Review report, Sheriffs' Retirement Fund of Georgia, a component unit of the state of Georgia, year ended June 30, 1999

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REVIEW REPORT SHERIFFS' RETIREMENT FUND OF GEORGIA A COMPONENT UNIT OF THE STATE OF GEORGIA
YEAR ENDED JUNE 30,1999
STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334-8400

SHERIFFS' RETIREMENT FUND OF GEORGIA
- TABLE OF CONTENTS -

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

EXHIBITS

FINANCIAL STATEMENTS

A STATEMENT OF PLAN NET ASSETS

ARISING FROM CASH TRANSACTIONS

FIDUCIARY FUND TYPE - PENSION TRUST FUND

2

B STATEMENT OF CHANGES IN PLAN NET ASSETS

ARISING FROM CASH TRANSACTIONS

PENSION TRUST FUND

3

C NOTES TO THE FINANCIAL STATEMENTS

5

SUPPLEMENTARY INFORMATION

SCHEDULES

1 SCHEDULE OF ADMINISIRATNE EXPENSES PAID BY OBJECT

18

2 RECONCILIATION OF SALARIES AND IRAVEL

19

3 RECONCILIATION OF PER DIEM AND FEES

20

4 SCHEDULE OF FUNDING PROGRESS

21

5 SCHEDULE OF EMPLOYER CONTRIBUTIONS

22

RUSSELL W. HINTON
STATE AUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
January 28, 2000

Honorable Roy E. Barnes, Governor Members of the General Assembly of Georgia Members ofthe Board of Commissioners ofthe Sheriffs' Retirement Fund of Georgia
and Honorable James A. Cody, Secretary-Treasurer Sheriffs' Retirement Fund of Georgia
INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF
FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have reviewed the accompanying financial statements (Exhibits A through C) ofthe Sheriffs' Retirement Fund of Georgia as of and for the year ended June 30, 1999, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. As described in Note 2, these financial statements were prepared on the basis ofcash receipts and disbursements, which is a comprehensive basis of accounting other than generally accepted accounting principles. All information included in these financial statements is the representation of the management of the Sheriffs' Retirement Fund of Georgia.
A review consists principally of inquiries ofretirement fund personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with the basis of accounting described in Note 2.
Our review was made for the purpose of expressing limited assurance that there were no material modifications that should be made to the financial statements in order for them to be in conformity with the basis ofaccounting described in Note 2. The accompanying supplementary information (Schedules 1 through 5) is presented only for supplementary analysis purposes. Such information has been subjected to the

99ARL-4C

inquiries and analytical procedures applied in the review ofthe financial statements and we are not aware of any material modifications that should be made thereto.
Respectfully submitted,
~~IW~.HinJton ).~ State Auditor
RWH:gp 99ARL-4C

FINANCIAL STATEMENTS - 1-

SHERIFFS' RETIREMENT FUND OF GEORGIA STATEMENT OF PLAN NET ASSETS ARISING FROM CASH TRANSACTIONS
FIDUCIARY FUND TYPE- PENSION TRUST FUND JUNE 30. 1999

EXHIBITA

ASSETS
Cash and Cash Equivalents
Investments U.S. Government Securities, at Cost (Market Value $12,808,520.25) Stocks, at Cost (Market Value $34,1.83,675.83) Bonds and Debentures, at Cost (Market Value $8,077,334.00) Investment Accounts, at Cost (Market Value $9,534.60) Mutual Funds, at Cost (Market Value $2,381,964.09) Real Estate Limited Partnerships, at Cost (Market Value not Available) Real Estate Investment Trusts, at Cost (Market Value $84,607.50)
TOTAL ASSETS
LIABILITIES

$

20,857.76

$

12,984,375.54

20,913,151.73

8,197,534.50

9,534.60

2,381,964.09

34,362.00

25,913.00

44,546,835.46

$ 44,567,693.22

0.00

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

$ 44,567,693.22

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 -2-

SHERIFFS' RETIREMENT FUND OF GEORGIA STATEMENT OF CHANGES IN PLAN NET ASSETS ARISING FROM CASH TRANSACTIONS
PENSION TRUST FUND YEAR ENDED JUNE 30.1999

EXHIBIT"B"

