Sheriffs' Retirement Fund of Georgia, report on review of the financial statements for the fiscal year ended June 30, 2000

STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
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SHERIFFS' RETIREMENT FUND OF GEORGIA
REPORT ON REVIEW OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2000
Russell W. Hinton
State Auditor RECEIVED
APR 0 9 2001

SHERIFFS' RETIREMENT FUND OF GEORGIA -TABLE OF CONTENTS -

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

EXHffiiTS

FINANCIAL STATEMENTS

A STATEMENTOFPLANNET ASSETS

ARISING FROM CASH TRANSACTIONS

FIDUCIARY FUND TYPE- PENSION TRUST FUND

2

B STATEMENT OF CHANGES IN PLAN NET ASSETS

ARISING FROM CASH TRANSACTIONS

PENSION TRUST FUND

3

C NOTES TO THE FINANCIAL STATEMENTS

4

SUPPLEMENTARY INFORMATION

SCHEDULES

1 SCHEDULE OF ADMINISTRATIVE EXPENSES PAID BY OBJECT

18

2 RECONCILIATION OF SALARIES AND TRAVEL

19

3 RECONCILIATION OF PER DIEM AND FEES

20

4 SCHEDULE OF FUNDING PROGRESS

21

5 SCHEDULEOFEMPLOYERCONTRffiUTIONS

22

RussELL W. HINTON
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS AND AccOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
January 19, 2001

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) of the Sheriffs' Retirement Fund of Georgia as of and for the year ended June 30, 2000, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. As described in Note 2, these financial statements were prepared on the basis 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 ofthe Sheriffs' Retirement Fund of Georgia.
A review consists principally of inquiries of retirement fund personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with the basis ofaccounting described in Note 2.
Our review was made for the purpose of expressing limited assurance that there were no material modifications that should be made to the financial statements in order for them to be in conformity with the basis of accounting described in Note 2. The accompanying supplementary information (Schedules 1 through 5) is presented only for supplementary analysis purposes. Such information

OOARL-4C

has been subjected to the inquiries and 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,

0 .... ~ell

..QQ W.~_
W. Hinton

State Auditor

RWH:gp OOARL-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. 2000

EXHIBIT"A"

ASSETS

Cash and Cash Equivalents

Investments

U.S. Government Securities, at Cost (Market Value $10,615,395.00)

$

Stocks, at Cost (Market Value $35,476,285.15)

Bonds and Debentures, at Cost (Market Value $10,230,971.85)

Investment Accounts, at Cost (Market Value $12,924.96)

Mutual Funds, at Cost (Market Value $3,266, 143.94)

Real Estate Limited Partnerships, at Cost (Market Value not Available)

TOTAL ASSETS

LIABILITIES

$

39,238.00

11,018,431.89 28,126,096.07 10,649,779.19
12,924.96 3,334,682.16
2,232.00
$

53,144,146.27 53,183,384.27
0.00

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

$ _ _5_,31-.83;;;.;.,3;;;;;84o..;;;;;;.27.-

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-

SHERIFFS' RETIREMENT FUND OF GEORGIA

EXHIBIT "B"

STATEMENT OF CHANGES IN PLAN NET ASSETS ARISING FROM CASH TRANSACTIONS

PENSION TRUST FUND

YEAR ENDED JUNE 30. 2000

ADDITIONS

Member Contributions

$

59,795.62

Fines and Bond Forfeitures

2,151,368.75

Investment Income Interest Received Dividends Received Gain or (Loss) on Sale of Investments (Net) Distributions

