A.G. Gancarski
In a meeting of the Jacksonville City Council Finance Committee Wednesday, Council Auditor Kyle Billy presented a report on the local Police and Fire Pension Fund‘s bank account.
That report revealed myriad governance issues with the fund throughout 2016, including dubious purchases and questionable accounting practices.
Checks without signature, checks without documentation, delayed check endorsements, questionable invoicing for medical examinations, payments made without adequate support, failure to present all payments to the Board of Trustees (a failure in database management), and an accounting system with software that hasn’t been supported since 2011: all of these were issues Billy spotlighted.
A big takeaway: the PFPF needs to junk its separate checking account.
“Overall, we found the internal control structure, specifically with regards to proper segregation of duties, would be improved if the fund stopped collecting payments directly and ceased operation of a separate checking account. The revenue could be directed to the Tax Collector and the normal operating expenses could be processed by the City’s Finance Department,” the report reads.
Benefits of that move: a clearer paper trail for audits and more accountability generally.
As well, the audit found “issues with the accuracy and timeliness of the deposits of revenues received directly by the Fund (excluding pension contributions and fines/fees remitted to the City first).”
Another issue identified in the audit: 13 payments being made without adequate support, including one $58,973 payment without an invoice.
Audit recommendation?
Use the city’s accounting division to handle this process.
What the audit calls “questionable payments” also came under scrutiny: “20 out of 2,242 payments from the local bank account or .082% totaling $4,849.69.”
A payment for frequent flyer website membership was among those payments.
Also, this: “We also found a payment from the custodial account totaling $19,219.66 which was made for the purchase of a 2012 Ford Expedition. This payment is questionable from a stand point of why the Fund needed the vehicle and from the stand point of why it was paid from the custodial account which is supposed to only be utilized for professional services.”
Another internal control issue revealed: over $2M in payments not explicitly approved by the board of trustees, between the two accounts the PFPF used.
Further payments were reported in the wrong amount on board minutes, or approved on more than one consent agenda.
Council members had their say also.
Councilman Bill Gulliford, instrumental in PFPF reforms, noted the “excessively high administrative costs” of the pension fund were still trending in the “wrong direction.”
While there has been a leadership change since this report’s time frame, the audit is a lagging indicator of how badly things went in the John Keane era.
