Oklahoma’s top auditor is asking questions about fairness and bias in the hiring of a pension fund consultant.
The consultant, NEPC LLC, was hired to analyze the performance of the state’s pension systems and investment managers.
But state Auditor Gary Jones says there were irregularities in the way the consultant was hired, and a pension board may have violated stated Open Meeting laws in the process.
From the Oklahoman:
[Auditor] Jones said communications were taking place between commissioners outside of official meetings and he has asked the attorney general’s office to also look into whether there were violations of the state Open Meeting Act.
“It appears that a violation of the Open Meeting Act may have occurred with regard to some commission members being contacted prior to the Feb. 18, 2015, meeting, to obtain a consensus with regard to changing the RFP (request for proposals) process after the sealed bids had been opened and evaluated to approving the second highest bidder’s proposal,” Jones said in his letter to the attorney general’s office.
Jones contends Miller also showed favoritism by scheduling the commission meeting on the same day as the state Tobacco Settlement Endowment Trust meeting. Boston-based NEPC provides consulting services to that trust and the special scheduling enabled its officials to save on travel expenses.
As for the bidding process:
The auditor told The Oklahoman he saw several irregularities.
NEPC was not the low bidder, Jones noted.
When bids were originally submitted in October, NEPC submitted a bid of $125,000 a year plus up to $10,000 a year for expenses.
Competitor RVK Inc. submitted a significantly lower bid of $98,000 a year plus up to $7,500 a year for expenses, Jones said.
After the bids were publicly revealed in November, commission officials went back and gave NEPC officials the opportunity to lower their bid, even though there was nothing in the commission’s request for proposals that said that was permissible, Jones said.
NEPC came back with a bid of $100,000 a year, plus up to $10,000 in expenses.
The commission voted 4-1 to accept that bid Feb. 19, even though it was still higher than the bid submitted by RVK. No one at the meeting questioned the ability of RVK to fulfill the contract, Jones said.
All other commission members defended the process. Read their statements here.