In a recent announcement, the California Controller has indicated his office is broadening a review of public employee retirement accounts. He stated that his office needed further time to complete the audits so they can review all the targeted accounts. These retirement accounts are of state employees who have allegedly been receiving unauthorized raises as they approach retirement age, which has increased their benefit payments.
The audit was originally commenced in Nov. 2011. It was initially believed the full audit would take about 2 months. However, the Controller has determined that, due to the allegations that employees were receiving inflated payments, that more time would be needed.
It has been reported that the state of California has been unable to cover all of the expenses associated with pensions, and that the amount covered dropped from 75 percent in 2010 to 69 percent in 2011. These costs have caused the price of hiring employees in the state to rise significantly. As a result, California Governor Jerry Brown has proposed several laws that would work to ensure that the retirement payments reflect a more accurate representation of employees’ wages at the end of their employment career.
Audits of California financial accounts are a common occurrence. These reviews are a mechanism through which government and private agencies can ensure that the proper compensation and financial reporting is being conducted. Although these audits can be taxiing on a business or organization, they do not need to be as stressful as they might originally appear to be. By enacting a plan on how to organize the financial documents so that the audit can be accomplished as efficiently as possible, businesses and individuals can ensure that the time and expenses associated with the audit are minimized, all while ensuring a fair and accurate accounting takes place.
Source: Bloomberg, “California Widens Audit of Pension Abuse, Controller Says,” James Nash, Aug. 24, 2012