Auditor Logo Susan Montee

Report No. 2010-68
June 2010

Complete Audit Report

Findings in the audit of the Public School and Education Employee Retirement Systems of Missouri

Travel Expenditures
Improvements to the Public School and Education Employee Retirement Systems of Missouri (systems) Board of Trustees (Board) travel policies and procedures are needed. Travel and training expenditures totaled approximately $1.2 million during the 3 years ended June 30, 2009. Our review noted instances where lodging and meal reimbursements and restaurant charges to systems' credit cards during that period appeared excessive. Prior to July 2009 and December 2009, the Board had not established limits for meal and lodging expenses, respectively, or sufficient procedures for ensuring these costs were reasonable. The Board established meal per diems equaling applicable federal employee per diem maximums set by the federal government, effective July 2009. Subsequent to our audit inquiries, the Board established lodging maximums effective December 2009. The maximum for in-state hotels is now the applicable federal employee per diem maximum, while the maximum for out-of-state hotels is 150 percent of the applicable federal employee per diem maximum. The establishment of this higher out-of-state maximum was not supported by an analysis or review of the current hotel rates in the cities in which Board members and employees typically travel. In addition, some expense reports submitted by Board members and employees, as well as credit card payment records, lacked sufficient documentation.

Travel Expenses Paid by Third Parties
Systems' officials indicated, and our follow up on travel expenses confirmed, that Board members and employees periodically receive paid travel expenses (e.g., meals, lodging, and conference fees) from investment managers and other third parties while attending conferences or conducting monitoring reviews. The Board has not established a system for reporting and monitoring paid travel expenses accepted by Board members and employees.

Complete Audit Report
Missouri State Auditor's Office