Article Archives >> Lead Stories >> June 16-30, 2009
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Are Board Officers Personally Liable
For State Overpayments to School
Court remands case to determine whether
officers breached their fiduciary duty of oversight
Are the Board Chair and Treasurer of a nonprofit community school in Ohio personally liable for overpayments the state made to the school? An appellate court in Ohio has reversed a trial court decision finding strict liability and remanded to determine whether they breached their fiduciary duty in overseeing the school’s finances. (Cordray v. The International Preparatory School, Ct. of App., OH, Eighth App. Dist., No. 91912, 3/21/09.)
After the school had terminated its contract and closed down in 2005, a state audit showed that the state Department of Education had paid $1.4 million too much to the International Preparatory School because its actual enrollment figures were smaller than the number of students for which it was paid. The auditor concluded that the school and the officers were jointly liable to reimburse the state.
Article Archives >> Lead Stories >> June 16-30, 2009
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