Even before a failed effort to oust leaders of the giant PSERS pension fund showed a deep split on the plan’s board, the panel was fracturing.

To address that, the 15-member board did what it does often — it hired a consultant. It authorized paying nearly $400,000 last fall to a Michigan firm that specializes in state pension “governance.”

The goal was find a way to consensus, but so far the effort has provided ammunition to both sides in the fund’s divide. A “preliminary recommendations” report, obtained by The Inquirer, recommends increasing the power of the same top executives whom a bloc of board members want to fire.

Perhaps this wasn’t surprising, since those executives have had unusual influence and a final say in crafting what is supposed to be an analysis for the board.

The stakes are high for PSERS, the $67 billion Public School Employees’ Retirement System. The fund, one of the top 25 in the nation, takes in money from taxpayers, working teachers and its own investment returns and sends out more than $6 billion yearly in retirement checks to 265,000 pensioners.

This year, the system has been facing an FBI investigation probing the board’s mistaken adoption in December of an exaggerated number for its investment performance, as well as its purchases of real estate near its headquarters. The board has faced other headaches, too, ranging from criticism over the luxury travel of its investment staff to the longstanding $40 billion shortfall in what it needs to meet future claims.

Frustration with weak investment returns boiled over earlier this month when board dissidents tried and failed to win majority support to fire executive director Glen Grell and investments chief James H. Grossman Jr. In a sign of the deadlock on the panel, the same board on which there were not enough votes to dismiss the two men also lacked enough votes to approve the same executives’ latest call for $1 billion in new investments.

PSERS spokesperson Evelyn Williams said last week that she had no comment on the consultant’s work pending a final report, expected later this year.

Among the draft report’s big-picture conclusions was that the agency needs a “cultural reset and governance transformation” to make sure the unpaid board members pursue their responsibilities to taxpayers and pensioners, rather than serving their own allies. The appointed and elected members are drawn from diverse constituencies — Democratic and Republican state legislative caucuses, teachers’ unions, school boards, prominent among them.

The draft was produced by Funston Advisory Services, a leader in its niche of offering governance advice to public pension plans. The firm, based in a Detroit suburb, was founded a decade ago by Frederick Funston, formerly an executive with the giant Deloitte consulting firm. For Deloitte, he was the “national practice leader” in governance and “risk oversight,” Funston Advisory says.

In its preliminary report, Funston warned that “a continued lack of board cohesion will destabilize the system and impair its performance.” The draft said the panel spent too much time compared to other pension funds on the minutiae of individual investments, and too little charting general policy.

It also cautioned against the “potential for management capture/control,” its phrase for a danger that paid staff takes over decisions that should be made by the board. Tellingly, it said it was unclear whether PSERS’s consultants work for the board or for the staff.

As it happens, these issues were key complaints of dissident board members. In their public letter calling for the management shakeup, six board members led by state Treasurer Stacey Garrity portrayed PSERS staff as having usurped the powers of the PSERS board. The dissidents complained that executives delayed in giving information to the board, controlled the selection of staff and consultants and even trashed dissident board members to the media.

But even as the reports cited a need for “independence” on the part of PSERS’s board, the draft advised other steps that would augment the staff’s powers. Notable among them: that executives be permitted to pick many investments without board approval.

It also said that PSERS, dependent on $5 billion in annual taxpayer money, should have unfettered power to hire and set pay, free of current procedures under which other top state officials review those decisions.

The contract hiring Funston included provisions that troubled other corporate governance experts. The pact, posted on a state website, stipulated that PSERS’s senior staff would monitor Funston’s review “without limitation” — and that the consultant’s reports would be “subject to PSERS management’s review, consideration and approval.”

In contrast, Funston contracts with other funds, including PSERS’s sister fund — SERS, the pension plan for state workers — called for the firm to report directly to boards.

Staff approval of material meant for a board wouldn’t fly in corporate America, says Charles Elson, professor of management at the University of Delaware and a business-governance consultant. ”A governance report about the board goes to the board,” he said. “It shouldn’t be subject to staff review.”

Chris Tobe, a former Kentucky government auditor and pension board member, agreed. (Now a consultant, he was part of a rival group that bid on the governance-review job, but lost out to Funston.) “This contract is designed to prevent an independent report,” Tobe said.

Asked about the requirement that staff have this kind of oversight, consultant Funston said he wasn’t prepared to answer. “The final report has not been submitted,” he said.