BENTON COUNTY TABLE OF CONTENTS FINANCIAL _part2 pot

BENTON COUNTY Combined Statement of Revenues, Expenditures and Changes in Fund Balances Budget (Non-GAAP Budgetary Basis) and Actual - All Governmental Fund Types For the Year Ended September 30, l995 General Fund Special Revenue Funds Budget Revenues Property taxes Licenses, commissions and other revenue Fines and forfeitures Intergovernmental revenues: Federal sources State and local sources Charges for services Use of money and property Miscellaneous revenues Total Revenues End of year 65,392 114,222 12,157 37,652 70,600 77,221 6,621 223,714 24,000 21,629 37,512 1,440,789 8,884 22,570 (4,271) 36,762 132,721 291,136 587,333 143,691 9,447 1,419,009 291,136 481,854 174,049 12,060 128 1,362,052 (105,479) 30,358 2,613 128 (56,957) 777,377 317,057 299,046 1,703 47,300 41,600 1,125,762 46,640 21,551 1,114,428 660 20,049 11,334 53,616 47,322 41,315 6,000 11,820 1,254,507 33 2,500 303,282 291,136 107,875 1,613,673 291,136 107,875 1,581,630 32,043 186,282 436,003 (194,664) (219,578) (24,914) (74,123) (74,123) 77,500 139,895 62,395 (249,721) 112,159 361,880 (117,164) (79,683) 37,481 416,204 $ 8,802 Fund Balances Beginning of year 325,604 (249,721) Excess of Revenues and Other Sources over (under) Expenditures and Other Uses 316,802 53,649 49,822 41,315 6,000 11,820 1,557,789 Other Financing Sources (Uses) 18,967 1,076,423 318,760 Excess of Revenues over (under) Expenditures 954,320 214,830 1,430 25,900 750 1,308,068 Expenditures General government Public safety Public works Health and welfare Culture and recreation Conservation of natural resources Economic development and assistance Debt service Total Expenditures 935,353 53,235 76,570 $ Actual Variance Favorable (Unfavorable) 674,280 416,570 644,004 166,483 786,439 299,406 564,321 The notes to the financial statements are an integral part of this statement Budget Actual Variance Favorable (Unfavorable) Exhibit C Debt Service Funds Budget Actual Variance Favorable (Unfavorable) 24,000 27,960 3,960 977 1,115 138 24,977 29,075 4,098 32,524 32,524 25,331 25,331 7,193 7,193 (7,547) 3,744 11,291 0 (7,547) 3,744 11,291 37,030 40,044 29,483 43,788 BENTON COUNTY Notes to Financial Statements For the Year Ended September 30, 1995 (1) Significant Accounting Policies A Financial Reporting Entity Benton County is a political subdivision of the State of Mississippi The county is governed by an elected five-member Board of Supervisors Generally accepted accounting principles require Benton County to present these financial statements on the primary government and its component units which have significant operational or financial relationships with the county Management has chosen to omit from these financial statements the following component unit which has a significant operational or financial relationship with the county Accordingly, the financial statements not include the data of this component unit necessary for reporting in conformity with generally accepted accounting principles • Lt General Robert M Bond Memorial Public Library State law pertaining to county government provides for the independent election of county officials The following officials are all part of the county legal entity and therefore are reported as part of the primary government financial statements • • • • • • • B Board of Supervisors Chancery Clerk Circuit Clerk Justice Court Clerk Purchase Clerk Tax Assessor-Collector Sheriff Basis of Presentation The accompanying financial statements of the primary government have been prepared in conformity with generally accepted accounting principles as prescribed by the Governmental Accounting Standards Board However, the primary government financial statements, because they not include the financial data of the county's component unit, not present fairly, in all material respects, the financial position and results of operations for the entire reporting entity C Account Classifications The account classifications used in the financial statements conform to the broad classifications recommended in Governmental Accounting, Auditing and Financial Reporting as issued in 1988 by the Government Finance Officers Association and the Mississippi County Financial Accounting Manual as revised in 1993 by the Office of the State Auditor 10 BENTON COUNTY Notes to Financial Statements For the Year Ended September 30, 1995 D Fund Accounting The financial activities of the county are recorded in individual funds and account groups used to report financial position and results of operations Fund accounting is used to demonstrate legal compliance and to aid financial management by segregating transactions relating to certain government functions or activities A fund is a separate accounting entity with a self-balancing set of accounts, segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with specific regulations, restrictions or limitations An account group is a financial reporting device designated to provide accountability for certain assets