One year after the departure of the director of the teachers’ pension system, the report further details the turnover at the top
A year after the director of Illinois’ largest public employee pension fund resigned over what the fund described only as “performance issues,” a recently released report by the director of Illinois State ethics reveals the circumstances of the departure of two other former top executives. senior officials of the pension fund in 2020.
The former chief information officer of the Illinois Teachers Retirement System has repeatedly directed contracts to the company he founded and also lied about the severing of ties with the company, according to a report released last month by Illinois Executive Inspector General Susan Haling. TRS manages pensions of more than 427,000 current and retired teachers as well as pension recipients.
The report focuses on the conflicts of interest of former CIO Jay Singh, but also highlights the sacking of former TRS CFO Jana Bergschneider, who was fired last July as the investigation unfolded. Singh resigned in April last year, two months after being questioned in an internal investigation into his conflicts of interest.
Singh started as CIO of the pension fund in August 2019, but for 10 months before that he worked under contract as a project manager for TRS’s Gemini project, a custom software designed to administer a new contribution plan. defined made available to teachers in a law 2018.
While he was a contract project manager on the Gemini project, Singh led three contract jobs to employees of Singh3 Consulting, the company he founded in 2015. According to the report, investigators found that Singh had stepped in the scales during the procurement process by choosing not to review a bid for the work of a competing supplier. and closely overseeing the scoring process for contract award. .
Singh3’s first employee was hired as a part-time software developer in November 2018, just over a month after Singh started his contract as Gemini’s project manager. Investigators also noted that despite the work order stipulation that at least 90% of the work for this position must be done on site in Springfield, the Singh3 employee was working from India and was never on site.
This person was eventually hired as a Senior Technical Systems Analyst in April 2019 at an hourly rate of $ 105, an increase of $ 30 per hour from the previous contract.
Singh also influenced the awarding of contracts to two other Singh3 employees while he was still the contractual project manager, investigators said, including being present for an interview, directing work orders to be handled for the better. ‘adapting to Singh3 employees and ultimately directing the contract award of at least one of the employees.
According to TRS spokesperson Dave Urbanek, Singh3 employees were sub-contractors to two anonymous suppliers that TRS keeps constantly on call in order to expedite the filling of vacancies, which pointed out that the fund pension fund had completely overhauled its procurement protocols as a result of the investigation.
Even with outsourced Singh3 employees coming from another vendor, an anonymous TRS employee began to be suspicious of Singh’s behavior, the report said, and began to request information about the outsourcers from the outsourcers. treating TRS at the end of July 2019.
But several days after that, Singh officially started working full-time as CIO of TRS on August 5, 2019, earning $ 220,000 per year. The day before, Singh provided TRS with a letter stating that he was “resigning from his posts at Singh3 and severing all ties, financial interests and management control with the company.”
During an internal investigation, TRS officials and later OEIG investigators discovered this was not true.
Singh remained involved in his business
Six months after starting as a CIO, Singh was still officially registered as a commercial agent on Singh3 company registration with the state of Georgia, where the company is based. Although Singh said he ceded Singh3’s bank account to his family members who took over the business, he never transferred his shares to his family members.
Additionally, according to accounts cited by the OEIG during the investigation, Singh3 made over $ 30,000 in payments to a credit firm through transactions referencing Singh even after he became a full-time employee of TRS.
Despite this, Singh gave a final contract to a Singh3 employee after starting as CIO, this time awarding someone a contract for a business analyst position Singh admitted he said the team rating had “good skills”. Singh also asked the suspicious and anonymous TRS employee to remove another vendor from the search process.
Singh has not worked for the state for almost a year and a half, and OEIG can only recommend that he never be rehired and that Singh3 never be used for a contract again. But the report also blames the TRS management team for turning a blind eye to Singh’s conflicts of interest and recommends big changes to the contract award process – changes have already been made by Urbanek.
The report revealed that Ingram was aware of outstanding questions about measures Singh was taking to distance himself from his company, and that this was being discussed among TRS superiors. But in the end, no one investigated whether Singh had in fact stepped down as leader of the company or was still benefiting financially from Singh3.
Singh could not be reached for comment through Singh3 or his new venture, a startup based in Marietta, Georgia, aimed at “connecting cooks to consumers through shared kitchens,” according to Singh’s LinkedIn account.
OEIG called TRS ‘lack of action on Singh’s conflicts of interest “puzzling.”
“It appears that managers believed the issue was sufficiently addressed based solely on Mr. Singh’s statement that he was severing ties with Singh 3,” the report said. “No action was taken or no follow-up was done by TRS. While the OEIG agrees that TRS managers do not have to be investigators, it is the duty of managers to determine at least one appropriate course of action when faced with real or perceived conflict.
The report noted that several high-level TRS employees who should have exercised oversight in the matter were no longer working for the pension fund, including Bergschneider, who allegedly performed part of the contract award in concert with Singh. . Since November, Bergschneider has worked as Director of Finance and Director of Human Resources at the Office of the State Defender on State Appeals.
Bergschneider could not be reached for comment.
Corrective action and a cloud
Bergschneider was fired from TRS on July 2, 2020 based on her “job performance and conduct related to the Gemini Project procurement process,” the OEIG report said, apparently citing a reason given to investigators by the pension fund.
Ingram was put on administrative leave at the end of this month – following a unanimous vote by the TRS board after a performance investigation released by Chicago law firms King and Spalding. He resigned a few days later and TRS remains silent on the exact reason for Ingram’s departure, calling it a personal issue.
But Urbanek reiterated to NPR Illinois the same reasoning given to every media outlet investigating last year: that Ingram “was having difficulty meeting performance measures in its contract.”
In fiscal 2020 – the last four months of which were marked by the COVID-19 pandemic – TRS’s assumed rate of return on its pension investments was 7%, but the actual rate of return was only 0.6%, according to a final report. report released by the Commission on Government Forecasts and Responsibility earlier this summer. However, Urbanek said last month in August that the pension fund’s preliminary rate of return for the most recent fiscal year ended June 30 was 23.5%, which represents a $ 10 billion windfall for the fund in the past. during a hot stock market year.
According to a response to a Freedom of Information Act request from Illinois weather Last year, TRS spent $ 577,000 on the King and Spalding investigation between March and September 2020 targeting Ingram only. The pension fund spent an additional $ 114,000 on an investigation by Chicago law firm Elrod Friedman during the same period into an investigation into Ingram and Bergschneider.
According to reports from the Illinois weatherThe FBI expressed interest in the matter last year, but it’s unclear what, if anything, came of that interest.
The OEIG report describes some changes TRS has made since investigators examined Singh’s conflicts of interest, including a new contracting process overseen by a hiring committee of five or six senior executives.
“Everything has to be documented, every decision is recorded,” Urbanek said of the hiring and contracting process. “It keeps everything from going through one person who can basically manipulate the system. “
While Urbanek acknowledged that the new protocol slowed down contract awarding and inhibited the fund’s ability to be as nimble as before, he described it as a “necessary compromise” to rectify the “embarrassment” of TRS.
In addition to hiring a new director of human resources and providing additional training to procurement staff, TRS has also implemented a whistleblower hotline allowing employees and contractors to anonymously report fraud.
“One of the things that was concerning about this incident was that people were raising questions about the hiring practices – very courageous people raising concerns – and their concerns. [vanished]”said Urbanek.
Urbanek stressed that Singh’s conflicts of interest were limited to hiring from the pension fund and did not affect the pension benefits of TRS members.