~k ~goo '(l\ C15 \q'\4.q5 STATE OF GEORGIA DEPARTMENT OF AUDITS 254 WASHINGTON STREET ATLANTA, GEORGIA 30334 REVIEW REPORT STATE OF GEORGIA GEORGIA COURTS AUTOMATION COMMISSION YEAR ENDED JUNE 30, 1995 GEORGIA COURTS AUTOMATION COMMISSION - 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 STATEMENT OF CHANGES IN FUND BALANCES (STATUTORY BASIS) GOVERNMENTAL FUND TYPE 3 C STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES BUDGETFUND 4 D STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BUDGET FUND 5 E NOTES TO THE FINANCIAL STATEMENTS 6 SUPPLEMENTARY INFORMATION F COMBINING BALANCE SHEET (STATUTORY BASIS) BUDGET FUND 18 G COMBINING STATEMENT OF CHANGES IN FUND BALANCES (STATUTORY BASIS) BUDGET FUND 19 H COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES BUDGET FUND 20 SCHEDULES 1 SCHEDULE OF APPROVED BUDGET 21 2 CASH AND CASH EQUIVALENTS 22 3 SCHEDULEOFFEDERALREVENUES 23 4 SCHEDULE OF OTHER OPERATING EXPENSES 24 5 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 January 10, 1996 Honorable Zell Miller, Governor Members of the General Assembly of Georgia Members of the Georgia Courts Automation Commission Honorable George R. Nolan, Project Manager Georgia Courts Automation Commission and Honorable Robert L. Doss, Jr., Director Administrative Office of the Courts 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 E) of the Georgia Courts Automation Commission 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 Georgia Courts Automation Commission. 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 of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express suc)i an opinion. Based on our review, we are not aware of any 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 95ARL-4 accounting described in Note 1. The accompanying supplementary information (Exhibits F through H and Schedules 1 through 5) is presented only for supplementary analysis purposes. Such information has been subjected to the inquiries and analytical procedures applied in the review of the financial statements and we are not aware of any material modifications that should be made thereto. a~ Respectfully submitted, Claude L. Vickers State Auditor CLV:dt 95ARL-4 FINANCIAL STATEMENTS - 1- GEORGIA COURTS AUTOMATION COMMISSION COMBINED BALANCE SHEET (STATUTORY BASIS) ALL FUND TYPES AND ACCOUNT GROUPS JUNE 30. 1995 EXHIBIT"A" ASSETS Cash and Cash Equivalents (See Schedule) Accounts Receivable Federal Financial Assistance Fixed Assets Equipment Amount to be Provided for Payment of Accrued Compensated Absences GOVERNMENTAL FUND TYPE BUDGET ACCOUNT GROUPS GENERAL GENERAL FIXED LONG-TERM ASSETS DEBT TOTAL (Memorandum Only) $ 5.784.06 $ 108.000.00 $ 11.801.04 - - - - - - $ _ _ _1_1._,889_._52~ 5.784.06 108.000.00 11.801.04 11,889.52 Total Assets $ LIABl!,ITIES AND FUND EQUITY Liabilities Accounts Payable $ Compensated Absences Total Liabilities $ Fund Equity Investment in General Fixed Assets Fund Balances Unreserved Designated Surplus $ Total Fund Equity $ Total Liabilities and Fund Equity $ 113 784.06 $ 11 801.04 $ 11,889.52 $ 112.925.49 112,925.49 $ 858.57 858.57 $ 113?84.06 $ $ $ 11,801.04 11 801.04 11 1801.04 $ $ 11,889.52 11,889.52 $ $ $ 11,889.52 $ 137474.62 112.925.49 11,889.52 124815.01 11,801.04 858.57 12 659.61 137,474.62 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. -2- GEORGIA COURTS AUTOMATION COMMISSION STATEMENT OF CHANGES IN FUND BALANCES (STATUTORY BASIS) GOVERNMENTAL FUND TYPE YEAR ENDED JUNE 30, 1995 EXHIBIT"B" FUND BALANCES - JULY 1 Unreserved Designated Surplus ADDITIONS Excess of Funds Available over Expenditures Exhibit "C" FUND BALANCES - JUNE 30 (To Exhibit "A") BUDGET $ _ _ _ _ _ _0._0_0 $ _ _ _ _.;:8;.;;.5~8.;.;;.5.;,_7 $ ====8=5=8=.5=7 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- GEORGIA COURTS AUTOMATION COMMISSION STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES BUDGET FUND YEAR ENDED JUNE 30, 1995 EXHIBIT "C" FUNDS AVAILABLE REVENUES STATE APPROPRIATION General Appropriation FEDERAL REVENUES (See Schedule) Total Funds Available EXPENDITURES OPERATING EXPENSES COMPUTERIZED INFORMATION NETWORK Total Expenditures Excess of Funds Available over Expenditures $ 1,244,331.00 108,000.00 $ 1,352,331.00 $ 696,666.58 654,805.85 $ 1,351,472.43 858.57 $ 1,352,331.00 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- FUNDS AVAILABLE REVENUES State Appropriation Federal Revenues GEORGIA COURTS AUTOMATION COMMISSION STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BUDGET FUND YEAR ENDED JUNE 30. 