and liabilities that are not recorded in funds because they not directly affect net expendable available financial resources Account groups are presented for general fixed assets and general long-term obligations The following fund categories, which are further subdivided into separate "fund types", are utilized by the county: GOVERNMENTAL FUND TYPES General Fund - This fund is used to account for all activities of the general government for which a separate fund has not been established Special Revenue Funds - These funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes Special Revenue Funds account for, among others, certain federal grant programs, taxes levied with statutorily defined distributions and other resources restricted as to purpose Debt Service Funds - These funds are used to account for the accumulation of resources for, and the payment of, general long-term debt principal, interest and related costs FIDUCIARY FUND TYPE Agency Funds - These funds account for various taxes, deposits and other monies collected or held by the county, acting in the capacity of an agent, for distribution to other governmental units or designated beneficiaries ACCOUNT GROUPS General Fixed Assets - The General Fixed Assets Account Group is used to account for the fixed assets of the county General Long-term Debt - The General Long-term Debt Account Group is used to account for all long-term debt of the county E Basis of Accounting/Measurement Focus Governmental Fund Types and Agency Funds - All Governmental Funds are accounted for using a current financial resources measurement focus With this measurement focus, only current assets and current liabilities are generally included on the balance sheet Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets 11 BENTON COUNTY Notes to Financial Statements For the Year Ended September 30, 1995 The modified accrual basis of accounting is used by all Governmental Fund Types and Agency Funds Under this method, revenues are recognized in the accounting period in which they become both available and measurable to finance operations during the year or to liquidate liabilities existing at the end of the year Available means collected in the current year or soon enough after year end to liquidate liabilities existing at the end of the year Significant revenue sources which are susceptible to accrual include intergovernmental revenues, consisting of grants, entitlements and shared revenues and charges for services Expenditures are recognized in the accounting period in which the fund liability is incurred Modifications to the accrual basis of accounting include: • • Property taxes are recognized as revenue when received because the remaining delinquent property taxes not collected before the close of the fiscal year are considered immaterial See Note 1L for further explanation • F Licenses, fees, fines and forfeits and other miscellaneous revenues are recognized when received since they normally are only measurable at that time Principal and interest on general long-term debt are recognized when due Budgetary Process and Accounting Process: Statutory requirements dictate how and when the county's budget is to be prepared Generally, in the month of August, prior to the ensuing fiscal year beginning each October 1, the Board of Supervisors of the county, using historical and anticipated fiscal data and proposed budgets submitted by the Sheriff and the Tax Assessor-Collector for his or her respective department, prepares an original budget for each of the Governmental Funds for said fiscal year The completed budget for the fiscal year includes for each fund every source of revenue, each general item of expenditure and the unencumbered cash and investment balances When during the fiscal year it appears to the Board of Supervisors that budgetary estimates will not be met, it may make revisions to the budget Accounting: The county's budget is prepared principally on the cash basis of accounting All appropriations lapse at year end and there are no encumbrances to budget because state law does not require that funds be available when goods or services are ordered, only when payment is made G Cash and Investments State law authorizes the county to invest in interest bearing time certificates of deposit for periods of fourteen days to one year with depositories and in obligations of the U.S Treasury, State of Mississippi, or any county, municipality or school district of this state Further, the county may invest in certain repurchase agreements that have a term of less than fourteen days Cash includes amounts in demand deposits, all certificates of deposit and cash equivalents, which are short-term highly liquid investments that are readily convertible to cash (generally three months or less) Investments in governmental securities are stated at cost or amortized cost However, the county did not invest in any governmental securities during the audited fiscal year 12 BENTON COUNTY Notes to Financial Statements For