Pension director’s travel costs, time jolt lawmakers
Posted on Friday, October 10, 2008
URL: http://www.nwanews.com/adg/News/239786/
Lawmakers groused Thursday about the executive director of the Arkansas Teacher Retirement System traveling out of state on 115 of 246 workdays over 13 months and receiving reimbursement for trips to places where he has homes.
Paul Doane took 18 trips to Boston and three to New Mexico, according to a Legislative Audit Division report submitted to a legislative committee.
His out-of-state travel expenses totaled $ 34, 515 from April, 1, 2007, when he started work for the system, through April 30, 2008. Deputy legislative auditor Charles Fiser said the expenses marked a “significant increase” over the travel expenses of Doane’s predecessor, David Malone.
Doane’s salary is $ ™, 000 this fiscal year.
Doane indicated that he attended 83 out-of-state meetings, including 14 with officials of two companies in Boston and New York for which he previously worked and which the system employs, Fiser said.
To confirm the validity of certain meetings, auditors contacted 20 participants, 11 of whom acknowledged meeting with Doane, Fiser said. The auditors’ inability to confirm meetings with the other nine could have been affected by the quality of information Doane provided on his travel forms, Fiser said.
Doane said he couldn’t confirm one of the meetings. He said he usually has three or four meetings a day.
In apparent conflict with state law, Fiser said, Doane collected reimbursement for a $ 750 frequent flier discount book of 10 tickets without documenting its purpose, as well as commuter expenses to his home in Massachusetts and a $ 250 American Airlines Admiral Club membership.
He also collected room and meal charges in excess of state limits.
Fiser said Doane has reimbursed the system $ 2, 784. 68 for items that the audit couldn’t confirm. The reimbursement also covered items that Doane’s records either couldn’t back up or those in which the records showed the expenses didn’t comply with regulations.
State Sen. Randy Laverty, DJasper, said he read the audit “with some real amazement.
“ My jaws just dropped when I saw it,” he said.
Doane said his out-of-state meetings helped him become familiar with the system’s investment managers and prospective managers.
“For me to serve as chief investment officer, I felt I really needed to know these companies top to bottom basically,” he said. “While I do meet with many [investment ] managers going through the [Little Rock ] office and they still are frequent visitors, it doesn’t sort of replace the ability to actually see the operation first and to become thoroughly familiar and conversant with it.
“ My personality and style I am sure is not common,” Doane said.
He said he works 65-70 hours a week.
Laverty said the issue isn’t a matter of personality or style.
“It is a matter of right and wrong, and agency directors being good stewards of public funds,” he said.
Doane said he visited investment managers in Boston and elsewhere to meet with their top decision-makers.
He apologized for collecting reimbursement for commuter expenses to his home in Massachusetts and said he has reimbursed the system for those.
“I didn’t sort of identify the fact from a regulatory standpoint. My home is considered Little Rock, even though my wife is in Massachusetts, and I think of that as my permanent home,” Doane said. “I regret that error was made.”
Robin Nichols, chairman of the system’s board of trustees, said of Doane: “We are very comfortable. We are very proud of him, and we support him 100 percent.”
Nichols added, “The board feels like Mr. Doane has done a fabulous job.”
State Sen. Steve Faris, D-Central, said Doane needs to tell other lawmakers that he made “a grave error,” he has taken steps to remedy it, and he won’t let this happen again.
State Sen. Jimmy Jeffress, D-Crossett, said this audit “is a dark hour, but it’s not the end” for Doane.
“I know this may seem to you that it’s the lowest day you have had in a while. Perhaps it is,” he said to Doane. “I don’t think this is the end.”
The Legislative Joint Auditing Committee’s committee on state agencies decided to meet in the next few weeks to allow the system’s trustees to review the audit and respond to it.