ERB Continues to Shoot Itself in Proverbial "Foot"

Jan Goodwin

KOAT - TV - The ERB ended a contract early that cost it hundreds of thousands of dollars more than the board had assumed. This miscalculation comes after Target 7 exposed that the ERB overpaid some of its members by millions. The ERB is entrusted to manage the money of nearly 100,000 current and former public school employees. It’s a lesson you learn in business 101, if you sign a contract, you better know what’s in it. But a state agency made up of people with lifetimes worth of business experience did not. “Well, I’m thinking someone did not project the cost correctly,” ERB Executive Director Jan Goodwin said.

Target 7 has uncovered that the ERB terminated a contract last July with Rothschild, a New York-based asset management company, 19 days into the quarter and nine weeks before the contract would expire. The ERB said Rothschild wasn’t making enough money compared to other asset managers. The agency estimated the termination would cost $88,000, but it actually cost $724,000. If the ERB let the contract run out, it would have cost hundreds of thousands less. In an email obtained by Target 7, the ERB’s chief financial officer said, “We got an invoice for over $700,000 when we estimated 88” and we “should have known,”… “had we read our own contract.” Later in message he asked what the board is doing to “ensure we do not make errors of this magnitude in the future.” Goodwin was one of four people who made the recommendation to cut the contract early. “We thought it was a greater risk to keep them on rather than lose more money,” Goodwin said. Goodwin said she believes the fund would have lost $7 million over the remaining nine weeks if the ERB stayed with Rothschild. Up until the point when the ERB severed ties, Rothschild had made the fund millions in profit. Read full story here: News New Mexico

ERB Continues to Shoot Itself in Proverbial "Foot"