and then the Michigan Court of Appeals. The Court of Claims ruled against SMC in early 2018.
As for the college’s decision to withdraw from the OAG lawsuit, Mathews said last week that the case was resolved “exactly the way that the college said it would.” “The college withdrew our appeal, the OAG did not object,” he said. “The withdrawal was ordered. The case is over.”
Mathews noted that the Office of Retirement Services issued
procedural changes a few years ago that did not have the force of law. Despite that, the OAG attempted to enforce that interpretation as if it did have the force of law and tried to enforce it on SMC alone rather than on all Michigan community colleges.
“As we said before, it is also the case that the OAG has overstepped its authority by becoming in ‘audits’ of local units of government that are not branches of state government,” he said. “The OAG has consistently tried to expand their scope of authority. This past December, the governor vetoed a bill that would have expanded the Auditor General’s powers.”
Mathews said filing the lawsuit against the OAG was “absolutely essential” in raising the visibility of what he called the “crazy policy” of putting part-time student workers into MPSERS. It was also essential to show that SMC was following the same practice as most community colleges in not enrolling part-time student workers in MPSERS.
Michigan Attorney General Communications Director Kelly Rossman-McKinney said last week that the Court of Appeals granted SMC’s decision to withdraw even though the case had been fully briefed and was scheduled for oral arguments in early February.
She noted that the OAG’s position was that the Court of Claims had rightly decided the issue as it concluded that the OAG had the authority to conduct a limited-scope investigatory audit of SMC records.
Rossman-McKinney said the college’s lawsuit ended with the Attorney General’s office not seeking to have SMC pay the state’s attorney fees and the Court of Appeals not ordering it. Mathews has said that pursuing the lawsuit against the OAG cost the college around $152,000.
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