ADDITIONS
Member Contributions
Fines and Bond Forfeitures
Invesbnent Income Interest Received Dividends Received Gain or (Loss) on Sale of Invesbnents (Net) Distributions
Other Sources Interest Received on Demand Deposits Other
DEDUCTIONS
Benefits Death Benefits Retirement Benefits SUrvivorship Benefits
Administrative Expenses Personal Services Operating Expenses
NET INCREASE
NET ASSETS HELD IN TRUST FOR PENSION BENEFITS - JULY 1. 1998

$

69,390.10

2,124,778.40

$ 1,276,153.50 370,007.89
4,653,122.17 9,565.00

6,308,848.56

$

605.76

69.97

675.73 $

8,503,692.79

$

42,000.00

1,808,318.16

434,761.32 $ 2,285,079.48

$

101,674.24

353,638.19

455,312.43 $

2,740,391.91 5,763,300.88 38,804,392.34

NET ASSETS HELD IN TRUST FOR PENSION BENEFITS - JUNE 30.1999

$ 44,567,693.22

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

SHERIFFS' RETIREMENT FUND OF GEORGIA
NOTESTOTHEF~~STATEMENTS
JUNE 3D. 1999

EXHIBIT "C"

NOTE 1: PLAN DESCRIPTION

ORGANIZATION AND PURPOSE The Sheriffs' Retirement Fund of Georgia is a cost-sharing multiple employer defined benefit pension plan established in 1963 by the General Assembly ofGeorgia for the purpose of paying retirement benefits to the sheriffs ofthe State of Georgia. The Board of Commissioners ofthe Retirement Fund is comprised of six (6) members and consists ofthe Director of the Office of Treasury and Fiscal Services, one former sheriff who is a retired beneficiary of the Retirement Fund, and four persons holding office as sheriffs within the State of Georgia, each of whom are active members of the Retirement Fund and have held office as a sheriff for at least four years. The Sheriffs' Retirement Fund of Georgia is considered a component unit of the State of Georgia and is included within the State ofGeorgia reporting entity for financial reporting purposes because of the significance of its legal, operational, and financial relationships with the State of Georgia. These reporting entity relationships are defined in Section 2100 of the Governmental Accounting Standards Board Co~ification of Governmental Accounting and Financial R!4>orting Standards.

Any qualified and commissioned sheriff of any county within the State of Georgia who makes payment of the required contributions is eligible for membership. The Retirement Fund is funded through a combination of member contributions paid by the affected sheriff and designated portions of fines and forfeitures for criminal and quasi-criminal cases involving the violation of State of Georgia statutes, including traffic laws.

CURRENT MEMBERSHIP The following analysis compares the membership of the Sheriffs' Retirement Fund of Georgia at June 30, 1999, to that of the prior year:

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

June 3D. 1999 June 3D. 1998

160

160

32

32

Number of Active Members Vested Nonvested

192

192

70

70

84

--H1

154

157

PLAN BENEFITS The Sheriffs' Retirement Fund of Georgia provides retirement as well as death benefits. Benefit provisions and vesting requirements are established by statute and may be amended only by the General Assembly of Georgia. A description ofplan benefits and vesting requirements is as follows:

-5-

SHERIFFS' RETIREMENT FUND OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1999

EXHIBIT "C"

NOTE 1: PLAN DESCRIPTION
PLAN BENEFITS (A) RETIREMENT CONDITIONS: Normal retirement is at age fifty-five (55) provided the member has
at least four years of credited service as a sheriff after and including January 1, 1961. The credited service requirement is eight years for a sherifIwho first or again becomes an active member on or after July 1, 1988. A member must have terminated hislher service as sheriff to receive benefits.
(B) RETIREMENT BENEFITS: The normal benefit is calculated by multiplying $72.00 by the number of years of credited service. The minimum monthly benefit paid is $288.00 and the maximum monthly benefit paid is $2,160.00.
(C) OPTIONAL BENEFITS: The following optional benefit provisions are available to members upon application for retirement benefits:
(1) 100% Joint Life Annuity
(2) 50% Contingency Life Annuity
The monthly benefit amount paid under the optional provisions is the actuarial equivalent ofthe monthly normal retirement benefit and is payable until remarriage.
(D) DEATH BENEFITS:
(1) Upon the death of any member, the total amount ofhislher contributions, or those in excess of any retirement benefits received to that date, will be paid, without interest, to the surviving spouse, the named beneficiary, or the member's estate.
(2) In addition to the death benefit discussed in item (1), upon the death of either:
(a) an inactive member who would otherwise qualify to be carried upon the active membership rolls except that he/she no longer holds the office of sheriff;
(b) a member who is receiving retirement benefits; or
(c) a member who is otherwise qualified to receive retirement benefits from this Retirement Fund except that he/she has not reached the age of55 years or has not filed an application or has not been approved for retirement benefits.
The sum of$7,000.00 will be paid as additional death benefits to the surviving spouse, the named beneficiary, or the member's estate.

