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REPORT DIGEST
ILLINOIS STATE BOARD OF INVESTMENT
FINANCIAL AUDIT For the Year Ended: June 30, 2006
Release Date:
March 27, 2007 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 the
Full Report are also available on the worldwide web at http://www.auditor.illinois.gov |
INTRODUCTION
This
digest covers our financial audit of the Illinois State Board of Investment
(ISBI) for the year ended June 30, 2006.
A report on the results of our compliance attestation examination for
the year ending June 30, 2006 is being issued separately.
Pursuant to the Illinois Pension Code, the Illinois State Board of
Investment manages the investments of the State Employees’ Retirement System,
General Assembly Retirement System and the Judges’ Retirement System.
LEGISLATION
AFFECTING ISBI
Public Act 94-0004 became law June 1, 2005 and
addressed the early retirement option (ERO), benefit changes and funding
reductions. The Act established
specific dollar amounts to be contributed by the State as employer contributions
for fiscal years 2006 and 2007, as opposed to the State’s contribution being
calculated based on the existing funding formula. The legislative funding reduction will
be approximately $429.4 million in fiscal year 2007 for employer
contributions to the State Employees’, Judges’ and General Assembly
Retirement Systems. Member systems’
withdrawals increased by approximately $211 million in fiscal year 2006 from
$ 547.7 million in fiscal year 2005 to $759 million in fiscal year 2006.
AUDITORS' OPINION
Our
auditors state the June 30, 2006 financial statements of the Illinois State
Board of Investment are fairly presented.
____________________________________
WILLIAM
G. HOLLAND, Auditor General
WGH:RPU:pp SPECIAL
ASSISTANT AUDITORS
Our
special assistant auditors for this audit were KPMG LLP. {Financial data is
summarized on the reverse page} |
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ILLINOIS STATE BOARD OF INVESTMENT
FINANCIAL
AUDIT
FOR THE YEAR ENDED JUNE 30,
2006
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OPERATING
STATEMENT ANALYSIS |
FY 2006 |
FY 2005 |
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Revenues:
Investment Income - Appreciation in Fair Value...... Investment Income - Interest
& Dividends.............. Investment Income - Securities
Lending.................. Total Investment Income.................................... Expenses: Salaries and Benefits......................................... Operating Expenses..............................................
External Support (consulting and investment fees).. Total Expenses.................................................. Revenue Over Expenses............................... Member
Systems’ Withdrawals.............................................. Net
Assets Beginning of the Year.......................................... Net
Assets End of the Year................................................... |
$ 892,599,986 306,226,121 4,321,712 $ 1,203,147,819 $ 1,173,380 413,205 28,556,047 $ 30,142,632 $ 1,173,005,187 (759,000,000) 10,902,479,667 $11,316,484,854 |
$ 766,090,763 262,157,730 3,674,829 $ 1,031,923,322 $ 1,082,345 374,817 23,025,047 $ 24,482,209 $ 1,007,441,113 (547,700,000) 10,442,738,554 $10,902,479,667 |
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EXTERNAL SUPPORT EXPENSES |
FY 2006 |
FY 2005 |
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Custody................................................................................ Consulting and Professional.................................................... Investment Advisors / Managers............................................ Investment Services and Research......................................... Total External Support Expenses.................................... |
$ 224,730 739,748 27,434,504 157,065 $28,556,047 |
$ 197,857
647,218 22,010,299 169,673 $23,025,047 |
MEMBER SYSTEMS’ WITHDRAWALS |
FY 2006 |
FY 2005 |
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State Employees’ Retirement System................................... Judges’
Retirement System...................................................... General
Assembly Retirement System...................................... Total Member Systems’
Withdrawals............................... |
$721,000,000 28,500,000
9,500,000 $759,000,000 |
$518,000,000 21,600,000
8,100,000 $547,700,000 |
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INVESTMENT PORTFOLIO ANALYSIS - Fair Value |
JUNE 30, 2006 |
JUNE 30, 2005 |
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Government
and Agency Obligations........................................ Foreign
Obligations.................................................................. Corporate
Obligations.............................................................. Convertible
Bonds................................................................... Common
Stock & Equity Funds................................................ Preferred
Stock....................................................................... Foreign
Equity Securities.......................................................... Hedge
Funds........................................................................... Real Estate Investments........................................................ Private Equity...................................................................... Money
Market Instruments...................................................... Forward
Foreign Exchange Contracts....................................... Total
Investment Portfolio............................................... |
$ 1,110,919,988 104,455,671 1,382,574,163 0 5,369,124,032 1,057,334 1,113,268,102 416,462,183 1,134,025,154 482,264,036 320,641,552 26,145 $11,434,818,360 |
$ 1,130,079,107 88,970,486 1,643,935,794 1,404,244 5,529,033,328 1,593,391 1,035,874,373 0 778,951,123 466,871,030 283,461,008 (497,874) $10,959,676,010 |
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SELECTED ACCOUNT BALANCES |
JUNE 30, 2006 |
JUNE 30, 2005 |
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Cash..................................................................................... Total Accounts Receivable..................................................... Capital Assets....................................................................... Operating Expenses Payable.................................................. Investment Purchases Payable................................................. |
$ 80,644,137 $184,529,093 $ 45,348 $ 6,893,061 $376,678,007 |
$ 13,722,061 $294,208,301 $ 41,772 $ 5,944,261 $359,224,216 |
BOARD CHIEF EXECUTIVES
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During Engagement Period:
Executive Director: William R. Atwood. Chairman: Edward M. Smith (through
12-31-2005), Michael Goetz (starting March 2006). Currently: Executive Director: William R.
Atwood. Chairman: Michael Goetz. |
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