STATE OF MISSISSIPPI OFFICE OF THE STATE AUDITOR_part2 docx

8 PIKE COUNTY Exhibit B Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types and Expendable Trust Funds For the Year Ended September 30, 1997 Totals Totals Governmental Fiduciary Memorandum Memorandum Fund Types Fund Type Only Only Special Debt Expendable Primary Component Reporting General Revenue Service Trust Government Units Entity Revenues Property taxes $ 3,305,393 2,045,164 844,003 6,194,560 6,194,560 Licenses, commissions and other revenue 279,496 410,152 689,648 689,648 Fines and forfeitures 367,390 100,039 467,429 467,429 Intergovernmental revenues: Federal sources 32,299 216,585 248,884 248,884 State and local sources 800,879 1,136,554 1,937,433 1,937,433 Charges for services 678,784 5,082 683,866 683,866 Use of money and property 250,049 421,589 45,649 1,331 718,618 19,691 738,309 Miscellaneous revenues 200,683 62,647 240 263,570 28,763 292,333 Total Revenues 5,914,973 4,397,812 889,652 1,571 11,204,008 48,454 11,252,462 Expenditures Current: General government 2,742,635 448,781 9,789 3,201,205 3,201,205 Public safety 2,134,043 737,116 2,871,159 2,871,159 Public works 2,877,169 2,877,169 2,877,169 Health & welfare 283,527 283,527 283,527 Culture & recreation 181,022 181,022 181,022 Conservation of natural resources 101,386 101,386 101,386 Economic development and assistance 23,773 23,773 221,505 245,278 Capital projects 12,347 274,700 287,047 287,047 Debt service: Principal retirement 344,131 752,000 1,096,131 1,096,131 Interest and fiscal charges 273,226 261,415 534,641 534,641 Total Expenditures 5,297,711 5,136,145 1,013,415 9,789 11,457,060 221,505 11,678,565 Excess of Revenues over (under) Expenditures 617,262 (738,333) (123,763) (8,218) (253,052) (173,051) (426,103) Other Financing Sources (Uses) Proceeds of general obligation bonds 1,450,000 1,450,000 1,450,000 Proceeds of other debt 61,863 61,863 61,863 Operating transfers in 386,915 26,659 413,574 413,574 Operating transfers out (406,621) (6,953) (413,574) (413,574) Operating transfers from primary government 167,423 167,423 Other sources - lease principal 275,000 275,000 275,000 Operating transfers to component units (167,423) (167,423) (167,423) Total Other Financing Sources (Uses) (406,621) 1,999,402 0 26,659 1,619,440 167,423 1,786,863 Excess of Revenues and Other Sources over (under) Expenditures and Other Uses 210,641 1,261,069 (123,763) 18,441 1,366,388 (5,628) 1,360,760 9 Fund Balances Beginning of year as previously reported 2,075,505 1,507,751 611,770 12,992 4,208,018 519,100 4,727,118 Prior period adjustments: Error corrections 16,919 16,919 16,919 Beginning of year as restated 2,075,505 1,524,670 611,770 12,992 4,224,937 519,100 4,744,037 Residual equity transfers 15,206 (15,206) End of year $ 2,301,352 2,785,739 472,801 31,433 5,591,325 513,472 6,104,797 The notes to the financial statements are an integral part of this statement. 10 PIKE 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, l997 General Special Fund Revenue Funds Variance Variance Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) Revenues Property taxes $ 3,289,513 3,289,513 2,036,825 2,036,825 Licenses, commissions and other revenue 366,817 366,817 408,390 408,390 Fines and forfeitures 367,390 367,390 100,039 100,039 Intergovernmental revenues: Federal sources 35,240 35,240 212,561 212,561 State and local sources 859,323 859,323 1,141,115 1,141,115 Charges for services 678,784 678,784 5,082 5,082 Use of money and property 250,713 250,713 153,899 153,899 Miscellaneous revenues 26,651 26,651 47,408 47,408 Total Revenues 5,874,431 5,874,431 0 4,105,319 4,105,319 0 Expenditures General government 2,863,023 2,863,023 445,184 445,184 Public safety 2,151,932 2,151,932 671,259 671,259 Public works 2,817,001 2,817,001 Health and welfare 284,685 284,685 Culture and recreation 3,500 3,500 180,971 180,971 Conservation of natural resources 102,227 102,227 Economic development and assistance 23,403 23,403 167,423 167,423 Capital projects 274,700 274,700 Debt service 74,667 74,667 Total Expenditures 5,428,770 5,428,770 0 4,631,205 4,631,205 0 Excess of Revenues over (under) Expenditures 445,661 445,661 0 (525,886) (525,886) 0 Other Financing Sources (Uses) (328,254) (328,254) 0 1,812,990 1,812,990 0 Excess of Revenues and Other Sources over (under) Expenditures and Other Uses 117,407 117,407 0 1,287,104 1,287,104 0 Fund Balances Beginning of year 2,038,692 2,038,692 1,415,299 1,415,299 End of year $ 2,156,099 2,156,099 2,702,403 2,702,403 The notes to the financial statements are an integral part of this statement. 