Arkansas State Capitol, Little Rock
LITTLE ROCK, Ark. (KTHV) - The chief investment officer for the state treasurer's office asked lawmakers in Friday's meeting if she would be protected under the whistleblower law while answering questions about investment practices.
The chairman for the panel said he could not answer that question and an attorney says that is governed by the courts.
An audit found that Treasurer Martha Shoffner's office sold bonds from its investment portfolio before they had matured and purchased similar bonds from the same brokers, resulting in a net loss of more than $58,000. Sanson said she advised against selling the bonds early but Shoffner says she received no objections in her office.
Shoffner could not explain why the bonds were sold early. She said she would do research and get it to lawmakers. In opening statements, she said the "economic downturns and the yields are low. We try to get the best we have and we want to work to get the best returns in all the investments."
State Treasurer Martha Shoffner is appearing before a legislative panel to discuss an audit questioning her office's investment practices after not showing up at a hearing last week.
Shoffner arrived at a hearing room Monday afternoon to discuss the audit with the Legislative Joint Auditing Committee.
Shoffner didn't show up to a Friday hearing on the audit, even though lawmakers issued a subpoena for her to appear.
Legislators planned to issue another subpoena to compel her to testify before the panel's Monday meeting. Shoffner's office said she missed Friday's meeting because of a scheduling conflict.
An audit found that Shoffner's office sold bonds from its investment portfolio before they had matured and purchased similar bonds from the same brokers, resulting in a net loss of more than $58,000.
According to the audit the investment transactions occurred from July 1, 2011 to May 17, 2012. During this time, the Treasury sold these 12 bonds valued at over $240 million and replaced them with similar bonds, resulting in an economic net loss of $58, 172. The legislative special report says this could have been avoided "had the Treasury continued to hold the original bonds until they were called by the bond issuer."
In a separate report by the State Board of Finance, it recommends contracting with an independent consultant, place funds with outside money managers, develop a new investment policy, State Board of Finance play a more active role, changing the law to include private citizens who are experts in financial investment.
There is no mention of firing Shoffner in The Legislative Audit or the State Board of Finance's report. Instead, both have reached similar conclusions of consulting a third party money manager regarding investments.
(Copyright 2012 The Associated Press. All rights reserved.)