Lauterbach & Amen, LLP * Article 3 Police Pension Funds Article 4 Firefighters’ Pension Funds

Presented by Nathan J. Gaskill, Partner Lauterbach & Amen, LLP *

Reporting and Recordkeeping  Financial Reporting (tab 4)  Annual Financial Report/Financial Audit (tab 5)  IDOI Annual Compliance Report (tab 6)  Interim Financial Reporting (tab 7)  Recordkeeping (tab 9)  Forms (tab 10) Lauterbach & Amen, LLP *

Financial Reporting  Elements of Financial Accounting  Investment Terminology  Annual Financial Report/Financial Audit  Annual IDOI Compliance Report/Compliance Audit  Interim Accounting and Financial Statements  Internal Controls Lauterbach & Amen, LLP *

Elements of Financial Accounting  Assets = What is Owned  Liabilities = What is Owed to Others  Equity = What is Owed to the Owners  Pension Equity = Plan Net Assets Held in Trust for Pension Benefits  Accounting Equation: Assets – Liabilities = Equity  Income  Expense  Balance Sheet = Statement of Plan Net Assets  Income Statement = Statement of Changes in Plan Net Assets  Generally Accepted Accounting Principles (GAAP)  Governmental Accounting Standards Board (GASB) Lauterbach & Amen, LLP *

Investment Terminology  Cost/Cost Basis  Par Value  Premium/Discount  Interest Rate  Amortization  Purchase Date/Maturity Date/Call Date  Book Value  Market Value  CUSIP #’s  US Treasury Notes (USTN)#91282XXXX  US Treasury Bonds (USTB)#91281XXXX  US Treasury Strips (USTS)#91283XXXX  Government National Mortgage Association (GNMA)#362XXXXXX  Federal Home Loan Bank (FHLB)#3133XXXXX  Federal Home Loan Mortgage Corporation (FHLMC)#31XXXXXXX  Federal National Mortgage Association (FNMA)#31XXXXXXX Lauterbach & Amen, LLP *

Annual Financial Report/Financial Audit  Audits are conducted by an Independent CPA  To Render an Opinion on Compliance with Generally Accepted Accounting Principles  Includes a Review of Internal Controls  Includes a Review of Employer Contributions (Property Taxes)  Brings Together Actuarial Information and Financial Reporting  Employer Contributions Required and Made – Six Year Trend Table (RSI)  Funded Stats – Six Year Trend Table (RSI)  Includes Confirmation with Banks/Brokers of all Cash and Investment Balances  Issuance of a Management Letter to the Pension Board Including:  Recommendation for Improvements in Internal Controls  Information Regarding Recent Changes onPension Issues Lauterbach & Amen, LLP *

Sample Annual Financial Report (AFR) Lauterbach & Amen, LLP *

Sample Annual Financial Report (AFR) Lauterbach & Amen, LLP *

Sample Annual Financial Report (AFR) Lauterbach & Amen, LLP *

Sample Annual Financial Report (AFR) Lauterbach & Amen, LLP *

Sample Annual Financial Report (AFR) Lauterbach & Amen, LLP *

Sample Annual Financial Report (AFR) Lauterbach & Amen, LLP *

Sample Annual Financial Report (AFR) Lauterbach & Amen, LLP *

Illinois Department of Insurance (IDOI)  Annual Compliance Report  Detailed Report Filed with IDOI Summarizing Transactions  Detailed Participant and Beneficiary Information  Is Required to Agree with the Financial Audit  Is the Basis on Which the Actuarial Report and Funding are Determined  Compliance Audit  Conducted by the Department of Insurance  Determine Compliance with State Statutes  Review of Benefit Calculations  Review of Employer Contributions (Property Taxes)  Review of Employee Contributions  Review of Salary Structure (Pensionable/Non-Pensionable)  Review of Minutes Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Sample Annual IDOI Report Lauterbach & Amen, LLP *

Interim/Monthly Financial Reporting  Strongest Feature of Internal Control  Detects Errors and Irregularities in a Timely Fashion  Knowledgeable Individual to Review Transactions on a Monthly Basis  Interim/Monthly Financial Services Includes:  Reconciliation of all Bank/Broker Accounts for all Investment Transactions  Posting of all Cash Receipt and Cash Disbursement Transactions  Posting and Maintenance of General Ledger  Issuance of Vendor Checks (upon request)  Posting of Benefit Transactions  Interim/Monthly Financial Statements Includes:  Accountant’s Compilation Report  Statement of Plan Net Assets and Statement of Changes in Plan Net Assets  Schedule of Cash and Investments  Balance Sheet Report  Revenue Report  Expense Report  Schedule of Member Contributions  Schedule of Monthly Benefits  Vendor Check Report  Interim/Monthly Financial Statements are Designed to Assist in the Preparation of the IDOI Annual Compliance Report Lauterbach & Amen, LLP *

Sample Interim Financial Statements Lauterbach & Amen, LLP *

Sample Interim Financial Statements Lauterbach & Amen, LLP *

Sample Interim Financial Statements Lauterbach & Amen, LLP *

Sample Interim Financial Statements Lauterbach & Amen, LLP *

Sample Interim Financial Statements Lauterbach & Amen, LLP *

Sample Interim Financial Statements Lauterbach & Amen, LLP *

Sample Interim Financial Statements Lauterbach & Amen, LLP *

Sample Interim Financial Statements Lauterbach & Amen, LLP *

Sample Interim Financial Statements Lauterbach & Amen, LLP *

Sample Interim Financial Statements Lauterbach & Amen, LLP *

Sample Interim Financial Statements Lauterbach & Amen, LLP *

Sample Interim Financial Statements Lauterbach & Amen, LLP *

Sample Interim Financial Statements Lauterbach & Amen, LLP *

Sample Interim Financial Statements Lauterbach & Amen, LLP *

Recordkeeping  Reimbursements to Board Members  Minutes  Participant Files  Rules and Regulations  Investment Policy Lauterbach & Amen, LLP *

Recordkeeping - Reimbursements  Allowable Reimbursements:  Training, Meals, Mileage  Not-Allowable Reimbursements:  Services as a Trustee Lauterbach & Amen, LLP *

Recordkeeping - Minutes  Attendance and Roll Call  Public Comment (Required to be Included on Agenda)  The Employment Date of New Members Accepted into the Fund  The Termination Date of and Participant, Including Status of Contributions (i.e. Refund)  Approval of New Beneficiary Including Date of Retirement, Salary, Benefit Amount  Annual Board Approval of Benefit Payments and any Pension Increases  The Annual Actuarial Required Contribution Recommended to the Municipality  Board Approval of Investment Transactions  Board Approval of Investment Policy and/or any Changes  Board Approval of Service or Vendor Contracts  Attorney, Money Manager, Investment Advisor, Actuary, Accountant, Auditor, Secretary  Board Approval of Rules and Regulations and/or any Changes  Election Results of Trustees and their respective terms  Appointment/reappointment of “civilian” trustees and their respective terms Lauterbach & Amen, LLP *

Recordkeeping – Participant Files  See Example in Program Binder  Application for Membership  Birth Certificate  Marriage License (Dissolution of Marriage, QILDRO)  Spousal and Dependent(s) Birth Certificate(s)  Member Contribution Summary  Application for Retirement Benefits  Death Certificate  Other:  DD-214 for Military Service Purchase  Portability / Reciprocity Documentation Lauterbach & Amen, LLP *

Recordkeeping – Rules and Regulations  See Example in Program Binder Lauterbach & Amen, LLP *

Nathan J. Gaskill, CPA Lauterbach & Amen, LLP 27W457 Warrenville Rd Warrenville, IL /