The Honorable, The Legislature:
Attached is our quarterly report (Attachment A) listing all expenses that were charged directly to funds managed by the State of Wisconsin Investment Board (SWIB or the Board). This report includes expenses incurred during the quarter ending June 30, 2008. Section
25.17 (13m), Stats., requires that we provide this report on a quarterly basis.
The statutes authorize the Board to employ special legal or investment counsel in any matter arising from the scope of our investment authority and to employ professionals, contractors or agents to evaluate or operate any property in which the Board has an interest. The Board may also contract with external advisers to manage various types of investments. Expenses for these services are directly charged to the current income of the fund for which the services were furnished.
This report lists expenses on an accrual basis, which lists costs when they are incurred rather than paid. Providing the information on a n accrual basis gives a better picture of quarter to quarter trends in services that are directly charged to the funds. A negative charge typically indicates an adjustment to expenses accrued in a prior quarter or a refund of expenses that were prepaid and subsequently adjusted.
Attachment A lists all expenses by category. The following highlights changes from the previous quarter:
• Private equity fees increased $5.5 million during the second quarter. Of that amount, approximately $3.2 million was for expenses associated with new commitments. Real estate costs decreased by $337,000 from the first quarter of 2008. The total funded amount for each asset class has reached the 5% asset allocation target.
• Custodial fees decreased slightly during the second quarter. Because of the lower fees that SWIB negotiated with the custodian in 2007, fees for calendar year 2008 are expected to be less than 20% of the fees paid during calendar year 2007.
• Costs for investment counsel were slightly lower for the second quarter but are expected to be somewhat higher for the entire calendar year.
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• Indexed and enhanced commingled fund fees increased slightly during the quarter primarily due to a payment of BYN Mellon for managing assets when transitioned between managers or strategies. Assets managed in enhanced commingled funds decreased by approximately $1.5 billion in the second quarter, reflecting market effects and a further shift of assets to less expensive internal management. Active external investment management fees increased by $500,000 in the second quarter due to several accrual adjustments and corrections.
Attachment B provides further explanation about the various expenditure categories. Attachment C includes legal expenses that were capitalized at the time of acquisition or directly associated with the ongoing activity of an asset, such as appraisals or bankruptcy costs. Unlike other expenses listed in the report, these expenses are reflected in the value of the asset or are netted against gross returns of the asset, consistent with standard industry practices.
Attachment D shows the amount and percent of Wisconsin Retirement System (WRS) assets managed internally and externally over the last four quarters. For the fifth consecutive quarter, the percentage of total assets managed internally increased, while externally managed assets decreased. This shows the result of the increased staff and budget authority, which is allowing SWIB to manage more assets internally and reduce the use of more expensive external management.
We hope this report gives you a clear picture of expenditures and how funds are managed. Please contact me, however, if you have any questions or comments about the report.
Sincerely,
Keith Bozarth
Executive Director
Referred to committee on Veterans and Military Affairs, Biotechnology and Financial Institutions.
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State of Wisconsin
Department of Administration
August 19, 2008
The Honorable, The Legislature:
Included with this correspondence, I am submitting the reports from the Department of Administration, Division of Gaming (Gaming), for the fourth quarter of fiscal year 2008 (April 1, 2008 through June 30, 2008). As required by s.562.02(1)(g), Wis. Stats., the attached materials contain pari-mutuel wagering and racing statistical information, as well as the revenues for the program areas of Racing, Charitable Gaming, Bingo and Indian Gaming.
If you have any questions or comments regarding this report, please do no hesitate to contact Rachel Meek at (608) 270-2535.
Sincerely,
Robert W. Sloey
Administrator
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University of Wisconsin System
August 22, 2008
The Honorable, The Legislature:
Enclosed please find the report required under s.
36.55, Wisconsin Statutes, for the period July 1, 2006 to June 30, 2008.
Sincerely,
kevin reilly
President, UW System
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State of Wisconsin
Housing and Economic Development Authority
August 25, 2008
The Honorable, The Legislature:
Pursuant to Wisconsin Statute 234.931 (5), enclosed please find the following report relating to the Wisconsin Development Reserve Fund:
Annual Report of Guarantee Funds as of June 30, 2008.
Should you have any questions or comments on the reports, please fell free to call me at 266-1640.
Sincerely,
laura b. morris
Chief Financial Officer
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State of Wisconsin
Department of Health Services
August 29, 2008
The Honorable, The Senate:
Section
55.14(12) of the Wis. Stats. requires the Department of Health Services to submit a report concerning any orders for the involuntary administration of psychotropic medications to individuals who are receiving protective services. Counties and their contract agencies are required to submit copies of these orders to the Department. Sections
51.14(3) and
(8) establish the criteria for issuance of court orders. Eight counties (La Crosse, Manitowoc, Marinette, Oneida, Rock, Washburn, Waushara and Wood) provided copies of protective placement court orders for psychotropic medications in the last year.
Sincerely,
Karen e. timberlake
Secretary
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State of Wisconsin
Department of Health Services
August 29, 2008
The Honorable, The Senate:
In accordance with s.
1.11(2)(j) Wis. Stats., the Department of Health Services reports that it conducted one Environmental Assessment during the reporting period of July 1, 2007, through June 30, 2008.
The EA was done for the project to construct a 300 bed addition at the Sand Ridge Secure Treatment Center in Mauston, WI. It was determined that the construction of this project does not have a significant negative effect on the environment.
Sincerely,
karen e. timberlake
Secretary
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State of Wisconsin
Department of Health Services
August 29, 2008
The Honorable, The Senate:
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Section
227.485 (9) Wis. Stats. requires the Department to submit a report concerning decisions and resulting payments of attorney fees and related legal costs. Attorney fees and other legal costs are to be paid whenever the opposing party to an agency's Chapter
227 hearing prevails and it is determined the agency's position was not substantially justified. The attached report reflects payments made during SFY 2008.
In addition, under s.
814.245 (10) Wis. Stats., the Department is required to report any awards granted to the Department regarding frivolous motions brought against this Department. In SFY 2008, no motions of opposing parties were found to be frivolous. Consequently, the Department has no awards to report.
Sincerely,
karen e. timberlake
Secretary
Referred to committee on Health, Human Services, Insurance, and Job Creation.
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Relating to national emission standards for hazardous air pollutants for facilities engaged in the secondary production of aluminum.
Submitted by Department of Natural Resources.
Report received from Agency, August 27, 2008.
Referred to committee on Environment and Natural Resources, August 28, 2008
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Relating to child care centers.
Submitted by Department of Health and Family Services.
Report received from Agency, August 27, 2008.
Referred to committee on Tax Fairness and Family Prosperity, August 28, 2008
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Relating to national emission standards for hazardous air pollutants (NESHAP) for halogenated solvent cleaners and the NESHAP general provisions.