Code of Massachusetts Regulations › 840 CMR - PUBLIC EMPLOYEE RETIREMENT ADMINISTRATION COMMISSION › Title 840 CMR 25.00 - The Conduct Of Field Examinations Of Contributory Retirement Systems › Section 25.01 - Field Examinations of Contributory Retirement Systems

Current through Register 1525, July 5, 2024
840 CMR 25.00 is the standard rule for the field examinations
				of contributory retirement systems promulgated by PERAC pursuant to M.G.L. c.
				7, § 50(a) and M.G.L. c. 32, § 21(1)(a). Except as otherwise provided
				by PERAC, or by statute, 840 CMR 25.00 shall govern any examination of the
				financial condition of a contributory retirement system.
Examinations of contributory retirement systems are conducted
				to determine the system's financial condition, to monitor performance under the
				terms of its legal, contractual and fiduciary requirements, and to examine the
				system's effectiveness in achieving the intended results established by M.G.L.
				c. 32.
An examination of each system shall be conducted at intervals
				not exceeding every three years to ascertain the system's financial condition,
				its ability to fulfill its obligations, whether all parties in interest have
				complied with the laws applicable thereto, and whether the transactions of the
				board have been in accordance with the rights and equities of those in
				interest.
The examination of a retirement system encompasses the period
				beginning on January 1st immediately following the
				ending date of the preceding M.G.L. c. 32, § 21(1)(a) examination. An
				examination of each intervening year of the audit period must be conducted as
				well as a review of the subsequent years as appropriate to ensure that the
				board is presently operating within the practices and procedures prescribed by
				PERAC and M.G.L. c. 32.
Prior to the start of the examination, the Board's
				Administrator will be provided with the Internal Control Questionnaire
				prescribed by PERAC. This questionnaire is designed to assist in understanding
				and evaluating internal controls. It consists of general questions that apply
				to all retirement boards, however, it does not purport to cover all aspects of
				internal control present at a particular system.
The board of any system may have an examination of its
				financial condition conducted by a certified public accountant or a public
				accountant selected by the board. Upon the employment of such person or firm,
				the board shall file said individual's or firm's name and address with
				PERAC.
Within ten days of making a report on the financial condition
				of the system to the board of such system, the individual or firm conducting
				the examination shall file a certified copy thereof with the PERAC.
Any such examination conducted in accordance with 840 CMR 25.00
				shall be deemed upon acceptance by PERAC to be the examination required by
				M.G.L. c. 32, § 21(1)(a). To be so accepted by PERAC the examination(s)
				must cover the period beginning on January 1st of
				the year following the completion of the most recent examination conducted
				pursuant to said M.G.L. c. 32, § 21(1)(a), and ending on December
				31st three years later. Acceptance is contingent
				upon PERAC's review of the audit workpapers.
In conducting an examination pursuant to 840 CMR 25.00, PERAC
				audit staff may utilize and rely on such portions of the report of an
				examination by a certified public accountant or public accountant selected by a
				retirement board as it deems appropriate. PERAC audit staff shall then examine
				areas supplemental to the board-selected accountant required by 840 CMR 25.00
				and, together with the board-selected accountant's work, it shall be deemed
				acceptable as the examination required by M.G.L. c. 32, §
				21(1)(a).