-6-

SHERIFFS' RETIREMENT FUND OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1999

EXHIBIT "C"

NOTE 1: PLAN DESCRIPTION

PLAN BENEFITS (D) DEATH BENEFITS:
(3) In addition to the death benefit discussed in item (1), upon the death of an active member, the sum of $7,000.00 will be paid as additional death benefits to the surviving spouse, the named beneficiary, or the member's estate.

(4) In addition to the death benefit discussed in item (3), upon the death of an active member, the surviving spouse receives an additional benefit in the fonn of a 100% joint life annuity. In such event, the death benefit discussed in item (1) will not be payable.

(E) TERMINATION: The sum ofcontributions without interest can be paid to the member at any time prior to commencing benefits, but the withdrawal causes the member to lose entitlement to any benefits.

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

(A) MEMBER'S CONTRIBUTIONS: Members must contribute $37.50 per month ofcredited service, with a maximum payment period of thirty years. For credited service prior to January 1, 1961, deductions in the amount of $20.00 are made from monthly retirement benefits until all credited months prior to January 1, 1961, are paid, subject to a twenty-five year maximum. Dues of $25.00 must be paid for every month of credited service claimed from January 1961 to June 30, 1990, $30.00 per month of credited service from July 1, 1990, to June 30, 1994, and $37.50 per month of credited service after July 1, 1994.

(B) COURT FINES AND FORFEITURES: For each criminal and quasi-criminal case involving the violation of State of Georgia statutes, including traffic laws, a sum based upon the scale set forth below is collected by the presiding judge and remitted to the Retirement Fund:

For fines or bond forfeitures in excess of$5.00, in which a Sheriff of the Superior Courts acts as Sheriff in other courts

$ 2.00

In addition, the following amounts are required to be collected by the applicable courts and remitted to the Retirement Fund:

For civil suits filed in Superior Courts

$ 1.00

For civil actions filed in State Courts and Magistrate Courts where a Sheriffofthe Superior Courts acts as a Sheriff in those courts

$ 1.00

-7-

SHERIFFS' RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1999

EXHIBIT "C"

. NOTE 2: SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES AND PLAN ASSET MATTERS
FUND COMPRISING FINANCIAL STATEMENTS The Sheriffs' Retirement Fund of Georgia uses a fund to report on its financial position and the results ofits operations determined in conformity with the accounting practices prescribed or permitted by statutes and regulations of the State of Georgia. A fund is an independent fiscal and accounting entity with a selfbalancing set of accounts. 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 of funds are maintained consistent with legal and managerial requirements. The fund represented in the accompanying financial statements is as follows:
FIDUCIARY FUND TYPE
PENSION TRUST FUND - The fund used to account for the accumulation of resources for retirement benefits to eligible members.
BASIS OF ACCOUNTING The Sheriffs' Retirement Fund of Georgia prepares its financial statements on the basis of cash receipts and disbursements, which is a comprehensive basis of accounting other than generally accepted accounting principles. This basis of accounting is defined as that method of accounting in which certain revenues and related assets are recognized when received rather than when earned, and certain expenses are recognized when paid rather than when the obligation is incurred.
Generally accepted accounting principles applicable to retirement funds require that investments be valued at fair value as of the plan year-end for the Statement of Plan Net Assets. While market value has been
disclosed, it is not presented within the financial statements at June 30, 1999, as it is the policy ofthe Sheriffs'
Retirement Fund of Georgia to prepare its financial statements on a basis of accounting other than generally accepted accounting principles as noted above.
Generallyaccepted accounting principles also require that plan liabilities for benefits and refunds due to plan members and beneficiaries should be recognized when due and payable in accordance with the terms ofthe plan, and all other plan liabilities should be recognized on the accrual basis ofaccounting. Plan liabilities are not recorded in the financial statements at June 30, 1999, as it is the policy of the Sheriffs' Retirement Fund of Georgia to prepare its financial statements on a basis of accounting other than generally accepted accounting principles as noted above.
CASH AND CASH EQUIVALENTS Cash and Cash Equivalents include demand deposits with a bank.
INVESTMENTS The Official Code of Georgia Annotated Section 47-16-26 states that the Board of Commissioners of the Sheriffs' Retirement 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 oftheir investments.' In addition, the Board of Commissioners is restricted to invest
-8-