the Year Ended September 30, 1995 H Receivables Receivables are reported net of allowances for uncollectible accounts, where applicable I Interfund Receivables/Payables Interfund receivables and payables arise principally from loans and advances between county funds and transactions that have not resulted in the actual transfer of cash at the end of the fiscal year Interfund loans due in the subsequent fiscal year are reported as "Due To" and "Due From Other Funds" and noncurrent portions of interfund receivables and payables are reported as "Advances To" and "Advances From Other Funds" on the combined balance sheet The county has no interfund advances outstanding at the end of the fiscal year J Fixed Assets Fixed assets are not capitalized in the funds used to acquire or construct them Instead, capital acquisition and construction are reflected as expenditures in Governmental Funds and the related assets are reported in the General Fixed Assets Account Group All purchased fixed assets are stated at cost where historical records are available and at an estimated historical cost where no historical records exist Donated assets are valued at market value at the time of donation The costs of normal maintenance and repairs that not add to the value of assets or materially extend their respective lives are not capitalized; however, improvements are capitalized Interest expenditures are not capitalized on general fixed assets Public domain (infrastructure) fixed assets consisting of certain improvements other than buildings, such as roads, bridges, sidewalks, drainage systems, lighting systems and similar assets that are immovable and of value only to the county, are not capitalized Depreciation is not provided on general fixed assets K Governmental Fund Equity The unreserved fund balances represent the amount available for budgeting future operations The reserved fund balance represents the amount that has been legally restricted to a specific purpose The county had the following reserved fund balance at year end: Reserved for Debt Service - An account used to segregate a portion of fund balance for debt service resources legally restricted to the payment of general long-term debt principal and interest amounts maturing in future years L Property Tax Revenues Numerous statutes exist under which the Board of Supervisors may levy property taxes The selection of authorities is made based on the objectives and responsibilities of the county Restrictions associated with property tax levies vary with the statutory authority The amount of increase in certain property taxes is limited by state law Generally, this restriction provides that these tax levies shall produce no more than 110% of the amount which resulted from the assessments of the previous year The Board of Supervisors, each year at a meeting in September, levies property taxes for the ensuing fiscal year which begins on October Real property taxes become a lien on January of the current year and personal property taxes become a lien on March of the current year Taxes on both real and personal property, however, are due on or before February of the next succeeding year Taxes on motor vehicles and mobile homes become a lien and are due in the month that coincides with the month of original purchase 13 BENTON COUNTY Notes to Financial Statements For the Year Ended September 30, 1995 Generally accepted accounting principles require property taxes to be recognized at the levy date if measurable and available All property taxes are recognized as revenue when received Real property taxes are recognized as revenue when received because most delinquent real property taxes are collected by selling real property for taxes, together with all fees, penalties and damages accruing until date of sale, before the close of the fiscal year The remaining amount of real property not sold for taxes at the tax sale is considered immaterial; therefore, no end of year delinquent taxes receivable is recorded The amount of delinquent personal property taxes unpaid at year end is also considered immaterial Motor vehicle and mobile home taxes not meet the measurability and collectibility criteria for property tax recognition because the lien and due date cannot be established until the date of original purchase occurs M Intergovernmental Revenues in Governmental Funds Intergovernmental revenues, consisting of grants, entitlements and shared revenues, are usually recorded in Governmental Funds when measurable and available However, the "available" criterion applies for certain federal grants and shared revenues when the expenditure is made because expenditure is the prime factor for determining eligibility Similarly, if cost sharing or matching requirements exist, revenue recognition depends on compliance with these requirements N Interfund Transfers Interfund transfers are segregated from revenues and expenditures in the county's financial statements Reimbursements of expenditures made between funds are not