Audit report, Judges of the Probate Courts Retirement Fund of Georgia, fiscal year ended June 30, 2013

Audit Report
Judges of the Probate Courts Retirement Fund of Georgia Fiscal Year Ended June 30, 2013
Prepared by: State Accounting Office
"Thunder Clouds over Atlanta", Photograph by John Mason, Mableton, Georgia

The artwork on the cover was created by Georgia artist, John Mason, and was selected to hang in the Office of the Governor as part of a rotating exhibit "The Art of Georgia". For more information about the exhibit, the artists and their work, visit www.gaarts.org.

JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA (A Component Unit of the State of Georgia)

- TABLE OF CONTENTS Page
SECTION I - FINANCIAL

1 Independent Auditor's Report

Basic Financial Statements

Statement of Fiduciary Net Position

6

Statement of Changes in Fiduciary Net Position

7

Notes to the Financial Statements

8

Required Supplementary Information (Unaudited)

Schedule of Funding Progress

20

Schedule of Contributions from the Employer and Other Contributing Entities

21

SECTION II - REPORT ON INTERNAL CONTROL OVER FINANCIAL

REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN

AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE

WITH GOVERNMENT AUDITING STANDARDS

25

SECTION III - SCHEDULE OF FINDINGS AND QUESTIONED COSTS

31

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SECTION I - FINANCIAL

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BASIC FINANCIAL STATEMENTS

JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA (A Component Unit of the State of Georgia)
Statement of Fiduciary Net Position
June 30, 2013

Assets: Cash and cash equivalents
Due from brokers for securities sold
Investments, at fair value: Mutual funds U.S. Government obligations Corporate bonds/notes/debentures Stocks Asset-backed securities Mortgage investments Real estate investment trusts Total investments
Total assets
Liabilities: Due to brokers for securities purchased Salaries/withholdings payable
Total liabilities
Net position restricted for pensions
See accompanying notes to financial statements.

$

474,975

211,077

$

3,746,519

3,408,267

6,465,033

50,171,703

1,567,391

659,760

462,033

66,480,706 67,166,758

1,156,589 200
1,156,789

$

66,009,969

6

JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA (A Component Unit of the State of Georgia)
Statement of Changes in Fiduciary Net Position
Year ended June 30, 2013

Additions: Contributions: Members Fines and bond forfeitures Other fees
Investment income: Dividends and interest Net increase in fair value of investments Less investment expense Net investment income
Total additions
Deductions: General and administrative expenses Benefits Refunds of member contributions and interest
Total deductions
Net increase in net position
Net position restricted for pensions:
Beginning of year
End of year
See accompanying notes to financial statements.

$

153,022

529,624

760,335

$

1,530,441

6,213,287

(421,162)

7,322,566 8,765,547

48,297 3,489,191
10,314
3,547,802
5,217,745

60,792,224

$

66,009,969

7

JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA (A Component Unit of the State of Georgia)
Notes to Financial Statements
For the Year Ended June 30, 2013

NOTE 1 - PLAN DESCRIPTION

ORGANIZATION AND PLAN DESCRIPTION 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 of Georgia for the purpose of paying retirement benefits to judges of the probate courts of the State of Georgia. The Board of Commissioners of the Retirement Fund is comprised of seven members and consists of the Governor or his designee, an appointee of the Governor other than the Attorney General, four judges of the probate courts who are members of the Retirement Fund, and one appointee of the Governor who is a member of the Retirement Fund and a retired judge of a probate court. The Judges of the Probate Courts Retirement Fund of Georgia is included within the State of Georgia's basic financial statements as a part of the primary government.

All duly qualified and commissioned judges of the probate court of the counties of the State of Georgia, any person serving as secretary-treasurer of the Board of Commissioners of the Judges of the Probate Courts Retirement Fund of Georgia and qualified employees of the Board are eligible 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 designated portions of fees collected for civil filings and the processing of marriage and pistol licenses.

CURRENT MEMBERSHIP As of June 30, 2013 participation in the Retirement Fund is as follows:

Retirees and beneficiaries currently receiving benefits For disability For retirement For survivorship

June 30, 2013
2 108 46

Total

156

Number of Active Members

Vested

29

Nonvested

121

Total

150

PARTICIPATING EMPLOYERS AND CONTRIBUTING ENTITIES The number of participating employers of the Retirement Fund at June 30, 2013 was 150. The number of contributing entities of the Retirement Fund at June 30, 2013 was 159.

