Highest paid superintendent in Illinois history fired for ‘pay padding’

Following an investigation into allegations of “pay padding,” among other offenses, Calumet school district board members dismissed Illinois’ highest-paid superintendent less than a week before retirement.

Calumet School District 155 dismissed Illinois’ highest-paid superintendent Oct. 26 following a school board investigation into expensive misconduct, according to the Daily Southtown.

The investigation alleged Superintendent Troy Paraday was improperly “padding” his own pay, doctoring and destroying records of his work hours and falsifying the school district’s finances. Paraday’s termination came only days before he planned to retire.

Paraday was the most highly compensated superintendent in state history, according to Forbes, earning nearly $440,000 in total annual compensation, according district records. In addition to a base salary of $336,241, those earnings were sweetened with more than $33,255 in retirement enhancements and a combined $71,755 in annuities and other benefits. Paraday, who served as superintendent since 2006, could have counted on a generous pension, given his high salary and number of years of service. But the termination will cost the former official his pension payout, according to the Daily Southtown.

Egregious behavior

The school board leveled 11 specific charges of misconduct against Paraday. The Daily Southtown lists some of the more egregious allegations, including one charge alleging the administrator falsely claimed the school board had approved a 6 percent raise – amounting to a $25,000 salary bump, which Paraday collected during the last four months of employment. Other improper financial schemes involved Paraday allegedly omitting his excessive post-retirement earnings from his 2019 budget presentation, and compensating himself without limit for any day in which he recorded more than eight hours of work.

Perhaps the most unusual among the allegations involve a “detailed plan” Paraday had apparently conceived in 2010, in which he mapped out his exit from the district and the benefits he anticipated receiving on the way out. The school board, according to the Southtown, discovered the plan “in a folder of Disney photos” on the former superintendent’s computer.

A District 155 attorney submitted the board’s findings to the Calumet City Police Department, but it remains to be seen whether a criminal investigation is pending.

Extravagant compensation

Paraday’s termination comes weeks after the administrator had been placed on paid leave following an investigation by Fox Chicago and Open the Books. That investigation found Paraday’s pending retirement entitled him to $762,000 in unused sick days and vacation time.

Meanwhile, Paraday calculated his own outgoing collections at more than $1.7 million, according to the Daily Southtown, counting “532 unused sick days and 350 unused vacation days multiplied by his nearly $2,000 per diem rate.”

Paraday could have expected a massive pension payout based on his end-of-career salary. However, as the Daily Southtown notes, included in the board’s Oct. 26 resolution discharging him is a revocation of Paraday’s claim “to any severance payment or any post-contractual or post-retirement benefits that may be provided for in his employment contract.”

The need for reform

Taxpayers may find comfort in being off the hook for generous severance pay or a large pension payout Paraday would have otherwise received. Less comforting is the long period over which Paraday’s financial gymnastics went undetected.

What’s worse, Illinois school districts have a history of inflating employees’ late-career salaries in an attempt to inflate their pension payouts. Thankfully, the most recent state budget includes a stricter cap on pension spiking.

Paraday’s excessive compensation is only one example of Illinois’ misplaced spending priorities in education. Illinois spends more per student on K-12 public education than nearly every other state in the Midwest, but yields discouraging results. That’s because too great a share of education funding never reaches the classroom. Instead, many of those education funding dollars are captured by bloated administrative bodies. According to U.S. Census Bureau data, Illinois is ranked 8th in the nation in administrative spending as a percentage of education spending.

Calumet taxpayers – as well as other Illinois taxpayers – deserve an education system that’s transparent and cost-efficient. And while school districts should provide those assurances regardless of Springfield’s priorities, state lawmakers should build on recent reforms that shed light on administrative spending and protect taxpayers against systemic abuses in Illinois school districts when they reconvene next session.