The new trustees and top management brought in after the 2004 election — who set fixing the accounting control problems of the Indiana Public Employees' Retirement Fund, Indianapolis, as one of their goals — have turned the situation around.
The $15.6 billion fund received an unqualified audit opinion from the Indiana State Board of Accounts for its financial statements for the fiscal year ended June 30, its first "clean" audit since 2002.
"When new management arrived at PERF in late fiscal year 2005, it aggressively attacked the SBOA findings," according to a statement from the fund. Mitchell E. Daniels Jr., who was elected Indiana governor in 2004, replaced the fund's trustees and brought in a new executive director, David Adams. "The result was a significantly improved 2005 audit, leading to the unqualified opinion for 2006."
"When I arrived in 2005, the auditors identified serious issues with managing our finances," Mr. Adams said in the statement. "Our leadership aggressively implemented a plan to improve the situation, and I'm extremely pleased with the result."
An SBOA audit of the fund for fiscal year 2004, for example, noted 30 findings of inadequate internal controls, including trading $269 million in bonds for mutual funds in March 2004 without apparent board approval.