A.G. Gancarski
Dead pensioners getting money. Inadequate and outdated procedures. Slow responses to audit recommendations.
County Referendum 1 offered a a path to a funding source for Jacksonville’s $2.8 billion unfunded pension liability, but issues remain with the pension office itself.
On Wednesday in the Jacksonville City Council Finance Committee, auditor Kirk Sherman discussed matters with “a few legal issues” related to Jacksonville’s public pensions.
“We still have a few open issues,” Sherman said, and is hopeful for a “glitch bill” after collective bargaining.
Among those issues: computer access rights, with some people having unwarranted access.
Sherman discussed the follow-up to an audit released last week, of the general employees and the corrections officers plans.
The purpose of the follow-up was to discern whether corrective action was taken after a previous audit.
The Finance and Administration Department, Sherman said, complied with recommendations with some exceptions.
Among those issues: “multiple aspects of calculating pension benefits where the municipal code either contradicts current policy or is vague as to the intent of the law … the pension office is in the process of addressing language issues … the legal issues are only partially resolved and that there needs to be a clean-up bill.”
The Finance and Administration Department asserts problems will be resolved via collective bargaining.
Another concern is identifying when pension recipients die.
The audit notes “the pension office did not actively utilize the Death Master File of the Social Security Administration. The department responded that a trial subscription was purchased based on the recommendation in the original report, but the pension office staff found the database was often inaccurate, was time consuming to use, and that this, along with the expense, outweighed the potential benefit.”
The trial subscription costs $2,000 a year; the subscription upgrade costs $5,000.
The auditor recommended using the service, given that the one incident involving a decedent who died in a nursing home saved the city $18,000 when payments were refunded from the pensioner’s nursing home.
“During the 18 months of using this service,” the Finance and Administration Department responded, “the office found little value-add in helping to identify decedents. The one case that you mention as having been caught by the death master file would have also been caught through our current annual affidavit process and would have been returned by the assisted living facility in the same manner.”
Speaking of dead pensioners, some had access to make interesting material changes regarding their accounts.
“One employee had the capability to perform the payroll function and retirement function, which enabled them to process everything for a pensioner without any review by a third party. Additionally, we found that employees that could process the payroll or the annual affidavits were also able to update the pensioners’ addresses in the system allowing them to divert payments from a deceased pensioner by changing their address and forging the annual affidavit,” the auditor’s office noted.
Employee turnover is cited as a reason for this, as well as a shortfall in employees in general. The pension office has just five full-time employees.
Once a new employee is trained and an employee on leave returns, the pension office will resolve this issue.
Another issue: “policy and procedures of the pension office were overall inadequate, outdated and disorganized. The city’s follow-up response indicated that policy and procedures had been updated. We requested the updated policies and procedures. While there are overall guidelines dictated by the municipal code and there are fairly detailed procedures for the JaxPension system, we still feel that the procedures aspect of the manual is inadequate. Overall the procedures need to be cleaned up, enhanced to incorporate all aspects of the office and maintained in a more formal and secure manner.”
