Review report, Peace Officers' Annuity and Benefit Fund of Georgia, a component unit of the state of Georgia, year ended June 30, 1996

GA
A~oo
.oR\
P l\-"?:> \ e'(l?l S- C\ fc
REVIEW REPORT PEACE OFFICERS' ANNUITY AND
BENEFIT FUND OF GEORGIA A COMPONENT UNIT OF THE STATE OF GEORGIA
YEAR ENDED JUNE 30, 1996

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

EXHIBITS

FINANCIAL STATEMENTS

A STATEMENT OF ASSETS AND FUND EQUITY

ARISING FROM CASH TRANSACTIONS

FIDUCIARY FUND TYPE - PENSION TRUST FUND

2

B STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS

PENSION TRUST FUND

3

C NOTES TO THE FINANCIAL STATEMENTS

4

SUPPLEMENTARY INFORMATION

SCHEDULES

1 CASH AND CASH EQUIVALENTS

19

2 SCHEDULE OF INVESTMENT ACTIVITIES

20

3 SCHEDULE OF ADMINISTRATIVE EXPENSES PAID BY OBJECT

28

4 RECONCILIATION OF SALARIES AND TRAVEL

29

SECTION II FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
January 21, 1997

Honorable Zell Miller, Governor Members ofthe General Assembly of Georgia Members of the Board of Commissioners ofthe Peace Officers' Annuity and Benefit Fund of Georgia
and Honorable Robert W. Carter, Secretary-Treasurer
INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have reviewed the accompanying financial statements (Exhibits A through C) of the Peace Officers' Annuity and Benefit Fund of Georgia as of and for the year ended June 30, 1996, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. As described in Note 2, these financial statements were prepared on the basis of cash receipts and disbursements, which is a comprehensive basis of accounting other than generally accepted accounting principles. All information included in these financial statements is the representation of the management of the Peace Officers' Annuity and Benefit Fund of Georgia.
A review consists principally of inquiries of agency personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware ofany 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.
Our review was made for the purpose ofexpressing limited assurance that there were no material modifications that should be made to the financial statements in order for them to be in conformity with the basis of accounting described in Note 2. The accompanying supplementary information (Schedules 1 through 4) is presented only for supplementary analysis purposes. Such information has been subjected to the inquiries and
96ARL-4C

analytical procedures applied in the review of the financial statements and we are not aware of any material modifications that should be made thereto.
Respectfully submitted,

CLV:gp
96ARL-4C

Claude L. Vickers State Auditor

FINANCIAL STATEMENTS - 1-

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA STATEMENT OF ASSETS AND FUND EQUITY ARISING FROM CASH TRANSACTIONS
FIDUCIARY FUND TYPE - PENSION TRUST FUND JUNE 30, 1996

EXHIBIT "A"

ASSETS
Cash and Cash Equivalents - Schedule "1"
Investments - Schedule "2"
U. S. Government Securities, at Cost (Market Value $68,074,478.69) Stock, at Cost (Market Value $79,657,839.13) Bonds and Debentures, at Cost (Market Value $13,137,205.00) Notes, at Cost (Market Value $24,374,148.40) Investment Accounts, at Cost (Market Value $50,618.79) Investment Pool, at Cost (Market Value $19,002,565.64) Mutual Funds, at Cost (Market Value $14,466,516.69)
Fixed Assets Land Building Equipment
Total Assets

$

452,001.59

$ 68,349,767.79 60,929,937.04 13,513,130.00 24,439,882.18 50,618.79 11,872,443.72 14.466,516.69

193,622,296.21

$

5,000.00

50,961.28

147,826.28

203,787.56

$ 194,278,085.36

Investment in Fixed Assets Fund Balance
Reserved for Benefits

FUND EqUITY

$

203,787.56

194,074,297.80

Total Fund Equity

$ 194,278,085.36

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-

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS PENSION TRUST FUND YEAR ENDED JUNE 30, 1996

EXHIBITa-

CASH RECEIPTS
REVENUES COLLECTED
OTHER REVENUES RETAINED Member Contributions
Fines and Bond Forfeitures
Investment Income Schedule "2" Interest Received Dividends Received Gain or (Loss) on Sale of Investments (Net) Distributions
Other Sources Commission Rebates Contract with State Agency Georgia Department of Revenue For Collection of Fees from Fines and Bond Forfeitures Donations Interest Received on Delinquent Member Contributions Interest Received on N.O.W. Account Penalty on Member Withdrawal Prior Year Void Checks
Total Cash Receipts
BALANCE JULY 1
Cash and Cash Equivalents Investments

$

879,409.76

10,787,518.23

$ 8,183,857.39 2,233,823.38 3,673,260.76 2,088.00

14,093,029.53

$

47.480.92

37,800.00 1.912.77
21,576.84 32.376.73
2,389.28 107.11
$

143,643.65 25,903,601.17

$

618,591.37

177,231,926.07

177,850,517.44

$ 203,754,118.61

EXPENSES PAID
Benefits Death Benefits Disability Benefits Retirement Benefits Survivorship Benefits
Administration - Schedule 3 Personal Services Operating Expenses
Refunds to Terminated Members
Total Disbursements
BALANCE - JUNE 30
Cash and Cash Equivalents Investments

DISBURSEMENTS

See Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information.
The notes to the financial statements are an integral part of this, statement.
-3-

$

179,500.00

805,599.39

6,712,617.14

1,009,243.96 $ 8,706.960.49

$

201,286.61

712,805.60

914,092.21

58.768.11

$ 9,679,820.81

$

452,001.59

193,622,296.21

194,074,297.80

$ 203,754,118.61

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA EXHIBIT "C" NOTES TO THE FINANCIAL STATEMENTS JUNE 30.1996

NOTE 1: PLAN DESCRIPTION

ORGANIZAnON AND PURPOSE The Peace Officers' Annuity and Benefit Fund of Georgia is a multiple employer, defined benefit pension plan established in 1950 by the General Assembly of Georgia for the purpose of paying retirement benefits to the peace officers of the State of Georgia. The Board of Commissioners of the Annuity and Benefit Fund is comprised of six (6) members and consists of the Governor or his designee, an appointee of the Governor other than the Attorney General, the Commissioner ofInsurance or his designee, and three (3) active or retired peace officers appointed by the Governor in accordance with the Official Code of Georgia Annotated Section 47-17-20. The Peace Officers' Annuity and Benefit Fund of Georgia is considered a component unit ofthe State ofGeorgia and is included within the State ofGeorgia reporting entity for financial reporting purposes because ofthe significance ofits 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.

Individuals eligible to apply for membership in the Annuity and Benefit Fund are defined in the Official Code ofGeorgia Annotated Section 47-17-1 and generally include any individual employed by the State ofGeorgia or any municipality, county or other political subdivision thereof for the preservation of public order, the protection oflife and property or the detection of crime and full-time employees of the Annuity and Benefit Fund. The Annuity and Benefit Fund is funded through a combination of member contributions paid by the affected member and designated portions offines and forfeitures for criminal and quasi-criminal cases involving the violation of State of Georgia statutes or municipal ordinances.