$

817,109.47

1,026,910.66

7,325,288.44

13,510.00

9,182,818.57

Other Sources Interest Received on Demand Deposits

529.72 $

DEDUCTIONS

Benefits Death Benefits Retirement Benefits Survivorship Benefits

$

21,000.00

1,803,184.05

467,562.30 $ 2,291,746.35

Administrative Expenses Personal Services Operating Expenses

$

130,151.40

356,923.86

487,075.26

NET INCREASE

$

NET ASSETS HELD IN TRUST FOR PENSION BENEFITS- JULY 1, 1999

11,394,512.66
2, 778,821.61 8,615,691.05 441567,693.22

NET ASSETS HELD IN TRUST FOR PENSION BENEFITS - JUNE 30, 2000

$ ___53;;,:,;,;18;.;;3..3._8_4..,27-

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

SHERIFFS' RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2000

EXHffiiT"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 of Georgia for the purpose of paying retirement benefits to the sheriffs of the State of Georgia. The Board of Commissioners of the Retirement Fund is comprised of six (6) members and consists of the Director of the Office of Treasury and Fiscal Services, one former sheriffwho is a retired beneficiary ofthe 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 ofthe State of Georgia and is included within the State ofGeorgia reporting entity for financial reporting purposes because ofthe significance of its legal, operational, and financial relationships with the State of Georgia. These reporting entity relationships are defined in Section 2100 ofthe Governmental Accounting Standards Board Codification of Governmental Accounting and Financial Reporting 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 ofmember contributions paid by the affected sheriffand 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, 2000, to that of the prior year:

June 30. 2000 June 30, 1999

Retirees and Beneficiaries Currently Receiving

Benefits and Terminated Members Entitled to

but not yet Receiving Benefits

For Retirement

162

160

For Survivorship

_ll

32

Number of Active Members Vested Nonvested

111

70

43

84

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SHERIFFS' RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2000

EXHffiiT"C"

NOTE 1: PLAN DESCRIPTION
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 ofGeorgia. A description ofplan benefits and vesting requirements is as follows:
(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 sheriffwho first or again becomes an active member on or after July 1, 1988. A member must have terminated his/her service as sheriff to receive benefits.
(B) RETIREMENT BENEFITS: The normal benefit is calculated by multiplying $82.00 by the number of years of credited service. The minimum monthly benefit paid is $328.00 and the maximum monthly benefit paid is $2,460.00.
(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 of his/her contributions, or those in excess ofany 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 of 55 years or has not filed an application or has not been approved for retirement benefits.
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SHERIFFS' RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 2000

EXHffiiT"C"

NOTE 1: PLAN DESCRIPTION

PLAN BENEFITS (D) DEATH BENEFITS:
(2) 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.

(3) In addition to the death benefit discussed in item (1 ), upon the death ofan 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 form ofa 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 of credited 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 ofState ofGeorgia 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:

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SHERIFFS' RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2000

EXHffiiT"C"

NOTE 1: PLAN DESCRIPTION

FUNDING REQUIREMENTS (B) COURT FINES AND FORFEITURES:
For civil suits filed in Superior Courts

$ 1.00

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

$ 1.00

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 of its 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 self-balancing set ofaccounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with financerelated 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 ofaccounting is defined as that method ofaccounting in which certain revenues and related assets are recognized when received rather than when earned, and certain expenses are recognized when paid rather than when the obligation is incurred.

Generally accepted accounting principles applicable to retirement funds require that investments be valued at fair value as ofthe plan year-end for the Statement ofPlan Net Assets. While market value has been disclosed, it is not presented within the financial statements at June 30, 2000, as it is the policy of the Sheriffs' Retirement Fund of Georgia to prepare its financial statements on a basis of accounting other than generally accepted accounting principles as noted above.

