Honorable John C. Liu
Comptroller
Office of the Comptroller, City of New York
One Centre Street, Room 710
New York, NY 10007

Dear Comptroller Liu:

Recent discussion about the possibility of using money from the Health Insurance Premium Stabilization Fund (HISF) to support payroll expenses in the City's fiscal year 2012 budget has called attention to the existence of this fund and raised questions about its nature. According to press reports, the fund has a balance of about $500 million and it is jointly controlled by the City and the Municipal Labor Committee. But it does not appear among the fiduciary funds listed in the Comptroller's Annual Report, nor is it listed as an asset of the Municipal Labor Committee on its federal IRS filing.

Since the funds in HISF are deposited by the City, it is important that there be full transparency concerning its operation. We would, therefore, appreciate answers to the following questions:

1. What entity has custody of the HISF? How is it governed and administered?
2. What is the current account balance? What is the history of deposits and withdrawals and what provisions govern these transactions?
3. How are the funds invested and by whom? What is the performance record of these investments?

We are not aware of any audits of the HISF. Since the Comptroller is authorized to audit other union administered funds comprised of tax levy dollars, notably the union welfare funds, it would seem appropriate that this fund be audited by the Comptroller. Do you have audit authority for the HISF? If so, when will it be initiated? If not, we urge action to establish such authority, promptly followed by an audit.

Thank you in advance for your attention to this inquiry.

Sincerely,

Carol Kellermann,
President

cc: Honorable Michael R. Bloomberg, Mayor