1995 BUDGET ACTUAL EXHIBIT "D" VARIANCEFAVORABLE (UNFAVORABLE) $ 1,244,331.00 $ 108,000.00 $ 1,352,331.00 $ 1,244,331.00 $ 0.00 108,000.00 0.00 1,352,331.00 $ _ _ _ _...;;o.;.;,.oo_ EXPENDITURES Operating Expenses Computerized Information Network $ 696,985.00 $ 655,346.00 $ 1,352,331.00 $ 696,666.58 $ 654,805.85 1,351,472.43 $ 318.42 540.15 858.57 Excess of Fu11ds Available over Expenditures $ 858.57 $ 858.57 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- GEORGIA COURTS AUTOMATION COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXI-IlBIT "E" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY The Georgia Courts Automation Commission, an organizational unit of the State of Georgia, is part of the judicial branch of the government of the State of Georgia. The Commission is composed of eleven ( 11) members. One member is the ChiefJustice ofthe Supreme Court or his designee; and the remaining members are appointed by the Chief Justice as follows: one (1) Judge of the Court of Appeals of Georgia; Three (3) Superior Court Judges; One (1) Superior Court Clerk; One (1) State Court Judge; One (1) Juvenile Court Judge; One (1) Probate Court Judge; One (1) Magistrate Court Judge; and One (1) Municipal Court Judge. The Commission is authorized to define, implement and administer a state-wide court automation system. The Commission is also authorized to establish policies, procedures, and technical and performance standards for county and local government access to the courts automation system network and offer advisory services to county and local governments to assist in guiding their efforts towards automating their court procedures and operations. The Georgia Courts Automation Commission does not have authority to determine the amount of funding it will receive from the State of Georgia for any given fiscal year. Such authority is vested in the General Assembly of Georgia. The Commission also does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, the Georgia Courts Automation Commission 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 Georgia Courts Automation Commission uses a fund and account groups to report on its financial position and the results of its operations determined in conformity with accounting practices prescribed or permitted by statutes and regulations ofthe State ofGeorgia. A fund is an independent fiscal and accounting entity with a self-balancing set of accounts. 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 of funds are maintained consistent with legal and managerial requirements. Account groups are a reporting device used to account for certain assets and liabilities of the governmental funds not recorded directly in those funds. The fund and account groups presented in the accompanying financial statements are as follows: GOVERNMENTAL FUND TYPE 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. -6- GEORGIA COURTS AUTOMATION COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXIIlBIT "E" NOTE 1: 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 of current 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 TYPE BUDGET FUND Except as disclosed in the following paragraph, units of government 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 Federal grants and entitlements. 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. 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 -7- GEORGIA COURTS AUTOMATION COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXHIBIT "E" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING GOVERNMENTAL FUND TYPE BUDGET FUND financial statements. This accounting practice causes expenditure-driven grant revenues to be accrued based, in part, on the unexecuted portion of contracts for goods and services. The recognition of encumbrances as expenditures and liabilities is in conformity with accounting practices prescribed or permitted by statutes and regulations ofthe State ofGeorgia, but is not consistent with generally accepted accounting principles, which provide for the recording of encumbrances as a reservation of fund balance. Further, revenue recognition for expenditure-driven grants should be based upon expenditures determined in accordance with generally accepted accounting principles. BUDGET Appropriation allotments to the Georgia Courts Automation Commission are on the basis of a budget submitted by the Commission and approved by the Legislature and the Governor. The budget is adopted on a basis consistent with accounting practices prescribed or permitted by statutes and regulations of the 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 ofthe aggregate budget. CASH AND CASH EQUIVALENTS Cash and Cash Equivalents consist of funds on deposit with the Judicial Council. INVENTORIES No inventories ofsupplies are reported in the current financial statements. Expendable supplies are recorded as expenditures at the time of purchase. 