GA A80o oRl C(CJ t"}"IL/- 'JS- STATE OF GEORGIA DEPARTMENT OF AUDITS 254 WASHINGTON STREET ATLANTA, GEORGIA 30334 REVIEW REPORT STATE OF GEORGIA COURT OF APPEALS OF GEORGIA YEARENDEDJUNE30, 1995 COURT OF APPEALS OF GEORGIA - TABLE OF CONTENTS - INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION EXHIBITS FINANCIAL STATEMENTS A COMBINED BALANCE SHEET (STATUTORY BASIS) ALL FUND TYPES AND ACCOUNT GROUPS 2 B COMBINED STATEMENT OF CHANGES IN FUND BALANCES (STATUTORY BASIS) GOVERNMENTAL FUND TYPES 3 C STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES BUDGET FUND 4 D STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BUDGET FUND 6 E STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS STATE REVENUE COLLECTIONS FUND 7 F NOTES TO THE FINANCIAL STATEMENTS 8 SUPPLEMENTARY INFORMATION SCHEDULES I SCHEDULE OF APPROVED BUDGET 22 2 CASH AND CASH EQUIVALENTS 23 3 SCHEDULE OF OTHER OPERATING EXPENSES 24 4 RECONCILIATION OF SALARIES AND TRAVEL 25 CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS 254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 August 18, 1995 Honorable Zell Miller, Governor Members of the General Assembly of Georgia and Judges of the Court of Appeals ofGeorgia INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION Ladies and Gentlemen: We have reviewed the accompanying financial statements (Exhibits A through F) ofthe Court of Appeals of Georgia as of and for the year ended June 30, 1995, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. As described in Note 1, these financial statements were prepared on a prescribed basis of accounting that demonstrates compliance with the budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles. All information included in these financial statements is the representation of the management of the Court of Appeals of Georgia. A review consists principally of inquiries of agency personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression ofan opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware ofany material modifications that should be made to the accompanying financial statements in order for them to be in conformity with the basis of accounting described in Note 1. Our review was made for the purpose of expressing limited assurance that there were no material modifications that should be made to the financial statements in order for them to be in conformity with the basis of accounting described in Note 1. The accompanying supplementary information (Schedules 1 through 4) is presented only for supplementary analysis purposes. Such information has been subjected to the inquiries and 95ARL-4 analytical procedures applied in the review of the financial statements and we are not aware of any material modifications that should be made thereto. Respectfully submitted, ~ Claude L. Vickers State Auditor CLV:gp 95ARL-4 FINANCIAL STATEMENTS -1- ~BT QEafeE& QE g~g~ ~NEl2 BALANC~ li!t:IEl:I ~!ATUTORY ~I} ALL F!JNO :r:t'.fl; ANO ~ ! t i l GBQU~ JUNE30 1995 EXHIBIT"A" ~ Cash and Cash Equivalent& (Sae Schedule) Accounts Receivabkt OlheJ "'-id Items FixedEquipment Amount to be ProYided for Payment of Accrued Compensated Absences GOVERNMENTAL FUND TYPES STATE REVENUE BUDGET COLLECTIONS ACCOUNT GROUPS GENERAL GENERAL FIXED LONG-TERM ASSETS DEBT TOTALS ~morandum On~} JUNE30 1995 JUNE30 1994 136.272.50 $ 0.30 2~4.60 0.00 136 272.50 $ 127527.23 0.30 $ 2 224.60 $ 0.00 11726.23 645 705.81 645 705.81 $ 609~.23 321 378.92 $ 321.378.92 $ 289 559.60 Total Assets 138497.40 $ 0.00 $ 645 705.81 $ 321 378.92 $ 1 105 582.13 $ 1 038 TT7.29 ~L!Il&S ~12 B~NQ ~UITY Liabirrlies Accounts Payable Compensated Absences T ota1 Liabilities Fund Equity Investment in General Fixed Assets Fund Balances Reoerved State Revenue Collections Fund Un,-vect Designated Surplus Total Fund Equity 41,710.13 41710.13 96 787.27 96787.27 $ s 321 378.92 321 378.92 $ 41,710.13 $ 321 378.92 363 089.05 $ 62,748.45 289559.60 352 308.05 645,705.81 645,705.81 $ 609,964.23 0.00 0.00 0.00 0.00 $ 645 705.81 96 787.27 742 493.08 $ 76505.01 686469.24 Total UabiliUes and Fund Equity 138,497.40 $ 0.00 $ 645 705.81 $ 321 378.92 $ 1105582.13 $ 1 038 TT7.29 or See Independent Accountants Combined Report on Review Financial Statements and Suppktmenlary lnfonnation. or The notes to the financial statements are an integral part this statement. 