Review report, Judges of the Probate Court Retirement Fund of Georgia, a component unit of the state of Georgia, year ended June 30, 1994

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STATE OF GEORGIA DEPARTMENT OF AUDITS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334

REVIEW REPORT nJDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA
A COMPONENT UNIT OF THE STATE OF GEORGIA
YEAR ENDED JUNE 30, 1994

JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA - TABLE OF CONTENTS -

INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION

EXHIBITS

FINANCIAL STATEMENTS

A STATEMENT OF ASSETS, LIABILITIES AND FUND EQUITY

ARISING FROM CASH TRANSACTIONS

FIDUCIARY FUND TYPE - PENSION TRUST FUND

2

B STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS

PENSION TRUST FUND

3

C NOTES TO THE FINANCIAL STATEMENTS

4

SUPPLEMENTARY INFORMATION

SCHEDULES

1 CASH AND CASH EQUIVALENTS

17

2 SCHEDULE OF INVESTMENT ACTNITIES

18

3 SCHEDULE OF ADMINISTRATNE EXPENSES BY OBJECT

22

4 SCHEDULE OF SALARIES AND TRAVEL

23

CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174
TAX RATIO (404) 656-0494

~epartmeut nf J\uhits
254 WASHINGTON STREET. S.W. ROOM 214
J\tlauht, &ieor_gia 30334-8400
December 14, 1994

FINANCIAL AUDITS (404) 656-2180
PROGRAM AUDITS (404) 656-2006

Honorable Zell Miller, Governor Members of the General Assembly of Georgia Members ofthe Board of Commissioners ofthe Judges of the Probate Courts Retirement Fund of Georgia
and Honorable Hazel C. McDonald, Secretary-Treasurer
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 C) of the Judges of the Probate Courts Retirement Fund ofGeorgia as ofand for the year ended June 30, 1994, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. As described in Note 2, these financial statements were prepared on the basis of cash receipts and disbursements, which is a comprehensive basis of accounting other than generally accepted accounting principles. All information included in these financial statements is the representation ofthe management of the Judges ofthe Probate Courts Retirement Fund 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 of an 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 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 accounting described in Note 2. The accompanying supplementary information (Schedules 1 through 4) is presented only for supplementary analysis purposes. Such information has been subjected to the inquiries and

. 94ARL-4C

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,

CLV:gp 94ARL-4C

Claude L. Vickers State Auditor

FINANCIAL STATEMENTS - 1-

JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA STATEMENT OF ASSETS, LIABILITIES AND FUND EQUITY ARISING FROM CASH TRANSACTIONS
FIDUCIARY FUND TYPE - PENSION TRUST FUND JUNE 30. 1994

EXHIBIT "A"

ASSETS
Cash and Cash Equivalents - Schedule "1"
Investments - Schedule "2" U. S. Government Securities, at Cost (Market Value $11,100,125.25) Stock, at Cost (Market Value $8,820,350.00) Investment Account, at Cost (Market Value $16,336.47) Mutual-Funds, at Cost (Market Value $4,733,268.32)
Fixed Assets Equipment

$ 7,825.39

$10,806,118.77 7,730,727.69 16,336.47 4,733,268.32

23,286,451.25

7,700.00

Total Assets

$23,301,976.64

Liabilities Payroll Withholdings
Fund Equity Investment in Fixed Assets Fund Balance Reserved for Benefits

LIABILITIES AND FUND EQUITY

$

3,500.61

$

7,700.00

23,290,776.03 23,298,476.03

Total Liabilities and Fund Equity

$23,301,976.64
=============

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.
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JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS PENSION TRUST FUND YEAR ENDED JUNE 30, 1994

EXHIBIT "B"

CASH RECEIPTS
REVENUES
OPERATING REVENUES Other Revenues Retained Member Contributions Fines and Bond Forfeitures Marriage License Fees Investment Income - Schedule "2" Interest Received Dividends Received Gain or (Loss) on Sale of Investments (Net) Other Sources Interest Received on Delinquent Members' Contributions Interest Received on Demand Deposits
Total Operating Revenues
NON-OPERATING REVENUES Payroll Withholdings (Net)
Total Cash Receipts
BALANCE - JULY 1
Cash and Cash Equivalents Investments

EXPENSES
Benefits Expense Disability Benefits Retirement Benefits Survivorship Benefits
Administrative Expenses - Schedule "3" Personal Services Operating Expenses
Total Disbursements
BALANCE - JUNE 30
Cash and Cash Equivalents Investments

DISBURSEMENTS

$ 184,753.95 382,815.93 138,240.15

$ 1,226,700.31 242,883.50
330,385.09

1,799,968.90

$

515.19

1,558.14

2,073.33

$ 2,507,852.26

334.61 $ 2,508,186.87

$ 49,018.64 21,576,482.35 21,625,500.99

$24.133,687.86

$ 24,037.62 623,805.13 80,315.38 $ 728,158.13

$ 39,175.46 72,077.63

111,253.09

$ 839,411.22

$

7,825.39

23,286,451.25 23,294,276.64

$24,133,687.86

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.
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JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1994