CURRENT MEMBERSHIP The following analysis compares the membership ofthe Peace Officers' Annuity and Benefit Fund of Georgia at June 30, 1996, to that of the prior year:

Retirees and Beneficiaries Currently Receiving Benefits and Terminated Members Entitled to Benefits but not yet Receiving Them For Disability For Retirement For Survivorship
Number of Active Members Vested Nonvested
(1) Not Available

June 30. 1996 June 30. 1995

205 1,169
---2.li
1.589
(1)
----CD
7,644

195 1,141
203
1.539
(1)
----CD
6,849

-4-

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA EXHIBIT "C" NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1996
NOTE 1: PLAN DESCRIPTION
CURRENT MEMBERSHIP A detailed analysis ofindividuals receiving benefits during the fiscal year ended June 30, 1996, is on file in the office of the State Auditor.
PLAN BENEFITS The Peace Officers' Annuity and Benefit Fund of Georgia provides retirement as well as death and disability benefits. Benefit provisions and vesting requirements are established by statute and may be amended only by the State ofGeorgia General Assembly. A description of plan benefits and vesting requirements is as follows:
(A) RETIREMENT CONDITIONS: Retirement benefits vest after ten (10) years of credited service. Normal retirement is the earlier of:
(1) The later of the first day of the month next following the member's fifty-fifth birthday or the first day of the month following the completion often (10) years of service, or
(2) The first day of the month following the completion of thirty (30) years of service, regardless of age.
(B) RETIREMENT BENEFITS: The normal monthly benefit is calculated by multiplying $19.91 by the number ofyears ofcredited service. Thirty (30) years ofcredited service is the maximum amount which may be used for the calculation.
(C) OPTIONAL BENEFITS: The following optional benefit provisions are available to members upon application for retirement benefits:
(1) 100% Joint Life Annuity
(2) 50% Joint Life Annuity
The monthly benefit amount paid under the optional provisions is the actuarial equivalent of the normal monthly retirement benefit and is payable until remarriage.
(D) DISABILITY BENEFITS: Disability benefits vest after twenty (20) years of credited service. Subject to the approval of the Board of Commissioners, any active member of the Annuity and Benefit Fund with less than twenty (20) years of credited service who becomes totally and permanently disabled due to disease or injury may be granted a monthly pension in the amount of$308.00. Any active member of the Annuity and Benefit Fund with more than twenty (20) years of credited service who meets the criteria cited above may qualify for a monthly pension calculated in the same manner as a retirement based on age and service.
-5-

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA EXHIBIT "C"
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30.1996

NOTE 1: PLAN DESCRIPTION

PLAN BENEFITS (E) DEATH BENEFITS:
{l) If a member dies before retirement, the beneficiary is entitled to a lump sum settlement in the amount of$3,500.00.

(2) Ifa member dies while in the line of duty and has a designated beneficiary, that beneficiary will be eligible for a lump sum benefit of$5,500.00.

(3) Ifa member dies after his/her retirement date, the beneficiary is entitled to a death payment that is decreased by the amount received by the member in retirement until they have received a total of $1,000.00 in pension. After they have received the first $1,000.00 in pension, the death payment remains at the $2,500.00 level.

(4) Ifa member dies before or after the retirement date, but before benefits begin, and has an eligible spouse, that spouse may elect to receive a reduced monthly annuity.

(F) TERMINATION: At any time before a member begins drawing retirement benefits the member may request a 95% refund ofall dues paid into the Annuity and Benefit Fund. Any interest or penalties paid are not refundable.

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

(A) MEMBER'S CONTRIBUTIONS: Members must contribute $10.00 per month of credited service.

(B) COURT FINES AND FORFEITURES: For each criminal and quasi-criminal case involving the violation of State of Georgia laws, county ordinances or municipal ordinances, a sum based upon the scale set forth below is collected and remitted to the Annuity and Benefit Fund:

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

$ 3.00

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

$ 4.00

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

$ 5.00

For fines or bond forfeitures in excess of$100.00

5%

- 6-

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA EXIllBIT "c"
NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1996
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PLAN ASSET MATTERS
FUND COMPRISING FINANCIAL STATEMENTS The Peace Officers' Annuity and Benefit 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 this report 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 Peace Officers' Annuity and Benefit Fund ofGeorgia prepares its financial statements on the basis of cash receipts and disbursements, which is a comprehensive basis of accounting other than generally accepted accounting principles. This basis of accounting is defined as that method of accounting in which certain revenues and related assets are recognized when received rather than when earned, and certain expenses are recognized when paid rather than when the obligation is incurred.
CASH AND CASH EQUIVALENTS Cash and Cash Equivalents include currency on hand and demand deposits with a bank.
INVESTMENTS The Official Code of Georgia Annotated Section 47-17-23 states that the Board of Commissioners of the Peace Officers' Annuity and Benefit Fund ofGeorgia shall have full power to invest and reinvest funds subject to the terms and conditions imposed by the laws of the State of Georgia upon domestic life insurance companies in the making and disposing of their investments. In addition, the Board is restricted to invest no more than 5()OJO ofthe funds or assets in equities. Statutory provisions governing the investments of domestic life insurance companies are enumerated in Title 33, Chapter 11 ofthe Official Code of Georgia Annotated. The significant forms ofinvestment in accordance with these statutes and available to the Annuity and Benefit Fund are as follows:
(1) Deposits in checking, savings, certificates ofdeposit or similar evidences of deposits in banks, trust companies, savings and loan associations and building and loan associations which have qualified for the insurance protection afforded by the Federal Deposit Insurance Corporation.
(2) Securities of any open-end management type investment company or investment trust registered with the Securities and Exchange Commission, provided that the investment company or trust has been organized for not less than ten years or has assets of not less than $25,000,000.00 at the date o f investment.
-7-

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA EXHIBIT "C"
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PLAN ASSET MATTERS
INVESTMENTS (3) Bonds, notes, securities or other evidences of indebtedness which are direct obligations of the government ofthe United States of America.
(4) Loans guaranteed as to principal and interest by the government of the United States of America, to the extent of such guaranty.
(5) Bonds, notes, warrants or securities not in default which are direct obligations of any state ofthe United States of America or of the District of Columbia, or of the government of Canada or any province of Canada, or for which the full faith and credit of such state, district, government or province has been pledged for the payment of principal and interest.
(6) Obligations oflocal units of government or government related entities located within the United States of America or Canada, subject to certain conditions.
(7) Dividend paying stocks, common or preferred, of any solvent corporation created or existing under the laws of the United States of America or any state or of the District of Columbia, subject to certain conditions.
(8) Bonds, debentures, notes, or other evidences of indebtedness of any solvent corporation created or existing under the laws of the United States of America or of any state or of the District of Columbia, subject to certain conditions.
(9) Bonds, debentures, notes, or other evidences of indebtedness which are secured by first mortgage or deed of trust or deed to secure debt upon fee simple, unencumbered improved real estate or income producing real property located in the United States of America or Canada, subject to certain conditions.
(10) Purchase money mortgages or like securities received upon the sale or exchange of real property acquired.
(11) Real estate acquired for the purpose ofleasing same to any person, firm or corporation, or in real estate already leased to any person, firm or corporation, subject to certain conditions.
Investments are defined as those financial instruments with terms in excess of three months from the date of purchase and certain other securities held for the production of revenue. In addition, funds on deposit with the Annuity and Benefit Fund's investment custodian for purposes of continual investment are reflected as Investments regardless of the term of the instruments. The method used to exchange or "swap" securities is the par-for-par basis with the proviso that exceptions may be made on quantities in order to even out odd lot transactions and provided further that the amount of such differences shall not be more than 100 bonds of
on $1,000 denominations. Any pay-up a swap must be recouped by additional income over a seven-year
period or over the life ofthe bond to call, whichever is shorter. Pay-up shall not be greater than the differenc~
-8-

