november 5-7, 2012 redondo beach, california · 2017-09-08 · november 5-7, 2012 redondo beach,...

NOVEMBER 5-7 , 2012

Redondo Beach, California

PROFESSIONAL DEVELOPMENT CONFERENCE

CONFERENCE AGENDA

ACTUARIAL DATA FILE ANALYSIS 101 AND BEYOND

INTRODUCTION

WORKPLACE INVESTIGATIONS

OPENING COMMENTS

INVESTMENT ADVISOR COMPLIANCE

ROLL CALL OF THE STATES

HEALTH CARE REFORM

REAL ESTATE INVESTMENTS

CONFERENCE ATTENDEES

THE CLOUD

APPFA MEMBER DIRECTORY

METADATA

CONFERENCE EVALUATION FORM

THE GASB REVOLUTION

NOTES & ADDITIONAL INFORMATION

NOVEMBER 5-7 , 2012

Redondo Beach, California PORTOFINO HOTEL & YACHT CLUB

260 PORTOFINO WAY 310.379.8481 www.hotelportofino.com

Earn 18 CPE Units – See Details Inside

PROFESSIONAL DEVELOPMENT CONFERENCE

http://www.hotelportofino.com/

FALL 2012 APPFA PROFESSIONAL DEVELOPMENT CONFERENCE | REDONDO BEACH, CALIFORNIA

SUNDAY NOV 4, 2012| WELCOME RECEPTION The Pacific Room

6 – 8:30 PM Join us for cocktails, food and more!

MONDAY NOV 5, 2012| DAY ONE The Bayside Ballroom

7:30 – 8:30 AM Breakfast and Registration

8:30 – 8:45 AM Introduction…………………………………………………….……Steve Hayward, APPFA President, SURS of Illinois

8:45 – 9:15 AM Opening Comments…………………………….………………………..…Tom Moutes, General Manager, LACERS

9:15 – 10 AM Roll Call of the States……………………..……………….…….......Ryan Babin, APPFA Vice-President, LASERS

10 – 10:15 AM Break

10:15 AM – 12 PM Roll Call of the States (continued)…………………………..…Ryan Babin, APPFA Vice-President, LASERS

12 – 1:15 PM Lunch

1:15 – 2:15 PM Real Estate Investments…………………Mike Gutierrez, Managing Partner, KPM & Associates, LLP

2:15 – 3 PM The Cloud……………………………………………..…………………………………….…James Pu, Systems Director, LACERA

3 – 3:15 PM Break

3:15 – 4:45 PM Metadata……………………………………………………..……………………………….James Pu, Systems Director, LACERA

6 – 10 PM Group Dinner at Kincaid’s Restaurant

TUESDAY NOV 6, 2012| DAY TWO The Bayside Ballroom

7:30 – 8:30 AM Breakfast

8:30 – 10:45 AM The GASB Revolution…………..…………………...Paul Angelo, SVP and Actuary, The Segal Company &

Eric S. Berman, Managing Partner, Brown Armstrong 10:45 – 11 AM Break

11 AM – 12 PM Actuarial Data File Analysis 101 and Beyond………...…….Ryan Babin, APPFA Vice-President

12 – 1:15 PM Lunch

1:15 – 3 PM Workplace Investigations (Pt. 1)………………….. Eugene F. Ferraro, CEO, Business Controls, Inc.

3 – 3:15 PM Break

3:15 – 4:45 PM Workplace Investigations (Pt. 2)……………………Eugene F. Ferraro, CEO, Business Controls, Inc.

4:45 PM Business Meeting

WEDNESDAY NOV 7, 2012| DAY THREE The Bayside Ballroom

7:30 – 8:30 AM Breakfast

8:30 – 10 AM Investment Advisor Compliance.…..………………….…Jorge A. Rodriguez, ACA Compliance Group Dan Smith, ACA Compliance Group

10 – 10:15 AM Break

10:15 – 11:45 AM Health Care Reform………..Jorge A. Alvidrez, Vice-President and Consulting Actuary, Aon Hewitt

11:45 AM CONFERENCE ADJOURNS

ASSOCIATION OF PUBLIC PENSION FUND AUDITORS

Professional Development Conference Agenda


INTRODUCTION Steve Hayward, APPFA President Steve Hayward is the Director of Internal Audit for the State Universities Retirement System of Illinois (SURS), which is located in Champaign, Illinois. He has been in this position since 1984. In this capacity he is responsible for directing all internal audits and internal control reviews for all areas of SURS.

Prior to joining SURS in 1984, Mr. Hayward worked in various auditing and accounting positions for McGladrey & Pullen, CPA’s and Growmark.

Mr. Hayward has a Masters degree in Accountancy from the University of Illinois in Champaign. He also has a Bachelors of Science degree in Accounting from Illinois State University in Normal.

He is the current President of the Association of Public Pension Fund Auditors (APPFA). He has served the organization as Vice President, Secretary and Board member for over 18 years, and was one of four original members that helped form APPFA in 1991. In addition, he is a Certified Public Accountant and a member of the Institute of Internal Auditors. He also received the ASLAN Award in 2000 in recognition of his role as “guardian of the public trust” for pension funds.

OPENING COMMENTS Tom Moutes will share some of his views of the challenges in the current public pension environment facing administrators and auditors.

Tom Moutes, General Manager, LACERS Since 1983, Mr. Thomas Moutes has held a number of positions in various Los Angeles City Departments. Joining the Los Angeles City Employees’ Retirement Association (LACERS) in 2001, he served as Chief Management Analyst heading the Retirement Services Division for four years and the Administrative Services Division for a year and a half, prior to becoming the Assistant General Manager. Mr. Moutes has served as LACERS General Manager since 2010.

Mr. Moutes earned a Bachelor of Science Degree (Summa Cum Laude) in Business

Administration from California State University, Northridge, a Master of Science Degree in Public Administration from California State University, Northridge, and a Certified Employee Benefit Specialist designation from the International Foundation of Employee Benefit Plans and the Wharton School of the University of Pennsylvania.

ROLL CALL OF THE STA TES A representative from each participating organization will speak to the group about current audit areas, ongoing projects, and recent legislation affecting their pension fund. They will discuss how they get results, overcome obstacles, and prepare for issues in their audit shops. Dialogue will be facilitated by Ryan Babin, APPFA Vice-President to present possible solutions for problems and ongoing issues. The session is designed to prompt networking by identifying peers working on similar projects or facing similar challenges.

Ryan Babin, APPFA Vice-President Ryan began his career as an Internal Auditor for the Louisiana State Employees’ Retirement System (LASERS) in 2003 and is the current Audit Director. He earned a Bachelor of Science Degree in Accounting from Nicholls State University. He is a Certified Internal Auditor (CIA), Certified Information Systems Auditor (CISA) and Certified Public Accountant (CPA). Ryan also serves on the Best Practices Committee.

REAL ESTATE INVESTME NTS UNDERSTANDING THE AUDITING RISKS Mike Gutierrez, CPA This presentation will provide an introduction to audits of real estate investments. The speaker will explain the common types of real estate investments and the resulting audit approaches for such investments. The presentation will highlight the risk areas that internal auditors should identify and address in their real estate audit plan. Finally, the speaker will share experiences of identifying audit risks and provide examples of typical findings and resolutions in real estate audits.

MONDAY NOVEMBER 5, 2012


Mike Gutierrez, CPA, Managing Partner, KPM & Associates, LLP, Costa Mesa, CA Mike Gutierrez began his career with Conrad & Associates, LLP in 1994 upon graduating from California State Polytechnic University of Pomona. Mike worked on a variety of financial and compliance audits with large federal and state agency clients. In 2003, Mike became the Senior Manager in-charge of the Real Estate Compliance Audit division. Clients included several large public pension funds and private land owners. In 2005, Mike became a Partner in the firm and began to build the division’s audit practice including construction compliance audits. In 2011, Mike became the Managing Partner of KPM & Associates LLP.

Mike has been in public accounting for 18 years but has devoted the past 9 years to providing public and private clients with consulting and compliance audits of real estate general partners, property managers, and construction contractors. Areas of expertise include asset types such as: Hotel Casino, Retail, Industrial, Office, Apartment, Residential, Urban Infill, Senior Housing, and Land Development.

Mike has provided his public pension fund clients with remote and in-field consulting expertise in an effort to transfer knowledge to the Internal Audit division. In addition, Mike and his associates have performed numerous in-field compliance audits as an out-source function to the Internal Audit divisions. As a result, Mike has an array of experiences to share with the members of APPFA.