EXHIBIT "C"

NOTE 1: PLAN DESCRIPTION

ORGANIZATION AND PURPOSE The Judges ofthe Probate Courts Retirement Fund of Georgia is a multiple employer, defined benefit pension plan established in 1958 by the General Assembly of Georgia for the purpose of paying retirement benefits to the judges of the Probate Courts of the State of Georgia. The Board of Commissioners of the Retirement Fund is comprised of seven (7) members and consists of the Governor or his designee, an appointee of the G9vernor other than the Attorney General, four (4) judges of the Probate Courts who are members of the - Retirement Fund and one appointee ofthe Governor who is a member ofthe Fund and a retired judge ofthe probate court. The Judges ofthe Probate Courts Retirement Fund of Georgia is considered a component unit of the State of Georgia and 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.

All duly qualified and commissioned judges of the counties ofthe State of Georgia and any person serving as Secretary-Treasurer of the Board of Commissioners of the Retirement Fund are eligible to apply for membership. The Retirement Fund is funded through a combination of member contributions paid by the affected judges of the probate courts, designated portions of fines and forfeitures for criminal and quasicriminal cases involving the violation of State of Georgia traffic laws, and a designated portion of fees collected for the processing of marriage licenses.

CURRENT MEMBERSHIP The following analysis compares the membership of the Judges of the Probate Courts Retirement Fund of Georgia at June 30, 1994, to that ofthe prior year:

June 30, 1994 June 30, 1993

Retirees and Beneficiaries Currently Receiving Benefits and Terminated Members Entitled to Benefits but not yet Receiving Them For Disability For Retirement For Survivorship Terminated Members

3

3

76

75

21

21

_8

_Q

108

99

Number of Active Members Vested Nonvested

110

103

39

49

149

ill

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JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1994

EXHIBIT "C"

NOTE 1: PLAN DESCRIPTION
CURRENT MEMBERSHIP A detailed analysis ofindividuals receiving benefits during the fiscal year ended June 30, 1994, is on file in the office ofthe State Auditor.
PLAN BENEFITS The Judges ofProbate Courts Retirement Fund of Georgia provides retirement as well as death and disability benefits. -Benefit-provisions and vesting requirements are established by statute and may be amended only by the State ofGeorgia General Assembly. A description of plan benefits and vesting requirements is as follows:
(A) RETIREMENT CONDITIONS: A member shall be eligible for retirement at sixty (60) years of age and must have served at least four (4) years as a regularly qualified and commissioned probate judge or Secretary-Treasurer ofthe Retirement Fund.
(B) _RETIREMENT BENEFITS: Any member approved for retirement benefits shall be paid a monthly benefit equal to five percent (5%) of his/her average monthly net earnings up to, but not exceeding, a total of twenty (20) years to determine their monthly benefit with the following exception:
Any judge of probate court and any Secretary-Treasurer of the Retirement Fund who has served for a total of twenty (20) years as a judge of the probate court or Secretary-Treasurer, or a combination of such service, and who has contributed all dues owed to the Retirement Fund as provided but who is not eligible upon retirement to receive the maximum retirement benefits provided, shall be entitled to continue dues to the Retirement Fund or, in the case of the SecretaryTreasurer, to continue to receive credit during such a period of time as he/she shall continue to serve as a judge of the probate court or Secretary-Treasurer beyond twenty (20) years of service. The average monthly net earnings ofany suchjudge ofthe probate court or Secretary-Treasurer
shall be added to the monthly net earnings ofthe individual during the twenty (20) year period of service. The sum ofthese amounts shall then be divided by two hundred forty (240), and the result
of such division shall then be used as the average monthly net earnings upon which retirement
benefits shall be calculated. Benefits calculated and paid pursuant to this provision shall not exceed
the limitations specified.
(C) OPTIONAL BENEFITS: The monthly benefits referred to above are payable for the lifetime of the members. Members may elect to receive an actuarially reduced benefit in the form of a Joint and Survivor Annuity.
(D) DISABILITY BENEFITS: Any member who becomes totally and permanently disabled after completing four (4) years of creditable service is entitled to receive retirement benefits in the amount that the member would receive iftheir retirement were effective at the time the member became disabled.

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JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1994

EXHIBIT "C"

NOTE I: PLAN DESCRIPTION

PLAN BENEFITS (E) DEATH BENEFITS:
(I) Death before Retirement: In the event ofthe death of the member, the surviving spouse may elect to withdraw the dues paid into the Retirement Fund by the deceased member plus interest, in which case the spouse shall be deemed to have waived any rights to any benefits; or an optional payment plan may be chosen for which benefits will be paid according to the terms ofthe Plan.

