STATE OF GEORGIA , ",' , . GA AgOG - ,~R I -:J75 lCfGJQ-l00Q oo 0 0 00 00000 0 0 1776 I JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA REPORT ON REVIEW OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30,2000 Russell W. Hinton State Auditor 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 EXHffiITS FINANCIAL STATEMENTS A STATEMENT OF PLAN NET ASSETS ARISING FROM CASH TRANSACTIONS FIDUCIARY FUND TYPE - PENSION TRUST FUND 2 B STATEMENT OF CHANGES IN PLAN NET ASSETS ARISING FROM CASH TRANSACTIONS PENSION TRUST FUND 3 C NOTES TO THE FINANCIAL STATEMENTS 4 SUPPLEMENTARY INFORMATION SCHEDULES 1 SCHEDULE OF ADMINISTRATNE EXPENSES PAID BY OBJECT 18 2 RECONCILIATION OF SALARIES AND TRAVEL 19 3 SCHEDULE OF FUNDING PROGRESS 20 4 SCHEDULE OF EMPLOYER CONTRffiUTIONS 21 RUSSELL W. HtNTON STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 January 22, 2001 Honorable Roy E. Barnes, Governor Members of the General Assembly of Georgia Members of the Board of Commissioners of the Judges of the Probate Courts Retirement Fund of Georgia and Honorable Robert W. Carter, Secretary-Treasurer Judges of the Probate Courts Retirement Fund of Georgia 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) ofthe Judges of the Probate Courts Retirement Fund of Georgia as of and for the year ended June 30, 2000, 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 ofcash receipts and disbursements, which is a comprehensive basis ofaccounting other than generally accepted accounting principles. All information included in these financial statements is the representation of the management of the Judges of the Probate Courts Retirement Fund of Georgia. A review consists principally of inquiries of retirement fund 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 ofaccounting described in Note 2. 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 I through 4) is presented only for supplementary analysis purposes. Such information 00ARL-4C has been subjected to the inquiries and analytical procedures applied in the review ofthe financial statements and we are not aware of any material modifications that should be made thereto. Respectfully submitted, RWH:jb OOARL-4C R sell W. Hinton State Auditor FINANCIAL STATEMENTS - 1- JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA STATEMENT OF PLAN NET ASSETS ARISING FROM CASH TRANSACTIONS FIDUCIARY FUND TYPE - PENSION TRUST FUND JUNE 30, 2000 EXHIBIT "A" ASSETS Cash and Cash Equivalents $ 2,787.75 Investments U. S. Government Securities, at Cost (Market Value $21,358,130.00) $ 21,459,296.89 Stocks, at Cost (Market Value $26,656,800.35) 14,242,939.20 Investment Account, at Cost (Market Value $7,034,570.73) 7,034,570.73 TOTAL ASSETS $ LIABILITIES 42,736,806.82 42,739,594.57 0.00 NET ASSETS HELD IN TRUST FOR PENSION BENEFITS (A schedule of funding progress is presented on page 20) $ 42,739,594.57 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. -2- JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA STATEMENT OF CHANGES IN PLAN NET ASSETS ARISING FROM CASH TRANSACTIONS PENSION TRUST FUND YEAR ENDED JUNE 30, 2000 EXHIBITB" ADDITIONS Member Contributions Fines and Bond Forfeitures Marriage License Fees Investment Income Interest Received Dividends Received Gain or (Loss) on Sale of Investments (Net) Other Sources Commission Recapture on Stock Transaction Fees Interest Received on Member Buy-Back Provisions (O.C.G.A. Section 47-11-40) Other DEDUCTIONS Benefits Disability Benefits Retirement Benefits Survivorship Benefits Administrative Expenses Personal services Operating Expenses NET INCREASE NET ASSETS HELD IN TRUST FOR PENSION BENEFITS - JULY 1, 1999 $ 184,635.78 462,938.90 139,241.30 $ 1,571,208.80 401,864.34 3,106,800.46 5,079,873.60 $ 3,629.12 72.63 21.69 3,723.44 $ 5,870,413.02 $ 34,051.31 1,068,235.95 173,769.95 $ 1,276,057.21 $ 12,634.10 156,061.80 168,695.90 1,444,753.11 $ 4,425,659.91 38,313,934.66 NET ASSETS HELD IN TRUST FOR PENSION BENEFITS - JUNE 30, 2000 $ 42,739,594.57 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. -3- JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2000 EXHffiIT "C" NOTE 1: PLAN DESCRIPTION ORGANIZATION AND PURPOSE The Judges of the Probate Courts Retirement Fund of Georgia is a cost-sharing multiple-employer defined benefit pension plan established in 1958 by the General Assembly ofGeorgia for the purpose ofpaying retirement benefits to the judges ofthe Probate Courts ofthe State ofGeorgia. The Board of Commissioners of the Retirement Fund is comprised of seven (7) members and consists of the Governor or his designee, an appointee ofthe Governor other than the Attorney General, four judges ofthe probate courts who are members ofthe Retirement Fund, and one appointee ofthe Governor who is a member of the Retirement Fund and a retired judge ofa probate court. The Judges of the Probate Courts Retirement Fund of Georgia is considered a component unit ofthe State of Georgia and is included within the State ofGeorgia 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. All duly qualified and commissioned judges ofthe counties ofthe State ofGeorgia and any person serving as Secretary-Treasurer of the Board of Commissioners ofthe Judges of the Probate Courts Retirement Fund of Georgia 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 quasi-criminal cases involving the violation of State of Georgia traffic laws, and a designated portion of fees collected for the processing ofmarriage licenses. CURRENT MEMBERSHIP The following analysis compares the membership of the Judges of the Probate Courts Retirement Fund of Georgia at June 30, 2000, to that of the prior year: June 30, 2000 June 30, 1999 Retirees and Beneficiaries Currently Receiving Benefits and Terminated Members Entitled to but not yet Receiving Benefits For Disability 3 2 For Retirement 81 79 For Survivorship 34 34 ill Number ofActive Members Vested Nonvested 119 112 38 39 ill ill -4- JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2000 EXHIDIT "C" NOTE I: PLAN DESCRIPTION PLAN BENEFITS The Judges of the Probate Courts Retirement Fund ofGeorgia 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 General Assembly of Georgia. 