Auditors rap comptroller over
million-dollar purchase orders
Posted: Saturday, November 22, 2014 12:15
am
By Don Michak
Journal Inquirer
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The state comptroller’s office over a three-year period
improperly executed a dozen state purchase orders for $1 million or more,
according to the state auditors.
But officials say software has since been added to the
state’s computerized accounting system so it complies with a statute requiring
“pre-audits” of all such purchase orders.
In their latest review of departmental operations in the
comptroller’s office — covering the 2008, 2009, and 2010 fiscal years —
auditors reported that 12 of the 40 purchase orders tested were not approved
but nevertheless executed.
They said officials had deemed eight orders to be exempt
from review and approval, but that the officials were “unable to provide
documentation supporting the reasons for the exemptions.”
Moreover, the auditors said six of 10 approved purchase
orders were OK’d after they already had been executed.
The auditors also said the comptroller’s office had “lost
valuable staff members due to retirements” and didn’t have adequate staff to
follow up with agencies that didn’t voluntarily submit purchase orders for
“pre-audit.”
But they said they were unable to say why the office
previously had not complied with the established guidelines and policies for
pre-approving big purchase orders.
“There are no repercussions for agencies that are not in
compliance with these policies,” they wrote, and no controls
in state’s computerized accounting system to prevent unaudited purchase
orders from being executed.
The auditors recommended that the comptroller follow and
enforce those policies.
The comptroller’s office, they said, responded that the
state’s accounting system over the three-year period didn’t “contain
functionality” to detect the big purchase orders that were not voluntarily
submitted for approval.
The office also advised the auditors that it had since
utilized technology outside of the accounting system to expand its detection of
outstanding purchase orders, and that a software
upgrade to the accounting system will require approval of all requisitions and
purchase orders of $1 million or more.
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Auditors: More miscues managing CT teachers’ retirement
system
By: KEITH M. PHANEUF | September 12, 2014 The Connecticut
Mirror
http://ctmirror.org/auditors-find-more-problems-with-ct-teachers-retirement-funds/
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You can also Access More info on the State Budget/Economy
by CTMirror.org
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The state
agency that oversees benefits for 32,000 retired Connecticut teachers and their
beneficiaries came under fire again Thursday from the state auditors.
While
Auditors Robert M. Ward and John C. Geragosian
expanded concerns they raised earlier about the Teachers' Retirement Board's
struggles to deliver benefits, they also criticized the TRB for failing to:
•Reclaim
benefits in dozens of cases where money was paid out improperly to the
deceased.
•Keep track
of $50 million owed to a retirement health care program throughout most of 2012
and 2013.
"The lack
of internal controls and accounting procedures is shocking," Ward told The
Mirror. "For an agency that is responsible for $14 billion in assets and
over $1.6 billion in receipts and in expenditures, to have the deficiencies
they have is really shocking."
The auditors
had sent a letter to Gov. Dannel P. Malloy in late
May complaining about the TRB's chronic failure to
collect adequate contact information about beneficiaries. Retired teachers can
designate a spouse or other individual to receive their benefits, under certain
conditions, after the retiree's death.
In one
instance, the board had not even attempted to search for five years for a
beneficiary owed $192,000, the auditors noted in the letter to Malloy.
More than
$1.5 billion in total was paid out last year to more than 32,000 retired
teachers or their beneficiaries.
TRB
Executive Director Darlene Perez responded to the governor on June 6, writing
that – despite the one big miss – her agency had failed to deliver teacher
pension funds over the past decade in just 15 of more than 7,800 cases
involving deaths – a failure rate of less than one-fifth of 1 percent. Those
pending cases represent about $1.2 million in undelivered benefits.
A bigger problem
But the auditors’ latest report suggests
the scope of the problem was larger.
The new
audit reports that "as of April 2014, there were a total of 83 deceased
retiree member cases under review in the (TRB's)
benefits division in which the board owed money to beneficiaries. Our review of
11 of these cases disclosed a total of $520,203 in unrecorded
liabilities."
Perez said
Thursday that most of these additional cases cropped up after the auditors
began reviewing her agency, and that the numbers she reported to Malloy covered
a decade before the audit period, which began last spring.
Perez told
the Mirror back in late May that her agency's resources,
"are at an extreme low," and the agency is particularly in need of
updated software – concerns she reaffirmed on Thursday.
The
Teachers' Retirement Board is one of the smallest agencies, both in terms of
funding and staffing, in state government.
Though this
year's board budget technically is just over $1 billion, most of those funds
involve benefits for members. The agency has an operations budget of just under
$2.3 million with 27 full-time positions, 21 of which currently are filled.
A second
concern raised in the latest audit involves 51 cases that the board had under
review, as of April 2014, involving $434,709 in benefits improperly paid out
after retirees' deaths.
In 47 of the
51 cases, the auditors wrote, no collection effort had been made in the prior
10 months.
The TRB
wrote in its formal response to the auditors that "the identification of a
decedent is a difficult issue for pension systems."
Some
families report deaths to the board, which also receives notifications in some
cases from the federal government. The TRB also employs a death identification
service provider.
Still,
"efforts are underway to reorganize the function within the accounting
division," the agency wrote.
$53 million due
The final
major concern raised by the auditors involves the premium retired teachers pay
for their health care – a fee that is deducted from their regular pension
payments.
The board,
in turn, must deposit those premiums into the retiree health fund.
But Ward and
Geragosian wrote that those premiums were not
transferred into the retiree health fund from February 2012 "until the
(TRB) was notified by our staff in November 2013."
At one
point, more than $53 million was due to the health fund, the auditors wrote.
Eventually
the matter was reconciled and the full amount was transferred out of the
pension program and into the health fund.
But state
legislators and the governor build the state budget – including contributions
for both components of the teachers' retirement benefits system – based on the
balances reported by the TRB.
The board is
in violation of state accounting manual requirements "as well as those of
reasonable business practice regarding the proper identification and
recording" of funds owed to system, the auditors wrote.
Perez said
Thursday that her agency had kept track of the health-care premiums on an
internal system, but failed to record the funds properly on the central
statewide accounting network.
KEITH M. PHANEUF is a reporter for The Connecticut Mirror Copyright 2014 © The Connecticut Mirror.