MTPR

Audit Finds Over $1.5 Billion In State Investment Accounting Errors

Feb 28, 2018

A legislative audit released Wednesday found over $1.5 billion worth of financial reporting errors in nearly $18 billion of Montana state and local government investments.

The Montana State Board of Investments has the sole authority to invest nearly $18 billion in public retirement system money and state workers compensation insurance funds.

An audit found that the investment board improperly presents and discloses information in financial reports. That's according to legislative staff who briefed a legislative committee about the annual check-up today. 

"We didn't find any issues with money being missing or anything like that," says Legislative Staffer Karen Simpson.

Simpson says the accounting errors don't show that the state has less money than previously thought, but that the state's investment books don't do a good job accounting for what money the state does have. 

"Our issues were in how the board's financial activity was presented on the face of its financial statements," she says.

Simpson pointed out one trust fund in the Department of Commerce where both revenues and spending were overstated by more than $48 million, making the account look busier than it actually was. Although it didn't change how much money was actually in the account. 

Geri Burton, deputy director of the investment board, says every dollar is where it should be, but the board will receive additional training, get help from an outside expert, and reviews of their accounting process. 

"I want to assure you we take this matter very seriously at the board," Burton said. 

Members of the legislative audit committee noted how big the pool of money is, and how important the board's investments are, saying that although many of their past audits have come up clean, this one caught their eye.