(2) Death after Retirement: The surviving spouse, upon reaching sixty (60) years of age, may elect to receive a benefit equal to fifty percent (500/o) ofthe monthly retirement benefit being paid to the deceased spouse at the time of death. These benefits will be paid for the remainder of the surviving spouse's life.

(F) TERMINATION: In the event oftermination, a member is entitled to any retirement benefits that may
have been earned. However, the member may waive the right to these benefits and receive all dues paid plus interest.

FUNDING REQUIREMENTS Contribution provisions are established by statute and may be amended only by the State of Georgia General Assembly. A description of contribution requirements is as follows:

(A) MEMBER'S CONTRIBUTIONS: Members must contribute five percent (5%) of their net monthly earnings up to the ceilings for total net earnings specified in the Plan.

(B) PROBATE COURT CONTRIBUTIONS: For each criminal and quasi-criminal case involving the violation ofState ofGeorgia traffic laws, a sum based upon the scale set forth below is collected by the presiding judge and remitted to the Secretary-Treasurer ofthe Retirement Fund:

For fines or bond forfeitures in excess of $4.00, but not more than $25.00

$ 1.00

For fines or bond forfeitures in excess of$25.00, but not more than $50.00

$ 1.50

For fines or bond forfeitures in excess of$50.00, but not more than $100.00

$ 2.00

For fines or bond forfeitures in excess of $100.00

$ 2.50

(C) PROCESSING OF MARRIAGE LICENSES: Each probate court within the State of Georgia remits twenty percent (20%) of all fees collected for processing marriage licenses to the Secretary-Treasurer of the Retirement Fund.

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JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1994

EXHIBIT "C"

NOTE 2: SUM1.1ARY OF SIGNIFICANT ACCOUNTING POLICIES AND PLAN ASSET MATTERS
FUND COMPRISING FINANCIAL STATEMENTS The Judges of the Probate Courts Retirement Fund of Georgia uses a fund to report on its financial position
and the results ofits operations determined in conformity with the accounting practices prescribed or permitted
by statutes and regulations ofthe State of Georgia. A fund is a separate accounting entity with a self-balancing set of accounts. The fund represented in this report is as follows:
FIDUCIARYFUND TYPE
PENSION TRUST FUND - The fund used to account for the accumulation of resources for retirement benefits to eligible members.
BASIS OF ACCOUNTING The Judges of the Probate Courts Retirement Fund of Georgia prepares its financial statements on the basis of cash receipts and disbursements, which is a comprehensive basis of accounting other than generally accepted accounting principles. This basis of accounting is defined as that method of accounting in which certain revenues and related assets are recognized when received rather than when earned, and certain expenses are recognized when paid rather than when the obligation is incurred.
CASH AND CASH EQUIVALENTS Cash and cash equivalents include demand deposits with banks and other financial institutions.
INVESTMENTS The Official Code of Georgia Annotated Section 47-11-23 states that the Board of Commissioners of the Judges of the Probate Courts Retirement Fund of Georgia shall have full power to invest and reinvest funds subject to the terms and conditions imposed by the laws of the State of Georgia upon domestic life insurance companies in the making and disposing oftheir investments. Statutory provisions governing the investments ofdomestic life insurance companies are enumerated in Title 33, Chapter 11 of the Official Code of Georgia Annotated. The significant forms of investment in accordance with these statutes and available to the Retirement Fund are as follows:
( 1) Deposits in checking, savings, certificates of deposit or similar evidences of deposits in banks, trust companies, savings and loan associations, and building and loan associations which have qualified for the insurance protection afforded by the Federal Deposit Insurance Corporation.
(2) Securities of any open-end management type investment company or investment trust registered with the Securities and Exchange Commission, provided that the investment company or trust has been organized for not less than ten years or has assets of not less than $25,000,000.00 at the date of investment.
(3) Bonds, notes, securities or other evidences of indebtedness which are direct obligations of the government of the United States of America.
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JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1994

EXHIBIT "C"

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PLAN ASSET MATTERS
INVESTMENTS (4) Loans guaranteed as to principal and interest by the government ofthe United States of America, to the extent of such guaranty.
(5) Bonds, notes, warrants or securities not in default which are direct obligations of any state ofthe United States of America or ofthe District of Columbia, or ofthe government of Canada or any province of Canada, or for which the full faith and credit of such state, district, government or province has been pledged for the payment of principal and interest.
(6) Obligations oflocal units of government or government related entities located within the United States of America or Canada, subject to certain conditions.
(7) Dividend paying stocks, common or preferred, ofany solvent corporation created or existing under the laws of the United States of America or any state or of the District of Columbia, subject to certain conditions.
(8) Bonds, debentures, notes, or other evidences of indebtedness of any solvent corporation created or existing under the laws of the United States of America or of any state or of the District of Columbia, subject to certain conditions.
(9) Bonds, debentures, notes, or other evidences of indebtedness which are secured by first mortgage or deed of trust or deed to secure debt upon fee simple, unencumbered improved real estate or income producing real property located in the United States of America or Canada, subject to certain conditions.
(10) Purchase money mortgages or like securities received upon the sale or exchange of real property acquired.
(11) Real estate acquired for the purpose of leasing same to any person, firm or corporation, or in real estate already leased to any person, firm or corporation, subject to certain conditions.
Investments are defined as those financial instruments with terms in excess ofthree months from the date of purchase and certain other securities held for the production of revenue. In addition, funds on deposit with the Retirement Fund's investment custodian for purposes of continual investment are reflected as Investments regardless of the term of the instruments. Investments in U. S. Government securities, stock, investment accounts and mutual funds (open-end) are recorded at cost. Accrued interest purchased, premiums or discounts on U. S. Government securities are reflected as a part of cost and are not amortized over the remaining life of the security. The market values reflected on Exhibit "A" of this report were based on valuations appearing in the Retirement Fund's Investment Custodian Trust Report at June 30, 1994.