8

JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA (A Component Unit of the State of Georgia)
Notes to Financial Statements
For the Year Ended June 30, 2013
NOTE 1 - PLAN DESCRIPTION (Continued)
BENEFITS The Judges of the Probate Courts Retirement Fund provides retirement as well as disability and death 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: Members prior to July 1, 1995 shall be eligible for retirement at age 60 and must have served at least four years as a regularly qualified and commissioned probate judge, secretarytreasurer or qualified employee of the Board of Commissioners of the Retirement Fund. Members on or after July 1, 1995, shall be eligible for retirement at age 60 and must have served at least eight years. A member must have terminated his or her official capacity as a judge of a probate court or as an employee of the Board to receive benefits.
(B) RETIREMENT BENEFITS: Members approved for retirement benefits prior to July 1, 1996, shall be paid a monthly benefit equal to 5 percent of his or her average monthly net earnings (subject to a salary cap) for each year served up to, but not exceeding, a total of twenty years, with exceptions. The benefit for members approved for retirement benefits on or after July 1, 1996 is equal to 5 percent of his or her final monthly net earnings (subject to a salary cap) for each year served up to, but not exceeding, a total of twenty years, with exceptions. The Board of Commissioners is authorized to provide for increases in benefits being paid up to 1 percent in a six month period and can increase the salary caps in effect up to 3 percent annually.
(C) OPTIONAL BENEFITS: The monthly benefits referred to above are payable for the lifetime of the member. Members may elect, as an alternate to the benefit described above, 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.
(E) DEATH BENEFITS (1) In the event of the death of a member who has not commenced receiving any benefits, the 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) In the event of the death of a member who has commenced receiving benefits, the surviving spouse, upon reaching age 60, may elect to receive a benefit equal to 50 percent of the 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 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.
9

JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA (A Component Unit of the State of Georgia)
Notes to Financial Statements
For the Year Ended June 30, 2013
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING The Retirement Fund's financial statements are prepared on the accrual basis of accounting, except for the collection of fines, forfeitures and fees which are recognized when collected from the courts. Any accrual of these fines, forfeitures and fees would be immaterial to the Retirement Fund's financial statements. Contributions from members are recognized as additions in the period in which the members provide services. Retirement benefit and refund payments are recognized as deductions when due and payable.
During fiscal year 2013, the Fund adopted the provisions of GASB Statement No. 61, The Financial Reporting Entity: Omnibus an amendment of GASB Statements No. 14 and No. 34. The objective of this Statement is to improve financial reporting for a governmental financial reporting entity by modifying certain requirements for inclusion of component units in the financial reporting entity, amending the criteria for blended component units, and clarifying the reporting entity interests in component units. The Fund did not have any component units for fiscal year 2013.
During fiscal year 2013, the Fund adopted the provisions of GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position. This Statement amends the net asset reporting requirements in Statement No. 34, Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments, and other pronouncements by incorporating deferred outflows of resources and deferred inflows of resources into the definitions of the required components of the residual measure and renames that measure as net position. The Fund changed its presentation of net assets to net position for fiscal year 2013. There were no other applicable changes to the Fund.
In June 2012, GASB issued Statement No. 67, Financial Reporting for Pension Plans an amendment of GASB No. 25. This Statement improves financial reporting by state and local governmental pension plans. This Statement results from a comprehensive review of the effectiveness of existing standards of accounting and financial reporting for pensions with regard to providing decision-useful information, supporting assessments of accountability and inter-period equity, and creating additional transparency. This Statement will be effective for the Fund in fiscal year 2014. Management of the Fund is evaluating the impact on the Fund's financial statements.
CASH AND CASH EQUIVALENTS Cash and cash equivalents, reported at cost, include cash in banks, cash on deposit with the investment custodian earning a credit to offset fees, and short-term highly liquid financial securities with original maturities of three months or less from the date of acquisition.
INVESTMENTS Investments are reported at fair value. Securities traded on a national or international exchange are valued at the last reported sales price. There are no investments in, loans to, or leases with parties related to the Retirement Fund.
The Retirement Fund utilizes various investment instruments. Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the financial statements.
10

JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA (A Component Unit of the State of Georgia)
Notes to Financial Statements
For the Year Ended June 30, 2013
NOTE 3 - DEPOSITS AND INVESTMENTS
The Retirement Fund maintains sufficient cash to meet its immediate liquidity needs. Cash not immediately needed is invested as directed by the investment policy of the Retirement Fund. All investments are held by agent custodial banks in the name of the Retirement Fund. State statutes and the Retirement Fund's investment policy authorize the Retirement Fund to invest in a variety of short-term and long-term securities as follows:
1) U.S. or Canadian corporations or their obligations with limits as to the corporations' size and credit rating. 2) Repurchase and reverse repurchase agreements for direct obligations of the U.S. Government and for
obligations unconditionally guaranteed by agencies. 3) Federal Deposit Insurance Corporation (FDIC) insured cash assets or deposits. 4) Bonds, notes, warrants, loans or other debt issued or guaranteed by the U.S. Government. 5) Taxable bonds, notes, warrants or other securities issued and guaranteed by any state, the District of
Columbia, Canada or any province in Canada. 6) Bonds, debentures or other securities issued or insured or guaranteed by an agency, authority, unit, or
corporate body created by the U.S. Government. 7) Investment grade collateralized mortgage obligations. 8) Obligations issued, assumed or guaranteed by the International Bank for Reconstruction and Development or
the International Financial Corporation. 9) Bonds, debentures, notes and other evidence of indebtedness issued, assumed, or guaranteed by any solvent
institution existing under the laws of the U.S. or of Canada, or any state or province thereof, which are not in default and are secured to a certain level. 10) Secured and unsecured obligations issued by any solvent institution existing under the laws of the U.S. or of Canada, or any state or province thereof, bearing interest at a fixed rate, with mandatory principal and interest due at a specified time with additional limits. 11) Equipment trust obligations or interests in transportation equipment, wholly or in part within the U.S., and the right to receive determinate portions or related income. 12) Loans that are secured by pledge or securities eligible for investment. 13) Purchase money mortgages or like securities received upon the sale or exchange of real property acquired. 14) Secured mortgages or mortgage participation, pass-through, conventional pass-through, trust certificate, or other similar securities with restrictions. 15) Land and buildings on such land used or acquired for use as a fund's office for the convenient transaction of its own business with restrictions. 16) Real property and equipment acquired under various circumstances.
The investment policy of the Retirement Fund prohibits the following investments, even if authorized in State statutes:
1) Commodities and futures. 2) Private placements. 3) Options. 4) Limited partnerships. 5) Venture-capital investments. 6) Real Estate Properties. 7) Interest-only (IO), principal-only (PO), and residual tranche collateralized mortgage obligations (CMO).
11

JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA (A Component Unit of the State of Georgia)
Notes to Financial Statements
For the Year Ended June 30, 2013

NOTE 3 - DEPOSITS AND INVESTMENTS (continued)

DEPOSITS

The carrying amount of the Retirement Fund's deposits totaled $474,975 at June 30, 2013, with actual bank balances of $474,975. At June 30, 2013, the Retirement Fund's cash balance of $324,975 was insured through the Federal Deposit Insurance Corporation, an independent agency of the U.S. Government. The remaining cash balance of $150,000 was exposed to credit risk and uncollateralized.

INVESTMENTS

Fixed income investments are authorized in the following instruments:



U.S. Government obligations. At June 30, 2013, the Retirement Fund held U.S. Treasury bonds of

$1,404,547.



Obligations unconditionally guaranteed by agencies of the U.S. Government. At June 30, 2013, the

Retirement Fund held U.S. Agency obligations of $2,003,720.



Corporate bonds that are rated as investment grade as defined by a nationally recognized rating agency.

At June 30, 2013, the Retirement Fund held U.S. corporate bonds of $5,946,662 and international

corporate bonds of $518,371.



Asset-backed investments. At June 30, 2013, the Retirement Fund held asset-backed investments of

$1,567,391.



Mortgage investments are authorized to the extent that they are secured by first mortgages on improved

real property located in the state of Georgia. At June 30, 2013, the Retirement Fund held mortgage

investments of $659,760.

