AIDTaudit

Alabama Department of
Examiners of Public Accounts
Report on the
Alabama Industrial Development
Training Institute
Montgomery, Alabama
October 1, 2021 through September 30, 2022
Filed: December 22, 2023
Rachel Laurie Riddle, Chief Examiner

State of Alabama
Department of
P.O. Box 302251, Montgomery, AL 36130-2251
401 Adams Avenue, Suite 280
Montgomery, Alabama 36104-4338
Rachel Laurie Riddle Telephone (334) 242-9200
Chief Examiner FAX (334) 242-1775
Honorable Rachel Laurie Riddle

Chief Examiner of Public Accounts
Montgomery, Alabama 36130
Dear Madam:
An audit was conducted on Alabama Industrial Development Training Institute,

Montgomery, Alabama, for the period October 1, 2021 through September 30, 2022,
by Examiners Rachel Hamm and Zach Pugh. I, Rachel Hamm, served as Examiner-in-Charge
on the engagement, and under the authority of the Code of Alabama 1975, Section 41-5A-19,
I hereby swear to and submit this report to you on the results of the audit.
Respectfully submitted,
Rachel Hamm
Examiner of Public Accounts
rb
24-027
Table of Contents
Page
Summary A
Contains items pertaining to state legal compliance, Institute operations and

other matters.
Independent Auditor’s Report C
Reports on whether the financial information constitutes a fair presentation of

the financial position and results of financial operations in accordance with
generally accepted accounting principles (GAAP).
Management’s Discussion and Analysis H
Provides information required by the Governmental Accounting Standards Board

(GASB) that is prepared by management of the Institute introducing the basic
financial statements and providing an analytical overview of the Institute’s financial
activities for the year. This information has not been audited, and no opinion is
provided about the information.
Basic Financial Statements 1
Provides the minimum combination of financial statements and notes to the financial
statements that is required for the fair presentation of the Institute’s financial
position and results of operations in accordance with GAAP.
Alabama Industrial Development Training Institute
Exhibit #1 Statement of Net Position 2
Exhibit #2 Statement of Revenues, Expenses and Changes in Net Position 4
Exhibit #3 Statement of Cash Flows 5
Notes to the Financial Statements 7

Training Institute
Montgomery, Alabama
Table of Contents
Page
Required Supplementary Information 30
Provides information required by the Governmental Accounting Standards Board

(GASB) to supplement the basic financial statements. This information has not
been audited and no opinion is provided about the information.
Exhibit #4 Schedule of the Institute’s Proportionate Share of the

Collective Net Pension Liability 31
Exhibit #5 Schedule of the Institute’s Contributions – Pension 32
Exhibit #6 Schedule of the Institute’s Proportionate Share of the

Collective Net Other Postemployment Benefits (OPEB) Liability
Alabama Retired Education Employees’ Health Care Trust 33
Exhibit #7 Schedule of the Institute’s Contributions –

Other Postemployment Benefits (OPEB)
Alabama Retired Education Employees’ Health Care Trust 34
Notes to Required Supplementary Information

for Other Postemployment Benefits (OPEB) 35
Additional Information 37
Provides basic information related to the Institute, including reports and items
required by generally accepted government auditing standards.
Exhibit #8 Institute Officials – a listing of the Institute officials. 38
Exhibit #9 Report on Internal Control Over Financial Reporting and on

Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance With Government Auditing
Standards – a report on internal controls related to the financial
statements and on whether the Institute complied with laws and
regulations which could have a direct and material effect on
the Institute’s financial statements. 39
Exhibit #10 Auditee Response – a response by the Institute on the results

of the audit. 44
_______________________________________________

Training Institute
Montgomery, Alabama
Department of
SUMMARY

Alabama Industrial Development Training Institute (the “Institute”) provides quality

workforce development for Alabama’s new and existing businesses. The Institute encourages
economic development through job-specific training. Training services are offered in many
areas, at no cost, to new and expanding businesses throughout the state. The services and
solutions include, but are not limited to Pre-Employment recruiting, screening, selection,
assessments and training; Post/OUT support; Leadership Development; Maintenance
Assessments; Safety Assistance and Training; the Maritime Center; and Robotics Technology
Park. Alabama Industrial Development Training Institute is committed to meeting customer
requirements and increasing customer satisfaction through continuous improvement of all
their services, with emphasis on pre-employment and on-the-job training and quality
management system.
The Institute is a publicly supported division of the Alabama Department of Commerce. The
Institute is under the direction and control of the Secretary of the Alabama Department of
Commerce through an executive director.
This report presents the results of an audit, the objectives of which were to determine whether
the financial statements present fairly the financial position and results of financial operations
and whether the Institute complied with applicable laws and regulations. The audit was
conducted in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States, as well as, the
requirements of the Department of Examiners of Public Accounts under the authority of the
Code of Alabama 1975, Section 41-5A-12.
An unmodified opinion was issued on the basic financial statements, which means the
Institute’s financial statements present fairly, in all material respects, its financial position and
the results of its operations for the fiscal year ended September 30, 2022.
COMMENT
An investigation is in process by Authorities regarding alleged fraudulent activity involving a

former employee. The employee allegedly purchased over $240,000 worth of items using
Institute funds for personal benefit. The investigation is still ongoing at the date of this report.
24-027 A
AUDIT FINDINGS
Problems were found with the Institute’s internal control over financial reporting and are
summarized below.
♦ 2022-001: The Institute failed to properly establish Information Technology controls

relating to the monitoring of employee access to applications.
♦ 2022-002: The Institute failed to properly support entries to the general ledger as well as
amounts reflected on the financial statements.
♦ 2022-003: The Institute failed to properly establish and implement adequate internal
controls regarding the purchasing and receiving process.
EXIT CONFERENCE
The following officials/employees were invited to an exit conference to discuss the

results of the audit: Edwin B. Castile, Executive Director and Karen McGraw, Assistant
Director of Business Operations. The following individuals attended the exit conference:
Edwin B. Castile, Executive Director and Karen McGraw, Assistant Director of
Business Operations. Representing the Department of Examiners of Public Accounts were
Melissa Knepper, Director of Higher Education Audits; Annette G. Williams, Audit Manager;
Rachel Hamm, Examiner and Sahara Christensen, Intern.
24-027 B
Independent Auditor’s Report
C
Edwin B. Castile, Executive Director

Report on the Audit of the Financial Statements
Opinion
We have audited the basic financial statements of Alabama Industrial Development Training
Institute, as of and for the year ended September 30, 2022, and related notes to the financial
statements which collectively comprise Alabama Industrial Development Training Institute’s
basic financial statements as listed in the table of contents as Exhibits 1 through 3.
In our opinion, the accompanying financial statements referred to above present fairly, in all
material respects, the financial position of Alabama Industrial Development Training Institute
as of September 30, 2022, and its changes in financial position and its cash flows thereof for
the year then ended in accordance with accounting principles generally accepted in the United
States of America.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the
United States of America and the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States
(Government Auditing Standards). Our responsibilities under those standards are further
described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of
our report. We are required to be independent of Alabama Industrial Development Training
Institute and to meet our other ethical responsibilities in accordance with the relevant ethical
requirements relating to our audit. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit opinion.
Emphasis of Matter
Alabama Industrial Development Training Institute’s basic financial statements for the year
ended September 30, 2022, reflect the provisions of the Governmental Accounting Standards
Board’s (GASB) Statement Number 87, Leases. As discussed in Note 1 to the financial
statements, Alabama Industrial Development Training Institute implemented the requirements
of GASB Statement Number 87 during the fiscal year. Our opinion on the basic financial
statements is not modified with respect to this matter.
24-027 D
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial
statements in accordance with accounting principles generally accepted in the United States of
America, and for the design, implementation, and maintenance of internal control relevant to
the preparation and fair presentation of financial statements that are free of material
misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are
conditions or events, considered in the aggregate, that raise substantial doubt about Alabama
Industrial Development Training Institute’s ability to continue as a going concern within one
year after the date that the financial statements are available to be issued, including any
currently known information that may raise substantial doubt shortly thereafter.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance
but is not absolute assurance and therefore is not a guarantee that an audit conducted in
accordance with generally accepted auditing standards and Government Auditing Standards
will always detect a material misstatement when it exists. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control. Misstatements are considered material if there is a substantial likelihood that,
individually or in the aggregate, they would influence the judgment made by a reasonable user
based on the financial statements.
In performing an audit in accordance with generally accepted auditing standards and

Government Auditing Standards, we:
♦ exercise professional judgment and maintain professional skepticism throughout the audit.
♦ identify and assess the risks of material misstatement of the financial statements, whether
due to fraud or error, and design and perform audit procedures responsive to those risks.
Such procedures include examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements.
♦ obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of Alabama Industrial Development Training Institute’s
internal control. Accordingly, no such opinion is expressed.
24-027 E
♦ evaluate the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluate the overall
presentation of the financial statements.
♦ conclude whether, in our judgment, there are conditions or events, considered in the
aggregate, that raise substantial doubt about Alabama Industrial Development Training
Institute’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit, significant audit findings, and certain
internal control related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that
the Management’s Discussion and Analysis (MD&A), the Schedule of the Institute’s
Proportionate Share of the Net Pension Liability, the Schedule of the Institute’s
Contributions – Pension, the Schedule of the Institute’s Proportionate Share of the Net OPEB
Liability and the Schedule of the Institute’s Contributions – OPEB be presented to supplement
the basic financial statements. Such information is the responsibility of management and,
although not a part of the basic financial statements, is required by the Governmental
Accounting Standards Board, who considers it to be an essential part of financial reporting for
placing the basic financial statements in an appropriate operational, economic, or historical
context. We have applied certain limited procedures to the required supplementary
information is accordance with auditing standards generally accepted in the United States of
America, which consisted of inquiries of management about the methods of preparing the
information and comparing the information for consistency with management’s responses to
our inquiries, the basic financial statements, and other knowledge we obtained during our
audit of the basic financial statements. We do not express an opinion or provide any
assurance on the information because the limited procedures do not provide us with sufficient
evidence to express an opinion or provide any assurance.
24-027 F
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
December 5, 2023, on our consideration of Alabama Industrial Development Training
Institute' s internal control over financial reporting and on our tests of its compliance with
certain provisions of laws, regulations, contracts and grant agreements and other matters. The
purpose of that report is solely to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing, and not to provide an
opinion on the effectiveness of Alabama Industrial Development Training Institute' s internal
control over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering Alabama
Industrial Development Training Institute' s internal control over financial reporting and
compliance.
?J~tde
Rachel Laurie Riddle
Chief Examiner
Department of Examiners of Public Accounts
Montgomery, Alabama
December 5, 2023
24-027 G
This Page Intentionally Blank
Management’s Discussion and Analysis
(Required Supplementary Information)
H
AIDT
Management’s Discussion and Analysis
Overview of the Financial Statements and Financial Analysis
AIDT is proud to present its financial statements for fiscal year 2022. The
emphasis of discussions about these statements will be on current year data. There are
three financial statements presented: the Statement of Net Position; the Statement of
Revenues, Expenses, and Changes in Net Position; and the Statement of Cash Flows.
AIDT is an incentive for the state of Alabama to attract new businesses and assist
existing businesses with expansions. AIDT’s mission is to provide quality workforce
development for Alabama’s new and existing industries and to expand the opportunities
of its citizens through the jobs these industries create. AIDT accomplishes this by
assisting in the recruitment of potential employees and designing and delivering
training programs customized to each industry’s needs. AIDT does not charge for its
services and therefore depends on its state appropriation for all of its training projects.
This discussion and analysis of the Institute’s financial statements provide an