11 Exhibit C Debt Service Funds Variance Favorable Budget Actual (Unfavorable) 850,277 850,277 45,649 45,649 895,926 895,926 0 1,013,415 1,013,415 1,013,415 1,013,415 0 (117,489) (117,489) 0 0 0 0 (117,489) (117,489) 0 591,678 591,678 474,189 474,189 PIKE COUNTY Notes to Financial Statements For the Year Ended September 30, 1997 12 (1) Significant Accounting Policies. A. Financial Reporting Entity. Pike 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 Pike County to present these financial statements on the primary government and its component units which have significant operational or financial relationships with the county. 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 general- purpose financial statements. $ Board of Supervisors $ Chancery Clerk $ Circuit Clerk $ Justice Court Clerk $ Purchase Clerk $ Tax Assessor-Collector $ Sheriff B. Individual Component Unit Disclosures. Discretely Presented Component Unit The component units columns in the combined financial statements include the financial data of the following component unit of the county. It is reported in a separate column to emphasize that it is legally separate from the county. A majority of the members of the governing body of this component unit are appointed by the county Board of Supervisors. Pike County Economic Development District is a legally separate entity organized under Section 57-31-1, Miss. Code Ann. (1972), for the purpose of promoting economic development within the county. The entity is governed by a 16 member board of directors. Pike County appoints nine board members, which includes four recommendations by the Chamber of Commerce. The City of McComb appoints four board members. The Cities of Summit, Osyka and Magnolia each appoint one board member. Pike County funds almost all of the entity=s operating budget. C. Basis of Presentation. The accompanying general-purpose financial statements have been prepared in conformity with generally accepted accounting principles as prescribed by the Governmental Accounting Standards Board. D. 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 1994 by the Government Finance Officers Association and the Mississippi County Financial Accounting Manual as revised in 1993 by the Office of the State Auditor. PIKE COUNTY Notes to Financial Statements For the Year Ended September 30, 1997 13 E. 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 do not directly affect net expendable available financial resources. 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 (other than expendable trusts) 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 TYPES Expendable Trust Funds - These funds are used to account for assets held by the county in a formal trustee capacity where the principal and income may be expended in the course of designated operations. 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 - The General Fixed Assets Account Group is used to account for general fixed assets. The General Long-term Debt Account Group is used to account for general long-term debt and certain other liabilities. F. Basis of Accounting/Measurement Focus. Governmental Fund Types and Expendable Trust and Agency Funds - All Governmental Funds and Expendable Trust 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. PIKE COUNTY Notes to Financial Statements For the Year Ended September 30, 1997 14 The modified accrual basis of accounting is used by all Governmental Fund Types, Expendable Trust Funds 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. Expenditures are recognized in the accounting period in which the fund liability is incurred. Modifications to the accrual basis of accounting include: $ Licenses, fees, fines and forfeits and other miscellaneous revenues are recognized when received since they normally are only measurable at that time. $ 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 1M for further explanation. $ Principal and interest on general long-term debt are recognized when due. $ Obligations for accumulated unpaid employee benefits are recognized when paid. G. 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. H. 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 cash on hand, 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 fiscal year. PIKE COUNTY Notes to Financial Statements For the Year Ended September 30, 1997 15 I. Receivables. Receivables are reported net of allowances for uncollectible accounts, where applicable. J. Interfund Receivables/Payables. Transactions between funds that are representative of short-term lending/borrowing arrangements, and transactions that have not resulted in the actual transfer of cash at the end of the fiscal year are referred to as "interfund receivables/payables." K. 