Equity securities are also authorized by the Public Retirement System Investment Authority Law for investment as a complement to the Retirement Fund's fixed income portfolio and as a long-term inflation hedge. By statute, no more than 75% of the total invested assets on a historical cost basis may be placed in equities. Equity holdings in any one corporation may not exceed 5% of the total portfolio. The equity portfolio is managed by the Retirement Fund in conjunction with independent advisors. Buy/sell decisions are based on securities meeting rating criteria established by the investment policy of the Retirement Fund. Equity trades are approved and executed by the independent advisors. Common stocks eligible for investment must meet the Objectives and Guidelines of the Retirement Fund investment policy. Equity investments are authorized in the following instruments:

Mutual funds are investments that are made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets. At June 30, 2013, the Retirement Fund held mutual funds - equity of $3,746,519.



Domestic equities are those securities considered by The Official Code of Georgia Annotated (O.C.G.A.)

to be domiciled in the United States. At June 30, 2013, the Retirement Fund held domestic equities of

$40,039,956.

12

JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA (A Component Unit of the State of Georgia)
Notes to Financial Statements
For the Year Ended June 30, 2013

NOTE 3 - DEPOSITS AND INVESTMENTS (continued)



International equities will be a diversified portfolio including both developed and emerging countries.

These securities are not considered by the O.C.G.A. to be domiciled in the United States. At June 30,

2013, the Retirement Fund held international equities of $10,131,747.



Real Estate Investment Trust (REIT) is a type of security that sells like a stock on the major exchanges

and invests in real estate directly, either through properties or mortgages. At June 30, 2013, the Annuity

and Benefit Fund held shares of REITs of $462,033.

Interest Rate Risk: Interest rate risk is the risk that changes in interest rates of debt investments will adversely affect the fair value of an investment. The Retirement Fund does not address specific policies for managing interest rate risk. The following table provides information about the Retirement Fund's interest rate risk:

U. S. Treasury Obligations U. S. Agency Obligations Corporate Debt
Domes tic International Asset-backed Securities Domes tic Mortgage-backed Securities Total Debt Securities

Total Fair Value $ 1,404,547
2,003,720

Less than

3 Months

$

-

-

Maturity Periods

4 - 12 Months 1 - 5 Years 6 - 10 Years

$

- $ 890,540 $ 514,007

-

736,127

-

More than

10 Years

$

-

1,267,593

5,946,662

110,439

169,078

3,553,507

2,113,638

-

518,371

-

-

459,976

58,395

-

1,567,391

-

38,404

1,434,505

94,482

-

659,760

-

-

-

-

659,760

12,100,451 $ 110,439 $ 207,482 $ 7,074,655 $ 2,780,522 $ 1,927,353

Mutual Funds - Equity Equity Securities
Domes tic International Real Estate Investment Trust
Total Investments

3,746,519
40,039,956 10,131,747
462,033
$ 66,480,706

Credit Risk: Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations to the Retirement Fund. State law limits investments to investment grade securities. The Retirement Fund's investment policy requires that purchases of bonds be restricted to bonds rated as investment grade rated BAA (or equivalent) or better as defined by a nationally recognized rating agency. Obligations of the U.S. Government or obligations explicitly guaranteed by the U.S. Government are not considered to have credit risk and do not require disclosure of credit quality. The quality ratings of investments in fixed income securities as described by Standard & Poor's and by Moody's Investor Services, which are nationally recognized statistical rating organizations, at June 30, 2013 are shown in the chart on the following page.

13

JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA (A Component Unit of the State of Georgia)
Notes to Financial Statements
For the Year Ended June 30, 2013

NOTE 3 - DEPOSITS AND INVESTMENTS (continued)
Investment Type Domestic obligations:
U.S. Treasuries

Standard and Poor's /Moody's quality rating

June 30, 2013 fair value

$

1,404,547

U.S. Agencies Total U.S. Agencies

AA/AAA AA/Unrated
Unrated

1,683,993 130,751 188,976
2,003,720

Corporates Total corporates

AA/Aa AA/A A/A A/Baa BBB/Baa

143,919 401,650 2,163,066 701,993 2,536,034 5,946,662

Asset-backed investments Total Asset-backed investments

AAA/Aaa AAA/Unrated Unrated/Aaa

905,192 156,286 505,913 1,567,391

Mortgage investments Total Mortgage investments

AAA/Aaa AAA/Unrated Unrated/Aaa

329,227 143,653 186,880 659,760

International obligations: Corporates
Total International obligations

AA/Aa A/Aa A/A BBB/Baa

73,282 67,960 150,827 226,302 518,371

Total fixed income investments

$

12,100,451

14

JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA (A Component Unit of the State of Georgia)
Notes to Financial Statements
For the Year Ended June 30, 2013

