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40 ILCS 5/1A-104

    (40 ILCS 5/1A-104)
    Sec. 1A-104. Examinations and investigations.
    (a) The Division shall make periodic examinations and investigations of all pension funds established under this Code and maintained for the benefit of employees and officers of governmental units in the State of Illinois. However, in lieu of making an examination and investigation, the Division may accept and rely upon a report of audit or examination of any pension fund made by an independent certified public accountant pursuant to the provisions of the Article of this Code governing the pension fund. The acceptance of the report of audit or examination does not bar the Division from making a further audit, examination, and investigation if deemed necessary by the Division.
    The Department may implement a flexible system of examinations under which it directs resources as it deems necessary or appropriate. In consultation with the pension fund being examined, the Division may retain attorneys, independent actuaries, independent certified public accountants, and other professionals and specialists as examiners, the cost of which (except in the case of pension funds established under Article 3 or 4) shall be borne by the pension fund that is the subject of the examination.
    (b) The Division shall examine or investigate each pension fund established under Article 3 or Article 4 of this Code. The schedule of each examination shall be such that each fund shall be examined once every 3 years.
    Each examination shall include the following:
        (1) an audit of financial transactions, investment
    
policies, and procedures;
        (2) an examination of books, records, documents,
    
files, and other pertinent memoranda relating to financial, statistical, and administrative operations;
        (3) a review of policies and procedures maintained
    
for the administration and operation of the pension fund;
        (4) a determination of whether or not full effect is
    
being given to the statutory provisions governing the operation of the pension fund;
        (5) a determination of whether or not the
    
administrative policies in force are in accord with the purposes of the statutory provisions and effectively protect and preserve the rights and equities of the participants;
        (6) a determination of whether or not proper
    
financial and statistical records have been established and adequate documentary evidence is recorded and maintained in support of the several types of annuity and benefit payments being made; and
        (7) a determination of whether or not the
    
calculations made by the fund for the payment of all annuities and benefits are accurate.
    In addition, the Division may conduct investigations, which shall be identified as such and which may include one or more of the items listed in this subsection.
    A copy of the report of examination or investigation as prepared by the Division shall be submitted to the secretary of the board of trustees of the pension fund examined or investigated and to the chief executive officer of the municipality. The Director, upon request, shall grant a hearing to the officers or trustees of the pension fund or their duly appointed representatives, upon any facts contained in the report of examination. The hearing shall be conducted before filing the report or making public any information contained in the report. The Director may withhold the report from public inspection for up to 60 days following the hearing.
(Source: P.A. 95-950, eff. 8-29-08.)