The Richmond Retirement System (RRS) erroneously paid $554,661.50 to 44 deceased former employees over the past nine years, according to a recent audit by the Office of the City Auditor. The report found that RRS failed to recover $415,660.76 of the improper payments due to ineffective controls in preventing, detecting, and recovering funds sent to ineligible recipients. The audit revealed significant shortcomings in RRS’s ability to identify deceased retirees in a timely manner, manage overpayments, and inform the Board of Trustees about these issues.
In one case, a retiree continued to receive payments totaling more than $247,000 for seven years after their death. RRS Executive Director Leo Griffin told city auditors that management focused more on governance, considering the overpayment issue operational. However, city code requires the RRS board to oversee and correct payment issues, but Griffin was unaware of these requirements.
City auditors discovered that several managers had not read the procedures for overpayment collection until the audit began, and a payroll accountant responsible for these procedures worked largely in isolation.
Richmond Retirement System issues found
Proper documentation was missing, with auditors able to review only nine out of 26 collection letters sent by RRS staff.
In response to the findings, RRS has taken corrective steps, including implementing a new tracking process to monitor outstanding overpayments, issuing new letters to beneficiaries and estates, holding weekly meetings to review overpayments, and revising the overpayment collection process. “This is not a scandal. This is exactly the sort of improvement processes that we expect to find in audits, and that’s the point of doing these audits,” said Andrew Breton, Richmond City Councilor.
State Delegate Mike Jones, a former Richmond councilor who played a role in hiring the city’s new auditor, noted, “And that’s what we brought him in to do. To find issues, to find misuse, to find processes that are costing taxpayer dollars rather than saving and securing taxpayer dollars.”
The audit lists several strategies to improve the system, such as updating systems and holding more frequent meetings. Some changes have already been implemented within the Richmond Retirement System based on the audit’s recommendations.
