Pension Board Members Draw Fire Over Expense Submissions

Orange County’s chief auditor said Friday that members of the county pension board, criticized for submitting $5,000 in personal expenses from a recent trip to Europe, are notorious for filing questionable or incomplete travel records.

“We spend more time and energy trying to decipher their expense accounts than on anyone else’s,” Auditor-Controller Steven E. Lewis said.

The Employee Retirement Pension Board, an independent agency that manages a $1.5-billion fund on behalf of 20,000 county employees, has seen its travel practices come under fire since Lewis’ office refused to reimburse personal expenses incurred by several board members during a 26-day trip overseas in April. Board officials have said that charges for opera tickets and alcohol during that trip were mistakenly submitted to the auditor’s office by a new accountant with the pension agency.

But travel records inspected this week show that county auditors and accountants frequently red-pencil pension board expense accounts with questions about specific charges, and have rejected some credit card charges that they believed were not allowable under county rules.

Pension Administrator Mary-Jean Hackwood said Friday that she was unaware of any general problem in the way her agency submits expense accounts for county reimbursement.

“I don’t know how much time they spend on us,” Hackwood said. “But if there are problems, I would hope that they would put it in writing.”

Many of the auditors’ questions are related to personal expenses during out-of-town trips taken by board members in which entire hotel bills are placed on board-issued credit cards. Others have to do with the costs of air fares or meals.

“They don’t live like you or me,” Gary Leach, a manager in the auditor’s claims and disbursements division, said of the board members. “We’re chasing our tails trying to keep up with them.”

Records show that auditors have raised questions about several recent board expense reimbursement requests:

* After an Aug. 16 trip that pension administrator Hackwood made to St. Louis to meet with a financial consultant, she submitted an expense of $1,066 for a first-class airline ticket. Auditors rejected the claim, but agreed to pay $966 for the cost of a standard coach fare.

* After a May 9-11, 1990, trip to a conference in Concord, Calif., Hackwood turned in a credit card charge for $2,226.57 that included hotel bills for herself and two board members. The auditor’s office questioned several long-distance phone charges, room service fees and other charges on the bill. But they agreed to pay the tab after pension officials indicated that all costs were business-related.

* After Hackwood and nine board members took a trip to Hawaii for a conference Nov. 10-16 last year, auditors questioned why her air fare cost 40% more and her hotel room cost 25% more than anyone else’s. Auditors said they are still negotiating with pension fund officials over how much of that bill the county will pay.

With less than a month to go until the end of this fiscal year--the new year begins July 1--the pension board has already spent a record $59,000 in travel, with at least $15,000 going to pay for the 26-day European trip. During the 1989-90 fiscal year, panel members spent $47,711 on numerous trips from Hawaii to Disney World in Orlando, Fla., to attend conferences and educational seminars or check up on fund managers in other cities.

Pension fund administrators have said the trips are necessary to monitor investments placed with managers throughout the nation and abroad. But the controversy over the European trip prompted board members Thursday to call for a review of their travel policy.

Auditors said that not only is the volume of pension board travel larger than other county agencies or departments that have to process their expense accounts through the auditor’s office, but they also do not follow the same expense account procedures that others use.

When questions arose over the nearly $20,000 in total expenses for the April trip to Europe, Lewis put some of the auditors’ complaints in writing.

In a letter to Hackwood rejecting the $5,000 in personal expenses, Lewis complained about the board’s use of credit cards, which he believes is at the heart of the auditing problems.

“I am extremely concerned by retirement’s submittal of the attached credit card billings for payment,” Lewis wrote. “Because of the above difficulties and others, I am opposed to the use of county credit cards.”