Judges of the Probate Courts Retirement Fund of Georgia, report on review of the financial statements for the fiscal year ended June 30, 2001

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 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

5' C NOTES TO THE FINANCIAL STATEMENTS

4

SUPPLEMENTARY INFORMATION

SCHEDULES

1 SCHEDULE OF ADMINISTRATIVE EXPENSES PAID BY OBJECT.

18

2 RECONCILIATION OF SALARIES AND TRAVEL

19

3 RECONCILIATION OF PER DIEM AND FEES

20

4 SCHEDULE OF FUNDING PROGRESS

21

5 SCHEDULE OF EMPLOYER CONTRIBUTIONS

22

RUSSEl.l. \\', HINTON
STATE AUDITOR (4041656.2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta. Georgia 30334-X400
February 1,2002

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) of the Judges of the Probate Courts Retirement Fund of Georgia as of and for the year ended June 30, 2001, in accordance with Statements on ~tandards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. All information included in these financial statements is the representation ofthe management ofthe 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 da~a. It is substantially less in scope than an audit in accordance with auditing standards' generally accepted in the United States of America, 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.
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 accounting principles generally accepted in the United States of America.
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 2.

01ARL-4C

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 5) is presented for additional analysis purposes. Such information 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:gp OlARL-4C

Ru 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, 2001

EXHIBIT "A"

ASSETS
Cash and Cash Equivalents
Investments U. S. Government Securities, at Cost (Market Value $14,204,638.20) Stocks, at Cost (Market Value $21,414,296.75) Bonds and Debentures, at Cost (Market Value $7,920,002.50) Investment Account, at Cost (Market Value $8,708,108.79)
TOTAL ASSETS
LIABILITIES

$

7,577.60

$ 13,744,317;00 14,256,393.35 7,759,112.50 8,708,108.79

44,467,931.64

$ 44,475,509.24

0.00

NET ASSETS HELD IN TRUST FOR PENSION BENEFITS (A schedule of funding progress is presented on page 21)

$ 44,475,509.24'

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, 2001

EXHIBIT"B"

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 Miscellaneous Income
DEDUCTIONS
Benefits Disability Benefits Retirement Benefits Survivorship Benefits
Administrative Expenses Personal Services Operating Expenses
Refunds to Terminated Members
NET INCREASE
NET ASSETS HELD IN TRUST FOR PENSION BENEFITS JULY 1, 2000

$ 179,401,81 460,993,40 140,545,73

$ 1,843.046,25 283,473,73 708,120,28

2,834.640,26

1,057,54 $ 3.616,638,74 '

$

32,657.28

1,372.714.28

194,512.37 $ 1,599.883.93

$

14.260,76

239,360,28

253,621,04

27.219,10

1.880.724,07

$ 1,735.914,67

42,739,594.57

NET ASSETS HELD IN TRUST FOR PENSION BENEFITS JUNE 30, 2001

$ '44,475,509.24

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, 2001

EXHIBIT "C"

NOTE 1: PLAN DESCRIPTION

O R G A N I. Z A T I O N

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 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 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 of a probate court. The Judges of the

Probate Courts RetirementFund of Georgia is considered a component unit ofthe State of Georgia

and is included within the State of Georgia reporting entity fOf 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 of Georgia and anyperson serving as Secretary-Treasurer of the Board of Commissioners of the Judges ofthe 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 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, 2001, to that of the prior year:

June 30, 2001 June 30, 2000

Retirees and Beneficiaries Currently Receiving

Benefits and Terminated Members Entitled to

but not yet Receiving Benefits

For Disability

2

3

For Retirement

94

81

For Survivorship

38

34

Number of Active Members Vested Nonvested
-4-

36

119

129

38

157

JUDGES OFTHE PROBATE COURTS RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 20bi

EXHIBIT "C"

NOTE 1: PLAN DESCRIPTION

PLAN BENEFITS The Judges ofthe Probate 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 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%) of his/her average monthly net earnings up to, but not exceeding, a total of twenty 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 of time as he/she shall continue to serve as ajudge oftheprobate court or employee of the 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 of a Joint and Survivor Annuity,

(D) 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, 2001

EXHIBIT "C"

NOTE 1: PLAN DESCRIPTION

PLAN BENEFITS (E) DEATH BENEFITS:'

(1) Death before Retirement: In the event of the 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 of the Plan.

