STATE OF MISSISSIPPI OFFICE OF THE STATE AUDITOR PHIL BRYANT _part3 pptx

SUNFLOWER COUNTY Notes to Financial Statements For the Year Ended September 30, 1997 19 Advance Refunding - On September 1, 1997, the county issued $1,020,000 in general obligation bonds with an average interest rate of 4.36% to advance refund $975,000 of the following outstanding bonds: Average Interest Outstanding Issue Rate Amount South Sunflower County Hospital general obligation refunding bonds 7.45% $ 975,000 The net proceeds of $1,021,210 (including $2,980 in accrued interest and $50,990 in transfers from prior issue Debt Service Funds and after payment of $52,760 in underwriting fees and other issuance costs) were used to purchase U.S. government securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the bonds. As a result, those bonds are considered to be defeased and the liability for those bonds has been removed from the General Long-term Debt Account Group. The county advance refunded the above bonds to reduce its total debt service payments over the next 9 years by $132,639 and to obtain an economic gain (difference between the present values of the debt service payments on the old and new debt) of $67,622. The following changes occurred in liabilities reported at year end: Balance Balance Styling Oct. 1, 1996 Additions Reductions Sept. 30, 1997 General Long-term Debt Account Group: General obligation bonds $ 3,575,000 4,020,000 1,400,000 6,195,000 Capital leases 135,155 19,402 60,219 94,338 Other loans 1,467,000 542,000 925,000 Total $ 3,710,155 5,506,402 2,002,219 7,214,338 (10) Contingencies. Federal Grants - The county has received federal grants for specific purposes that are subject to audit by the grantor agencies. Entitlements to these resources are generally conditional upon compliance with the terms and conditions of grant agreements and applicable federal regulations, including the expenditure of resources for allowable purposes. Any disallowance resulting from a grantor audit may become a liability of the county. As of September 30, 1997, the single audit performed on these federal grants disclosed an instance of noncompliance, resulting in questioned costs by the auditor in the amount of $13,922. Also, during the audited fiscal year, the U.S. Department of Justice notified the county that certain grant expenditures were being questioned and may have to be repaid. The county is contesting the findings of the U.S. Department of Justice. Any disallowance by the grantor agency could result in a liability of the county but ultimate resolution cannot presently be determined. Accordingly, no provision for any liability that may result has been recognized in the county=s financial statements. SUNFLOWER COUNTY Notes to Financial Statements For the Year Ended September 30, 1997 20 Litigation - The county is party to legal proceedings, many of which occur in the normal course of governmental operations. It is not possible at the present time to estimate ultimate outcome or liability, if any, of the county with respect to the various proceedings. However, the county's legal counsel believes that ultimate liability resulting from these lawsuits will not have a material adverse effect on the financial condition of the county. (11) No Commitment Debt (Not Included in Financial Statements). No commitment debt is repaid only by the entities for whom the debt was issued and includes debt that either bears the county's name or for which a moral responsibility may exist that is not an enforceable promise to pay. No commitment debt explicitly states the absence of obligation by the county other than possibly an agreement to assist creditors in exercising their rights in the event of default. Because a default may adversely affect the county's own ability to borrow, the principal amount of such debt outstanding at year end is disclosed as follows: Balance at Styling September 30, 1997 Hospital revenue notes $ 236,209 (12) Jointly Governed Organizations. The county participates in the following jointly governed organizations: Mississippi Delta Community College operates in a district composed of the Counties of Bolivar, Humphreys, Issaquena, Leflore, Sharkey, Sunflower and Washington. The Sunflower County Board of Supervisors appoints six of the 20 members of the college board of trustees. The county appropriated $382,432 for the maintenance and support of the college in fiscal year 1997. Yazoo-Mississippi Water Management District operates in a district composed of the Counties of Bolivar, Carroll, Coahoma, DeSoto, Holmes, Humphreys, Issaquena, Leflore, Panola, Quitman, Sharkey, Sunflower, Tallahatchie, Tate, Tunica, Washington and Yazoo. The Sunflower County Board of Supervisors appoints one of the 21 members of the district board of commissioners. The county levied a .61 mill tax, which brought in $60,034 for the maintenance and support of the district in fiscal year 1997. Region Six Mental Health/Mental Retardation Center/Life Help operates in a district composed of the Counties of Attala, Carroll, Grenada, Holmes, Humphreys, Leflore, Montgomery and Sunflower. The Sunflower County Board of Supervisors appoints one of the eight members of the board of commissioners. The county appropriated $57,300 to the entity in fiscal year 1997. South Delta Planning and Development District operates in a district composed of the Counties of Bolivar, Humphreys, Issaquena, Sharkey, Sunflower and Washington. The Sunflower County Board of Supervisors appoints four of the 22 members of the district board of directors. The county appropriated $9,378 for support of the district in fiscal year 1997. SUNFLOWER COUNTY Notes to Financial Statements For the Year Ended September 30, 1997 21 (13) Defined Benefit Pension Plan. Plan Description. Sunflower County, Mississippi, contributes to the Public Employees' Retirement System of Mississippi (PERS), a cost-sharing, multiple-employer, defined