overview of its financial activities for the year.
Statement of Net Position
The Statement of Net Position presents the assets, deferred outflows, liabilities,
deferred Inflows and net position of the Institute as of the end of the fiscal year. The
Statement of Net Position is a point of time financial statement. The purpose of the
Statement of Net Position is to present to the readers of these financial statements a
fiscal snapshot of AIDT. The Statement of Net Position presents end-of-year data
concerning Assets (current and noncurrent), Deferred Outflows, Liabilities (current and
noncurrent), Deferred Inflows and Net Position (Assets and Deferred Outflows minus
Liabilities and Deferred Inflows). The difference between current and noncurrent assets
will be discussed in the financial statement disclosures.
I
From the data presented, readers of the Statement of Net Position are able to
determine the assets available to continue the operations of the institution. They are
also able to determine how much the institution owes vendors, investors and lending
institutions. Finally, the Statement of Net Position provides a picture of the net position
(assets and deferred outflows minus liabilities and deferred inflows) and their availability
for expenditure by the institution.
Net position is divided into three major categories. The first category, Net
Investment In Capital Assets, provides the institution’s equity in property, plant and
equipment owned by the institution. AIDT made purchases of capital assets during the
fiscal year for the Airbus FAL (Flight Works Alabama) and Airbus A220 in Mobile,
Alabama, MBUSI in Vance, Alabama, Mazda-Toyota in Huntsville, Alabama, Robotics
Technology Park in Tanner, Alabama and other AIDT projects, departments and sites.
The next category is restricted net position, which is divided into two categories,
expendable and nonexpendable. Expendable restricted net position Is available for
expenditure by the institution but must be spent for purposes as determined by donors
and/or external entities that have placed time or purpose restrictions on the use of the
assets. The corpus of nonexpendable restricted resources is only available for
investment purposes. The final category is unrestricted net position, which Is available to
the institution for any appropriate purpose of the institution. AIDT had no restricted net
position in 2022.
J
Assets 2021 2022

Current $ 102,994,867 $ 105,842,288
Noncurrent 69,703,694 77,553,975
Total Assets 172,698,561 183,396,263
Deferred Outflows of Resources

Pension 5,216,508 5,302,402
OPEB 3,115,742 3,019,845
Total Deferred Outflows of Resources 8,332,250 8,322,247
Liabilities
Current 8,584,524 8,648,275
Noncurrent 27,915,651 25,133,270
Total Liabilities 36,500,175 33,781,545
Deferred Inflows of Resources

Pension 791,000 4,794,000
OPEB 4,763,802 5,206,761
Total Deferred Inflows of Resources 5,554,802 10,000,761
Net Position
Net Investment in Capital Assets 69,703,694 77,553,271
Unrestricted 69,272,140 70,382,933
Total Net Position $ 138,975,834 $ 147,936,204
The philosophy of the institution is to use available resources to acquire and improve all
areas of the institution to better serve the instruction and public service missions of the
institution.
K
Statement of Revenues, Expenses, and Changes in Net Position
Changes in total assets as presented on the Statement of Net Position are based
on the activity presented in the Statement of Revenues, Expenses, and Changes in Net
Position. The purpose of the statement is to present the revenues received by the
institution, both operating and nonoperating, and the expenses paid by the institution,
operating and nonoperating, and any other revenues, expenses, gains and losses
received or spent by the institution. Generally speaking, operating revenues are
received for providing goods and services to the various customers and constituencies
of the institution. AIDT’s funding is now almost exclusively through its appropriation. to
meet large training commitments like MBUSI, Mazda-Toyota, ThyssenKrupp, Airbus FAL,
Airbus A220, and Toyota as well as AIDT’s traditional training projects. Operating
expenses are those expenses paid to acquire or produce the goods and services
provided in return for the operating revenues, and to carry out the mission of the
institution. Nonoperating revenues are revenues received for which goods and services
are not provided. For example, state appropriations are nonoperating because they are
provided by the Legislature to the institution without the Legislature directly receiving
commensurate goods and services for those revenues.
Statement of Revenues, Expenses, and Changes in Net Position
2022 2021
Operating Revenues $ 597,064 $ -
Operating Expenses (66,087,442) (59,062,839)
Operating Income (Loss) (65,490,378) (59,062,839)
Net Nonoperating Revenue (Expense) 71,486,846 67,956,457
Net Other Revenue (Expense) 2,963,902 542,324
Net Increase/Decrease 8,960,370 9,435,942
Net Position at Beginning of Year 138,975,834 129,477,339
Restatements 62,553
Net Position at End of Year $ 147,936,204 $ 138,975,834
L
The Operating Revenues AIDT received were classified under state grants/contracts for
Fiscal Year 2022.
Operating Expenditures
2022 2021
Instruction $ 51,276,924 $ 45,879,793
Institutional Support 9,522,236 8,948,544
O&M 498,333 473,364
Depreciation 4,789,949 3,761,138
Total $ 66,087,443 $ 59,062,839
The Statement of Revenues, Expenses, and Changes in Net Position reflects an

increase in net position at the end of the year.
Statement of Cash Flows
The final statement presented by AIDT is the Statement of Cash Flows. The
Statement of Cash Flows presents detailed information about the cash activity of the
institution during the year. The statement is divided into five parts. The first part deals
with operating cash flows and shows the net cash used by the operating activities of the
institution. The second section reflects cash flows from noncapital financing activities.
This section reflects the cash received and spent for nonoperating, noninvesting, and
noncapital financing purposes. The third section deals with cash flows from capital and
related financing activities. This section deals with the cash used for the acquisition and
construction of capital and related items. The fourth section reflects the cash flows from
investing activities and shows the purchases, proceeds, and interest received from
investing activities. The fifth section reconciles the net cash used to the operating
income or loss reflected on the Statement of Revenues, Expenses, and Changes in Net
Position.
M
Cash Flows for the Year ended September 30, 2022
2022 2021
Cash flows Used in Operating Activities $ (62,280,690) $ (49,956,735)
Cash Flow from Noncapital Financing Activities 71,380,873 67,904,829
Cash Flow from Capital and Related Financing Activities (6,313,801) (2,734,908)
Cash Flow from Investing Activities 105,973 51,628
Net Increase/Decrease in Cash 2,892,355 15,264,814
Cash, Beginning of Year 102,913,204 87,648,389
Cash, End of Year $ 105,805,559 $ 102,913,204
Economic Outlook
AIDT is not aware of any facts, decisions, or conditions that are expected to have
a significant effect on the financial position or results of operations during this fiscal
year beyond those unknown variations having a global effect on virtually all types of
business operations.
The Institute’s overall financial position is strong and anticipates the current fiscal
year will be much like the last and will maintain a close watch over resources to maintain
the Institute’s ability to react to unknown internal and external issues.
N
Basic Financial Statements
1
September 30, 2022
ASSETS
Current Assets
Cash and Cash Equivalents $ 105,805,559.26
Accounts Receivable, Net 36,729.14
Total Current Assets 105,842,288.40
Noncurrent Assets
Other Noncurrent Assets 704.16
Capital Assets:
Buildings and Improvements 70,549,057.88
Improvements Other Than Buildings 1,542,781.73
Equipment and Furniture 35,386,962.87
Construction in Progress 5,915,076.10
Right to Use Assets-Leases 3,361,823.49
Less: Accumulated Depreciation (39,202,431.26)
Total Capital Assets, Net of Depreciation 77,553,270.81
Total Noncurrent Assets 77,553,974.97
Total Assets 183,396,263.37
Deferred Outflows of Resources

Defined Benefit Pension Plan 5,302,402.00
Other Postemployment Benefit Plan 3,019,845.00
Total Outflows of Resources $ 8,322,247.00
The accompanying Notes to the Financial Statements are an integral part of this statement.

Training Institute
Montgomery, Alabama 2 Exhibit #1
LIABILITIES
Current Liabilities
Accounts Payable and Accrued Liabilities $ 7,951,289.74
Lease Payable 618,264.38
Deposits Refundable 23,205.57
Compensated Absences 55,515.07
Total Current Liabilities 8,648,274.76
Noncurrent Liabilities
Compensated Absences 1,713,491.10
Lease Payable 2,242,574.03
Net Pension Liability 15,306,000.00
Net OPEB Liability 5,871,205.00
Total Noncurrent Liabilities 25,133,270.13
Total Liabilities 33,781,544.89
Deferred Inflows of Resources

Defined Benefit Pension Plan 4,794,000.00
Other Postemployment Benefit Plan 5,206,761.00
Total Inflows of Resources 10,000,761.00
NET POSITION
Net Investment in Capital Assets 77,553,270.81
Unrestricted 70,382,933.67
Total Net Position $ 147,936,204.48

Training Institute
Statement of Revenues, Expenses and Changes in Net Position
For the Year Ended September 30, 2022
OPERATING REVENUES
State Grants and Contacts $ 597,064.49
Total Operating Revenues 597,064.49
OPERATING EXPENSES
Instruction 51,276,924.42
Institutional Support 9,522,235.96
Operation and Maintenance 498,333.21
Depreciation 4,789,948.84
Total Operating Expenses 66,087,442.43
Operating Income (Loss) (65,490,377.94)
NONOPERATING REVENUES (EXPENSES)

State Appropriation 71,307,610.00
Gifts 15,000.00
Investment Income 105,973.27
Other Nonoperating Revenues 58,263.23
Net Nonoperating Revenues 71,486,846.50
Income Before Other Revenues, Expenses, Gains or Losses 5,996,468.56
Capital Grant 2,963,901.54
Changes in Net Position 8,960,370.10
Total Net Position - Beginning of Year 138,975,834.38
Total Net Position - End of Year $ 147,936,204.48

Training Institute
Statement of Cash Flows
CASH FLOWS FROM OPERATING ACTIVITIES

Grants and Contracts $ 597,064.49
Payments to Employees (12,559,945.95)
Payments for Benefits (4,371,517.15)
Payments to Suppliers (45,946,291.30)
Net Cash Provided (Used) by Operating Activities (62,280,689.91)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES

State Appropriation 71,307,610.00
Other 73,263.23
Net Cash Provided (Used) by Noncapital Financing Activities 71,380,873.23
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES

Capital Grant 2,963,901.54
Purchases of Capital Assets (9,277,702.53)
Net Cash Provided (Used) by Capital and Related Financing Activities (6,313,800.99)
CASH FLOWS FROM INVESTING ACTIVITIES