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA EXIllBIT "C" NOTES TO THE FINANCIAL STATEMENTS JUNE 3D. 1996
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PLAN ASSET MATTERS
INVESTMENTS regardless of the term of the instruments. Investments in U. S. Government securities, stock, bonds and debentures, notes, investment accounts, mutual funds, real estate limited partnerships and investment pools are recorded at cost. Accrued interest purchased, premiums or discounts on bonds and debentures and U. S. Government securities are reflected as a part of cost and are not amortized over the remaining life of the security. The market values reflected on Exhibit "A" ofthis report were based on valuations appearing in the Annuity and Benefit Fund's Investment Custodian Trust Report at June 30, 1996.
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 35% ofthe net assets available for benefits are invested in U. S. Government securities. The Annuity and Benefit Fund has no other investments in securities of governmental, commercial or industrial organizations whose market value exceeds 5% or more ofthe net assets available for benefits.
Statutory provisions governing the investment of funds by the Peace Officers' Annuity and Benefit Fund of Georgia do not appear to provide for investments in real estate limited partnerships. The Annuity and Benefit Fund invested in these instruments during the year under review; however, no investment balances ofthis type were present at June 30, 1996.
The Peace Officers' Annuity and Benefit Fund of Georgia participates in an investment pool managed by the Employees'Retirement System ofGeorgia (ERS). Disclosures concerning risk exposure from investments in derivatives or similar investments made through the ERS investment pool, if any, are located in the ERS financial report.
The Annuity and Benefit Fund also has funds invested in open-end mutual funds. The Annuity and Benefit Fund is not aware ofthe risk exposure resulting from investments in derivatives or similar investments, if any, through these open-end mutual funds.
FIXED ASSETS Fixed assets are recorded as expenditures at the time ofpurchase. No depreciation has been provided on fixed assets. Fixed assets are reflected on Exhibit "A" for informational purposes only.
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, 1996, are categorized below in order to provide information about the extent to which such deposits are exposed to custodial credit risk.
-9-

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA EXHIBIT "C" NOTES TO THE FINANCIAL STATEMENTS JUNE 30,1996

NOTE 3: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS

CATEGORIZATION OF DEPOSITS Category 1 - Amounts covered by depository insurance or collateralized with securities (at market value) held by the Annuity and Benefit Fund or by its agent in the Annuity and Benefit 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 Annuity and Benefit 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 Annuity and Benefit Fund's name, and amounts uncollateralized.

Cash Deposits

Carrying Amount

Bank Balance

Risk Categories

2

3

$ 451 801.59 $ 75378268 $ 100000 00 $,==:=:o~o~o $ 65378268

CATEGORIZATION OF INVESTMENTS For purposes of analysis of custodial credit risk, investments consist ofU. S. Government securities, stock, bonds and debentures, notes and investment accounts. Investments are stated at 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 Annuity and Benefit Fund or its agent in the Annuity and Benefit Fund's name.

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

The carrying amounts of investment balances as ofJune 30, 1996, are categorized below. These amounts include amounts maintained in an investment pool by the Employees' Retirement System of Georgia and openend mutual funds which are not subject to risk categorization.

- 10-

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA EXIllBIT "C" NOTES TO THE FINANCIAL STATEMENTS JUNE 30.1996

NOTE 3: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS

CATEGORIZATION OF INVESTMENTS

Type ofInvestment

Risk Categories 2

U. S. Government Securities Stock Bonds and Debentures Notes Investment Accounts

$ 68,349,767.79 $ 60,929,937.04 13,513,130.00 24,439,882.18 50,618.79

0.00 $

Total

$16728333580 $

000 $

Government Investment Pool

Mutual Funds (Open-End)

Carrying

Market

3

Amount

Value

0.00 $ 68,349,767.79 $ 68,074,478.69

60,929,937.04 79,657,839.13

13,513,130.00 13,137,205.00

24,439,882.18 24,374,148.40

50,618.79

50,618.79

000 $167,283,335.80 $185,294,290.01

11,872,443.72 19,002,565.64

14.466.516.69 14.466.516.69

$19362229621 $218763372 34

NOTE 4: FUNDING STATUS AND PROGRESS

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

In accordance with policies prescribed or permitted by statutes of the State of Georgia, the Peace Officers' Annuity and Benefit Fund of Georgia does not calculate the pension obligation in the manner prescribed by the Governmental Accounting Standards Board. The actuary engaged by the Annuity and Benefit Fund utilized a combination of the entry age actuarial cost method and the unit credit actuarial cost method to calculate the actuarial present value of accumulated plan benefits at the valuation date of July 1, 1995. The valuation results with regard to the funded status of the plan is reflected below:

- 11 -

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA EXHIBIT "C" NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1996

NOTE 4: FUNDING STATUS AND PROGRESS

VALUATION RESULTS Actuarial Present Value ofAccumulated Plan Benefits Vested Benefits Participants Currently Receiving Payments Other Participants Nonvested Benefits

$ 70,875,775.00 63,307,766.00 7,131.580.00

Total

$141,315,121.00

Net Assets Available for Benefits, at Cost (Market Value $192,306,762.38)

177,850,517.00

Assets in Excess of Actuarial Present Value of Accumulated Plan Benefits (July 1, 1995)

$ 36.535.396 00

ACTUARIAL ASSUMPTIONS The most recent actuarial investigation of the Annuity and Benefit Fund was performed by the consulting actuary engaged by the Peace Officers' Annuity and Benefit Fund of Georgia using census data as ofJuly 1, 1995. Official Code of Georgia Annotated Section 47-1-3 requires local retirement systems to have an actuarial investigation once every three years. Significant actuarial assumptions used include:

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

(B) Mortality Rates: The 1971 Towers, Perrin, Forster & Crosby Forecast Mortality Table. This table provides separate annual rates of mortality for males and females.

(C) Withdrawal Rates: Rates set forth by table of annual rates ofturnover for males and females developed by Towers, Perrin, Forster & Crosby.

(D) Retirement Age: It has been assumed that members will retire upon the attainment of age sixty-five (65), or earlier of(a) age fifty-five (55) (or age on completion often (10) years of service, if older), or (b) age at completion of thirty (30) years of service.

(E) Funding Method: Entry age actuarial cost method and unit credit actuarial cost method.

