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State estimates $2.67 million hit to general fund after DRB payroll security breach
Summary
Department of Administration staff told a Senate Finance subcommittee the Department of Retirement and Benefits estimates about $2,670,000 in missed contributions and interest related to a security breach; DOA said work to finalize details is ongoing.
The Senate Finance Subcommittee on the Department of Administration heard on March 17 that the Department of Administration and the Department of Retirement and Benefits (DRB) are still compiling data after a security breach that delayed payroll contributions.
“We're still compiling the information necessary to give a full response to the committee,” Eric Demolen, Administrative Services Director for the Department of Administration, said as the hearing began. Demolen provided the committee the most recent estimate that has been produced: approximately $2,670,000 from the general fund to cover missed payroll contributions and corresponding interest tied to the incident.
Demolen said the estimate apportions about $1.5 million to the Public Employees' Retirement System (PERS) plan, about $1,060,000 to the Teacher, ERS, or TERS program, and just under $100,000 to the SBS plan. He said those figures were determined using the labor fiduciary corrections program (the VFC calculator) and that the Office of Management and Budget (OMB) had additional calculation details packaged with the amended budget.
The committee was told the work remains ongoing and that DOA and OMB will follow up with more detailed documentation. No final authorization, appropriation language, or vote was recorded at the hearing.
The subcommittee did not receive a full, itemized reconciliation at the meeting; Demolen offered to produce fuller documentation from OMB on the calculators and methodology used to arrive at the estimates.
The committee closed the item with a request for additional detail; the department did not present a final timeline for completing the full reconciliation during this session.
