GA MOO ,Rl 597 /99LJ-ENPJIURFS BLIOGEI BJNP YEAR ENDED .lllNf; 30 1ffi EXHIBIT"C" EXPENPITUBES OPERATING EXPENSES TRAVEL EQUIPMENT Equipo,-11 Purchasas ~rchaseolEquipment - ' Equipment COMPUTER CHARGES -Olhoreaots Supplieo and Materials Repairs and Maintenance Equipment Equipo,-11 Purchasas Per Diam, Fees and Contracts Conlracts ~Billings, D0AS REAL ESTATE RENTALS TELEc:aMUNlCATIONS PER DIEM, FEES AND CONTRACTS Per Diem and Fees Conlracts Tolal Operating Expenses Total Expenditures Excess of Funds Available over Expenditures TOTALS YEAR ENDED JUNE 30 1995 JUNE30 1994 27739.76 $ 101,038.35 $ 9,278.76 1 497.73 1118104 $ 38189.35 126,751.95 9,278.76 1 s.43.00 137 573.71 2,988.45 $ 12,961.25 12,509.88 44,365.119 18,455.87 33125.56 124 407.00 $ 322128.62 $ 38674.35 $ 180,938.17 $ 73,065.44 254 003.61 $ 1 370 047.36 $ 6,038,545.10 $ 80608.41 6,558.47 17,701.68 10,703.29 97,049.78 21,166.33 35 003.67 188183.20 302~.00 47 836.91 173,885.37 173,536.89 347 422.26 1 509412.03 5,754,498.14 81 030.34 6 099 153.51 $ 5 835 528.48 Sae Independent Accountanfs Combined Report on Review of F'mancial Statements and Supplementary Information. The notes to the financial statements are an Integral part of this statement. 7- SUPREME COURT OF GEORGIA STATEMENT OF FUNDS A\/AILABLE AND EXPENDITURES COMPARED TO BUDGET BUDGET FUND YEAR ENDED JUNE 30 1995 EXHIBIT "D" FUNDS AVAILABLE REVENUES State Appropriation Federel RB11811ues other Revenues Retained CARRY::QV!;;R FROM PRIOR YEAR Transfer from Reserved Fund Balance BUDGET ACTUAL VARIANCEFAVORABLE (UNFAVORABLE) $ 5,433,395.00 $ 5,433,395.00 $ 31,404.00 31,751.82 795 304.00 623,512.94 $ 6,260,103.00 $ 6,088,659.76 $ 0.00 347.82 -171 791.06 -171,443.24 0.00 10 493.75 10 493.75 $ 6 260 103.00 $ 6,099,153.51 $ -160,949.49 EXPENDITURES Personal Services Operating Expenses $ 4,687,085.00 $ 4,668,497.74 $ 1573018.00 1370047.36 18,587.26 202 970.64 Excess of Funds Available over Expenditures $ 6,260,103.00 $ 6,038,545.10 $ _ _ _.;c22"-1"-';;...55c..7..;..9;..c0_ $ s____ 60 608.41 6;;;0.;6.0.8..41.. 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. -8- SUPREME COURT OF GEORGIA STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS STATE REVENUE COLLECTIONS FUND YEAR ENDED JUNE 30 1995 EXHIBIT"E" CASH RECEIPTS STATE REVENUE COLLECTIONS Admissions Bar Examination Fees Certified Records Court Costs Total Cash Receipts CASH AND CASH EQUIVALENTS - JULY 1 1994 $ 12,742.00 189,051.35 985.00 90,320.00 $ 293,098.35 67,387.60 $ 360,485.95 DISBURSEMENTS TRANSFERS To Office of Treasury and Fiscal Services CASH AND CASH EQUIVALENTS - JUNE 30 1995 $ 280,498.35 79,987.60 $ 360,485.95 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. -9- SUPREME COURT OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30 1995 EXHIBIT "F" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY The Supreme CoW1 ofGeorgia, an organizational unit ofthe State of Georgia, is a unit ofthe judicial branch ofthe government ofthe State of Georgia. The Court is the State of Georgia's highest court of review and exercises exclusive appellate jurisdiction over a variety oftypes ofcases and may review by certiorari cases in the Court of Appeals ofGeorgia which are of gravity or of public importance. The Supreme CoW1 ofGeorgia does not have authority to detennine the amount offunding it will receive from the State of Georgia for any given fiscal year. Such authority is vested in the General Assembly of Georgia. The CoW1 also does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, the Supreme CoW1 ofGeorgia 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. FUND ACCOUNTING The Supreme CoW1 ofGeorgia uses funds and account groups to report on its financial position and the results ofits operations detennined in conformity with 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 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. Account groups are a reporting device used to .account for certain assets and liabilities of the governmental funds not recorded directly in those funds. Funds and account groups presented in the accompanying financial statements are as follows: GOVERNMENTAL FUND TYPES BUDGET FUND - The fund used to account for activities and functions as set forth in the Amended Appropriations Act of 1994-1995. The Budget Fund is similar in nature to a General Fund as identified in generally accepted accounting principles in that the Budget Fund is used to account for all activities except those required to be accounted for in some other fund. STATE REVENUE COLLECTIONS FUND - The fund used to account for the collection of specific revenues ofthe State ofGeorgia as provided by statute or administrative action and the subsequent transfer of such funds to the Office of Treasury and Fiscal Services. This presentation differs from