Software pension program among Fund’s unresolved findings

The long-delayed database software program of the Retirement Fund was identified as one of the two unresolved issues at the agency, according to an audit report that was tackled Friday in an exit conference with the independent auditor and representatives of the Office of the Public Auditor.

According to Perlie Santos, representative of J. Scott Magliari & Co., the software project was marked unresolved because the new database has yet to be implemented despite the Fund exploring ways on how to recover the money that’s already been paid the vendor.

OPA audit manager Ross Zapanta and public auditor Mike Pai also agreed that the finding is classified unresolved because conditions have not changed and no recovery has been made yet.

The pension software cost $449,000 and the contract was signed in 2008 with Express Electronics Ltd., which is owned by Gary Sword. Based on Fund records, it had already paid Sword’s company over $402,000 for the still non-functioning software.

Because there is still $47,400 remaining on the project cost, the board opted to give the contractor more time to fix the program’s deficiency.

The software project was supposed to have been completed in 2009. This was not realized, resulting in a delay of more than two years now.

In the single audit performed for the Fund in 2009, the pension software system was among the serious findings noted by auditors. The audit noted violations of the contract in both parties.

During Friday’s exit conference with auditors, Fund board chair Sixto Igisomar said the pension software will be tackled at their next meeting, slated for Aug. 4.

The board has deferred action on the overdue pension software project on many occasions. It recently gave Sword’s company 10 days to respond on how it plans to fix the program. The ten-day period was set to expire on July 17.

Besides the pension software program, auditors also indicated overpayment of refunds as one of the unresolved findings. The report says that “there were no documentations in fiscal year 2010 showing subsequent collection or communication with the former member who was overpaid.”

For fiscal year 2010, J. Scott Magliari indicated that it found no material weaknesses and significant deficiencies in the financial statements of the Fund. It cited only two findings in the latest audit: the untimely posting and reconciliation of member contributions, which was caused by the staff turnover, and untimely remittances from autonomous agencies.

The other finding is the non-distribution of Form 1099 to recipients before the Jan. 31 deadline. This was due to staff turnover in the records section. The auditors said these findings are noncompliant with the Fund’s own regulations and policies.