SHERIFFS' RETIREMENT FUND OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1999

EXHIBIT"C"

NOTE 2: SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES AND PLAN ASSET MATTERS
INVESTMENTS no more than 50% ofthe assets ofthe Retirement Fund in common stocks or equities and may not invest more than 5% ofthe investment portfolio in corporations or in obligations of corporations organized in a country other than the United States of America or Canada. Statutory provisions governing the investments of domestic life insurance companies are enumerated in Title 33, Chapter 11 of the Official Code of Georgia Annotated. The significant fonns of investments in accordance with these statutes and available to the Retirement Fund are as follows:
(1) Deposits in checking, savings, certificates of deposit or similar evidences of deposits in banks, trust companies, savings and loan associations, and building and loan associations which have qualified for the insurance protection afforded by the Federal Deposit Insurance Corporation.
(2) Securities of any open-end management type investment company or investment trust registered with the Securities and Exchange Commission, provided that the investment company or trust has been organized for not less than ten years or has assets of not less than $25,000,000.00 at the date of investment.
(3) Bonds, notes, securities or other evidences of indebtedness which are direct obligations of the government ofthe United States ofAmerica.
(4) Loans guaranteed as to principal and interest by the government ofthe United States of America, to the extent of such guaranty.
(5) Bonds, notes, warrants or securities not in default which are direct obligations of any state ofthe . United States of America or 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 ofprincipal and interest.
(6) Obligations oflocal units of government or government related entities located within the United States ofAmerica or Canada, subject to certain conditions.
(7) Dividend paying stocks, common or preferred, of any solvent corporation created or existing under the laws ofthe United States ofAmerica or of any state or ofthe 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-

SHERIFFS' RETIREMENT FUND OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1999

EXHIBIT"C"

NOTE 2: SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES AND PLAN ASSET MATTERS
INVESTMENTS (9) Bonds, debentures, notes, or other evidences ofindebtedness which are secured by first mortgage or deed of trust or deed to secure debt upon fee simple, unencumbered improved real estate or income producing real property located in the United States of America or Canada, subject to certain conditions.
(10) Purchase money mortgages or like securities received upon the sale or exchange of real property acquired.
(11) Real estate acquired for the purpose of leasing same to any person, firm or corporation, or in real estate already leased to any person, firm or corporation, subject to certain conditions.
fuvestments 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 ofrevenue. fu addition, funds on deposit with the Retirement Fund's investment custodian for purposes of continual investment are reflected as investments regardless ofthe term of the instruments. fuvestments in U. S. government securities, stocks, bonds and debentures, investment accounts, certificates ofdeposit, mutual funds, and real estate limited partnerships and investment trusts 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 ofthe security. The market values reflected on the Statement ofPlan Net Assets were based on valuations appearing in the Retirement Fund's fuvestment Custodian Trust Report at June 30, 1999.
futerest 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 29% ofthe net assets available for benefits are invested in U. S. government securities. The Retirement Fund has no other investments in securities of governmental, commercial, or industrial organizations whose cost exceeds 5% ofplan net assets.
Statutory provisions governing the investment of fun<is by the Sheriffs' Retirement Fund of Georgia do not appear to provide for investments in real estate limited partnerships and investment trusts. These investments represent one-tenth of 1% ofthe total investments, at cost, of the Retirement Fund.
The Retirement Fund has funds invested in open-end mutual funds. The Retirement 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.
-10 -

SHERIFFS' RETIREMENT FUND OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1999

EXHIBIT"C"

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

RELATED PARTY TRANSACTIONS Certain related party transactions were noted between the Sheriffs' Retirement Fund of Georgia (Retirement Fund) and the Georgia Sheriffs' Youth Homes, Incorporated (youth Homes). The Secretary-Treasurer of the Retirement Fund also serves as the Executive Director of the Youth Homes; and the Assistant SecretaryTreasurer and Comptroller ofthe Retirement Fund hold similar positions with the Youth Homes.

