A lawsuit prevented the State Auditor from conducting a full audit of the local government retirement system. A bill in the state Senate would clarify vague language, end the lawsuit and give the Auditor authority to review LAGERS.
Sen. Jason Crowell (R-Cape Girardeau) sponsored SB 714 after learning that the State Auditor was prevented from auditing LAGERS, the Missouri Local Government Employees Retirement System.
“What happened was a lawsuit was filed to block the State Auditor from actually auditing the LAGERS retirement system and this legislation is in response to that,” Crowell tells a Senate committee considering his bill.
State Auditor Susan Montee testifies before the committee in favor of Crowell’s bill.
“The ability to have oversight into our public retirement systems is, I think, important for all of us,” says Montee.
Montee explains that’s what her office attempted to do, until officials at LAGERS filed suit. In the lawsuit, LAGERS leaned on the letter of the law. It gives the State Auditor only the power to review its financial papers, not to conduct a thorough audit. Montee says that undercuts the value of an audit, pointing out that those financial papers are posted on the Web and accessible to anyone.
A Cole County Circuit Court judge sided with LAGERS. The Auditor’s office has appealed the decision.
State law mandates audits of public retirement systems every three years, a rather routine task for the Auditor’s office.
“What we have done, though, up until the point of this lawsuit is we had come in and done a review of the audits, but also the underlying audit work, ever since these statutes were in place since the 80s,” Montee testifies. “So, this is the first time it has come up as a problem.”
The bill doesn’t single out LAGERS. It would allow the State Auditor to audit any state or local public employee retirement system every three years. Testimony in committee indicates that no other public retirement system has blocked the Auditor access to their books, despite the apparent ambiguous language.
A Pew Center on the States report has found that Missouri’s overall pension system healthy, though Montee says it lists LAGERS as needing improvement since it is no longer considered fully funded. She says the extra financial oversight is needed, because the public pensions represent $37 billion in assets and provide retirement benefits to 370,000 people as well as their families.