A Report on the Audit of the Teacher Retirement System’s Fiscal Year 2021 Financial Statements
In our audit report dated November 19, 2021, we concluded that the Teacher Retirement System’s (the System) basic
financial statements for fiscal year 2021 were materially correct and presented in accordance with accounting principles
generally accepted in the United States of America. The System published our audit report as part of its basic financial
statements, which it has posted on its website at
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We also issued a report on internal control over financial reporting and on compliance and other matters as required by
auditing standards (that report, including responses from management, is presented in the attachment to this letter).
In that report, auditors determined that the System should update its review processes to help ensure that hedge funds
are properly classified as Alternative Investments on the financial statements.
The System incorrectly classified two hedge funds valued at $1.3 billion as Pooled Investments when those funds should have
been classified as Alternative Investments. After auditors brought the error to its attention, the System corrected it
before finalizing the annual comprehensive financial report for fiscal year 2021.
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The Teacher Retirement System should strengthen its process to ensure that hedge funds are properly
classified as Alternative Investments on its Annual Comprehensive Financial Report.
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