Interest on Investments 105,973.27
Net Cash Provided (Used) by Investing Activities 105,973.27
Net Increase (Decrease) in Cash and Cash Equivalents 2,892,355.60

Cash and Cash Equivalents - Beginning of Year, Restated 102,913,203.66
Cash and Cash Equivalents - End of Year $ 105,805,559.26

Training Institute
Reconciliation of Net Operating Revenues (Expenses) to Net
Cash Provided (Used) by Operating Activities:
Operating Income (Loss) $ (65,490,377.94)
Adjustments to Reconcile Net Operating Income (Loss)

to Net Cash Provided (Used) by Operating Activities:
Depreciation Expense 4,789,948.84
Changes in Assets and Liabilities:
(Increase)/Decrease in Receivables, Net 44,230.65
(Increase)/Decrease in Deferred Outflows 10,003.00
(Increase)/Decrease in Other Assets (3,361,823.49)
Increase/(Decrease) in Accounts Payable (527,294.45)
Increase/(Decrease) in Deposit Liabilities (18,164.93)
Increase/(Decrease) in Lease Liability 2,860,838.41
Increase/(Decrease) in Pension Liability (4,026,000.00)
Increase/(Decrease) in OPEB Liability (1,167,568.00)
Increase/(Decrease) in Deferred Inflows 4,445,959.00
Increase/(Decrease) in Compensated Absences 159,559.00
Net Cash Provided (Used) by Operating Activities $ (62,280,689.91)

Training Institute
Notes to the Financial Statements
Note 1 – Summary of Significant Accounting Policies
The financial statements of Alabama Industrial Development Training Institute (the “Institute”)
are prepared in accordance with accounting principles generally accepted in the United States of
America (GAAP). The Governmental Accounting Standards Board (GASB) is the accepted
standard-setting body for establishing governmental accounting and financial reporting
principles. The more significant accounting policies of the Institute are described below.
A. Reporting Entity
The Institute is a component unit of the State of Alabama. A component unit is a legally
separate organization for which the elected officials of the primary government are financially
accountable. The Governmental Accounting Standards Board (GASB) in Statement Number 14,
“The Financial Reporting Entity,” states that a primary government is financially accountable for
a component unit if it appoints a voting majority of an organization’s governing body and (1) it
is able to impose its will on that organization or (2) there is a potential for the organization to
provide specific financial benefits to, or impose specific financial burdens on, the primary
government. In this case, the primary government is the State of Alabama and the Institute is a
division of the Department of Commerce. The Secretary of the Department of Commerce,
through an executive director, has the authority and responsibility for the operation,
management, supervision, and regulation of Alabama Industrial Development Training Institute.
In addition, the Institute receives a substantial portion of its funding from the State of Alabama
(potential to impose a specific financial burden). Based on these criteria, the Institute is
considered for financial reporting purposes to be a component unit of the State of Alabama.
B. Measurement Focus, Basis of Accounting and Financial Statement Presentation
The financial statements of the Institute have been prepared using the economic resources
measurement focus and the accrual basis of accounting. Revenues are recorded when earned and
expenses are recorded when a liability is incurred, regardless of the timing of the related cash
flows. Grants and similar items are recognized as revenue as soon as all eligibility requirements
imposed by the provider have been met.
It is the policy of the Institute to first apply restricted resources when an expense is incurred and
then apply unrestricted resources when both restricted and unrestricted resources are available.
The Statement of Revenues, Expenses and Changes in Net Position distinguishes between
operating and nonoperating revenues. Operating revenues result from exchange transactions
associated with the principal activities of the Institute. Exchange transactions are those in which
each party to the transactions receives or gives up essentially equal values. Nonoperating
revenues arise from exchange transactions not associated with the Institute’s principal activities,
such as investment income and from all nonexchange transactions, such as state appropriations.
Alabama Industrial Development 7

Training Institute
Montgomery, Alabama
C. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources and Net
Position
1. Cash and Cash Equivalents
Cash and cash equivalents include cash on hand and demand deposits.
2. Receivables
Accounts receivable relate to amounts due from state bond funds and third parties.
3. Capital Assets
Capital assets, other than intangibles, with a unit cost of over $5,000 and an estimated useful life
in excess of one year, and all library books, are recorded at historical cost or estimated historical
cost if purchased or constructed. The capitalization threshold for intangible assets such as
capitalized software and internally generated computer software is $1 million and $100,000 for
easements and land use rights and patents, trademarks and copyrights. In addition, works of art
and historical treasures and similar assets are recorded at their historical cost. Donated capital
assets are recorded at acquisition value (an entry price). Land, Construction in Progress and
intangible assets with indefinite lives are the only capital assets that are not depreciated.
Depreciation is not allocated to a functional expense category. The costs of normal maintenance
and repairs that do not add to the value of the asset or materially extend its life are not
capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed.
GASB Statement Number 89, Accounting for Interest Cost Incurred before the end of a
Construction Period requires interest cost incurred before the end of a construction period to be
expensed instead of capitalized.
Maintenance and repairs are charged to operations when incurred. Betterments and major
improvements which significantly increase values, change capacities or extend useful lives are
capitalized. Upon the sale or retirement of fixed assets being depreciated using the straight-line
method, the cost and related accumulated depreciation are removed from the respective accounts
and any resulting gain or loss is included in the results of operation.

Training Institute
Montgomery, Alabama
The method of depreciation and useful lives of the capital assets are as follows:
Depreciation Useful
Assets Method Lives
Buildings and Improvements Straight-Line 50 years

Improvements other than Buildings Composite 25 years
Equipment Composite 5 – 10 years
Library Materials Composite 20 years
Capitalized Software Straight-Line 10 years
Internally Generated Computer Software Straight-Line 10 years
Easement and Land Use Rights Straight-Line 20 years
Patents, Trademarks and Copyrights Straight-Line 20 years
4. Deferred Outflows of Resources
Deferred outflows of resources are reported in the Statement of Net Position. Deferred outflows
of resources are defined as a consumption of net assets by the government that is applicable to a
future reporting period. Deferred outflows of resources increase net position, similar to assets.
5. Long-Term Obligations
Long-term debt and other long-term obligations are reported as liabilities in the Statement of
Net Position.
6. Compensated Absences
No liability is recorded for sick leave. Substantially all employees of the Institute earn 12 days
of sick leave each year with unlimited accumulation. Payment is not made to employees for
unpaid sick leave at termination or retirement.
All non-instructional employees earn annual leave at a rate which varies from 12 to 24 days per
year depending on duration of employment, with accumulation limited to 60 days. Instructional
employees do not earn annual leave. Payment is made to employees for unused leave at
termination or retirement.

Training Institute
Montgomery, Alabama
7. Deferred Inflows of Resources
Deferred inflows of resources are reported in the Statement of Net Position. Deferred inflows of
resources are defined as an acquisition of net assets by the government that is applicable to a
future reporting period. Deferred inflows of resources decrease net position, similar to liabilities.
8. Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred
inflows of resources related to pensions, and pension expense, the Teachers’ Retirement System
of Alabama (the “Plan”) financial statements are prepared using the economic resources
measurement focus and accrual basis of accounting. Contributions are recognized as revenues
when earned, pursuant to plan requirements. Benefits and refunds are recognized when due and
payable in accordance with the terms of the Plan. Expenses are recognized when the
corresponding liability is incurred, regardless of when the payment is made. Investments are
reported at fair value. Financial statements are prepared in accordance with requirements of the
Governmental Accounting Standards Board (GASB). Under these requirements, the Plan is
considered a component unit of the State of Alabama and is included in the State’s Annual
Comprehensive Financial Report.
9. Postemployment Benefits Other Than Pensions (OPEB)
The Alabama Retired Education Employees’ Health Care Trust (the “Trust”) financial statements
are prepared by using the economic resources measurement focus and accrual basis of
accounting. This includes for purposes of measuring the net OPEB liability, deferred outflows of
resources and deferred inflows of resources related to OPEB, and OPEB expense, information
about the fiduciary net position of the Trust and additions to/deductions from the Trust’s
fiduciary net position. Plan member contributions are recognized in the period in which the
contributions are due. Employer contributions are recognized when due pursuant to plan
requirements. Benefits are recognized when due and payable in accordance with the terms of the
plan. Subsequent events were evaluated by management through the date the financial statements
were issued.

Training Institute
Montgomery, Alabama
10. Net Position
Net position is required to be classified for accounting and reporting purposes into the following
categories:
♦ Net Investment in Capital Assets – Capital assets, including restricted capital assets, reduced
by accumulated depreciation and by outstanding principal balances of debt attributable to the
acquisition, construction or improvement of those assets. Deferred outflows of resources and
deferred inflows of resources that are attributable to the acquisition, construction, or
improvement of those assets or related debt are also included in this component of net
position. Any significant unspent related debt proceeds or inflows of resources at year-end
related to capital assets are not included in this calculation.
♦ Restricted:
 Nonexpendable – Net position subject to externally imposed stipulations that they be

maintained permanently by the Institute.
 Expendable – Net position whose use by the Institute is subject to externally imposed
stipulations that can be fulfilled by actions of the Institute pursuant to those stipulations
or that expire by the passage of time.
♦ Unrestricted – Net position which is the net amount of the assets, deferred outflows of
resources, liabilities, and deferred inflows of resources that are not included in the
determination of net investment in capital assets or the restricted component of net position.
Unrestricted net position may be designated for specific purposes by action of management.
11. Implementation of New Accounting Standard
In the fiscal year ended September 30, 2022, the Institute adopted GASB Statement Number 87,
Leases. This statement better meets the information needs of financial statement users by
improving accounting and financial reporting for leases by governments. The statement
increases the usefulness of governments’ financial statements by requiring recognition of certain
lease assets and liabilities for leases that previously were classified as operating leases and as
inflows of resources or outflows of resources recognized based on the payment provisions of the
contract. It establishes a single model for lease accounting based on the foundational principle
that leases are financings of the right to use and underlying asset. Under this statement, a lessee
is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is
required to recognize a lease receivable and a deferred inflow of resources, thereby enhancing
the relevance and consistency of information about governments’ leasing activities.

