Copeland Cos. 457 auditIn an Oct. 30 article on page 47, you commented on the status of Copeland's relationship with the Cook County Internal Revenue Code Section 457(b) Deferred Compensation Plan which we have administered since 1980. The content of the article was misleading and erroneous, and not only did a disservice to Cook County but also to The Copeland Cos. We are requesting that a retraction of the implication in that article be published as soon as possible.
The Copeland Cos. are one of the largest national plan administrators for Section 457 deferred compensation plans in the United States, with assets in excess of $6 billion, serving nearly 500,000 participants. We operate at the highest level of professionalism and integrity. We are audited annually by numerous firms, including all of the "Big Six," which have considerable experience in the audit of plans identical to Cook County. Our record is unblemished since 1978.
Copeland strongly disputes any implication that our record-keeping systems are not adequate as referenced in the Cook County Management Letter for the 1993 plan year. For the past 10 years, our outside auditors have conducted an internal control audit of our record-keeping system, and each year they have validated the integrity of our record-keeping systems and have found no material weakness.
Copeland not only makes the assertion that we have no material weaknesses, but we have enclosed an Unqualified Opinion by Coopers & Lybrand attesting to our assertion.
Coopers & Lybrand issued an unqualified report dated May 20, 1994, on the control structure, policies and procedures related to the processing of transaction by this system for the year ended Dec. 31, 1993. No control weaknesses material or otherwise were identified in the report.
Additionally, each year, including 1993, numerous audits of many deferred compensation plans similar to or larger in size than Cook County are completed. All of these audited plans use the same record-keeping system that is referenced in the Cook County audit. These audits are generally conducted by Big Six accounting firms, each of which has considerable experience in the auditing of municipal deferred compensation plans. All of these firms audit the same type of financial records and systems as were reviewed in the Cook County audit.
Since the Cook County deferred compensation plan uses the same audited system as is used by all of our other municipal deferred compensation plans, it is logical to conclude that all of the experienced audit firms would have discovered material system weakness, if one existed. None of the audit firms discovered or commented on a material system weakness because none exists!
We believe the local auditor's general unfamiliarity with this type of audit led to a questionable reference to a material weakness in the Management Letter sent to Cook County. We have steadfastly refuted this claim in both written and oral communications since the draft of the Management Letter was issued earlier this year. It is obviously inconsistent to have issued an audit opinion, with no qualifications, as was the case in the Cook County audit, if a material weakness existed.
Many plans maintain cash basis accounting as opposed in GAAP accounting, as we have done in Cook County since inception. The primary reason for cash basis reporting is simply to allow for a more understandable report for our clients and participants. When the auditor requested to express plan values on a GAAP or "present value" basis, we accommodate this adjustment as we did in the Cook County audit. It is customary to maintain records in the manner in which our system does; and, it is a normal occurrence to adjust the records for audit purposes as we did in this case. Doing so does not suggest any such weakness and it does not suggest plan values are overstated or inflated. Copeland received no compensation on any of the assets involved in this classification issue so there was no possibility of receiving excess compensation.
We are proud of the Cook County plan. More than 8,500 county employees take advantage of a valuable benefit in large part because of the effective efforts of my Copeland associates. We have worked hard to earn their trust as we have modernized the plan over the years. They are entitled, as are the other many Copeland clients throughout the country, and the 1,000 Copeland employees, to a retraction of the damaging implications in your article, which are not accurate as stated.
Robert C. Dughi
Chairman of the Boardand President
The Copeland Cos.
East Brunswick, N.J.
Editor's note: As stated in the story, Copeland officials were contacted, but declined to comment.