NOTE 3 - DEPOSITS AND INVESTMENTS (continued)
Concentration of Credit Risk: Concentration of credit risk is the risk of loss attributed to the magnitude of the Retirement Fund's investment in a single issue. The Retirement Fund's concentration of credit risk policy limits investments to no more than 5% in any one issue. On June 30, 2013, the Retirement Fund did not have any investments in any one organization which represented greater than 5% of total investments.

NOTE 4 - CONTRIBUTIONS

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 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, 2013, which reflected the proceeds of designated portions of fines and forfeitures for violation of traffic laws and a designated portion of fees collected for civil filings and processing of marriage and pistol licenses as the employer contribution are insufficient to fund the plan in conformity with the minimum funding standards. Member contribution requirements are set forth in O.C.G.A. Section 47-11-40 and are not actuarially determined.

Administrative expenses are generally funded from current member and court fine and fee contributions. Investment earnings may be utilized to fund any expenses in excess of contributions.

A description of 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) MEMBERS CONTRIBUTIONS: Members must contribute $105 per month as dues; provided, however, that requirement for such dues shall cease after the member has paid such dues for a period of 20 years.

(B) PROBATE COURT CONTRIBUTIONS: For each criminal and quasi-criminal case involving the violation of State of Georgia traffic laws which is before a judge of the probate court and in which case a fine is collected or a bond is forfeited, $3.00 shall be collected and paid to the board.

(C) LICENSE CONTRIBUTIONS:

For civil filings

$2.00

For marriage

20% of fee

For pistol

$1.00

15

JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA (A Component Unit of the State of Georgia)
Notes to Financial Statements
For the Year Ended June 30, 2013

NOTE 4 - CONTRIBUTIONS (continued) Actual contributions for the year ended June 30, 2013, were as follows:

Member Contributions Fines and Forfeitures Other Fees
Civil Filing Fees Marriage License Fees Courts Interest and Penalties Pistol License Fees
Total

$

153,022

529,624

$

111,502

482,142

12

166,679

760,335

$

1,442,981

NOTE 5 - FUNDED STATUS AND FUNDING PROGRESS

The funded status of the plan as of July 1, 2013, the most recent actuarial valuation date, is as follows:

Actuarial value of plan
assets (a)

Actuarial accrued liability (AAL) entry age
(b)

Unfunded AAL (UAAL)
(funding excess) (b-a)

Funding ratio (a/b)

Annual covered payroll
(c)

UAAL (funding excess) as a percentage of covered payroll [(b-a)c]

$ 60,975,517 $ 61,138,263 $

162,746

99.7% N/A

N/A

The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information about whether the actuarial values of plan assets are increasing or decreasing over time relative to the AAL for benefits.

16

JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA (A Component Unit of the State of Georgia)
Notes to Financial Statements
For the Year Ended June 30, 2013

NOTE 5 - FUNDED STATUS AND FUNDING PROGRESS (continued)

Additional information as of the latest actuarial valuation follows:

Valuation Date

July 1, 2013

Actuarial cost method

Entry age normal

Amortization method

Level dollar, open

Remaining amortization period
Asset valuation method
Actuarial assumptions: Investment rate of return (includes inflation) Projected salary increases Cost-of-living adjustments

30 years Five-year smoothed market value
7% N/A 2%

NOTE 6 - SUBSEQUENT EVENT
On April 29, 2014, Governor Nathan Deal signed House Bill 601 which amends the Official Code of Georgia Annotated (OCGA) 47-11-1 by adding the terms "adjusted annual income" and "adjusted monthly income". The bill defines "adjusted annual income" to mean the maximum income determined by application of paragraph (5) of Code Section 47-11-40 and "adjusted monthly income" to mean a sum equal to one-twelfth of the adjusted annual income. The bill also amends OCGA 47-11-22 in that benefit increases that are awarded by the board will not be greater than 1.5 percent in any six-month period. This bill has an effective date of July 1, 2014.

