Indictment doesn’t affect accounts, officials say

CARSON CITY -- A state college savings program did not lose money because of how it was handled by now Lt. Gov. Brian Krolicki, according to officials who run the program.

Kim Huys, the treasurer's employee who supervises the program, said Krolicki was indicted on charges of mishandling fees the state received from the program, not of taking money out of any college savings account.

She said it would be a mistake for parents who want to help their children to avoid the program because of the indictments of Krolicki and his chief of staff, Kathy Besser.

"The fund is healthy," said Deputy Treasurer Steve George. "All money owed to the state is within the control of the state. This was not a case of someone absconding with money to be used for other purposes."

As treasurer, Krolicki operated the program from its inception in 2001 until he became lieutenant governor.

Under the program, parents contribute money toward the future college expenses of their children. That money is invested by professional investment firms contracted by the state. Earnings of the program are tax free, a benefit that makes the plan especially popular.

Once a person enters college, earnings from his or her account can be spent on any qualified education expenses.

As the economy has soured, Huys said, fewer people have turned to the savings program. She added that the collapse of the stock market has not been good for any investments. She couldn't say whether individuals lost money. Like a 401(k), the types of college savings' investment opportunities vary.

A parent could enroll in a more risky stock program, or one with little risk.

Huys said she already has been receiving calls from concerned parents.

"It is a good plan," George said. "We don't want people to panic and believe their funds are not safe."