Training Institute
Montgomery, Alabama
Note 2 – Deposits
Deposits
The Institute’s deposits at year-end were held by financial institutions in the State of Alabama’s
Security for Alabama Funds Enhancement (SAFE) Program. The SAFE Program was
established by the Alabama Legislature and is governed by the provisions contained in the
Code of Alabama 1975, Sections 41-14A-1 through 41-14A-14. Under the SAFE Program all
public funds are protected through a collateral pool administered by the Alabama State
Treasurer’s Office. Under this program, financial institutions holding deposits of public funds
must pledge securities as collateral against those deposits. In the event of failure of a financial
institution, securities pledged by that financial institution would be liquidated by the State
Treasurer to replace the public deposits not covered by the Federal Deposit Insurance
Corporation (FDIC). If the securities pledged fail to produce adequate funds, every institution
participating in the pool would share the liability for the remaining balance.
Note 3 – Receivables
Accounts receivable relate to amounts due from federal grants, state bond funds and third parties.
Accounts Receivable:
State $17,831.66
Other 18,897.48
Total Accounts Receivable, Net $36,729.14
Note 4 – Capital Assets
Capital asset activity for the year ended September 30, 2022, was as follows:
Beginning Adjustment/ Ending

Balance Additions Deductions Reclassification Balance
Buildings and Improvements $ 69,324,671.48 $1,155,161.40 $ $ 69,225.00 $ 70,549,057.88

Improvements Other Than Buildings 1,515,568.20 27,213.53 1,542,781.73
Equipment and Furniture 30,866,900.68 5,108,619.27 (588,557.08) 35,386,962.87
Construction in Progress 2,997,592.77 2,986,708.33 (69,225.00) 5,915,076.10
Right to Use Asset 3,361,823.49 3,361,823.49
Total 104,704,733.13 12,639,526.02 (588,557.08) 116,755,702.07
Less: Accumulated Depreciation

Buildings and Improvements 13,479,173.19 1,426,422.55 14,905,595.74
Improvements Other Than Buildings 517,243.37 57,410.43 574,653.80
Equipment and Furniture 21,004,622.94 2,719,495.65 (588,557.08) 23,135,561.51
Right to Use Asset 586,620.21 586,620.21
Total Accumulated Depreciation 35,001,039.50 4,789,948.84 (588,557.08) 39,202,431.26
Total Capital Assets, Net $ 69,703,693.63 $7,849,577.18 $ $ $ 77,553,270.81

Training Institute
Montgomery, Alabama
Note 5 – Defined Benefit Pension Plan
A. Plan Description
The Teachers’ Retirement System of Alabama (TRS), a cost-sharing multiple-employer public

employee retirement plan (the “Plan”), was established as of September 15, 1939, under the
provisions of Act Number 419, Acts of Alabama 1939, for the purpose of providing retirement
allowances and other specified benefits for qualified persons employed by State-supported
educational institutions. The responsibility for the general administration and operation of the
TRS is vested in its Board of Control. The TRS Board of Control consists of 15 trustees. The
Plan is administered by the Retirement Systems of Alabama (RSA). The Code of Alabama 1975,
Section 16-25-2, grants the authority to establish and amend the benefit terms to the TRS
Board of Control. The Plan issues a publicly available financial report that can be obtained at
www.rsa-al.gov.
B. Benefits Provided
State law establishes retirement benefits as well as death and disability benefits and any ad hoc
increase in postretirement benefits for the TRS. Benefits for TRS members vest after 10 years of
creditable service. TRS members are eligible for retirement after age 60 with 10 years or more of
creditable service or with 25 years of service (regardless of age) and are entitled to an annual
retirement benefit, payable monthly for life. Service and disability retirement benefits are based
on a guaranteed minimum or a formula method, with the member receiving payment under the
method that yields the highest monthly benefit. Under the formula method, members of the TRS
are allowed 2.0125% of their average final compensation (highest 3 of the last 10 years) for each
year of service.
Act Number 2012-377, Acts of Alabama, established a new tier of benefits (Tier 2) for members
hired on or after January 1, 2013. Tier 2 TRS members are eligible for retirement after age 62
with 10 years or more of creditable service and are entitled to an annual retirement benefit,
payable monthly for life. Service and disability retirement benefits are based on a guaranteed
minimum or a formula method, with the member receiving payment under the method that yields
the highest monthly benefit. Under the formula method, Tier 2 members of the TRS are allowed
1.65% of their average final compensation (highest 5 of the last 10 years) for each year of service
up to 80% of their average final compensation. Members are eligible for disability retirement if
they have 10 years of creditable service, are currently in-service, and determined by the RSA
Medical Board to be permanently incapacitated from further performance of duty. Preretirement
death benefits equal to the annual earnable compensation of the member as reported to the Plan
for the preceding year ending June 30 are paid to a qualified beneficiary.

Training Institute
Montgomery, Alabama
C. Contributions
Covered Tier 1 members of the TRS contributed 5% of earnable compensation to the TRS as
required by statute until September 30, 2011. From October 1, 2011 to September 30, 2012,
covered members of the TRS were required by statute to contribute 7.25% of earnable
compensation. Effective October 1, 2012, covered members of the TRS were required by statute
to contribute 7.50% of earnable compensation. Certified law enforcement, correctional officers
and firefighters of the TRS contributed 6% of earnable compensation as required by statute until
September 30, 2011. From October 1, 2011 to September 30, 2012, certified law enforcement,
correctional officers, and firefighters of the TRS were required by statute to contribute 8.25% of
earnable compensation. Effective October 1, 2012, certified law enforcement, correctional
officers, and firefighters of the TRS are required by statute to contribute 8.50% of earnable
compensation.
Effective October 1, 2021, the covered Tier 2 member contribution rate increased from 6% to
6.2% of earnable compensation to the TRS as required by statute. Effective October 1, 2021, the
covered Tier 2 certified law enforcement, correctional officers, and firefighters contribution rate
increased from 7% to 7.2% of earnable compensation to the TRS as required by statute.
Participating employers’ contractually required contribution rate for the year ended
September 30, 2022, was 12.43% of annual pay for Tier 1 members and 11.32% of annual pay
for Tier 2 members. These required contribution rates are a percent of annual payroll, actuarially
determined as an amount that, when combined with member contributions, is expected to finance
the costs of benefits earned by members during the year, with an additional amount to finance
any unfunded accrued liability. Total employer contributions to the pension plan from the
Institute were $1,572,401.71 for the year ended September 30, 2022.
D. Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred
Inflows of Resources Related to Pensions
At September 30, 2022, the Institute reported a liability of $15,306,000.00 for its proportionate
share of the collective net pension liability. The collective net pension liability was measured as
of September 30, 2021, and the total pension liability used to calculate the collective net pension
liability was determined by an actuarial valuation as of September 30, 2020. The Institute’s
proportion of the collective net pension liability was based on the employers’ shares of
contributions to the pension plan relative to the total employer contributions of all participating
TRS employers. At September 30, 2021, the Institute’s proportion was 0.162478%, which was
an increase of 0.006192% from its proportion measured as of September 30, 2020.

Training Institute
Montgomery, Alabama
For the year ended September 30, 2022, the Institute recognized pension expense of
$1,464,000.00. At September 30, 2022, the Institute reported deferred outflows of resources and
deferred inflows of resources related to pensions from the following sources:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Differences between expected and actual experience $ 709,000.00 $ 892,000.00

Changes of assumptions 1,607,000.00
Net difference between projected and actual earnings
on pension plan investments 3,613,000.00
Changes in proportion and differences between employer
contributions and proportionate share of contributions 1,414,000.00 289,000.00
Employer contributions subsequent to the measurement date 1,572,000.00
Total $5,302,000.00 $4,794,000.00
The $1,572,000.00 reported as deferred outflows of resources related to pensions resulting from
Institute pension liability in the year ended September 30, 2023. Other amounts reported as
deferred outflows of resources and deferred inflows of resources related to pension will be
recognized in pension expense as follows:
Year Ending:
September 30, 2023 $ (1,000.00)

2024 $ 90,000.00
2025 $(214,000.00)
2026 $(939,000.00)
2027 $ 0.00
Thereafter $ 0.00

Training Institute
Montgomery, Alabama
E. Actuarial Assumptions
The total pension liability was determined by an actuarial valuation as of September 30, 2020,
using the following actuarial assumptions, applied to all periods included in the measurement:
Inflation 2.50%
Investment Rate of Return (*) 7.45%
Projected Salary Increases 3.25%-5.00%
(*) Net of pension plan investment expense
The actuarial assumptions used in the actuarial valuation as of September 30, 2020, were based
on the results of an investigation of the economic and demographic experience for the TRS based
upon participant data as of September 30, 2020, completed by the RSA and its actuaries. The
purpose of the investigation was to assess the reasonableness of the actuarial assumptions and
methods currently used by the RSA. This investigation resulted in changes to the actuarial
assumptions. The Board of Control accepted and approved these changes in September 2021
which became effective at the beginning of fiscal year 2020.
The assumed investment rate of return used to prepare the actuarial valuation as of
September 30, 2020, was 7.45% for the TRS. The Board of Control accepted and approved the
new assumed investment rate of return in September 2021 which became effective
September 30, 2020. The new assumed investment rate of return was used to measure the total
pension liability as of September 30, 2021.

Training Institute
Montgomery, Alabama
Mortality rates for TRS were based on the Pub-2010 Teacher tables with the following
adjustments, projected generationally using scale MP-2020 adjusted 66-2/3% beginning with
year 2019:
Set Forward (+)/

Group Membership Table Setback (-) Adjustment to Rates
Service Retirees Teacher Retiree – Male: +2, Male: 108% ages <63,
Below Median Female +2 96% ages > 67;
Phasing down 63-67
Female: 112% ages <69,
98%>age 74;
Phasing down 69-74
Contingent Survivor – Male:+2,
Beneficiaries Below Median Female: None None
Male:+8,
Disabled Retirees Teacher Disability Female:+3 None
The long-term expected rate of return on pension plan investments was determined using a
log-normal distribution analysis in which best-estimate ranges of expected future real rates of
return (expected returns, net of pension plan investment expense and inflation) are developed for
each major asset class. These ranges are combined to produce the long-term expected rate of
return by weighting the expected future real rates of return by the target asset allocation
percentage and by adding expected inflation. The target asset allocation and best estimates of
geometric real rates of return for each major asset class are as follows:
Long-Term
Target Expected Rate
Asset Class Allocation of Return (*)
Fixed Income 15.00% 2.80%

U. S. Large Stocks 32.00% 8.00%
U. S. Mid Stocks 9.00% 10.00%
U. S. Small Stocks 4.00% 11.00%
International Developed Market Stocks 12.00% 9.50%
International Emerging Market Stocks 3.00% 11.00%
Alternatives 10.00% 9.00%
Real Estate 10.00% 6.50%
Cash Equivalents 5.00% 2.50%
Total 100.00%
(*) Includes assumed rate of inflation of 2.00%.