2. COURT OF APPEALS OF GEORGIA COMBINED STATEMENT OF CHANGES IN FUND BALANCES /STATUTORY BASIS\ GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30 1995 EXHIBIT"B" BUDGET STATE REVENUE COLLECTIONS TOTALS (Memorandum Only) YEAR ENDED JUNE 30, 1995 JUNE 30 1994 FUND BALANCES - JULY 1 Reserved Unreserved Designated Surplus $ 0.00 $ 0.00 $ 0.00 0.00 76,505.01 3 776.47 $ 76,505.01 $ 0.00 $ 76 505.01 $ _ _:::,3,!c77c,:::6;,c,,47!... ADDITIONS Adjustments to Prior Year's Accounts Payable $ Cash Receipts for the Year Exhibit"E" Excess of Funds Available over Expenditures Exhibit "C" 4,929.86 $ 91 857.41 $ 4,929.86 $ 21,012.48 242,499.52 242,499.52 227,196.25 91,857.41 55,492.53 $ 96,787.27 $ 242,499.52 $ 339,286.79 $ 303 701.26 DEDUCTIONS Unreserved Fund Balance (Surplus) Returned to Office of Treasury and Fiscal Services Year Ended June 30, 1993 Year Ended June 30, 1994 Cash Disbursements for the Year Exhibit "E" $ 0.00 76,505.01 _____ $ $ 0.00 $ 76,505.01 3,776.47 0.00 242,499.52 242,499.52 227,196.25 $ 76,505.01 $ 242,499.52 $ 319 004.53 $ 230,972.72 FUND BALANCES - JUNE 30 (To Exhibit "A") $ 96,787.27 $ 0.00 $ 961a1.21 $-==76...,..50.s=.0=1= See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. The notes to the financial statements are an integral part of this statement. - 3- COURT OF APPEALS OF GEORGIA STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES BUDGET FUND YEAR ENDED JUNE 30 1995 EXHIBIT"C" FUNDS AVAILABLE REVENUES STATE APPROPRIATION General Appropriation Amended Appropriation Total State Appropriation OTHER REVENUES RETAINED Fees for Copies of Opinions Jury Duty Fees Total Other Revenues Retained Total Funds Available TOTALS YEAR ENDED JUNE 30 1995 JUNE 30 1994 $ 6,269,416.00 $ 0.00 $ 6,269 416.00 $ 5,778,182.00 41 704.00 5 819 886.00 $ 69,751.50$ 0.00 $ 69,751.50 $ 59,096.11 165.00 59261.11 $ 6,339,167.50 $ 5,879 147.11 EXPENDITURES PERSONAL SERVICES Salaries and Wages Employer's Contributions for: F.I.C.A. Retirement Health Insurance Personal Liability Insurance Unemployment Compensation Insurance Workers' Compensation Insurance $ 4,052,976.07 $ 273,377.18 665,242.30 506,610.72 4,554.00 565.00 6 894.00 5 510 219.27 $ OPERATING EXPENSES REGULAR OPERATING EXPENSES Motor Vehicle Expenses Supplies and Materials Repairs and Maintenance utilities Other Operating Expenses (See Schedule} Duplicating and Rapid Copy Publications and Printing $ 97.22 $ 62,633.18 21,780.96 6,574.00 30,148.46 1,119.65 29103.38 151 456.85 $ See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. The notes to the financial statements are an integral part of this statement. -4- 3,762,461.87 199,861.57 668,861.90 470,307.60 2,688.00 685.00 5 582.00 5,110 447.94 1,073.64 47,782.97 22,395.43 5,786.00 34,027.95 1,237.40 7 767.50 120 070.89 COURT OF APPEALS OF GEORGIA STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES BUDGET FUND YEAR ENDED JUNE 30 1995 EXHIBIT"C" EXPENDITURES OPERATING EXPENSES TRAVEL EQUIPMENT Equipment Purchases Rental of Equipment COMPUTER CHARGES Other Costs Supplies and Materials Repairs and Maintenance Other Operating Expenses (See Schedule) Equipment Equipment Purchases Per Diem, Fees and Contracts Contracts Computer Billings, OAS REAL ESTATE RENTALS TELECOMMUNICATIONS PER DIEM, FEES AND CONTRACTS Per Diem and Fees Contracts Total Operating Expenses Total Expenditures Excess of Funds Available over Expendttures TOTALS YEAR ENDED JUNE 30 1995 JUNE 30 1994 $ 14 115.75 $ _ __;2:..4,,_4;;2cc7c:.OO=- $ 138,562.95 $ 4,971.00 132,953.72 9 205.50 $ 143,533.95 $ _ _1'--'4"'2'-'1C.C5~9-c:2=-2 $ 29,770.06 $ 8,325.25 1,271.00 68,931.51 17,368.72 582.62 $----12'=6,2=49.16 $ $ - - - =2-4=3 , 1' -3=2 .=7 5- $ $ _ _,=3-:6..:4..7..1c."9"6'- $ 15,467.12 16,631.11 0.00 43,207.96 47,756.68 550.89 123 613.76 242 187.00 39,356.23 $ 17,130.40 $ 5 000.00 $ _ ___2,2=-130.40 $ 737,090.82 $ $ 6,247,310.09 $ 91 857.41 21,392.54 0.00 21 392.54 713 206.64 5,823,654.58 55 492.53 $ 6,339,167.50 $ 5,879,147.11 See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. The notes to the financial statements are an integral part of this statement. -5- COURT OF APPEALS OF GEORGIA STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BUDGET FUND YEAR ENDED JUNE 30 1995 EXHIBIT"D" FUNDS AVAILABLE REVENUES State Appropriation Other Revenues Retained BUDGET ACTUAL VARIANCEFAVORABLE {UNFAVORABLE) $ 6,269,416.00 $ 6,269,416.00 $ 69,751.50 69,751.50 $ 6,339,167.50 $ 6,339,167.50 $ 0.00 0.00 0.00 EXPENDITURES Personal Services Operating Expenses Excess of Funds Available over Expenditures $ 5,615,839.00 $ 5,510,219.27 $ 723,328.50 737,090.82 105,619.73 -13,762.32 $ 6,339,167.50 $ 6,247,310.09 $ 91,857.41 $ 91 857.41 $ 91 857.41 See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. The notes to the financial statements are an integral part of this statement. -6- COURT OF APPEALS OF GEORGIA STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS STATE REVENUE COLLECTIONS FUND YEAR ENDED JUNE 30 1995 CASH RECEIPTS STATE REVENUE COLLECTIONS Admissions Appellate Settlement Conference Cost Certified Records Court Costs Total Cash Receipts CASH AND CASH EQUIVALENTS - JULY 1 1994 DISBURSEMENTS TRANSFERS To Office of Treasury and Fiscal Services CASH AND CASH EQUIVALENTS - JUNE 30 1995 EXHIBIT"E" $ 16,920.00 15,248.77 140.75 210,190.00 $ 242,499.52 0.00 $ 242,499.52 $ 242,499.52 0.00 $ 242,499.52 See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. The notes to the financial statements are an integral part of this statement. -7- COURT OF APPEALS OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30 1995 EXIIlBIT "F" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY The Court ofAppeals of Georgia, an