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 of Treasury 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 of the Commission 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 of funds each year to the Commission to cover the cost of annual leave paid to terminated employees. - 8- GEORGIA COURTS AUTOMATION COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXHIBIT "E" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES COMPENSATED ABSENCES 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 The total column on the Combined Balance Sheet (Statutory Basis) is captioned "Memorandum Only" because it does not represent consolidated financial information and is presented only to facilitate financial analysis. The column does not present information that reflects financial position in conformity with generally accepted accounting principles. Neither is such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES Funds of the 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 of a 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. (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 of the bonds for this purpose. (4) Industrial revenue bonds and bonds of development authorities created by the laws of the 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 -9- GEORGIA COURTS AUTOMATION COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXHIBIT "E" NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES adopted policies which allow agencies ofthe State of Georgia the option of exempting demand deposits from the collateral requirements. CATEGORIZATION OF DEPOSITS Deposits of the Georgia Courts Automation Commission shown on Schedule "2" ofthis report are a part of the demand deposits maintained by the Judicial Council. The amounts of the bank balances for these deposits are classified by custodial credit risk categories in the review report ofthe Judicial Council. 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 $ 0.00 Additions 11,801.04 Balance June 30, 1995 $ 11,801.04 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 1, 1994 $ 0.00 Additions Annual Leave Earned and Utilized (Net) Salaries Salary Related Fringe Benefits 11,044.61 844.91 Balance June 30, 1995 $11,889.52 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 of government of the State of Georgia and units of county government and local education agencies located within the State of Georgia. This plan - 10 - GEORGIA COURTS AUTOMATION COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXHIBIT "E" NOTE 5: RISK MANAGEMENT Public Entity Risk Pool 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 Board, Merit System of Personnel Administration has contracted with Blue Cross Blue Shield of Georgia to 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 Georgia Courts Automation Commission is part ofthe State of Georgia reporting entity, and as such, is covered by the State ofGeorgia 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 of Georgia 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 salary 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 of the State Personnel Board - Merit System ofPersonnel Administration for the year ended June 30, 1995. NOTE 7: RETIREMENT PLANS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA Plan Description The Georgia Courts Automation Commission participates in the Employees' Retirement System of Georgia ("ERS "), a single-employer, defined benefit plan established by the General Assembly of Georgia for - 11 - GEORGIA COURTS AUTOMATION COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXlilBIT "E" NOTE 7: RETIREMENT PLANS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA Plan Description the purpose of providing retirement allowances for employees of the State of Georgia. The Commission's payroll for the year ended June 30, 1995, for employees covered byERS was $137,796.17. The Commission's total payroll for all employees was $137,796.17. Benefits The benefit structure of ERS was significantly modified on July 1, 1982. Unless elected otherwise, an employee who currently maintains membership with ERS based upon State employment that started prior to July 1, 1982, is an "old plan" member subject to the plan provisions in effect prior to July 1, 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 10 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 of age. Contributions Required and Contributions Made Under the old plan, member contributions consist of employee contributions paid by the employee of 1.25% ofannual compensation and 4.75% ofannual compensation paid by the Commission on behalf of the employee. Under the new plan, member contributions consist solely of 1.25% of annual compensation paid by employee. The Commission also is required to contribute at a specified percentage of active member payroll determined annually by actuarial valuation. For the year ended June 30, 1995, the ERS employer contribution rate for the Commission amounted to 14.74% 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 $22,017.46, of which $20,312.20 was made by the Commission and $1,705.26 was made by employees. These contributions met the requirements ofthe 