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JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1994

EXHIBIT "C"

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PLAN ASSET MATTERS

INVESTMENTS Interest income and dividend income are recognized when received in cash. Gains and/or losses are recognized using the completed transaction method. Accrued interest purchased is recorded as a reduction of interest income at the time of purchase.

Approximately 46% of the net assets available for benefits are invested in U. S. Government securities. In addition,approximately 20% of the net assets available for benefits are invested in Short-Term Investment Company B, an open-end mutual fund.

FIXED ASSETS Fixed assets are recorded as expenditures at the time ofpurchase. No depreciation has been provided on fixed assets. Fixed assets are reflected on Exhibit "A" for informational purposes only.

RELATED PARTY TRANSACTIONS The Secretary-Treasurer of the Judges of the Probate Courts Retirement Fund of Georgia, Mrs. Hazel C. McDonald, is also the Secretary-Treasurer ofBlue Ridge Developers, Incorporated from which the Retirement Fund rents office space. For the year ended June 30, 1994, the Retirement Fund paid $1,800.00 in rentals.

NOTE 3: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS

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. These bank balances 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 Retirement Fund or by its agent in the Retirement Fund's name.

Category 2 - Amounts collateralized with securities (at market value) held by the financial institution's trust department or agent in the Retirement Fund's name.

Category 3 - Amounts collateralized with securities (at market value) held by the financial institution or by its trust department or agent, but not in the Retirement Fund's name, and amounts uncollateralized.

Carrying Amount

Bank ~

Risk Categories

2

3

Cash Deposits

$ 1!!2532 $ 65 5!11 !!8 $ 65 S!11 !!8 $

!)00 $

Q,00

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JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1994

EXHIBIT "C"

NOTE 3: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS

CATEGORIZATION OF INVESTMENTS For purposes of analysis of custodial credit risk, investments consist ofU. S. Government securities, stock, and investment accounts. Investments are stated at cost, and are summarized and classified as to custodial credit risk within the categories described below:

Category I - Insured or registered, or securities held by the Retirement Fund or its agent in the Retirement Fund's name.

Category 2 - Uninsured or unregistered, with securities held by the counterparty's trust department or agent in the Retirement Fund's name.

Category 3 - Uninsured or unregistered, with securities held by the counterparty, or by its trust department or agent but not in the Retirement Fund's name.

The carrying amounts shown below also include amounts maintained in mutual funds (open-end) which are not subject to risk categorization.

Type ofInvestment

Risk Categories

2

3

Carrying Amount

Market
Value

U.S. Government Securities Stock Investment Account

$ 10,806,118.77 $

0.00 $

0.00 $ 10,806,118.77 $ 11,100,125.25

7,730,727.69

7,730,727.69

8,820,350.00

16,336.47

16,336.47

16,336.47

Total

S 10.806 118 77 S

000 S 7.747,96416 $ 18,553,182.93 $ 19,936,811.72

Mutual Funds (Open-end)

4,733,268.32

4,733,268.32

S 23 286 4~1 2~ S 24 670,980 04

NOTE 4: FUNDING STATUS AND PROGRESS

PENSION BENEFIT OBLIGATION Governmental Accounting Standards Board (GASB) Statement Number 5 requires the use of a standardized measure ofthe pension obligation in order to help users assess funding status on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among public employee retirement systems. The standardized pension obligation measure required by GASB Statement Number 5 is the actuarial present value of credited projected benefits, which is defined as the present value of benefits estimated to be payable in the future as a result of employee service to date, computed by attributing an equal benefit amount (including the effects ofboth projected salary increases and any step-rate benefits, ifapplicable) to each year ofcredited and expected future employee service, using assumptions that
reflect the best judgement offuture events affecting the actuarial present value. The Statement further requires

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JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1994

EXHIBIT "C"

NOTE 4: FUNDING STATUS AND PROGRESS

PENSION BENEFIT OBLIGATION the use ofthe term pension benefit obligation when referring to the standardized measure. The standardized measure is independent ofthe actuarial funding method, ifany, used to determine contributions to the affected public employees retirement system.