generally accepted accounting principles in that such activity should be included in the General Fund of the governmental organization. FIDUCIARY FUND TYPE AGENCY FUNDS - The funds used to account for assets held for use by other funds, governments, or individuals. - 10- SUPREME COURT OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30 1995 EXHIBIT"F" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FUND ACCOUNTING ACCOUNT GROUPS GENERAL FIXED ASSETS - The account group used to account for fixed assets used in governmental fund type operations. Fixed assets purchased are recorded at cost or at estimated historical cost if historical cost is not practically detenninable. Donated fixed assets are recorded at fair market value on the date donated. Disposals are deleted at recorded values. No depreciation has been provided on general fixed assets. The cost ofnormal maintenance and repairs that do not add to the value of the asset or materially extend assets' lives are not included in the General Fixed Assets Account Group. Material improvements adding to the value or useful life ofthe assets are included in the General Fixed Assets Account Group. GENERAL LONG-TERM DEBT - The account group used to report the noncurrent portions ofcertain governmental long-term liabilities, such as claims, judgments and compensated absences, which will be paid from future resources. BASIS OF ACCOUNTING MEASUREMENT FOCUS The accounting and financial reporting treatment applied to a fund is detennined by its measurement focus. Governmental funds should be accounted for using the flow ofcurrent financial resources measurement focus. With this measurement focus, operating statements present increases and decreases in net current assets and unreserved fund balance is a measure ofavailable spendable resources. In accordance with accounting practices prescribed or pennitted by statutes and regulations of the State of Georgia, the Budget Fund remits its unreserved fund balance (surplus) to the Office ofTreasury and Fiscal Services in the subsequent fiscal year. GOVERNMENTAL FUND TYPES BUDGET FUND Except as disclosed in the following paragraphs, units of government of the State of Georgia record their Budget Fund revenues and expenditures in accordance with the modified accrual basis of accounting. Under the modified accrual basis ofaccounting, revenues are recognized when susceptible to accrual (i.e., when they are "measurable and available"). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to pay liabilities of the current period. Revenues that are accrued include primarily State appropriations, Federal grants and entitlements, and certain amounts earned under operating agreements with other parties. Expenditures are recorded when the related fund liability is incurred, except for unmatured interest on general long-term debt which is recognized when due, and certain compensated absences, claims and judgements which are recognized when the obligations are expected to be liquidated with expendable available financial resources. - 11 - SUPREME COURT OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30 1995 EXHIBIT "F" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING GOVERNMENTAL FUND TYPES BUDGET FUND Contractual obligations for services which have not been performed and for goods which have not been delivered at the end of the fiscal year are recognized as expenditures and liabilities in the accompanying financial statements. This accounting practice causes expenditure-driven grant revenues to be accrued based, in part, on the unexecuted portion of contracts for goods and services. The recognition of encumbrances as expenditures and liabilities is in conformity with accounting practices prescribed or permitted by statutes and regulations ofthe State of Georgia, but is not consistent with generally accepted accounting principles, which provide for the recording of encumbrances as a reservation offund balance. Further, revenue recognition for expenditure-driven grants should be based upon expenditures determined in accordance with generally accepted accounting principles. Prior period adjustments and certain other items are reported as additions to and deductions from fund balances ofthe Budget Fund in the accompanying financial statements. This presentation is in accordance with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia, but differs from generally accepted accounting principles in that immaterial adjustments should be reported as current period revenues and expenditures. STATE REVENUE COLLECTIONS FUND The State Revenue Collections Fund is maintained on the Cash Receipts and Disbursements basis of accounting as prescribed or permitted by statutes and regulations of the State of Georgia. This basis of accounting is defined