REPORT DIGEST

GENERAL ASSEMBLY RETIREMENT SYSTEM

FINANCIAL AUDIT
For the Year Ended June 30, 2014

Release Date:  January 22, 2015

FINDINGS THIS AUDIT:  2

CATEGORY:  NEW -- REPEAT -- TOTAL
Category 1:  0 -- 0 -- 0
Category 2:  2 -- 0 -- 2
Category 3:  0 -- 0 -- 0
TOTAL:  2 -- 0 -- 2

FINDINGS LAST AUDIT: 0

Category 1:	Findings that are material
weaknesses in internal control and/or a
qualification on compliance with State laws
and regulations (material noncompliance).
Category 2:	Findings that are significant
deficiencies in internal control and
noncompliance with State laws and regulations.
Category 3:	Findings that have no internal
control issues but are in noncompliance with
State laws and regulations.

State of Illinois, Office of the Auditor
General
WILLIAM G. HOLLAND, AUDITOR GENERAL

To obtain a copy of the Report contact:
Office of the Auditor General, Iles Park
Plaza, 740 E. Ash Street, Springfield, IL
62703
(217) 782-6046 or TTY (888) 261-2887

This Report Digest and Full Report are also
available on the worldwide web at
www.auditor.illinois.gov

INTRODUCTION

This digest covers the financial statement
audit of the General Assembly Retirement
System of the State of Illinois (System) as of
and for the year ended June 30, 2014.  The
General Assembly Retirement System’s
Compliance Examination covering the year ended
June 30, 2014 will be issued in a separate
report at a later date.

During fiscal year 2014 the System implemented
Governmental Accounting Standards Board (GASB)
Statement No. 67, Financial Reporting for
Pension Plans.  Implementation of the new
statement requires the System to disclose the
total pension liability and net pension
liability in the financial statement notes as
well as other related information as required
supplementary information.  The System’s total
pension liability is $397.5 million at June
30, 2014.  The net pension liability at June
30, 2014 is $340.7 million, which is the
difference between the System’s fiduciary net
position of $56.8 million and the total
pension liability.  The System’s funded ratio
is 14.29%.  The criteria used for computing
pension liability information in the financial
report in accordance with GASB Statement No.
67 differs from the criteria used to compute
the actuarial accrued liability and actuarial
unfunded liability under the State’s funding
plan.  The pension information under the
State’s funding plan is no longer reported in
the financial statements.

FINDING SYNOPSIS

• (14-2) The General Assembly Retirement
System has weaknesses in controls over
creditable earnings and member census data
reported by the Illinois Office of the
Comptroller.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

CONTROLS OVER CENSUS DATA

The General Assembly Retirement System of the
State of Illinois (System) has weaknesses in
controls over creditable earnings and member
census data reported by the Illinois Office of
the Comptroller (Comptroller).
During our current fiscal year testing we
noted no errors in census data reported to the
System out of 16 active members tested.
During a review of the System’s internal
controls over creditable earnings and member
census data, it was noted the System’s current
processes and controls for verifying the data
rely heavily on the reporting of the
information by the Comptroller and there are
limited controls in place by the System to
verify the creditable earnings and member
census information.
System officials indicated the System did not
have procedures in place to conduct audits of
the Comptroller to verify census data.
(Finding 2, pages 35-36)
The System accepted our recommendation to
update current processes and controls to
include the verification of significant
elements of census data.

OTHER FINDING

The remaining finding is reportedly being
given attention by the System.  We will review
the System’s progress towards the
implementation of our recommendations in our
next financial audit.

AUDITOR’S OPINION

Our auditors stated the financial statements
of the General Assembly Retirement System as
of June 30, 2014, and for the year then ended,
are fairly stated in all material respects.

WILLIAM G. HOLLAND
Auditor General

WGH:JAF

SPECIAL ASSISTANT AUDITORS

Our Special Assistant Auditors for this audit
were BKD LLP.