THE CLOUD WHAT’S INSIDE James Pu, Systems Director, LACERA Everyone talks about "The Cloud" and wanting to be "In the Cloud", but not many actually understand what is actually inside The Cloud. What are the risks and rewards? What do we consider before flying into The Cloud? What are some of the potential legal and logistical issues surrounding The Cloud? What do we audit? What questions do we ask before engaging in The Cloud?

The truth is we are all in The Cloud in some way. In this session, we will discuss the history of The Cloud, some of the technologies that make up The Cloud, ideal applications, potential pitfalls, necessary due diligence, and some recommendations to ensure that your organization is on Cloud 9.

METADATA WHAT YOU DON’T KNOW CAN HURT James Pu, Systems Director, LACERA What hidden information in your electronic documents can reveal more than you intend to share? How do you ensure that a document is properly cleansed before they are sent to others? What concealed information may be helpful during an investigation?

In this instructional session, we will show you what metadata is, where they can be hidden in popular file types, how they can be used, and how they should be cleansed. We will also include methods to optimize scanned documents, reduce the final file size, and improve quality at the same time. These simple steps can result in faster printing, more efficient email, and ensure that you do not reveal uncontrolled information.


http://www.usapics.net/wp-content/uploads/2012/05/redondo-pier-redondo-beach-california.jpg


James Pu, Systems Director, LACERA James Pu is LACERA's Chief Information Officer and Information Security Officer. With over twenty years of experience in the information and business technology arena, James manages the organization's comprehensive IT program encompassing development, infrastructure, security, and more. James continues to challenge the industry to improve technology efficacy and data security, often meshing the best-of-breed systems to create capabilities that were previously unavailable. In 2001, James pioneered an enterprise biometric authentication system that integrated single-sign-on, resulting in a more secure, yet zero password environment.

Prior to joining LACERA in 1994, James was engaged in consulting services, including participation in the Galileo program at Jet Propulsion Laboratory. Possessed of expertise in multiple technologies, James has provided innovations in data security, mobile and wireless communications. James is active in peer education and his opinions on current and emerging technologies are highly valued in the industry. James was recently cited in a syndicated article on cloud computing security. James Pu is a Certified Information Systems Auditor and Certified in the Governance of Enterprise Information Technology.

GROUP DINNER KINCAID’S RESTAURANT 500 Fisherman’s Wharf, Redondo Beach, CA

Join us for an evening of great food and a view of the harbor lights at Kincaid's Redondo, a stunning restaurant on the Redondo Pier. Guests of Kincaid’s enjoy one of the best seaside dining experience experiences in Southern California with unobstructed views of the water as they watch the waves crash underneath the restaurant.

Only Kincaid's recalls the simpler place and time of the Great American Fish, Chop and Steakhouses. Since opening in 1999, visitors become lifetime guests because Kincaid's recalls the warmth, memories and flavors they know and love.



GASB REVOLUTION The Governmental Accounting Standards Board (GASB) recently voted to approve two new standards that they hope will substantially improve the accounting and financial reporting of public employee pensions by state and local governments. Statement No. 67, Financial Reporting for Pension Plans, revises existing guidance for the financial reports of most pension plans. Statement No. 68, Accounting and Financial Reporting for Pensions, revises and establishes new financial reporting requirements for most governments that provide their employees with pension benefits. GASB’s intent behind the new standards is to improve the way state and local governments report their pension liabilities and expenses, resulting in a more faithful representation of the full impact of these obligations. We anticipate a lively and interesting presentation, from both an accounting and actuarial perspective, on what is in these new standards and what impact they will have on pension funds and plan sponsors.

Paul Angelo, FSA, MAAA, FCA, EA, Senior Vice President and Actuary, The Segal Company Paul Angelo joined The Segal Company's San Francisco office in 1998 as a Vice President and Actuary and was promoted to a Senior Vice President in 2006. Mr. Angelo's areas of expertise include the design and administration of large defined benefit plans, including extensive experience with large public sector plans, public universities and collectively bargained plans.

Mr. Angelo currently serves as valuation actuary for fourteen major California county and city retirement systems and associations. His assignments for these systems have included funding policy design and review, pension obligation bond issues and consulting to bargaining parties on benefit design. Following the recent market turmoil, Mr. Angelo completed a variety of studies of contribution volatility management. He is an active participant on the GASB's Postemployment Benefits Accounting and Financial Reporting Project Task Force and also serves as an

appointed member of the California Actuarial Advisory panel.

Mr. Angelo has over 30 years of actuarial consulting experience and is active in national actuarial organizations. He has a BS in Mathematics from the University of Notre Dame and an MA in Mathematics from Harvard University. He also holds an MAS from the University of Michigan Graduate School of Business Administration. Mr. Angelo is a Fellow of the Society of Actuaries, a Member of the American Academy of Actuaries, a Fellow of the Conference of Consulting Actuaries, and an Enrolled Actuary. He is an accomplished speaker and has presented to the National Conference of Public Employee Retirement Systems, National Association of State Retirement Administrators and the National Council on Teachers Retirement, as well as California's statewide public retirement associations.

Eric S. Berman, CPA, Managing Partner, Brown Armstrong Eric S. Berman recently joined Brown Armstrong and is the managing partner of their newest office in Pasadena, California. He has over 20 years of experience and focuses on federal, state, and local governmental auditing and consulting. He is also the firm’s quality control partner.

Prior to joining Brown Armstrong, Eric spent 11 years as the Deputy Comptroller of the Commonwealth of Massachusetts. One of the numerous responsibilities he had for the Commonwealth was implementation of all Government Accounting Standards Board (GASB) standards.

Through his position with the Commonwealth, he became a nationally recognized authority and author on GASB standards and is a member of the Governmental Accounting Standards Advisory Council (GASAC) as the representative of the Association of Governmental Accountants (AGA) and as an advisor to the GASB on new accounting standards.

TUESDAY NOVEMBER 6, 2012


Eric S. Berman, CPA, Managing Partner, Brown Armstrong Eric is also the chairman of the National Financial Management Standards board, which comments on all new federal and GASB proposed accounting standards and the American Institute of Certified Public Accountants (AICPA) proposed auditing standards. He is the author of the 2011 Governmental GAAP Guide and 2011 Governmental GAAP Practice Manual series and the twice a month Governmental GAAP Update Service newsletter.

Eric has served on GASB’s Derivatives project and GASB’s Environmental remediation project. He also chaired the National Association of State Comptrollers (NASC’s) task force on other post employment benefits (OPEB) and currently serves on its derivatives implementation group. As chairman of the OPEB committee, he won a President’s Award from NASC. Eric has also won a President’s award from the National Association of State Auditors, Comptrollers and Treasurers for his service to that organization. As part of the member of Massachusetts’ GASB Statement 34 Implementation Team, he was awarded the Manuel Carballo Award for Excellence in Public Service. He is also a President’s award winner from AGA and has received high ratings for his presentations in front of conferences all across the country and webcasts. Eric serves on the board of a not-for-profit foundation raising funds for performing arts programs and scholarships at his high school in suburban Pittsburgh, Pennsylvania (which he co-founded).

ACTUARIAL DATA F ILE ANALYSIS 101 AND BEY OND A key document used to cite the health of a retirement system is their actuarial valuation. There are many data elements used when developing the valuation. One of these being the data provided to the actuary from your computer system. Even though this data is critical, there are few organizations that fully understand how the data provided to the

actuary is derived or can attest to the accuracy of the data. Whether you are in the minority or majority, this session is for you.

The session will provide:

Insight into how the actuarial data file process should function and some common control weaknesses.

Practical test cases for use when performing analysis and validation of this data file.

Ryan Babin, APPFA Vice-President Ryan began his career as an Internal Auditor for the Louisiana State Employees’ Retirement System (LASERS) in 2003 and is the current Audit Director. He earned a Bachelor of Science Degree in Accounting from Nicholls State University. He is a Certified Internal Auditor (CIA), Certified Information Systems Auditor (CISA) and Certified Public Accountant (CPA). Ryan is the current APPFA Vice President and also serves on the Best Practices Committee.



WORKPLACE INVESTIGAT IONS Attendees will be introduced to methodologies on how to perform proper and ethical workplace investigations and derive the highest possible return on investment.

