SPRINGFIELD – A new state audit of the troubled Hampden County Retirement Board concluded that the cleaned-up board shows improvement after an era of inflated expenses and paying scam vendors.
A copy of the audit conducted on behalf of the state’s Public Employees Retirement Administration Commission, better known as PERAC, covers the board’s financial activities from Jan. 1, 2018, to Jan. 31, 2018. December 2020.
A previous audit that rocked the board and angered its members covered Jan. 1, 2014, to Dec. 31, 2017, as that review highlighted more than $235,000 in payments to 50 bogus vendors for “optimization of search engines” and other bogus services in addition to hints that previous officials were using the retirement fund as a watering hole.
But the current audit suggests the council is getting back on track.
“Our current audit found that the HCRB adequately addressed several of the following issues,” says the report, which goes on to provide a retrospective of its past issues.
These included vendor payment problems, which led to a criminal investigation and a possible insurance claim to try to recoup losses, plus unauthorized meetings of former board members, shady contracts for the company’s previous lawyers board, unauthorized Social Security benefits for board members and a State Ethics Commission decision that penalized former chairman Richard Theroux for charging the board to stay at his own home beach
Theroux reimbursed the board more than $5,000 for the scheme and agreed to settle the issue with the state by paying a $10,000 fine.
The board cut ties with its two former lawyers — former state Sen. Stephen Buoniconti and now Springfield District Court Judge Robert Santaniello — and refunded their contributions. But not before the retirement fund paid an additional $175,000 for health and dental benefits during the current audit period, according to the report.
The board manages retirement investments for various groups of public employees throughout the county and currently has assets totaling more than $456 million, according to the audit. After the previous audit, Theroux and longtime executive director Julianne Bartley resigned and retired, respectively.
After agreeing to pay the ethics fine in April, Theroux said seeking reimbursement for staying at his Cape Cod home during annual retirement conferences was a mistake.
Theroux, who had submitted lodging receipts with false addresses and signatures, argued that hotel and rental stock typically ran low in early June when state retirement conferences were held in Hyannis.
“I could have stayed wherever I wanted and the board would have paid for it,” Theroux said. “I charged the board an average of $350 to about $400 over four days. I guess not understanding the law is no excuse. It was the wrong thing to do. It was a mistake, but not on purpose.”
He served as chairman of the board from 1996 until his resignation in December.
The current audit shows the board is also pursuing more than $27,000 in benefits it awarded to a retiree’s son-in-law after the retiree died in 2019.
The board responded that it was the victim of fraud after the family member submitted a false affidavit claiming to have been signed by the still-living retiree.
“Law enforcement authorities are pursuing criminal charges against the violator,” according to the audit.
PERAC’s audit staff will follow up in six months to make sure all the reforms promised by the board are in place.
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