Public Employees' Retirement Division, Department of Administration financial-compliance audit for the two fiscal years ended ..

74 Pages·1991·1.5 MB·English

by  Montana. Legislature. Office of the Legislative Auditor

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353.549
L72PERD
1993
Ofifice of the Legislative Auditor
State of Montana
Report to the Legislature
Financial-Compliance Audit
June 1993
For the Two Fiscal Years Ended June 30, 1992
Public Employees' Retirement
Division
Department of Administration
The report contains five recommendations to improve the
division's operations. These recommendations include:
Retirement payments to deceased retirees totalling $54,000.
Overpayment of disability retirement payments totalling
$35,528.
STATE DOCUMENTS COLLECTION
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MONTANA STATE LIBRARY
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Direct comments/inquiries to:
Office of the Legislative Auditor
R(K)m 135, State Capitol
92-15 Helena, Montana 59620
MONTANASTATELIBRARY
IIIIIIIP
3 0864 1002 3832 1
FINANCIAL-COMPLIANCE AUDITS
Financial-compliance audits are conducted by the Office ofthe Legislative Auditor to deter-
mine ifan agency's financial operationsare properly conducted, the financial reportsare pre-
sented fairly, and the agency has complied with applicable laws and regulations which could
have a significant financial impact. In performing the audit work, the audit staff uses stand-
ards set forth by the American Institute ofCertified Public Accountants and the UnitedStates
General Accounting Office. Financial-compliance auditstaffmembers hold degrees with an
emphasis in accounting. Most staff members hold Certified Public Accountant (CPA)
certificates.
The Single Audit Act of 1984 and OMB Circular A-128 require the auditor to issue certain
financial, internal control, and compliance reports regarding the state's federal financial
assistance programs, including all findings of noncompliance and questioned costs. This
individual agency audit report is not intended to comply with the Single Audit Act of 1984
or OMB Circular A-128 and is therefore not intended for distribution to federal grantor
agencies. The Office of the Legislative Auditor issues a statewide biennial Single Audit
Reportwhich complies with thereportingrequirements listedabove. TheSingle AuditReport
for the two fiscal years ended June 30, 1991 has been issued. Copies of the Single Audit
Report can be obtained by contacting:
Office of the Legislative Auditor
Room 135, State Capitol
MT
Helena, 59620
MEMBERS OF THE LEGISLATIVE AUDIT COMMITTEE
Senator Greg Jergeson, Chairman RepresentativeJohnCobb, ViceChairman
Senator Gerry Devlin Representative Ernest Bergsagel
Senator Eve Franklin Representative Linda Nelson
Senator Tom Keating Representative Robert Pavlovich
STATE OF MONTANA
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STATE CAPITOL
HELENA, MONTANA 59620
406/444-3122 DEPUTY LEGISLATIVEAUDITORS:
MARYBRYSON
Operationsand EDPAudit
JAMESGILLETT
LEGISLATIVEAUDITOR:
SCOTTA. SEACAT Financial-ComplianceAudit
June 1993 JIM PELLEGRINI
LEGAL COUNSEL:
JOHNW. NORTHEY PerformanceAudit
The Legislative Audit Committee
of the Montana State Legislature:
This is our financial-compliance audit report on the Public Employees'
Retirement Division (division) of the Department of Administration for the two
fiscal years ended June 30, 1992. Included in this report are recommendations
concerning retirement payments to deceased individuals and overpayment of
disability retirement payments. Also included in the report is a recommendation
concerning testing data on the division's computer system for accuracy and
completeness and a disclosure issue relating to the funding of the Judges'
Retirement System. The division's written response to the audit recommendation is
included in the back of the audit report.
We thank the administrator and his staff for their assistance and
cooperation.
Resnectfullv submitte
Scott A. Seacat
Legislative Auditor
Digitized by the Internet Archive
in 2010 with funding from
IVIontana State Library
http://www.archive.org/details/publicemployeesr1993mont
Office of the Legislative Auditor
Financial-Compliance Audit
For the Two Fiscal Years Ended June 30, 1992
Public Employees' Retirement
Division
Department of Administration
Members of the audit staff involved in this audit were Kari D.
Brustkern, Shawn F. Bubb, Jeane Carstensen, Renee Foster, Wayne
Guazzo, Tori Hunthausen, Paul J. O'Loughlin and Julie Quist.

1
Table of Contents
Appointed and Administrative Officials ii
Summary of Recommendations iii
Intnxluction Introduction
1
Background
1
Prior Audit Prior Audit Recommendations 3
Recommendations
Findings and Controls Over Benefit Payments 4
Recommendations Payments to Deceased Retirees 4
Disability Benefits Overpaid 5
Review of Changes to Retirement Files 6
Inaccurate Information Provided to Actuary 8
Untimely Deposits 9
Disclosure Issue Judges' Retirement System Funding 11
Independent Auditor's Summary of Independent Auditor's Report A-2
&
Report Agency
Financial Schedules Independent Auditor's Report A-3
Schedule of Assets, Liabilities, Fund Balance,
and Analysis of Fund Balance Pension Trust and
Agency Fund June 30, 1992 A-4
Schedule of Revenues, Expenses, and Changes
in Fund Balances Pension Trust Funds for the
Fiscal Year Ended June 30, 1992 A-5
Schedule of Revenues, Expenses, and Changes
in Fund Balances Pension Trust Funds for the
Fiscal Year Ended June 30, 1991 A-6
Notes to the Financial Schedules A-7
Appendix B-
Agency Response Public Employees' Retirement Division C-3
Page
i
Appointed and Administrative OfFicials
Public Employees'
Summary of Recommendations
This listing below serves as a means of summarizing the recommendations contained in the report,
the division's response thereto, and a reference to the supporting comments.
Recommendation #1 We recommend the Public Employees' Retirement
Division annually compare its benefit payment
file of retirees to information on deceased
individuals provided by the Social Security
Administration and the Montana Department of
Health and Environmental Sciences
Agency Response Concur. See page C-3.
:
Recommendation #2 We recommend the Public Employees' Retirement
Division verify wage information for individuals
receiving disability benefits
Agency Response Concur. See page C-3.
:
Recommendation #3 We recommend the Public Employees' Retirement
Division properly review changes to retirement
files
Agency Response Concur. See page C-3.
:
Recommendation #4 We recommend the Public Employees' Retirement
Division test data for accuracy and complete-
ness before providing it to the actuary
Agency Response Concur. See page C-4.
:
Recommendation #5 We recommend the Public Employees' Retirement
Division deposit receipts in a timely manner
as required by state law 10
Agency Response Concur. See page C-4.
:
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