State sues technology vendor for breach of contract after work halted on ETF benefits system
Complaint: Only 7 percent of work completed

By: Jessica Arp
Posted: Mar 21, 2019 09:27 AM CDT Updated: Mar 21, 2019 09:30 AM CDT

MADISON, Wis. - The State of Wisconsin is suing a vendor contracted to build a new computer system for the Department of Employee Trust Funds, claiming they paid the company $14.3 million and only 7 percent of the project was completed.

The Wisconsin Department of Justice filed the lawsuit on March 8, claiming Vitech Systems Group did not live up to a contract to create a new benefits system that would administer programs to public employees.

A News 3 Now investigation first reported that the project had halted in March 2018, but lawmakers weren't notified until a July memo. Even after the memo, some lawmakers were not aware of the issue with the major project until asked by News 3 Now.

. . . go here to read whole story.

1924 Pleasant View Drive Stoughton, WI 53589-1959
Chair: Sandy Drew, email: telephone: 608-833-5811

February 28, 2019 WISCONSIN
State and Local

Honorable Robert Cowles, State Senator
118 South, State Capitol
Madison WI 53707

Honorable Samantha Kerkman, State Representative
315 North, State Capitol
Madison WI 53708

Dear Senator Cowles and Representative Kerkman:

I am writing on behalf of the Wisconsin Coalition of Annuitants’ (WCOA) Board. The WCOA is composed of organizations that represent retired state and local government employees who are covered by the Wisconsin Retirement System (WRS). Many of them also participate in the group health insurance program and other benefit programs under the supervision of the Group Insurance Board (GIB) and administered by the Department of Employee Trust Funds (ETF). As such, the WCOA closely follows the two agencies that oversee the WRS and the other employee benefit programs to assure they are administered for the benefit of the participants.

The WCOA discussed the audit of the Group Insurance Board that was recently completed by the Joint Legislative Audit Bureau, particularly the release of sensitive personal information. The Board felt the issue of the breach of Social Security numbers was addressed by the LAB and ETF. With respect to the release of other personal information, the Board passed the following motion: “The WCOA appreciates ETF’s thorough analysis and process in communicating GIB participants’ personal identifying data.”

We trust you will share this with the other committee members. Thank you for your time.


Sandy Drew

Cc: Tarna Hunter, ETF

West Allis Retirees - DILHR Retirees - Epsilon Sigma Phi - AFSCME Retirees Chapter 7 – WI Professional Police Association Retired - DNR Retirees - Wisconsin Retired School District Administrators - Wisconsin Education Association Council Retired - Beloit Area Retired Educators Association - UW Eau Claire Emeriti Faculty - UW-Madison Retirement Association – Office of the Commissioner of Insurance - UW Milwaukee Retiree’s Association -Wisconsin State Attorneys Association - Association of Career Employees – SWIB Retirees - WFT/AFT Retirees - Retired Professional Fire Fighters of WI - Wisconsin Retired Corrections Personnel - State Engineering Association - Central Wisconsin Center Retirees - State Attorneys Association - DOT Retirees - Wauwatosa Employees Retirement Club -Wisconsin Retired Educators Association

December 20, 2018

Audit Examines SWIB Performance and Management Special February Southern ARC Meeting Announcement

For More Information Contact:
Senator Robert Cowles, 800.334.1465
Representative Samantha Kerkman, 888.529.0061

MADISON – Today, the nonpartisan Legislative Audit Bureau (LAB) released its biennial evaluation of the State of Wisconsin Investment Board (report 18-19). SWIB invests assets for the Wisconsin Retirement System (WRS), the State Investment Fund, and five other funds.

As of December 2017, SWIB managed $117.0 billion in assets for the State. In 2017, the WRS Core Fund and Variable Fund exceeded five-year benchmarks with average annual investment returns of 8.6 percent and 13.3 percent, respectively. However, the Core Fund’s investment return did not meet the long-term expected rate-of-return assumption of 7.2 percent on a 20-year basis in 2016 or 2017. Given that SWIB projects it may earn investment returns between 6.2 percent and 6.8 percent annually for the next five to seven years, LAB recommends SWIB conduct additional stress tests that focus on the effect of sustained market downturns and certain other conditions. SWIB had 188.0 authorized full-time equivalent positions, and 40 contracted staff positions in December 2017. LAB reviewed five staff recruitments SWIB conducted in early 2018 and recommends SWIB revise its hiring policy to ensure it equally considers all qualified applicants. LAB also noted that, SWIB staff received $29.4 million in salaries and fringe benefits and $11.5 million in bonuses for 2017 performance.

“As market changes are anticipated, we are looking to SWIB for exceedingly good management,” said Rep. Samantha Kerkman (R-Salem Lakes). “SWIB has the framework for best-possible performance which comes with a high expectation of transparency and accountability across all areas of responsibility.”

From 2013 through 2017, LAB found SWIB’s annual expenses increased by 21.7 percent. After considering the effect of increases in assets managed by SWIB, LAB found the increase in annual expenses was attributable to higher management fees paid to external investment managers for more-complex investment strategies, an information systems implementation, and the hiring of additional staff. LAB recommends SWIB track future technology project expenses, develop policies to require Board approval for expenses that exceed the total budget, and report investment returns that include management fees and other investment expenses to the Board.

“I have long been an advocate of prudent fiscal management in state government. Maintaining thorough oversight of operating and project expenses needs to be at the forefront of the Board’s priorities to determine the appropriateness of budget overruns and avoid unnecessary cost while continuing to allow SWIB to manage investments to the best of their ability,” said Senator Robert Cowles (R-Green Bay).

Copies of report 18-19 may be obtained from LAB’s website,, or by calling (608) 266- 2818.

Report concerns related to state government activities to LAB by calling the toll-free hotline at