The Board of Supervisors ordered an audit Tuesday of L.A. County’s pension fund following a Times investigation of trustees’ spending on tour.
By MATT STILESSTAFF WRITER
JULY 30, 2019 three: forty four PM
The Board of Supervisors on Tuesday ordered an audit of L.A. County’s huge employee pension fund, increasing scrutiny of its trustees’ spending on tour.
In a split vote, the supervisors adopted a movement calling at the county’s auditor-controller to examine operational spending at the Los Angeles County Employees Retirement Assn. And document back inside 60 days.
The assessment is supposed to look mainly at the budget and administrative prices of LACERA because the affiliation is normally recognized. The audit is possibly to encompass high priced trips taken by using trustees to academic conferences and seminars.
Supervisor Hilda Solis said she sought the audit so the county “can reassure LACERA’s contributors that their retirement plans and health advantages are at ease.”
The Times suggested this week that trustees have taken hundreds of journeys, lots of them distant places and that they have valued the fund more than $1.3 million on account that 2015 — costs that outpace those of peer pension budget.
An internal audit launched this month called LACERA a “massive outlier” amongst peer pension finances for tour costs. In economic 2018, for instance, LACERA spent $four hundred,000 on schooling tour for its trustees — three instances as plenty as the California Public Employees’ Retirement System, or CalPERS, the audit determined.
Many of the trips were approved earlier by way of the trustees themselves and in large part adhered to their inner policies. But the amounts have prompted concern outside and inside of LACERA’s Pasadena headquarters.
Although LACERA is a public entity funded through contributions from the county and personnel and returns on investments, it operates independently with its forums, budget, and inner and external auditors. But California law also lets the supervisors order their very own auditor to check a fund’s spending — so long because it doesn’t bypass the price of the overview to the pension fund.
The newly ordered audit might awareness extra widely of LACERA’s “tactics and controls over their administrative operations,” in keeping with Solis’s movement, which becomes co-led by Supervisor Mark Ridley-Thomas. It seeks to “decide whether or not LACERA affords adequate stewardship” overcharges.
The motion includes an evaluation of LACERA’s price range will increase, journey and training operations and administrative expenses, and how the ones compare with different funds and enterprise norms. The movement also consists of choosing the country’s Joint Legislative Audit Committee to study the affiliation.
Supervisor Sheila Kuehl — whose appointee, Alan Bernstein, chairs LACERA’s Board of Retirement — voted in opposition to the latter measure whilst supporting the county audit. Supervisor Kathryn Barger didn’t attend Tuesday’s assembly due to the fact she changed into visiting.
In a written announcement, LACERA stated it continues the “highest regard for transparency,” even stating that it often conducts inner audits.
“LACERA is aware and respects the county Board of Supervisors’ statutory right to perform an audit, and we can cooperate to the fullest volume,” Steven Rice, the affiliation’s performing leader executive, stated in an announcement.
Bernstein, an actual estate investor from Hancock Park, took about $97,000 in trips during the 3 years tested employing The Times — costs that may be inflated with the aid of high-priced admissions prices charged by using businesses that organize the conferences. LACERA will pay the one’s prices and different journey prices for such events to keep away from the advent that its potential clients are influencing trustees.
Other board individuals who topped the journey spending list had been Lt. Shawn Kehoe, a Sheriff’s Department investigator; Vivian Gray, an attorney in the county’s Alternate Public Defender’s Office; and David Green, a social worker inside the Department of Children and Family Services. Their journeys totaled approximately $135,000, $one hundred fifteen,000, and $120,000, respectively, throughout the period.
The supervisors haven’t raised approximately the affiliation’s investments, which have produced wholesome investment returns in recent years.