In accordance with policies prescribed or permitted by statutes of the State of Georgia, the Judges of the Probate Courts Retirement Fund of Georgia does not calculate the pension obligation in the manner prescribed by the Governmental Accounting Standards Board. The actuary engaged by the Retirement Fund utilized the Unit Credit Cost method to calculate the actuarial present value of accumulated plan benefits at the valuation date of June 30, 1994. The valuation results with regard to the funded status of the plan is reflected below.

VALUATION RESULTS Actuarial Present Value of Accumulated Plan Benefits Vested Benefits Active Members Pensioners, Future Survivors and Beneficiaries Former Members Eligible for Deferred Vested Benefits Nonvested Benefits (Inactive Members)

$ 7,155,400.00 6,901,400.00
332,600.00 66,700.00

Total

$14,456,100.00

Net Assets Available for Benefits, at Cost (Market Value $24,677,905.43)

23,294,300.00

Assets in Excess of Actuarial Present Value of Accumulated Plan Benefits

$ 8,838,200.00

ACTUARIAL ASSUMPTIONS The most recent actuarial investigation of the Retirement Fund was performed by the consulting actuary engaged by the Judges of the Probate Courts Retirement Fund using census data as of June 30, 1994. Significant actuarial assumptions used include:

(A) Interest Rate: All cost estimates have been based on an interest rate of seven percent (7%) per annum. This rate serves as an estimate of the average yield which the assets of the Retirement Fund may reasonably be expected to earn over an extended period.

(B) Mortality Rates: The 1971 Group Annuity Mortality Tables. Mortality for disability pensioners is the same, set forward seven years.

(C) Withdrawal Rates: Termination rates before retirement, all causes: mortality.

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JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXHIBIT "C"

NOTE 4: FUNDING STATUS AND PROGRESS

ACTUARIAL ASSUMPTIONS (D) Retirement Age: It has been assumed that members will retire upon the attainment of age sixty-five (65)
or two years following the valuation date.

(E) Investment Return: Seven percent (7%) per annum.

(F) Funding Method: Unit credit cost method.

(G) Asset Valuation Method: Assets are determined on the basis ofbook value.

NOTE 5: CONTRIBUTIONS REQUIRED AND MADE

FUNDING POLICY The minimum annual employer contribution requirements are set forth in the Official Code of Georgia Annotated (O.C.G.A) Section 47-20-10. This statute further prohibits any action to grant a benefit increase until such time as the minimum annual contribution requirements meet or exceed legislative requirements. The actuarial valuation as of June 30, 1994, which reflected the proceeds ofthe designated portions offines and forfeitures for violation of traffic laws and a designated portion of fees collected for processing marriage licei;ises as the employer contribution, indicated that the minimum employer contribution level was being met. Member contribution requirements are set forth in O.C.G.A Section 47-11-40. Contribution levels are not actuarially determined. Covered payroll information was not available.

FUNDING REQUIREMENTS Actual contributions for the year ended June 30, 1994, were as follows:

Member Contributions Fines and Bond Forfeitures Marriage License Fees

$ 184,753.95 382,815.93 138,240.15

$ 705,810.03

NOTE 6: HISTORICAL TREND INFORMATION

Statement Number 5 issued by the Governmental Accounting Standards Board requires the disclosure of certain 10-year historical trend data and an explanation that this data provide information about progress made in accumulating sufficient assets to pay benefits when due.

All required historical trend data for the Judges of the Probate Courts Retirement Fund of Georgia were not available at the time ofthis report. In addition, trend information relative to the pension benefit obligation was not available. Available trend data are as follows:

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JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1994

EXHIBIT "C"

NOTE 6: IITSTORICAL TREND INFORMATION

REVENUES BY SOURCE AND EXPENSES BY TYPE

Fiscal Year

Member Contributions

REVENUES Fines, Bonds Forfeitures and Fees from Marriage Licenses

Other (1)

Total

1988
1989 1990 1991 1992 1993 1994

$ 99,911.08 $ 465,649.00 $ 1,046,698.80 $ 1,612,258.88 $ 102,126.58 $ 457,192.03 $ 1,190,816.82 $ 1,750,135.43 $ 100,772.25 $ 488,770.40 $ 1,406,076.57 $ 1,995,619.22 $ 114,998.29 $ 470,204.20 $ 1,445,277.21 $ 2,030,479.70 $ 135,613.86 $ 481,114.60 $ 1,497,681.07 $ 2,114,409.53 $ 168,100.07 $ 490,889.31 $ 1,838,383.67 $ 2,497,373.05 $ 184,753.95 $ 521,056.08 $ 1,802,042.23 $ 2,507,852.26

