Summary of Report 99-012

November 1998

Report Number 99-012

Overall Conclusion

We recommend that the Commission continue to improve its monitoring processes and provide adequate segregation of duties among employees. Segregation of duties at small agencies can be difficult, especially when attempting to expand monitoring activities. Options the Commission might explore include working with the Legislature and Governor's Office to provide additional funding for:

• Helping to maintain full staffing or increasing staffing
• Contracting with another state agency to provide support for monitoring activities

Key Facts and Findings

• During fiscal year 1998, the Board of Trustees and the Commission substantially reduced the investment operations risk to the $25 million Fire Fighters' Pension Fund.

• Staff resources and workloads keep the Commission from fully implementing the remaining three recommendations in SAO Report Number 98-003. These recommendations relate to monitoring internal controls, contractor performance, and investment activity.

• The Commission has two new reportable conditions related to internal controls:

• The Commission is unable to separate duties effectively. If only one employee performs all the steps in a process, the risk of that employee processing transactions with undetected errors or without the agency's knowledge or authorization increases.

• Back-up employees are not available to perform the essential functions of absent employees (such as providing services to local fire fighters' pension boards and calculating benefit determinations and payments).

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