On September 8, 2016 the NYCERS Board of Trustee held their regular board meeting for September. The second item on the agenda was three resolutions authorizing NYCERS to reimburse the City for “investment” expenses incurred by the Comptroller’s Bureau of Asset Management from July 1, 2016 to March 31, 2016. The amount for the first quarter of FY-2016 was $552,461. We never got hear what the amounts were for the two quarters from October 1, 2015 to March 31, 2016 because the resolutions were tabled for the next meeting in October. I have written about these reimbursements in the past.
The reason they were tabled was because the Chair of the Board, John Adler, asked that they be tabled.
Because as the Chair stated the documentation supporting the expenses provided by the Comptroller’s Office was “difficult to decipher”. He stated he had questions and he wanted all three resolutions held up until he was satisfied that the expense were properly documented and appropriate for reimbursement from the corpus of the fund.
The Comptroller’s representative asked whether the Chair had communicated his issues to the Comptroller’s Office.
The Chair said that he had not yet done so. He further said that the documentation was very unclear, hard to decipher and was not in any standard format. This made it a laborious process to analyze. He also stated that this analysis had not been done before.
John Adler is a low key person who became the Chair of NYCERS in March, 2015. This is the first time since he became settled into his current position that he has had to deal with this budgetary flimflam. It, unfortunately, also occurs at the other four city pension systems and runs about $5M per year.
The Comptroller’s representative agreed that this type of analysis on the expenses had never been done before and asked for specifics on what the reporting format should be.
The Chair responded that the City had uniform directives about documenting expenses. He also stated that it appeared to him that the Comptroller, as the City auditor, was not abiding by those actual directives. Specifically he said that the Comptroller was sometimes using city expense rules and sometimes federal rules.
The Comptroller’s rep said that she did not think that different rules were being use and that she would be surprised if they were.
“I think you will be surprised” the Chair said in response.
To the casual observer this might not seem to be a big deal. Trust me, this is a big deal.