organizational unit of the State of Georgia, is part of the judicial branch of the government of the State of Georgia. The Court consists of nine (9) judges elected in a statewide election for staggered six-year terms. The judges elect one of their members as Chief Judge. The Court of Appeals ofGeorgia is a court ofreview authorized to exercise appellate and certiorari jurisdiction in all cases not reserved to the Supreme Court of Georgia or conferred on other courts. The Court of Appeals of Georgia does not have authority to determine the amount offunding it will receive from the State of Georgia for any given fiscal year. Such authority is vested in the General Assembly of Georgia. The Court also does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, the Court of Appeals of Georgia is included within the State of Georgia reporting entity for financial reporting purposes because of the significance of its legal, operational and financial relationships with the State of Georgia. These reporting entity relationships are defined in Section 2100 of the Governmental Accounting Standards Board Codification of Governmental Accounting and Financial Reporting Standards. FUND ACCOUNTING The Court of Appeals of Georgia uses funds and account groups to report on its financial position and the results ofits operations determined in conformity with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia. A fund is an independent fiscal and accounting entity with a selfbalancing set ofaccounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum number offunds are maintained consistent with legal and managerial requirements. Account groups are a reporting device used to account for certain assets and liabilities ofthe governmental funds not recorded directly in those funds. Funds and account groups presented in the accompanying financial statements are as follows: GOVERNMENTAL FUND TYPES BUDGET FUND - The fund used to account for activities and functions as set forth in the Amended Appropriations Act of 1994-1995. The Budget Fund is similar in nature to a General Fund as identified in generally accepted accounting principles in that the Budget Fund is used to account for all activities except those required to be accounted for in some other fund. STATE REVENUE COLLECTIONS FUND -The fund used to account for the collection of specific revenues ofthe State of Georgia as provided by statute or administrative action and the subsequent transfer of such funds to the Office of Treasury and Fiscal Services. This presentation differs from generally accepted accounting principles in that such activity should be included in the General Fund of the governmental organization. - 8- COURT OF APPEALS OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE30 1995 EXHIBIT "F" NOTE I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FUND ACCOUNTING ACCOUNT GROUPS GENERAL FIXED ASSETS - The account group used to account for fixed assets used in governmental fund type operations. Fixed assets purchased are recorded at cost or at estimated historical cost if historical cost is not practically determinable. Donated fixed assets are recorded at fair market value on the date donated. Disposals are deleted at recorded values. No depreciation has been provided on general fixed assets. The cost ofnormal maintenance and repairs that do not add to the value of the asset or materially extend assets' lives are not included in the General Fixed Assets Account Group. Material improvements adding to the value or useful life of the assets are included in the General Fixed Assets Account Group. GENERAL LONG-TERM DEBT - The account group used to report the noncurrent portions of certain governmental long-term liabilities, such as claims, judgments and compensated absences, which will be paid from future resources. BASIS OF ACCOUNTING MEASUREMENT FOCUS The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. Governmental funds should be accounted for using the flow ofcurrent financial resources measurement focus. With this measurement focus, operating statements present increases and decreases in net current assets and unreserved fund balance is a measure ofavailable spendable resources. In accordance with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia, the Budget Fund remits its unreserved fund balance (surplus) to the Office of Treasury and Fiscal Services in the subsequent fiscal year. GOVERNMENTAL FUND TYPES BUDGET FUND Except as disclosed in the following paragraphs, units ofgovernment of the State of Georgia record their Budget Fund revenues and expenditures in accordance with the modified accrual basis of accounting. Under the modified accrual basis ofaccounting, revenues are recognized when susceptible to accrual (i.e., when they are "measurable and available"). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to pay liabilities of the current period. Revenues that are accrued include primarily State appropriations, and certain amounts earned underoperating agreements with other parties. Expenditures are recorded when the related fund liability is incurred, except for unmatured interest on general long-term debt which is recognized when due, and certain compensated absences, claims and judgements which are recognized when the obligations are expected to be liquidated with expendable available financial resources. - 9- COURT OF APPEALS OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30 1995 EXHIBIT "F" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING GOVERNMENTAL FUND TYPES BUDGET FUND Contractual obligations for services which have not been performed and for goods which have not been delivered at the end of the fiscal year are recognized as expenditures and liabilities in the accompanying financial statements. The recognition of encumbrances as expenditures and liabilities is in conformity with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia, but is not consistent with generally accepted accounting principles, which provide for the recording of encumbrances as a reservation offund balance. Prior period adjustments and certain other items are reported as additions to and deductions from fund balances ofthe Budget Fund in the accompanying financial statements. This presentation is in accordance with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia, but differs from generally accepted accounting principles in that immaterial adjustments should be reported as current period revenues and expenditures. STATE REVENUE COLLECTIONS FUND The State Revenue Collections Fund is maintained on the Cash Receipts and Disbursements basis of accounting as prescribed or permitted by statutes and regulations of the State of Georgia. This basis of accounting is defined as that method of accounting in which certain revenue and the related assets are recognized when received rather than when earned, and certain expenses are recognized when paid rather than when the obligation is incurred. The State Revenue Collections Fund, which should be included in the General Fund in accordance with generally accepted accounting principles, should be maintained on the modified accrual basis of accounting. BUDGET Appropriation allotments to the Court of Appeals of Georgia are on the basis of a budget submitted by the Court and approved by the Legislature. The budget is adopted on a basis consistent with accounting practices prescribed or permitted by statutes and regulations ofthe State of Georgia and is compiled in the same manner as all State departments. Expenditures are classified by budget unit object classes as provided in Act No. 1208 of Georgia Laws 1994 (as approved April 18, 1994) and amended by Act No. 6 of Georgia Laws 1995 (as approved February 22, 1995), which is an appropriated budget and is referred to in these notes as the Amended Appropriations Act of 1994-1995. There is no legal prohibition regarding overexpenditure of the aggregate budget. CASH AND CASH EQUIVALENTS Cash and Cash Equivalents consist of demand deposits with banks. INVENTORIES No inventories ofsupplies are reported in the current financial statements. Expendable supplies are recorded as expenditures at the time of purchase. - 10 - COURT OF APPEALS OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS ruNE30 1995 EXHIBIT "F" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES UNRESERVED FUND BALANCE In accordance with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia, the Budget Fund's unreserved fund balance is remitted to the Office ofTreasury and Fiscal Services in the subsequent fiscal year as surplus. This amount ofunexpended general appropriations is available to the State for reappropriation in subsequent years. COMPENSATED ABSENCES Compensated absences represent obligations ofthe Court relating to employee's rights to receive compensation for future absences based upon services already rendered. This obligation relates only to vesting accumulating annual leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the individual funds for the current portion of this obligation as this amount will not be liquidated with expendable available financial resources. Funds are provided in the appropriation offunds each year to the Court to cover the cost of annual leave paid to terminated employees. The liability for compensated absences at year end is reported in the General Long-Term Debt Account Group for governmental funds. MEMORANDUM ONLY - TOTAL COLUMNS Total columns on the Combined Statements (Statutory Basis) are captioned "Memorandum Only" because they do not represent consolidated financial information and are presented only to facilitate financial analysis. The columns do not present information that reflects financial position, results of operations or changes in financial position in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. COMPARATIVE DATA Comparative total data for the prior year have been presented in selected sections of the accompanying financial statements in order to provide