The office of Idaho Treasurer Ron Crane is under scrutiny after legislative auditors concluded that he unnecessarily exposed state funds to risk, the Lewiston Tribune reports.
The results of the audit, released Friday, indicate that Crane's office lost the state as much as $10 million in 2013 after he shifted money from distressed local investment accounts to the state account. In addition, between 2008 and 2009, the Treasurer's Office purchased mortgage-based securities at face value, rather than market value, and auditors speculate that the state's unrealized loss was about $17.4 million, bringing the total loss to $27.4 million.
Crane's office is authorized to transfer idle funds into investment accounts on state and local levels if those funds aren't in use or immediately necessary.
"In an intentional effort to avoid a likely downgrading of the LGIP (local government investment pool), the Treasurer's Office reallocated securities from the LGIP in exchange for (state investment pool) assets," the audit report said. "The LGIP did not participate in the realized losses related to those transferred securities, and now has no exposure to any remaining risk of loss."
Crane objected to the finding and said that the investment practices that resulted in the losses are no longer used by the Treasurer's Office and that those with knowledge of securities lending "would conclude that the Treasurer's Office made decisions that were consistent with its duties."