ASSOCIATION OF PUBLIC PENSION FUND AUDITORS
PROFESSIONAL DEVELOPMENT CONFERENCE
November 3 – 5, 2003
Earn up to 17.5 CPE CreditsRegister NowSee Details Inside
About Your Sponsor
The APPFA Professional Development Conference is designed to further enhance participants’ auditing skills and provide a forum for the exchange of ideas and concepts. At the conference, the participants will attain an overview of the topic areas. Attendees should have a basic knowledge of accounting and auditing procedures, practices and theory. There is no experience requirement and no advance preparation is needed. Participants attending this seminar will receive an attendance certificate following the completion of this program. Auditing and accounting professionals may qualify for 17.5 hours of Continuing Professional Education (CPE) by attending this conference, which is designed to comply with the AICPA’s Statement on CPE Standards.
APPFA is registered with the National Association of State Boards of Accountancy (NASBA), as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be addressed to the National Registry of CPE Sponsors, 150 Fourth Avenue North, Suite 700, Nashville, TN 37219-2417, (615) 880-4200, Web site:
Agenda
Sunday – November 2
Reception 6:00 – 8:30 pm
Monday – november 3
Continental Breakfast 7:30 – 8:30 am
Introduction & 8:30 – 8:45 am
Logistics
Welcome and Opening 8:45 – 9:45 am
Comments
Sheila W. Beckett, Executive Director, ERS of Texas, and Ronnie Jung, Interim Executive Director, TRS of Texas
Roll Call of the 9:45 – 10:30 am
States
Break 10:30 – 10:45 am
Roll Call of the 10:45 – 12:00 pm
States (continued)
Lunch 12:00 – 1:15 pm
Lies, Cons and 1:15 – 3:15 pm
the Truth
Break 3:15 – 3:30 pm
Alternative Assets 3:30 – 5:00 pm
APPFA Business Meeting 5:15 pm
Tuesday – november 4
Continental Breakfast 7:30 – 8:30 am
System Implementation 8:30 – 10:00 am
Projects…and the Role
of the Auditor
Break 10:00 – 10:15 am
Panel Discussion: 10:15 – 12:00 pm
Current Issues in Public
Pension Fund Auditing
Lunch 12:00 – 1:15 pm
Discussion on Best 1:15 – 2:45 pm
Practices for Audit
Division Charters
Break 2:45 – 3:00 pm
Operational Reviews: 3:00 – 4:30 pm
Commercial Real Estate
BBQ Dinner at the 6:00 pm
County Line on the River Walk
Wednesday – november 5
Continental Breakfast 7:30 – 8:30 am
Business Continuity 8:30 – 10:00 am
Break 10:00 – 10:15 am
New Standards, New 10:15 – 11:35 am
Challenges
Session Descriptions and Presenters
Welcome and Opening Comments
Sheila W. Beckett, Executive Director of ERS of Texas and Ronnie Jung, Interim Executive Director of TRS of Texas
Sheila Beckett has served as Executive Director of the Employees Retirement system of Texas (ERS) since 1996 when she was appointed to the position by the ERS Board of Trustees. Under her leadership, ERS administers programs that provide retirement, health insurance, deferred compensation, and flexible benefits for more than 200,000 current state employees and retirees. As Executive Director of ERS, Sheila was named Agency Administrator of the Year in 1998 by the Texas Public Employees Association, Professional Administrator of the Year by the Central Texas Chapter of the American Society for Public Administration in 2001, and she received the prestigious National Public Service Award for the American Society for Public
Administration and the National Academy of Public Administration in 2003, for her commitment to ensuring ERS accomplishes its mission of enhancing the lives of its customers through the efficient delivery of high quality benefits at the lowest practical cost.
Sheila holds a Masters of Public Affairs degree from the University of Texas at Austin, Lyndon B. Johnson School of Public Affairs, and a Bachelor of Arts in Political Science from Texas A&M University.