In addition to shared personnel, the Retirement Fund and the Youth Homes share property space. Fdr the fiscal year ended June 30, 1999, the Retirement Fund reimbursed the Youth Homes $13,200.00 for shared space.

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, 1999, are categorized below in order to provide information about the extent to which such deposits are exposed to custodial credit risk.

Category 1 - Amounts covered by depository insurance or collateralized with securities (at market value) held by the Retirement Fund or by its agent in the Retirement Fund's name.

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

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

Cash Deposits

Carrying Amount

Bank Balances

Risk Categories

2

3

$ 20,857,76 $ 184.594.57 $ 100,000.00 $ 84,594.57 $'==::::=:l0~'o~o

CATEGORIZATION OF INVESTMENTS For purposes of analysis of custodial credit risk, investments consist ofU. S. government securities, stocks, bonds and debentures, 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 Retirement Fund or its agent in the Retirement Fund's name.

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

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SHERIFFS'RETIREMENT FUND OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1999

EXHIBIT "C"

NOTE 3: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS

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

The carrying amounts of investment balances as of June 30, 1999, are categorized below. These amounts include amounts maintained in open-end mutual funds and real estate limited partnerships and investment trusts which are not subject to risk categorization.

Type ofInvestment

Risk Categories

2

3

Carrying Amount

Market Value

D, S. Government Securities Stocks Bonds and Debentures Investment Accounts

$ 12,984,375.54 $ 20,913,151.73 8,197,534.50 9.534.60

0.00 $

0.00 $ 12,984,375.54 $ 12,808,520.25

20,913,151.73 34,183,675.83

8,197,534.50 8,077,334.00

9.534.60

9.534.60

$ 42.104,596.37 $

0.00 $==~0.~ 00 $ 42,104,596.37 $ 55,079,064.68

Mutual Funds (Open-End) Real Estate Limited Partnerships

2,381,964.09 34,362.00

2,381,964.09


Real Estate Investment Trusts

25,913.00

84,607.50

Total Investments

$ 44.546.835.46 $ 57.545,636.27

(Not Available)

NOTE 4: 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 actuarialiy 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, 1998, 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 47-16-43 and are not actuarially determined. Covered payroll information was not available.

FUNDING REQUIREMENTS Actual contributions for the year ended June 30, 1999, were as follows:

Member Contributions Fines and Bond Forfeitures

$ 69,390.10 2,124.778.40

$ 2.1942168.50

- 12-

SHERIFFS' RETIREMENT FUND OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1999

EXHIBIT"C"

NOTE 5: CHANGES IN FIXED ASSETS

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

Balance July 1, 1998 Additions Deletions Balance June 30, 1999 NOTE 6: RISK MANAGEMENT

Equipment $ 20,619.98
0.00 0.00 $ 20,619.98

The Department ofAdministrative Services (DOAS) has the responsibility for the State of Georgia ofmaking and carrying out decisions that will minimize the adverse effects of accidental losses that involve State government assets. The State believes it is more economical to manage its risks internally and set aside assets for claim settlement. Accordingly, DOAS processes claims for risk of loss to which the State is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' indemnification. Limited amounts of commercial insurance are purchased applicable to property, employee and automobile liability, fidelity and certain other risks. The Sheriffs' Retirement Fund of Georgia is part of the State of Georgia reporting entity, and as such, is covered by the State of Georgia risk management program administered by DOAS. Premiums for the risk management program are charged to the various state organizations by DOAS to provide claims servicing and claims payment.

NOTE 7: YEAR 2000 SYSTEMS READINESS

The Sheriffs' Retirement Fund of Georgia has identified two computer systems that are critical to operations which are affected by the year 2000 issue. The year 2000 issue is the result of shortcomings in many electronic data processing systems and other equipment that make operations beyond the calendar year 1999 troublesome. These computer systems are "in-house" systems where the Retirement Fund is responsible for remediation efforts. The following stages have been identified by Governmental Accounting Standards Board Technical Bulletin 98-1, Disclosure About Year 2000 Issues, as necessary to implement year 2000 compliant systems.

