Follow-up Letter

October 1, 2010

Laurie Giardella, Chairperson
Revere Retirement Board
Revere City Hall
281 Broadway
Revere, MA 02151

REFERENCE: Report of the Examination of the Revere Retirement Board for the three-year period from January 1, 2006 through December 31, 2008.

Dear Chairperson Giardella:

The Public Employee Retirement Administration Commission has completed a follow-up review of the findings and recommendations contained in its audit report of the Revere 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 related to membership issues, specifically noting that new employees and/or existing employees whose employment status changes must be enrolled in the retirement system on a timely basis; that certain employees are required to become members of the system; and certain code errors were noted in the database.

Follow-up Result: A report detailing new hires and status changes was provided during the follow up visit. This report should be generated on a regular basis. The system has entered a cycle of reducing total membership through layoffs and attrition. As a result, the priority has migrated away from identifying new members to properly counseling former members of the appropriate options available upon termination of employment. The members previously identified as eligible, but not enrolled, were confirmed to have completed enrollment forms and deductions have begun. The coding errors noted have not been substantially corrected. The system currently has insisted the vendor provide resources to facilitate this process. This finding has not been resolved in its entirety.

2. The Audit Report cited a finding that the system files lacked evidence that certain active members age seventy or older had made an irrevocable election to continue contributing to the syste

Follow-up Result: The retirement administrator was certain that all current active members qualified with these criteria did want to continue their deductions. The reports generally available from the automated system have not been demonstrated to be reliable. Evidence was provided to support the determination that active members age seventy or more were being counseled appropriately relative to their irrevocable election to continue participating in the retirement system. Forms were made available to confirm that premise. This finding has been resolved.

3. The Audit Report noted a finding that several stale dated checks were included in the bank reconciliation and proper notification had not been circulated to resolve these items on a timely basis.

Follow-up Result: An inspection of the current bank reconciliation revealed that several stale dated checks continue to be included as outstanding items in the reconciliation process. The notification procedure referenced in the Board’s response to this finding was not implemented to the extent necessary to resolve this issue. Checks cited in the prior audit were not voided or reissued. The system remains without a reliable process for resolving stale reconciling items on a timely basis. This finding has not been resolved.

PERAC auditors may conduct an additional follow-up visit to ensure appropriate progress is being made in those areas that have not been corrected adequately at this time.

We anticipate your cooperation in resolving these important matters.

Sincerely,
Joseph E. Connarton
Executive Director

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