Ronnie Jung is currently the Interim Executive Director for the Teacher Retirement System of Texas (TRS) which serves over one million public and higher education employees and retirees. He was appointed as Deputy Director for TRS in August 2001. Prior to that appointment, Ronnie served as Chief Financial Officer for TRS for five years. He previously worked for twenty years at the Texas State Auditor’s Office and two years at the Texas Legislative Budget Board. He earned a B.A. in Accounting from the University of Texas at Austin in 1974 and a Masters of Public Affairs from the LBJ School of Public Affairs, UT Austin in 1991. He is a Certified Public Accountant and a member of the American Institute of CPAs and the Texas Society of CPAs.
Ronnie previously served as a member of the Governmental Accounting Standards Board’s task force for higher education financial reporting which lead to the development of GASB #35. He was recognized as “2002 Administrator of the Year” by the Texas State Agency Business Administrators’ Association.
Roll Call of the States
In this session, a representative from each participating organization will speak to the group about current audit areas, ongoing projects and recent legislation affecting their pension fund. They will discuss how they accomplished the results and how they overcame hurdles. This session facilitates networking and is extremely beneficial in locating peers that are working on similar projects and facing similar challenges.
Moderator: Marci Sundbeck
Lies, Cons and the Truth
What profession can detect lying better than any other…and why? What is the profile of the person who is the easiest to deceive? How do you not become that person? What is the profile of the most dangerous deceiver and can they be neutralized? In this presentation, Dan Korem, one of the IIA’s most popular speakers, details this vital information as well as little-known techniques to detect lying. Resisting and not falling prey to deception has never been more important for auditors – the ethical standard bearers of the global business community.
Presenter: Dan Korem
Dan is a critically acclaimed author, documentary producer, and independent investigative journalist whose programs have been seen by over 150 million people worldwide. A much sought-after speaker for corporate, law enforcement and education groups in North America and Europe, he is the president of two Dallas-based communications companies. Korem & Associates (K&A) is one of the world’s leaders when it comes to training professionals in on-the-spot behavioral profiling. His most recent books are Suburban Gangs – The Affluent Rebels (1995), The Art of Profiling – Reading People Right the First Time (1997), Streetwise Parents, Foolproof Kids, 2d ed. (early 2004), and Rage of the Random Actor (fall 2003).
Alternative Assets
More institutional investors are considering alternative assets to diversify their portfolios and diminish volatility of returns. This presentation will include a discussion of private equity and hedge fund investments and staff’s fiduciary role in evaluating and monitoring general partners and working with consultants, trustees and other limited partners.
Presenter: Keith Garrison
Keith is currently the Director of Alternative Assets for the Teacher Retirement System of Texas (TRS) and has been employed by TRS since 1989. Prior to this, Keith was a commercial lending officer with two different banks in the Austin area. Keith received his undergraduate degree in Finance in 1980 from the University of Texas-Austin and obtained the Certified Property Management (CPM) designation from the Institute of Real Estate Management in 1998.
System Implementation Projects…and the Role of the Auditor
Mr. Wechsler will describe the role of auditors in large public employee pension system implementation projects. He will review historical involvement and offer several potential roles with increasing participation and value to the process. In addition, he will provide perspectives on what traditionally goes wrong in such projects and how to avoid it happening at each of our systems.
Presenter: Leon Wechsler
Leon is the President of L.R. Wechsler, Ltd. (LRWL) – a mid-sized consulting firm. Since 1994, he has focused on providing support to LRWL’s 23 public employee and teacher retirement system clients – including over a dozen new system implementation projects – from inception; through needs analysis, RFP preparation and procurement and contract negotiation; to overall project management.
Leon received a B.S. degree from Purdue University and a M.S. degree from Worcester Polytechnic Institute. He has been an invited speaker at PRISM, SCTR and HLSUA.
Panel Discussion: Current Issues in Public Pension Fund Auditing
A distinguished panel of APPFA Chief Audit Executives will discuss current issues and challenges in their respective pension funds. This interactive session will provide answers and solutions to help APPFA members more effectively handle their ever-increasing responsibilities.