Awareness Stage - Encompasses establishing a budget and project plan for dealing with the year 2000 Issue.

Assessment Stage - The actual process ofidentifying all of its systems and individual components of the systems to check for compliance.

- 13 -

SHERIFFS' RETIREMENT FUND OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1999

EXHIBIT "c"

NOTE 7: YEAR 2000 SYSTEMS READINESS

Remediation Stage - When changes are made to systems and equipment.

Validation/Testing Stage - The process of ensuring that the changes made to systems and equipment will produce a year 2000 compliant system..

It will be necessary for the Retirement Fund to progress through all four of these stages for each computer system, not already year 2000 compliant, in order to assure that these systems will not be adversely affected.

The following is a list ofthe financial systems, their primary function, and the year 2000 compliance stage the systems are in at June 30, 1999.

Systems . 1) ffiM Mapics System
2) ffiM System 36

Primary Function
General accounting, fixed assets, etc.
Accounts receivable and pension processing

Compliance Stage at June 30.1999
Assessment Stage
Assessment Stage

Compliance Stage Necessary for Completion
Remediation and Validation!Testing Stages
Remediation and Validation!Testing Stages

Expenditures by the Retirement Fund during fiscal year 1999 amounted to approximately $7,541.25. The Retirement Fund's management currently estimates that the completion of the project will result in expenditures of approximately $20,000.00.

Because ofthe unprecedented nature ofthe year 2000 issue, its effects and the success ofrelated remediation efforts will not be fully detenninable until year 2000 and thereafter. While management is confident that the Retirement Fund will be year 2000 ready, it cannot assume that its remediation efforts will be successful in whole or in part, or that parties with whom the Retirement Fund does business will be year 2000 ready.

NOTE8: CONIlliGENCrnS

Litigation, claims and assessments filed against the Sheriffs' Retirement Fund of Georgia, ifany, are generally considered to be actions against the State of Georgia. Accordingly, significant litigation, claims and assessments pending against the State ofGeorgia are disclosed in the State ofGeorgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 1999.

At June 30, 1999, the Sheriffs' Retirement Fund ofGeorgia had inactive members' dues on hand in the amount of $688,592.00. One-hundred percent (100%) of such dues are refundable upon request of the inactive members.

- 14-

SHERIFFS' RETIREMENT FUND OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1999

EXIllBIT "e"

NOTE 9: EMPLOYEES' RETIREMENT PLAN

The Sheriffs' Retirement Fund ofGeorgia participates in a defined contribution plan, in which benefits depend solely on amounts contributed to the plan plus investment earnings. The Georgia Sheriffs' Youth Homes, Incorporated Money Purchase Pension Plan was established May 22, 1979, for the purpose of providing retirement allowances for employees ofthe Georgia Sheriffs' Youth Homes, Incorporated and employees of the Sheriffs' Retirement Fund of Georgia. The Georgia Sheriffs' Youth Homes, Incorporated administers the money purchase pension plan. The plan is available to all employees that are twenty-one (21) years of age and have completed one year of service. An employee must have completed at least 1,000 hours of service in an eligibility service period to qualify for one year ofservice in the plan. Vesting in employer contributions to the plan is based on the following table:

Years of Service

Percentage

1

30%

2

35%

3

40%

4

45%

5

60%

6

80%

7

100%

The Sheriffs' Retirement Fund ofGeorgia contributes 14% of the employee's qualified salary to the plan per fiscal year. Employees may contribute up to 5% of qualified salaries each fiscal year. Upon termination or retirement, any vested benefit will be paid to the participant in a lump sum or as periodic payments from one of the deferred options available. The Retirement Fund's total payroll in fiscal year 1999 amounted to $80,000.16, ofwhich $72,000.00 was for covered employees and used by the Retirement Fund for calculating contributions. For fiscal year 1999, the Retirement Fund contributed $11,200.08 to this retirement plan. No employee contributions were made to the plan for fiscal year 1999. The Retirement Fund has no further liability under the plan other than the future contributions to the plan as established.