An overview of the following topics will be covered:

The fundamentals of the fact-finding

The methods utilized in conducting investigations

The Process of Investigation

How to conduct workplace interviews and obtain proper admissions

How to avoid legal traps and keep your organization out of court

Eugene F. Ferraro, CPP, CFE, PCI, SPHR, CEO of Business Controls, Inc. Mr. Ferraro has been a corporate investigator for over 29 years. Specializing in the investigation and prevention of workplace violence, employee dishonesty, fraud, harassment, discrimination, substance abuse, and misconduct in the workplace, he has conducted thousands of investigations for employers (public and private) throughout the United States and elsewhere. His clients include some of the most successful corporations, law firms and insurance companies in the country. His expertise includes loss prevention/asset protection and security management, negligent and inadequate investigation, negligent hiring, supervision and retention. He is also a published author and book critic, and lectures frequently on the topics of workplace investigations, applicant screening and employee misconduct prevention and intervention.

Areas of practical expertise include:

Workplace Investigations

Pre-employment Screening and Background Investigations

Employee Substance Abuse Investigations

Employee Theft and Dishonesty Investigations

Employee Interviews and Interrogations

Workplace Violence Prevention and Intervention

Corporate Crime, Fraud and Loss Prevention

Security Management

Mr. Ferraro is board certified in both Security and Human Resources Management. He has been a member of ASIS International (formerly American Society for Industrial Security) since 1987 and currently serves as the Program Advisor for the Professional Certified Investigator Review course. He is a member of the ASIS International Standards and Guidelines Commission and recently co-chaired the oversight of the development of the new American National Standards Institute (ANSI) standard on workplace violence prevention and intervention. He has written numerous articles on the topic of workplace investigations and interviews and interrogation for Security Management magazine and is a frequent book critic for the magazine. Mr. Ferraro is also the author of nine books, of which Investigations in the Workplace, Second Edition (2012) is his most recent.



INVESTMENT ADVISOR COMPLIANCE The regulatory environment for investment advisers has changed significantly during the last few years. Several rules and regulations have been proposed and adopted, and additional rules and regulations are on the horizon. Join Dan Smith and Jorge Rodriguez (both former SEC Examiners) from ACA Compliance Group as they provide an overview of the key regulations governing investment advisers’ operations and learn what investment advisers and institutional investors can do to lessen the risk of material violations.

Jorge A. Rodriguez, ACA Compliance Group Jorge A. Rodriguez joined ACA as a Consultant in 2011, after earning a joint JD/MBA degree from the UCLA School of Law and the UCLA Anderson School of Management.

While at UCLA, Jorge interned with the Compliance Group at Guggenheim Partners Asset Management, LLC. He also clerked for the Enforcement Division of State Bar of California and founded LBSA Fund, Inc., a nonprofit 501(c)(3) corporation that awards scholarships to college students.

Prior to attending UCLA, Jorge’s positions included Compliance Officer at Trust Company of the West and Examiner in the Pacific Regional Office of the U.S. Securities and Exchange Commission. In addition, he interned with the Regulation Division of the Financial Industry Regulatory Authority. He has a broad professional and academic background, as well as a diverse skill set, but his primary area of expertise is investment adviser regulation.

Jorge holds a BS in Business Administration from the Haas School of Business at UC Berkeley. He also completed Level I of the CFA Program and obtained an Award in Accounting from the UCLA Extension Program.

Dan Smith, ACA Compliance Group Dan Smith joined ACA in 2004 and is a Partner in ACA’s Los Angeles office. Previously he spearheaded the establishment and management of ACA’s Chicago office. In addition to his client work, Dan oversees a large portion of ACA’s internal training and testing program.

Prior to joining ACA, Dan spent 5 years as a regulator at the Pacific Regional Office of the Securities and Exchange Commission, first as a Securities Compliance Examiner and later as a Staff Accountant. While at the SEC he led and participated in numerous examinations of investment advisers, hedge funds, and investment companies of all sizes. He helped refer several cases to the SEC’s Division of Enforcement and worked closely with the Enforcement staff to pursue those cases. He was also involved in certain SEC focus or “sweep” examinations involving market-timing and late-trading practices.

Dan is a frequent speaker at industry conferences and has been quoted in various industry publications. He received his BA in Economics from Pomona College in Claremont, California. Dan was awarded the Chartered Financial Analyst designation in 2002 and is a member of the CFA Institute and the CFA Society of Los Angeles.

WEDNESDAY NOVEMBER 7, 2012


HEALTH CARE REFORM THE EFFECT ON RETIREE MEDICAL PLANS Since the Patient Protection and Affordable Care Act was signed into law on March 23, 2010, sweeping changes have been put into motion to expand coverage and attempt to control the quality and cost of health care in the United States. The law spells out many related responsibilities to be borne by individuals, plan sponsors, insurers, providers and government. It has been a challenge for many individuals and plan sponsors to understand the changes and comply with so many new requirements. However, the most significant changes have yet to be implemented and along with those changes come significant risks and opportunities.

It is important to understand that much of the law is designed to lay a foundation for more effectively managing the quality and cost of care without providing a specific set of rules or guidance for getting there. For this reason, plan sponsors must look beyond the implementation requirements in the law to develop appropriate strategies to manage coverage and plan costs in the future. This presentation will focus on the key changes affecting retiree medical plans and review some of the common approaches available to plan sponsors to take advantage of related opportunities over the next several years.

Jorge A. Alvidrez, ASA, MAAA, MBA - Vice President and Consulting Actuary, Aon Hewitt Jorge A. Alvidrez is a Vice President and Consulting Actuary in the West Region Health and Benefits Actuarial Practice of Aon Hewitt and works out of the Los Angeles office. He is part of the Los Angeles office Health and Benefits Practice leadership team. His responsibilities include developing service offerings and delivering consulting services to local and regional clients.

Jorge has worked in the benefits and insurance industries for over 30 years. His experience includes large public sector programs and private sector employers. He has collaborated with benefits professionals and clinicians on benefits issues, and finance professionals and auditors on accounting and financial reporting issues. His insurance industry background encompasses over 10 years at Metropolitan Life Insurance Company and the Principal Financial Group. His familiarity with carrier operations and years of experience as a consultant allow him to work effectively with carriers to achieve client objectives.

Jorge has conducted internal training seminars and webcasts at Aon Hewitt and has been a speaker at industry conferences and meetings for the International Foundation of Employee Benefit Plans, Western Pension Benefits Conference, Certified Employee Benefit Specialist program and the Society of Actuaries. Jorge received his Bachelor of Science in Engineering degree from Princeton University and a Master of Business Administration degree from the Anderson School of Management at UCLA. He has been an Associate of the Society of Actuaries since 1986, a Member of the American Academy of Actuaries since 1998, and a licensed life and health agent since 2003.

WEDNESDAY NOVEMBER 7, 2012

APPFA | THE POWER OF ASSOCIA TION The Association of Public Pension Funds Auditors (APPFA) Professional Development Conference is a group-live conference designed to further enhance participants’ auditing skills and provide a forum for the exchange of ideas and concepts. Attendees should have a basic knowledge of accounting and auditing procedures, practices, and theory. There is no experience requirement and no advance preparation is needed.

Participants attending this seminar will receive an attendance certificate following the completion of this program. Auditing and accounting professionals may qualify for a total of 18 hours of Continuing Professional Education (CPE) credits by attending this conference, which is designed to comply with the American Institute of Certified Public Accountants’ Statement on CPE Standards.

APPFA is registered with the National Association of State Boards of Accountancy (NASBA), as a sponsor of continuing professional education on the National Registry of CPE Sponsors; State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be addressed to the National Registry of CPE Sponsors, 150 Fourth Avenue North, Suite 700, Nashville, TN 37219-2417, website: www.nasba.org

ABOUT YOUR SPONSOR

http://www.nasba.org/


REGISTRATION Deadline to register is Friday, October 5, 2012 The conference registration form and $250 fee should be received by Friday, October 5, 2012 to reserve your place at this conference. The registration form, which is located on the APPFA website, has complete details. The registration fee includes all materials, lunches, breaks and the group dinner on Monday evening. There is an additional $50 for Monday night dinner guests.

Business casual attire is appropriate. Please be aware that the temperature in the meeting room may be cool so a jacket or sweater is recommended.

REFUND POLICY Refunds are available if a written cancellation notice is received 10 days before the conference. Refunds will not be issued after that date. For more information regarding administrative policies, please visit our website at www.appfa.org

COMPLAINT POLICY Complaints regarding conference or other matters must be written and should be sent to APPFA, PO Box 16064, Columbus, OH 43216-6064. Complaints will be forwarded to the President who will decide how to address the complaint. The complaint must contain the name, address, phone number and e-mail address of the person submitting the complaint. All complaints submitted will receive a written response.