an understanding ofthe changes in the Court's financial position and operations. Comparative totals have not been included on statements where their inclusion would not provide enhanced understanding of the Court's financial position and operations or would cause the statements to be unduly complex and difficult to understand. NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES Funds ofthe State of Georgia cannot be placed in a depository paying interest longer than ten days without the depository providing a surety bond to the State. In lieu ofa surety bond, the depository may pledge as collateral any one or more ofthe following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59: (1) Bonds, bills, certificates of indebtedness, notes, or other direct obligations of the United States or ofthe State of Georgia. - 11 - COURT OF APPEALS OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30 1995 EXHIBIT "F" NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES (2) Bonds, bills, certificates ofindebtedness, notes, or other obligations of the counties or municipalities ofthe State of Georgia. (3) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose. (4) Industrial revenue bonds and bonds of development authorities created by the laws ofthe State of Georgia. (5) Bonds, bills, certificates of indebtedness, notes, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest, and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association. (6) Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation. As authorized in the Official Code of Georgia Annotated Section 50-17-53, the State Depository Board has adopted policies which allow agencies ofthe State of Georgia the option of exempting demand deposits from the collateral requirements. CATEGORIZATION OF DEPOSITS For purposes of analysis of custodial credit risk, cash deposits consist of all bank balances which include demand deposits and/or interest bearing accounts. The bank balances as of June 30, 1995, are categorized below in order to provide information about the extent to which such deposits are exposed to custodial credit risk. Category 1 - Amounts covered by depository insurance or collateralized with securities (at market value) held by the Court or by its agent in the Court's name. Category 2 - Amounts collateralized with securities (at market value) held by the pledging financial institution's trust department or agent in the Court's's name. Category 3 - Amounts collateralized with securities (at market value) held by the pledging financial institution or by its trust department or agent, but not in the Court's name, and amounts uncollateralized. - 12 - COURT OF APPEALS OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30 1995 EXHIBIT "F" NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS CATEGORIZATION OF DEPOSITS Carrying Amount Bank Balance Risk Categories Cash Deposits s 13627250 s 31684681 s J26J46!i2 s==a!!,OOO!!!! s ~ NOTE 3: CHANGES IN GENERAL FIXED ASSETS The following is a summary of changes of equipment in the General Fixed Assets Account Group during the fiscal year: Balance July 1, 1994 $ 609,964.23 Additions Deductions 69,540.72 33 799.14 Balance June 30, 1995 $ 645 705 81 NOTE 4: GENERAL LONG-TERM DEBT CHANGES IN GENERAL LONG-TERM DEBT During the year ended June 30, 1995, the following changes occurred in the compensated absences liability reported in the General Long-Term Debt Account Group: Balance July I, 1994 $ 289,559.60 Additions Annual Leave Earned and Utilized (Net) Salaries Salary Related Fringe Benefits 29,558.13 2 261.19 Balance June 30, 1995 $ 32) 378 92 NOTE 5: RISK MANAGEMENT Public Entity Risk Pool The State Personnel Board, Merit System ofPersonnel Administration internally administers for the State of Georgia a program of health benefits for the employees of units ofgovernment ofthe State of Georgia and units of county government and local education agencies located within the State of Georgia. This plan is funded by participants covered in the plan, by employers' contributions paid by the various units of government participating in the plan, and appropriations made by the General Assembly of Georgia. The State Personnel - 13 - COURT OF APPEALS OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30 1995 EXHIBIT "F" NOTE 5: RISK MANAGEMENT Public Entity Risk Pool Board, Merit System ofPersonnel Administration has contracted with Blue Cross Blue Shield ofGeorgia to process claims in accordance with the State Employees' Health Benefit Plan as established by the State Personnel Board. Other Risk Management The Department ofAdministrative Services (DOAS) has the responsibility for the State of Georgia of making and carrying out decisions that will minimize the adverse effects of accidental losses that involve State government assets. The State believes it is more economical to manage its risks internally and set aside assets for claim settlement. Accordingly, DOAS services claims for risk of loss to which the State