2011 Annual TCRS Report - Tennessee Department of Treasury

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F I N A N C I A L S E C T I O N INDEPENDENT AUDITOR’S REPORT STATE OF TENNESSEE COMPTROLLER OF THE TREASURY DEPARTMENT OF AUDIT DIVISION OF STATE AUDIT SUITE 1500 JAMES K. POLK STATE OFFICE BUILDING NASHVILLE, TENNESSEE 37243-1402 PHONE (615) 401-7897 FAX (615) 532-2765 December 19, 2011 Members of the General Assembly and Members of the Board of Trustees Tennessee Consolidated Retirement System and The Honorable David H. Lillard, Jr., Treasurer State Capitol Nashville, Tennessee 37243 Ladies and Gentlemen: We have audited the accompanying statements of plan net assets of the Tennessee Consolidated Retirement System as of June 30, 2011, and June 30, 2010, and the related statements of changes in plan net assets for the years then ended. These financial statements are the responsibility of the Tennessee Consolidated Retirement System’s management. Our responsibility is to express an opinion on these financial statements, based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. Tennessee statutes, in addition to audit responsibilities, entrust certain other responsibilities to the Comptroller of the Treasury. Those responsibilities include serving as a member of the board of trustees of the Tennessee Consolidated Retirement System. We do not believe that the Comptroller’s service in this capacity affected our ability to conduct an independent audit of the Tennessee Consolidated Retirement System. As discussed in Note A.1., the financial statements present only the Tennessee Consolidated Retirement System, pension trust funds of the State of Tennessee, and do not purport to, and do not, present fairly the financial (continued) P A G E 1 5
T E N N E S S E E C O N S O L I D A T E D R E T I R E M E N T S Y S T E M INDEPENDENT AUDITOR’S REPORT (CONTINUED) December 19, 2011 Page Two position of the State of Tennessee as of June 30, 2011, and June 30, 2010, and the changes in its financial position for the years then ended in conformity with accounting principles generally accepted in the United States of America. In our opinion, the financial statements referred to above present fairly, in all material respects, the plan net assets of the Tennessee Consolidated Retirement System as of June 30, 2011, and June 30, 2010, and the changes in its plan net assets for the years then ended in conformity with accounting principles generally accepted in the United States of America. The management’s discussion and analysis and the schedules of funding progress and employer contributions, as listed in the table of contents, are not required parts of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Our audits were conducted for the purpose of forming an opinion on the basic financial statements. The accompanying financial information listed as supporting schedules in the table of contents is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory, investment, actuarial, and statistical sections, as listed in the table of contents, are presented for purposes of additional analysis and are not required parts of the basic financial statements. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on it. In accordance with generally accepted government auditing standards, we have also issued our report dated December 19, 2011, on our consideration of the Tennessee Consolidated Retirement System’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, and contracts and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with generally accepted government auditing standards and should be considered in assessing the results of our audit. Sincerely, Arthur A. Hayes, Jr., CPA Director P A G E 1 6
Page 2 and 3: T ENNESSEE CONSOLIDATED R ETIREMENT
Page 4 and 5: TABLE OF CONTENTS INTRODUCTORY SECT
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Page 52 and 53: INVESTMENT SECTION Nashville’s Pa
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T E N N E S S E E C O N S O L I D A
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S T A T I S T I C A L S E C T I O N
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2011 Annual TCRS Report - Tennessee Department of Treasury

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