The CalSTRS employer audits process is designed to promote accurate reporting of payroll information used to calculate benefits for our members. This important process is one way in which CalSTRS ensures correct benefits are paid and the fund is protected for our members.

When an employer is audited by CalSTRS, a sample of member accounts is reviewed to determine if the employer’s payroll reporting is in compliance with the Teachers’ Retirement Law. If a sampled member’s account is affected due to an employer’s adjustment because of an audit finding, a copy of the draft audit report’s related finding is provided to the affected sampled members. This allows the potentially affected members to provide further information or documentation to CalSTRS to review prior to issuing the final audit report. Sampled members included in the audit have appeal rights, as well. CalSTRS then works with the employer to ensure the member data is reported correctly and then provides education on how to report accurately in the future.

Audits and Risk Management Committee

The Audits and Risk Management Committee of the Teachers’ Retirement Board meets three times a year in March, July and November. The committee is responsible for overseeing the employer audits process.

The March ARM Committee Internal Audit Plan Final Progress Report agenda item contains a list of employers audited in the previous calendar year. In this report, you’ll find information regarding common audit findings, employers who had audit findings affecting a population of members beyond those that were sampled—known as “systemic findings”—and the total number of members affected by systemic findings.

The July ARM Committee Internal Audit Plan Mid-Year Progress Report agenda item contains a list of employers that have been audited through the mid-year point.

The November ARM Committee contains the Annual Risk Assessment and Audit Plan for the upcoming calendar year, and the Internal Audit Plan Progress Report.