is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' indemnification. Limited amounts of commercial insurance is purchased applicable to property, employee and automobile liability, fidelity and certain other risks. The Court of Appeals of Georgia is part of the State of Georgia reporting entity, and as such, is covered by the State of Georgia risk management program administered by DOAS. Premiums for the risk management program are charged to the state agencies by DOAS to provide claims servicing and claims payment. NOTE 6: DEFERRED COMPENSATION PLAN The State ofGeorgia offers its employees a deferred compensation plan in accordance with Internal Revenue Code Section 457. The plan, available to employees of the State of Georgia and county health departments, permits such employees to defer a portion oftheir salaiy until future years. Participation in the plan is optional. Participants choose the option or options in which they wish to participate. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. All amounts of compensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property, or rights are (until paid or made available to the employee or other beneficiary) solely the property or rights of the State of Georgia subject only to the claims of the State's general creditors. Participant's rights under the plan are equal to those of a general creditor of the State of Georgia in an amount equal to the fair market value of the deferred account of each participant. Financial information relative to the plan is presented in the financial report ofthe State Personnel Board - Merit System ofPersonnel Administration for the year ended June 30, 1995. NOTE7: RETIREMENTPLANS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA Plan Description The Court of Appeals of Georgia participates in the Employees' Retirement System of Georgia ("ERS"), a single-employer, defined benefit plan established by the General Assembly of Georgia for the purpose of - 14 - COURT OF APPEALS OF GEORGIA NOTES TO TIIB FINANCIAL STATE.MENTS JUNE 30 1995 EXHIBIT "F" NOTE7: RETIRE.MENTPLANS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA Plan Description providing retirement allowances for employees ofthe State ofGeorgia. The Court's payroll for the year ended June 30, 1995, for employees covered by ERS was $4,034,861.07. The Court's total payroll for all employees was $4,052,976.07. Benefits The benefit structure of ERS was significantly modified on July I, 1982. Unless elected otherwise, an employee who currently maintains membership with ERS based upon State employment that started prior to July I, 1982, is an "old plan" member subject to the plan provisions in effect prior to July I, 1982. All other members are "new plan" members subject to the modified plan provisions. Members become vested after 10 years of creditable service. A member may retire and receive normal retirement benefits after completion of IO years of creditable service and attainment of age 65. Retirement benefits paid to members are based upon a formula which considers the monthly average of the member's highest eight consecutive calendar quarters of salary, the number of years of creditable service and the member's age at retirement. Postretirement cost-of-living adjustments are also made to member's benefits. The normal retirement pension is payable monthly for life; however, options are available for distribution of the member's monthly pension at reduced rates to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS. If 10 years of service is completed and age 60 is reached, the member may retire with a reduced benefit. Additionally, there are certain provisions allowing for retirement after 30 years of service regardless ofage. Contributions Required and Contributions Made Under the old plan, member contributions consist of employee contributions paid by the employee of 1.25% of annual compensation and 4. 75% of annual compensation paid by the Court on behalf of the employee. Under the new plan, member contributions consist solely of 1.25% of annual compensation paid by employee. The Court also is required to contribute at a specified percentage ofactive member payroll determined annually by actuarial valuation. For the year ended June 30, 1995, the ERS employer contribution rate for the Court amounted to 15.76% of covered payroll and included the 4.75% contributed on behalf of the employee referred to above. Contributions are also made on amounts paid for accumulated leave of retiring employees. Total contributions to the plan made during fiscal year 1995 amounted to $702,390.61, of which $636,064.16 was made by the Court and $66,326.45 was made by employees. These contributions met the requirements of the plan. Funding Status and Progress Pension Benefit Obligation The amount shown as the "pension benefit obligation" is a standardized disclosure measure of the present value of pension benefits, adjusted for the effects of projected salary increases and step-rate benefits, estimated