Training Institute
Montgomery, Alabama
F. Discount Rate
The discount rate used to measure the total pension liability was 7.45%. The projection of cash
flows used to determine the discount rate assumed that plan member contributions will be made
at the current contribution rate and that the employer contributions will be made at rates equal to
the difference between actuarially determined contribution rates and the member rate. Based on
those assumptions, components of the pension plan’s fiduciary net position were projected to be
available to make all projected future benefit payments of current plan members. Therefore, the
long-term expected rate of return on pension plan investments was applied to all periods of
projected benefit payments to determine the total pension liability.
G. Sensitivity of the Institute’s Proportionate Share of the Collective Net Pension Liability to
Changes in the Discount Rate
The following table presents the Institute’s proportionate share of the collective net pension
liability calculated using the discount rate of 7.45%, as well as what the Institute’s proportionate
share of the collective net pension liability would be if it were calculated using a discount rate
that is 1-percentage point lower (6.45%) or 1-percentage point higher (8.45%) than the current
rate:
Current
1% Decrease Discount Rate 1% Increase
(6.45%) (7.45%) (8.45%)
Institute’s Proportionate Share of

Collective Net Pension Liability $22,529 $15,306 $9,222
(Dollar Amounts in Thousands)
H. Pension Plan Fiduciary Net Position
Detailed information about the pension plan’s fiduciary net position is available in the separately
issued RSA Annual Comprehensive Report for the fiscal year ended September 30, 2021. The
supporting actuarial information is included in the GASB Statement Number 67 Report for the
TRS prepared as of September 30, 2021. The auditor’s report dated April 19, 2022, on the total
pension liability, total deferred outflows of resources, total deferred inflows of resources, total
pension expense for the sum of all participating entities as of September 30, 2021, along with
supporting schedules is also available. The additional financial and actuarial information is
available at www.rsa-al.gov.

Training Institute
Montgomery, Alabama
Note 6 – Other Postemployment Benefits (OPEB)
A. Plan Description
The Alabama Retired Education Employees’ Health Care Trust (the “Trust”) is a cost-sharing
multiple-employer defined benefit postemployment healthcare plan that administers healthcare
benefits to the retirees of participating state and local educational institutions. The Trust was
established under the Alabama Retiree Health Care Funding Act of 2007 which authorized and
directed the Public Education Employees’ Health Insurance Board (PEEHIB) to create an
irrevocable trust to fund postemployment healthcare benefits to retirees participating in the
Public Education Employees’ Health Insurance Plan (PEEHIP). Active and retiree health
insurance benefits are paid through PEEHIP. In accordance with GASB, the Trust is considered a
component unit of the State of Alabama (the “State”) and is included in the State’s Annual
Comprehensive Financial Report.
The PEEHIP was established in 1983 pursuant to the provisions of the Code of Alabama 1975,
Section 16-25A-4, (Act Number 83-455, Acts of Alabama) to provide a uniform plan of health
insurance for active and retired employees of state and local educational institutions which
provide instruction at any combination of grades K-14 (collectively, eligible employees), and to
provide a method for funding the benefits related to the plan. The four-year universities
participate in the plan with respect to their retired employees and are eligible and may elect to
participate in the plan with respect to their active employees. Responsibility for the establishment
of the health insurance plan and its general administration and operations is vested in the
PEEHIB. The PEEHIB is a corporate body for purposes of management of the health insurance
plan. The Code of Alabama 1975, Section 16-25A-4, provides the PEEHIB with the authority to
amend the benefit provisions in order to provide reasonable assurance of stability in future years
for the plan. All assets of the PEEHIP are held in trust for the payment of health insurance
benefits. The Teachers’ Retirement System of Alabama (TRS) has been appointed as the
administrator of the PEEHIP and, consequently, serves as the administrator of the Trust.
B. Benefits Provided
PEEHIP offers a basic hospital medical plan to active members and non-Medicare eligible
retirees. Benefits include inpatient hospitalization for a maximum of 365 days without a dollar
limit, inpatient rehabilitation, outpatient care, physician services, and prescription drugs.
Active employees and non-Medicare eligible retirees who do not have Medicare eligible
dependents can enroll in a health maintenance organization (HMO) in lieu of the basic hospital
medical plan. The HMO includes hospital medical benefits, dental benefits, vision benefits, and
an extensive formulary. However, participants in the HMO are required to receive care from a
participating physician in the HMO plan.

Training Institute
Montgomery, Alabama
The PEEHIP offers four optional plans (Hospital Indemnity, Cancer, Dental, and Vision) that
may be selected in addition to or in lieu of the basic hospital medical plan or HMO. The Hospital
Indemnity Plan provides a per-day benefit for hospital confinement, maternity, intensive care,
cancer, and convalescent care. The Cancer Plan covers cancer disease only and benefits are
provided regardless of other insurance. Coverage includes a per-day benefit for each hospital
confinement related to cancer. The Dental Plan covers diagnostic and preventative services, as
well as basic and major dental services. Diagnostic and preventative services include oral
examinations, teeth cleaning, x-rays, and emergency office visits. Basic and major services
include fillings, general aesthetics, oral surgery not covered under a Group Medical Program,
periodontics, endodontics, dentures, bridgework, and crowns. Dental services are subject to a
maximum of $1,250 per year for individual coverage and $1,000 per person per year for family
coverage. The Vision Plan covers annual eye examinations, eyeglasses, and contact lens
prescriptions.
PEEHIP members may opt to elect the PEEHIP Supplemental Plan as their hospital medical
coverage in lieu of the PEEHIP Hospital Medical Plan. The PEEHIP Supplemental Plan provides
secondary benefits to the member’s primary plan provided by another employer. Only active and
non-Medicare retiree members and dependents are eligible for the PEEHIP Supplemental Plan.
There is no premium required for this plan, and the plan covers most out-of-pocket expenses not
covered by the primary plan. The plan cannot be used as a supplement to Medicare, the PEEHIP
Hospital Medical Plan, or the State or Local Governmental Plans administered by the State
Employees’ Insurance Board (SEIB).
Medicare eligible members and Medicare eligible dependents who are covered on a retiree
contract were enrolled in the United Healthcare Group Medicare Advantage plan for PEEHIP
retirees. Effective January 1, 2020, Humana Insurance Company replaced United Healthcare as
the administrator of the PEEHIP Group Medicare Advantage (PPO) Plan. The plan is fully
insured, and members are able to have all of their Medicare Part A (hospital insurance), Part B
(medical insurance), and Part D (prescription drug coverage) in one convenient plan. Retirees
can continue to see their same providers with no interruption and see any doctor who accepts
Medicare on a national basis. Members have the same benefits in and out-of-network and there is
no additional retiree cost share if a retiree uses an out-of-network provider and no balance billing
from the provider.

Training Institute
Montgomery, Alabama
C. Contributions
The Code of Alabama 1975, Section 16-25A-8, and the Code of Alabama 1975,
Section 16-25A-8.1, provide the PEEHIB with the authority to set the contribution requirements
for plan members and the authority to set the employer contribution requirements for each
required class, respectively. Additionally, the PEEHIB is required to certify to the Governor and
the Legislature, the amount, as a monthly premium per active employee, necessary to fund the
coverage of active and retired member benefits for the following fiscal year. The Legislature
then sets the premium rate in the annual appropriation bill.
For employees who retired after September 30, 2005, but before January 1, 2012, the employer
contribution of the health insurance premium set forth by the PEEHIB for each retiree class is
reduced by 2% for each year of service less than 25 and increased by 2% for each year of service
over 25 subject to adjustment by the PEEHIB for changes in Medicare premium costs required to
be paid by a retiree. In no case does the employer contribution of the health insurance premium
exceed 100% of the total health insurance premium cost for the retiree.
For employees who retired after December 31, 2011, the employer contribution to the health
insurance premium set forth by the PEEHIB for each retiree class is reduced by 4% for each year
of service less than 25 and increased by 2% for each year over 25, subject to adjustment by the
PEEHIB for changes in Medicare premium costs required to be paid by a retiree. In no case does
the employer contribution of the health insurance premium exceed 100% of the total health
insurance premium cost for the retiree. For employees who retired after December 31, 2011, who
are not covered by Medicare, regardless of years of service, the employer contribution to the
health insurance premium set forth by the PEEHIB for each retiree class is reduced by a
percentage equal to 1% multiplied by the difference between the Medicare entitlement age and
the age of the employee at the time of retirement as determined by the PEEHIB. This reduction
in the employer contribution ceases upon notification to the PEEHIB of the attainment of
Medicare coverage.
D. OPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred
Inflows of Resources Related to OPEB
At September 30, 2022, the Institute reported a liability of $5,871,205.00 for its proportionate
share of the collective net OPEB liability. The collective net OPEB liability was measured as of
September 30, 2021 and the total OPEB liability used to calculate the net OPEB liability was
determined by an actuarial valuation as of September 30, 2020. The Institute’s proportion of the
collective net OPEB liability was based on a projection of the Institute’s long-term share of
contributions to the OPEB plan relative to the projected contributions of all participating
employers, actuarially determined. At September 30, 2021, the Institute’s proportion was
0.113633%, which was an increase of 0.005175% from its proportion measured as of
September 30, 2020.

Training Institute
Montgomery, Alabama
For the year ended September 30, 2022, the Institute recognized OPEB expense of $(388,249.00)
with no special funding situations. At September 30, 2022, the Institute reported deferred
outflows of resources and deferred inflows of resources related to OPEB from the following
sources.
Deferred Deferred
Outflows of Inflows of
Resources Resources
Differences between expected and actual experience $ 138,913.00 $2,042,603.00

Changes of assumptions 2,090,973.00 2,275,729.00
Net difference between projected and actual earnings
on OPEB plan investments 183,143.00
Changes in proportion and differences between employer
contributions and proportionate share of contributions 547,077.00 705,286.00
Employer contributions subsequent to the measurement date 242,882.00
Total $3,019,845.00 $5,206,761.00
The $242,882.00 reported as deferred outflows of resources related to OPEB resulting from the
Institute’s contributions subsequent to the measurement date will be recognized as a reduction of
the net OPEB liability in the year ended September 30, 2023.
Other amounts reported as deferred outflows of resources and deferred inflows of resources
related to OPEB will be recognized in OPEB expense as follows:
Year Ending:
September 30, 2023 $(881,551.00)

2024 $(679,256.00)
2025 $(700,185.00)
2026 $ (41,138.00)
2027 $ 357.00
Thereafter $(128,025.00)

Training Institute
Montgomery, Alabama
E. Actuarial Assumptions
The total OPEB liability was determined by an actuarial valuation as of September 30, 2020,
using the following actuarial assumptions, applied to all periods included in the measurement:
Inflation 2.50%
Projected Salary Increases (¹) 3.25% - 5.00%
Long-Term Investment Rate of Return (²) 7.00%
Municipal Bond Index Rate at the Measurement Date 2.29%
Municipal Bond Index Rate at the Prior Measurement Date 2.25%
Projected Year for Fiduciary Net Position (FNP) to be Depleted 2051
Single Equivalent Interest Rate at the Measurement Date 3.97%
Single Equivalent Interest Rate at the Prior Measurement Date 3.05%
Healthcare Cost Trend Rate:
Pre-Medicare Eligible 6.50%
Medicare Eligible (**)
Ultimate Trend Rate:
Pre-Medicare Eligible 4.50% in 2028
Medicare Eligible 4.50% in 2025
(¹) Includes 2.75% wage inflation.

