Summary of Report 98-002

October 1997

Report Number 98-002

The Office of the Fire Fighters' Pension Commissioner's (Commission) general purpose financial statements for fiscal year 1996 are accurately presented in all material respects, in accordance with generally accepted accounting principles. We noted certain matters involving the internal control structure and its operations that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Additionally, in an October 1997 management control audit report, (SAO Report No. 98-003), we noted a material control environment weakness and one instance of noncompliance with depository law.

At August 31, 1996, the Fire Fighters' Relief and Retirement Fund had total assets with a market value of $19.4 million and paid out approximately $910,000 in retirement benefits.

There are 144 member fire departments participating in the pension system and 6,109 total members.

The Commission did not implement three prior year recommendations relating to its investment portfolio. The Commission did not implement the recommendations due to its lack of controls over contracted investment services.

The Commission could not obtain detail billing information under the "wrapped" fee arrangement for investment services, and the Commissioner's approval was not given for all payments.

The Commission is operating without an effective income anticipation schedule to accurately forecast dividend and interest revenue. A material adjustment in the amount of $181,652 was needed to correct the prior years' reported accrual and revenue associated with investment interest income.

Efficiency of operations can be achieved by using the audited fiscal year financial statements in the Commission's annual report to local departments.

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