COUNTYWIDE : Retirement Board Ills Traced to Growth

Responding to a spate of criticism in an independent management audit, the top administrator of the county employees’ retirement fund said Monday that many of the problems cited were a result of adjustments to the pension fund’s “tremendous growth.”

Mary-Jean Hackwood, who has been at the center of a controversy over frequent travel by the retirement board and its staff, submitted a 29-page written response to the audit by KPMG Peat Marwick.

The audit, delivered last month after a five-month review of the Orange County Employees Retirement System, which oversees a $1.6 billion pension fund, made 72 recommendations for changes.

“I think they came in and did the job they were given by the board,” Hackwood said about the auditors. “As far as the tone of the report was concerned, I welcomed any suggestions for improvement.

“A lot of these problems we already knew about. Board members wanted to know everything, and they got everything.”

The report made several recommendations to improve accountability of some sections of the retirement system and to streamline the administration of claims for payment.

But in its most pointed criticism, the report cited a lack of teamwork on the 27-member staff. The auditors said management and staff “are having difficulty maintaining a high level of coordination, cooperation and mutual respect.” It went on to say that “it is imperative that the board and management establish improved teamwork as a priority. . . .”

“I don’t agree that at this stage of the game we lack teamwork,” Hackwood said. “There’s been an adjustment time with us growing. We’ve gone through a lot of trials and tribulations.

“We’ve had tremendous growth financially as well as on our staff. The problems have to do with adjustment to growth and in how you do things.”

Hackwood, who has worked for the retirement system since 1987, was out of town on a family emergency when the report was issued July 15.

The audit was the first in-depth review of the system since it broke away from the county tax collector-treasurer’s office in 1986. The system’s staff, and the value of the fund, have grown considerably since then.

The audit also criticized the retirement system’s lack of a standardized travel policy and pointed out that there is not enough of a review of expenses that are turned in for payment after out-of-town trips.

The nine-member retirement board of directors and Hackwood came under fire recently for the number of out-of-town trips they have taken, which they said were necessary to check up on the system’s investments.

In May, the county auditor-controller rejected more than $5,000 in personal expenses charged to the county during a 26-day trip to Europe, which four board members and Hackwood attended.

Retirement board President Patrick Brunner said he was pleased with Hackwood’s response to the management audit.

“Her response and my reading of the report say that half the things mentioned we’re already doing,” he said. “Some suggestions are certainly appropriate, and we’re gong to implement them, too.”