(²) Compounded annually, net of investment expense, and includes inflation.
(**) Initial Medicare claims are set based on scheduled increases through plan year 2022
The rates of mortality are based on the Pub-2010 Public Mortality Plans Mortality Tables,
adjusted generationally based on scale MP-2020, with an adjustment of 66-2/3% to the table
beginning in year 2019. The mortality rates are adjusted forward and/or back depending on the
plan and group covered, as shown in the table below.
Set Forward (+)/

Group Membership Table Setback (-) Adjustment to Rates
Active Members Teacher Employee – None 65%

Below Median
Service Retirees Teacher – Male: +2, Male: 108% ages<63,
Below Median Female: +2 96% ages>67;
Phasing down 63-67
Female: 112% ages <69
98%> age 74;
Phasing down 69-74
Disabled Retirees Teacher Disability Male: +8, None
Female: +3
Beneficiaries Teacher Contingent Male: +2, None
Survivor Below Median Female: None

Training Institute
Montgomery, Alabama
The decremental assumptions used in the valuation were selected based on the actuarial
experience study prepared as of September 30, 2020, submitted to and adopted by the Teachers’
Retirement System of Alabama Board on September 13, 2021.
The remaining actuarial assumptions (e.g., initial per capita costs, health care cost trends, rate of
plan participation, rates of plan election, etc.) were based on the actuarial valuation as of
September 30, 2020.
The long-term expected return on plan assets is to be reviewed as part of regular experience
studies prepared every five years, in conjunction with similar analysis for the Teachers’
Retirement System of Alabama. Several factors should be considered in evaluating the long-term
rate of return assumption, including long-term historical data, estimates inherent in current
market data, and a log-normal distribution analysis in which best-estimate ranges of expected
future real rates of return (expected return, net of investment expense and inflation), as
developed for each major asset class. These ranges should be combined to produce the long-term
expected rate of return by weighting the expected future real rates of return by the target asset
allocation percentage and then adding expected inflation. The assumption is intended to be a
long-term assumption and is not expected to change absent a significant change in the asset
allocation, a change in the inflation assumption, or a fundamental change in the market that alters
expected returns in future years.
The long-term expected rate of return on the OPEB plan investments is determined based on the
allocation of assets by asset class and by the mean and variance of real returns.
The target asset allocation and best estimates of expected geometric real rates of return for each
major asset class is summarized below:
Long-Term
Target Expected Rate
Asset Class Allocation of Return (*)
Fixed Income 30.00% 4.40%

U. S. Large Stocks 38.00% 8.00%
U. S. Mid Stocks 8.00% 10.00%
U. S. Small Stocks 4.00% 11.00%
International Developed Market Stocks 15.00% 9.50%
Cash 5.00% 1.50%
Total 100.00%
(*) Geometric mean, includes 2.5% inflation

Training Institute
Montgomery, Alabama
F. Discount Rate
The discount rate (also known as the Single Equivalent Interest Rate (SEIR), as described by
GASB Statement 74) used to measure the total OPEB liability was 3.97%. Premiums paid to the
Public Education Employees’ Health Insurance Board for active employees shall include an
amount to partially fund the cost of coverage for retired employees. The projection of cash flows
used to determine the discount rate assumed that plan contributions will be made at the current
contribution rates. Each year, the State specifies the monthly employer rate that participating
school systems must contribute for each active employee. Currently, the monthly employer rate
is $800 per non-university active member. Approximately, 12.990% of the employer
contributions were used to assist in funding retiree benefit payments in 2021 and it is assumed
that the 12.990% will increase at the same rate as expected benefit payments for the closed group
reaching 20.00%. It is assumed the $800 rate will increase with inflation at 2.50% starting in
2024. Retiree benefit payments for university members are paid by the universities and are not
included in the cash flow projections. The discount rate determination will use a municipal bond
rate to the extent the trust is projected to run out of money before all benefits are paid. Therefore,
the projected future benefit payments for all current plan members were projected through 2119.
The long-term rate of return is used until the assets are expected to be depleted in 2051, after
which the municipal bond rate is used.
G. Sensitivity of the Institute’s Proportionate Share of the Collective Net OPEB Liability to
Changes in the Healthcare Cost Trend Rates
The following table presents the Institute’s proportionate share of the collective net OPEB
liability of the Trust calculated using the current healthcare trend rate, as well as what the
collective net OPEB liability would be if calculated using one percentage point lower or one
percentage point higher than the current rate:
Current Healthcare
1% Decrease Trend Rate 1% Increase
(5.50% Decreasing (6.50% Decreasing (7.50% Decreasing
to 3.50% for to 4.50% for to 5.50% for
Pre-Medicare, Known Pre-Medicare, Known Pre-Medicare, Known
Decreasing to 3.50% Decreasing to 4.50% Decreasing to 5.50%
for Medicare Eligible) for Medicare Eligible) for Medicare Eligible)
Institute’s proportionate share of

the collective net OPEB liability $4,606,974 $5,871,205 $7,500,044

Training Institute
Montgomery, Alabama
H. Sensitivity of the Institute’s Proportionate Share of the Collective Net OPEB Liability to
Changes in the Discount Rate
The following table presents the Institute’s proportionate share of the collective net OPEB
liability of the Trust calculated using the discount rate of 3.97%, as well as what the collective
net OPEB liability would be if calculated using one percentage point lower or one percentage
point higher than the current rate:
1% Decrease Current Rate 1% Increase

(2.97%) (3.97%) (4.97%)
Institute’s Proportionate Share of

the Collective Net OPEB Liability $7,221,842 $5,871,205 $4,787,845
I. OPEB Plan Fiduciary Net Position
Detailed information about the OPEB plan’s fiduciary net position is located in the Trust’s
financial statements for the fiscal year ended September 30, 2021. The supporting actuarial
information is included in the GASB Statement Number 74 Report for PEEHIP prepared
as of September 30, 2021. Additional financial and actuarial information is available at
www.rsa-al.gov.
Note 7 – Long-Term Liabilities
Long-term liabilities activity for the year ended September 30, 2022, was as follows:
Beginning Ending Current

Balance Additions Reductions Balance Portion
Leases Payable:
Equipment $ $ 537,993.18 $144,575.82 $ 393,417.36 $150,199.57
Buildings 2,823,830.31 356,409.26 2,467,421.05 468,064.81
Total Leases Payable 3,361,823.49 500,985.08 2,860,838.41 618,264.38
Compensated Absences 1,609,447.17 159,559.00 1,769,006.17 55,515.07

Total Long-Term Liabilities $1,609,447.17 $3,521,382.49 $500,985.08 $4,629,844.58 $673,779.45

Training Institute
Montgomery, Alabama
Leases Payable include the following:
Total Right-to-Use assets are for support site building leases, copier services, and postage meter
leases that have terms of 12 to 30 months. The leases expire at various dates through 2032. In
accordance with GASB Statement Number 87, the Institute records right-to-use assets and lease
liabilities based on the present value of expected payments over the lease term of the respective
leases. The expected payments are discounted using the interest rate charged on the lease, if
available, or otherwise discounted using the Institute’s incremental borrowing rate. The interest
rate used for leases was 3.20%.
Future minimum payments under the lease agreements and the present value of the minimum
payments as of September 30, 2022, are as follows:
Buildings
Fiscal Year Principal Interest Total
2022-2023 $ 468,064.81 $ 88,003.38 $ 556,068.19

2023-2024 363,420.32 57,721.76 421,142.08
2024-2025 191,350.41 49,559.67 240,910.08
2025-2026 197,564.23 43,345.85 240,910.08
2026-2027 203,979.84 36,930.24 240,910.08
2027-2028 210,603.79 30,306.29 240,910.08
2028-2029 217,442.84 23,467.24 240,910.08
2029-2030 224,503.97 16,406.11 240,910.08
2030-2031 231,794.41 9,115.67 240,910.08
2031-2032 158,696.45 1,910.27 160,606.72
Total $2,467,421.07 $356,766.48 $2,824,187.55
Equipment
Fiscal Year Principal Interest Total
2022-2023 $150,199.57 $10,406.78 $160,606.35

2023-2024 147,079.86 5,598.02 152,677.88
2024-2025 94,754.93 1,195.26 95,950.19
2025-2026 1,382.98 22.19 1,405.17
Total $393,417.34 $17,222.25 $410,639.59

Training Institute
Montgomery, Alabama
Note 8 – Risk Management
The Institute is exposed to various risks of loss related to torts; theft of, damage to, and
destruction of assets; errors and omissions; injuries to employees; and natural disasters. The
Institute has insurance for its buildings and contents through the State Insurance Fund (SIF), part
of the State of Alabama, Department of Finance; Division of Risk Management which operates
as a common risk management and insurance program for state owned properties. The Institute
pays an annual premium based on the amount of coverage requested. The SIF provides coverage
up to $2 million per occurrence and is self-insured up to a maximum of $6 million in aggregate
claims. The SIF purchases commercial insurance for claims which in the aggregate exceed
$6 million. The Institute purchases commercial insurance for its automobile coverage, general
liability, and professional legal liability coverage. In addition, the Institute has fidelity bonds on
the Institute’s Director, Assistant Directors, and Assistant Director of Business Operations as
well as on all the other Institute personnel who handle funds.
Employee health insurance is provided through the Public Education Employees’ Health
Insurance Fund (PEEHIF) administered by the Public Education Employees’ Health Insurance
Board (PEEHIB). The Fund was established to provide a uniform plan of health insurance for
current and retired employees of state educational institutions and is self-sustaining. Monthly
premiums for employee and dependent coverage are determined annually by the plan’s actuary
and based on anticipated claims in the upcoming year, considering any remaining fund balance
on hand available for claims. The Institute contributes a specified amount monthly to the
PEEHIF for each employee and this amount is applied against the employee’s premiums for the
coverage selected and the employee pays any remaining premium.
Settled claims resulting from these risks have not exceeded the Institute’s coverage in any of the
past three fiscal years.
Claims which occur as a result of employee job-related injuries may be brought before the State
of Alabama Board of Adjustment. The Board of Adjustment serves as an arbitrator and its
decision is binding. If the Board of Adjustment determines that a claim is valid, it decides the
proper amount of compensation (subject to statutory limitations) and the funds are paid by
the Institute.

