The Employees Retirement System’s (System) fiscal year 2017 financial statements had material accounting errors in the proprietary fund related to (1) inappropriately reporting the net
position of the retiree insurance plan as an asset in the active insurance plan, (2) lacking support for a loan between insurance plans, and (3) inappropriately applying a change in an
accounting estimate retroactively.
Additionally, the System did not properly implement part of a new standard, Governmental Accounting Standards Board (GASB) Statement No. 74, Financial Reporting for Postemployment
Benefit Plans Other Than Pension Plans, related to its special funding situation in the fiduciary fund.
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