as that method of accounting in which certain revenue and the related assets are recognized when received rather than when earned, and certain expenses are recognized when paid rather than when the obligation is incurred. The State Revenue Collections Fund, which should be included in the General Fund in accordance with generally accepted accounting principles, should be maintained on the modified accrual basis of accounting. FIDUCIARY FUND TYPE AGENCY FUNDS Agency Funds are custodial in nature and do not measure results ofoperations or have a measurement focus. The modified accrual basis of accounting is utilized for recognizing assets and liabilities. BUDGET Appropriation allotments to the Supreme Court of Georgia are on the basis of a budget submitted by the Court and approved by the Legislature. The budget is adopted on a basis consistent with accounting practices prescribed or permitted by statutes and regulations ofthe State ofGeorgia and is compiled in the same manner as all State departments. Expenditures are classified by budget unit object classes as provided in Act No. 1208 of Georgia Laws 1994 (as approved April 18, 1994) and amended by Act No. 6 of Georgia Laws 1995 (as approved February 22, 1995), which is an appropriated budget and is referred to in these notes as the Amended Appropriations Act of 1994-1995. There is no legal prolubition regarding overexpenditure of the aggregate budget. - 12- SUPREME COURT OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30 1995 EXHIBIT "F" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CASH AND CASH EQUIVALENTS Cash and Cash Equivalents include demand deposits with banks and other financial institutions, funds on deposit with the Judicial Council and cash management pools that have the general characteristics of demand deposit accounts in that the Court may deposit additional cash at any time and also may withdraw cash at any time without prior notice or penalty. INVESTMENTS The Supreme Court of Georgia participates in an investment pool managed by the State of Georgia's Office ofTreasury and Fiscal Services (OTFS) referred to as the "Georgia Fund l ". The Commission does not have any risk exposure from investments in Georgia Fund 1 as the investment policy of OTFS does not provide for investments in derivatives or similar investments through the Georgia Fund 1. INVENTORIES No inventories ofsupplies are reported in the current financial statements. Expendable supplies are recorded as expenditures at the time of purchase. RESERVED FUND BALANCE Reserves represent those portions of fund equity not appropriable for expenditure or legally segregated for a specific future use. The following is a brief description of the reserves reflected in the accompanying financial statements: FEDERAL FINANCIAL ASSISTANCE The residual portion ofFederal financial assistance revenues not yet expended or encumbered. This amount is restricted for expenditure in future years. This accounting treatment differs from generally accepted accounting principles in that the unearned portion of Federal financial assistance should be reflected as deferred revenue. MEDIATOR APPLICANT FEES AND REGISTRATION Funds received for this program represent fees charged to administer the registration of mediator applicants on a biyearly basis. This amount is restricted for expenditure in future years. STATE REVENUE COLLECTIONS FUND The balance ofrevenues collected but not transmitted to the Office of Treasury and Fiscal Services at fiscal year end. These funds are required by the Official Code of Georgia to be transferred to the Office of Treasury and Fiscal Services and are not available for use by the Supreme Court of Georgia. UNRESERVED FUND BALANCE In accordance with accounting practices prescribed or permitted by statutes and regulations ofthe State of Georgia, the Budget Fund's unreserved fund balance is remitted to the Office of Treasury and Fiscal Services in the subsequent fiscal year as surplus. This amount ofunexpended general appropriations is available to the State for reappropriation in subsequent years. - 13 - SUPREME COURT OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30 199S EXHIBIT "F" NOTE I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES COMPENSATED ABSENCES Compensated absences represent obligations ofthe Supreme Court of Georgia relating to employee's rights to receive compensation for future absences based upon services already rendered. This obligation relates only to vesting accumulating annual leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the individual funds for the current portion of this obligation as this amount will not be liquidated with expendable available financial resources. Funds are provided in the appropriation of funds each year to the Court to cover