STATE OF MISSISSIPPI OFFICE OF THE STATE AUDITOR_part2 pot

8 PRENTISS COUNTY Exhibit B Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types For the Year Ended September 30, 1997 Governmental Fund Types Totals Special Debt Capital Memorandum General Revenue Service Projects Only Revenues Property taxes $ 1,628,808 364,635 811,011 2,804,454 Licenses, commissions and other revenue 90,692 256,340 347,032 Fines and forfeitures 245,981 245,981 Intergovernmental revenues: Federal sources 18,890 55,995 74,885 State and local sources 830,824 721,436 10,000 283,117 1,845,377 Charges for services 152,228 152,228 Use of money and property 89,473 298,619 3,014 4,163 395,269 Miscellaneous revenues 2,078 17,717 19,795 Total Revenues 2,906,746 1,866,970 824,025 287,280 5,885,021 Expenditures Current: General government 1,567,400 600 1,568,000 Public safety 1,117,585 259,520 1,377,105 Public works 15,203 1,740,429 1,755,632 Health & welfare 241,536 241,536 Culture & recreation 93,633 28,534 122,167 Conservation of natural resources 84,677 6,884 91,561 Economic development & assistance 82,490 17,165 99,655 Capital projects 46,351 1,061,595 1,107,946 Debt service: Principal retirement 26,976 307,334 373,500 707,810 Interest and fiscal charges 7,512 309,799 413,614 730,925 Total Expenditures 3,237,012 2,716,616 787,114 1,061,595 7,802,337 Excess of Revenues over (under) Expenditures (330,266) (849,646) 36,911 (774,315) (1,917,316) Other Financing Sources (Uses) Proceeds of general obligation bonds 400,000 575,000 975,000 Proceeds of other debt 60,850 60,850 Proceeds from sale of assets 66,446 7,300 73,746 Insurance recoveries 80,103 8,857 88,960 Operating transfers in 100,033 178,479 21,414 299,926 Operating transfers out (78,947) (204,071) (16,908) (299,926) Lease principal payments 230,000 230,000 Total Other Financing Sources (Uses) 167,635 681,415 (16,908) 596,414 1,428,556 Excess of Revenues and Other Sources over (under) Expenditures and Other Uses (162,631) (168,231) 20,003 (177,901) (488,760) Fund Balances Beginning of year 197,936 1,480,675 303,259 153,437 2,135,307 End of year $ 35,305 1,312,444 323,262 (24,464) 1,646,547 The notes to the financial statements are an integral part of this statement. 9 PRENTISS COUNTY (This page left blank intentionally) 10 PRENTISS 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 $ 1,624,404 1,624,404 365,642 365,642 Licenses, commissions and other revenue 91,039 91,039 255,956 255,956 Fines and forfeitures 245,981 245,981 Intergovernmental revenues: Federal sources 18,890 18,890 55,995 55,995 State and local sources 830,824 830,824 721,436 721,436 Charges for services 152,228 152,228 Use of money and property 90,501 90,501 554,072 554,072 Miscellaneous revenues 1,184 1,184 17,717 17,717 Total Revenues 2,902,823 2,902,823 0 2,123,046 2,123,046 0 Expenditures General government 1,646,829 1,646,829 2,700 2,700 Public safety 1,117,109 1,117,109 263,802 263,802 Public works 15,313 15,313 1,706,718 1,706,718 Health and welfare 245,125 245,125 Culture and recreation 93,634 93,634 28,534 28,534 Conservation of natural resources 84,467 84,467 Economic development and assistance 82,721 82,721 17,165 17,165 Capital projects 40,312 40,312 Debt service 34,488 34,488 621,646 621,646 Total Expenditures 3,319,686 3,319,686 0 2,680,877 2,680,877 0 Excess of Revenues over (under) Expenditures (416,863) (416,863) 0 (557,831) (557,831) 0 Other Financing Sources (Uses) 223,634 223,634 0 420,565 420,565 0 Excess of Revenues and Other Sources over (under) Expenditures and Other Uses (193,229) (193,229) 0 (137,266) (137,266) 0 Fund Balances Beginning of year 325,482 325,482 1,425,956 1,425,956 End of year $ 132,253 132,253 1,288,690 1,288,690 The notes to the financial statements are an integral part of this statement. 11 Exhibit C Debt Capital Service Funds Projects Funds Variance Variance Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) 809,424 809,424 140,029 140,029 10,000 10,000 451,661 451,661 3,014 3,014 4,163 4,163 822,438 822,438 0 595,853 595,853 0 1,257,698 1,257,698 789,114 789,114 789,114 789,114 0 1,257,698 1,257,698 0 33,324 33,324 0 (661,845) (661,845) 0 (16,908) (16,908) 0 596,413 596,413 0 16,416 16,416 0 (65,432) (65,432) 0 286,525 286,525 231,513 231,513 302,941 302,941 166,081 166,081 12 PRENTISS COUNTY Exhibit D Combined Statement of Revenues, Expenses and Changes in Retained Earnings - Proprietary Fund Type - Enterprise Fund For the Year Ended September 30, 1997 Proprietary Fund Type Enterprise Operating Revenues Charges for sales and services $ 1,034,458 Total Operating Revenues 1,034,458 Operating Expenses Personal services 253,772 Contractual services 662,298 Materials and supplies 62,689 Depreciation expense 70,778 Indirect administrative cost 7,150 Total Operating Expenses 1,056,687 Operating Income (Loss) (22,229) Nonoperating Revenues (Expenses) Property tax 47 Interest income 2,032 Interest expense (22,384) Waste tire grant program 9,736 Insurance recoveries 6,260 Net Nonoperating Revenues (Expenses) (4,309) Net Income (Loss) For the Year (26,538) Retained Earnings Beginning of year 332,734 End of year $ 306,196 The notes to the financial statements are an integral part of this statement. 13 PRENTISS COUNTY Exhibit E Combined Statement of Cash Flows - Proprietary Fund Type - Enterprise Fund For the Year Ended September 30, 1997 Proprietary Fund Type Enterprise Cash Flows From Operating Activities Cash received from customers $ 901,414 Cash payments to suppliers for goods and services (715,851) Cash payments to employees for services (249,541) Net Cash Provided (Used) by Operating Activities (63,978) Cash Flows From Noncapital Financing Activities Waste tire grant program 9,736 Cash received from property taxes 57 Principal paid on long-term debt (45,847) Interest expense (22,542) Insurance recoveries 6,260 Net Cash Provided (Used) by Noncapital Financing Activities (52,336) Cash Flows From Investing Activities Interest and dividends on investments 2,032 Net Cash Provided (Used) by Investing Activities 2,032 Net Increase (Decrease) in Cash and Cash Equivalents (114,282) Cash and Cash Equivalents at Beginning of Year 243,497 Cash and Cash Equivalents at End of Year $ 129,215 Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities Operating income (loss) $ (22,229) Adjustments to reconcile operating income to net cash provided (used) by operating activities: Depreciation 70,778 Provision for uncollectible accounts (1,021) Change in assets and liabilities: Increase (decrease) in interfund payables 7,150 (Increase) decrease in accounts receivable 20,421 (Increase) decrease in other receivable (154,131) Increase (decrease) in claims payable 12,698 Increase (decrease) in intergovernmental payables 669 Increase (decrease) in deferred revenue 1,687 Total adjustments (41,749) Net Cash Provided (Used) by Operating Activities $ (63,978) Noncash Investing, Capital and Financing Activity: On October 1, 1996, the county entered into a lease purchase in the amount of $56,263 for the purchase of a backhoe/loader. The notes to the financial statements are an integral part of this statement. PRENTISS COUNTY Notes to Financial Statements For the Year Ended September 30, 1997 14 (1) Significant Accounting Policies. A. Financial Reporting Entity. Prentiss 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 Prentiss County to present these financial statements on the primary government and its component units which have significant operational or financial relationships with the county. There are no outside organizations that should be included as component units of the county's reporting entity. 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. 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. 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 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. 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 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: PRENTISS COUNTY Notes to Financial Statements For the Year Ended September 30, 1997 15 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 for major capital projects) 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. Capital Projects - These funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities. Such resources are derived principally from proceeds of general obligation bond issues and federal grants. PROPRIETARY FUND TYPE Enterprise Funds - These funds are used to account for those operations that are financed and operated in a manner similar to private business enterprises or where the county has decided that periodic determination of revenues earned, expenses incurred and/or net income is necessary for management accountability. 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 - The General Fixed Assets Account Group is used to account for general fixed assets not accounted for in Proprietary Funds. The General Long-term Debt Account Group is used to account for general long-term debt and certain other liabilities that are not specific liabilities of Proprietary Funds. 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. PRENTISS COUNTY Notes to Financial Statements For the Year Ended September 30, 1997 16 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. 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 1L for further explanation. $ Principal and interest on general long-term debt are recognized when due. Proprietary Fund Types - All Proprietary Funds are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and all liabilities associated with the operation of these funds are included on the balance sheet. Fund equity (i.e., net total assets) is segregated into contributed capital and retained earnings components. Proprietary operating statements present increases (e.g., revenues) and decreases (e.g., expenses) in net total assets. The accrual basis of accounting is utilized. Under this method, revenues are recognized when earned and expenses are recognized at the time liabilities are incurred. F. 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. PRENTISS COUNTY Notes to Financial Statements For the Year Ended September 30, 1997 17 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 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. H. Receivables. Receivables are reported net of allowances for uncollectible accounts, where applicable. I. 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." 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. However, the General Fixed Assets Account Group, reported on the accompanying combined balance sheet, is not fairly presented because the county did not maintain adequate subsidiary records documenting the completeness and valuation of general fixed assets. 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. Fixed assets acquired or constructed for Proprietary Fund operations are capitalized at cost in the respective funds in which they are utilized. No interest is capitalized on self-constructed assets because noncapitalization of interest does not have a material effect on the county's financial statements. Donated fixed assets are recorded at their fair market value at the time of donation. Enterprise fixed assets, excluding land, are depreciated on the straight-line method over the following estimated useful lives of the respective assets: Buildings and facilities 25 years Mobile equipment 5 years Other furniture and equipment 5 years [...]... contributions from other funds or fixed assets transferred from the General Fixed Assets Account Group 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... 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... 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... 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 Generally accepted accounting principles require property taxes to be recognized at the levy date if measurable... 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 Total Column on General-Purpose Financial Statements The total column on the general-purpose financial statements is captioned "Memorandum Only"... 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"...PRENTISS COUNTY Notes to Financial Statements For the Year Ended September 30, 1997 K Fund Equity Unreserved fund balance represents the amount available for budgeting future operations Unreserved retained earnings represents the net assets available for future operations or distribution Reservations of fund balance represent amounts that are not appropriable or are... 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 18 . 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. D. Fund Accounting. The financial. 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 $. 1, 1996, the county entered into a lease purchase in the amount of $56,263 for the purchase of a backhoe/loader. The notes to the financial statements are an integral part of this statement. PRENTISS