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 ofpension benefits, adjusted for the effects of projected salary increases and step-rate benefits, estimated to - 12 - GEORGIA COURTS AUTOMATION COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXIIlBIT "E" NOTE7: RETIREMENTPLANS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA Funding Status and Progress Pension Benefit Obligation be payable in the future as a result of employee service to date. The measure is intended to help users assess 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 ofthe funding method used to determine contributions to the plan. The pension benefit obligation was computed as part of an actuarial valuation performed as of June 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 of7.5 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 mcreases: Age 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 of June 30, 1994, was $310,149,000, as follows: - 13 - GEORGIA COURTS AUTOMATION COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXHIBIT "E" 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 1,206,805,000 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 of June 30, 1994. Net assets available for benefits were valued as ofthe 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 of annual 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 Commission's contribution was actuarially determined and represented 0.0079% of total contributions made by all participating employers. - 14 - GEORGIA COURTS AUTOMATION COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXIIlBIT "E" NOTE7: RETIREMENTPLANS 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 Georgia Courts Automation Commission is eligible to participate 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 of providing 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 Commission did not have any employees eligible to participate in the GDCP for the year ended June 30, 1995. 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. Employees earn annual leave ranging from ten to fourteen hours each month depending upon the employees' length ofcontinuous 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 Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies. This could result in refunds to the grantor agency for any expenditures which are disallowed under grant terms. The amount of expenditures which may be disallowed by the grantor cannot be determined at this time although the Commission expects such amounts, if any, to be immaterial to its overall financial position. - 15 - GEORGIA COURTS AUTOMATION COMMISSION NOTES TO THE FINANCIAL STATE:MENTS JUNE 30, 1995 EXHIBIT "E" NOTE 9: CONTINGENCIES Litigation, claims and assessments filed against the Georgia Courts Automation Commission, 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 selfinsurance 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: OTHER FINANCIAL NOTES The Georgia Courts Automation Commission is directed by State law to coordinate the automation of the court systems ofthe State ofGeorgia. As part ofthis process, the Commission purchased computer equipment and computer services in the amount of $109,705.00 through the Department of Administrative Services for the Middle Judicial Circuit and was subsequently reimbursed by the circuit in the amount of $109,705.00. The Commission "netted" these transaction on their financial records. As a result, this activity is not reflected in these financial statements. NOTE 11: BONDING INFORMATION Accounting records are maintained by employees of the Judicial Council. The employees of the Judicial Council, in addition to all employees of the Georgia Courts Automation Commission are bonded under a Public Employees Blanket Bond written by Employers Insurance ofWausau, 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 Council and the Commission to a maximum of $1,000,000.00 against loss sustained through fraudulent or dishonest acts by its employees. The Faithful Performance of Duty Coverage insures the Council and the Commission to a maximum of $1,000,000.00 against loss sustained from failure of its 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 Judicial Council and the Georgia Courts Automation Commission 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 Council and the Commission to a maximum of $9,000,000.00 against loss sustained through fraudulent or dishonest acts by its employees. - 16 - SUPPLEMENTARY INFORMATION - 17 - GEORGIA COURTS AUTOMATION COMMISSION COMBINING BALANCE SHEET (STATUTORY BASIS) BUDGET FUND JUNE 30. 1995 ASSETS Cash and Cash Equivalents Accounts Receivable Federal Financial Assistance OPERATING EXPENSES COMPUTERIZED INFORMATION NETWORK $ $ ___1_;0_8.:..;;,0..;.0.;.;0..;.00.;.. 