An Audit Report on Ethics Policies for Trustee Investing Practices at the Employees Retirement System, the Teacher Retirement System, and The University of Texas Investment Management Company
April 2009
Report Number 09-031
Overall Conclusion
Ethics policies for investment practices at the Employees Retirement System (ERS), the Teacher Retirement System (TRS), and The University of Texas Investment Management Company (UTIMCO) comply with statutory requirements.
Opportunities exist for all three entities to strengthen the processes through which board members, employees, and contractors disclose information regarding potential conflicts of interest. Additionally, all three entities should strengthen their processes for authorizing and monitoring employees' personal securities transactions and better safeguard confidential investment information.
ERS, TRS, and UTIMCO also should enhance their emphasis on ethics by consistently providing ethics training to board members and employees, strengthening their criminal background checks, and implementing or strengthening processes for employees to report ethics violations anonymously.
Results of a State Auditor's Office survey of employees covered by investment ethics policies at ERS, TRS, and UTIMCO indicated that most employees surveyed believed their entities have high ethical standards. For example, 94 percent of all survey respondents were confident that any ethics violations they report will be appropriately processed and resolved. However, survey respondents' comments indicate that the entities do not provide sufficient training on their ethics policies.
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