Panel Members: David MacCabe, John Spielman, Greg Beck, Janet Harris and Caroline Drum Bradley
David is the Director of Internal Audit for the Teacher Retirement System of Texas. He has worked in management and audit positions in state and federal government for over 30 years. He has a BBA form the University of Texas at Austin and a master’s degree in public administration from Southwest Texas University. Dave was the founding chair of the Texas State Agency Internal Audit Forum and has been active in the Institute of Internal Auditors since 1978. He currently serves on the IIA International Educational Products Committee, the CIA Advocates Council, and is a Quality Auditing Services volunteer. Dave is a CIA, CGAP and CFE.
John joined Colorado PERS in 1991, as a Systems Auditor, and was appointed Internal Audit Director in 2001. John previously worked in systems audit and software quality assurance related positions with Lockheed Martin Corporation and Computer Data Systems, Inc. He was also a Business Systems Analyst with Great West Life Assurance Company and helped regionalize the information systems for their United States headquarters established in Denver. John received his undergraduate degree from the University of Connecticut and his Master degree in Business and Computer Resource Management from Webster University in 1993. He is a member of the Information Systems Audit and Control Association. He is a CISA and currently serves on APPFA’s Board of Directors.
Greg is the Internal Auditor at the Missouri State Employees’ Retirement System (MOSERS). He has held this position since February 1, 2001. Prior to joining MOSERS, Greg was the Manager of Financial Management and Policy for the Missouri Department of Health, a Program Evaluator for the Missouri General Assembly for two years, and worked nine years at the Missouri State Auditor’s Office where his last position was Senior Auditor. He has an undergraduate degree in business administration from Central Missouri State University. He is a CIA, CPA, CIDA and CGFM. He is a member of the Institute of Internal Auditors, the Association of Government Accountants, and the Missouri Society of CPA’s. He is currently the treasurer of the Mid-Missouri chapter of the IIA.
Janet is currently the Internal Auditor for The Public School and Non-Teacher School Employee Retirement Systems of Missouri. Prior to this Janet has 22 years of public accounting experience, which included auditing financial statements for public entities. Janet received her undergraduate degrees in Accounting and Business Administration in 1985 and her CPA certificate in 1988.
Caroline is currently the Internal Auditor for the Indiana Public Employees’ Retirement Fund (PERF). Prior to coming to PERF, Caroline worked for American United Life and Bank One as an internal auditor. She received a degree in Business Administration from the University of Iowa. She is a Certified Internal Auditor (CIA), has her Fellow of Life Management Institute and has also passed the Series 7 exam.
Discussion on Best Practices for Audit Division Charters
Persons attending this session will attain an appreciation of the components of an audit division charter through discussion of a DRAFT Example Audit Division Charter. The discussion will cover the purpose, responsibility, authority, roles, standards, accountability and relationships of the audit division. The following topics will be discussed: auditing and consulting roles; independence; relationship to the Board and to Management; standards; access to records and personnel; relationships to the external financial statement auditor and other external auditors; relationship to risk management and internal control programs; relationship to compliance with pertinent laws, regulations and Board policies; relationship to audits performed by outside government agencies; and hiring of outside consultants/experts. The effect of the Sarbanes Oxley Act of 2002 on audit division best practices will be discussed. The DRAFT Example Audit Division Charter will be discussed with respect to the passages that are parallel to and are complimentary to the APPFA-endorsed Example Audit Committee Charter.
Presenters: Bob Benson and Jeanette Eckert, Co-Chairs of the APPFA Best Practices Committee
Bob has been an internal auditor at CalPERS for over ten years. During that time, Bob has participated in audits of the benefits programs, investment operations, real estate investment unit, and the accounting systems. Bob has also participated in many special projects, including the new investment accounting system, the new financial accounting system, the new headquarters building, major revision of the financial statements and responses to GASB and SEC exposure drafts. Bob is the contract manager for the annual financial audit and for the audits of real estate advisors and properties. Bob is a CIA, CISA, CPA, CMA and CGFM.
