Fire Fighters' Pension Commissioner
An Opinion Audit on the Office of the Fire Fighters' Pension Commissioner
April 1996
Report Number 96-062
Overall Conclusion
The fiscal year 1995 general purpose financial statements of the Office of the Fire Fighters' Pension Commission, a component unit of the State of Texas, are accurately presented in all material respects, in accordance with generally accepted accounting principles. However, we identified certain areas which could be improved related to internal controls and the accounting and reporting of certain financial transactions.
Key Facts And Findings
As of the fiscal year ended August 31, 1995, the Fire Fighters' Relief and Retirement Fund had total assets of $16.5 million and paid out approximately $820,000 in retirement benefits.
Our consideration of the internal accounting controls related to the control environment, investments, cash disbursements, and cash receipts disclosed no reportable conditions that involve a material weakness. Subsequently, other financial analysis and review indicated that the financial statements are free from material misstatement, and the Commission complied, in all material respects, with laws and regulations.
Internal controls over a new arrangement for contracted investment services are not sufficient to mitigate the appearance of conflict of interest. Investment managers should report investment activities directly to the Commission and not through other parties. The Commission should obtain data necessary to perform complete reconciliations of investment managers' and custodian's activities. The Commission should have on-line access to their subaccount at the Depository Trust Corporation to verify transactions.
The Commission receives one quarterly billing from the investment consultant for all contracted investment services. The billing detail does not itemize each service and allocate the "wrapped" fee to each service. As a result, the Commission cannot accurately account for its contracted investment services. In fiscal year 1995, $41,676 of professional service fees were included in calculating net gain on disposition of investments due to inadequate billing detail.
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