I was fortunate to inherit 60 intelligent and hardworking Treasurer’s office staffers that have allowed me to make many enhancements to not only the office, but elsewhere in state government. The successes listed below are theirs, and it is all due to their dedication, experience and diligence.
- Completed the first Treasurer’s office GAAP Financial Audit since 1988.
- Conducted the first Performance Audit in STO history.
- Prioritized IT Security in March 2011 by performing an IT Security Audit and IT Stress Testing.
– Instituted a new IT Security Policy for the STO.
– Provided additional specialized training for staff.
- Treasurer Loftis is only public official in SC and Nation to publish his full work calendar online.
- Treasurer Loftis is the only public official in SC to post all of his expenses online.
- Saved taxpayers nearly $40,000 by refusing a state issued vehicle and instead drives his personal car.
- Successfully pushed the B&CB meetings to a larger conference room to accommodate more interested taxpayers and allowed the meeting to be streamed live online.
- Created a “Transparency Center” on website to provide better access for interested taxpayers.
- In 2011 helped mitigate the financial crises at DOT by calling attention to their low cash flow, backlog of payments to contractors and worked with DOT to strengthen their internal financial organization. DOT has since implemented protocols and become more fiscally responsible.
- Strengthened internal controls in STO Banking Division.
- Strengthened internal controls and work processes in STO Investment Division.
- Updated STO Institutions websites to make them more user friendly and added more public information for interested taxpayers and key customers.
- Initiated an annual Financial Literacy Tour and visited dozens of schools across the State to teach students about important financial information. Donated over 150 privately purchased laptops and tablets to the schools, each loaded with financial literacy software.
– Created a “Kids Page” on the STO website that includes informative financial literacy games.
- Made the STO more accessible to constituents through the utilization of social media such as Facebook, Twitter, YouTube and Flickr.
- Worked with DOR to provide a new option for tax return payments on a debit card.
- Managed multiple bank mergers including Wells Fargo & Wachovia and Carolina First & TD Bank to ensure there was no interruption to services provided.
- Engaged in a major document scanning operation to preserve STO archives and eliminate waste in the STO.
- Ongoing effort to reduce and eliminate manual data entry and utilize automated data entry thereby saving thousands of dollars on office supplies and allowing for more efficient reporting.
- Maintain regular communication with County Treasurer’s and Auditor’s and track legislation on their behalf.
- Transitioned “contingent” check processing, public assistance check and tax refund checks to SCEIS.
- Implemented an electronic payables program that has expedited vendor payments and saved money by reducing processing costs. Received a $197,000 rebate check for savings.
- Issued RFP’s:
- Banking services
– Saved over $1.3 million annually.
- College Savings Plans (1st time ever)
– Lowest fees in the nation for the Direct Plan;
– Expanded investment choices;
– Lower investment minimums.
- Custodial Banking (1st renegotiated contract in 30 years);
– Enhanced services;
– Enhanced training.
– Negotiated discounts that will save millions over the 10 year contract.
- Unclaimed Property software to manage holdings and claims.
- Banking services
- Strengthened staff skills and hired:
- Hired skilled professionals with the following credentials:
– 8 CPA’s (previously 1);
– 3 Master’s in Accountancy (previously 0);
– 3 MBA’s (previously 0);
– 3 Juris Doctorate (previously 1);
– 2 sitting for CPA (previously 0);
– 1 Master’s of Public Policy (previously 0);
– 1 Master’s in Taxation (previously 0);
– 1 Certified Financial Forensics (previously 0);
– 1 Certified Internal Auditor (previously 0);
– 1 Certified Treasury Professional (previously 0).
- Prioritized staff cross-training within divisions.
- Expanded staff training opportunities.
- Began strategic planning group with outside facilator.
- Required division directors to draft and implement succession plans.
- Monthly reviews of each division’s work progress, staffing needs and budgets.
- Hired skilled professionals with the following credentials:
- Successfully settled the securities lending lawsuit against the Bank of New York Mellon securing $20 million for the pension fund and $5 million for LGIP. Settlement included service discounts and credits.
- All initial filing documents, pleading documents and attorney compensation were posted online since early 2011 in a completely transparent process.
- All legal fees were paid by bank. No legal fees paid by retirees.
- Final settlement approved by BNY Mellon, Attorney General of SC, State Treasurer, and a SC Circuit Court Judge.
- Working to reconfigure the antiquated debt and investment management systems to interface with SCEIS. This will provide cost-savings and increased efficiencies.
- Fully implemented the SCEIS HR/Payroll system for state salary supplements paid to County Treasurer’s and Auditor’s.
- Established the STO Quarterly Investment Meetings to review benchmarks, performance and investment strategies with staff and investment advisors.
- Issued over $1.029 billion in new and refinanced bonds saving over $164 million for the State and its institutions.
- Saved additional $213,000 on bond issuance by carefully managing the market.
- Maintain regular communication and visits to rating agencies in New York.
- Maintained the State’s coveted AAA credit rating.
- Annually post the State Debt Report and Local Government Debt Report online.
- Tobacco Authority meeting all internal controls per external auditor.
- Retained the State’s first bond disclosure counsel to establish statewide standardized processes and disclosure for bond work.
- Provide the General Assembly and other state entities with advice and expertise.
FUTURE SCHOLAR 529 PROGRAM
- Rebidding the contract for the first time since the inception of the program..
- Plan participants now have lower fees and expanded investment options.
- SC Future Scholar is ranked among the lowest cost plans in the nation.
