Committee members asked each audit candidate whether CalPERS meets disclosure requirements for investment positions and fees and how auditors would evaluate those claims. Firms said they would test the primary assertions—existence, valuation and ownership—using custodial confirmations, manager confirmations for alternatives and prescribed GASB disclosure checklists. Several firms noted that the extent of disclosure about fees depends on the information provided by investment managers and industry practices.

Keith Miller, principal at BDO, summarized the accounting focus: “The major assertions over investments are whether they're correctly valued and whether they exist and that CalPERS actually owns those investments,” and he noted prescribed GASB disclosures and schedules that financial statements must include. BDO and other firms said they can perform additional targeted procedures focused on investment fees if the committee directs them to make fees an area of heightened audit scope.

Why it matters: Investment disclosures and fee reporting are important to public accountability. Committee members said transparency about fees paid to external managers has been a point of public concern; auditors said they could expand procedures, but that analyst‑level disclosure beyond GASB requirements is often limited by what managers report to investors.

What auditors proposed: Firms described similar core steps—confirmations with custodians and managers, third‑party pricing services for marketable securities and review of audited financial statements and confirmations for commingled and private funds. Several firms described proprietary tools to compare confirmed amounts with CalPERS’ books and to trace fees from manager statements to the system’s expense records. Crowe and KPMG said analytics and population‑level routines allow broader testing of holdings rather than small random samples.

Limits and options: Panelists agreed GASB establishes baseline requirements for fair value reporting and required schedules, but that practices for allocating and reporting investment manager fees differ across plans and managers. KPMG noted that while GASB addresses valuation and many disclosures, GASB historically did not prescribe a single national standard for detailed private‑fund fee disclosures, which has produced variation in practice; KPMG said it can evaluate whether CalPERS' disclosures meet current GASB requirements and can design deeper tests of fees when asked to do so.

What committee members heard: Firms repeatedly offered to incorporate deeper fee testing into the audit plan on explicit committee direction; none reported an inability to test fees, but all said the work is more resource‑intensive and often depends on manager cooperation.