recorded as interfund transfers but are recorded as expenditures in the reimbursing fund and as a reduction of expenditures in the reimbursed fund The county reported the following types of interfund transactions: Residual Equity Transfers - Nonroutine or nonrecurring transfers between funds are reported as additions to or deductions from fund equity Operating Transfers - Legally authorized and routine transfers between funds are reported as operating transfers Operating transfers are reported as "Other Financing Sources (Uses)" in the Combined Statement of Revenues, Expenditures and Changes in Fund Balances (for Governmental Funds) O Total Column on Primary Government Financial Statements The total column on the primary government financial statements is captioned "Memorandum Only" to indicate that it is presented only to facilitate financial analysis Data in this column does not present financial position and results of operations in conformity with generally accepted accounting principles Neither is such data comparable to a consolidation Interfund eliminations have not been made in the aggregation of this data 14 BENTON COUNTY Notes to Financial Statements For the Year Ended September 30, 1995 (2) Budgetary Basis vs GAAP The accompanying Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget (Non-GAAP Budgetary Basis) and Actual - All Governmental Fund Types presents comparisons of the legally adopted budget with actual data on a budgetary basis Since the budgetary and GAAP presentations of actual data differ, a reconciliation of the results of operations for the year follows: Excess of Revenues and Other Sources Over (Under) Expenditures and Other Uses Governmental Fund Types General Budget (Cash Basis) GAAP Basis (3) 3,744 47,911 92,228 (50) 47,660 $ (79,683) 12,732 (77,231) Increase (Decrease) Net adjustment for revenue accruals Net adjustment for expenditure accruals Debt Service 112,159 $ Special Revenue 60,456 3,694 Intergovernmental Revenues Intergovernmental revenues consisted of the following at September 30, 1995: Governmental Fund Types General Federal Sources: Community development block grants Bridge inspection program Total Federal Sources State Sources: State Grants: Reimbursement for food stamps, welfare Reimbursement for homestead exemption Reimbursement for state aid roads Reimbursement for emergency management funds Total State Grants State Shared Revenues: Motor vehicle fuel tax Motor vehicle licenses Severance taxes Insurance premium tax distribution National forest distribution Payments in lieu of taxes Railcar tax Land redemption-state rebate Harvest and overload permits Total State Shared Revenues Special Revenue $ 291,136 2,480 293,616 $ 12,589 108,650 $ 29,052 $ 121,239 $ 29,206 31,448 2,570 29,042 12,583 267 $ 105,116 15 9,595 38,647 351,506 21,352 2,176 72,370 6,154 454,178 BENTON COUNTY Notes to Financial Statements For the Year Ended September 30, 1995 (4) Deposits The carrying amount of the county's total deposits with financial institutions at September 30, 1995, was $1,460,161 and the bank balance was $1,556,120 The bank balance is categorized below to reflect the level of credit risk assumed by the county at year end Bank Balance Amount federally insured or collateralized with securities held by the county or its agent in the county's name $ Amount collateralized with securities held by the pledging financial institution's trust department or agent in the county's name Total Bank Balance 251,160 1,304,960 $ 1,556,120 The Financial Institution Reform, Recovery and Enforcement Act (FIRREA) requires a collateral security agreement to be executed between the county and the depository bank The agreement was not executed with Union Planters Bank Since the requirements of FIRREA have not been met pursuant to an executed collateral security agreement, the county may not have a perfected security interest in $1,185,327 of the collateral in case of default by the depository institution (5) Deferred Compensation Plan The county offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457 The plan, available to all employees of the county, permits participants to defer a portion of their salary until future years, thereby deferring taxation on the portion deferred The deferred compensation is not available to employees until they are separated from service or face an unforeseeable financial emergency All amounts of compensation deferred under the plan, all property rights purchased with those amounts and all income attributable to those amounts, property or rights are (until paid or made available to the employee or his beneficiary) solely the property of the employer (without being restricted to the provisions of benefits under the plan), subject only to the claims of the employer's general creditors Participants' rights under the plan are equal to those of the employer's general creditors in an amount equal to the fair market value of the deferred account for each participant At June 30, 1995, assets held for