to be payable in the future as a result of employee service to date. The measure is intended to help users assess - IS - COURT OF APPEALS OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30 1995 EXHIBIT "F" NOTE 7: RETIREMENT PLANS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA Funding Status and Progress Pension Benefit Obligation the funding status ofERS on the going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due and make comparisons among employers. The measure is the actuarial present value of credited projected benefits, and is independent of the funding method used to determine contributions to the plan. The pension benefit obligation was computed as part of an actuarial valuation performed as ofJune 30, 1994. Significant actuarial assumptions used in the valuation include the following: 1) The present value offuture pension benefits paid was computed using a discounted rate of 7.5 percent. This rate is also the same rate assumed to be earned on investments in the plan in future years. 2) Future pension payments reflect the following assumed salary increases as a result ofinflation and merit increases: ~ Percentage 20 9.5% 25 8.5% 30 6.5% 35 6.0% 40 to 65 5.7% 3) ERS has the authority to grant cost-of-living adjustments by state statute. As of June 30, 1994, cost-ofliving adjustments have been included in the pension benefit obligation. The total unfunded pension benefit obligation ofERS as ofJune 30, 1994, was $310,149,000, as follows: - 16 - COURT OF APPEALS OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30 1995 EXIIlBIT "F" NOTE 7: RETIREMENT PLANS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA Funding Status and Progress Pension Benefit Obligation Pension Benefit Obligation: Retirees and Beneficiaries Currently Receiving Benefits and Terminated Employees Entitled to Benefits but Not Yet Receiving Benefits $ 2,227,653,000 Current Employees Accumulated Contributions 648,516,000 Employer-Financed Vested 1,085,190,000 Employer-Financed Nonvested 1206805 000 Total Pension Benefit Obligation $5,168,164,000 Net Assets Available for Benefits 4 858 015 000 Unfunded Pension Benefit Obligation $ 310 149 000 The measurement ofthe total pension benefit obligation is based on an actuarial valuation as ofJune 30, 1994. Net assets available for benefits were valued as of the same date. ERS does not make separate measurements of assets and pension benefit obligation for individual employers. Funding Policy The ERS funding policy provides for periodic employer contributions at actuarially determined rates that, expressed as percentages ofannual payroll, are sufficient to accumulate sufficient assets to pay benefits when due. Level percentage of payroll employer contribution rates are determined using the entry age funding method. ERS also uses the level percentage of payroll method to amortize the unfunded liability within approximately 20 years following the valuation date. Total contributions from all employers to ERS for the year ended June 30, 1995, were $256,624,679.00. The Court's contribution was actuarially determined and represented 0.26% of total contributions made by all participating employers. - 17 - COURT OF APPEALS OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30 1995 EXHIBIT "F" NOTE 7: RETIREMENT PLANS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA Funding Status and Progress Funding Policy Significant actuarial assumptions used to compute contributions are the same as those used to compute the standardized measure of pension obligation. Trend Information Historical trend information is presented in the financial report ofERS for the year ended June 30, 1995. This information gives an indication of the progress made in accumulating sufficient assets to pay benefits when due. GEORGIA DEFINED CONTRIBUTION PLAN Plan Description The Court of Appeals of Georgia participates in the Georgia Defined Contribution Plan ("GDCP") which is a single-employer defined contribution plan established by the Georgia General Assembly in July 1993 for the purpose ofproviding retirement coverage for State employees who are temporary, seasonal, and part-time and are not members of a public retirement or pension system. GDCP is administered by the Employees' Retirement System Board of Trustees. The Court's payroll for the year ended June 30, 1995, for employees covered by GDCP was $18,115.00. The Court's total payroll for all employees was $4,052,976.07. Benefits A member may retire and elect to receive periodic payments after attainment of age 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board. If a member has less than $ 3,500 credit to his/her account, the Board has the option of requiring a lump sum distribution to the member in lieu of making periodic payments. Upon the death of a member, a lump sum distribution equaling the amount credited to his/her account will be paid to the member's designated beneficiary. Contributions and Vesting Member contributions are seven and