HOTEL INFORMATION Portofino Hotel & Yacht Club, Redondo Beach, CA www.hotelportofino.com The Conference will be held at the Portofino Hotel & Yacht Club, the only ocean front hotel in Los Angeles. The hotel is located in the heart of Redondo Beach offering panoramic views of the Pacific Ocean, Palos Verdes Peninsula and Catalina Island.

Guests of the hotel are just minutes away from the Redondo, Hermosa and Manhattan Beach Piers, glass-bottom boat tours, shopping in the Riviera Village and South Bay Galleria, and some of the best restaurants in Los Angeles.

Guests of the Portofino Hotel & Yacht Club will also enjoy:

an ocean or marina view room

free high speed, wireless internet access, and

complimentary use of the onsite 24-hour fitness center, pool, whirlpool, and beach cruiser bicycles

The single or double occupancy room rate for a standard guestroom will be $139 per night. This rate will also be available two days before and two days after the Conference. The room rate does not include applicable occupancy tax which is 12.10%. Depending upon availability, there are some discounts on upgrades.

Please make your reservations by 12:00 PM PST on Friday, October 5, 2012 by calling (800) 468-4292. Space is limited. We have secured 75 rooms and the cut-off date for accepting guaranteed reservations at the block rate is October 5

th.

FROM THE AIRPORT Los Angeles International Airport (LAX) The Portofino Hotel is conveniently located just 7 miles from the Los Angeles International Airport (LAX). There are various modes of transportation available to and from the airport.

Taxi Service Taxi service is available from the airport to the hotel for about $30. Taxis can be found curbside on the Lower/Arrival Level islands in front of each terminal under the yellow sign indicating Taxis. Only authorized taxis with an official seal issued by City of Los Angeles Department of Transportation on each vehicle are permitted in the airport.

EVENTS AND ATTRACTIO NS The Best of Southern California Southern California has so much to offer all year round. California travel is all about living life to the fullest, and we have more tourist attractions than any other place in the world.

For more information on what to do and see in the Redondo Beach area in November, you can take a look at http://www.redondobeachresort.org/ or contact the Portofino Hotel Concierge at (310) 379-8481.

CONFERENCE INFORMATION

http://www.appfa.org/

http://www.hotelportofino.com/

http://www.redondobeachresort.org/

INTRODUCTION THE ASSOCIATION OF PUBLIC PENSION FUND AUDITORS (APPFA)

Professional Development Conference Redondo Beach, California

November 5 – 7, 2012

STEVE HAYWARD, APPFA PRESIDENT

Steve Hayward is the Director of Internal Audit for the State Universities Retirement System of Illinois (SURS), which is located in Champaign, Illinois. He has been in this position since 1984. In this capacity he is responsible for directing all internal audits and internal control reviews for all areas of SURS.

Prior to joining SURS in 1984, Mr. Hayward worked in various auditing and accounting positions for McGladrey & Pullen, CPA’s and Growmark.

Mr. Hayward has a Masters degree in Accountancy from the University of Illinois in Champaign. He also has a Bachelors of Science degree in Accounting from Illinois State University in Normal.

He is the current President of the Association of Public Pension Fund Auditors (APPFA). He has served the organization as Vice President, Secretary and Board member for over 18 years, and was one of four original members that helped form APPFA in 1991. In addition, he is a Certified Public Accountant and a member of the Institute of Internal Auditors. He also received the ASLAN Award in 2000 in recognition of his role as “guardian of the public trust” for pension funds.

OPENING COMMENTS THE ASSOCIATION OF PUBLIC PENSION FUND AUDITORS (APPFA)



OVERVIEW

Tom Moutes will share some of his views of the challenges in the current public pension environment facing administrators and auditors.

TOM MOUTES, GENERAL MANAGER, LACERS

Since 1983, Mr. Thomas Moutes has held a number of positions in various Los Angeles City Departments. Joining the Los Angeles City Employees’ Retirement Association (LACERS) in 2001, he served as Chief Management Analyst heading the Retirement Services Division for four years and the Administrative Services Division for a year and a half, prior to becoming the Assistant General Manager. Mr. Moutes has served as LACERS General Manager since 2010.

Mr. Moutes earned a Bachelor of Science Degree (Summa Cum Laude) in Business Administration from California State University, Northridge, a Master of Science Degree in Public Administration from California State University, Northridge, and a Certified Employee Benefit Specialist designation from the International Foundation of Employee Benefit Plans and the Wharton School of the University of Pennsylvania.

ROLL CALL OF THE STATES THE ASSOCIATION OF PUBLIC PENSION FUND AUDITORS (APPFA)



OVERVIEW

A representative from each participating organization will speak to the group about current audit areas, ongoing projects, and recent legislation affecting their pension fund. They will discuss how they get results, overcome obstacles, and prepare for issues in their audit shops. Dialogue will be facilitated by Ryan Babin, APPFA Vice-President to present possible solutions for problems and ongoing issues. The session is designed to prompt networking by identifying peers working on similar projects or facing similar challenges.

RYAN BABIN, APPFA VICE-PRESIDENT

Ryan began his career as an Internal Auditor for the Louisiana State Employees’ Retirement System (LASERS) in 2003 and is the current Audit Director. He earned a Bachelor of Science Degree in Accounting from Nicholls State University. He is a Certified Internal Auditor (CIA), Certified Information Systems Auditor (CISA) and Certified Public Accountant (CPA). Ryan also serves on the Best Practices Committee.




STATE ATTENDEE ORGANIZATION Alaska Scott Jones Alaska Retirement Management Board Alberta, CA Nicole Grey-Heinzer Alberta Teachers’ Retirement Fund Board Arizona Larry Rennaker Arizona State Retirement System Rosie Tomforde Arizona State Retirement System Jeff Volzka Arizona State Retirement System California Lyndon Coggin Alameda County Employees’ Retirement Association Harsh Jahdav Alameda County Employees’ Retirement Association Cheryl Dietz California Public Employees Retirement System Alan Feblowitz California Public Employees Retirement System Young Hamilton California Public Employees Retirement System Phyllis Miller California Public Employees Retirement System Diana Thomas California Public Employees Retirement System Nathan Amick Los Angeles County Employees Retirement Association Beulah Auten Los Angeles County Employees Retirement Association Richard Bendall Los Angeles County Employees Retirement Association Sylvia Botros Los Angeles County Employees Retirement Association Leisha Collins Los Angeles County Employees Retirement Association Ted Granger Los Angeles County Employees Retirement Association George Lunde Los Angeles County Employees Retirement Association Sarah Marks Los Angeles County Employees Retirement Association Quoc Nguyen Los Angeles County Employees Retirement Association David Redman Los Angeles County Employees Retirement Association Darla Vidger Los Angeles County Employees Retirement Association Erin Kenney Los Angeles Fire and Police Pensions Caroline Dinu Los Angeles Fire and Police Pensions James Yeung Los Angeles Fire and Police Pensions Mark Adviento Orange County Employees Retirement System David James Orange County Employees Retirement System Kyle Elser San Diego City Employees’ Retirement System Christina McGough San Diego County Employees Retirement Association Colorado Mary Kay Howard Colorado Public Employees’ Retirement Association Florida Flerida Rivera-Alsing State Board Administration of Florida Illinois Cecilia A. Gonzales Illinois Municipal Retirement Fund Steve Hayward State Universities Retirement System of Illinois Doug Taylor State Universities Retirement System of Illinois Tassi Maton Teachers’ Retirement System of the State of Illinois Stacy Smith Teachers’ Retirement System of the State of Illinois Indiana Teresa Snedigar Indiana Public Retirement System Iowa Roger Wheatley Iowa Public Employees’ Retirement System




STATE ATTENDEE ORGANIZATION Kansas Alberta Rea Kansas Public Employees Retirement System Kentucky Connie Davis Kentucky Retirement Systems Louisiana Ryan Babin Louisiana State Employees’ Retirement System Blake Lee Louisiana State Employees’ Retirement System Maryland Toni Voglino Maryland State Retirement and Pension System Missouri Pam Hoffman Missouri Local Government Employees Retirement System Greg Beck Missouri State Employees’ Retirement System Tom Chapman Public School Retirement System of Missouri Jeff Hyman Public School Retirement System of Missouri Montana Hollie Koehler Montana Public Employee Retirement Administration Nevada Kristina Reyna Public Employees’ Retirement System of Nevada New York Stephen R. Hillerman Office of the State Comptroller, New York Robert Kosky Office of the State Comptroller, New York Ken Kasper New York State Teachers’ Retirement System Bruce Woolley New York State Teachers’ Retirement System Ohio Greg Januszewski Ohio Public Employees’ Retirement System Kellie Rosta Ohio Public Employees’ Retirement System Oklahoma Josh Richardson Teachers’ Retirement System of Oklahoma South Carolina Andrew Chernick South Carolina Retirement System Monica Houston South Carolina Retirement System South Dakota Susan Jahraus South Dakota Retirement System Tennessee Andy Furlong Tennessee Consolidated Retirement System Texas Dinah Arce Teacher Retirement System of Texas Amy Barrett Teacher Retirement System of Texas Lih-Jen Lan Teacher Retirement System of Texas Jennifer Hymel Texas County & District Retirement System Virginia Frank Berry Virginia Retirement System Jane Berry Virginia Retirement System Judy Bolt Virginia Retirement System Matt Priestas Virginia Retirement System Michael Scott Virginia Retirement System Washington Debbie Ocheltree Washington State Department of Retirement Systems Shawna Killman Washington State Investment Board Rodney Reynolds Washington State Investment Board