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 do 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. L. Fund Equity. Unreserved fund balance represents the amount available for budgeting future operations. Reservations of fund balance represent amounts that are not appropriable or are legally segregated for a specific purpose. M. 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 1. Real property taxes become a lien on January 1 of the current year and personal property taxes become a lien on March 1 of the current year. Taxes on both real and personal property, however, are due on or before February 1 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. PIKE COUNTY Notes to Financial Statements For the Year Ended September 30, 1997 16 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 do 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. N. 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. O. Compensated Absences. The county has adopted a policy of compensation for accumulated unpaid employee personal leave. No payment is authorized for accrued major medical leave. Generally accepted accounting principles require accrual of accumulated unpaid employee benefits in Governmental Funds to the extent that they are to be paid with current assets and the remainder of the liability to be reported in the General Long-term Debt Account Group, representing the county's commitment to fund such costs from future operations. Due to immateriality, the current portion of the liability was not estimated and reported in the Governmental Funds. Therefore, the county's full liability in the amount of $136,758 for accumulated unpaid personal leave up to a maximum of 30 days per employee is reported in the General Long-term Debt Account Group of the accompanying combined balance sheet. P. Total Column on General-Purpose Financial Statements. The total column on the general-purpose 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. PIKE COUNTY Notes to Financial Statements For the Year Ended September 30, 1997 17 (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 Special Debt General Revenue Service Budget (Cash Basis) $ 117,407 1,287,104 (117,489) Increase (Decrease) Net adjustment for revenue accruals 13,541 653,281 (6,274) Net adjustment for expenditure accruals 79,693 (679,316) GAAP Basis $ 210,641 1,261,069 (123,763) (3) Prior Period Adjustments. Governmental Funds. The effects of error corrections on the prior period financial statements are summarized in the table below: Fund Special Revenue Fund Type Balance As previously reported $ 1,507,751 Cash and investments - Civil Defense Fund 16,919 As adjusted $ 1,524,670 [...]...PIKE COUNTY Notes to Financial Statements For the Year Ended September 30, 1997 (4) Deposits PRIMARY GOVERNMENT: The carrying amount of the county's total deposits with financial institutions at September 30, 1997, was $6,061,796 and the bank balance was $6,631,167 The bank balance is categorized below to reflect the level of credit risk assumed by the county at year end Bank Balance Amount... $513,306 and the bank balance was $522,963 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 district or its agent in the district=s name $ 520,399 Amount uncollateralized 2,564 Total Bank Balance (5) $ 522,963 Interfund Receivables and Payables The composition of interfund... insured or collateralized with securities held by the county or its agent in the county's name $ 212,888 Amount collateralized with securities held by the pledging financial institution's trust department or agent in the county's name 6,418,279 Total Bank Balance $ 6,631,167 COMPONENT UNIT - PIKE COUNTY ECONOMIC DEVELOPMENT DISTRICT: The carrying amount of the county's total deposits with financial institutions... in the district=s name $ 520,399 Amount uncollateralized 2,564 Total Bank Balance (5) $ 522,963 Interfund Receivables and Payables The composition of interfund balances at September 30, 1997, consists of the following: Interfund Receivable/Payables: Receivable Fund Payable Fund Special Revenue Funds: Pike-Amite-Walthall Regional Library Reappraisal maintenance Garbage and solid waste Volunteer fire department . by the Government Finance Officers Association and the Mississippi County Financial Accounting Manual as revised in 1993 by the Office of the State Auditor. PIKE COUNTY Notes to Financial Statements For. with the county. 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. Disclosures. Discretely Presented Component Unit The component units columns in the combined financial statements include the financial data of the following component unit of the county. It is reported in a