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
Auditor Suzanne M. Bump | Paul V. Doane | James M. Machado | Donald R. Marquis | Robert B. McCarthy | Gregory R. Mennis

Joseph E. Connarton, Executive Director

July 13, 2011

Mr. John P. O’Leary - Board Chairman
Salem Retirement Board
20 Central Street
Suite 110
Salem, MA 01970

REFERENCE: Report of the Examination of the Salem Retirement Board for the   two-year period from January 1, 2008 through December 31, 2009.

Dear Chairman O’Leary:

The Public Employee Retirement Administration Commission has completed a follow-up review of the findings and recommendations contained in its audit report of the Salem 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 several 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 additional 2% deduction was not being consistently withheld.

Follow-up Result
This issue is unresolved. The auditor followed up on the 2% deductions for a July 1, 2011 payroll register relating to the members cited in the 2009 Audit Report. The 2% continued to be improperly withheld on these members regular earnings. In addition, there has been no progress on the development of an Error Exception report which was recommended to assist in the deduction monitoring process.

2. The Audit Report cited a finding that a significant level of absenteeism was evident for one Board member.

Follow-up Result:  The issue has been resolved. The Board member in question has improved attendance to an acceptable level over the period from August 2010 to July 2011.

The Commission wishes to acknowledge the effort demonstrated by the staff of the Salem Retirement Board to correct the deficiencies cited in the most recent examination of the system. PERAC auditors will 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 continued cooperation in resolving this important matter.

Sincerely,

Joseph E. Connarton
Executive Director

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