the cost ofannual leave paid to terminated employees. The liability for compensated absences at year end is reported in the General Long-Term Debt Account Group for governmental funds. MEMORANDUM ONLY -TOTAL COLUMNS Total columns on the Combined Statements (Statutory Basis) are captioned "Memorandum Only" because they do not represent consolidated financial information and are presented only to facilitate financial analysis. The columns do not present information that reflects financial position, results of operations or changes in financial position in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. lnterfund eliminations have not been made in the aggregation of this data. COMPARATIVE DATA Comparative total datafor the prior year have been presented in selected sections of the accompanying financial statements in order to provide an understanding of the changes in the Court's financial position and operations. Comparative totals have not been included on statements where their inclusion would not provide enhanced understanding ofthe Court's financial position and operations or would cause the statements to be unduly complex and difficult to understand. Also, certain amounts presented in the prior year data have been reclassified in order to be consistent with the current year's presentation. NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES Funds ofthe State ofGeorgia cannot be placed in a depository paying interest longer than ten days without the depository providing a surety bond to the State. In lieu of a surety bond, the depository may pledge as collateral any one or more ofthe following securities as enumerated in the Official Code of Georgia Annotated Section S0-17-S9: (I) Bonds, bills, certificates of indebtedness, notes, or other direct obligations of the United States or ofthe State of Georgia. (2) Bonds, bills, certificates of indebtedness, notes, or other obligations of the counties or municipalities ofthe State of Georgia. (3) Bonds of any public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose. - 14 - SUPREME COURT OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30 1995 EXIIlBIT "F" NOTE 2 CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES (4) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia. (5) Bonds, bills, certificates of indebtedness, notes, or other obligations ofa subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest, and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association. (6) Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation. As authorized in the Official Code of Georgia Annotated Section 50-17-53, the State Depository Board has adopted policies which allow agencies ofthe State of Georgia the option of exempting demand deposits from the collateral requirements. CATEGORIZATION OF DEPOSITS For purposes of analysis of custodial credit risk, cash deposits consist of all bank balances which include demand deposits and/odnterest bearing accounts. The bank balances as ofJune 30, 1995, 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 Court or by its agent in the Court's name. Category 2 - Amounts collateralized with securities (at market value) held by the pledging financial institution's trust department or agent in the Court'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 Court's name, and amounts uncollateralized. Cash Deposits Carrying Amount Bank Balances Risk Categories SJ68JS7681 $1875525)2 S 2QOQQOOO S 12S97940 SJ54954572 Certain deposits of the Supreme Court of Georgia shown on Schedule "2" of this report are a part of the demand deposits maintained by the Judicial Council. The amount of the bank balance for those deposits is classified by credit risk categories in the review report of the Judicial Council. - 15 - SUPREME COURT OF GEORGIA NOTES TO TIIB FINANCIAL STATEMENTS JUNE30 1995 EXIIlBIT "F" NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS CATEGORIZATION OF INVESTMENTS Investments are stated at cost. The carrying amount of the investment balance as of June 30, 1995, shown below is maintained in an investment pool by the Office of Treasury and Fiscal Services and is not subject to risk categorization. Type oflnvestment Carrying Amount Market Value State Investment Pool S 203 426 32 S 203 426 32 NOTE 3: CAPITAL LEASE COMMITMENTS The Supreme Court ofGeorgia acquires certain property and equipment through multi-year capital leases with varying terms and options. The majority ofthese agreements contain fiscal funding clauses in accordance with O.C.G.A 50-5-64 which prohibits the creation ofa debt to the State ofGeorgia for the payment of any sums under such agreements beyond the fiscal year ofexecution ifappropriated funds are not available. If renewal of such agreements is reasonably assured, however, capital leases