How to scramble state's nest egg
The State Board of Administration is supposed to play it safe. It protects $97.3-billion in pension money for nearly 1-million current and retired teachers, public employees and their families. It invests an additional $25.3-billion for more than 800 school districts and state and local government entities to, among other things, pay police and teachers, buy books and health care for children and help hurricane victims.
But in audit after audit over the past eight years, the supposedly low-risk agency was warned again and again about making risky, complex investments, without proper controls. Now, with the economy tanking, the overexposure to risk highlighted in those audits has come back to haunt the SBA. In the past 18 months, one-third of the agency's assets — $61.4-billion — have been wiped out.
Times special report here.