Bob has a varied background, which includes a B.A. in botany-biology fromPomona College and a Ph.D. in entomology and biochemistry from the University of Illinois. Bob taught entomology at Washington State University for six years, and he taught biochemistry at the University of California
at Davis for four years. Following this, Bob retooled into accounting and taught accountancy at California State University at Sacramento for eleven years. Bob taught classes in financial, intermediate and advanced accounting; managerial and cost accounting; auditing; and CPA Exam review. Bob also coached the varsity punters and place-kickers at Cal State Sacramento.
Jeanette is the Audit Manager of the Louisiana State Employees’ Retirement System (LASERS) in Baton Rouge, Louisiana. She started this audit division in 1994. In this capacity, she is responsible for directing all internal control reviews and special projects in the financial, compliance, operational and information systems areas for LASERS. Jeanette is the coordinator of LASERS’ external audit. Prior to joining LASERS in May 1994, Jeanette was a state financial institution auditor for 5 years, a state budget analyst for 8 years and an accountant for the state prison system for 3 years.
Jeanette has an undergraduate degree in Business Education from the University of Southwestern Louisiana in 1972 and an MBA from Louisiana State University and a Masters in Information Systems Decision Science. She is a CIA and a CPA. She has served as a local chapter officer of the IIA for 3 years including one year as the chapter’s president. She is currently a member of the IIA’s Educational Products Committee. Jeanette is an APPFA member and is Co-Chair of the Best Practices Committee. She conducts peer reviews and has conducted peer reviews for the Texas Teachers Retirement System, State Universities Retirement System of Illinois, and the Missouri State Employees’ Retirement System. She has taught part-time at two vocation technical colleges and at a business college. She has been an adjunct professor at Baton Rouge Community College for the past year and a half teaching Access and Excel.
Operational Reviews: Commercial Real Estate
This session will cover operational reviews of commercial real estate that is held in public pension fund investment portfolios. The presentation will cover risk assessment, audit approach strategies and effective reporting.
Presenter: Tom Britting, CIA, CISA, CGFM, CFE
Tom is a Consultant with the firm of Conrad and Associates, LLP. Tom currently oversees client relations for the firm’s public pension fund clients. Prior to this position, Tom served for more than 10 years as the Chief Auditor of the California Public Employees’ Pension Fund and has 20 years of audit experience with California’s Office of the Auditor General and the U.S. General Accounting Office. Tom holds an undergraduate degree in Accounting and a graduate degree in Public Administration.
Business Continuity
Persons attending this session will develop an understanding of business continuity planning. The discussion will address the evolution of business continuity planning, why management should be interested in a successful business continuity program, where it belongs in an organization, elements of a business continuity program, working with management to develop awareness and support and internal audit’s role in business continuity planning. The following topics will be discussed:
- Historical progression of disaster recovery to business continuity program.
- Management’s interest and responsibility in an effective business continuity program.
- Suggestions on where the business continuity planning function best fits in an organization.
- A number of elements of a business continuity program to include but not limited to
business impact analysis, disaster
recovery plan, incident manage-
ment team plan and business
continuity/resumption plans.
- The working relationship between internal audit and business continuity planning.
In addressing these topics, examples will be cited as well as proven methods for avoiding some of the pitfalls.
Presenter:Rick Torres, CBCP, CRP
Rick has twenty-six years of combined mainframe data processing and business continuity experience. Since joining the Teacher Retirement System of Texas (TRS) as Risk Manager, he is now responsible for ergonomics, property management, safety, a portion of worker’s compensation, interaction with State Office of Risk Management, wellness program and business continuity. In the area of business continuity, Rick has developed, designed, coordinated and completed the TRS Business Impact Analysis. He coordinates with the TRS Information Technology Section and business units to develop, implement, exercise and maintain business continuity plans. He is directly involved in administering the hot site contract with Northrop Grumman.