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
Paul V. Doane | James M. Machado | Donald R. Marquis | Robert B. McCarthy | Gregory R. Mennis
Joseph E. Connarton, Executive Director
June 2, 2010
Mr. Joseph P. Mahoney , Chairman
Lowell Contributory Retirement Board
City Hall, Room 3
375 Merrimac Street
Lowell , MA 01852
REFERENCE: Report of the Examination of the Lowell Contributory Retirement Board for the two-year period from January 1, 2006 through December 31, 2007
Dear Mr. Mahoney:
The Public Employee Retirement Administration Commission has completed a follow-up review of the findings and recommendations contained in its audit report of the Lowell Contributory 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 the City Treasurer had not been supplying the Board with a cash reconciliation for over 18 months, and that there was a $107,846 unidentified variance with the general ledger.
Follow-up Result: The treasurer is now providing a monthly cash reconciliation to the Board, as obligated to do as custodian of the retirement funds. The March 31, 2010 cash reconciliation from the treasurer was reviewed and found to have an identified variance of $10,000, which will be cleared in the following month. This finding is resolved.
2. The Audit Report cited a finding that the City had underpaid their FY07appropriation by $113,412, and the Lowell Housing Authority had underpaid their FY08 appropriation by $240,727. Also that the Board had no process to monitor the payments from the various governmental units.
Follow-up Result: Make-up payments have been received by the Board. The staff has developed an Excel spreadsheet to monitor full and timely payments from all governmental units. This finding is resolved.
3. The Audit Report cited a finding that as of the end of the audit period, $278,000 was recorded in the Accounts Receivable account that could not be supported. It was also noted that, in many cases, items were booked to Accounts Receivable, but when the cash was ultimately received, incorrect entries were processed and the items were never removed from the Accounts Receivable account.
Follow-up Result: The December 31, 2009 general ledger was reviewed to determine if the Accounts Receivable account was supported. As of that date the account was compared and found to agree with the Assets and Liabilities page and Schedule A of the 2009 Annual statement. The entries were determined to be properly documented. This finding is resolved.
The Commission wishes to acknowledge the effort demonstrated by the staff of the Lowell Contributory 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