Generally accepted accounting principles also require that plan liabilities for benefits and refunds due to plan members and beneficiaries should be recognized when due and payable in accordance with the terms of the plan, and all other plan liabilities should be recognized on the accrual basis of

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SHERIFFS' RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2000

EXHIBIT "C"

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PLAN ASSET MATTERS
BASIS OF ACCOUNTING accounting. Plan liabilities are not recorded in the financial statements at June 30, 2000, 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 (O.C.G.A.) Section 47-16-26 states that the Board of Commissioners ofthe Peace Officers' Annuity and Benefit Fund ofGeorgia shall have full power to invest and reinvest funds, subject to all terms, conditions, limitations, and restrictions imposed by the "Public Retirement Systems Investment Authority Law" of Georgia. In addition, the Board of Commissioners is restricted to invest no more than 60% of the assets of the Annuity and Benefit Fund in equities and may not invest more than 10% ofthe assets in corporations or in obligations of corporations organized in a country other than the United States of America or Canada. Statutory provisions governing eligible investments are enumerated in the O.C.G.A. Section 47-20-83 as follows:
(1) Corporations or obligations of corporations organized under the laws of Georgia or any other state or under the laws of Canada, but only if the corporation has a market capitalization equivalent to $100 million; provided, however, that except as provided in O.C.G.A. Section 47-20-84, no fund shall invest in corporations or in obligations of corporations organized in a country other than the United States or Canada; provided, further, that such obligation shall be listed as investment grade by a nationally recognized rating agency;
(2) Repurchase and reverse repurchase agreements for direct obligations ofthe United States government and for obligations unconditionally guaranteed by agencies of the United States government and for investments eligible under paragraph (1) ofthis Code section;
(3) Cash assets or deposits in checking or savings accounts under certificates ofdeposit or in other form in banks and trust companies and in savings accounts, certificates ofdeposit, or similar certificates or evidences ofdeposits in savings and loan associations and building and loan associations which have qualified for the insurance protection afforded by the Federal Deposit Insurance Corporation;
(4) Bonds, notes, warrants, and other evidence ofindebtedness which are direct obligations of the government of the United States of America or for which the full faith and credit of the government of the United States of America is pledged for the payment ofprincipal and interest;
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SHERIFFS' RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2000

EXHIBIT "C"

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PLAN ASSET MATTERS
INVESTMENTS (5) Loans guaranteed as to principal and interest by the government of the United States of America, or by any agency or instrumentality of the government of the United States of America, to the extent of such guaranty;
(6) Taxable bonds, notes, warrants, and other securities not in default which are the direct obligations of any state of the United States or of the District of Columbia, or of the government ofCanada or any province ofCanada, or for which the full faith and credit of such state, district, government, or province has been pledged for the payment ofprincipal and interest;
(7) Bonds, notes, warrants, and other securities not in default which are the direct obligations ofthe government of any foreign country which the International Monetary Fund lists as an industrialized country and for which the full faith and credit of such government has been pledged for the payment ofprincipal and interest, provided such securities are listed as investment grade by a nationally recognized rating agency;
(8) Bonds, debentures, or other securities issued or insured or guaranteed by any agency, authority, unit, or corporate body created by the government of the United States of America whether or not such obligations are guaranteed by the United States;
(9) Collateralized mortgage obligations that are listed as investment grade by a nationally recognized rating agency;
(10) Obligations issued, assumed, or guaranteed by the International Bank for Reconstruction and Development or the International Financial Corporation;
(11) In addition to those investments eligible under paragraph (1) ofthis Code section, bonds, debentures, notes, and other evidences ofindebtedness issued, assumed, or guaranteed by any solvent institution existing under the laws of the United States of America or of Canada, or any state or province thereof, which are not in default as to principal or interest and which are secured by collateral worth at least 50 percent more than the par value of the entire issue of such obligations, but only ifnot more than one-third ofthe total value of the required collateral consists of common stocks;
(12) In addition to those investments eligible under paragraph (1) ofthis Code section, secured and unsecured obligations ofissuers described in paragraph (11) ofthis Code section other than the obligations described in paragraph (11) ofthis Code section, bearing interest at a fixed rate, with mandatory principal and interest due at specified times, ifthe net earnings of the issuing, assuming, or guaranteeing institution available for its fixed charges for a period of five fiscal years next preceding date ofacquisition by the fund have averaged per
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SHERIFFS' RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2000

EXHIBIT "C"