.

(2) Death after Retirement: The surviving sp,ouse, 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 of termination, 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 PI~m.

(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

.

.

For fines or bond forfeitures in excess of$25.00, .

but not more than $50.00

$ 1.00 $ 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

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JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA

.

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2001

EXHIBIT "C"

NOTE 1: PLAN DESCRIPTION
FUNDING REQUIREMENTS (C) PROCESSING OF MARRIAGE 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 of the 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 of Georgia. 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 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 accounting principles generally accepted in the United 'States of America. 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.
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 30,2001, as it is the policy of the Judges of the Probate Courts Retirement Fund of Georgia to prepare its financial statements on a basis ofaccounting other than accounting principles generally accepted in the United StateS of America 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, 2001, as it is the
-7-

. JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA

.

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2001

EXHIBIT "c"

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 ona basis of accounting other than accounting principles generally accepted in the United .. States of America 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,e.G.A.) Section 47-11-23 states that the Board of Commissioners ofthe Judges of the Probate Co.urts Retirement Fund of Georgia shall have full power to invest and reinvest funds, subject to all terms, conditions, limitations, and restrictions imposed by the "Public Retirement Systems Investment Authority Law" of Georgia, 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.e.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.e.G,A. Section 47-20-84, no fundshall 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 of deposit or in other form in banks and trust companies and in savings accounts, certificates ofdeposit, or similar certificates or evidences of deposits 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 of principal and interest;

-8-

JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2001

EXHIBIT "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 qirect obligations of any state of the United States or of the District of Columbia, or of the government of Canada 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 of the 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 bya nationally recognized rating agency;

(8) Bonds, debentures, or other securities issued or insured or guaranteed by any agency, authority, unit, orcorporate body created by the government of the United States of Amerioca 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 morethan the par value of the entire issue of such obligations, but only if not more than one-third of the 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 of five fiscal years next preceding date of acquisition by the fund have averaged per

'I

- 9-

nI.

JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30,2001

EXHIBIT "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 determined 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 undivid~d, beneficial interest in a pool ofloans secured by first mortgages, deeds oftrust, or deeds to secure debt upon fee si,mple, 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 secU!e debt are fully guaranteed or insured by the Federal Housing Administration, the United States Department of Veterans Affairs, the Farmers Home Administration, the Federal Home Loan Mortgage Corporation, the Governrilent 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 forits 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-

FUND JUDGES OF THE PROBATE COURTS RETIREMENT

OF GEORGIA

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30,2001

EXHIBIT "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, bonds and debentures, 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, 2001.

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 31 % 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, 2001, the Retirement Fund paid $8,700.00 in fees for administrative functions performed.

- 11 -

JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2001

EXHIBIT "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, 2001, 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 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 Categories 2

$ . 757760 $ 129314.11 $ 10000000 "$====O!!!=!.O~O$

3 29314.11

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

Category 1 - 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, 2001, are categorized below.

- 12-

JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA

.

NOTES TO THE FINANCIAL STATEMENTS

.JUNE 30, 2001

EXHIBIT "C"

