US - An audit of the Louisiana School Employees Retirement System (LSERS) found that the board of trustees, key staff and consultant accepted approximately $8,100 of means from investment managers and custodians between 2003 and 2004.
The audit by the Louisiana legislative auditor concluded that LSERS does not have adequate policies in place to ensure that potential conflicts of interest do not arise.
“LSERS does not employ adequate policies and procedures to ensure that key staff members and trustees avoid potential conflicts of interest,” according to the report. “As a result, we found that members of LSERS’s staff and trustees may have violated the Louisiana Code of Governmental Ethics by accepting gifts from an investment manager hired by LSERS.”
The audit found that the LSERS office received a Christmas plant valued at $55, and cakes valued at $100, which are potential violations of the state’s ethics code. The audit recommended that the $1.44bn pension scheme obtain an opinion from the state ethics board as to whether these gifts were violations and, if so, strengthen its conflicts of interest policies to comply with the state code.
However, the report concluded that LSERS’ investment manager fees are in line with or below the average fee paid by other, similar pension funds and that the pension scheme adequately monitors its investment managers.
The Louisiana legislative auditor has been examining the four state government pension systems in the wake of allegations of unwise investment management, poor decision making and improper contact between retirement board members and consultants and managers. The Louisiana Sate Police Pension and Retirement System received a mostly clear bill of health in its audit.
The audits into two other systems - the Teachers Retirement System of Louisiana and the Louisiana School Employees Retirement System - will be published by April, officials have said.
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