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PLAN ASSET MATTERS
INVESTMENTS (12) year not less than one and one-halftimes its average annual fixed charges applicable to such period and if during either of the last two years of the period of such net earnings have been not less than one and one-half times its fixed charges for the year; provided, however, that any such obligation shall be listed as investment grade by a nationally recognized rating agency;
(13) In addition to those investments eligible under paragraph (1) of this Code section, equipment trust obligations or certificates adequately secured and evidencing an interest in transportation equipment, wholly or in part within the United States ofAmerica, and the right to receive determined portions of rental, purchase, or other fixed obligatory payments for the use or purchase of the transportation equipment;
(14) Loans that are secured by pledge or securities eligible for investment under this article;
(15) Purchase money mortgages or like securities received upon the sale or exchange of real property acquired;
(16) In addition to those investments eligible under paragraph (1) of this Code section, a mortgage or a mortgage participation, pass-through, conventional pass-through, trust certificate, or other similar security which represents an undivided, beneficial interest in a pool ofloans secured by first mortgages, deeds oftrust, or deeds to secure debt upon fee simple, unencumbered, improved, or income-producing real property located in the United States or Canada, which is improved with a residential building or condominium unit or buildings designed for occupancy by not more than four families, including leasehold estates in such real estate ifsuch first mortgages, deeds oftrust, or deeds to secure debt are fully guaranteed or insured by the Federal Housing Administration, the United States Department of Veterans Affairs, the Farmers Home Administration, the Federal Home Loan Mortgage Corporation, the Government National Mortgage Association, the Federal National Mortgage Association, or any similar governmental entity or instrumentality;
(17) Land and buildings on such land used or acquired for use as a fund's office for the convenient transaction of its own business; provided, however, that portions of such buildings not used for its own business may be rented by the fund to others; provided, further, that the amount investment by a fund in office property shall not exceed 10 percent of the retirement system assets;
(18) Real property acquired in satisfaction in whole or in part of loans, mortgages, liens, judgments, decrees, or debts previously owing to the fund in the course of its business;

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SHERIFFS' RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2000

EXHIBIT"C"

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PLAN ASSET MATTERS
INVESTMENTS (19) Real property acquired in part payment of the consideration on the sale of other real property owned by the fund if such transaction effects a net reduction in the fund's investment in real estate;
(20) Real property acquired by gift or devise, or through merger or consolidation with another fund; and
(21) Additional real property and equipment incident to real property if necessary or convenient for the enhancement of the marketability or sale value of real property previously acquired or held by the fund under paragraphs (18), (19), and (20) ofthis Code section.
Investments are defined as those financial instruments with terms in excess ofthree months from the date ofpurchase and certain other securities held for the production ofrevenue. In addition, funds on deposit with the Retirement Fund's investment custodian for purposes of continual investment are reflected as investments regardless ofthe term ofthe instruments. Investments in U. S. government securities, stocks, bonds and debentures, investment accounts, certificates ofdeposit, mutual funds, and real estate limited partnerships are recorded at cost. Accrued interest purchased, premiums or discounts on bonds and debentures and U. S. government securities are reflected as a part ofcost and are not amortized over the remaining life of the security. The market values reflected on the Statement of Plan Net Assets were based on valuations appearing in the Retirement Fund's Investment Custodian Trust Report at June 30, 2000.
Interest income and dividend income are recognized when received in cash. Gains and/or losses are recognized using the completed transaction method. Accrued interest purchased is recorded as a reduction of interest income at the time of purchase.
Approximately 21% of the net assets available for benefits are invested in U.S. government securities.
Statutory provisions governing the investment offunds by the Sheriffs' Retirement Fund of Georgia do not appear to provide for investments in real estate limited partnerships. These investments represent .004% 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 of the risk exposure resulting from investments in derivatives or similar investments, if any, through these open-end mutual funds.

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SHERJFFS' RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2000

EXHIBIT"C"

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

FIXED ASSETS Fixed assets are recorded as expenditures at the time ofpurchase. No depreciation has been provided on fixed assets.

