The Fund prepares its financial statements in accordance with insurance accounting practices prescribed by the Commissioner of Insurance. We found its financial statements to be fairly presented in accordance with these accounting practices.
State statutes require the Fund's net profits to be distributed annually as policy dividends, except that the Fund's surplus must be maintained at a level between 7.0 and 10.0 percent of assets, insofar as is feasible. However, the actual, audited surplus-to-assets ratio as of December 31, 2004, was only 2.7 percent, compared to 8.1 percent as of December 31, 2001. This decline occurred primarily because the Office of the Commissioner of Insurance did not take timely steps to lower the dividends paid to policyholders. However, significant financial reporting errors that were detected during our audit also reduced the Fund's surplus. The Office worked with its actuary to lower the level of policy dividends effective August 2005. Additional adjustments to policy dividends and other changes are anticipated in January 2006. The Office believes these actions will allow the surplus-to-assets ratio to reach the statutory guideline by the end of calendar year 2008.
The decline in the Fund's surplus-to-assets ratio and the financial reporting errors are discussed in detail in a separate management letter, dated December 8, 2005, which also presents several other areas of internal control, our recommendations for improvement, and the Office's responses.
We appreciate the courtesy and cooperation extended to us by the staff of the Office of the Commissioner of Insurance in completing our audit.
Sincerely,
JANICE MUELLER
State Auditor
State of Wisconsin
Controlled Substances Board
December 9, 2005
The Honorable, The Senate:
Attached please find the State of Wisconsin Controlled Substances Board's annual report for 2005. The Controlled Substances Board is required to submit this report to you annually, pursuant to Wis. Stat. §
961.36 (3). It includes findings with respect to the Board's effect on the distribution and abuse of controlled substances, including recommendations for improving control and prevention of the diversion of controlled substances.
Sincerely,
CYNTHIA BENNING
Chair
Referred to the committee on Judiciary, Corrections, and Privacy.
Pursuant to Senate Rule
17 (5), Representative Shilling added as a cosponsor of
Senate Bill 440.
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By Patrick E. Fuller, chief clerk.
Mr. President:
I am directed to inform you that the Assembly has concurred in:
Senate Bill 132
Senate Bill 171
Senate Bill 180
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Senate amendment 1 to Senate Bill 375 offered by Senator Darling.
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The Chair, with unanimous consent, asked that the Senate adjourn until Tuesday, December 13, 2005 at 10:00 A.M.
10:01 A.M.
