Board Resolution 2019-05-09(b)

Meeting room

Topic: Employers
Subtopic: Employer Audits - Follow-up Procedures
Date: 5/17/2019
Status: Active

WHEREAS, section 7-198 of the Illinois Pension Code authorizes the Board of Trustees of the Illinois Municipal Retirement Fund to establish rules necessary or desirable for the efficient administration of the Fund; and

WHEREAS, to ensure IMRF employers are correctly implementing IMRF statutes, policies, and procedures, IMRF conducts Employer Audits; and

WHEREAS, a key part of IMRF’s Audit process is IMRF’s follow-up with employers to ensure that they resolve exceptions and come into compliance.

NOW, THEREFORE, BE IT RESOLVED that the IMRF staff will undertake the following action steps when completing an employer audit and implementing audit findings:

  1. Communication with Employer
    1. Audits will conclude with a verbal exit interview which identifies all exceptions so the content of subsequent correspondence will not be a surprise.
    2. Initial Report
      • To be emailed by the responsible IMRF audit staff member within two weeks of the completion of the audit.
      • Neutral/factual report.
      • Sent to Authorized Agent; with copies to a Chief Operating Officer (such as the Village Manager, County Administrator, School Superintendent), Internal Audit Manager, Internal Audit Supervisor, and Field Representative.
      • Requires employer to respond within two weeks of emailing the report.
      • Follow-up email/call will be made by IMRF audit staff to determine status of compliance the day after response due date.
    3. Next Level Letter
      • Occurs when Authorized Agent does not respond to the initial report or if Authorized Agent denies access to records and prevents an audit.
      • Intended to reach additional parties at the employer. (Signed by the Internal Audit Manager.)
      • Addressee will be the Governing Body with copies to the Authorized Agent, Chief Executive Officer/Chief Operating Officer, IMRF Internal Audit Supervisor, Field Representative, and Field Services Manager.
    4. Final Letter
      • Used after Next Level Letter and only if the Governing Body is nonresponsive (Signed by the Executive Director).
      • This letter can also address employers who have not submitted the required documents to conduct audit testing. In this instance, an external audit firm can be engaged to complete the audit on-site at the employer’s offices. The cost incurred by IMRF in engaging the external audit firm may be billed to the employer upon approval by the Audit Committee.
      • Outlines the steps to be taken administratively by IMRF in order to conduct the audit or resolve the audit findings.
      • Letters could go to:
        • Participants
        • Internal Revenue Service
        • Local Press (Press Release)
        • Unions
        • State’s Attorney’s Office
        • Employer’s External Auditors
  2. Removal of Authorized Agents
    Occasionally, IMRF encounters Authorized Agents who lack the commitment to be an effective liaison between IMRF and the unit of local government. Historically, IMRF has not objected to the continued use of an appointed agent. Depending on the circumstances, IMRF would request appointment of a new Authorized Agent.
  3. Appeal of Findings
    • If employers disagree with the findings, they will be offered the right to an administrative appeal.
    • Hearings would be pursuant to the IMRF non-disability appeal procedures.
  4. Cost
    Normal audits are part of IMRF’s cost of doing business. Audits requiring excessive IMRF staff time due to non-compliance or non-cooperation (when an issue of judgment is not involved) may be charged to the recalcitrant employer after approval by the Audit Committee.