After the Los Angeles County Employees Retirement System’s board announced in July that it was overhauling its travel and education policy, its trustees continued to pay thousands for airfare.
In one case, recently published plan documents show, two trustees attended the same conference — but one paid $2,000 more on their flight than the other.
LACERA’s expenses became a flashpoint for the fund over the summer, when its former chief executive officer Lou Razatin was fired for approving thousands of dollars in board expenses that she was not authorized to sign off on, its chief counsel said in a memo at the time.
An internal audit issued just weeks after Razatin was let go showed that board expenses ballooned from $269,861 in fiscal year 2016 to a projected $569,000 for fiscal 2020, Institutional Investor reported at the time.
Between July and December 2019, LACERA employees and trustees spent a total of $255,527.69 on travel and education expenses, according to its travel and education expenditure report. This included $49,303.74 on airfare and $99,746.20 on lodging during the same time period.
In December, two trustees, Alan Bernstein and Herman Santos, attended the Responsible Investor Annual Conference in New York City. Santos spent $1,294.29 on flights for the trip, while Bernstein spent $3,491.61, according to the expenditure report. The board approved both expenses.
A spokesperson did not return a phone call seeking comment. LACERA’s general counsel did not return an email seeking comment.
These weren't the only discrepancies in spending. Shawn Kehoe, another trustee, spent $2,712.86 on domestic flights to and from Raleigh, North Carolina in August for the IAFCI Annual Training Conference and Exhibitor Show. James Brekk, the retirement association’s information systems manager, also attended the event — but spent only $1,029.55 on airfare.
One of the major issues uncovered by LACERA’s internal audit was that the retirement association allows its trustees and employees to book business class tickets for flights that take six hours or more, setting it apart from many pension funds, Institutional Investor reported previously.
This, according to the audit, explained how airfare expenditures for single trips were in the thousands.
A separate document published on March 4 as a part of LACERA’s auditing team’s meeting shows that it plans to implement changes to its travel and education expenditure policy by June 30.
Most of the recommendations for the June 30 deadline involve adequately enforcing the policy and ensuring that trustees and staff submit the appropriate expenses, it showed.
Recommendations in that document showed that the board and management should require the traveler to justify using upgraded ground transportation like executive car service and re-evaluate the use of business class airfare.