Training Institute
Montgomery, Alabama
Note 9 – Contractual Commitments
The net position of Institute is obligated by contractual commitments that were entered into by
the State. These commitments are as follows:
Aerojet $ 2,203,078.00
Airbus FAL 11,668,376.00
Autocar/BAO 1,978,870.00
Daikoyonishikawa 634,715.00
Toyota Boshoku AKI 2,061,325.00
Mazda-Toyota 11,116,242.91
YTKAL 1,162,386.00
Blue Origin 340,735.00
STEM Council 452,757.00
MBUSI 19,422,025.00
Si02 2,427,765.00
Lockheed Martin-Building 963,782.00
Bombardier-A220 5,750,811.00
Unallocated Funded Balance 10,200,065.76
Total Commitments $70,382,933.67

Training Institute
Montgomery, Alabama
Required Supplementary Information

Training Institute
Montgomery, Alabama
Schedule of the Institute's Proportionate Share of the Collective Net Pension Liability
(Dollar amounts in thousands)
2022 2021 2020 2019 2018 2017 2016 2015
Institute's proportion of the collective net pension liability 0.162478% 0.156286% 0.142415% 0.147224% 0.150719% 0.150835% 0.144860% 0.142898%
Institute's proportionate share of the collective

net pension liability $ 15,306 $ 19,332 $ 15,747 $ 14,638 $ 14,813 $ 16,329 $ 15,161 $ 12,982
Institute's covered payroll during the measurement period (*) $ 11,809 $ 11,101 $ 10,174 $ 9,839 $ 9,922 $ 9,529 $ 9,137 $ 8,976
Institute's proportionate share of the collective net pension

liability as a percentage of its covered payroll 129.61% 174.15% 154.78% 148.78% 149.29% 171.36% 165.93% 144.63%
Plan fiduciary net position as a percentage of the total

collective pension liability 76.44% 67.72% 69.85% 72.29% 71.50% 67.93% 67.51% 71.01%
(*) Per GASB 82, which amends GASB 68, covered payroll is defined as the payroll on which contributions
to a pension plan are based, also known as pensionable payroll. For fiscal year 2022, the
measurement period for covered payroll is October 1, 2020 - September 30, 2021.
This schedule is intended to show information for 10 years. Additional years will be displayed as they become available.

Training Institute
Schedule of the Institute's Contributions - Pension
2022 2021 2020 2019 2018 2017 2016 2015
Contractually required contribution $ 1,572 $ 1,422 $ 1,348 $ 1,238 $ 1,182 $ 1,180 $ 1,134 $ 1,036
Contributions in relation to the contractually

required contribution $ 1,572 $ 1,422 $ 1,348 $ 1,238 $ 1,182 $ 1,180 $ 1,134 $ 1,036
Contribution deficiency (excess) $ $ $ $ $ $ $ $
Institute's covered payroll $ 12,720 $ 11,809 $ 11,101 $ 10,174 $ 9,839 $ 9,922 $ 9,529 $ 9,137
Contributions as a percentage of
covered payroll 12.36% 12.04% 12.14% 12.17% 12.01% 11.89% 11.90% 11.34%
Per GASB 82, which amends GASB 68, covered payroll is defined as the payroll on which contributions
to a pension plan are based. This is also known as pensionable payroll. For fiscal year 2022, the
covered payroll is for the reporting fiscal year October 1, 2021 through September 30, 2022.
The amount of contractually required contributions is equal to the amount that would be recognized as
additions from the Institute's contributions in the pension plan's schedule of changes in fiduciary net
position during the period that coincides with the Institute's fiscal year. For participants in TRS, this
includes amounts paid for Accrued Liability, Normal Cost, Term Life Insurance, Pre-Retirement Death
Benefit and Administrative Expenses.

Training Institute
Schedule of the Institute's Proportionate Share of the Collective Net Other Postemployment Benefits (OPEB) Liability
Alabama Retired Education Employees' Health Care Trust
2022 2021 2020 2019 2018
Institute's proportion of the collective net OPEB liability 0.113633% 0.108458% 0.119275% 0.114555% 0.114356%
Institute's proportionate share of the collective net OPEB liability (asset) $ 5,871 $ 7,039 $ 4,500 $ 9,415 $ 8,494
Institute's covered-employee payroll during the measurement period (*) $ 11,809 $ 11,101 $ 10,174 $ 9,839 $ 9,922
Institute's proportionate share of the collective net OPEB liability (asset)

as a percentage of its covered-employee payroll 49.72% 63.41% 44.23% 95.69% 85.61%
Plan fiduciary net position as a percentage of the total collective OPEB liability 27.11% 19.80% 28.14% 14.81% 15.37%
(*) Per GASB 75, covered-employee payroll is defined as the payroll of employees that are
provided with OPEB through the OPEB plan. The covered-payroll for this RSI Schedule
(GASB 75 paragraph 97) is for the reporting period (i.e. the measurement period),
which for the September 30, 2022 year is October 1, 2020 - September 30, 2021.

Training Institute
Schedule of the Institute's Contributions - Other Postemployment Benefits (OPEB)
Alabama Retired Education Employees' Health Care Trust
2022 2021 2020 2019 2018
Contractually required contribution $ 243 $ 199 $ 215 $ 339 $ 284
Contributions in relation to the contractually required contribution $ 243 $ 199 $ 215 $ 339 $ 284
Contribution deficiency (excess) $ $ $ $ $
Institute's covered-employee payroll $ 12,720 $ 11,809 $ 11,101 $ 10,174 $ 9,839
Contributions as a percentage of covered-employee payroll 1.91% 1.69% 1.94% 3.33% 2.89%

Training Institute
for Other Postemployment Benefits (OPEB)
Changes in Actuarial Assumptions
Changes to the actuarial assumptions as a result of the experience study for the five-year period
ending June 30, 2020, are summarized below.
Assumption Description
Price Inflation 2.50%

Investment Return 7.00%
Wage Inflation 2.75%
Mortality Rates (Pre-Retirement, Update to Pub-2010 Public Mortality Plans Mortality
Post-Retirement Healthy and Disabled) Tables. For future mortality improvement, generational
mortality improvement with mortality improvement
scale MP-2020, with an adjustment of 66-2/3% to the
table beginning in year 2019.
Retirement Rates Decreased rates of retirement at most ages and
extended retirement rates at age 80.
Withdrawal Rates Changed from an age-based table broken down by
service bands to a pure service-based table. Used a
liability weighted methodology in analyzing rates.
Disability Rates Lowered rates of disability retirement at most ages.
Salary Increases No change to total assumed rates of salary increases,
but increased merit salary scale by 0.25%to offset the
recommended decrease in the wage inflation
assumption by 0.25%
In 2019, the anticipated rates of participation, spouse coverage, and tobacco use were adjusted to
more closely reflect actual experience.
Recent Plan Changes
Beginning in plan year 2021, the Medicare Advantage Plan with Prescription Drug Coverage
(MAPD) plan premium rates exclude the Affordable Care Act (ACA) Health Insurer Fee which
was repealed on December 20, 2019.
Effective January 1, 2017, Medicare eligible medical and prescription drug benefits are provided
through the MAPD plan.
The Health Plan is changed each year to reflect the ACA maximum annual out-of-pocket
amounts.

Training Institute
Montgomery, Alabama
for Other Postemployment Benefits (OPEB)
Method and Assumptions Used in Calculations of Actuarially Determined Contributions
The actuarially determined contribution rates in the Schedule of Employer’s Contributions –

Other Postemployment Benefits (OPEB) are calculated as of September 30, 2018, which is three
years prior to the end of the fiscal year in which contributions are reported. The following
actuarial methods and assumptions were used to determine the most recent contribution rate
reported in that schedule:
Actuarial Cost Method Entry Age Normal

Amortization Method Level percent of pay
Remaining Amortization Period 23 years, closed
Asset Valuation Method Market Value of Assets
Inflation 2.75%
Healthcare Cost Trend Rate:
Medicare Eligible (*) 5.00%
Ultimate Trend Rate:
Medicare Eligible 4.75%
Year of Ultimate Trend Rate 2026 for Pre-Medicare Eligible
2024 for Medicare Eligible
Optional Plans Trend Rate 2.00%
Investment Rate of Return 5.00%, including inflation
(*) Initial Medicare claims are set based on scheduled increases

through plan year 2019.

Training Institute
Montgomery, Alabama
Additional Information

Training Institute
Montgomery, Alabama
Officials
Officials Position
Edwin B. Castile Executive Director
Lola Allen Assistant Director of Business Operations
Alabama Industrial Development 38 Exhibit #8

Training Institute
Montgomery, Alabama
Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of
Financial Statements Performed in Accordance With
Government Auditing Standards

We have audited, in accordance with auditing standards generally accepted in the United States
of America and the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States (Government Auditing
Standards), the financial statements Alabama Industrial Development Training Institute, a
component unit of the State of Alabama, as of and for the year ended September 30, 2022, and
the related notes to the financial statements, which collectively comprise Alabama Industrial
Development Training Institute’s basic financial statements, and have issued our report thereon
dated December 5, 2023.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered Alabama
Industrial Development Training Institute’s internal control over financial reporting (internal
control) as a basis for designing audit procedures that are appropriate in the circumstances for the
purpose of expressing our opinions on the financial statements, but not for the purpose of
expressing an opinion on the effectiveness of Alabama Industrial Development Training
Institute’s internal control. Accordingly, we do not express an opinion on the effectiveness of
Alabama Industrial Development Training Institute’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct, misstatements on a timely basis. A material weakness is a
deficiency, or combination of deficiencies, in internal control, such that there is a reasonable
possibility that a material misstatement of the entity’s financial statements will not be prevented,
or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a
combination of deficiencies, in internal control that is less severe than a material weakness, yet
important enough to merit attention by those charged with governance.

Training Institute
Montgomery, Alabama
Our consideration of internal control was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control that
might be material weaknesses or significant deficiencies and therefore, material weaknesses or
significant deficiencies may exist that have not been identified. We identified certain
deficiencies in internal control, described below as Findings 2022-001, 2022-002 and 2022-003
to be material weaknesses.
Finding 2022-001
In order to ensure reliable financial reporting, an entity should have a good system of
information technology (IT) controls. An IT control is a procedure or policy that provides
reasonable assurance that the information technology used by an organization operates as
intended, that data is reliable, and that the organization is in compliance with applicable laws and
regulations. IT controls are both preventive and detective. An effective internal control system
will have both types.
During the audit, it was noted that the Institute was not maintaining security over specific user
activity for applications the Institute uses. Specifically, the Institute did not enable monitoring
functions in the accounting information system, that the Institute uses for financial reporting
purposes. As a result, the Institute was only able to provide documentation regarding logins/outs
of the accounting information system but could not definitively tie the logins/outs to a specific
IP address. Failure to utilize these functions can lead to an increased risk of misappropriations
and fraud that will not be traceable to a specific user.
Recommendation
The Institute should implement policies and procedures regarding system access for monitoring
the usage of system applications.
Views of Responsible Officials
We agree with the finding.

Training Institute
Montgomery, Alabama
Finding 2022-002
Generally Accepted Accounting Principles require accounting entries to be properly prepared

and supported with documentation. Supporting documentation consists of source documents,
supportive calculations, and/or other items necessary to substantiate the accuracy and
appropriateness of a journal entry and should be attached and available at the time the journal
entry is submitted for approval.
Due to a lack of understanding of the new accounting standard related to leases (GASB 87),
multiple journal entries were recorded and reversed. Review of these journal entries revealed the
entries did not include supporting documentation nor could any be provided to justify these
entries were necessary. As a result of these entries, the Institute erroneously reported a
restatement on financial statements in the amount of $(2,868,275.93). In addition, the Institute
reported a credit expense in the amount of $(3,566,583.38) on the financial statements which
could not be located on the general ledger nor was it properly supported. The Institute agreed to
adjust the final financial statements for the errors.
Recommendation
The Institute should implement procedures to ensure the general ledger supports the financial
statements, journal entries have supporting documentation attached at the time of submission,
and that new accounting standards are appropriately implemented.
Finding 2022-003
Internal control is a process affected by an entity's oversight, management, and other personnel
that provides reasonable assurance that objectives of an entity will be achieved. Part of an
effective internal control system includes establishing and following appropriate purchasing
policies and procedures and having proper reviews in place helps an entity maintain
accountability for purchases and to minimize the possibility that errors or irregularities, including
misappropriations and fraud, could occur and not be detected.

