MISSOURI LOCAL GOVERNMENT EMPLOYEES RETIREMENT SYSTEM MANAGEMENT ADVISORY REPORT- STATE AUDITOR’S FINDINGS
In addition to our review of the reports and substantiating working papers of KPMG, LLP, we included those procedures which we considered necessary in the circumstances.
We reviewed probable compliance with certain constitutional provisions, statutes, administrative rules, and attorney general’s opinions, as we deemed necessary or appropriate. This review was not intended to provide assurance of full compliance with all regulatory provisions and, thus, did not include all regulatory provisions which may apply. Nevertheless, our review disclosed no conditions that represent significant violations.
During our review, we identified a certain management practice which we believe could be improved. Our review was not designed or intended to be a detailed study of every system, procedure, and transaction. Accordingly, the finding presented in our report should not be considered as all-inclusive of areas where improvements may be needed.
Professional Services Contracts
The Missouri Local Government Employees Retirement System (LAGERS) Board of Trustees has not formally solicited proposals for the auditing service, actuarial consulting service, investment consulting service, or medical consulting service contracts in recent years. The Board spends approximately $24,000, $300,000, $135,000, and $19,000, respectively, for these services annually. The Board has not solicited proposals for some of these services for over twenty years. Without requesting proposals for such services periodically, the LAGERS Board of Trustees has not ensured it will receive these services at a fair price.
WE RECOMMEND the LAGERS Board of Trustees periodically solicit proposals for all professional services.
The Board Chairperson responded as follows:
In our most recent selection of outside counsel, the LAGERS Board of Trustees went through a very detailed review of proposals from numerous law firms before making a selection. A similar process is used in the selection of new investment management firms. We work in conjunction with our investment consultant and review numerous firms before deciding on those to be interviewed. In addition, we retain consultants to review and recommend various carriers and brokers for all of our risk management activities. Thus, we feel we are complying with your recommendation for all new professional service providers.