San Diego City Attorney Michael Aguirre on Sept. 21 reported that the outside auditor for the San Diego City Employees’ Retirement System, Brown Armstrong, had identified 29 deficiencies in the pension system’s internal controls.
“What this tells us is that the internal books and records of the pension plan are in shambles,” said Aguirre. “The organization is more like a fly-by-night operation than a sound system responsible for safeguarding the retirement funds of city employees.”
Among the problems listed in the report, said Aguirre:
* Armstrong noted that, “SDCERS does not currently perform procedures to notify terminated participants of their funds still on deposit with SDCERS.”
* The firm noted no formal policy for processing expenditures, and inconsistencies in the processing of the request-for-direct-payment forms, including lack of approval, difference in account coding from source document to form, and missing invoices and request-for-direct-payment forms misplaced during the city’s audit.
“This is a house in disrepair,” Aguirre said at a news conference. “For months, the pension board has assured us that all is well. It is time for the City Council to move aggressively and correct matters.”
SDCERS was not immediately available to comment on the report.