Fiscal Year

Benefits

EXPENSES
Administrative Expenses

Refunds To Terminated
Members

Total

1988
1989 1990 1991 1992 1993 1994

$ 294,557.43 $ 62,644.15 $ $ 426,395.13 $ 73,956.23 $ $ 498,843.27 $ 91,554.53 $ $ 514,112.19 $ 95,473.23 $ $ 529,524.95 $ 94,301.22 $ $ 635,766.44 $ 108,135.50 $ $ 728,158.13 $ 111,253.09 $

11,081.24 $ 368,282.82 0.00 $ 500,351.36 0.00 $ 590,397.80 0.00 $ 609,585.42 0.00 $ 623,826.17 0.00 $ 743,901.94 0.00 $ 839,411.22

( 1) Includes Investment Income

To conform to generally accepted accounting principles, the above trend information should include certain information relative to the pension benefit obligation and should be presented as required supplementary information.

NOTE 7: CHANGES IN FIXED ASSETS

The following is a summary of changes in Fixed Assets during the fiscal year:

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JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1994

EXHIBIT "C"

NOTE 7: CHANGES IN FIXED ASSETS

Equipment

Balance July 1, 1993

$ 7,561.00

Additions

139.00

Balance June 30, 1994

$ 7 700 00

NOTES: SUBSEOUENTEVENT

Effective July 1, 1994, any person eligible for membership in the Judges of the Probate Courts Retirement Fund ofGeorgia for at least 12 months preceding July 1, 1994, may join or rejoin the Fund by complying with certain provisions of Georgia law applicable to the Fund. This option expires on June 30, 1995.

NOTE 9: BONDING INFORMATION

The Secretary-Treasurer and all employees ofthe Judges of the Probate Courts Retirement Fund of Georgia are bonded in the amount of$100,000.00 under an Employees Dishonesty Coverage Blanket Bond written by the United States Fire Insurance Company, New York, New York, their Bond Number 601-060434-3, on which the premium has been paid to May 16, 1995.

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SUPPLEMENTARY INFORMATION - 15 -

JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA CASH AND CASH EQUIVALENTS JUNE 30 1 1994

SCHEDULE "1"

INTEREST BEARING ACCOUNT
Wachovia Bank of Georgia, N.A., Dalton, Georgia

$ 7,825.39

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 17 -

JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA SCHEDULE OF INVESTMENT ACTIVITIES
JUNE 30. 1994

U. S. GOVERNMENT SECURITIES
---------------------------
Wachovia Bank of Georgia, N.A., Atlanta, Georgia
Federal National Mortgage Association
United.States Treasury Bonds
Unites States Treasury Notes

MATURITY SHARES HELD

PAR

---D-A-T-E --

JUNE 30, 1994
-------------

VALUE

MARKET VALUE

INTEREST
---R-A-T-E --

8/10/94
8/10/94 9/10/97
9/10/97
2/15/94 2/15/94
2/15/94
2/15/94
11/15/95 5/15/98 5/15/98 5/15/98 5/15/98 5/15/98
5/15/98 5/15/98
5/15/01 5/15/01
2/15/04 2/15/04

$ 500,000.00$ 502,185.00 500,000.00 502,185.00 200,000.00 216,062.00 575,000.00 621,178.25
100,000.00 107,500.00 500,000.00 537,500.00 500,000.00 537,500.00 500,000.00 537,500.00 200,000.00 215,000.00 200,000.00 215,000.00 500,000.00 537,500.00 3,000,000.00 3,133,590.00 2,000,000.00 2,089,060.00 1,000,000.00 898,910.00 500,000.00 449,455.00
------------- -------------
$10,775,000.00 $11,100,125.25
============= =============

8.900%
8.900%
9.550% 9.550%
9.000% 9.000%
9.000% 9.000%
9.000% 9.000% 9.000% 9.000% 9.000% 9.000% 9.000% 9.000%
8.000% 8.000%
5.875% 5.875%

STOCK
Wachovia Bank of Georgia, N.A., Atlanta, Georgia
Abbott Labs Aluminum Company America Airtouch Cornnunications American Brands, Incorporated American Express Company American Home Products Corporation American International Group, Incorporated American Telephone and Telegraph Company Amoco Corporation Bell South Corporation Boeing Company Bristol Myers-Squibb Company Capital Holding Corporation CPC International, Incorporated Chevron Corporation Coca Cola Canpany Delta Air Lines, Incorporated Dow Chemical Company EG and G, Incorporated Equifax Exxon Corporation Ford Motor Company, Delaware General Electric Company

5,500 2,500 1,500 6,000
8,000 3,500
2,200 5,000
3,500 6,500
1,500 5,500
5,000 6,500
6,000 5,000
1,000 2,500 6,500 4,000 4,500 2,500
7,000

$ 159,500.00 182,812.50 35,437.50 189,750.00
206,000.00 198,625.00
190,575.00 271,875.00
199,062.50 401,375.00
69,375.00 294,937.50 151,250.00 313,625.00
251,250.00 203,125.00
45,250.00 163,437.50 97,500.00 113,000.00
255,375.00 147,500.00
326,375.00