STATE ATTENDEE ORGANIZATION West Virginia Annamarie O. Short West Virginia Consolidated Public Retirement Board Wisconsin Mark Shikoski State of Wisconsin Investment Board John Vincent Wisconsin Department of Employee Trust Funds Wyoming Erin Gorney Wyoming Retirement System




Please email the completed survey no later than October 5, 2012 to: [email protected]

SURVEY PRESENTED BY: Scott Jones

STATE/PROVINCE: Alaska

NAME OF ORGANIZATION: Alaska Retirement Management Board

TOTAL ASSETS MANAGED: 45b TOTAL IA STAFF SIZE: 1

TOTAL EMPLOYEES: 27 # IA STAFF AT CONFERENCE: 1

1. CURRENT AUDIT AREAS (OR MAJOR PROJECTS):

Private Equity, Real Estate, Timber, and Farmland Management and Performance Fees

2. AUDITS (MAJOR PROJECTS) YOU PLAN TO PERFORM WITHIN THE YEAR:

Hedge Fund of Funds: fees, valuations

3. RECENT LEGISLATION THAT WILL AFFECT YOUR PENSION FUND:

Iran divestiture

4. NEW INTERNAL AUDIT STAFF OR NEW STAFF CERTIFICATIONS:

none

5. OTHER ISSUES:

mailto:[email protected]





SURVEY PRESENTED BY: Rosie Tomforde

STATE/PROVINCE: Arizona State Retirement System

NAME OF ORGANIZATION:

TOTAL ASSETS MANAGED: 27.3 billion TOTAL IA STAFF SIZE: 5



Employer Audits

Audit Followup

Program Changes


Member services-MSAC, Contact us

Records Management

Ineligible members

Biennial Audit Plan 3. RECENT LEGISLATION THAT WILL AFFECT YOUR PENSION FUND:

Accruing interest at 2% on refunds

Self insurance on Health insurance program

LTD Program plan changes 4. NEW INTERNAL AUDIT STAFF OR NEW STAFF CERTIFICATIONS:

5. OTHER ISSUES:






SURVEY PRESENTED BY: HARSH JADHAV/LYNDON COGGIN

STATE/PROVINCE: CALIFORNIA

NAME OF ORGANIZATION: ALAMEDA COUNTY EMPLOYEES RETIREMENT ASSOCIATION

TOTAL ASSETS MANAGED: $5.2B TOTAL IA STAFF SIZE: 4



CASH MANAGEMENT

WIRE PAYMENTS

PREPAID EXPENSES

RETIREMENT DEATH BENEFITS

VENDOR COMPLIANCE 2. AUDITS (MAJOR PROJECTS) YOU PLAN TO PERFORM WITHIN THE YEAR:

IMPLEMENTATION OF IDEA SOFTWARE


PENSION REFORM

GASB 67 & 68


ALL PROFESSIONAL STAFF IS ENROLLED IN THE CIA CERTIFICATION PROGRAM

5. OTHER ISSUES:

EMPLOYER AUDITS (NEW)






SURVEY PRESENTED BY:

STATE/PROVINCE:

NAME OF ORGANIZATION:

TOTAL ASSETS MANAGED: TOTAL IA STAFF SIZE:

TOTAL EMPLOYEES: # IA STAFF AT CONFERENCE:





5. OTHER ISSUES:





SURVEY PRESENTED BY: Caroline Dinu

STATE/PROVINCE: California

NAME OF ORGANIZATION: City of Los Angeles Fire & Police Pensions (LAFPP)

TOTAL ASSETS MANAGED: $14.9 Billion TOTAL IA STAFF SIZE: 3



Audit of LAFPP Health Subsidy Program to each of the four unions. One was completed in early 2012, the second audit is underway.

Audit of Travel Expenditures Process is near completion.

Risk assessment.


Coordination of requests from firm selected to perform the City's management audit of the fund.

Audit of Investment, Selection, Monitoring, Reporting, Renewal, and Termination Process.

Business continuity/disaster recovery.

Peer review. 3. RECENT LEGISLATION THAT WILL AFFECT YOUR PENSION FUND:

H.R. 567/S.347 Public Employee Pension Transparency Act.

H.R. 3561 Small Business Pension Promotion Act of 2011.


None.

5. OTHER ISSUES:

Contractor Disclosure Policy - track incoming disclosure reports, policy review and revisions. Review incoming reports for nexus with Marketing Cessation Policy and other ethics policies.






SURVEY PRESENTED BY: David James

STATE/PROVINCE: Orange County, California

NAME OF ORGANIZATION: Orange County Employees Retirement System - OCERS

TOTAL ASSETS MANAGED: $9.6 billion TOTAL IA STAFF SIZE: 2



Member Benefits Setup

Investment Reconciliation Process


Pension Administration System Conversion

Actuarial Census Data


California Assembly Bill 340 - Public Employees Pension Reform Act - PEPRA


Mark Adviento, CPA

5. OTHER ISSUES:

Investigating use of ACL Audit Exchange

Due diligence documentation

Hotline and investigations






SURVEY PRESENTED BY: Phyllis Miller


NAME OF ORGANIZATION: CalPERS

TOTAL ASSETS MANAGED: $243.9 Billion TOTAL IA STAFF SIZE: 51



Budget Management

Access controls

Enterprise Risk Management - Consulting

Employer Reviews - Several very complex and high-profile reviews

Quality Assurance and Improvement 2. AUDITS (MAJOR PROJECTS) YOU PLAN TO PERFORM WITHIN THE YEAR:

Investment Audit Specialty Pool - [co-sourced]

Dependent Eligiblity Initiative - Consulting engagement

Cloud Computing

Governance Process 3. RECENT LEGISLATION THAT WILL AFFECT YOUR PENSION FUND:

Health Care Reform SB 1234 Retirement Savings Plans (offering retirement savings plans to 6.3 million private sector employees)

Pension Reform 4. NEW INTERNAL AUDIT STAFF OR NEW STAFF CERTIFICATIONS:

Authorization to hire 5 staff in FY 2012-13 and 5 additional staff in FY 2013-14 Rachel Stark, Aileen Wong, Noah Schreier, Jack Peterson, Rosalyn Dollesin, John Jacob, and Tanya Lecky

5. OTHER ISSUES:

Recruiting a Chief Financial Officer

Coordinating and enhancing reassurance functions within CalPERS (e.g. Audits, ERM, Compliance)

Monitoring financially troubled public agencies






SURVEY PRESENTED BY: Christina McGough

STATE/PROVINCE: CA

NAME OF ORGANIZATION: SDCERA (San Diego County Employees Retirement Association

TOTAL ASSETS MANAGED: $8.4B (6/30/2012) TOTAL IA STAFF SIZE: 1



Fraud, Waste & Abuse - Risk Assessment Faciliation; Testing design and operating effectiveness of controls identified

Pension Administration System Implementation - CPAS

Policy and Procedure Management Audit

Risk Assessment Update


Various co-sourced IT Audits (recently issued RFP)

Due Diligence Audit (external manager oversight & initial due diligence activities)

Investment Policy Compliance Audit


Public Employees Pension Reform Act (PEPRA aka AB340)


Hiring now - please share with anyone that might be interested!

5. OTHER ISSUES:

Portfolio Strategist RFP Process (could impact organziational structure and roles of investments department)

Ongoing Education Efforts - Internal Audit roles and responsibilities with Management






SURVEY PRESENTED BY: Kyle Elser


NAME OF ORGANIZATION: San Diego City Employees' Retirement System

TOTAL ASSETS MANAGED: 4.8 Billion TOTAL IA STAFF SIZE: 1



Internal Audit Plan Risk Assessment (Completed)

Audit of Actuarial Data Export Process

Audit of Bank Reconciliations


Audit of Purchase of Service Contract Processing

Audit of Domestic Relations Order Benefits Calculations

Risk Assessment of Controls Including Privacy and IT Security

Monitoring the New Pension System Implementation 3. RECENT LEGISLATION THAT WILL AFFECT YOUR PENSION FUND:

The City of San Diego's Proposition B recently passed that will replace the current Defined Benefit Plan with a 401(k)-Style Plan for all new hires except for sworn police officers. It also proposes a five-year freeze on the pensionable pay of current workers.


