SOUTH CAROLINA GENERAL ASSEMBLY-LPITS State Treasurer Annual Accountability Report Fiscal Year

State Treasurer Annual Accountability Report

Fiscal Year

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Last Updated: May 24, 2005 at 9:40 AM

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ANNUAL ACCOUNTABILITY REPORT - FISCAL YEAR

MISSION STATEMENT

The State Treasurer's mission is to advocate savings and efficiency for the government and citizens of the State of South Carolina. Savings and efficiency are the driving forces behind the State Treasurer's commitment to providing the most efficient and effective financial management services including the investment management, banking, debt management, public finance and unclaimed property programs administered by the State Treasurer's Office. They are also the driving forces behind the State Treasurer's leadership in recognizing savings and efficiency in State Government, providing financial advice to local governments and promoting personal savings and responsibility. The State Treasurer's Office motto--"We Work for the Taxpayers"--is posted throughout the office in acknowledgment of the fact that we are public stewards with a sacred trust to make the most of taxpayers' resources.

PROGRAMS OF THE OFFICE

Program:	Accounting and Banking Programs are managed in accordance, with the South Carolina Code of Laws, 1976 as amended, Sections 11-5-40 through , among other laws.

Program Goal:	To serve as the State's bank, receiving and disbursing funds from all sources, pursuant to legislative enactment and federal laws and regulations, in the most efficient and effective manner possible.

Program Objectives:	Receive and disburse funds from all sources.
	Distribute shared revenues.
	Maintain adequate collateral to secure state funds deposited in financial institutions.
	Conduct detailed analysis of bank accounts throughout the State.
	Manage cash flow, in part, to optimize earnings for the State.

Accounting and Banking Operations Performance Measures:

	Actual	Actual
Workload Indicators:	FY 1994-95	FY 1995-96

Items processed	5,226,719	5,245,227
Cash Receipts	$10,956,063,784	$11,459,850,948
Cash Disbursements	$10,353,649,496	$11,133,253,841

Performance Measures:

The number of payments made electronically increased from approximately 826 thousand to 945 thousand. The increase of 119 thousand (or 14%) was accomplished through an increase in the number of income tax refunds paid electronically and the direct deposit of state employee expense reimbursements initiated during the fiscal year.
All checks issued by the State Treasurer's Office were available for distribution within 24 hours of disbursement authorization.
All shared revenues were distributed between the 20th and 25th of the month in which distribution is required by statute.
All deposits were properly collateralized.

Program:	Debt Management Programs are managed in accordance with applicable State laws.

Program Goal:	To structure and administer all state debt.

Program Objectives:	Coordinate Communications with bond rating agencies to maximize the State's credit ratings.
	Manage all debt issues for the State to optimize debt structure.
	Assure compliance with legal requirements.

Debt Management Performance Measures:

In connection with the July 1996 issuance of bonds by the State Treasurer's Office, South Carolina's credit rating was upgraded from AA+ to AAA by Standard & Poor's. An underwriter associated with the sale of the July bonds estimated that the interest saved on that bond issue alone, over the life of the bonds, would exceed $4 million.
All debt payments were promptly made and all arbitrage guidelines were certified as being followed.
All agency requests to draw bond proceeds were processed within 24 hours of receipt.
The State's debt service for fiscal year 1995-96 represented 3.049% of the revenues of the prior fiscal year as compared to the constitutional limit of 5%.

Program:	Investments Programs are managed in accordance with Section of the South Carolina Code of Laws, 1976, as amended, among other laws.

Program Goal:	To invest all State funds pursuant to statutory authority, including the Retirement Systems portfolios which are structured to meet the long-term nature of pension obligations.

Program Objectives:	Preserve capital
	Maintain adequate liquidity
	Obtain the best yield within prescribed parameters

Objectives identified in the investment of the State's funds are to safeguard principal, to maintain appropriate liquidity as dictated by the account administered, and to obtain the highest yield possible with quality investments.

The objective of maintaining appropriate liquidity must be determined by the cash flow needs of the accounts administered. The State Treasurer's cash management techniques provide cash flow projections which allow for the maximum utilization of available funds. All available balances in accounts at the end of a day are invested in collateralized repurchase agreements, federal agency discount notes or commercial paper.

To obtain the best yield opportunities within the guidelines of approved investments, the State Treasurer's Office maintains constant communication with securities professionals and uses on-line securities quotation services. The Treasurer also receives expert advice from an independent financial advisory firm.

Investments Performance Measures:

The combined cash-basis earnings for the general funds and the SCRS exceeded one billion dollars for the first time in the history of the State of South Carolina.
Earnings on General Fund investments were $68,567,893, which exceeded the Board of Economic Advisors estimate for the year.
The earnings, including unrealized gains and losses, for Retirement Systems funds were $702.8 million.
The State's Local Government Investment Pool (LGIP) earned a rate of return of 5.92% as compared to the average overnight investment rate of 5.54%.