See accanpanying notes and Independent Accountant's Canbined Report on Review of Financial Statements and Supplementary Infonnation.
- 18 -

SCHEDULE "2" Page 1

BALANCE JULY 1, 1993

INVESTMENTS

INVESTMENTS INVESTMENTS

MADE

REALIZED

BALANCE JUNE 30, 1994

INTEREST RECEIVED

DIVIDENDS RECEIVED

GAIN OR (LOSS) ON SALE
OF INVESTMENTS

$ 503,184.38

$ 503,184.38$ 44,500.00

503,184.37

503,184.37

44,500.00

200,000.00

200,000.00

19,100.00

575,000.00

575,000.00

54,912.50

992,234.38

$ 992,234.38

0.00

90,000.00

507,343.75

507,343.75

0.00

45,000.00

992,781.25

992,781.25

0.00

90,000.00

510,781.25

510,781.25

0.00

45,000.00

1,498,350.00

1,498,350.00

0.00

68,447.85

97,687.50

97,687.50

9,000.00

509,765.63

509,765.63

45,000.00

507,500.00

507,500.00

45,000.00

495,703.13

495,703.13

45,000.00

152,812.50

152,812.50

18,000.00

247,609.38

247,609.38

18,000.00

506,875.00

506,875.00

45,000.00

2,940,468.75

2,940,468.75 240,000.00

2,138,750.00

2,138,750.00 160,000.00

0.00 $ 954,687.50

954,687.50

-5,301. 57

0.00 472,890.63

472,890.63

-2,650.78

------------- ------------- ------------- ------------- -------------

$13,880,031.27 $1,427,578.13 $ 4,501,490.63 $10,806,118.77 $1,118,508.00

$

7,765.62

-7,343.75

7,218.75

-10,781.25

946.88

--------------
$ -2,193.75

$ 66,745.00$ 92,262.50$

141,685.50

70,252.50

0.00

27,771.27

206,838.13

231,498.45

177,337.50

60,677.50

92,622.00

89,227.50

160,355.90

26,532.50

52,162.50 133,600.00

289,544.66

0.00

66,885.00

244,297.70

64,695.50

0.00 153,845.00

207,976.72

22,857.50

229,568.94

126,467.84

0.00

43,777.50

143,943.00

17,577.00

110,843.67

0.00

98,360.00

209,128.12

85,228.34

215,195.25

13,250.62 $ 46,056.75 68,060.54
32,795.56 11,497.08 26,920.00
14,204.72 26,899.41

145,756.88 165,881.25
27,771.27 206,838.13 163,437.91 238,015.00
181,849.50 186,888.40
185,762.50 289,544.66
66,885.00 308,993.20
153,845.00 230,834.22
196,773.38 114,970.76 43,777.50 134,600.00 110,843.67 98,360.00
209,128.12
71,023.62 188,295.84

$ 3,435.00$ 3,840.00
11,865.00 8,750.00 8,852.00
750.00 6,171.00 6,325.00 17,940.00
625.00 13,996.00 1,000.00 7,800.00 11,675.00 3,610.00
25.00 7,410.00 3,510.00
620.00 12,960.00 4,950.00 9,765.00

1,818.88 6,965.98 19,018.12
13,782.88 10,769.67 7,846.34
16,311.76 22,491.44

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JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA
SCHEDULE OF INVESTMENT ACTIVITIES JUNE 30, 1994

STOCK
Wachovia Bank of Georgia, N.A., Atlanta, Georgia
General Telephone Electronics Corporation Georgia Pacific Corporation Halliburton Canpany Harsco Corporation Hewlett Packard Canpany Honeywe11 Canpany IBP, Incorporated International Business Machines Corporation International Paper Canpany J.P. Morgan and Company Letlllan Brothers Holdings, Incorporated Limited, Incorporated Liz Claiborne, Incorporated McDonald's Corporation MCI CCJ1111Jnications Corporation Merck and Canpany, Incorporated Minnesota Mining and Manufacturing Company Monsanto Company Motorola, Incorporated Norfolk Southern Corporation Pacific Gas and Electric Company Pacific Telesis Group Pfizer, Incorporated Philip Morris Canpanies, Incorporated Procter and Gamble Company Stanley Works Schlumberger Ltd. Xerox Corporation

MATURITY SHARES HELD DATE JUNE 30, 1994
2,500 1,500 10,000 4,500 1,300 8,000 2,000 4,300 1,500 4,500
5,000 2,300 7,000 1,000 5,000 5,000
5,000 4,000 10,000 1,500 5,000 2,000 5,000 3,500 2,000 1,800

PAR VALUE

MARKET VALUE

INTEREST RATE

$ 77,500.00 89,812.50 338,750.00 184,500.00 97,825.00 248,000.00 53,250.00 252,625.00 99,375.00 279,000.00
86,250.00 46,000.00 202,125.00 22,125.00 148,750.00 248,125.00
223,125.00 252,000.00 237,500.00 46,125.00 315,625.00 103,000.00 266,875.00 140,875.00 118,250.00 175,950.00