My self, Kyle Elser - started at the end of April 2012 as SDCERS Internal Auditor

5. OTHER ISSUES:






SURVEY PRESENTED BY: David Mather

STATE/PROVINCE: Colorado

NAME OF ORGANIZATION: Colorado Public Employees’ Retirement Association

TOTAL ASSETS MANAGED: $39.6 billion TOTAL IA STAFF SIZE: 5 (Admin Not Included)



Risk assessment and development of IA Plan, Employer audits (multiple), PeopleSoft audit

IT general controls audit, Integrated audit of corporate actions, Real estate partnership review Regular monitoring of transactions and audit logs in the investment, benefits, HR, A/P, and accounting areas, Pre-implementation review of employer issues database

Presentations on internal controls and the Internal Audit function at PERA for new hires Database to facilitate IA risk assessment, audit planning, and status reporting, Pre-implementation review of compliance monitoring and reporting solution


Pre-implementation review of fixed income futures trading controls, Integrated audit of fixed income trading, settlement, and accounting, Employer audits (multiple), Real estate partnership review,

Presentations on internal controls and the Internal Audit function for new hires

Testing of controls over valuations of less liquid investments Regular monitoring of transactions and audit logs in the investment, benefits, HR, A/P, and accounting areas, and matching of data between systems to identify indicators of fraud



5. OTHER ISSUES:

Pending selection of Executive Director by the Board

Memorial Hospital disaffiliation






SURVEY PRESENTED BY: Flerida Rivera-Alsing

STATE/PROVINCE: Florida

NAME OF ORGANIZATION: State Board of Administration of Florida

TOTAL ASSETS MANAGED: $156 billion TOTAL IA STAFF SIZE: 6



Securities Class Action

Oversight of the financial statement audits of over 60 entities/funds

Oversight of agreed-upon procedures and tax compliance of over 50 entities


Strategic Investments

Transition to a new electronic workpaper system


Increase in the private equity allocation


Dan Weber, Senior Audit Analyst III

5. OTHER ISSUES:






SURVEY PRESENTED BY: Steve Hayward

STATE/PROVINCE: Illinois

NAME OF ORGANIZATION: State Universities Retirement System of Illinois

TOTAL ASSETS MANAGED: $13.8 B TOTAL IA STAFF SIZE: 2



Disability & Disability Retirement Annuity audits

Review Organization's Privacy Framework

Member contributions, interest & service credit audit


Refund and Portable Refund Claims

New health insurance premiums for annuitants


Expect Pension Reform and possible Tier III after election

PA 97-0695 State Retiree Health Insurance Reform eliminates free annuitant coverage PA 97-0968 SURS Return to Work requires employer contribution if annuitant returns to work; gives SURS right to audit employer records PA 97-1055 Financial Reporting Standards Act requires min quals for GAAP coordinators; requires annual internal audit of its GAAP package and financial statement process


1 new audit staff position approved in budget

5. OTHER ISSUES:

Need to make changes to implement 2011 and now 2013 IIA standards

Completeness of SSA Death Master File






SURVEY PRESENTED BY: Cecilia A. Gonzales

STATE/PROVINCE: IL

NAME OF ORGANIZATION: Illinois Municipal Retirement Fund

TOTAL ASSETS MANAGED: $26M (per July 31 report)

TOTAL IA STAFF SIZE: 4



Benefit

Cash

Fixed Asset

Investment

Employer Audits 2. AUDITS (MAJOR PROJECTS) YOU PLAN TO PERFORM WITHIN THE YEAR:

Total and Permanent Disability Testing


quite a few new bill passed the Legislation but no major impact to IMRF


currently looking for a Senior Internal Auditor-Employer Audits

5. OTHER ISSUES:

Modernization RFP is out and waiting for responses Internal Audit unit just purchased a new audit software-Autoaudit which will be used primarily for the employer audits workpapers.






SURVEY PRESENTED BY: Stacy Smith

STATE/PROVINCE: Illinois

NAME OF ORGANIZATION: Teachers' Retirement System

TOTAL ASSETS MANAGED: $37 Billion TOTAL IA STAFF SIZE: 3



Privacy

Optional Service

Purchasing


Fixed Income / Real Return

Securities Litigation

Transition Management


PA 97-1055 Financial Reporting Standards Act requires min quals for GAAP coordinators; requires annual internal audit of its GAAP package and financial statement process

PA 97-0695 State Retiree Health Insurance Reform eliminates free annuitant coverage

Expect Pension Reform possibly including changes to annuitants and current employees 4. NEW INTERNAL AUDIT STAFF OR NEW STAFF CERTIFICATIONS:

CIDA

CFE 5. OTHER ISSUES:

TRS recently lowered it's assumed rate of return from 8.5% to 8%






SURVEY PRESENTED BY: Teresa Snedigar

STATE/PROVINCE: Indiana

NAME OF ORGANIZATION: Indiana Public Employees Retirement System

TOTAL ASSETS MANAGED: 26 Billion TOTAL IA STAFF SIZE: 4



New Investment Policy Statement Review

Implementation of New Defined Benefit System

Third Party Vendor Management

Implementation of ACL software for Internal Audit fraud and audit testing

Employer Reporting system implementation 2. AUDITS (MAJOR PROJECTS) YOU PLAN TO PERFORM WITHIN THE YEAR:

Data Privacy

Data Security/Implemenation of Role Based Access

Custodian Bank controls

Actuarial Factors 3. RECENT LEGISLATION THAT WILL AFFECT YOUR PENSION FUND:

ASA only option for new state employees


5. OTHER ISSUES:






SURVEY PRESENTED BY: Roger Wheatley

STATE/PROVINCE: Iowa

NAME OF ORGANIZATION: Iowa PERS




Refunds


New pension system operations


Reform measures that took effect on 7/1/12: larger benefit reduction for those not meeting normal retirement; later vesting; final average salary over highest 5 years, not 3 years; changes apply to current members prospectively.


5. OTHER ISSUES:

Tipping point at which total contribution rate is not acceptable to plan sponsor.






SURVEY PRESENTED BY: Alberta Rea

STATE/PROVINCE: Kansas

NAME OF ORGANIZATION: Kansas Public Employees Retirement System (KPERS)




Contract Compliance - Minnesota Life

Optional Group Life Insurance Process Review Internal Control Documentation for FY 2012 Audit and Resolution of Prior Year Management Letter Comments

Employer Reporting


Continuous Monitoring of Data Exports

Outside Investment Manager Compliance Monitoring and Due Diligence Documentation

Benefit Over-payment Collection Procedures

Actuarial Data Export File Processing 3. RECENT LEGISLATION THAT WILL AFFECT YOUR PENSION FUND:

Sub House Bill 2333 - Current members to elect to keep contributions the same and reduce future benefits or increase contributions and increase future benefits

New Plan Tier (3) for new hires beginning January 2015 - Cash Balance

Increases employer contributions 4. NEW INTERNAL AUDIT STAFF OR NEW STAFF CERTIFICATIONS:

None in Internal Audit. Employer Auditing (Within Fiscal Services Division) has added three auditors for better coverage and in anticipation of changes to employer reporting due to new plan tier requirements.