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

- 12 -

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA EXlllBIT "c"
NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1996
NOTE 4: FUNDING STATUS AND PROGRESS
ACTUARIAL ASSUMPTIONS (G) Changes in Actuarial Assumptions: For the actuarial valuation at July 1, 1995, the following changes
in the actuarial assumptions were made from the actuarial valuation at July 1, 1992.
(1) The rate ofretum on investments was increased from 6% per annum to 7% per annum.
The effect of this change was to decrease the unfunded actuarial accrued liability by $18,382,183.00.
(H) Changes in Benefit Provisions: The following changes in the benefit provisions occurred since the actuarial valuation at July 1, 1992.
(1) Cost-of-living adjustments increased the normal retirement benefit from $18.50 to $19.91 for the factor multiplied by the number ofyears of credited service to obtain the monthly retirement benefit. In addition, monthly disability benefits increased from $287.00 to $308.00.
The effect of this change was to increase the unfunded actuarial accrued liability by $5,195,934.00.
(2) Vesting for retirement benefits was decreased from twenty years to ten years of creditable servIce.
The effect of this change was to increase the unfunded actuarial accrued liability by $3,409,467.00.
NOTE 5: CONTRIBUTIONS REQUIRED AND MADE
FUNDING POLICY The minimum annual employer contribution requirements are set forth in the Official Code of Georgia Annotated (O.C.G.A) Section 47-20-10 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, 1995, which reflected the proceeds of designated portions of fines and bond forfeitures as the employer contribution, indicated that the minimum employer contribution level was being met. Member contribution requirements are set forth in O.C.G.A Section 47-17-44 and are not actuarially determined. Covered payroll information was not available.
- 13 -

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA EXHIBIT "c"
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30.1996

NOTE 5: CONTRIBUTIONS REOUIRED AND MADE

FUNDING REQUIREMENTS Actual contributions for the year ended June 30, 1996, were as follows:

Member Contributions Fines and Bond Forfeitures

$ 879,409.76 10,787.518.23

$11.666.927.99

NOTE 6: mSTORICAL TREND INFORMATION

Statement No.5 issued by the Governmental Accounting Standards Board requires the disclosure of certain 10-year historical trend data and an explanation that this data provide information about progress made in accumulating sufficient assets to pay benefits when due.

All required historical trend data for the Peace Officers' Annuity and Benefit Fund of Georgia were not available at the time ofthis report. In addition, trend information relative to the pension benefit obligation was not available. Available trend data are as follows:

REVENUES COLLECTED BY SOURCE AND EXPENSES PAID BY TYPE

REVENUES COLLECTED

Fiscal Year

Member Fines and Bond

Contributions Forfeitures

Other 0)

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996

$ 432,471.51 $ 7,160,829.69 $ 9,717,377.19$17,310,678.39 $ 446,189.54 $ 7,496,880.38 $ 8,739,952.70 $ 16,683,022.62 $ 473,408.28 $ 8,244,347.69 $ 8,699,313.34$17,417,069.31 $ 498,819.76 $ 8,345,910.23 $11,291,422.75 $ 20,136,152.74 $ 519,911.16 $ 8,716,897.45 $ 9,559,006.19 $ 18,795,814.80 $ 572,804.79 $ 9,571,653.48 $10,142,919.17 $ 20,287,377.44 $ 726,172.92 $ 9,670,470.75 $13,157,368.84 $ 23,554,012.51 $ 881,834.23 $10,243,046.25 $11,343,924.74 $ 22,468,805.22 $ 880,117.09 $10,194,379.23 $10,017,690.36 $ 21,092,186.68 $ 879,409.76 $10,787,518.23 $14,236,673.18 $ 25,903,601.17

- 14 -

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA EXHIBIT "C" NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

NOTE 6: HISTORICAL TREND INFORMATION

Fiscal Year

EXPENSES PAID Benefits Administration

Other (2)

Total

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996

$ 4,899,509.55 $ 413,435.18 $ $ 4,968,324.29 $ 447,211.91 $ $ 6,165,796.59 $ 496,177.36 $ $ 6,179,626.30 $ 518,930.55 $ $ 7,330,036.12 $ 552,085.02 $ $ 7,457,978.54 $ 560,965.79 $ $ 7,639,535.61 $ 650,036.60 $ $ 8,095,639.03 $ 762,579.47 $ $ 8,309,993.28 $ 788,007.44 $ $ 8,706,960.49 $ 914,092.21 $

64,516.15 $ 5,377,460.88 78,390.92 $ 5,493,927.12 57,665.24 $ 6,719,639.19 71,061.12 $ 6,769,617.97 46,716.27 $ 7,928,837.41 72,718.71 $ 8,091,663.04 67,123.04 $ 8,356,695.25 72,079.28 $ 8,930,297.78 57,954.63 $ 9,155,955.35 58,768.11 $ 9,679,820.81

(1) Includes investment income. (2) Includes refunds to terminated members.

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

NOTE 7: RISK MANAGEMENT

The Peace Officers' Annuity and Benefit 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 employees (workers' compensation); natural disaster; and unemployment compensation.

The Peace Officers' Annuity and Benefit Fund of Georgia has obtained commercial insurance for risk of loss associated with torts, assets, and workers' compensation. The Fund has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded insurance coverage in any of the past three years.

The Peace Officers' Annuity and Benefit Fund of Georgia has elected to self-insure for all losses related to errors or omissions, which includes, among other risks, risks for sexual harassment and discrimination. No losses related to errors or omissions have occurred in the past three years.

The Peace Officers' Annuity and Benefit Fund of Georgia has elected to self-insure with regard to unemployment insurance. Claims are accounted for on a cash basis and no losses related to unemployment insurance have occurred in the past three years.

- 15 -

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA EXlllBIT "C" NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1996

NOTE 8: CONTINGENCIES

Litigation, claims and assessments filed against the Peace Officers' Annuity and Benefit 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 fiscal year ended June 30, 1996.

At June 30, 1996, the Peace Officers' Annuity and Benefit Fund of Georgia had inactive members' dues on hand in the amount of$178,743.62. Ninety-five percent (95%) of such dues are refundable upon request of the inactive members.

NOTE 9: CHANGES IN FIXED ASSETS

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

Land

Building

Equipment

Total

Balance July 1, 1995

$ 5,000.00 $ 50,961.28 $ 143,427.90 $ 199,389.18

Additions

0.00

0.00

4,450.33

4,450.33

Deletions

0.00

0.00

51.95

51.95

Balance June 30, 1996

$ 5,000.00 $ 50,961.28 $ 147,826.28 $ 203,787.56

NOTE 10: BONDING INFORMATION

The Secretary-Treasurer ofthe Peace Officers' Annuity and Benefit Fund of Georgia is bonded in the amount of$100,000.00 under a Public Official Bond written by Employers Insurance ofWausau, their Bond No. 145005-129353, on which the premium has been paid to October 1, 1996

The Secretary-Treasurer and all employees of the Peace Officers' Annuity and Benefit Fund of Georgia are bonded under a Public Employees Blanket Bond written by Employers Insurance of Wausau, their Bond No. 1450-05-129353, on which the premium was paid to October 1, 1996. Under this agreement the Public Employee Dishonesty Coverage insures the Annuity and Benefit Fund to a maximum of $1,000,000.00 against loss sustained through fraudulent or dishonest acts by its employees. The Faithful Performance of Duty Coverage insures the Annuity and Benefit Fund to a maximum of$1,000,000.00 against loss sustained from failure of its employees to perform faithfully their duties or to account properly for all monies and property received by virtue of their position or employment.

