REPORT DIGEST OFFICE OF THE TREASURER - FISCAL OFFICER RESPONSIBILITIES ATTESTATION EXAMINATION – SECURITIES LENDING SCHEDULES FOR THE YEAR ENDED JUNE 30, 2017 Release Date: October 31, 2017 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 Attestation Examination of the Office of the Treasurer, Fiscal Officer Responsibilities (“State Treasurer”) Schedules of Securities Lending Entries; Securities Lending Collateral, SCO-576 Agency Fund Activity; Allocation of Securities Lending Collateral Based on Distribution of Interest Income Earned During the Month of June 2017; and Securities Lending Activity of State Treasurer, Agency Fund Activity and the related Notes to the Schedules, which collectively comprise the “Securities Lending Schedules” as of and for the year ended June 30, 2017. The State Treasurer lends securities to broker-dealers and other entities for collateral that will be returned for the same securities in the future. During fiscal year 2017, a bank contracted by the State Treasurer lent U.S. Agency securities and U.S. Treasury securities and received as collateral U.S. dollar denominated cash. Borrowers were required to deliver collateral for each loan equal to at least 100% of the aggregate fair value of the loaned securities. The securities lending collateral received that was invested in repurchase agreements and the fair value of securities on loan for the State Treasurer as of June 30, 2017 were $3,522,922,500 and $3,475,790,990, respectively. As described in Note 2 to the Securities Lending Schedules, when a government pools money from several funds for investment purposes and the pool, rather than the individual funds, has securities lending transactions, the government should report the assets and liabilities arising from the securities lending transactions in the balance sheets of the funds and activities that have the risk of loss on the collateral assets. As a result, the State, participating component units and certain departments will report a portion of the securities lending collateral and obligations in their financial statements. The State Treasurer has prepared Securities Lending Schedules as of and for the year ended June 30, 2017 which provide the necessary information to assist the State, its participating component units and certain departments in preparing financial statements. These schedules have been examined and will provide relevant information for the fiscal year 2017 financial statements and audits thereof. ACCOUNTANT'S OPINION We conducted an attestation examination of the Securities Lending Schedules of the State Treasurer as of and for the year ended June 30, 2017. The accountants stated the Securities Lending Schedules were presented in accordance with the criteria contained in Note 2 to the Securities Lending Schedules in all material respects. This securities lending attestation examination was conducted by Crowe Horwath LLP. JANE CLARK Division Director This report is transmitted in accordance with Section 3-14 of the Illinois State Auditing Act. FRANK J. MAUTINO Auditor General FJM:jaf