Audit Report on the New York City Board of Education Retirement System’s Controls over the Identification of Deceased Individuals Collecting Pension Payments

To identify deceased individuals collecting pensions, the Board of Education Retirement System (BERS) utilizes a monthly death match report comparing Federal Social Security Administration (SSA) and New York City Pension Payroll Management System (PPMS) records. The report would identify an individual who is actively receiving a pension payment but is reported deceased on the SSA death report. BERS itself does not produce any death match reports, so prior to October 2010 BERS would access the City Financial Information Service Agency’s (FISA) death match discrepancy report from the Report Management and Distribution System (RMDS). The death report lists individuals who have been reported as deceased during that month and are also receiving pension payments. The Death Match Discrepancy Report is not cumulative. The Death Match Discrepancy Report can only provide monthly information by SSA and PPMS.

As of October 2010, BERS replaced the RMDS death match discrepancy report with the City Human Resources and Management System (CHRMS) death match report. Since then, BERS has been using the HR-11 report generated through the CHRMS. The HR-11 report, preprogrammed by the Office of Payroll Administration (OPA), utilizes a cumulative database to identify and reduce instances of payments to deceased recipients and to compare dates of death recorded within PPMS to a database of deceased individuals. A match is generated when a pensioner or beneficiary listed as active (not deceased) in PPMS is reported as deceased in the database. The database of deceased individuals is updated on a monthly basis with a file provided by SSA.

Audit Findings and Conclusions

The audit determined that BERS’s management method of monitoring and overseeing the identification of deceased individuals collecting pensions after their date of death was deficient. BERS did not update its controls over identification of deceased individuals collecting pensions after their date of death in a timely manner. Specifically, BERS delayed using the HR-11 report, which became available in April 2010 and corrected deficiencies in the Death Match Discrepancy Report, until October 2010.

Our review of the reports found that BERS took appropriate action on those individuals who were identified as deceased and adequately handles the suspension of pension payments once notified of an individual’s date of death. However, the HR-11 and Death Match Discrepancy reports lack evidence of supervisory approval and identification of the staff responsible for the initial examination. Moreover, the PPMS CHRMS system only produces reports on a real-time basis and cannot be recreated or generated to obtain past information. Consequently, BERS needs to create an archive of previous reports for future investigations.

Audit Recommendations

BERS should:

• Ensure that work performed by staff is documented and supervisory reviews are evidenced by signoff—attesting to compliance with policies and procedures.
• Coordinate with the FISA to determine the feasibility of developing a back-up plan to store the HR-11 reports.

BERS Response

BERS strongly disagreed with the finding regarding its delayed implementation of the HR-11 report and one of the two recommendations regarding the coordinating efforts with FISA to develop a back-up plan to store the HR-11 reports. However, BERS agreed with the finding that there is a lack of evidence documenting supervisory verification and stated it would adhere to the recommendation that it add a supervisory signoff requirement to its procedures