requiring appropriation by the General Assembly of Georgia are considered noncancellable for financial reporting purposes. The assets acquired through capital leases are as follows: At June 30, 1995, future minimum commitments under capital leases for equipment are as follows: Fiscal Year Ending June 30 1996 1997 $ 9,278.76 5 412.61 Total Future Minimum Commitments $ 14,691.37 Less: Amounts Representing Interest 908.63 Present Value of Future Minimum Commitments $ 1372:Z~ NOTE 4: CHANGES IN GENERAL FIXED ASSETS In accordance with the statutory definition of moveable personal property as defined in Official Code of Georgia Annotated Section 50-16-161, only those items with an acquisition cost of $1,000.00 or greater are reflected in the General Fixed Assets Account Group. - 16 - SUPREME COURT OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS nJNE 30 1995 EXIIlBIT "F" NOTE 4: CHANGES IN GENERAL FIXED ASSETS The following is a summary of changes of equipment in the General Fixed Assets Account Group during the fiscal year: Balance July 1, I 994 $ 656,668.77 Additions Deductions 96,429.89 39 372.65 Balance June 30, 1995 $ 7]3 726 OJ NOTE 5: GENERAL LONG-TERM DEBT CHANGES IN GENERAL LONG-TERM DEBT A summary of changes in General Long-Term Debt for the year ended June 30, 1995, follows: Compensated Capital Lease Absences Commitments Total Balance July 1, 1994 $ 299,013.65 $ 21,656.95 $ 320,670.60 Additions Annual Leave Earned and Utilized (Net) Salaries Salary Related Fringe Benefits Deductions -22,162.45 -1,695.43 7 874.21 -22,162.45 -1,695.43 7 874.21 Balance June 30, 1995 $ 275 ISS 77 $ J3 782 74 $ 288 238 SI NOTE 6: RISK MANAGEMENT Public Entity Risk Pool The State Personnel Board, Merit System ofPersonnel Administration internally administers for the State of Georgia a program of health benefits for the employees of units ofgovernment ofthe State of Georgia and units of county government and local education agencies located within the State of Georgia. This plan is funded by participants covered in the plan, by employers' contributions paid by the various units of government participating in the plan, and appropriations made by the General Assembly of Georgia. The State Personnel Board, Merit System ofPersonnel Administration has contracted with Blue Cross Blue Shield ofGeorgia to process claims in accordance with the State Employees' Health Benefit Plan as established by the State Personnel Board. - 17 - SUPREME COURT OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE.JO 1995 EXHIBIT"F" NOTE 6: RISK MANAGEMENT Other Risk Management The Department ofAdministrative Services (DOAS) has the responsibility for the State of Georgia of making 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 services 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 is purchased applicable to property, employee and automobile liability, fidelity and certain other risks. The Supreme Court 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 state agencies by DOAS to provide claims servicing and claims payment. NOTE 7: DEFERRED COMPENSATION PLAN The State ofGeorgia offers its employees a deferred compensation plan in accordance with Internal Revenue Code Section 457. The plan, available to employees ofthe State of Georgia and county health departments, permits such employees to defer a portion oftheir salary until future years. Participation in the plan is optional. Participants choose the option or options in which they wish to participate. The deferred compensation is not available to employees. until termination, retirement, death, or unforeseeable emergency. All amounts of compensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property, or rights are (until paid or made available to the employee or other beneficiary) solely the property or rights of the State of Georgia subject only to the claims of the State's general creditors. Participant's rights under the plan are equal to those of a general creditor of the State of Georgia in an amount equal to the fair market value of the deferred account of each participant. Financial information relative to the plan is presented in the financial report ofthe State Personnel Board - Merit System ofPersonnel Administration for the year ended June 30, 1995. NOTES: RETIREMENTPLANS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA Plan Description The Supreme Court of Georgia participates in the Employees' Retirement System of Georgia (''ERS"), a single-employer, defined benefit plan established by the General Assembly of Georgia for the purpose of providing retirement allowances for employees ofthe State ofGeorgia The Court's payroll for the year ended June 30, 1995, for employees covered byERS was $3,353,836.59. The Court's total payroll for all employees was $3,458,004.70. - 18 - SUPREME COURT OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30 1995 EXHIBIT "F" NOTE 8: RETIREMENT PLANS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA Benefits The benefit structure of ERS was significantly modified on July 1, 1982. Unless elected otherwise, an employee who currently maintains membership with ERS based upon State employment that started prior to July 1, 1982, is an "old plan" member subject to the plan provisions in effect prior to July 1, 1982. All other members are "new plan" members subject to the modified plan provisions. Members become vested after 10 years of creditable service. A member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 65. Retirement benefits paid to members are based upon a formula which considers the monthly average of the member's highest eight consecutive calendar quarters of salary, the number of years of creditable service and the member's age at retirement. Postretirement cost-of-living adjustments are also made to member's benefits. The normal retirement pension is payable monthly for life; however, options are available for distribution of the member's monthly pension at reduced rates to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS. If IO years of service is completed and age 60 is reached, the member may retire with a reduced benefit. Additionally, there are certain provisions allowing for retirement after 30 years of service regardless of age. Contributions Required and Contributions Made Under the old plan, member contributions consist of employee contributions paid by the employee of I .25% of annual compensation and 4.75% of annual compensation paid by the Court on behalf of the employee. Under the new plan, member contributions consist solely of 1.25% of annual compensation paid by employee. The Court also is required to contribute at a specified percentage ofactive member payroll determined annually by actuarial valuation. For the year ended June 30, 1995, the ERS employer contribution rate for the Court amounted to 15.62% of covered payroll and included the 4.75% contributed on behalf of the employee referred to above. Contributions are also made on amounts paid for accumulated leave of retiring employees. Total contributions to the plan made during fiscal year 1995 amounted to $624,867.27, of which $524,223.99 was made by the Court and $100,643.28 was made by employees. These contributions met the requirements of the plan. Funding Status and Progress Pension Benefit Obligation The amount shown as the "pension benefit obligation" is a standardized disclosure measure of the present value ofpension benefits, adjusted for the effects ofprojected salary increases and step-rate benefits, estimated to be payable in the future as a result of employee service to date. The measure is intended to help users assess the funding status ofERS on the going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due and make comparisons among employers. The measure is the actuarial present value of credited projected benefits, and is independent ofthe funding method used to determine contributions to the plan. - 19 - SUPREME COURT OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30 1995 EXHIBIT "F" NOTE 8: RETIREMENT PLANS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA Funding Status and Progress Pension Benefit Obligation The pension benefit obligation was computed as part of an actuarial valuation performed as of June 30, 1994. Significant actuarial assumptions used in the valuation include the following: 1) The present value offuture pension benefits paid was computed using a discounted rate of7.5 percent. This rate is also the same rate assumed to be earned on investments in the plan in future years. 2) Future pension payments reflect the following assumed salary increases as a result of inflation and merit increases: ~ Percentage 20 9.5% 25 8.5% 30 6.5% 35 6.0% 40to 65 5.7% 3) ERS has the authority to grant cost-of-living adjustments by state statute. As ofJune 30, 1994, cost-ofliving adjustments have been included in the pension benefit obligation. The total unfunded pension benefit obligation ofERS as of June 30, 1994, was $310,149,000, as follows: Pension Benefit Obligation: Retirees and Beneficiaries Currently Receiving Benefits and Terminated Employees Entitled to Benefits but Not Yet Receiving Benefits Current Employees Accumulated Contributions Employer-Financed Vested Employer-Financed Nonvested Total Pension Benefit Obligation Net Assets Available for Benefits Unfunded Pension Benefit Obligation $ 2,227,653,000 648,516,000 1,085,190,000 1206 805 000 $5,168,164,000 4 858 015 000 $ 310 149 000 -20- SUPREME COURT OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE30 1995 EXHIBIT"F" NOTES: RETIREMENTPLANS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA Funding Status and Progress Pension Benefit Obligation The measurement ofthe total pension benefit obligation is based on an actuarial valuation as ofJune 30, 1994. Net assets available for benefits were valued as of the same date. ERS does not make separate measurements of assets and pension benefit obligation for individual employers. Funding Policy The ERS funding policy provides for periodic employer contributions at actuarially determined rates that, expressed as percentages ofannual payroll, are sufficient to accumulate sufficient assets to pay benefits when due. Level percentage of payroll employer contribution rates are determined using the entry age funding method. ERS also uses the level percentage of payroll method to amortize the unfunded liability within approximately 20 years following the valuation date. Total contributions from all employers to ERS for the year ended June 30, 1995, were $256,624,679.00. The Court's contribution was actuarially determined and represented 0.20% of total contributions made by all participating employers. Significant actuarial assumptions used to compute contributions are the same as those used to compute the standardized measure of pension obligation. Trend Information Historical trend infolllJlltion is presented in the financial report ofERS for the year ended June 30, 1995. This information gives an indication of the progress made in accumulating sufficient assets to pay benefits when due. GEORGIA DEFINED CONTRIBUTION PLAN Plan Description The Supreme Court of Georgia participates in the Georgia Defined Contribution Plan ("GDCP") which is a single-employer defined contribution plan established by the Georgia General Assembly in July 1993 for the purpose ofproviding retirement coverage for State employees who are temporary, seasonal, and part-time and are not members of a public retirement or pension system. GDCP is administered by the Employees' Retirement System Board of Trustees. The Court's payroll for the year ended June 30, 1995, for employees covered by GDCP was $104,168.11. The Court's total payroll for all employees was $3,458,004.70. - 21 - SUPREME COURT OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30 1995 EXIIlBIT "F" NOTES: RETIREMENTPLANS GEORGIA DEFINED CONTRIBUTION PLAN Benefits A member may retire and elect to receive periodic payments after attainment ofage 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board. If a member has less than $ 3,500 credit to hWher account, the Board has the option of requiring a lump sum distribution to the member in lieu of making periodic payments. Upon the death of a member, a lump sum distribution equaling the amount credited to his/her account will be paid to the member's designated beneficiary. Contributions and Vesting Member contnbutions are seven and one-half percent (7.5%) of gross salary. There are no employer contributions. Earnings are credited to each member's account in a manner established by the Board. Upon termination ofemployment, the amount ofthe member's account is refundable upon request by the member. Total contnbutions made by employees during fiscal year 1995 were not available due to the manner in which accounting records were maintained by the Court. NOTE 9: LEAVE POLICIES Employees earn ten hours of sick leave each month with a maximum accumulation of ninety days. Unused accumulated sick leave does not vest with the employee and is forfeited upon retirement or termination of employment. Employees earn annual leave ranging from ten to fourteen hours each month depending upon the employees' length ofcontinuous State service with a maximum accumulation offorty five days. Employees are paid for unused accumulated annual leave upon retirement or termination ofemployment. See Note 1 - Compensated Absences. Certain employees who retire with one hundred and twenty days or more offorfeited annual and sick leave are entitled to additional service credit in the Employees' Retirement System of Georgia. NOTE 10: CONTINGENCIES Amounts received or receivable from grantor agencies are suiject to audit and adjustment by grantor agencies. This could result in refunds to the grantor agency for any expenditures which are disallowed under grant terms. The amount of expenditures which may be disallowed by the grantor cannot be determined at this time although the Supreme Court ofGeorgia expects such amounts, if any, to be immaterial to its overall financial position. - 22- SUPREME COURT OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30 1995 EXHIBIT "F" NOTEl0: CONTINGENCIES Litigation, claims and assessments filed against the Supreme Court ofGeorgia, if any, are generally considered to be actions against the State of Georgia. Pursuant to the Official Code of Georgia Annotated, the Department ofAdministrative Services maintains a program of purchased insurance and self-insurance which provides coverage for such litigation, claims and assessments. 