benefit pension plan. PERS provides retirement and disability benefits, annual cost-of-living adjustments and death benefits to plan members and beneficiaries. Benefit provisions are established by state law and may be amended only by the State of Mississippi Legislature. PERS issues a publicly available financial report that includes financial statements and required supplementary information. That information may be obtained by writing to Public Employees= Retirement System, PERS Building, 429 Mississippi Street, Jackson, MS 39201-1005 or by calling 1-800-444-PERS. Funding Policy. PERS members are required to contribute 7.25% of their annual covered salary and the county is required to contribute at an actuarially determined rate. The current rate is 9.75% of annual covered payroll. The contribution requirements of PERS members are established and may be amended only by the State of Mississippi Legislature. The county's contributions (employer share only) to PERS for the years ending September 30, 1997, 1996 and 1995 were $226,529, $238,819 and $214,863, respectively, equal to the required contributions for each year. (14) Subsequent Events. Subsequent to September 30, 1997, Sunflower County issued the following debt obligations: Issue Interest Issue Type of Source of Date Rate Amount Financing Financing 10-1-97 4.1/5.2 $ 850,000 General obligation bonds Ad valorem taxes 11-1-97 3 1,000,000 General obligation bonds Ad valorem taxes 12-18-97 4.42 39,778 Lease purchase Ad valorem taxes 1-28-98 4.52 24,106 Lease purchase Ad valorem taxes 22 SUNFLOWER COUNTY (This page left blank intentionally) 23 SUNFLOWER COUNTY SUPPLEMENTAL INFORMATION 24 SUNFLOWER COUNTY (This page left blank intentionally) 25 SUNFLOWER COUNTY Schedule of Expenditures of Federal Awards For the Year Ended September 30, 1997 Federal Grantor/ Federal Agency or Program Pass-through Grantor/ CFDA Pass-through or Award Federal Federal Program Title Number Number Amount Revenue Expenditures MAJOR FEDERAL AWARDS U.S. Department of Housing and Urban Development/Passed-through the Department of Economic and Community Development - State of Mississippi Home investment partnership program 14.239 M95-SG-28-0190 $ 332,500 $ 320,673 320,673 Total Major Federal Awards 320,673 320,673 OTHER FEDERAL AWARDS U.S. Department of Housing and Urban Development/Passed-through the Department of Economic and Community Development - State of Mississippi Community development block grant 14.218 4-067-ED-1F01 132,667 1,166 1,166 U.S. Department of Justice - Office of Justice Programs Church arson prevention grant 16.580 N/A 4,600 4,600 4,600 Office of Community Oriented Policing Services - Public safety and community policing grant 16.710 N/A 58,603 18,203 18,203 Total U.S. Department of Justice 22,803 22,803 U.S. Department of Transportation - Federal Highway Administration/ Passed-through the Mississippi Department of Transportation Bridge inspection program 20.205 N/A 3,760 3,760 3,760 Federal Emergency Management Agency/Passed-through the Mississippi Emergency Management Agency State and local disaster assistance program 83.534 N/A 9,375 9,375 9,375 Total Other Awards 37,104 37,104 Total Federal Financial Assistance $ 357,777 357,777 NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Note A - Significant Accounting Policies The accompanying Schedule of Federal Awards is prepared on the modified accrual basis of accounting. Note B - Public Safety and Community Policing Grant In accordance with terms of the grant, the county has expended matching contributions totaling $4,220 during the year ended September 30, 1997. 26 SUNFLOWER COUNTY (This page left blank intentionally) 27 SUNFLOWER COUNTY SPECIAL REPORTS 28 SUNFLOWER COUNTY (This page left blank intentionally) [...].. .OFFICE OF THE STATE AUDITOR PHIL BRYANT AUDITOR INDEPENDENT AUDITOR' S REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF THE PRIMARY GOVERNMENT FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS October 14, 1998 Members of the Board of Supervisors Sunflower County, Mississippi We have audited the primary government financial statements... audited the primary government financial statements of Sunflower County, Mississippi, as of and for the year ended September 30, 1997, and have issued our report thereon dated October 14, 1998 The auditor' s report on the primary government financial statements is qualified because the primary government financial statements do not include the financial data of the county's component units, which should be... auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States Compliance As part of obtaining reasonable assurance about whether Sunflower County, Mississippi' s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,... effect on the determination of financial statement amounts 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 that are required to be reported under Government Auditing Standards However, we noted certain immaterial instances of noncompliance... required to be reported under Government Auditing Standards However, we noted certain immaterial instances of noncompliance that we have reported to the management of Sunflower County, Mississippi in our Independent Auditor' s Report on Compliance with State Laws and Regulations dated October 14, 1998, included within this document 29 . intentionally) 29 OFFICE OF THE STATE AUDITOR PHIL BRYANT AUDITOR INDEPENDENT AUDITOR& apos;S REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF THE PRIMARY GOVERNMENT. Washington. The Sunflower County Board of Supervisors appoints six of the 20 members of the college board of trustees. The county appropriated $382,432 for the maintenance and support of the college. composed of the Counties of Bolivar, Humphreys, Issaquena, Sharkey, Sunflower and Washington. The Sunflower County Board of Supervisors appoints four of the 22 members of the district board of directors.