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
Domenic J. F. Russo, Chairman | A. Joseph DeNucci, Vice Chairman
Mary Ann Bradley | Paul V. Doane | Kenneth J. Donnelly | James M. Machado | Donald R. Marquis
Joseph E. Connarton, Executive Director

October 3, 2008

Mr. Paul D.Brodeur , Chairman
Falmouth Retirement Board
744 Main Street
Falmouth , MA 02540

REFERENCE: Report of the Examination of the Falmouth Retirement Board for the
three-year period from January 1, 2004 through December 31, 2006

Dear Chairman Brodeur:

The Public Employee Retirement Administration Commission has completed a follow-up review of the findings and recommendations contained in its audit report of the Falmouth 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 results are as follows:

1. The Audit Report cited a finding that a review of the bank reconciliations during the audit period disclosed a number of unexplained variances between the adjusted bank balance and the general ledger.

Follow-up Result:  The Treasurer is now reconciling the bank statements on a monthly basis. The board is receiving a list of unpaid checks and similar reconciling items monthly. There have been no unexplained variances between the bank balances and the general ledger.

The Treasurer is now presenting the bank reconciliations to the board for their review at the regular monthly board meetings. This issue is considered resolved.

2. The Audit Report cited a finding that the board failed to make proper and timely lease payments to the Town of Falmouth for the building it occupies at 744 Main Street. Although the lease does not provide for it, the board has been deducting Leasehold Improvements made on the building from the rent payments.

Follow-up Result: The board has added an addendum to the lease, to which the Town of Falmouth has agreed, which allows for the board to deduct Leasehold Improvements made on the building from the rent payments.

The board has also calculated the total additional rent due to the Town of Falmouth for past rental payments. The amount is awaiting board approval prior to being paid to the Town of Falmouth. This issue is considered resolved.

3. The Audit Report cited a finding that some expenses were being misclassified in the general ledger.

Follow-up Result:  A review of the general ledger indicates that these expenses are now being charged to the correct accounts. This issue is considered resolved.

The Commission wishes to acknowledge the significant effort demonstrated by the staff of the Falmouth 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

JEC /cjc

cc: Falmouth Retirement Board Members