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supPLEMENTARY INFORMATION -17 -

SHERIFFS' RETIREMENT FUND OF GEORGIA SCHEDULE OF ADMINISTRATIVE EXPENSES PAID BY OBJECT
. YEAR ENDED JUNE 30,1999

SCHEDULE "1"

PERSONAL SERVICES
Salaries and Wages Employer's Contributions for:
F.I.C.A. Retirement Health Insurance
OPERATING EXPENSES
Regular Operating Expenses Supplies and Materials Insurance and Bonding Other Operating Expenses
Travel
Real Estate Rentals Georgia Sheriffs' Youth Homes, Incorporated
Per Diem, Fees and Contracts Per Diem and Fees

$ 80,000,16

$ 5,965,12
11,200.08 4,508.88

21,674.08 $

101,674.24

$ 10,462.33
1,433.00
22,413.25 $ 34,308.58
8,738,50
13,200.00
297,391.11

353,638,19

$ 455,312.43

See accompanying notes and Independent Accoimtanfs Combined Report on Review of Financial Statements and Supplementary Information,
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SHERIFFS' RETIREMENT FUND OF GEORGIA RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30.1999

SCHEDULE "2"

Totals per Annual Supplement

Adjustments Cody, Hall, Hall, Kilgore, Marchman,

James A. Gloria Walter Kathy Tracy L.

Totals per Report

SALARIES

TRAVEL

$

0.00 $

0.00

15,000.00 4,000.08
21,000.00 4,000.08
36,000.00

4,903.90 3,834.60

$ 80,000.16 $=====8:::.,7=3=8=.5::::0

See accompanying notes and Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information.
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SHERIFFS' RETIREMENT FUND OF GEORGIA RECONCILIATION OF PER DIEM AND FEES YEAR ENDED JUNE 30.1999

SCHEDULE "3"

Totals per Annual Supplement

Adjustments Langford, Saba,

Flynt Jamil

Totals per Report

TYPE PAYMENT
Consultant Board Member

FEE AMOUNT

EXPENSE AMOUNT

TOTAL

$ 280,656.99 $ 17,125.02 $ 297,782.01

14.00 -404.90

14.00 -404.90

$ 280,656.99 $ 16,734.12 $ 297,391.11

See accompanying notes and Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Infonnation.
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SHERIFFS' RETIREMENT FUND OF GEORGIA SCHEDULE OF FUNDING PROGRESS YEAR ENDED JUNE 30.1999

SCHEDULE "4"

ACTUARIAL VALUATION
DATE

ACTUARIAL VALUE OF
ASSETS (a)

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

UNFUNDED AAL
(UAAL) (b-a)

07/01/96 $ 32,426,196.00 $ 34,200,103.00 $ 1,773,907.00

07/01/98 $ 47,258,981.00 $ 40,494,247.00 $ -6,764,734.00

FUNDED RATIO (alb)
94.8%
116.7%

COVERED PAYROLL
(c)

UAALASA PERCENTAGE OF COVERED
PAYROLL b-a)/c)

nla

nla

n/a

nla

Information prior to July 1, 1996, is not available in accordance with the parameters of GASB Statement No. 25.

The information presented in this required supplementary schedule is based on the actuarial study prepared as of July 1, 1998. The actuarial value of assets is equal to 90% of market value of assets (excluding fixed assets).

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
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SHERIFFS' RETIREMENT FUND OF GEORGIA SCHEDULE OF EMPLOYER CONTRIBUTIONS
YEAR ENDED JUNE 30, 1999

SCHEDULE "5"

FISCAL YEAR
1998

ANNUAL REQUIRED CONTRIBUTION

$

638,626.00

Information prior to July 1, 1998, is not available in accordance with the parameters of GASB Statement No. 25.

PERCENTAGE CONTRIBUTED
324.9%

The information presented in this required supplementary schedule is based on the actuarial study prepared as of July 1, 1998. Additional information of this latest actuarial valuation follows:

Valuation Date
Actuarial Cost Method
Amortization Method
Remaining Amortization Period
Asset Valuation Method
Actuarial Assumptions: Investment Rate of Retum Projected Salary Increases Includes Inflation at Cost-of-Living Adjustments

July 1,1998 Entry age normal cost Level dollar, open
15 years 5-year smoothed market value with 10% corridor
6.5% None None None

See accompanying notes and Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information.
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