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 Secretary-Treasurer 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. For the fiscal year ended June 30, 2000, the Retirement Fund reimbursed the Youth Homes $14,400.00 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 ofJune 30, 2000, are categorized below in order to provide information about the extent to which such deposits are exposed to custodial credit risk.

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

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

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

Cash Deposits

Carrying Amount

Bank Balance

$ 39 238 00 $ 43 663.56 $

Risk Categories

2

3

43 663.56 $

0.00 $.===0~.0~0

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SHERIFFS' RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2000

EXHffiiT"C"

NOTE 3: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS

CATEGORIZATION OF INVESTMENTS For purposes ofanalysis ofcustodial 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.

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

The carrying amounts of investment balances as of June 30, 2000, are categorized below. These amounts include amounts maintained in open-end mutual funds and real estate limited partnerships which are not subject to risk categorization.

Tvoe of Investment

Risk Categories

2

3

Carrying Amount

Market Value

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

$ 11,018,431.89 $ 28,126,096.07 10,649,779.19 12,924.96

0.00 $

0.00 $ 11,018,431.89 28,126,096.07 10,649,779.19 12,924.96

$ 10,615,395.00 35,476,285.15 10,230,971.85 12,924.96

$ 42 8Q7.2J2 II $

QOO $==~!!l0l0!0 $ 49,807,232.1 I $ 56,335,576.96

Mutual Funds (Open-End) Real Estate Limited Partnerships

3,334,682.16 2,232.00

3,266,143.94
..

Total Investments

$ 5J,H4,H6 27. $ 52,(iQ 1.7.2Q 2Q

(Not Available)

NOTE 4: CONTRmUTIONS REQUIRED AND MADE

FUNDING POLICY The minimum annual employer contribution requirements are set forth in the Official Code of Georgia Annotated Section 47-20-10 and are not actuarially determined. This statute further prohibits any action to grant a benefit increase until such time as the minimum annual contribution requirements meet or exceed legislative requirements. The actuarial valuation as of July 1, 2000, which reflected the proceeds of designated portions of fines and bond forfeitures as the employer contribution, indicated that the minimum employer contribution level was met. Member contribution requirements are set forth in O.C.G.A. Section 47-16-43 and are not actuarially determined.

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SHERIFFS' RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2000

EXHffiiT"C"

NOTE 4: CONTRmUTIONS REQUIRED AND MADE

FUNDING REQUIREMENTS Actual contributions for the year ended June 30, 2000, were as follows:

Member Contributions Fines and Bond Forfeitures

$ 59,795.62 2,151,368.75

$ 2.211.164.37

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:

Equipment

Balance July 1, 1999

$ 20,619.98

Additions

6,447.62

Deletions

0.00

Balance June 30, 2000

$ 27.067.60

NOTE 6: RISK MANAGEMENT

The Department of Administrative Services (DOAS) has the responsibility for the State ofGeorgia ofmaking and carrying out decisions that will minimize the adverse effects ofaccidental 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 ofGeorgia 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.

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SHERIFFS' RETIREMENT FUND OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 2000

EXHffiiT"C"

NOTE 7: CONTINGENCIES

Litigation, claims and assessments filed against the Sheriffs' Retirement Fund ofGeorgia, ifany, 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, 2000.

At June 30, 2000, the Sheriffs' Retirement Fund of Georgia had inactive members' dues on hand in the amount of$790,750.00. One-hundred percent (100%) ofsuch dues are refundable upon request of the inactive members.

