SENATE BILL 2

53rd legislature - STATE OF NEW MEXICO - first session, 2017

INTRODUCED BY

Sander Rue

ENDORSED BY THE INVESTMENTS AND PENSIONS OVERSIGHT COMMITTEE

AN ACT

RELATING TO PUBLIC AUDITS; REQUIRING THE EDUCATIONAL RETIREMENT BOARD, THE OFFICE OF THE STATE TREASURER, THE PUBLIC EMPLOYEES RETIREMENT ASSOCIATION AND THE STATE INVESTMENT COUNCIL TO SUBMIT ADDITIONAL FINANCIAL INFORMATION TO THE STATE AUDITOR IN CONJUNCTION WITH THOSE AGENCIES' ANNUAL FINANCIAL AUDITS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. [NEW MATERIAL] ADDITIONAL REPORTS AND DISCLOSURES TO STATE AUDITOR.--Each of the educational retirement board, the office of the state treasurer, the public employees retirement association and the state investment council shall submit, in conjunction with the annual financial audit report each of those agencies is required to submit to the state auditor, the following information for the time period examined in the agency's audit:

          A. a discussion and analysis of the agency's audited financial statements;

          B. a statement of the changes in the agency's fiduciary net position that discloses:

                (1) the net appreciation or depreciation in fair value of agency investments;

                (2) interest and dividends earned on agency investments;

                (3) income from swaps on agency investments;

                (4) any other income resulting from the agency's investment activity; and

                (5) all expenses related to the agency's investment activity, including management fees, custody fees, consultant fees, performance-measurement fees and internal investment activity expenses;

          C. a schedule of internal investment activity that shows all expenses related to the agency's internal investment activity, including expenses for:

                (1) salaries and fringe benefits paid or given to agency personnel;

                (2) professional services, including actuarial, legal, auditing, banking and consulting services;

                (3) communication, including telephones and other communication devices, the maintenance and operation of those devices, printing, postage and mailing supplies;

                (4) facilities and the maintenance and operation of facilities, including leases, utilities and depreciation of facilities; and vehicles and the maintenance and operation of vehicles;

                (5) computer equipment, software and supplies, including depreciation of computer equipment, maintenance agreements, equipment rental and loss on the sale of equipment;

                (6) education, meetings and travel, including tuition reimbursement, professional development, travel for the professional development of agency staff and board members and travel for conducting due diligence on potential investments; and

                (7) general administration, including advertising, research and information services, insurance, membership dues, business continuity, office supplies and subscriptions to periodicals and publications;

          D. a schedule of administrative expenses that shows all expenses related to general administration of the agency, including expenses for:

                (1) salaries and fringe benefits paid or given to agency personnel;

                (2) professional services, including actuarial, legal, auditing, banking and consulting services;

                (3) communication, including telephones and other communication devices and the maintenance and operation of those devices, printing, postage and mailing supplies;

                (4) facilities and the maintenance and operation of facilities, including leases, utilities and depreciation of facilities; and vehicles and the maintenance and operation of vehicles;

                (5) computer equipment, software and supplies, including depreciation of computer equipment, maintenance agreements, equipment rental and loss on the sale of equipment;

                (6) education, meetings and travel, including tuition reimbursement, professional development, travel for the professional development of agency staff and board members and travel for conducting due diligence on potential investments; and

                (7) general administration, including advertising, research and information services, insurance, membership dues, business continuity, office supplies and subscriptions to periodicals and publications;

          E. a schedule of professional and consultant fees that shows all investment-related services used by the agency and, for each service, the nature of the service and the amount paid for the service;

          F. a schedule of investment advisors that shows all investment advisors used by the agency and, for each advisor, the advisor's style and the amount paid to the advisor;

          G. a schedule of base management fees and performance fees that shows:

                (1) base management fees and performance fees for each asset class of investments on budget;

                (2) base management fees and performance fees for each asset class of investments off budget;

                (3) overall investment performance gross of fees;

                (4) overall investment performance net of fees;

                (5) investment performance gross of fees for each asset class;

                (6) investment performance net of fees for each asset class; and

                (7) unfunded commitments for each asset class;

          H. information on investment performance, including gross investment performance and investment performance net of fees; and

          I. a schedule of commissions paid that shows all agency-paid commissions equal to or greater than five percent of the total amount of commissions paid by the agency and that shows, for each commission, the name of the firm that received, and the amount of, the commission.

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