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 years as a regularly qualified and commissioned probate judge or Secretary-Treasurer of the Retirement Fund. (B) RETIREMENT BENEFITS: Any member approved for retirement benefits shall be paid a monthly benefit equal to five percent (5%) ofhis/her average monthly net earnings up to, but not exceeding, a total oftwenty years to determine their monthly benefits with the following exception: Any member who has served for a total of twenty years as a judge of the probate court or employee of the Retirement Fund, 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 and to continue to receive credit during such a period oftime as he/she shall continue to serve as ajudge ofthe probate court or employee ofthe Retirement Fund beyond twenty years ofservice. The average monthly net earnings ofany such member shall be added to the monthly net earnings ofthe individual during the twenty year period of service. The sum of these amounts shall then be divided by 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 ofthe member. Members may elect to receive an actuarially reduced benefit in the form ofa Joint and Survivor Annuity. (0) DISABILITY BENEFITS: Any member who becomes totally and permanently disabled after completing four years of creditable service is entitled to receive retirement benefits in the amount that the member would receive if their retirement were effective at the time the member became disabled. -5- JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2000 EXHffiIT "C" NOTE 1: PLAN DESCRIPTION PLAN BENEFITS (E) DEATH BENEFITS: (l) Death before Retirement: In the event ofthe death ofthe 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 of the Plan. (2) Death after Retirement: The surviving spouse, upon reaching sixty (60) years ofage, may elect to receive a benefit equal to fifty percent (50%) of the monthly retirement benefit being paid to the deceased spouse at the time ofdeath. 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 General Assembly of Georgia. 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 of State of Georgia traffic laws, a sum based upon the scale set forth below is collected by the presiding judge and remitted to the Secretary-Treasurer of the 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 $1 00.00 $ 2.50 - 6- nJDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 2000 EXHIBIT "c" NOTE 1: PLAN DESCRIPTION FUNDING REQUIREMENTS (C) PROCESSING OF GE LICENSES: Each probate court within the State ofGeorgia remits twenty percent (20%) of all fees collected for processing marriage licenses to the Secretary-Treasurer of the Retirement Fund. NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PLAN ASSET MATTERS FUND COMPRISING FINANCIAL STATEMENTS The Judges ofthe Probate Courts Retirement Fund of Georgia uses a fund to report on its financial position and the results of its operations determined in conformity with the 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 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. The fund represented in the accompanying financial statements is as follows: FIDUCIARY FUND 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 ofthe 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 ofaccounting 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. Generally accepted accounting principles applicable to retirement funds require that investments be valued at fair value as ofthe plan year-end for the Statement ofPlan Net Assets. While market value has been disclosed, it is not presented within the financial statements at June 30, 2000, as it is the policy of the Judges of the Probate Courts Retirement Fund of Georgia to prepare its financial statements on a basis of accounting other than generally accepted accounting principles as noted above. Generally accepted accounting principles also require that plan liabilities for benefits and refunds due to plan members and beneficiaries should be recognized when due and payable in accordance with the terms of the plan, and all other plan liabilities should be recognized on the accrual basis of accounting. Plan liabilities are not recorded in the financial statements at June 30, 2000, as it is the -7- JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2000 EXHffiIT "e" NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PLAN ASSET MATTERS BASIS OF ACCOUNTING policy of the Judges of the Probate Courts Retirement Fund of Georgia to prepare its financial statements on a basis of accounting other than generally accepted accounting principles as noted above. CASH AND CASH EQUIVALENTS Cash and Cash Equivalents consist of demand deposits with banks. INVESTMENTS The Official Code of Georgia Annotated (O.C.G.A.) 