State of Illinois Office of the Treasurer, College Savings Plan Financial Audit

              Office of the Auditor General, Iles Park Plaza, 740 E. Ash St., Springfield, IL 62703 • Tel: 217-782-6046 or TTY 888-261-2887
This Report Digest and a Full Report are also available on the internet at www.auditor.illinois.gov
OFFICE OF THE STATE TREASURER –
COLLEGE SAVINGS PROGRAM
FINANCIAL AUDIT
For the Year Ended: June 30, 2011
Summary of Findings:
Total this audit:
Total last audit:
Repeated from last audit:
0
0
0
Release Date: March 20, 2012
INTRODUCTION
The College Savings Program (Program) was established in March 2000 pursuant to P.A. 91-0607 which authorizes the State Treasurer to establish and administer a “qualified state tuition program” under Section 529 of the Internal Revenue Code of 1986, as amended. Participants of the Program have a choice of two Section 529 investment programs, the Bright Start College Savings Program, which commenced operations on March 27, 2000, and the Bright Directions College Savings Program, which commenced operations on November 18, 2005. The State Treasurer selected an investment firm (Manager), one for Bright Start and one for Bright Directions, to advise the office on the investment of the Trust assets, to administer the Trust assets, and to provide other services relating to the Program. As such, the Managers act as agents of the Treasurer, and as trustees of the Trust. The Treasurer, however, retains ultimate authority to manage the investments of the Trust.
To administer the Program, the Treasurer has established a division entitled “The College Savings Program Division”. The revenues and expenditures of the Division are recorded in a fund maintained by the Treasurer entitled College Savings Program Administrative Trust Fund, which is classified as en enterprise fund. The administrative expenses paid out of this fund were $1,204,368 in FY11 and $1,047,634 in FY10.
An investment trust fund was used to account for assets held by the Program in a trustee capacity or as agent for individuals throughout the United States. At June 30, 2011, assets in this fund totaled $4,132,710,256.
AUDITORS’ OPINION
Our special assistant auditors stated that the College Savings Program financial statements, as of and for the year ended June 30, 2011 are fairly stated in all material respects.
___________________________________
WILLIAM G. HOLLAND
Auditor General
WGH:JC:rt
SPECIAL ASSISTANT AUDITORS
Our special assistant auditors for this audit were McGladrey & Pullen, LLP.
{Expenditures and Activity Measures are summarized on the reverse page.}ii
STATEMENTS OF FIDUCIARY NET ASSETS
STATEMENT OF FIDUCIARY NET ASSETS
Cash and Cash Equivalents...............................................................................
218,903,260$
174,843,388$
Capital Shares, Securities Sold and Dividends Receivable..............................
6,087,242
6,715,706
Mutual Funds....................................................................................................
3,907,719,754
2,941,972,926
Total Assets.......................................................................................
4,132,710,256$
3,123,532,020$
Payable for capital shares..................................................................................
5,656,591$
3,276,520$
Payable for Securities Purchased......................................................................
1,738,153
1,361,640
Other liabilities..................................................................................................
1,384,020
1,057,144
Total Liabilities.................................................................................
8,778,764$
5,695,304$
Net Assets available to participants..................................................................
4,123,931,492
3,117,836,716
Total Liabilities and Net Assets........................................................
4,132,710,256$
3,123,532,020$
STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS
Operations
Investment Earnings........................................................................................
34,501,712$
18,026,910$
Net Change in Fair Value of Investments (Unrealized)..................................
594,881,143
230,785,697
Distribution fees..............................................................................................
(2,880,424)
(2,439,470)
State administrative fees.................................................................................
(796,993)
(608,097)
Insurance fees.................................................................................................
(196,970)
(183,358)
12b-1 fees........................................................................................................
(2,211,451)
(1,602,610)
Management and Bank Custodial fees............................................................
(7,994,225)
(6,524,196)
Net Investment Earnings...................................................................
615,302,792
237,454,876
Distribution to Shareholders - Net Investment Income.....................................
(16,111)
(14,088)
Participant Transactions
Program Contributions....................................................................................
1,539,502,826
1,334,724,498
Program Distributions.....................................................................................
(1,148,711,670)
(948,223,446)
Distributions Reinvested.................................................................................
16,939
16,742
Net Changes in Net Assets................................................................
390,808,095
386,517,794
Net Increase in Net Assets................................................................................
1,006,094,776
623,958,582
Net Assets Beginning of the Year.....................................................................
3,117,836,716
2,493,878,134
Net Assets End of the Year...............................................................................
4,123,931,492$
3,117,836,716$
SELECTED ACTIVITY MEASURES (unaudited)
FY 2011
FY 2010
Number of Illinois Participants (Bright Start)...................................................
172,332
159,023
Balance of Illinois Participants (Bright Start)...................................................
2,550,670,139$
1,972,125,378$
Number of Non-Illinois Participants (Bright Start)..........................................
48,986
46,243
Balance of Non-Illinois Participants (Bright Start)...........................................
742,260,699$
577,298,055$
Number of Illinois Participants (Bright Directions)..........................................
55,504
47,599
Balance of Illinois Participants (Bright Directions)..........................................
765,733,522$
528,911,671$
Number of Out of State Participants (Bright Directions).................................
4,050
2,946
Balance of Out of State Participants (Bright Directions)..................................
65,660,105$
39,445,247$
STATE TREASURER
During Audit Period: Honorable Dan Rutherford (effective 1-10-11); Honorable Alexi Giannoulias (7-1-10 through 1-10-11)
Currently: Honorable Dan Rutherford
OFFICE OF THE STATE TREASURER - COLLEGE SAVINGS PROGRAM
FINANCIAL AUDIT
For The Year Ended June 30, 2011
FY 2010
FY 2011