February 1, 2014 in Idaho

Idaho treasurer’s ‘inappropriate transfers’ could cost $27 million

Associated Press

BOISE – State Treasurer Ron Crane’s office made inappropriate transfers that cost taxpayers $10.2 million, but the hit to public funds could rise to $27 million, according to an audit that concluded Idaho’s money manager overrode internal controls meant to contain financial risks.

Legislative auditors said in a report Crane’s office should strengthen measures designed to keep Idaho from losing money. Following its release, lawmakers Friday also called for new oversight on grounds Crane now has too much authority to shift investments without guidance of others.

The losses result from investments in mortgage-backed securities hit by the housing bubble’s collapse. Crane shifted these investments between accounts in 2009, exposing state taxpayers to the risk, auditors say.

Crane’s office “inappropriately transferred investments … resulting in a disproportionate share of investment losses incurred by the state,” according to the report issued by April Renfro, a certified public accountant who oversees Idaho’s Legislative Audits Division.

What’s more, auditors wrote, Crane’s office still oversees $2.9 billion in the accounts hit by the losses, “without the aid of independent oversight to review investment activity and to ensure fiduciary duties have been considered.”

Crane, a four-term treasurer whose management has drawn fire from auditors in the past, including spending thousands on limousines during trips to New York, didn’t immediately return a phone call Friday.

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