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 allterms, conditions, limitations, and restrictions imposed by the "Public Retirement Systems Investment Authority Law" ofGeorgia. In addition, the Board of Commissioners is restricted to invest no more than 55% of the assets of the Retirement Fund in equities. Statutory provisions governing eligible investments are enumerated in the O.C.G.A. Section 47-20-83 as follows: (1) Corporations or obligations of corporations organized under the laws of Georgia or any other state or under the laws of Canada, but only if the corporation has a market capitalization equivalent to $100 million; provided, however, that except as provided in O.C.G.A. Section 47-20-84, no fund shall invest in corporations or in obligations of corporations organized in a country other than the United States or Canada; provided, further, that such obligation shall be listed as investment grade by a nationally recognized rating agency; (2) Repurchase and reverse repurchase agreements for direct obligations ofthe United States government and for obligations unconditionally guaranteed by agencies of the United States government and for investments eligible under paragraph (1) ofthis Code section; (3) Cash assets or deposits in checking or savings accounts under certificates ofdeposit or in other form in banks and trust companies and in savings accounts, certificates ofdeposit, or similar certificates or evidences ofdeposits in savings and loan associations and building and loan associations which have qualified for the insurance protection afforded by the Federal Deposit Insurance Corporation; (4) Bonds, notes, warrants, and other evidence ofindebtedness which are direct obligations of the government of the United States of America or for which the full faith and credit of the government of the United States of America is pledged for the payment ofprincipal and interest; -8- JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2000 EXHmIT "c" NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PLAN ASSET MATTERS INVESTMENTS (5) Loans guaranteed as to principal and interest by the government of the United States of America, or by any agency or instrumentality of the government of the United States of America, to the extent of such guaranty; (6) Taxable bonds, notes, warrants, and other securities not in default which are the direct obligations of any state of the United States or of the District of Columbia, or of the government ofCanada or any province ofCanada, or for which the full faith and credit of such state, district, government, or province has been pledged for the payment ofprincipal and interest; (7) Bonds, notes, warrants, and other securities not in default which are the direct obligations ofthe government of any foreign country which the International Monetary Fund lists as an industrialized country and for which the full faith and credit of such government has been pledged for the payment ofprincipal and interest, provided such securities are listed as investment grade by a nationally recognized rating agency; (8) Bonds, debentures, or other securities issued or insured or guaranteed by any agency, authority, unit, or corporate body created by the government of the United States of America whether or not such obligations are guaranteed by the United States; (9) Collateralized mortgage obligations that are listed as investment grade by a nationally recognized rating agency; (10) Obligations issued, assumed, or guaranteed by the International Bank for Reconstruction and Development or the International Financial Corporation; (11) In addition to those investments eligible under paragraph (1) ofthis Code section, bonds, debentures, notes, and other evidences ofindebtedness issued, assumed, or guaranteed by any solvent institution existing under the laws of the United States of America or of Canada, or any state or province thereof, which are not in default as to principal or interest and which are secured by collateral worth at least 50 percent more than the par value of the entire issue of such obligations, but only if not more than one-third ofthe total value of the required collateral consists of common stocks; (12) In addition to those investments eligible under paragraph (1) ofthis Code section, secured and unsecured obligations ofissuers described in paragraph (11) ofthis Code section other than the obligations described in paragraph (11) ofthis Code section, bearing interest at a fixed rate, with mandatory principal and interest due at specified times, ifthe net earnings of the issuing, assuming, or guaranteeing institution available for its fixed charges for a period offive fiscal years next preceding date ofacquisition by the fund have averaged per -9- JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2000 EXHmIT "c" NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PLAN ASSET MATTERS INVESTMENTS (12) year not less than one and one-halftimes its average annual fixed charges applicable to such period and if during either of the last two years of the period of such net earnings have been not less than one and one-half times its fixed charges for the year; provided, however, that any such obligation shall be listed as investment grade by a nationally recognized rating agency; (13) In addition to those investments eligible under paragraph (1) of this Code section, equipment trust obligations or certificates adequately secured and evidencing an interest in transportation equipment, wholly or in part