- 16 -

SUPPLEMENTARY INFORMATION - 17 -

Blcv\f"'-\L.
'\) l~

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA CASH AND CASH EqUIVALENTS
JUNE 30, 1996

SCHEDULE "1"

INTEREST BEARING ACCOUNTS First National Bank of Griffin, .Griffin, Georgia
OTHER Cash on Hand

$ 451,801.59 200.00

$ ==4=5=:2,=00==:1=.5=9

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
-19-

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA SCHEDULE OF INVESTMENT ACTMTIES YEAR ENDED JUNE 30, 1996

U, S, GOVERNMENT SECURITIES Wachovia Bank of Georgia, NA, Atlanta, Georgia
Federal Farm Credit Banks Federal Home Loan Banks Federal Home Loan Mortgage Corporation
Federal National Mortgage Association Government National Mortgage Association
Tennessee Valley Authority United States Department of Vet~rans Affairs United States Treasury Bonds United States Treasury Notes

MATURITY DATE

SHARES HELD
JUNE 30,1996

PAR VALUE

MARKET VALUE

INTEREST RATE

02125108 01121104 09124/99 10121196 02103105 06111102 02101101 03101101 07101102 07101102 11101109 11101109 01101126 11/10195 06110/99 03110104 09126103 12109/03 07/15123 04/15109
04/15109 04/15109 04/15109 06115124 10115125 04115126 04115126 03115126 08115114 06115101 07/15101 07/15101 06115101 07/15116 06115106 04/15119 06115106 04/15120 10/15116 08115117 12115119 04/15104 02115119 06115122 02115122 06115123 10/15108 12115/96 05115112 08115/00 11/15/16 08115123 08115125 04130/00 14/15198 11/15101 08115102 10/15199 11130197 02115103 08115103 09130/98 11/15/96

$ 2,000,000,00 $ 1,883,200.00

2,000,000,00

1,894,380,00

2,000,000.00

1,980,000.00

2,000,000.00

2,013,440,00

2,000,000.00

2,060,000.00

2,000,000.00

1,971,880.00

5,430.22

5,669.48

3O,908.n

32,270.56

17,358.17

18,122.97

281,735.40

281,932.61

718,954.93

733,779.78

899,584.52

918,979.56

1,950,348.77

1,826,618.64

1,000,000.00

1,000,000.00

1,060,620.00

1,000,000,00

968,750,00

2,000,000.00

1,894,280,00

1,985,000.00

1,902,503,40

205,936.81

208,253.60

37,345.53

37,006.81

421,444.19

417,621,69

475,676,62

471,362.23

339,807.54

336,725,49

424,123,34

428,364,57

2,036,881.23

2,007,590.88

1,016,817.29

1,002,195,46

978,620,84

964,548.27

2,445,959.91

2,410,787.01

24,329.93

28,610.29

295,381.01

306,191.96

8,474,08

8,832,45

23,561.52

24,557,94

34,572,95

36,035.04

211,268.66

223,587.74

239,302,72

248,949.01

10,187,16

10,759,07

391,671.63

407,459,91

151,056,34

153,604,66

24,147.65

24,651.37

379,741.06

387,332,08

148,939.04

151,451.64

94,150,23

99,151.49

9,181.21

9,689,02

255,717.81

258,914,28

234,156.43

237,376.08

388,125.32

392,491,73

1,126,942,82

1,097,709,92

2,000,000,00

2,000,000,00

1,982,500,00

1,300,000,00

2,000,000.00

2,101,240.00

3,500,000,00

3,172,960,00

2,000,000,00

2,000,000,00

2,020,940,00

2,000,000,00

2,059,060.00

1,000,000,00

1,043,910,00

1,500,000,00

1,488,045.00

1,000,000.00 2,000,000,00 2,000,000.00 2,000,000,00

1,000,160,00 1,964,680.00 1,904,680,00 1,940,320,00

6,740% 6,160% 6,150% 7.920% 8.750% 6,850% 9.500% 9,500% 9.500% 7.000% 8.000% 8.000%
10.600% 8,700% 6,900% 5.930% 6.390% 8,000% 7.000% 7.000% 7.000% 7,000% 8.000% 7.500% 7,500% 7.500% 7.500% 13,000% 8,500% 9,000% 9.000% 9,000% 9.000% 8.500% 9,000% 8.500% 8,000% 8,000% 8,000% 8,000% 10.000% 9.000% 8,000% 8,000% 8.000% 6,500% 4,600% 7.000% 8,375% 7.500% 6,250% 6.875% 6,750% 7,875% 7.500% 6,375% 6,000% 6,000% 6,250% 5.750% 4.750% 4.375%

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
20

SCHEDULE "2"