NOTE 8: EMPLOYEES' RETIREMENT PLAN

The Sheriffs' Retirement Fund of Georgia 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 of the 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 of Georgia contributes 14% ofthe employee's qualified salary to the plan per fiscal year. Employees may contribute up to 5% ofqualified 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 ofthe deferred options available. The Retirement Fund's total payroll in fiscal year 2000 amounted to $104,319.96, ofwhich $90,319.92 was for covered employees and used by the Retirement Fund for calculating contributions. For fiscal year 2000, the Retirement Fund contributed $12,644.76 to this retirement plan. No employee contributions were made to the plan for fiscal year 2000. 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
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SHERIFFS' RETIREMENT FUND OF GEORGIA SCHEDULE OF ADMINISTRATIVE EXPENSES PAID BY OBJECT
YEAR ENDED JUNE 30. 2000

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
Equipment Lease/Purchase of Equipment
Real Estate Rentals Georgia Sheriffs' Youth Homes, Incorporated
Per Diem, Fees and Contracts Per Diem and Fees

$ 104,319.96

$ 7,980.48 12,644.76 5,206.20

25,831.44 $

130,151.40

$ 12,012.73 1,420.00
24,624.97 $ 38,057.70 17,223.26
3,052.62
14,400.00
284,190.28

356,923.86

$

487,075.26

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 RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30. 2000

SCHEDULE "2"

Totals per Annual Supplement

Adjustments Bittick, Burton, Cody, Ebersole, Hall, Hall, Hodge, Kilgore, Marchman, Massey, Saba, Ward, Webb,

L. Cary Jon James A. Dan Gloria Walter Gene Kathy Tracy L. Jerry Jamil Alice Kenny

Totals per Report

SALARIES

TRAVEL

$

0.00 $

0.00

14,000.04 15,900.00
6,399.96 22,260.00
6,399.96 38,160.00
1,200.00

2,265.43 33.75
2,894.75 1,157.23
171.95
2,231.25
1,851.95 2,265.17 2,707.23
1,644.55

$ 104,319.96 $ 17,223.26

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 RECONCILIATION OF PER DIEM AND FEES YEAR ENDED JUNE 30. 2000

SCHEDULE "3"

Totals per Annual Supplement

Adjustments Bittick, Ebersole, Hodge, Massey, Saba, Webb,

L. Cary Dan Gene Jerry Jamil Kenny

Totals per Report

TYPE PAYMENT
Board Member Board Member Board Member Board Member Board Member Board Member

FEE AMOUNT

EXPENSE AMOUNT

TOTAL

$ 284,080.78 $ 17,150.33 $ 301,231.11

-3,060.43 -1,952.23 -3,026.25 -3,060.17 -3,502.20 -2,439.55

-3,060.43 -1,952.23 -3,026.25 -3,060.17 -3,502.20 -2,439.55

$ 284,080.78 $

109.50 $ 284,190.28

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 SCHEDULE OF FUNDING PROGRESS YEAR ENDED JUNE 30. 2000

SCHEDULE "4"

ACTUARIAL VALUATION
DATE

ACTUARIAL VALUE OF
ASSETS (a)

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

UNFUNDED AAL
(UAAL) (b-a)

FUNDED RATIO (a/b)

07/01/96 $ 32,426,196.00 $ 34,200,103.00 $ 1,773,907.00 94.8%

07/01/98 $ 47,258,981.00 $ 40,494,247.00 $ -6,764,734.00 116.7%

07/01/00 $ 56,618,942.00 $ 50,178,073.00 $ -6,440,869.00 112.8%

COVERED PAYROLL
(C)
n/a
n/a
n/a

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

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, 2000. The actuarial value of assets is equal to 95% of market value of 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. 2000

SCHEDULE "5"

FISCAL YEAR
1998
2000

ANNUAL REQUIRED CONTRIBUTION

$

638,626.00

$

0.00

PERCENTAGE CONTRIBUTED
324.9%
0.0%

Information prior to July 1, 1998, 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. 2000. 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 Return Projected Salary Increases Includes Inflation at Cost-of-Living Adjustments

July 1, 2000 Entry age normal Level dollar, open 15 years 5-year smoothed market value with 10% corridor
6.5% Not applicable None None

Repository 2nd leveJ
See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
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