A judge in Jefferson City has determined State Auditor Susan Montee has no authority to conduct audits of a retirement system that serves local government employees. Cole County Circuit Judge Richard Callahan has ruled in favor of the Missouri Local Government Employees’ Retirement System (LAGERS) in a challenge to the State Auditor’s desire to carry out a financial and performance audit of LAGERS’ books and records.

In his ruling, Judge Callahan wrote: “The Auditor derives her authority solely from the Missouri Constitution and certain Missouri statutes. Unlike the General Assembly, she has no inherent or plenary authority.” He concludes nothing grants the Auditor the authority to conduct audits of LAGERS or the Prosecuting Attorneys’ and Circuit Attorneys’ Retirement System (PACARS), which was an intervenor-petitioner in the case.

Bill Schwartz, Executive Secretary with LAGERS, says current law only gives the State Auditor the authority to review the work of an independent auditor looking over the LAGERS’ books.

“He ruled that the Auditor’s authority is limited, under Chapter 70, which is the chapter of the statute that controls the LAGERS retirement system,” said Schwartz in an interview with the Missourinet. “The Legislature, in that statute, has limited their authority to reviewing the work papers of the independent certified public accounting firm.”

State Auditor Montee acknowledges the language in the statute might not be as precise as it could be, but believes there is a desire for the State Auditor to take a closer look at large retirement funds.

“The statutory language is somewhat ambiguous,” stated Montee in a Missourinet interview. “We interpret it as saying, obviously, the Legislature wanted us to do something more than just look at the financial statements that are available to everyone.”

An appeal is possible but Montee suggests a legislative effort will be made to change current statutes to allow the State Auditor to conduct financial and performance audits of large retirement funds like LAGERS and PACARS.

Download/Listen: Steve Walsh report (:60 MP3)