BALANCE JULY 1, 1995

INVESTMENTS

INVESTMENTS INVESTMENTS

MADE

REALIZED

BALANCE JUNE 30, 1996

INtEREST RECEIVED

DMDENDS RECENED

GAIN OR (LOSS) ON SALE OF INVESTMENTS DISTRIBUTIONS

$ 2,090,312.50

$ 2,090,312.50 $ 134,800.00

2,000,000.00

2.000,000.00

123,200.00

1.936,562.50

1,936,562.50

123,000.00

1,998.960.00

1.998.960.00

158,400.00

2.025,180.00

2,025,180.00

175,000.00

2,000.000.00

2.000.000.00

136.619.44

7,015.53

$

2,015.56

4,999.97

622.92

40,889.78

12,343.90

28,545.88

3,572.80

22,615.60

6,260.55

16,355.05

2.015.49

207,317.20

25.830.17

181,487.03

21,128.44

955,337.04

238,455.59

716,881.45

64,327.32

987.988.58

90,848.35

897,140.23

76,192.10

$ 1.938,256.25

9.544.16

1.928,712.09

46,617.81

1,000,000.00 968.750.00

1.000,000.00

. 968,750.00

53,000.00 87,000.00

904,700.00

904,700.00

69,000.00

2,000,000.00

2,000,000.00

118,600.00

1.803,829.05

1,803,829.05

126,841.50

233,057.56

30,925.19

202,132.37

17,094.25

42.453.42

4,749.26

37,704.16

2,767.90

482,137.72

56,794.63

425,343.09

31,864.33

529,312.30

49,187.84

480,124.46

35,254.99

383,153.63

40,265.80

342,887.83

24,969.84

492,750.78

75,835.56

416.915.22

38.605.03

2,On,148.75

21.263.95

2,050,884.80

94,719.27

1,022,341.46

1,711.10

1,020,630.36

9,119.58

966,525.00

1,360.19

965,164.81

8,774.86

2,416,314.57

3,986.61

2,412,327.96

21,935.08

49,376.92

388.43

48,988.49

3,184.47

441,537.65

81,211.11

360,326.54

29,285.11

9,371.04

1,329.54

8,041.50

829.32

32,727.10

10,919.31

21,807.79

2,695.02

37,410.56

5,789.74

31,620.82

3,401.63

131,435.01

3,781.88

127,653.13

19,239.06

358,137.15

117.828.47

240,308.68

26,095.95

8,169.61

1,844.33

6,325.28

1,028.70

555,307.91

162,651.71

392,656.20

43,213.82

234,158.36

85,993.40

148,164.96

15,583.63

24,442.01

2,148.52

22,293.49

1,976.94

367,839.50

19,972.25

347,867.25

31,546.86

173,738.50

38.790.52

134,947.98

14,754.62

158,913.00

39,206.35

119,706.65

12,147.44

6,982.59

98.80

6,883.79

831.80

272.291.63

21,186.95

251,104.68

21,270.11

259,933.08

30,045.47

229,887.61

20,593.02

410,949.45

29,754.69

381,194.76

31,775.18

1,266,630.87

143,209.75

1,123,421.12

68,005.33

1,996,250.00

1,996,250.00

75,900.00

2,020,937.50

2,020,937.50

140,000.03

1,287,843.75

1,287,843.75

54,437.50

1,998,437.50

1,998,437.50

150,000.00

3,273,515.63

3,273,515.63

10,719.32

1,995,580.00

1,995,580.00

92,548.08

2,049,062.50

2,049,062.50

89,877.72

1.992,812.50

1,992,812.50

157,500.00

1,125,312.50

1,125,312.50

75,000.00

1,534,687.50

1,534,687.50

95,625.00

2,023,750.00

2,023,750.00

45,245.90

1,002,812.50

1,002,812.50

60,000.00

2,124,375.00

2,124,375.00

125,000.00

2,011,875.00

2,011,875.00

15,625.00

1,802,380.00

1,802,380.00

95,000.00

2,993,203.13

2,993,203.13

118,990.38

$

51.79

307.46

121.81

10.564.11

635.08

241.95

107.07

530.82 -40.46 -483.93 -424.64 -343.09 1,301.68 -145.18 -6.39 18.97 55.57 -86.23 -4,731.50 16.28 236.61 76.26 768.86 -231.35 300.64 -267.85 1,476.05 140.96 1,277.03 2.251.14 -2,836.05 12.55 363.65 515.72 510.74 448.92 -9,375.00
12,156.25
7,388.75
-28,125.00
-11,484.38

- 21 -

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA
SCHEPULE OF INVESTMENT ACTMTIES YEAR ENDED JUNE 30 1996

U. S. GOVERNMENT SECURmES
Wachovia Bank 01 Georgie, NA, Atlani8, Georgie United Slates Treasury Noles

SHARES

MATURITY

HELD

DATE JUNE 30, 1996

PAR
VALUE

MARKET VALUE

INTEREST RATE

02115197 07131199 08131199 06l3OI97 08131/00 04I30I01 01115196 1Qf15196
01115197 04115197 01115198 01131196

$ 2,000,000.00 $ 2,028,440.00

2,000,000.00

2,028,440.00

3,000,000.00

2,995,320.00

2,500,000.00

2,482,425.00

2,000,000.00

1,980,940.00

2,000,000.00

2,042,180.00

4.750% 6.875% 6.875% 5.625% 6.250% 6.250% 9.250% 8.000% 8.000% 8.500% 7.875% 7.500%

$ 75,122,841.60 $ 68,074,478.69

~
Wachovia Bank of Georgie, NA, Atlanla, Georgie Aerospace and Defense AJr Transportation Apparel Automolive Banks Beverages Chemicals Computer Equipment Computer - Data Processing Services Cosmetics, Toiletries, Soap Drugs, Medical Electrical Equipment Elactronics Entertainment Environmeni8l Control Finaneiel Services - NonBanking Foods - Processed Food Servica Fumiture and F'Ddures Household Appliane:es and Supplies Insuranca Lumber and Wood Products Machinery - Farm and Construction Measuring and Scientific Devices Medical Supplies and Services Metal Products Fabricated Miscallanaous Oil and Gas - Domestic Oil and Gas - Exploration and Production Oil and Gas -International Oil and Gas - Supplies/Construction Paper and Paper Products Photography and Optical Preferred Stocks - Convertible Printing and Publishing Railroads Retail Trade - General Merchandise Retail Trade - Specialty Retail Trade - Food Rubber and Plastics Services - Non-Financiel

47,701 6,300
41,600 31,674 69,000 20,700 83,100 27,600 12,000 12,600 148,900 39,100 33,200 2,200 57,700 105,400 107,450 39,400 10,300 14,000 237,275
7,200 7,000 87,000
10,100 32,600 10,700 15,100 '
31,200 6,400
12,000
73,000 15,900
7,300 27,500 36,290

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

$ 3,976,709.00 183,487.50
1,512,125.00 1,025,445.75 2,519,625.00 1.396,500.00 2,495,412.50 2,744,962.50
593,000.00 974,775.00 7,818,175.00 3,457,537.50 1,745,825.00 138,325.00 1,812,050.00 4,123,175.00 3,620,150.00 1,841,950.00 315,437.50 694,750.00 10,563,071.88
273,000.00 293,125.00 4,114,600.00
491,875.00 1,988,500.00
503,150.00 1,311,812.50
2,276,550.00 342,400.00
849,000.00
1,477,437.50 539,037.50 302,037.50
1,465,187.50 1,873,162.50

SCHEDULE "2"