one-half percent (7.5%) of gross salary. There are no employer contributions. Earnings are credited to each member's account in a manner established by the Board. Upon termination ofemployment, the amount of the member's account is refundable upon request by the member. Total contributions made by employees during fiscal year 1995 amounted to $1,358.65 which represents 7.5% of covered payroll. These contributions met the requirements of the plan. NOTE 8: LEAVE POLICIES Employees earn ten hours of sick leave each month with a maximum accumulation of ninety days. Unused accumulated sick leave does not vest with the employee and is forfeited upon retirement or termination of employment. - 18 - COURT OF APPEALS OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30 1995 EXHIBIT "F" NOTE 8: LEAVE POLICIES Employees earn annual leave ranging from ten to fourteen hours each month depending upon the employees' length of continuous State service with a maximum accumulation of forty five days. Employees are paid for unused accumulated annual leave upon retirement or termination of employment. See Note 1 - Compensated Absences. Certain employees who retire with one hundred and twenty days or more of forfeited annual and sick leave are entitled to additional service credit in the Employees' Retirement System of Georgia. NOTE 9: CONTINGENCIES Litigation, claims and assessments filed against the Court of Appeals of Georgia, if any, are generally considered to be actions against the State of Georgia. Pursuant to the Official Code of Georgia Annotated, the Department of Administrative Services maintains a program of purchased insurance and self- insurance which provides coverage for such litigation, claims and assessments. Accordingly, significant litigation, claims and assessments pending against the State of Georgia are disclosed in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 1995. NOTE 10: BONDING INFORMATION All employees ofthe Court ofAppeals ofGeorgia are bonded under a Public Employees Blanket Bond written by Employers Insurance of Wausau, their Bond No. 1450-00-110723, on which the premium was paid to October 1, 1995. Under this agreement the Public Employee Dishonesty Coverage insures the Court to a maximum ofSl,000,000.00 against loss sustained through fraudulent or dishonest acts by its employees. The Faithful Performance of Duty Coverage insures the Court to a maximum of $1,000,000.00 against loss sustained from failure ofits employees to perform faithfully their duties or to account properly for all monies and property received by virtue of their position or employment. All employees ofthe Court of Appeals of Georgia are also bonded under Commercial Crime Policies written by the United States Fire Insurance Company, their Policy Nos. 626 012292 6 and 626 012294 4, on which premiums were paid to October 1, 1995. Under these additional public employee dishonesty coverages, the policies insure the Court to a maximum of $9,000,000.00 against Joss sustained through fraudulent or dishonest acts by its employees. - 19 - 13 \~\c 2.D SUPPLEMENTARY JNFORMATION -21 - COURT OF APPEALS OF GEORGIA SCHEDULE OF APPROVED BUDGET YEAR ENDED JUNE 30 1995 SCHEDULE "1" FUNDS AVAILABLE REVENUES State Appropriation Other Revenues Retained ORIGINAL AMENDED APPROPRIATION APPROPRIATION TOTAL $ 6,269,416.00 50,000.00 $ $ 19,751.50 6,269,416.00 69,751.50 $ 6319416.00 $ 19 751.50 $ 6,339 167.50 EXPENDITURES Personal Services Operating Expenses $ 5,615,839.00 703,577.00 $ $ 19,751.50 5,615,839.00 723,328.50 $ 6,319,416.00 $ 19,751.50 $ 6,339,167.50 See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. -22- COURT OF APPEALS OF GEORGIA CASH AND CASH EQUIVALENTS JUNE 30 1995 NONINTEREST BEARING ACCOUNTS Trust Company Bank, Atlanta, Georgia SCHEDULE "2" $ ====1=36=,2=7=2=.5=0 See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. -23- COURT OF APPEALS OF GEORGIA SCHEDULE OF OTHER OPERATING EXPENSES YEAR ENDED JUNE 30 1995 OPERATING EXPENSES REGULAR OPERATING EXPENSES Freight, Express and Storage Parking Fees Registration Fees Subscriptions and Dues COMPUTER CHARGES Registration Fees SCHEDULE " 3" $ 230.57 14.00 9,636.39 20,267.50 $ 30,148.46 $ =====1,1,2..1..1..=o.o. See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. -24- COURT OF APP!;;t,LS OF GEORGIA RECONCILIATION OF SALARIES AND TRAVEL YEAR ENDED JUNE 30 1995 SCHEDULE "4" Totals per Annual Supplement Adjustments Shared Services on Jointiy Staffed Personnel Supreme Court of Georgia Abbot, Faye S. Averitt, Melissa Jo Griffin, Kimberlyn 0. Harton, Patricia M. Henwood, W. Scott Horton, Janice L. Lynch, MarjorieM. McAdams, PiaR. Ruskell, Jean M. Wade, GingerP. Reimbursement for Annual Leave Supreme Court of Georgia Dailey, AndreaW. SALARIES $ 3,919,451.52 $ TRAVEL 12,956.17 10,156.86 15,398.52 911.00 19,431.00 35,347.44 1,897.70 12,204.57 11,500.00 10,156.86 19,620.00 -3,099.40 1,159.58 Totals per Report $ 4,052,976.07 $ 14115.75 See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. -25-