A state audit of an unusual public pension arrangement for an N.C. High School Athletic Association official is recommending a criminal investigation for possible fraud.

The audit said the association sought to help an associate commissioner stay on the state pension system by shifting his position over to the Chatham County school district. The association had been converted from a state agency into a nonprofit in early 2010, which meant its employees were no longer eligible to belong to the state pension plan.

The Chatham district's school board approved the arrangement, which allowed the associate commissioner, Rick Strunk, to be identified as a school employee while continuing to work for the association, which would give the district the money to pay Strunk his salary and benefits. The district had no control over Strunk's duties.

The audit found that the arrangement, which lasted roughly a year, did not cost the school system any money. But it meant that Strunk would continue to be considered a public employee accruing more money for his pension. Auditors found that the N.C. Retirement System was misled by the arrangement, which came to an end once it was discovered.

The audit said the arrangement could violate a state law forbidding the receipt of benefits through false pretenses. It said that Strunk, who had 26 years of eligible service, could have received more than $100,000 in improper pension benefits had he retired after 30 years in the system and had been collecting a pension for 14 years.

The audit also said that the association had tried a similar arrangement with the Orange County school district, but the state retirement system said it would have been improper.

The audit can be found here.

From correspondent Tammy Grubb

Chatham school board members delayed choosing a deficit-reduction plan Monday night to allow more time for alternatives.

Superintendent Robert Logan responded to the board’s previous requests for more options with six new scenarios, in addition to the four already on the table. He also explained how teachers might be allocated to the schools next year to achieve a balance of student services if the board approves a scenario that makes deep cuts to teacher’s assistant positions or hours.

All 10 budget-cutting plans include a mix of reductions in central office staff, teachers and teacher’s assistants. In addition, four plans, including one that would change the school calendar, cut 14.58 central office positions and a greater number of teacher and teacher’s assistants. The six new scenarios cut 18.58 positions from central office staff and fewer teachers and teacher’s assistants.

Scenario two eliminates the largest number of school-based personnel at 72 percent of positions cut, while scenario eight cuts the fewest classroom personnel at 32 percent. The last three scenarios save money but cut few classroom jobs; instead, they reduce the hours that teachers’ assistants, maintenance and clerical staff would work.

Several people at the meeting said there are options the superintendent hasn’t considered and have hired their own financial expert, county resident John Williamson, to review the district’s finances. Logan said he will meet Wednesday with Williamson.

Comment boxes are also in the schools this week so teachers and staff can share their thoughts. Those will be picked up Friday.

“We do not believe there is a need for a rush to judgment,” said Judi Anderson, who asked the school board to wait until the state has a solid budget plan.

The school board can wait another week, but it can’t wait for the state to finish its budget, board Chairwoman Deb McManus said. The schools budget is due to the county commissioners by April 15, although there will be time to make adjustments later, she said.

The board will pick a scenario at the April 4 public hearing. McManus said its members are leaning toward scenario 2A or scenario 9, both of which cut hours for some staff but save teaching jobs. The board asked Logan to consider ways of reducing the number of furlough days and to include administration staff in those plans, so teacher’s assistants don’t take the brunt of the cuts.

For a closer look at the 2011-12 budget-cutting scenarios or to see an example of how district resources might be allocated among schools next year, go here.