REPORT DIGEST

GENERAL ASSEMBLY RETIREMENT SYSTEM

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2016

Release Date:  January 26, 2017

FINDINGS THIS AUDIT:  1

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

FINDINGS LAST AUDIT: 1

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
FRANK J. MAUTINO, 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,
2016. The General Assembly Retirement
System’s Compliance Examination covering
the year ended June 30, 2016 will be
issued in a separate report at a later
date.

Governmental Accounting Standards Board
(GASB) Statement No. 67, Financial
Reporting for Pension Plans 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 $373.7 million
at June 30, 2016. The net pension
liability at June 30, 2016 is $324.6
million, which is the difference between
the System’s fiduciary net position of
$49.1 million and the total pension
liability. The System’s funded ratio is
13.13%. 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, therefore
this information under the State’s funding
plan is no longer reported in the
financial statements.

FINDINGS SYNOPSIS

• (16-1) The General Assembly Retirement
System was not in compliance with the
Fiscal Control and Internal Auditing Act.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

NONCOMPLIANCE WITH THE FISCAL CONTROL AND
INTERNAL AUDITING ACT

The General Assembly Retirement System
(System) was not in compliance with the
Fiscal Control and Internal Auditing Act
(the Act).

The Act (30 ILCS 10/2003) requires the
chief executive officer to ensure that
internal audits of all major systems of
internal control are conducted at least
once every two years. The System was
unable to complete internal audits of all
major systems of internal control at least
every two years as required by the Act.

System officials indicated the System was
not able to provide additional resources
to the internal audit function and
therefore the current internal auditor did
not have adequate time during the fiscal
year to complete internal audits as
required. (Finding 1, page 37). This
finding has been repeated since 2014.

System officials accepted our
recommendation to develop a plan to ensure
the internal audit function has the
resources necessary to comply with the
Act. (For the previous System response,
see Digest Footnote #1.)

AUDITOR’S OPINION

Our auditors stated the financial
statements of the General Assembly
Retirement System as of June 30, 2016, and
for the year then ended, are fairly stated
in all material respects.

FRANK J. MAUTINO
Auditor General

FJM:JAF

SPECIAL ASSISTANT AUDITORS

Our Special Assistant Auditors for this
audit were RSM US LLP.

DIGEST FOOTNOTES

#1 - Noncompliance with the Fiscal Control
and Internal Audit Act - Previous System
Response

The System accepts the finding and will
develop a plan to ensure that the internal
audit function continues in the event of
another vacancy within the position over a
significant period of time.