An Audit Report on Benefits Proportionality at the Office of the Comptroller of Public Accounts, the Teacher Retirement System, and the Employees Retirement System
Report Number 16-003
Inconsistencies in the benefits proportionality requirements in the General Appropriations Act make it unclear whether state entities should pay benefits (1) proportionately to their appropriated method of finance or (2) from the same source of funds used to pay the respective salaries.
In addition, under either of those interpretations of the benefits proportionality requirements, sufficient controls are still necessary at the state level to ensure that state entities pay benefits proportionately. However, it is important to note the following:
- State entities can request an unlimited amount of General Revenue funds to pay benefits.
- There is inadequate data available at the state level to monitor whether state entities adhere to benefits proportionality requirements.
The Office of the Comptroller of Public Accounts (Comptroller's Office) developed accounting policy statement 011 (APS 011) and a related reporting form to administer benefits proportionality requirements. APS 011 and the related reporting form are designed to ensure that benefits are paid proportionately to a state entity's appropriated method of finance.
Under either interpretation of the benefits proportionality requirements, the Comptroller's Office should make certain improvements to APS 011 and the related reporting form. For example, APS 011 and the related reporting form do not capture information on non-appropriated funds.
The Teacher Retirement System (TRS) and the Employees Retirement System (ERS) are not required to monitor benefit contributions they receive to ensure that state entities pay benefits from the appropriate funding source. However, they have certain processes to verify that pension and insurance funds receive the statutorily required contributions.
Auditors communicated other, less significant issues to the Comptroller's Office separately in writing.
Download the Acrobat version of this report. (.pdf)