$ 8,820,350.00

INVESTMENT ACCOUNT
Wachovia Bank of Georgia, N.A., Atlanta, Georgia
Sweep Account

$ 16,336.47

MUTUAL FUNDS (OPEN-END)
Wachovia Bank of Georgia, N.A., Atlanta, Georgia
Short-Term Investment Canpany B

$ 4,733,268.32
============

See accanpanying notes and Independent Accountant's Canbined Report on Review of Financial Statements and Supplementary Information.
- 20 -

SCHEDULE "2" Page 2

BALANCE JULY 1, 1993

INVESTMENTS

INVESTMENTS INVESTMENTS

MADE

REALIZED

BALANCE JUNE 30, 1994

INTEREST RECEIVED

DIVIDENDS RECEIVED

GAIN OR (LOSS) ON SALE
OF INVESTMENTS

$ 117,975.38

$ 44,240.77 $ 73,734.61

62,830.33

62,830.33

330,239.04 $ 30,027.50

360,266.54

0.00 183,715.00

183,715.00

73,015.00

38,382.50

14,658.38

96,739.12

110,330.00 171,600.00

281,930.00

0.00

52,805.00

52,805.00

325,545.50

42,890.00

368,435.50

61,590.00

32,295.00

93,885.00

163,790.54

50,809.50

29,118.32 185,481.72

0.00

21,760.86

21,760.86

0.00

82,190.00

31,260.00

113,450.00

86,244.50

86,244.50

135,474.57

25,204.57 110,270.00

0.00

24,007.80

24,007.80

0.00 153,200.00

153,200.00

200,739.00

41,486.00

242,225.00

129,814.84

129,814.84

0.00

120,341.10

29,277.00

63,624.54

85,993.56

130,815.40

32,857.50

163,672.90

69,055.00 216,812.50

285,867.50

69,724.50

27,771.27

41,953.23

123,857.57

62,840.00

186,697.57

112,256.25

22,451.25

89,805.00

210,399.50

35,938.00

246,337.50

0.00 141,865.00

141,865.00

0.00 127,265.00

127,265.00

0.00
-------------

151,974.50
-------------

-------------

151,974.50
-------------

$ 5,707,667.24 $ 2,641,389.93 $ 618,329.48$ 7,730,727.69

$ 6,050.00$ 2,400.00 9,250.00 2,450.00 1,175.00 5,405.50
4,225.00 2,520.00 10,432.00
1,800.00 1,035.00 1,770.00

12,102.34
2,523.04
27,907.76 4,894.24 19,546.93

8,218.00

1,712.00

32,329.73

1,566.00

133,516.77

6,960.00

4,280.00

3,270.00

7,120.00

5,735.00

752.96

5,611.00

1,190.00

960.00

1,875.00

------------- --------------

$ 242,883.50 $ 332,578.84

$ 5,031.77 $ 11,304.70

$ 16,336.47

$1,983,752.07 $ 5,263,371.75 $ 2,513,855.50 $ 4,733,268.32 $ 108,192.31 $21,576,482.35 $ 9,343,644.51 $ 7,633,675.61 $23,286,451.25$ 1,226,700.31 $ 242,883.50$ 330,385.09
============ ============ --==--------- ============= =======--==-- =---=-------- --------------
- 21 -

JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA SCHEDULE OF ADMINISTRATIVE EXPENSES BY OBJECT YEAR ENDED JUNE 30 1 1994

SCHEDULE "3"

PERSONAL SERVICES
Salaries and Wages - Schedule "4" Employer's Contributions for:
F. I.C.A. Group Insurance
OPERATING EXPENSES
Regular Operating Expenses Supplies and Materials Insurance and Bonding Other Operating Expenses Dues
Travel - Schedule "4"
Real Estate Rentals Blue Ridge Developers, Incorporated
Telecommunications
Per Diem, Fees and Contracts Per Diem and Fees

$ 29,523.00

$

1,608.46

8,044.00

9,652.46$ 39,175.46

$

3,119.15

284.00

200.00 $ 3,603.15

245.94

1,800.00 258.66

66,169.88

72,077.63

$ 111,253.09
=============

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 22 -

JUDGES DF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA SCHEDULE OF SALARIES AND TRAVEL YEAR ENDED JUNE 30, 1994

SCHEDULE "4"

NAME
Hall, McDonald, McDonald,

Rosemary Hazel C. Hazel C.

POSITION
--------
Bookkeeper Secretary-Treasurer Retirement Funding

(*) On Payroll June 30, 1994 2

TIME MONTHS
12 * 12 *

SALARIES
--------

TRAVEL

$ 21,135.92

7,387.08 $

245.94

1,000.00
------------- -------------

$ 29,523.00$

245.94

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 23 -