REPORT DIGEST

ILLINOIS TEACHERS’ RETIREMENT SYSTEM

COMPLIANCE EXAMINATION FOR THE TWO
YEARS ENDED JUNE 30, 2016

Release Date:  May 11, 2017

FINDINGS THIS AUDIT:  1

CATEGORY:  NEW -- REPEAT -- TOTAL
Category 1:  0 -- 0 -- 0
Category 2:  0 -- 0 -- 0
Category 3:  1 -- 0 -- 1
TOTAL:  1 -- 0 -- 1

FINDINGS LAST AUDIT: 1

Category 1:	Findings that are
material weaknesses in internal control
and/or a qualification on compliance
with State laws and regulations
(material noncompliance).
Category 2:	Findings that are
significant deficiencies in internal
control and noncompliance with State
laws and regulations.
Category 3:	Findings that have no
internal control issues but are in
noncompliance with State laws and
regulations.

State of Illinois, Office of the
Auditor General
FRANK J. MAUTINO, AUDITOR GENERAL

To obtain a copy of the Report contact:
Office of the Auditor General, Iles
Park Plaza, 740 E. Ash Street,
Springfield, IL 62703
(217) 782-6046 or TTY (888) 261-2887

This Report Digest and Full Report are
also available on the worldwide web at
www.auditor.illinois.gov

INTRODUCTION

This digest covers our Compliance
Examination of the Teachers’ Retirement
System of the State of Illinois for the
year ended June 30, 2016.  A separate
Financial Audit as of and for the year
ending June 30, 2016, was previously
released on January 12, 2017.  This
report contains one finding.  The
Financial Audit report contained no
findings.

SYNOPSIS

• (16-1) The Teachers’ Retirement
System of the State of Illinois did not
always obtain fully completed
disclosures from investment managers as
required in the Illinois Pension Code.

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

NONCOMPLIANCE WITH CERTAIN DISCLOSURES
REQUIRED BY THE ILLINOIS PENSION CODE

The Teachers’ Retirement System of the
State of Illinois (System) did not
always obtain fully completed
disclosures from investment managers as
required in the Illinois Pension Code.

During testing, the auditors noted two
of six (33%) investment manager
disclosures returned to the System
where the investment manager did not
properly disclose the number of
contracts with businesses owned by a
minority, a female and or a person with
a disability and the number of
contracts with other than those
businesses owned by a minority, a
female or a person with a disability.
(Finding 1, pages 10-11)

We recommended the System work with
their money managers to comply with the
disclosure requirements of the Illinois
Pension Code or seek legislative
remedy.

System officials respectfully but
strongly rejected the finding of
noncompliance with the Illinois Pension
Code and indicated that it is committed
to all efforts focused on greater
diversity within its investment program
and has worked diligently to ensure
professional implementation of the law
and its intent.

ACCOUNTANT’S OPINION

The accountants conducted a compliance
examination of the System for the year
ended June 30, 2016, as required by the
Illinois State Auditing Act.  The
accountants stated the System complied,
in all material respects, with the
requirements described in the report.

This State compliance examination was
conducted by RSM US LLP.

BRUCE L. BULLARD
Division Director

This report is transmitted in
accordance with Section 3-14 of the
Illinois State Auditing Act.

FRANK J. MAUTINO
Auditor General

FJM:JAF