RICHMOND, Va. — Richmond's retirement system sent $554,000 in payments to deceased retirees over the past nine years, with most of that money never recovered, according to a new audit report.
Auditors found that the Richmond Retirement System failed to prevent, detect, and recover these improper payments made to more than 40 people who had passed away.
Of the total amount sent in error, $415,000 was never recovered by the city.
The report cited inadequate oversight and staff's failure to follow protocols designed to identify when retirees had died as key factors in the payment errors.
According to the report, the Richmond Retirement System is now implementing several corrective actions, including strengthening its death audit process.
"Believe it or not, this is not a scandal. I see this as another success for the City Council’s excellent Audit Department," Richmond City Councilperson Andrew Breton said when asked about the audit. "I spoke with the Council’s Auditor and he explained that every pension in the country will invariably send money to deceased people because people die unexpectedly. The key is in having proper processes in place to minimize the incidence and regain as many of the funds as possible. City Council’s auditor identified a set of best practices not being followed closely enough, and the Retirement System immediately got to work implementing them. Another thing to keep in mind is that the amount of money identified was over the course of ten years, and to consider it in the context of the many millions of dollars that the Retirement System pays out.
This is an example of the new Council and the new Administration working together to identify improvements and to make those improvements. Our Auditors will perform periodic check-ins with the department to ensure that all the open items are closed. All of Council receives and reads those follow-up reports."
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