- Record account and sales growth:
o 64% increase in sales for the direct plan;
o 48% increase in sales for the advisor plan;
o Over 102,000 accounts have now been opened.
- Received a 5-Cap (star) rating from Saving For College, the industry rating agency.
- Launched “Future Scholar Day” on 5/29 as part of the promotional Palmetto Baby Grant Program which awards $529 to any family that opens an account for a child born on 5/29.
o 26 Babies participated—well above actuary and internal estimates of 4-6.
- Future Scholar operates without the use of any State appropriated funds.
- Manage $2 billion in assets for participants.
- Program website underwent major updates resulting in increased efficiencies, usability, and increased online options.
- Future Scholar call center earned the top rating for the fifth consecutive year from National Quality Review.
- Conducted public outreach campaigns at maternity events, school districts, institutions of higher and via social and electronic media.
• Upgraded antiquated software system resulting in increased efficiencies and enhanced reporting tools.
• Increased security procedures for property holders.
• Updated UPP website to include additional information for claimants, clearer instructions for holders and the ability for a claimant to request a claim. This has sped up the claim process and allowed employees to increase productivity.
• Held 11 Hometown Tours across the State allowing locals to meet the Treasurer and search for claims.
• Held 7 phone banks at local news stations to promote the UPP program resulting in breaking station’s call records and STO claims filed.
• Established a UPP Compliance Division that works with holders that escheat funds to the STO.
• The total funds held by UPP are a record high of approximately $420 million dollars.
• Processed claims increased by 82%.
• Dollars paid to rightful owners increased by 65%.
• Holders reporting unclaimed property increased by 12%.
• Dollars remitted by holders increased by 43%.
• Accounts reported by holders increased by 48%.
• Stock shares sold increased by 180%
• 95% of holder reports were submitted to the STO electronically.
• Over the past three years:
o 82,035 claims processed.
o $37,367,818 unclaimed funds returned to rightful owners.
o 274,264 stock shares sold.
o Largest single payout to an individual was $277,000.
• Outperformed the 90 day Treasury bills benchmark for three consecutive years.
• Outperformed the 90 day Federal funds benchmark for three consecutive years.
• LGIP outperformed the 90 day Treasury bills benchmark for three consecutive years.
• The BidSC Program’s quarterly CD auctions have generated an additional $441,972 in earnings over the last three years.
• Provided investment services at a cost of less than .014% compared to an industry average of .10%.
• Increase in LGIP participants utilizing the Internet Participants Access System resulting in cost-savings and increased efficiencies.
• Renegotiated the LGIP advisor contract.
• LGIP program meeting all internal controls per the external audit.
• Enhanced LGIP website to publicize the program and uploaded an online video testimonial from two LGIP participants and supporters.
BOARD OF FINANCIAL INSTITUTIONS
• Created BoFI subcommittees to delegate the work load and include more Board members in their oversight duties of BoFI.
• Increased interaction of Board and Agency.
• Posted all BoFI meeting minutes online.
• Updated Board of Financial Institutions websites to make them more user friendly and added more public information for interested taxpayers and key customers.
• Review budget and balance sheet regularly and working on process improvements.
• Strengthening staff skills by beefing up job descriptions, hiring personnel with enhanced credentials and encouraging staff participation in conferences/continuing education.
RETIREMENT SYSTEM INVESTMENT COMMISSION
• Reveled that:
o That Chairman Reynolds Williams was warned by the SC Ethics Commission that the “appearance of impropriety does exist” in relation to his behavior in the American Timberlands Investment.
o $773 million of investment fees and expenses were unreported in audited statements for FY2010, 11, 12;
o $427.5 million a FY2013 paid in investment fees and expenses to Wall Street;
o RSIC pays the highest investment fees and expenses in the nation (on % basis);
o Routinely rank in the bottom 20% in investment performance;
o $1.3 billion in unachieved returns due to below average investment returns over three years;
o Staff compensation ranks in the 10% nationally despite bottom 20% investment performance;
o $1.4 million in bonuses awarded to 14 staff;
o Former CEO/CIO travel to Bermuda on private jets provided by money manager who does business with RSIC.
• Because of those facts revealed to the public, these changes have been made:
o Financial Statements now in compliance with GAAP (concerning fees).
o Began dissolving expensive and unneeded investment structures..
o Implemented a formal investment approval process.
o Emphasis placed on ethics, conflicts of interest and sourcing of investments.
o Implemented insider trading and gifts policy
o Two reviews of internal controls and risk have been performed.
o Development of the operational due diligence program.
o Implemented initial due diligence guidelines.
o Implemented formal ongoing due diligence guidelines.
o Implemented an internal audit function.
o Hired internal auditor.
o Now has functioning internal audit committee.
o Hired compliance officer.
o Implemented Whistle Blower policy.
o Created Valuation Policies and Procedures committee jointly with PEBA.
o Percentage of assets in BNY custody have increased from 30% to 39%
o Nondisclosure agreement signed that allows STO staff and others to review confidential documents.
o Reduction in allocation to alternative investments.
o Moving to more passive, less active management.
o Renegotiating agreements with investment managers
o Moving from expensive fund of funds to direct investments
o Increased emphasis on management, control and reporting.
o Hired new CIO.
o Hired new general consultant.
o Established a 30-day review period for Commissioner’s to review an investment contract prior to execution.
- B&CB, Attorney General, outside counsel, Inspector General and the Supreme Court all affirmed the Treasurer’s right to full and unfettered access to investment documents.
- Prevented a $71,000 bonus to former CEO/CIO for one day of work.
- Retained seat as Commissioner by a 36-8 vote in the Senate.