5. OTHER ISSUES:






SURVEY PRESENTED BY: Connie Davis

STATE/PROVINCE: Kentucky

NAME OF ORGANIZATION: Kentucky Retirement Systems

TOTAL ASSETS MANAGED: 14 billion TOTAL IA STAFF SIZE: 3



START

IT General Controls


Anonymous Reports

Cooperatives Audit


Kentucky Public Pension Task Force


Certification in Risk Management Assurance received by all auditors

5. OTHER ISSUES:

Unfunded Liability






SURVEY PRESENTED BY: Ryan Babin

STATE/PROVINCE: Louisiana

NAME OF ORGANIZATION: Louisiana State Employees Retirement System (LASERS)

TOTAL ASSETS MANAGED: Approximately $9 billion


TOTAL EMPLOYEES: Approximately 140 # IA STAFF AT CONFERENCE: 2


System Development Project (Implementation of Legislative Changes)

Required Minimum Distributions

Employer Agency Reviews

1099R Process


System Development Project (Implementation of Legislative Changes)

Alternative Investment Manager Review (Hedge Fund)

Disaster Recovery Full System Restore Audit of System Actuary Employer Agency Reviews


Cash Balance Plan


Jessica Carnell - new staff auditor

Blake Lee - obtained CISA 5. OTHER ISSUES:






SURVEY PRESENTED BY: Toni Voglino

STATE/PROVINCE: Maryland

NAME OF ORGANIZATION: Maryland State Retirement and Pension System




Participating Employer Audits Follow-up Audits-Earnings Limitation, Retirement Database Access Security, Participating Employer Billing, Sensitive Data Loss, and Service Retirement

Bank Reconciliations

Salary Spiking Special Project


Absolute Return Operational Processes

Procurement

Member Refunds Disability Retirements Disaster Recovery Plan


Investment Division Salary Setting Authority

Earnings Limitation Period Reduced

Passing Teacher Pension Cost to Counties from State 4. NEW INTERNAL AUDIT STAFF OR NEW STAFF CERTIFICATIONS:

None

5. OTHER ISSUES:






SURVEY PRESENTED BY: Jeff Hyman

STATE/PROVINCE: Missouri

NAME OF ORGANIZATION: Public School Retirement System of Missouri




Working after retirement audits

Pension Project

Data Conversion


IT Security

Accounts Payable and Purchasing

Pension Project - GL Testing


None


Tom Chapman

5. OTHER ISSUES:

None






SURVEY PRESENTED BY: Hollie Koehler

STATE/PROVINCE: Montana

NAME OF ORGANIZATION: Montana Public Employee Retirement Administration

TOTAL ASSETS MANAGED: $5,581,225,776 TOTAL IA STAFF SIZE: 1



Contribution Reporting by employers- Testing how employers are reporting on our web based reporting system, if they are timely & accurate, and how that information uploads & ties to our state's accounting system(SABHRS). Death Payment Process- to ensure proper controls, as indicated through our use cases, are in place & they are in compliance with applicable statues.

Insurance Check Process for Retirees- To determine if MPERA is in compliance w/ state statues. Estimated Benefit Calculations- To determine if MPERA has controls in place to accurately & timely submit estimated benefit requests and that MPERA is in compliance with applicable laws. Disabilities-Annual Earnings Report- test controls over ensuring that individuals are submitting their reports back to MPERA timely and accurately.


125 Plan Employer Audits- Determine what employers are using health insurance premium as compensation for retirement purposes and they are in compliance with IRC125 as well as MPERA Policies. Refund Process- To determine if MPERA is in compliance with applicable ARMS & MCA for any contributing member who has terminated employment for any reason other than death or retirement. Payroll Processing Benefit & Disability Pymt- to test this process for segregation of duties, timely, accurate, & approval process. Retirement Setups- To determine that retirement setups are performed accurately & that MPERA is complying with applicable state laws & their use case.


Funding- an increase in employer contributions of .25% each year until 1% is attained. The increases would apply to the four actuarially unsound systems, PERS ( Public Employee Retirement System), GWPORS (Game Wardens & Peace Officers Retirement), SRS (Sheriffs Retirement System), & HPORS (Highway Patrol Officers Retirement). MPERA is proposing to limit the amount of 125 plan health insurance premiums that can be included in a members' compensation for retirement purposes. Working Retirees- MPERA will be trying to require the employers make contributions on behalf of their working retirees. Currently no contributions are paid on working retirees.



Hollie Koehler started in May

5. OTHER ISSUES:





SURVEY PRESENTED BY: Kristina Reyna

STATE/PROVINCE: Nevada

NAME OF ORGANIZATION: NVPERS




Employer Audits

Benefit Audits

Post Retirement Increase Audit

Deceased Recipient Review


Internal Control Audit- Deceased Member and Recipient Processes



Kristina Reyna

Certificate of Achievement in Public Plan Policy Employee Pensions- Dana Danforth 5. OTHER ISSUES:






SURVEY PRESENTED BY: Ken Kasper

STATE/PROVINCE: New York

NAME OF ORGANIZATION: NYS Teachers' Retirement System

TOTAL ASSETS MANAGED: $90 B TOTAL IA STAFF SIZE: 10



Accounts payable

Member loans

Portfolio Compliance

School District Billings

COLA 2. AUDITS (MAJOR PROJECTS) YOU PLAN TO PERFORM WITHIN THE YEAR:

Fixed Income Investments

Membership transfers to other Systems

Refunds of Member Contributions Vulnerability Assessment and Penetration Test MWBE Compliance


Nothing significant


Ken Kasper received the CFE

Bruce Woolley received the CFE 5. OTHER ISSUES:

Master Custody Conversion in process






SURVEY PRESENTED BY: Steve Hillerman

STATE/PROVINCE: New York State

NAME OF ORGANIZATION: New York State Office of the State Comptroller (OSC). This includes the New York State and Local Retirement System (NYSLRS).

TOTAL ASSETS MANAGED: $150.6 B (3/31/12) TOTAL IA STAFF SIZE: 17

TOTAL EMPLOYEES: 2,588 (All of OSC) # IA STAFF AT CONFERENCE: 2


Audits related to the NYSLRS: Private Equity

Real Estate

Internally Traded Equity Investments

System Procurement System Payments Privacy Risks Retirement Calculations Pension Payroll Data Remittance Control


As determined by our upcoming annual risk assessment. Audit plan may include: Master Custodian

Securities Lending

Survivor Services


Tier 6


Thara Kothandaraman

5. OTHER ISSUES:






SURVEY PRESENTED BY: Greg Januszewski

STATE/PROVINCE: Ohio

NAME OF ORGANIZATION: Ohio Publice Employees Retirement System

TOTAL ASSETS MANAGED: 78B TOTAL IA STAFF SIZE: 7 ( 1 vacancy to be filled 123112



Investment Accounting

Alternative Plan Design

Investment Consultant Reviews


Investment Risk and Investment Compliance Review

BARRA Risk System

Alternative Plan Design

Self Service Applications- Our Way Forward 3. RECENT LEGISLATION THAT WILL AFFECT YOUR PENSION FUND:

Pension Legislation increasing retirement age eligibility, COLA


Kimberly Van Gundy, Senior Auditor

DAve McKnight has new title- IT Auditor 5. OTHER ISSUES:

Board adopted Health Care Changes affecting all spouses ( including retirees)






SURVEY PRESENTED BY: Josh Richardson

STATE/PROVINCE: OK

NAME OF ORGANIZATION: Oklahoma Teachers Retirement System

TOTAL ASSETS MANAGED: 10.9 billion TOTAL IA STAFF SIZE: 1



Employer Data Maintenance

Building Investment Monitoring Department

Building Investment Compliance Function




5. OTHER ISSUES:






SURVEY PRESENTED BY: Susan Jahraus

STATE/PROVINCE: South Dakota

NAME OF ORGANIZATION: South Dakota Retirement System




RFP for external auditor

The Actuaries recently completed an experience study and our Board of Trustees is in the process

of reviewing all that information and making some modifications to our current assumptions.


RFP for consultant to assist us in 3 phases: 1) to do a cost benefit analysis to determine potential

system solutions; 2) develop RFP for system replacement; and 3) project management/support.

Preliminary steps in anticipation of data cleansing needed when FoxPro System is replaced. 3. RECENT LEGISLATION THAT WILL AFFECT YOUR PENSION FUND:

Passed enabling legislation to offer 457 Roth accounts in our Supplemental Retirement Plan.

Passed enabling legislation for an Alternative Benefit Enhancement Methodology.


None

5. OTHER ISSUES:

Sustainability . Contributions + Investment Earnings = Benefits + Expenses. How to keep the equation in balance or tilted in the right direction.






SURVEY PRESENTED BY: Jennifer Hymel

STATE/PROVINCE: Texas

NAME OF ORGANIZATION: Texas County and District Retirement System




Member special purchases

Withdrawal processing

Bank account reconciliation


Retirement processing

Employer deposit reporting and enrollment of new members

Death benefit processing



5. OTHER ISSUES:

New pension system in development






SURVEY PRESENTED BY: Amy Barret

STATE/PROVINCE: Texas

NAME OF ORGANIZATION: Teacher Retirement System of Texas

TOTAL ASSETS MANAGED: 110.9 billion at 8/31/12




Continue quarterly testing of compliance with the Investment Policy and benefit payments

Participation in TEAM (TRS Enterprise Application Modernization) Executive Steering Committee


Ethics and Communications Policies -Compliance Audit

Fraud Risk Identification and Prevention Audit

Benefits-Call Center Performance Measures Benefit Payment Testing Benefit Processing Health Care Administration Audit IT Backup and Recovery Audit HIPAA IT Security Rule Recommendations Implementation and Validation Internal Network Vulnerabilities Scan Network Penetration Test: Security Risk Assessment Review Employer Reporting Audit Procurement and Contracting Audit 1099 Reporting and Payment Processing Investment Selection and Monitoring (Emerging Managers) Derivatives Audit Investment Management Division Travel - Surprise Inspection


None at this time. Legislative session begins in January 2013. Topics on the horizon will most likely include restructuring/additional funding of the pension fund and the retiree health care plan.