Training Institute
Montgomery, Alabama
The Institute’s purchasing policies include a requirement that certain items be marked as
received in the accounting information system prior to payment being made. The policy excluded
items purchased from Wal-Mart, Home Depot, Sam’s Club, and Lowes from the receiving
requirement.
Marking items as received in the system ensures that payments are only made when items
have been received. In addition, having an individual not involved in the purchasing process
mark the item as received increases the strength of internal controls over the purchasing process.
Several questionable purchases were reviewed during the audit, and it was noted that 52 of 110
(47%) of the questionable items purchased were made at Home Depot, Sam’s Club and Walmart.
Twenty-two additional items were reviewed and three of these items were not marked as
received in accordance with policy. Excluding purchases made from certain vendors from the
receiving requirement increases the risk of errors or irregularities, including misappropriations
and fraud.
Recommendation
The Institute should establish internal controls that include policies and procedures that ensure
all items purchased are received by the Institute prior to payment.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether Alabama Industrial Development

Training Institute’s financial statements are free of material misstatement, we performed tests of
its compliance with certain provisions of laws, regulations, contracts and grant agreements,
noncompliance with which could have a direct and material effect on the financial statements.
However, providing an opinion on compliance with those provisions was not an objective of our
audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no
instances of noncompliance or other matters that are required to be reported under Government
Auditing Standards.

Training Institute
Montgomery, Alabama
Financial Statements Per/ormed in Accordance With
Alabama Industrial Development Training Institute's Response to Finding
Government Auditing Standards requires the auditor to perform limited procedures on Alabama
Industrial Development Training Institute' s response to the finding identified in our audit and
described above. Alabama Industrial Development Training Institute's response to the finding
identified in our audit is described in the accompanying Auditee Response. Alabama Industrial
Development Training Institute's response was not subjected to the auditing procedures applied
in the audit of the financial statements, and accordingly, we express no opinion on it.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of
the entity' s internal control or on compliance. This report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering the entity's
internal control and compliance. Accordingly, this communication is not suitable for any other
purpose.
?;~~ Rachel Laurie Riddle

Chief Examiner
Department of Examiners of Public Accounts
Montgomery, Alabama
December 5, 2023

Training Institute
Montgomery, Alabama
Auditee Response

Training Institute
Montgomery, Alabama
Auditee Response
The Alabama Industrial Development Training Institute has prepared and hereby submits the
following Auditee Response for the finding which is included in the Report on Internal Control
Over Financial Reporting and on Compliance and Other Matters Based on an Audit of
Financial Statements Performed in Accordance with Government Auditing Standards for the
year ended September 30, 2022.
Finding
Ref.
No. Corrective Action Plan Details
Finding 2022-001
In order to ensure reliable financial reporting, an entity should have a good system of
information technology (IT) controls. An IT control is a procedure or policy that provides
reasonable assurance that the information technology used by an organization operates as
intended, that data is reliable, and that the organization is in compliance with applicable laws and
regulations. IT controls are both preventive and detective. An effective internal control system
will have both types.
During the audit, it was noted that the Institute was not maintaining security over specific user
activity for applications the Institute uses. Specifically, the Institute did not enable monitoring
functions in the accounting information system, that the Institute uses for financial reporting
purposes. As a result, the Institute was only able to provide documentation regarding logins/outs
of the accounting information system but could not definitively tie the logins/outs to a specific IP
address. Failure to utilize these functions can lead to an increased risk of misappropriations
and fraud that will not be traceable to a specific user.
Recommendation
The Institute should implement policies and procedures regarding system access for monitoring
the usage of system applications.
Response/Views: We agree with the finding.
Corrective Action Planned: AIDT’s IT staff will implement a procedure to perform a monthly
check of the Oracle accounting system to ensure that monitoring functions are enabled. The
monthly check with be documented and shared with the Finance Division for audit purposes.
Anticipated Completion Date: The IT staff enabled the monitoring function immediately and
prior to the audit being completed.
Contact Person(s): Mr. Blake Higdon, IT Manager

Finding 2022-002
Generally Accepted Accounting Principles require accounting entries to be properly prepared

and supported with documentation. Supporting documentation consists of source documents,
supportive calculations, and/or other items necessary to substantiate the accuracy and
appropriateness of a journal entry and should be attached and available at the time the journal
entry is submitted for approval.
Due to a lack of understanding of the new accounting standard related to leases (GASB 87),
multiple journal entries were recorded and reversed. Review of these journal entries revealed the
entries did not include supporting documentation nor could any be provided to justify these
entries were necessary. As a result of these entries, the Institute erroneously reported a
restatement on financial statements in the amount of $(2,868,275.93). In addition, the Institute
reported a credit expense in the amount of $(3,566,583.38) on the financial statements which
could not be located on the general ledger nor was it properly supported. The Institute agreed to
adjust the final financial statements for the errors.
Recommendation
The Institute should implement procedures to ensure the general ledger supports the financial
statements, journal entries have supporting documentation attached at the time of submission,
and that new accounting standards are appropriately implemented.
Corrective Action Planned: Additional information and documentation will be included with all
journal entries. Furthermore, more training will be provided as it relates to new accounting
standards and principles for all appropriate staff.
Anticipated Completion Date: This will begin with the 2022-2023 financial statements.
Contact Person(s): Ms. Karen McGraw, Assistant Director of Business Operations/CFO.
Finding 2022-003
Internal control is a process affected by an entity's oversight, management, and other personnel
that provides reasonable assurance that objectives of an entity will be achieved. Part of an
effective internal control system includes establishing and following appropriate purchasing
policies and procedures and having proper reviews in place helps an entity maintain
accountability for purchases and to minimize the possibility that errors or irregularities, including
misappropriations and fraud, could occur and not be detected.
The Institute’s purchasing policies include a requirement that certain items have an approved
purchase order prior to purchase and be marked as received in the accounting information system
prior to payment being made. The policy excluded items purchased from Wal-Mart, Home
Depot, Sam’s Club, and Lowes from the receiving requirement and did not require an itemized
purchase order. Instead, the Institute allowed purchase orders that did not detail the purchase and
required the purchaser to provide an invoice or receipt for the items purchased. After the invoice
or receipt was received, the Institute would make payment to the vendor.
Requiring itemized purchase orders and marking items as received in the system helps to ensure
that payments are only made for allowable items and that the items have been received by the
Institute. In addition, having individuals not involved in the purchase review the allowability of
the item and mark the item as received increases the strength of internal controls over the
purchasing process. Several questionable purchases were reviewed during the audit, and it was
noted that 52 of 110 (47%) of the questionable items purchased were made at Home Depot,
Sam’s Club and Walmart. Twenty-two additional items were reviewed and three of these items
were not marked as received in accordance with policy. Excluding purchases made from certain
vendors from the purchase order and receiving requirement increases the risk of errors or
irregularities, including misappropriations and fraud.
Recommendation
The Institute should establish internal controls that include policies and procedures that ensure
all items purchased are allowable and received by the Institute prior to payment.
Corrective Action Planned: AIDT purchasing agents will be required to provide itemized
lists/purchase orders when shopping with the referenced vendors prior to purchase. There will be
no exclusions from the AIDT purchasing process. Once supplies are picked up from the
supplier, they will continue to provide signed and dated receipts (material receipts) as proof
indicating they made the purchase and have the items in their possession.
Anticipated Completion Date: These changes have been implemented as of this date.
Contact Person(s): Ms. Karen McGraw, Assistant Director of Business Operations/CFO.
_________________________________________


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Alabama Department of

Examiners of Public Accounts

Rachel Laurie Riddle, Chief Examiner

Honorable Rachel Laurie Riddle

An audit was conducted on Alabama Industrial Development Training Institute,

Contains items pertaining to state legal compliance, Institute operations and

Independent Auditor’s Report C

Reports on whether the financial information constitutes a fair presentation of

Management’s Discussion and Analysis H

Provides information required by the Governmental Accounting Standards Board

Basic Financial Statements 1

Alabama Industrial Development Training Institute

Exhibit #1 Statement of Net Position 2

Exhibit #2 Statement of Revenues, Expenses and Changes in Net Position 4

Exhibit #3 Statement of Cash Flows 5

Notes to the Financial Statements 7

Alabama Industrial Development

Required Supplementary Information 30

Provides information required by the Governmental Accounting Standards Board

Exhibit #4 Schedule of the Institute’s Proportionate Share of the

Exhibit #5 Schedule of the Institute’s Contributions – Pension 32

Exhibit #6 Schedule of the Institute’s Proportionate Share of the

Exhibit #7 Schedule of the Institute’s Contributions –

Notes to Required Supplementary Information

Exhibit #8 Institute Officials – a listing of the Institute officials. 38

Exhibit #9 Report on Internal Control Over Financial Reporting and on

Exhibit #10 Auditee Response – a response by the Institute on the results

Alabama Industrial Development

Alabama Industrial Development Training Institute

Alabama Industrial Development Training Institute (the “Institute”) provides quality

An investigation is in process by Authorities regarding alleged fraudulent activity involving a

♦ 2022-001: The Institute failed to properly establish Information Technology controls

The following officials/employees were invited to an exit conference to discuss the

Edwin B. Castile, Executive Director

Report on the Audit of the Financial Statements

Basis for Opinion

Auditor’s Responsibilities for the Audit of the Financial Statements

In performing an audit in accordance with generally accepted auditing standards and

Required Supplementary Information

Overview of the Financial Statements and Financial Analysis

This discussion and analysis of the Institute’s financial statements provide an

Statement of Net Position

Assets 2021 2022

Deferred Outflows of Resources

Deferred Inflows of Resources

Statement of Revenues, Expenses, and Changes in Net Position

Net Nonoperating Revenue (Expense) 71,486,846 67,956,457

Net Other Revenue (Expense) 2,963,902 542,324

Net Increase/Decrease 8,960,370 9,435,942

Net Position at Beginning of Year 138,975,834 129,477,339

Net Position at End of Year $ 147,936,204 $ 138,975,834

The Statement of Revenues, Expenses, and Changes in Net Position reflects an

Statement of Cash Flows

Cash Flow from Noncapital Financing Activities 71,380,873 67,904,829

Cash Flow from Investing Activities 105,973 51,628

Net Increase/Decrease in Cash 2,892,355 15,264,814

Cash, Beginning of Year 102,913,204 87,648,389

Cash, End of Year $ 105,805,559 $ 102,913,204

Deferred Outflows of Resources

Alabama Industrial Development

Deferred Inflows of Resources

Total Net Position $ 147,936,204.48

Alabama Industrial Development