participants employed by the county and reported in an Agency Fund totaled $17,257 The county believes that it is unlikely that it will use the assets to satisfy the claims of general creditors in the future The county has no liability for losses under the plan, but the Board of Trustees of the Public Employees' Retirement System, as plan administrator, does have the duty of due care that would be required of an ordinary prudent investor 16 BENTON COUNTY Notes to Financial Statements For the Year Ended September 30, 1995 (6) Interfund Receivables and Payables Individual fund interfund receivables and payables consisted of the following at September 30, 1995: Interfund Receivables 13,649 1,148 383 1,264 10,280 13,075 287 287 574 Due from/to Other Funds General Fund Interfund Payables 13,649 13,649 $ Special Revenue Funds: Reappraisal maintenance Countywide fire Waste disposal Road maintenance Total Debt Service Funds: Disaster emergency Jail I & S Total Total Due from/to Other Funds (7) $ Fixed Assets Changes in General Fixed Assets: Balance Oct 1, 1994 Additions Deletions Balance Sept 30, 1995 Governmental Funds: Land Buildings Mobile equipment Other furniture and equipment Leased property under capital leases Total (8) $ $ 86,680 1,238,914 930,950 155,652 447,389 141,463 5,180 139,561 151,093 1,530 40,000 86,680 1,238,914 921,320 159,302 546,950 2,859,585 286,204 192,623 2,953,166 Commitments On December 1, 1989, the county entered into an agreement to lease a county building to the ABC Company for a manufacturing operation On December 16, 1994, the company ceased operations The company breached the agreement with the county when it stopped making lease payments to Union Planters National Bank on May 4, 1995 On August 7, 1995, Benton County began making the lease payments, paying the June, July and August installments, and began making the regular monthly payments on September 5, 1995 The county committed to make the lease payments until the industrial revenue bonds are paid off or another industry moves in the building and assumes the lease payments At September 30, 1995, the total commitment was $74,376, with monthly payments of $2,434 17 BENTON COUNTY Notes to Financial Statements For the Year Ended September 30, 1995 (9) Claims and Judgments Risk Financing The county is exposed to risk of loss related to workers' compensation for injuries to its employees On February 13, 1990, the county decided to stop carrying workers' compensation insurance because of its prohibitive cost and joined the Mississippi Public Entity Workers' Compensation Trust, a public entity risk pool, to cover its exposure to risk of loss The pool was formed on January 1, 1990, by the Mississippi Association of Supervisors, Inc., pursuant to Section 71-3-75, Miss Code Ann (1972), to provide workers' compensation insurance for the benefit of participating counties and various other political subdivisions in the State of Mississippi The county pays premiums to the pool for its workers' compensation insurance coverage and the participation agreement provides that the pool will be self-sustaining through member premiums The retention for the pool is $350,000 for each accident and completely covers all statutory limits set by the Workers' Compensation Commission Risk of loss is remote for claims exceeding the pool's retention liability However, the pool also has catastrophic reinsurance coverage of $1,000,000 per accident, provided by Employers Reinsurance Corporation, effective from January 1, 1995 to January 1, 1996 The pool may make an overall supplemental assessment or declare a refund depending on the loss experience of all the entities it insures (10) Lease Obligations Operating As Lessee: The following is a schedule by years of future minimum rental payments required under operating leases that have initial or remaining noncancelable lease terms in excess of one year as of September 30, 1995: Amounts Year Ended September 30: 1996 1997 1998 $ $ Total Minimum Payments Required 3,102 1,896 560 5,558 Total rentals amounted to $7,209 for the fiscal year ended September 30, 1995 Capital As Lessee: The following is an analysis of property leased under capital leases by major classes as of September 30, 1995: General Fixed Assets Group Classes of Property Mobile equipment Other furniture and equipment $ 505,189 41,761 Leased Property Under Capital Leases $ 546,950 18 ... pertaining to county government provides for the independent election of county officials The following officials are all part of the county legal entity and therefore are reported as part of the primary... 43,788 BENTON COUNTY Notes to Financial Statements For the Year Ended September 30, 1995 (1) Significant Accounting Policies A Financial Reporting Entity Benton County is a political subdivision of. .. Officers Association and the Mississippi County Financial Accounting Manual as revised in 1993 by the Office of the State Auditor 10 BENTON COUNTY Notes to Financial Statements For the Year Ended