105,540.15 $ EXHIBIT "F" TOTAL 105,540.15 108,000.00 Total Assets $ 108,000.00 $ 105,540.15 $ =====2=1=3=,5.4..0,_...,.15.., LIABILITIES AND FUND EQUITY Liabilities Cash Overdraft Accounts Payable Total Liabilities Fund Equity Fund Balances Unreserved Designated Surplus $ 99,756.09 $ 99,756.09 7 925.49 $ 1051000.00 1121925.49 $ 107,681.58 $ 105,000.00 $ 212,681.58 318.42 540.15 858.57 Total Liabilities and Fund Equity $ 108,000.00 $ 105,540.15 $ 213,540.15 See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. -18- GEORGIA COURTS AUTOMATION COMMISSION COMBINING STATEMENT OF CHANGES IN FUND BALANCES (STATUTORY BASIS) BUDGET FUND YEAR ENDED JUNE 30, 1995 EXHIBIT"G" FUND BALANCES - JULY 1 Unreserved Designated Surplus ADDITIONS Excess of Funds Available over Expenditures Exhibit "H" FUND BALANCES - JUNE 30 (To Exhibit "Fj OPERATING EXPENSES COMPUTERIZED INFORMATION NETWORK TOTAL $ 0.00 $ 0.00 $ 0.00 $ 318.42 $ $ 318.42 $ 540.15 $ 858.57 540.15 $ 858.57 See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. - 19 - FUNDS AVAILABLE REVENUES STATE APPROPRIATION General Appropriation FEDERAL REVENUES GEORGIA COURTS AUTOMATION COMMISSION COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES BUDGET FUND YEAR ENDED JUNE 30 1995 EXHIBIT"H" COMPUTERIZED OPERATING INFORMATION EXPENSES NETWORK TOTAL $ 588,985.00 $ 655,346.00 $ 1,244,331.00 108,000.00 - - - - 108,000.00 Total Funds Available EXPENDITURES COST OF OPERATIONS PERSONAL SERVICES Salaries and Wages Employer's Contributions for: F.1.C.A. Retirement Health Insurance Personal Liability Unemployment Compensation Insurance Workers' Compensation Insurance REGULAR OPERATING EXPENSES Supplies and Materials Repairs and Maintenance Insurance and Bonding other Operating Expenses (See Schedule) Duplicating and Rapid Copy TRAVEL COMPUTER CHARGES other Costs Supplies and Materials Repairs and Maintenance Software Equipment Equipment Purchases Per Diem, Fees and Contracts Contracts Computer Billings, DOAS REAL ESTATE RENTALS TELECOMMUNICATIONS PER DIEM, FEES AND CONTRACTS Per Diem and Fees Contracts Total Expenditures Excess of Funds Available over Expenditures $ 137,796.17 9,652.47 21,335.31 17,052.45 138.00 22.80 159.64 $ 186,156.84 $ 974.67 375.87 188.00 4,125.89 1,183.55 $ _ ___,6::i;,84::...:..:.7.:-=.98=- $ 12,709.64 $ 137,796.17 9,652.47 21,335.31 17,052.45 138.00 22.80 159.64 $ 186.156.84 $ 974.67 375.87 188.00 4,125.89 1,183.55 $ _ _6~,84~7~.98- $ 12,709.64 $ 293.24 61,135.00 50,914.70 13,213.95 223,372.25 126,964.65 $ $_=4.7.5:,=893.79 $ $ _ __2,,=306.24 $ _ __3_,,9=37.38 $ 293.24 61,135.00 50,914.70 13,213.95 654,805.85 223,372.25 181,no.so 654,805.85 $ 1.130,699.64 $ 2,306.24 $ 3,937.38 $ 1,052.21 7.762.50 $ _ 8814.71 ____:;.,.;:;;..;....=...;.... $ 1,052.21 7,762.50 $ 8 814.71 $ 696,666.56 $ 654,805.85 $ 1,351,472.43 318.42 540.15 858.57 $ 696,985.00 $ 655,346.00 $ 1,352,331.00 See accompanying notes and Independent Accountant's Co'!Jbined Report on Review of Financial Statements and Supplementary Information. -20- GEORGIA COURTS AUTOMATION COMMISSION SCHEDULE OF APPROVED BUDGET YEAR ENDED JUNE 30. 1995 FUNDS AVAILABLE REVENUES State Appropriation Federal Revenues ORIGINAL APPROPRIATION AMENDED APPROPRIATION BUDGET ADJUSTMENTS TOTAL $ 1,244,331.00 $ 0.00 $ $ 108,000.00 1,244,331.00 108,000.00 $ 1,244,331.00 $ 0.00 $ 108,000.00 $ 1,352,331.00 EXPENDITURES Operating Expenses $ Computerized Information Network 561,763.00 $ 682,568.00 27,222.00 $ -27,222.00 108,000.00 $ 696,985.00 655,346.00 $ 1,244,331.00 $ 0.00 $ 108,000.00 $ 1,352,331.00 See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. - 21 - GEORGIA COURTS AUTOMATION COMMISSION CASH AND CASH EQUIVALENTS JUNE 30, 1995 NONINTEREST BEARING ACCOUNTS Funds on Deposit with the Judicial Council SCHEDULE "2" $ ===5=,7=8=4=.0=6 See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. - 22- GEORGIA COURTS AUTOMATION COMMISSION SCHEDULE OF FEDERAL REVENUES YEAR ENDED JUNE 30, 1995 PROGRAM Justice, U.S. Department of Drug Control and System Improvement - Formula Grant Through Office of the Governor CFDA NUMBER 16.579 SCHEDULE "3" AMOUNT $ 108,000.00 See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. -23 - GEORGIA COURTS AUTOMATION COMMISSION SCHEDULE OF OTHER OPERATING EXPENSES YEAR ENDED JUNE 30. 1995 REGULAR OPERATING EXPENSES Operating Expenses Freight, Express and Storage Publicity Registration Fees SCHEDULE "4" $ 168.39 487.50 3,470.00 $==4='1=2=5=.8=9 See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. -24 - GEORGIA COURTS AUTOMATION COMMISSION RECONCILIATION OF SALARIES AND TRAVEL YEAR ENDED JUNE 30, 1995 SCHEDULE "5" Totals per Annual Supplement Adjustments Blackbum, Browning, Neuren, Nolan, Smith, RodneyW. Kathryn Drake Michael S. George R. Anne Marie SALARIES $ 0.00 $ TRAVEL 0.00 12,795.75 40,141.92 30,699.00 52,782.00 1,377.50 1,500.40 1,701.01 3,633.83 5,874.40 Totals per Report $ 137,796.17 $===12=,7=0=9=.6=4 See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. - 25 -