Single Audit Report Fiscal Year Ended June 30, 2012 - State ...

State of GeorgiaFinancial Statement Findings and Questioned CostsFor the Fiscal Year Ended June 30, 2012principal duty of, and actually performs the function of, preventing and suppressing fires;provided, however, that such term shall not include persons whose primary responsibility is theperformance of emergency medical services; or(B) Appointed and regularly enrolled as a volunteer with a volunteer fire department or combinationfull-time and volunteer fire department which satisfies the requirements specified in subparagraph(a)(1)(D) of Code Section 25-3-23 and who, as a volunteer firefighter, has and primarily performsthe principal responsibility of preventing or suppressing fires.Cause:Effect:Recommendation:The Pension Fund began admitting part-time firefighters as members on July 1, 2006 based on HouseBill (HB) 344 which was introduced and passed during the 2005-2006 Regular Session of the GeorgiaGeneral Assembly with an effective date of July 1, 2006. Parts of HB 344 were specifically related toeligibility for retirement benefits under the Pension Fund. Accordingly, HB 344 amended O.C.G.A.47-7-1 to change certain definitions. In particular, HB 344 amended O.C.G.A. 47-7-1 to define parttimeemployment within Section 3 Paragraph 5.1 as “working at a permanent job position for less than40 hours a week.” However, the amended definition of what constitutes a firefighter did not includeany mention of a part-time firefighter.The Pension Fund appears to be operating in non-compliance with O.C.G.A. 47-7-1 by grantingmembership to part-time firefighters. Approving membership into the Pension Fund for participantsnot authorized by statute calls into question the disposition of member fees received from and benefitspaid to those unauthorized members. Furthermore, member data information used in determinationsmade in the Report of the Actuary on the Valuation of the Georgia Firefighters’ Pension Fund hasincluded counts for unauthorized part-time members; which misstates financial reporting and notedisclosure information in the Pension Fund’s audit report. Lastly, the admission of unauthorizedmembers could result in potential litigation or claims against the Pension Fund.In recognition of this apparent noncompliance with Georgia law, the Georgia Firefighters’ PensionFund should develop a plan of action regarding how the inclusion of the part-time firefighters asmembers of the Pension Fund will be addressed going forward. This plan should include the PensionFund’s proposed approach to handling the consequences of the past participation from July 1, 2006 tothe present time and include consideration of past member fees collected and benefits paid tounauthorized members. The plan should also include examining the extent of the impact theunauthorized participation has had on the Report of the Actuary on the Valuation of the GeorgiaFirefighters’ Pension Fund. Resolution to these areas by the Pension Fund could possibly includeseeking legislation to allow for the part-time firefighters to be authorized members of the Pension Fundretroactive to July 1, 2006. In addition, the Pension Fund’s plan of action should include alternativesteps to resolving the apparent noncompliance with O.C.G.A. 47-7-1 in its current state should thePension Fund fail to resolve the issue through legislative efforts. Lastly, the Georgia Firefighters’Pension Fund’s plan of action should include the development of policies and procedures to ensure thateligibility determinations in the future will be in compliance with all applicable laws and regulationsgoverning the Pension Fund.(*) THIS FINDING RESULTED FROM AN AUDIT PERFORMED BY OTHER AUDITORS.79