Joseph E. Connarton, Executive Director
December 5, 2012
Mr. Joseph Mahoney, Chairman
Lowell Retirement Board
375 Merrimack Street
Lowell, MA 01852
REFERENCE: Report of the Examination of the Lowell Retirement Board for the two-year period from January 1, 2008 through December 31, 2010.
Dear Chairman 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 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 three specific findings and recommendations included in the audit report for the period referenced above. The results are as follows:
1. The Audit Report cited a finding that the bank accounts were not being reconciled on a timely basis for the period covered by the Audit. This was a finding in the report for the prior Audit period.
Follow-up Result: The auditor reviewed the bank reconciliations prepared by the City Treasurer for several monthly periods since the conclusion of the audit period. The reconciliations were observed to agree with the general ledger and did not involve any unidentified variances. This issue is resolved.
2. The Audit Report noted that a Board member was not regularly attending the monthly meetings of the Board.
Follow-up Result: The auditor reviewed the minutes for 2011 and 2012. At the beginning of 2012 the Board scheduled all the meetings for the entire year. As a result Board attendance has increased to a range of 77.8% to 100%. The Board attendance issue has been addressed and current participation has been determined to be satisfactory. This issue is resolved.
3. The Audit report noted the additional 2% retirement deduction that is applied to compensation in excess of $30,000 annualized for certain members was not being calculated consistently within the same city department.
Follow-up Result: The auditor reviewed various payroll reports from multiple employer units including the Housing Authority, the Transit Authority as well as the City payroll. It was determined the withholding inconsistencies had been addressed and corrected. The 2% calculation is now based on 52 weeks for the City, Housing and Transit Authority. The School Department exemption is based on the relative payroll frequency of the members involved. This issue is resolved.
The Commission wishes to acknowledge the effort demonstrated by the staff of the Lowell 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.
Joseph E. Connarton
cc: Sheryl L. Wright
Thomas R. Moses
William J. Desrosiers
Michael M. Brennan