A Report Montana legislature financial audit _part1 doc

A RepoRt
to
the
MontAnA
Legi sL Atu Re
LegisLAtive Audit
division
08-09B
Fi n A n c i A L Au d i t
nov e M b e R 20 09
Teachers’ Retirement
System
For the Two Fiscal Years Ended
June 30, 2009
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Financial Audits
Financial audits are conducted by the Legislative Audit Division
to determine if the financial statements included in this report
are presented fairly and the agency has complied with laws and
regulations having a direct and material effect on the financial
statements. In performing the audit work, the audit staff uses
standards set forth by the American Institute of Certified Public
Accountants and the United States Government Accountability
Office. Financial audit staff members hold degrees with an
emphasis in accounting. Most staff members hold Certified
Public Accountant (CPA) certificates.
Government Auditing Standards, the Single Audit Act
Amendments of  and OMB Circular A- require the
auditor to issue certain financial, internal control, and compliance
reports. is individual agency audit report is not intended to

comply with these requirements and is therefore not intended
for distribution to federal grantor agencies. e Legislative
Audit Division issues a statewide biennial Single Audit Report
which complies with the above reporting requirements. e
Single Audit Report for the two fiscal years ended June , ,
was issued January , . e Single Audit Report for the two
fiscal years ended June , , will be issued by March , .
Copies of the Single Audit Report can be obtained by contacting:
Single Audit Coordinator Legislative Audit Division
Office of Budget and Program Planning Room , State Capitol
Room , State Capitol P.O. Box 
P.O. Box  Helena, MT -
Helena, MT -
Legislative Audit
Committee
Representatives
D B, V C
B H
S M
C P-L
W S
B W
Senators
M T, C
G B
J B
T B
M C
C L
Audit Staff

Financial-Compliance
A D
J E
J F
P J. O’L
F H
H  ,
,   
 .
C  F
H :
(S)
---
( H)
-
Direct comments or inquiries to:
Legislative Audit Division
Room , State Capitol
P.O. Box 
Helena, MT -
() -
Reports can be found in electronic format at:
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LEGISLATIVE AUDIT DIVISION

Tori Hunthausen, Legislative Auditor Deputy Legislative Auditors
Monica Huyg, Legal Counsel James Gillett
Angie Grove
Room 160 • State Capitol Building • PO Box 201705 • Helena, MT • 59620-1705

Phone (406) 444-3122 • FAX (406) 444-9784 • E-Mail
November 2009
e Legislative Audit Committee
of the Montana State Legislature:
is is our financial audit report on the Teachers’ Retirement System (system), a component unit of the
state of Montana, for the fiscal year ended June 30, 2009. is report contains one recommendation
related to the actuarial soundness of the system.
We issued an unqualified opinion on the system’s financial statements for the two fiscal years ended
June 30, 2009. Our opinion on the system’s financial statements is also contained in the Teachers’
Retirement System Comprehensive Annual Financial (CAFR) Report. e CAFR contains additional
background, statistical, investment and actuarial information not included in this audit report, which
may be of interest to legislators or the public. Copies of the CAFR can be obtained from the Teachers’
Retirement System or accessed on its website. e CAFR for fiscal year 2008-09 is expected to be
available in late December 2009.
e system’s response to our audit is on page B-1. We thank the Executive Director and his staff for
their assistance and cooperation throughout the audit.
Respectfully submitted,
/s/ Tori Hunthausen
Tori Hunthausen, CPA
Legislative Auditor
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Figures and Tables ii
Appointed and Administrative Officials iii
Report Summary S-1
CHAPTER I  INTRODUCTION 1
Introduction 1

Background 1
Prior Audit Recommendations 2
CHAPTER II  FINDINGS AND RECOMMENDATIONS 3
System Not Actuarially Sound 3
INDEPENDENT AUDITOR’S REPORT
Independent Auditor’s Report A-1
TEACHERS’ RETIREMENT SYSTEM MANAGEMENT’S DISCUSSION AND ANALYSIS,
FINANCIAL STATEMENTS, REQUIRED SUPPLEMENTARY INFORMATION,
AND SUPPLEMENTAL INFORMATION
Management’s Discussion and Analysis A-3
Statement of Fiduciary Net Assets
June 30, 2009 and 2008 A-6
Statement of Changes in Fiduciary Net Assets
Fiscal Years Ended June 30, 2009 and 2008 A-7
Notes to the Financial Statements
Fiscal Years Ended June 30, 2009 and 2008 A-8
Required Supplementary Information A-15
Schedule of Funding Progress A-15
Schedule of Contributions from Employers and Other Contributing Entities A-16
Notes to the Required Supplementary Information A-17
Schedule of Administrative Expenses A-19
Schedule of Payments to Consultants A-19
SYSTEM’S RESPONSE
Teachers’ Retirement System B-1
i
08-09B
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Tables

Table 1 History of Plan Soundness 3
Montana Legislative Audit Division
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Term Expires
Teachers’ Retirement Board Kari Peiffer, Chair Kalispell 7/1/12
Darrell Laymen, Vice Chair Glendive 7/1/11
Scott Dubbs Lewistown 7/1/13
Jeff Greenfield Shepherd 7/1/11
Robert Pancich Great Falls 7/1/14
James Turcotte Helena 7/1/10
Administrative Ocials David L. Senn, Executive Director
Tammy Rau, Deputy Executive Director
Dan Gaughan, Accounting/Fiscal Manager
For additional information concerning the Teachers’ Retirement
System, contact:
David L. Senn, Executive Director
1500 Sixth Avenue
P.O. Box 200139
Helena, MT 59620-0139
e-mail:
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08-09B
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