Lih-Jen Lan - CISSP

5. OTHER ISSUES:

Quality Assurance Review is due January 2013





SURVEY PRESENTED BY: Frank Berry

STATE/PROVINCE: VA

NAME OF ORGANIZATION: Virginia Retirement System

TOTAL ASSETS MANAGED: > $50 Billion TOTAL IA STAFF SIZE: 5

TOTAL EMPLOYEES: 300+ # IA STAFF AT CONFERENCE: 4 Audit, 1 Compliance


Refunds

Internal Public Equity

Virginia Sickness and Disability Program

Long-Term Care Program


IT Security

Post Implementation Review of Data Conversion

Cash Receipts


Mandatory Hybrid Plan for new employees effective January 1, 2014


Judy Bolt, Principal Benefits and Operations Auditor

Mike Scott, Principal Investments Auditor 5. OTHER ISSUES:






SURVEY PRESENTED BY: Shawna Killman

STATE/PROVINCE: Washington

NAME OF ORGANIZATION: Washington State Investment Board




Budget Management and Revenue Transfers In

Public Equity External Manager Monitoring

Travel Paid for Directly by Outside Sources

APPFA Website Update Project Team


Trade Processing, Confirmation, and Settlement

Public Equity and Real Estate Consultant - Hamilton Lane

Human Resources

Stock Distribution Manager 3. RECENT LEGISLATION THAT WILL AFFECT YOUR PENSION FUND:


5. OTHER ISSUES:

Board is now conducting executive sessions with external auditors and consultants each meeting

Public Pension Fund Fraud Review and Gap Analysis for the Audit Committee






SURVEY PRESENTED BY: Debbie Ocheltree

STATE/PROVINCE: Washington

NAME OF ORGANIZATION: WA State Dept. of Retirement Systems




Pension contributions - cash receipts


Pension disbursements



5. OTHER ISSUES:

Prepare for an external assessment






SURVEY PRESENTED BY: Annamarie Short

STATE/PROVINCE: West Virginia

NAME OF ORGANIZATION: WV Consolidated Public Retirement Board

TOTAL ASSETS MANAGED: $9,046 million TOTAL IA STAFF SIZE: 1



Dual Military Service Credit (in more than one administered plan)

Loans

Risk Assessment


Reinstatements to PERS

Reinstatements to TRS


Military Service Resolution/Study


5. OTHER ISSUES:






SURVEY PRESENTED BY: Mark Shikoski

STATE/PROVINCE: Wisconsin

NAME OF ORGANIZATION: State of Wisconsin Investment Board (SWIB)

TOTAL ASSETS MANAGED: ~$88B TOTAL IA STAFF SIZE: 2 (1 currently)

TOTAL EMPLOYEES: ~145 # IA STAFF AT CONFERENCE: 1


Private Debt

Hedge Funds


TBD


TBD (legislature back in session in January 2013)


TBD

5. OTHER ISSUES:






SURVEY PRESENTED BY: John Vincent

STATE/PROVINCE: Wisconsin

NAME OF ORGANIZATION: Department of Employee Trust Funds

TOTAL ASSETS MANAGED: na TOTAL IA STAFF SIZE: 4



Transformation, Integration, and Modernization project - advisory capacity

Benefits Administration System - monitor risk identification and mitigation progress

Security Council - advisory capacity


Peer Review

Actuarial File Testing

ER On-line Self-Audit


2011 legislation -changed vesting requirements, employee/employer contributions towards retirement system. 2011-2012 study of retirement system - Study was to address (1) DC plan as option for ees; and (2) permitting ee's to NOT make EE contribution to retirement system and limiting benefits to those ee's as money purchase annuity only.


5. OTHER ISSUES:






SURVEY PRESENTED BY: Erin Gorney

STATE/PROVINCE: Wyoming

NAME OF ORGANIZATION: Wyoming Retirement System

TOTAL ASSETS MANAGED: $7.8 B (as of Aug-12) TOTAL IA STAFF SIZE: 2



Depositing Procedures: Still looking for some audit programs if any are available

PAS Implementation: Go-Live set for April 2013 (ahead of schedule and on budget)

Data Cleansing

Payroll audit

Internal Risk Assessment 2. AUDITS (MAJOR PROJECTS) YOU PLAN TO PERFORM WITHIN THE YEAR:

User Acceptance Testing for the Pension Administration System

Interest Generation audit


New Tier for the Public Employee Pension Plan. (This is the first time a new tier has been created.) COLA: Transferred authority to provide COLAs from WRS Board to Legislature; researching alternative methods of providing COLAs; no COLAs will be granted until the fund reaches 100% fully funded, then only allowed if fund remains at or above 100% funded after COLA implementation.

Highway Patrol, Game & Fish Warden, DCI plan: Contribution rate increase 4. NEW INTERNAL AUDIT STAFF OR NEW STAFF CERTIFICATIONS:

N/A

5. OTHER ISSUES:

Microfiche Conversion: Hired contractor to convert microfiche & microfilm into electronic format

Legislators are still analyzing closing the DB plan and replacing with a DC plan


COURSE DESCRIPTION THE ASSOCIATION OF PUBLIC PENSION FUND AUDITORS (APPFA)



REAL ESTATE INVESTME NTS

This presentation will provide an introduction to audits of real estate investments. The speaker will explain the common types of real estate investments and the resulting audit approaches for such investments. The presentation will highlight the risk areas that internal auditors should identify and address in their real estate audit plan. Finally, the speaker will share experiences of identifying audit risks and provide examples of typical findings and resolutions in real estate audits.

MIKE GUTIERREZ, CPA, MANAGING PARTNER, KP M & ASSOCIATES, LLP, COS TA MESA, CA

Mike Gutierrez began his career with Conrad & Associates, LLP in 1994 upon graduating from California State Polytechnic University of Pomona. Mike worked on a variety of financial and compliance audits with large federal and state agency clients. In 2003, Mike became the Senior Manager in-charge of the Real Estate Compliance Audit division. Clients included several large public pension funds and private land owners. In 2005, Mike became a Partner in the firm and began to build the division’s audit practice including construction compliance audits. In 2011, Mike became the Managing Partner of KPM & Associates LLP.

Mike has been in public accounting for 18 years but has devoted the past 9 years to providing public and private clients with consulting and compliance audits of real estate general partners, property managers, and construction contractors. Areas of expertise include asset types such as: Hotel Casino, Retail, Industrial, Office, Apartment, Residential, Urban Infill, Senior Housing, and Land Development.

Mike has provided his public pension fund clients with remote and in-field consulting expertise in an effort to transfer knowledge to the Internal Audit division. In addition, Mike and his associates have performed numerous in-field compliance audits as an out-source function to the Internal Audit divisions. As a result, Mike has an array of experiences to share with the members of APPFA.

REAL ESTATE INVESTMENTSKPM & Associates LLP

Real Estate InvestmentsUnderstanding the Audit Risks

Overview:

• Real Estate Investment Structures

• Audit Plan

• Audit Risks

• Audit Experiences


Real Estate Investment Structures:

• Joint Venture Partnerships

• Commingled Funds

• Wholly Owned Assets


Audit Plan:

• Identify All Relationships

• Share Audit Plan with Investment Office

• Target High Risk Relationships

• Rotational Annual Audit Plan


Audit Risks:• Internal Controls• Asset Management Fees• Property Management Fees• Related Party Transactions• Allocated Costs• Insurance


Audit Experiences:

• Field Visits and Desk Reviews

• Findings and Recommendations

• Reports Commonly Used by Internal Audit

• Management Letters and Matrix of Findings for Resolution


Questions and Answers


151 Kalmus Drive, Suite C260

Costa Mesa, CA 92626

Contact Information:

Mike Gutierrez - [email protected]

Joe Chally - [email protected]

www.kpmassociates.com



http://www.kpmassociates.com/

november 5-7, 2012 redondo beach, california · 2017-09-08 · november 5-7, 2012 redondo beach,...

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