BALANCE JULY 1, 1995

INVESTMENTS

INVESTMENTS INVESTMENTS

MADE

REALIZED

BALANCE JUNE 30, 1996

INTEREST RECEIVED

DMDENDS RECEIVED

GAIN OR (LOSS) ON SALE OF INVESTMENTS DISTRIBUTIONS

$

963,437.50

$

963,437.50

$ 61,723.90

1,992,500.00

$ 1,992,500.00

137,500.00

$ 2,110,000.00

2,110,000.00

10,954.67

2,997,187.50

2,997,187.50

-47,287.09

2,521>,703.13

2,520,703.13

73,403.16

1,964,687.50

1,964,687.50

-11,548.91

1,136,406.25

1,136,406.25

92,500.00

2,112,500.00

2,112,500.00

186,229.51

2,194,218.75

2,194,218.75

226,373.63

1,968,750.00

1,968,750.00

170,000.00

2,241,875.00

2,241,875.00

164,423.08

1,081,093.75

1,081,093.75

67,866.85

$ 62,238,627.39 $ 28,604,828.16 $ 22,493,687.76 $ 68,349,767.79 $ 4,686,108.49

$

30,078.13

-136,406.25 -95,703.12 -167,968.75 -136,250.00 -79,062.50
$ -602,016.82

$ 2,255,510.62

$

426,222.00 $ 1,829,288.62

$

388,785.45

186,357.00

202,428.45

1,352,405.50

135,750.00

127,367.65

1,360,787.85

790,078.90

9.48

790,069.42

1,872,652.40

1,799,765.00

1,312,712.40

2,359,705.00

854,120.30

249,654.00

15,203.34

1,088,570.96

2,855,672.32

196,921.77

827,182.91

2,225,411.18

1,351,313.65

1,223,599.00

1,103,391.65

1,471,521.00

603,345.00

603,345.00

384,261.00

409,948.00

794,209.00

5,332,291.17

1,134,718.95

640,991.67

5,826,018.45

1,865,531.10

116,362.00

226,879.00

1,755,014.10

898,170.50

216,529.00

120,300.00

994,399.50

188,291.50

194,222.00

247,356.50

135,157.00

2,055,067.14

596,422.01

1,458,645.13

962,333.00

2,708,571.39

163,543.69

3,507,360.70

2,834,014.06

273,360.50

187,054.00

2,920,320.56

1,101,676.50

200,970.00

900,706.50

276,642.55

276,642.55

620,882.40

620,882.40

4,511,505.55

4,962,975.86

770,296.00

8,704,185.41

139,434.50

59,970.50

199,405.00

345,411.50

159,502.50

239,283.50

265,630.50

161,157.36

78,833.00

239,990.36

1,638,901.35

1,356,636.92

454,073.32

2,541,464.95

199,324.50

127,629.48

326,953.98

120,552.00

1,505,541.72

1,173,488.22

452,605.50

2,039,436.68

961,997.54

1,478,740.18

1,522,694.04

472,487.78

472,487.78

996,607.00

195,552.00

801,055.00

198,936.00

68,810.00

267,746.00

1,764,387.10

1,182,718.00

1,049,8~.10

1,897,206.00

300,392.00

300,392.00

790,078.90

790,078.90

1,535,162.02

893,222.02

641,940.00

257,777.00

257,777.00

1,862,082.67

287,114.80

468,345.20

1,680,852.27

1,248,793.60

938,434.08

1,709,136.85

478,090.83

275,100.50

275,100.50

1,508,204.50

1,064,910.00

1,269,370.00

1,303,744.50

767,042.00

1,234,974.40

250,933.59

1,751,082.81

- 23-

$ 76,425.50 $

478,360.62

111.30

-35,348.18

18,710.00

33,807.35

33,257.70

1.82

79,936.00

743,795.78

25,872.00

106,586.00

172,035.43

22,847.50

1,029,583.47

11,532.00 170,928.00
74,886.00 23,878.50
369.00 40,917.00 29,128.50 55,236.75 12,373.50
1,442.00 19,040.00 197,322.52
3,600.00 5,393.00 1,704.00 32,668.60 7,297.00 6,228.00 79,628.00
599.50 48,004.00
4,237.50 46,937.00
2,592.00 10,185.00 24,480.00
1,206.00 38,600.00 21,873.50
1,095.00 14,850.00 37,204.75

99,039.53 23,595.84 -13,103.59
971.21 209,917.09
271.32 50,650.91 25,242.95
90,614.49 9,013.04
64,292.58
195,251.32 1,206.45
28,013.59 94,098.63
113.58 58,478.73 91,049.63
171,536.42 -16,987.04 40,093.62 -91,720.82
-12,967.20 3,784.90

PEACE OFfICERS' ANNUITY AND BENEFIT fUND Of GEORGIA
SCHEDULE OF INVESTMENT ACTMTIES
YEAR ENDED JUNE 30, 1996

MATURITY DATE

SHARES HELD
JUNE 30,1996

PAR VALUE

MARKET VALUE

INTEREST RATE

Wachovia Bank of Georgia, NA., Atlanla, Georgia Telecommunications Services Textiles Tobacco Products Transportation Utilities - Electric and Gas Wholesale Trade - Specialty

17,500 65,000 19,500
75,000 27,300

$ 805,000.00 1,828,125.00 2,028,000.00
2,112,500.00 1,230,850.00

$ 79,657,839.13

BONDS AND DEBENTURES
Wachovia Bank of Georgia, NA, Atlanta, Georgia American Cyanamid Company CSX Trall&pOllation,lncorporated Carolina Telephone and Telegraph Company Dow Chemical Company GanneU Company, IllGOijIClI8led Intemational BusiIl8S& Machines Col'ponltion lei Wilmington,lncorporated Johnson Controls, Incorporated Norfolk Southern Railroad Company
Pennsytvanla PO\N8r end Ught Company Super-Valu Stores, Incorporated Walmart Stores, Incorporated Zeneca Wilmington Company

03115106 08115/95 08115100 08115113 05I01JOO 10l3OI25 03115.'97 06115/24 08115104 03f01106 05101102 04101116 08115/00 11115/23

$ 2,000,000.00 $ 1,926,460.00

1,000,000.00

914,830.00

2,000,000.00

1,930,420.00

1,500,000.00

1,383,825.00

1,000,000.00

1,010,900.00

2,000,000.00

2,042,360.00

1,000,000.00

1,032,000.00

1,000,000.00

1,059,130.00

2,000,000.00

1,837,280.00

8.375% 4.800% 5.750% 6.850% 5.850% 7.000% 7.625% 8.200% 7.750% 8.000% 7.750% 8.875% 10.875% 7.000%

$ 13,500,000,00 $ 13,137,205.00

~
Wachovia Bank of Georgia, NA., Atlanta, Georgia Atlanta Gas Ught Company Bane One Corporation Becton Dickinson and Company British Columbia Province British Petroleum North America, Incorporated Baroid Corporation CB Public Service Eleclric & Gas Chemical Banking Col'ponltion Dean Foods Fifth Third Bank General Eleclric Capital Col'ponltion Manitoba Province Canada NationsBank NOB Bank, NA, Delroil, Michigan Nordstrom, Incorporated Ontario Providence Canada
PfIZer, Incorporated Phillip Morris Corporation Private Export Commercial Bond

12102113 . 09115103 03115.'99 01115103 02101103 04115103 07101196 07115106 06115105 07115105 11109101 09115102 02115105 08115103 12115/95 02121106 01127103 02101197 12101197 01131196 04130104

$ 2,000,000.00 $ 1,881,700.00

1,000,000.00

1,080,960.00

10,000.00

1,077,890.00

1,000,000.00

1,006,280.00

200,000.00 1,500,000.00

2,080,940.00 1,344,825.00

2,000,000.00 2,000,000.00 2,000,000.00 1,000,000.00 1,000,000.00
100,000.00

1,923,240.00 2,128,360.00 1,982,080.00
968,980.00 941,470.00
915,870.00

1,000,000.00 1,940,000.00

1,038,460.00 1,946,033.40

7.p50% 8.740% 9.950% 7.000% 8.750% 8.000% 6.750% 7.875% 6.750% 6.750% 8.125% 6.875% 6.875% 6.250% 9.000% 6.000% 7.350% 6.500% 9.250% 9.000% 6.860%

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
-24-

SCHEDULE "2"