within the United States ofAmerica, and the right to receive determinated portions of rental, purchase, or other fixed obligatory payments for the use or purchase of the transportation equipment; (14) Loans that are secured by pledge or securities eligible for investment under this article; (15) Purchase money mortgages or like securities received upon the sale or exchange ofreal property acquired; (16) In addition to those investments eligible under paragraph (1) of this Code section, a mortgage or a mortgage participation, pass-through, conventional pass-through, trust certificate, or other similar security which represents an undivided, beneficial interest in a pool ofloans secured by first mortgages, deeds oftrust, or deeds to secure debt upon fee simple, unencumbered, improved, or income-producing real property located in the United States or Canada, which is improved with a residential building or condominium unit or buildings designed for occupancy by not more than four families, including leasehold estates in such real estate ifsuch first mortgages, deeds oftrust, or deeds to secure debt are fully guaranteed or insured by the Federal Housing Administration, the United States Dep~ent of Veterans Affairs, the Farmers Home Administration, the Federal Home Loan Mortgage Corporation, the Government National Mortgage Association, the Federal National Mortgage Association, or any similar governmental entity or instrumentality; (17) Land and buildings on such land used or acquired for use as a fund's office for the convenient transaction of its own business; provided, however, that portions of such buildings not used for its own business may be rented by the fund to others; provided, further, that the amount investment by a fund in office property shall not exceed 10 percent of the retirement system assets; (18) Real property acquired in satisfaction in whole or in part of loans, mortgages, liens, judgments, decrees, or debts previously owing to the fund in the course of its business; - 10- JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2000 EXHffiIT "c" NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PLAN ASSET MATTERS INVESTMENTS (19) Real property acquired in part payment of the consideration on the sale of other real property owned by the fund if such transaction effects a net reduction in the fund's investment in real estate; (20) Real property acquired by gift or devise, or through merger or consolidation with another fund; and (21) Additional real property and equipment incident to real property if necessary or convenient for the enhancement of the marketability or sale value of real property previously acquired or held by the fund under paragraphs (18), (19), and (20) ofthis Code section.. Investments are defined as those financial instruments with terms in excess ofthree months from the date ofpurchase and certain other securities held for the production ofrevenue. In addition, funds on deposit with the Retirement Fund's investment custodian for purposes of continual investment are reflected as investments regardless ofthe term ofthe instruments. Investments in U. S. government securities, stocks, and investment accounts 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 ofthe security, The market values reflected on the Statement of Plan Net Assets were based on valuations appearing in the Retirement Fund's Investment Custodian Trust Report at June 30, 2000. 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 ofpurchase. Approximately 50% of the net assets available for benefits are invested in U. S. government securities. FIXED ASSETS Fixed assets are recorded as expenditures at the time ofpurchase. No depreciation has been provided on fixed assets. RELATED PARTY TRANSACTIONS The Secretary-Treasurer of the Judges of the Probate Courts Retirement Fund of Georgia is also Secretary-Treasurer of the Peace Officers' Annuity and Benefit Fund of Georgia from which the Retirement Fund contracted out administrative functions, For the year ended June 30, 2000, the Retirement Fund paid $18,790.00 in fees for administrative functions performed. - 11 - JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2000 EXHmIT "C" 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. The bank balances as of June 30, 2000, are categorized below in order to provide information about the extent to which such deposits are exposed to custodial credit risk. Category I - 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 pledging 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 pledging financial institution or by its trust department or agent, but not in the Retirement Fund's name, and amounts uncollateralized. Cash Deposits Carrying Amount Bank Balance Risk Categ~on-",,'e,,-s _ 1 2 3 $ 2,767.75 $ 1,62,533.61 $ 162.533,63 $ 0.00 $==~Q!=!,Q~Q CATEGORIZATION OF INVESTMENTS For purposes of analysis ofcustodial credit risk, investments consist ofD. S. government securities, stocks, 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 and unregistered, with securities held by the counterparty's trust department or agent in the Retirement Fund's name. Category 3 - Uninsured and 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 of investment balances as of June 30, 2000, are categorized below. - 12- JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2000 EXHffiIT "c" NOTE 3: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS CATEGORIZATION OF INVESTMENTS IYPe of Investment Risk Cate,gl.!!-onJ.l