Massachusetts Treasury tangles its checkbook

Massachusetts Treasury tangles its checkbook

The Massachusetts State Treasury failed to reconcile its bank statements, establish proper controls over its systems and efficiently oversee its computer contractor, leaving abandoned stocks, bonds and dividends vulnerable to loss, theft and misuse, state auditors recently concluded.

State auditor Joe DeNucci recommended late last month that Treasury establish internal controls over abandoned property kept at Investors Bank and Trust Co. and Fleet Investment Services. His auditors found that assets were misclassified in accounts kept by the banks, leading to misleading statements of gains and losses in the accounts.

Also, the auditors found that Affiliated Computer Services, a company hired by Treasury to recover abandoned property, “occasionally retained instead of depositing securities directly in the Fleet Investment Services account, thus reducing the bank’s and the Treasury’s control over these holdings,” according to a statement by the auditor’s office.

Treasury officials told the auditors that tracking the abandoned property monthly would require changes to the office’s systems. The officials said they have started developing a system to reconcile mutual fund account statements. But the offices’ systems do not reflect the up-to-date market value of securities, only the original deposit amounts, Treasury officials said.

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