NOTE 3: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS

CATEGORIZATION OF INVESTMENTS

Type ofInvestment

Risk Categories 2

U. S. Government Securities Stocks Bonds and Debentures Investment Account

$ 13,744,317.00 $ 14,256,393.35 7,759,112.50 8,708,108.79

0.00 $

Total Investments

$ 44.467 931 64 $

000 $

Carrying

Market

3

Amount

Value

0.00 $ 13,744,317.00 14,256,393.35 7,759,112.50 8,708.108.79

$ 14,204,638.20 21,414,296.75 7,920,002.50 8,708,108.79

000 $ 44.467.931.64 $ 52,247,046,24

NOTE 4: CONTRIBUTIONS REQUIRED AND MADE

FUNDING POLICY The minimum annual employer contribution requirements are set forth in the Official Code of Georgia Annotated Section 47-20-10 and are not actuarially determined. 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 July 1,2001,
ot which reflected the proceeds of designated portions fines and forfeitures for violation of traffic
laws and a designated portion of fees collected for processing marriage licenses as the employer contribution, indicated that the minimum employer contribution level was met. Member contribution requirements are set forth in O.e.G.A. Section 47-11-40 and are not' actuarially determined.

FUNDING REQUIREMENTS Actual- contributions for the year ended June 30, 2001, were as follows:
Member Contributions Fines and Bond Forfeitures Marriage License Fees
NOTE 5: CHANGES IN FIXED ASSETS

$ 179,401.81 460,993.40 . 140,545.73
'$ 780.940.94

Fixed assets used in plan operations are not included in the accompanying financial statements as required by generally accepted accounting principles applicable to retirement funds. The following is a summary of changes in fixed assets during the fiscal year:

-13 - .

JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2001

EXHIBIT "c"

NOTES: CHANGES IN FIXED ASSETS

Equipment

Balance July 1,2000

$ 606:00

Additions

0.00

Deletions

0.00

Balance June 30, 2001

$ 606.00

NOTE 6: RISK MANAGEMENT

The Judges of the 'Probate Courts Retirement Fund of Georgia is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illnesses or injuries to employee (workers' compensation); natural disaster; and unemployment compensation.

The Judges ofthe Probate Courts Retirement Fund ofGeorgia has obtained commercial insurance for risk of loss associated with assets. The Retirement Fund has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded insurance coverage in any ofthe past three years.

TheJudges ofthe Probate Courts Retirement Fund of Georgia has elected to self-insure for all losses related to torts, errors or omissions, which incl:udes, among other risks, risks fOf sexual harassment and discrimination. Claims are accounted for on a cash basis and no losses related to errors or omissions have occurred in the past three years.

The Judges ofthe Probate Courts Retirement Fund of Georgia has elected to self-insure with regard to workers' compensation and unemployment insurance. Claims are accounted for on a cash basis and no losses related to workers' compensation or unemployment compensation have occurred in the past three years.

The Secretary-Treasurer and all employees ofthe Judges ofthe Probate Courts Retirement Fund of Georgia are bonded in the amount of$500,000.00 under an Employees Dishonesty Coverage Blan!.cet Bond written by the United StatesFire Insurance Company, on which the premium has been paid to May 16, 2002.

NOTE 7: CONTINGENCIES

Litigation, claims and assessments filed against the Judges ofthe Probate Courts Retirement Fund of Georgia, if any, are generally considered to be actions against the State of Georgia. 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 year ended June 30, 2001.
- 14-

JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2001

EXHIBIT "C"

NOTE 7: CONTINGENCIES
At June 30, 2001, the Judges of the Probate Courts Retirement Fund of Georgia had inactive members' dues on hand in the amount of$119,303.58. One-hundred percent (100%) of such dues are refundable upon request of the inactive members.

- 15 -

SUPPLEMENTARY INFORMATION
- 17 -
iii
It

JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA SCHEDULE OF ADMINISTRATIVE EXPENSES PAID BY OBJECT YEAR ENDED JUNE 30, 2001

SCHEDULE "1"

PERSONAL SERVICES

Salaries and Wages Employer's Contributions for:
F.I.CA Retirement

$ 13,100.04

$ 1,055.72 105.00

1,160.72 $

OPERATING EXPENSES

Regular Operating Expenses Publications, Printing and Media Supplies and Materials Insurance and Bonding Rents (Other Than Real Estate) Other Operating Expenses

$

243.28

308.78

-369.00

623.67

496.52 $ 1,303.25

Travel

6,099.91

Per Diem, Fees and Contracts Per Diem and Fees Contracts Peace Officers' Annuity and Benefit Fund of Georgia

$ 223,257.12 8,700.00

231,957.12

14,260.76 239,360.28

$

253,621.04

'.

