REPORT DIGEST
ILLINOIS STATE BOARD OF INVESTMENT
COMPLIANCE AUDIT For the Year Ended: June 30, 2003
Summary of Findings:
Total this audit 0 Total last audit 0 Repeated from last audit 0
Release Date: March 11, 2004
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 TDD (217) 524-4646
This Report Digest is also available on the worldwide web at http://www.state.il.us/auditor |
INTRODUCTION This digest covers our compliance audit of the Illinois State Board of Investments (Board) for the year ended June 30, 2003. A financial audit covering the year ending June 30, 2003 was issued separately. There were no material findings of noncompliance disclosed during our audit tests. We commend the Board for maintaining effective fiscal controls.
SUBSEQUENT EVENT On April 7, 2003, Governor Rod Blagojevich signed House Bill 2660 into law as Public Act 93-0002. This new law authorized the State of Illinois to issue $10 billion of General Obligation Bonds for the purpose of making contributions to designated retirement systems, which included the State Employees Retirement System, General Assembly Retirement System, and the Judges Retirement System. On July 2, 2003, the Board received an allocation of $1,554,924,744 from the respective retirement systems resulting from the pension bond proceeds. The Board approved a temporary allocation of the pension obligation bond proceeds as follows: 54% to a Russell 3000 Index Fund, 31% to a Lehman Brother Aggregate Index Fund, 15% to a EAFE Index Fund.
____________________________________ WILLIAM G. HOLLAND, Auditor General WGH:RPU:pp SPECIAL ASSISTANT AUDITORS KPMG, LLP were our special assistant auditors for this audit. {Financial Information is summarized on the reverse page.} |
ILLINOIS STATE BOARD OF INVESTMENT
INFORMATION FROM FINANCIAL AND COMPLIANCE AUDITS
YEAR ENDED JUNE 30, 2003
FINANCIAL STATEMENT ANALYSIS |
FY 2003 |
FY 2002 |
Revenues: Investment Income - Interest Investment Income - Dividends Investment Income - Securities Lending Total Investment Income Expenses: Operating Expenses #9; Net Investment Income Realized Gain (Loss) on Investments Unrealized Gain (Loss) on Investments Change in Investments Member Systems’ Withdrawals Net Assets, at Beginning of Year Net Assets, at End of Year |
$ 118,115,302 68,679,534 1,931,644 $ 188,726,480
16,756,528 $ 171,969,952 (608,949,507) 449,672,264 $ 12,692,709 (140,000,000) 7,928,328,501 $7,801,021,210 |
$ 165,057,208 48,392,308 2,279,015 $ 215,728,531
18,604,615 $ 197,123,916 (209,162,950) (565,864,432) $ (577,903,466) (71,850,000) 8,578,081,967 $7,928,328,501 |
INVESTMENT PORTFOLIO ANALYSIS – Fair Value |
JUNE 30, 2003 |
JUNE 30, 2002 |
Total Government Obligations Total Corporate Obligations Foreign Obligations Convertible Bonds Common Stock & Equities Convertible Preferred Stock Preferred Stock Foreign Equity Securities Real Estate Investments Alternative Investments Money Market Investments Forward Foreign Currency Contracts Total Investment Portfolio |
$ 862,128,328 695,789,042 181,133,769 861,871 3,772,803,315 4,263 4,402,445 1,174,665,480 614,846,458 441,537,163 283,727,618 (17,720) $8,031,882,032 |
$1,057,628,472 807,243,888 84,261,722 159,060 3,573,004,993 75,520 8,051 1,231,600,202 417,054,183 414,830,358 345,095,683 511,922 $7,931,474,054 |
OPERATING EXPENSES |
FY 2003 |
FY 2002 |
Salaries Benefits Rent and Utilities Audit Other External Support: Custody Consulting and Professional Investment Advisors/Managers Investment Services and Research Total Operating Expenses |
$ 1,003,424 280,235 147,239 93,200 115,974
357,750 334,708 14,202,759 221,239 $16,756,528 |
$ 1,162,229 325,957 127,535 90,010 118,688
358,068 357,771 15,888,360 175,997 $18,604,615 |
SUPPLEMENTARY INFORMATION |
FY 2003 |
FY 2002 |
Compounded Annual Rate of Return, Since July 1, 1982 (unaudited)Annual Time Weighted Return on Investments (unaudited)Average Number of System Employees Total Brokerage Commissions Paid Total Investment Manager Fees |
10.5% .3% 8 $8,174,036 $14,202,759 |
11.1% (6.9)% 12 $4,381,910 $15,888,360 |
EXECUTIVE DIRECTOR(S) |
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During Audit Period: Jane R. Patterson, until February 28, 2003; Katherine Spinato, Acting, March 1, 2003 through March 15, 2003; William R. Atwood , effective March 16, 2003 Currently: William R. Atwood |