financial audit of the department of public safety_part7 pdf

Accordingly, the assets and liabilities of the State’s deferred compensation plan are not reported in the State’s or the department’s basic financial statements.. Losses not covered by i

Trang 1

Chapter 3: Financial Audit

of the departments of the County Prosecuting Attorney and the Attorney General, narcotics enforcement investigators, and public safety

investigators are required to contribute 12.2% of their salary The funding method used to calculate the total employer contribution requirement is the Entry Age Normal Actuarial Cost Method Under this method, employer contributions to the ERS are comprised of normal cost plus level annual payments required to liquidate the unfunded actuarial liability over the remaining period of 27 years from June 30, 2002 Contributions by the department for the fiscal years ended June 30, 2005,

2004 and 2003 were approximately $11,269,000, $8,893,000 and

$8,568,000, respectively, which are equal to the required contributions The contribution rate for the fiscal year ended June 30, 2005 was 10.82% The contribution rate was 9.14% and 8.87% for the fiscal years ended June 30, 2004 and 2003, respectively

Postretirement Health Care and Life Insurance Benefits

In addition to providing pension benefits, the State provides certain health care and life insurance benefits to retired state employees

Contributions are financed on a pay-as-you-go basis The department’s share of the postretirement health care and life insurance benefits expense for the fiscal year ended June 30, 2005 was approximately

$6,863,000

Deferred Compensation Plan

The State offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457 The plan, available

to all state employees, permits employees to defer a portion of their salary until future years The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency

All plan assets are held in a trust fund to protect them from claims of general creditors The State has no responsibility for loss due to the investment or failure of investment of funds and assets in the plan, but does have the duty of due care that would be required of an ordinary prudent investor Accordingly, the assets and liabilities of the State’s deferred compensation plan are not reported in the State’s or the department’s basic financial statements

The State generally retains the first $250,000 per occurrence of property losses and the first $4 million with respect to general liability claims

Note 12 – Risk

Management

This is trial version www.adultpdf.com

Trang 2

Losses in excess of those retention amounts are insured with commercial insurance carriers The limit per occurrence for property losses is

$100 million for named hurricane, $25 million for earthquake and flood,

$50 million for terrorism, and the annual aggregate for general liability losses per occurrence is $10 million The State also has an insurance policy to cover medical malpractice risk in the amount of $30 million per occurrence with no annual aggregate limit Losses not covered by insurance are paid from legislative appropriations of the State’s general fund and are not included in the department’s basic financial statements

The State is generally self-insured for workers’ compensation and automobile claims The State’s estimated reserve for losses and loss adjustment costs includes the accumulation of estimates for losses and claims reported prior to fiscal year-end, estimates (based on projections

of historical developments) of claims incurred but not reported, and estimates of costs for investigating and adjusting all incurred and unadjusted claims Amounts reported are subject to the impact of future changes in economic and social conditions The State believes that, given the inherent variability in any such estimates, the reserves are within a reasonable and acceptable range of adequacy Reserves are continually monitored and reviewed, and as settlements are made and reserves adjusted, the differences are reported in current operations A liability for a claim is established by the State if information indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss is reasonably estimable

Accumulated Sick Leave

Employees earn sick leave credits at the rate of one and three-quarters working days for each month of service without limit, but can be taken only in the event of illness and are not convertible to pay upon

termination of employment However, a public employee who retires or leaves government service in good standing with 60 days or more of unused sick leave is entitled to additional service credit in the ERS

Accumulated sick leave as of June 30, 2005 amounted to approximately

$20,581,000

The Governmental Accounting Standards Board (GASB) has issued the following statements applicable to the department:

• Statement No 42, Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries,

establishes accounting and financial reporting standards for the impairment of capital assets and clarifies and establishes accounting requirements for insurance recoveries This

Note 13 –

Commitments and

Contingencies

Note 14 – New

Pronouncements for

Financial Reporting

Trang 3

statement is effective for financial statements for periods beginning after December 15, 2004 and is not expected to have a material effect on the department’s financial statements

• Statement No 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions,

establishes standards for the measurement, recognition, and display of other post employment benefits (OPEB) expense/ expenditures and related liabilities/assets, note disclosures, and,

if applicable, required supplementary information in the financial reports of state and local governmental employers This

statement is effective for financial statements for periods beginning after December 15, 2007 The department has not yet analyzed the effect on the financial statements of adopting Statement No 45

• Statement No 46, Net Assets Restricted by Enabling Legislation – An Amendment of GASB Statement No 34, clarifies the

definition of the legal enforceability of an enabling legislation restriction, specifies the accounting and financial reporting requirements if new enabling legislation replaces existing enabling legislation or if legal enforceability is reevaluated, and requires governments to disclose the portion of total net assets that is restricted by enabling legislation This statement is effective for financial statements for periods beginning after June

15, 2005 and is not expected to have a material effect on the department’s financial statements

• Statement No 47, Accounting for Termination Benefits,

establishes standards for the measurement, recognition, and display of termination expense/expenditures and related liabilities/assets, note disclosures, and, if applicable, required supplementary information in the financial reports of state and local governmental employers This statement is effective for financial statements periods beginning after June 15, 2005 and is not expected to have a material effect on the department’s financial statements

Trang 4

Trang 5

Trang 6

Trang 7

Trang 8

Trang 9

Trang 10

Định dạng
Số trang	10
Dung lượng	1,04 MB