17

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REQUIRED SUPPLEMENTARY INFORMATION

JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA (A Component Unit of the State of Georgia)
Schedule of Funding Progress
June 30, 2013

Actuarial valuation
date
July 1, 2009 $
July 1, 2011
July 1, 2013

Actuarial value of plan assets
(a)

Actuarial accrued liability (AAL) entry age
(b)

55,690,298 $

53,714,007 $

57,801,942

56,937,420

60,975,517

61,138,263

Unfunded AAL)/ (funded excess) (b-a)
(1,976,291)
(864,522)
162,746

Funded ratio (a/b)

Annual covered payroll
( c )

103.7% N/A

101.5% N/A

99.7% N/A

Unfunded AAL (funded
excess) as percentage of
covered payroll [(b-a)/c]
N/A
N/A
N/A

20

JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA (A Component Unit of the State of Georgia)
Schedule of Contributions from the Employer and Other Contributing Entities
June 30, 2013

Fiscal Year
2008 2009 2010 2011 2012 2013

Annual required contribution

$

623,378

841,975

1,047,068

1,186,191

1,180,024

1,291,074

Percentage contributed
192% 144% 108% 97% 95% 99.9%

21

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SECTION II - REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

(This page intentionally left blank)

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SECTION III - SCHEDULE OF FINDINGS AND QUESTIONED COSTS

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JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA (A Component Unit of the State of Georgia)
Schedule of Findings and Questioned Costs
For the Year Ended June 30, 2013

SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-949-12-01

Further Action Not Warranted

FS-949-12-01 Failure to Meet Deadlines Established by the State Accounting Office

Control Category:
Internal Control Impact: Compliance Impact:

Accounting Controls (Overall) Financial Reporting and Disclosure Significant Deficiency Nonmaterial Noncompliance

This finding was repeated in the current year. Please see finding # FS-949-13-01.

SCHEDULE OF FINDINGS AND QUESTIONED COSTS

FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FS-949-13-01 Forms Submitted Late to the State Accounting Office

Control Category:
Internal Control Impact: Compliance Impact:

Accounting Controls (Overall) Financial Reporting and Disclosure Significant Deficiency Nonmaterial Noncompliance

Requested forms and information were not submitted to the State Accounting Office (SAO) by the prescribed deadlines.

Criteria: As prescribed by O.C.G.A. 50-5B-4, "All organizations of state government...shall conform to and comply with the rules, regulations, policies, procedures, and forms devised, promulgated, and installed by the state accounting officer. All organizations of state government shall submit statements, reports, information, and data necessary to enable the state accounting officer to complete the reports required under this code section... All organizations of state government shall provide lease information to the state accounting officer to permit the state accounting officer to properly account for and report all capital and operating leases. All information and reports required in this Code section shall be provided in the form and within the time frame prescribed by the state accounting officer."

31

JUDGES OF THE PROBATE COURTS RETIREMENT FUND OF GEORGIA (A Component Unit of the State of Georgia)
Schedule of Findings and Questioned Costs
For the Year Ended June 30, 2013
Condition: The Judges of the Probate Courts Retirement Fund of Georgia (Fund) did not meet deadlines established by SAO for the submission of forms, data, and other information required for the preparation of the Comprehensive Annual Financial Report (CAFR). Our review revealed the following was not submitted to SAO by the prescribed deadlines:
- Allowance for Doubtful Accounts - Cash and Deposits - Lease Agreement Data - Year-end Questionnaire
Cause: In discussing this condition with Fund personnel, they stated that the forms were late due to a lack of personnel and a lack of understanding of the forms.
Effect or Potential Effect: Not submitting the required information to SAO by the prescribed deadlines results in delays in the preparation of the CAFR; delays which could result in that report not being issued by its deadline and could negatively impact the State's bond rating.
Recommendation: The Judges of the Probate Courts Retirement Fund of Georgia should implement policies and procedures, as needed, to ensure that all forms, data, and other information required by SAO for the preparation of the CAFR is submitted to SAO by the prescribed deadlines.
View of Responsible Officials and Corrective Action Plans: The Retirement Fund did not provide staff to have the reports completed on time.
The Judges of Probate Courts Retirement Fund did not have necessary trained staff in order to complete the forms on time. Additional staff has been hired and is currently in training to prevent the late reporting in the future.
Contact Person: Robert Carter, Executive Director Telephone: (770)228-8461 Fax: (770)412-1236 email: bcarterpoab@aol.com
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