BALANCE JULY 1, 1995

INVESTMENTS

INVESTMENTS INVESTMENTS

MADE

REALIZED

BALANCE JUNE 30, 1996

INTEREST RECEIVED

DMDENDS RECEIVED

GAIN OR (LOSS) ON SALE OF INVESTMENTS DISTRIBUTIONS

$ 1,241.884.80 $

788.958.20 $ 1,364,267.34 $

666.575.66

1.553.355.00

1.015,715.20

1.050.720.00

1,518,350.20

1,541,255.10

44,886.00

97,546.74

1.488.594.36

245.195.00

245.195.00

1.987.047.60

791.787.60

977.797.60

1.801.037.60

997.425.90

325,980.47

317.032.97

1.006,373.40

$ 54,177,373.79 $ 28,981,387.06 $ 22.228,823.81 $ 60,929,937.04

$ 69,777.00 $ 40,360.00 79,447.50 1.425.00 125,725.00 100,604.67

240.398.85 -125.551.00
46,214.46 -26.084.83 159.684.40
5,456.24

$ 1.806,521.79 $ 3,844,871.59

$

744.121.92

$

744.121.92

$ 37.008.19

2.005.780.00

2,005,780.00

48,000.00

1,988.000.00

$ 1.988,000.00

115.000.00

995,000.00

995.000.00

68.500.00

1.990,360.00

1,990.360.00

117,000.00

$ 1.477.980.00

1,477.980.00

51.625.00

1,074.840.00

1,074,840.00

76,250.00

2.007,080.00

2.007.080.00

164.000.00

1.024.110.00

1.024,110.00

77.500.00

949,960.00

949.960.00

80,000.00

1,497.930.00

1,497.930.00

36,812.50

498,680.00

498.680.00

31.802.08

1.409.850.00

1.409.850.00

70.687.50

2,005,800.00

2,005,800.00

140,000.00

$ 18.191,511.92 $ 1,477.980.00 $ 6.156.361.92 $ 13,513.130.00 $ 1.114,185.27

$

46,544.48

-5.780.00

63,495.00 23,195.00 -77,220.00

$

50,234.48

$ 2,000,000.00

$ 2,000.000.00 $ 141,000.00

1,039,990.00

1,039,990.00

87,400.00

1,000.000.00

1,000,000.00

99,500.00

$

991,640.00

991.640.00

-29.750.00

1,343.830.50

$ 1,343,830.50

161,765.63

2.037,040.00

2,037,040.00

160.000.00

1.461,480.00

1,461.480.00

-16,031.25

495.745.00

495,745.00

22.203.13

1,494.600.00

1.494.600.00

70,031.25

1.989,560.00

1,989.560.00

45,750.00

2.025.900.00

2,025,900.00

162.500.00

2,080.900.00

2,080.900.00

31,701.39

878,650.00

878,650.00

68,750.00

970,660.00

970,660.00

-7,638.89

1,000.000.00

1,000,000.00

45.000.00

994,960.00

994,960.00

1,020.110.00

1,020,110.00

78,666.67

993,700.00

993,700.00

91.180.56

998.300.00

998,300.00

92,500.00

1,022,187.50

1.022,187.50

90.000.00

2,163.936.72

240,434.54

1,923.502.18

145.560.63

$

129,600.00

24.355.00 34,200.00

68,990.00 8.860.00
-22,187.50 2.065.46

- 25-

PEACE OFFICERS' ANNUITY AND BENEFIT fUND OF GEORGIA SCHEPULE OF INVESTMENT ACTMTIES YEAR ENDED JUNE 30, 1996

SHARES

MATURITY

HELD

DATE JUNE 30, 1996

PAR VALUE

MARKET VALUE

INTEREST RATE

Wachovia Bank of Georgia, NA, A11anta, Georgia Republic New York Corporation SunTrust Banks,lncorporated; Wachovia Corporation

12/12101 07101102 12/15199

$ 2,000,000.00 $ 2,039,800.00

2,000,000,00

2,017,260.00

7.875% 7.375% 7.000%

$ 20,750,000.00 $ 24,374,148.40

INVESTMENT ACCOUNTS
Wachovia Bank of Georgia, NA., A1lanta, Georgia Combined Accounts Invesco Account and Wellington Account

$

50;;,:;;;,61,;.;8;;0.7,::9

INVESTMENT POOL
Employees' Retirement System or Georgia Georgia Pooled Index Fund

$ 19,002,565.64

MUTUAL FUNDS
Wachovia Bank of Georgia, NA, A1lanta, Georgia Short Term Investment Company B Invesco Short Term Invesco Denver -Short Term Wellington Short Term

$ 5,725,590,50 812,743.54
7,928,182.65

$ 14,466,516.69

REAL ESTATE LIMITED PARTNERSHIPS
Wachovia Bank of Georgia, NA., A1lanta, Georgia Servicemaster Limited Partnership

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
26

SCHEDULE?

BALANCE JULY 1, 1995

INVESTMENTS

INVESTMENTS INVESTMENTS

MADE

REALIZED

BALANCE JUNE 30, 1996

INTEREST RECEIVED

DMDENDS RECEIVED

GAIN OR (lOSS) ON SALE OF INVESTMENTS DISTRIBUTIONS

$

980.560.00

2.052,640.00

1,994.660.00

$

980,560.00

$ 62.781.25

$ 2.052.640.00

147,500.00

1,994,660.00

140,000.00

$ 24.541.849.72 $ 8.489,200.00 $ 8,591,167.54 $ 24,439,882.18 $ 1.890.370.37

$

83.460.00

$_---"3;.;;.29;;.:.,34"-=2.;.;;.96.:;..

$ _ _5~39;.;;..:..:.17;...4;.:.;.54;..;.

$

488,555.75 $ _ _..;;50.,;.:.:.61.:.;:8;,;.;;.7.;;,.9

$ 11.389,926.42 $ _ _48..:=::.2!::.5.:..:17..::.3O~

$ 11.872.443.72

$ 427.301.59 $ _ _.=5,:.:7'=.;87:.,::5.:.:.1.=.0

$ 2.007,308.65 $ 15.657.696.29 $ 11.939,414.44 $ 5.725,590.50 $ 232.048.82

1.297,594.40

11,946,915.47

12,431.766.33

812,743.54

64,761.52

2,848,559.24

28,964,095.64

23,884,472.23

7,928,182.65

196,382.92

$ 6,153,462.29 $ 56,568.707.40 $ 48,255,653.00 $ 14.466,516.69 $ 493,193.26

$

279,897.27 $ _---'2:.,:7.,;.91=.,89::.,:7-=.2:.:..,7

$

-7,046.55 $

2::...::08::::8",.00::0,

$ 177,231,926.07 $ 124,884,517.19 $ 108,494,147.05 $ 193,622,296.21 $ 8,183,857.39 $ 2,233,823.38 $ 3,673,260.76 $===2=,0=8=8=.00=

- 27-

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA SCHEDULE OF ADMINISTRATIVE EXPENSES PAID BY OBJECT
YEAR ENDED JUNE 30.1996

SCHEDULE "3"

PERSONAL SERVICES
Salaries and Wages Employers Contributions for:
F.I.CA. Group Insurance Workers' Compensation Insurance
OPERATING EXPENSES
Regular Operating Expenses Supplies and Materials Repairs and Maintenance Utilities Rents (Other than Real Estate) Insurance and Bonding Other Operating Expenses Bank Service Charges Brokerage Commissions Subscriptions and Dues Publications and Printing Equipment Purchases
Travel
Computer Charges Software
Per Diem, Fees and Contracts Per Diem and Fees

$ 166,850.75

$ 12,195.69
21,042.17 1,198.00

34,435.86 $ 201,286.61

$ 12,548.74
6,832.08 8,055.04
883.10 27,156.00

$

1,857.32

1,333.62

1,284.62

4,475.56 4,236.28
4,450.33 $

68,637.13

2,581.93

362.95

641,223.59

712,805.60

$ 914,092.21

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 28-

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA RECONCILIATION OF SALARIES AND TRAVEL YEAR ENDED JUNE 30, 1996

SCHEDULE "4"

Totals per Annual Supplement

Adjustments Carter, Colwell, Langford, Smith,

RobertW. John D. PauiF. JanetW.

SALARIES $ 167,707.03 $

TRAVEL 2,519.93

-856.28

-0.31 216.46 -154.15

Totals per Report

$ 166,850.75 $===2=,5=:8=1=:.9=3

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 29-

SECTION II FINDINGS AND IMPROPER OR QUESTIONED COSTS

PEACE OFFICERS' ANNUITY AND BENEFIT FUND OF GEORGIA SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30.1996

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status ofthe findings disclosed in the report for the year ended June 30, 1995, is summarized below:

Audit Control Number

Status ofFinding

947-95-01

See Audit Control Number 947-96-01

PRIOR YEAR

BENEFITS EXPENSE Retirement Benefit Overpayments Audit Control Number 947-96-01

The review report for the year ended June 30, 1995, noted an outstanding balance of overpayments to certain members in the amount of $5,054.64, which was a result of errors made in the calculation of retirement benefits. In the year under review, the Annuity and Benefit Fund received $1,622.58 in overpayment recovenes.

The remaining outstanding balance of $3,432.06 is being recovered through deductions from the monthly benefits paid to those individuals involved.