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, 1995. NOTE 11: BONDING INFORMATION All employees ofthe Supreme Court of Georgia are bonded under a Public Employees Blanket Bond written by Employers Insurance of Wausau, their Bond No. 1450-00-110723, on which the premium was paid to October 1, 1995. Under this agreement the Public Employee Dishonesty Coverage insures the Court to a maximum ofSI,000,000.00 against loss sustained through fraudulent or dishonest acts by its employees. The Faithful Performance of Duty Coverage insures the Court to a maximum of $1,000,000.00 against loss sustained from failure ofits employees to perform faithfully their duties or to account properly for all monies and property received by virtue of their position or employment. All employees ofthe Supreme Court ofGeorgia are also bonded under Commercial Crime Policies written by the United States Fire Insurance Company, their Policy Nos. 626 012292 6 and 626 012294 4, on which premiums were paid to October 1, 1995. Under these additional public employee dishonesty coverages, the policies insure the Court to a maximum of $9,000,000.00 against loss sustained through fraudulent or dishonest acts by its employees. - 23 - he~ ~u~J)~l SUPPLEMENTARY INFORMATION -25 - SUPREME COURT OF GEORGIA COMBINING STATEMENT Of CHANGES IN ASSETS AND LIABILITIES EIQUC!ARY FUND TYPE -AGENCY FUNDS VEAR ENDED JUNE 30 1995 EXHIBIT "G" BlliQ Alternative Dispute Resolution Board to Determine Fitness of Bar Applicants ASSETS/ LIABILITIES JULY1 1994 ADDITIONS DELETIONS ASSETS/ LIABILITIES JUNE 30 1995 $ 170,355.54 $ 85,311.30 $ 52,240.52 $ 203,426.32 1157,398.00 914,373.00 575,546.09 1496224.91 $ 1 327i753.54 $ 9991684.30 $ 627i786.61 $ 1699651.23 See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. -26- UPREMI;; COURT OF gi;ORglA SCHEDUbE OF APPROVl;;D BUDGET YEAR ENDED JUNE 30 1995 SCHEDULE "1" FUNDS AVAILABLE REVENUES State Appropriation Federal Revenues other Revenues Retained ORIGINAL APPROPRIATION BUDGET ADJUSTMENTS TOTAL $ 5,433,395.00 $ 5,433,395.00 $ 31,404.00 31,404.00 646 243.00 149 061.00 795 304.00 $ 6 079 638.00 $ 180 465.00 $ 6,260. 103.00 EXPENDITURES Personal Services Operating Expenses $ 4,594,033.00 $ 1 485605.00 93,052.00 $ 87 413.00 4,687,085.00 1,573 018.00 $ 6 079,638.00 $ 180,465.00 $ 6,260 103.00 See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. -27 - SUPREME COURT OF GEORGIA CASH AND CASH EQUIVALENTS JUNE 30 1995 SCHEDULE "2" NONINTEREST BEARING ACCOUNTS NationsBank of Georgia, N.A., Atlanta, Georgia Wachovia Bank of Georgia, Atlanta, Georgia Funds on Deposit with Judicial Council INTEREST BEARING ACCOUNT Funds on Deposit with Office of Treasury and Fiscal Services State Investment Pool $ 1,598,440.53 83,136.28 57,135.62 $ 1,738,712.43 203,426.32 $ 1,942,138.75 See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. -28- SUPREME COURT OF GEORGIA SCHEDULE OF FEDERAL REVENUES YEAR ENDED JUNE 30 1995 PROGRAM Justice, U.S. Department of Drug Control and System Improvement - Formula Grant Tlvough Office of the Governor State Justice Institute Georgia Conference on Substance Abuse and the Courts Direct CFDA NUMBER 16.579 NIA SCHEDULE "3" AMOUNT $ 29,819.96 1,931.86 $ 31,751.82 See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. -29- SUPREME COURT OF GEORGJA SCHEDULE OF OTHER OPERATING EXPENSES YEAR ENDED JUNE 30 1995 OPERATING EXPENSES REGULAR OPERATING EXPENSES Assessments - National Center for State Courts Clipping Service Conference Costs Copier Usage Examinations and Tesling FUm Processing Freight, Express and Storage Investigations Legal Advertising Registration Fees Subscriptions and Dues SCHEDULE "4" $ 108,932.00 330.35 11,625.81 9,982.43 59,396.00 1,648.14 2,578.59 10,021.07 90.86 8,893.00 11,895.73 $ 225,393.98 See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. -30- SUPREME COURT OF GEORGIA RECONCILIATION OF SALARIES AND TRAVEL YEAR ENDED JUNE 30 1995 SCHEDULE "5" Totals per Annual Supplement Accruals June 30, 1994 Adjustments Shared Services on Jointly Staffed Personnel Court of Appeals of Georgia Abbot, Faye S. Averitt, Melissa Jo Griffin, Kimberlyn 0. Harton, Patricia M. Henwood, W. Scott Horton, Janice L. Lynch, Marjorie M. McAdams, Pia R. Ruskell, Jean M. Wade, Ginger P. Reimbursement for Annual Leave Court of Appeals of Georgia Dailey, Andrea W. SALARIES $ 3,591,529.25 $ TRAVEL 27,799.40 -59.64 -10,156.86 -15,398.52 -911.00 -19,431.00 -35,347.44 -1,897.70 -12,204.57 -11,500.00 -10,156.86 -19,620.00 3,099.40 Totals per Report s 3.458,004.7D s ____2;;;;7:.:,,7;..;3;;;9;,;,.7.;;;.s See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. - 31 -