Commonwealth of Massachusetts | Public Employee Retirement Administration Commission
Five Middlesex Avenue, Suite 304, Somerville, MA 02145
Ph 617 666 4446 | Fax 617 628 4002 | TTY 617 591 8917 | www.mass.gov/perac
Philip Y. Brown, Esq., Chairman
Auditor Suzanne M. Bump | Kathleen M. Fallon | Kate Fitzpatrick | James M. Machado | Robert B. McCarthy | Jennifer F. Sullivan

Joseph E. Connarton, Executive Director

September 7, 2017

Ronald V. D'Onofrio, Chairman
Everett Retirement Board
484 Broadway
City Hall, Room 30
Everett, MA 02149

REFERENCE: Report of the Examination of the Everett Retirement Board for the three-year period from January 1, 2010 through December 31, 2012.

Dear Chairman D'Onofrio:

The Public Employee Retirement Administration Commission has completed a follow-up review of the findings and recommendations contained in its audit report of the Everett Retirement Board  for the most recent period referenced above. We conduct these visits as a regular part of the oversight process. They are designed to ensure the timely implementation of corrective action for the recommendations cited in that report. The examination addressed two specific findings and recommendations cited in that report and other matters that were discussed with the Board at the conclusion of our audit. The results are as follows:

1. The Audit Report cited that the Treasurer for the City of Everett wires funds between bank accounts to cover member refund and transfer disbursements. This monthly transaction is not recorded on the general ledger (GL). 

Follow-up Result:  We reviewed the general ledger activity and witnessed the transfers now being recorded.  We traced one of the entries back to the Warrant and observed the Board member approval as evidenced by a majority of signatures.  This issue is resolved. 

2. The Audit Report cited that members in the DPW department who receive an annual tool allowance stipend were set up in the payroll system to have retirement deductions withheld. Pursuant to 840 CMR 15.03 (3)(f), the term “regular compensation” as defined by M.G.L. c. 32 § 1 shall not include a tool allowance.

Follow-up Result:  We reviewed the list of employees who received tool allowances in 2016.  A sample of these employees were tested and it was determined that the Board is no longer withholding deductions on such compensation.  We also reviewed the refund back to the employees of deductions withheld from the tool allowance for the years 2010 through 2015. This issue is resolved. 

The other matters that were discussed with the Board at the completion of our audit were also reviewed and are resolved.

The Commission wishes to acknowledge the effort demonstrated by the staff of the Everett Retirement Board to correct the deficiencies cited in the most recent examination of the system.

Thank you for your continued cooperation in this important matter.

Sincerely,

Joseph E. Connarton
Executive Director