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
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JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA RECONCILIATION OF SALARIES AND TRAVEL YEAR ENDED JUNE 30, 2001

SCHEDULE "2"

Totals per Annual Supplement

Adjustments . Andrews, Carter, Crews, Green,

Virginia RobertW. Johnnie Mike

Totals per Report

SALARIES

TRAVEL

$ 13,100,04 $

6,099.94

-0.05 -250.00
0.02 250.00

$ 13,100.04 $ =~6;,;,;,O=9=9=.9.;,,1

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
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JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA RECONCILIATION OF PER DIEM AND FEES YEAR ENDED JUNE 30, 2001

SCHEDULE "3"

Totals per Annual Supplement
Adjustments Wachovia Corporation

TYPE PAYMENT
Consultant

Totals per Report

FEE AMOUNT

EXPENSE AMOUNT

TOTAL

$ 229,257.12 $

0,00 $ 229,257.12

-6,000.00

-6,000.00

$ 223,257.12 $======0=:.0==0 $ 223,257.12

See accompanying notes and Independent Accountant's Combined Report on Review of Fil)ancial Statements and Supplementary Information.
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JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA



SCHEDULE OF FUNDING PROGRESS

YEAR ENDED JUNE 30. 2001

SCHEDULE "4"

ACTUARIAL VALUATION
DATE

ACTUA~IAL
VALUE OF ASSETS (a)

ACTUARIAL ACCRUED LIABILITY (AAL) - ENTRY AGE NORMAL
(b)

UNFUNDED AAL
(UAAL) (b-a)

07/01/97 $ 35.171.185.00 $ 25,277 ,876.00 $ -9,893,309.00

07/01/99 $ 43,929,354.00 $ 36,768,843.00 $ -7,160,511.00

07/01/01 $ 53,036,654.00 $ 42,720,679.00 $ -10,315,975.00

FUNDED RATIO (a/b)
139.1%
119.5%
124.1%

COVERED PAYROLL
(c)
n/a
n/a
n/a

UAALASA PERCENTAGE OF COVERED
PAYROLL ((b-a)/c)
n/a
n/a
nla

Information prior to July 1, 1997, is not available in accordance with the parameters of GASB Statement No. 25.

The actuarial accrued liability was calculated based on a change in the actuarial cost method. Projected Unit Credit cost method was used in 1997; Entry Age Normal cost method was used in 1999 and 2001.

The information presented in this required supplementary schedule is based on the actuarial study prepared as of July 1, 2001. The actuarial value of assets is equal to 102% of market value of assets (excluding fixed assets).

See accompanying notes and Independent Accountant's Combined Report.on Review of Financial Statements and Supplementary Information.
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JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA SCHEDULE OF EMPLOYER CONTRIBUTIONS YEAR ENDED JUNE 30. 2001

SCHEDULE "5"

FISCAL YEAR 1998 1999 2000 2001

ANNUAL REQUIRED CONTRIBUTION

.$

534,700.00

$

570,791.00

$

415,539.00

$

238,627.00

PERCENTAGE CONTRIBUTED
106.7% 104.7% 144.9% 252.1%

Information prior to July 1, 1997, is not available in accordance with the parameters of GASB Statement No. 25.

The information presented in this required supplementary schedule is based on the actuarial study prepared as of July 1, 2001. Additional information of this latest actuarial valuation follows:

Valuation Date

July 1, 2001

Actuarial Cost Method

Entry age normal cost

Amortization Method

Level dollar, open

Remaining Amortization Period

40 years

Asset Valuation Method

5-year smoothed market value

Actuarial Assumptions: Investment Rate of Return Projected Salary Increases Includes Inflation at Cost-of-Living Adjustments

7% Not applicable None 2%

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