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ANNUAL FINANCIAL REPORT

MAURY COUNTY, TENNESSEE

FOR THE YEAR ENDED JUNE 30, 2004

Comptroller of the Treasury Department of Audit

Division of County Audit Nashville, Tennessee

ANNUAL FINANCIAL REPORT


FOR THE YEAR ENDED JUNE 30, 2004

DEPARTMENT OF AUDIT: JOHN G. MORGAN

Comptroller of the Treasury

DIVISION OF COUNTY AUDIT: RICHARD V. NORMENT

Assistant to the Comptroller

ARTHUR L. ALEXANDER Director

RHONDA DAVIS, CFE JOE F. KIMERY, CPA, CGFM, CFE RACHELLE BUNCH, CFE Audit Manager KATIE ARMSTRONG STEPHANIE GORDON JERRY DURHAM, CPA, CGFM, CFE WENDY HEATH, CFE Auditor 4 State Auditors

TABLE OF CONTENTS

Exhibit/Table Page Audit Highlights i INTRODUCTORY SECTION Maury County Officials 1 FINANCIAL SECTION Independent Auditor’s Report 5 Management’s Discussion and Analysis 9 BASIC FINANCIAL STATEMENTS: Government-wide Financial Statements: Statement of Net Assets A 27 Statement of Activities B 28 Fund Financial Statements: Governmental Funds: Balance Sheet C-1 30 Reconciliation of the Balance Sheet of Governmental

Funds to the Statement of Net Assets

C-2

31 Statement of Revenues, Expenditures, and Changes In Fund Balances

D-1

32

Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of

Governmental Funds to the Statement of Activities

D-2

33 Proprietary Funds: Statement of Net Assets E-1 34 Statement of Revenues, Expenses, and Changes in Net

Assets

E-2

35 Statement of Cash Flows E-3 36 Fiduciary Funds: Statement of Fiduciary Assets and Liabilities F 38 Notes to the Financial Statements 39 REQUIRED SUPPLEMENTARY INFORMATION: Schedule of Revenues, Expenditures, and Changes In Fund Balance – Actual (Budgetary Basis) and Budget:

General Fund G 95 Notes to the Required Supplementary Information 99

Exhibit/Table Page COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES:

Governmental Funds: Nonmajor Funds: Combining Balance Sheet H-1 105 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances

H-2

106

Schedules of Revenues, Expenditures, and Changes in Fund Balances – Actual (Budgetary Basis)

and Budget:

Special Purpose Fund H-3 108 Drug Control Fund H-4 109 Adequate Facilities/Development Tax Fund H-5 110 Other Special Revenue Fund H-6 111 Highway/Public Works Fund H-7 112 Major Fund: Schedule of Revenues, Expenditures, and Changes in Fund Balance – Actual and Budget:

General Debt Service Fund I 115 Internal Service Funds: Combining Statement of Net Assets J-1 119 Combining Statement of Revenues, Expenses and

Changes in Net Assets

J-2

120 Combining Statement of Cash Flows J-3 121 Agency Funds: Combining Statement of Fiduciary Assets and

Liabilities

K-1

125 Combining Statement of Changes in Assets and

Liabilities – All Agency Funds

K-2

126 Component Unit: Discretely Presented Maury County School

Department:

Statement of Activities L-1 129 Balance Sheet – Governmental Funds L-2 130 Reconciliation of the Balance Sheet of Governmental

Funds to the Statement of Net Assets

L-3

131 Statement of Revenues, Expenditures, and Changes

in Fund Balances – Governmental Funds

L-4

132 Reconciliation of the Statement of Revenues,

Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities

L-5

133 Combining Balance Sheet – Nonmajor Governmental

Funds

L-6

134 Combining Statement of Revenues, Expenditures, and

Changes in Fund Balances – Nonmajor Governmental Funds

L-7

135

Exhibit/Table Page Schedules of Revenues, Expenditures, and Changes in

Fund Balances – Actual (Budgetary Basis) and Budget:

General Purpose School Fund L-8 136 School Federal Projects Fund L-9 138 Central Cafeteria Fund L-10 139 Miscellaneous Schedules: Schedule of Changes in Long-term Notes, Other Loans, and Bonds

M-1

143

Schedule of Bond and Interest Requirements by Year

M-2

144

Schedule of Investments – All Funds M-3 145 Schedule of Notes Receivable – All Funds M-4 146 Schedule of Transfers – All Funds and Discretely Presented Maury County School Department

M-5

147

Schedule of Salaries and Official Bonds of Principal Officials

M-6

148

Schedule of Detailed Revenues – All Governmental Fund Types

M-7

149

Schedule of Detailed Revenues – All Governmental Fund Types – Discretely Presented Maury County

School Department

M-8

159 Schedule of Detailed Expenditures – All Governmental Fund Types

M-9

161

Schedule of Detailed Expenditures – All Governmental Fund Types – Discretely Presented

Maury County School Department

M-10

194 Schedule of Detailed Revenues and Expenses –

Central Maintenance/Garage Fund (Internal Service Fund)

M-11

208 Schedule of Detailed Revenues and Expenses –

Employee Insurance - Prescriptions Fund (Internal Service Fund)

M-12

210 Schedule of Detailed Revenues and Expenses – Solid

Waste Disposal (Enterprise Fund)

M-13

211 Schedule of Detailed Receipts, Disbursements, and Changes in Cash Balance – City Agency Fund

M-14

215

STATISTICAL SECTION Uncollected Taxes Filed in Chancery Court 1 219 Tax Rates and Assessments – Last Ten Years 2 220

Exhibit/Table Page SINGLE AUDIT SECTION Auditor’s Report on Compliance and on Internal Control Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards

223 Auditor’s Report on Compliance with Requirements Applicable to Each Major Program and Internal Control Over Compliance in Accordance With OMB Circular A-133

225 Other Auditor’s Report on Maury Regional Hospital: Report on Compliance and on Internal Control Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards

227 Other Auditor’s Report on Maury County Board of Public

Utilities Water System:

Report on Compliance and on Internal Control Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards

231 Other Auditor’s Report on Maury County Emergency Communications District:

Report on Compliance and on Internal Control Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards

232 Schedule of Expenditures of Federal Awards and State Grants

233

Schedule of Audit Findings Not Corrected 235 Schedule of Findings and Questioned Costs 237 Auditee Reporting Responsibilities 245

i

Audit Highlights Annual Financial Report

Maury County, Tennessee For the Year Ended June 30, 2004

Scope We have audited the financial statements of the governmental activities, business-type activi-ties, each major fund, and the aggregate remaining fund in-formation of Maury County as of and for the year ended June 30, 2004.

Results Our report on Maury County’s financial statements was un-qualified. Our audit resulted in nine find-ings and recommendations, which we have reviewed with Maury County management. Detailed findings, recommenda-tions, and management’s re-sponses are included in the Sin-gle Audit section of this report.

The following are summaries of the audit findings: OFFICE OF COUNTY MAYOR: ♦ Maury County and the City of Columbia jointly

funded the building of an animal control facility; however, they did not enter into a written agree-ment to specify each government’s duties, respon-sibilities, and contingent liabilities concerning the facility.

OFFICE OF HUMAN RESOURCES: ♦ The county had an unrecorded and unauthorized

investment in 1,850 shares of common stock. ♦ Some employees receiving workers’ compensation

benefits also received their regular payroll checks contrary to the plan. These overpayments cost the county approximately $13,900.

OFFICE OF DIRECTOR OF SCHOOLS: ♦ Several invoices were paid without documentation

that goods had been received or services had been rendered.

♦ The School Federal Projects Fund accounting re-cords were not closed in a timely manner to pro-vide the public with current financial information.

♦ The Maintenance Department did not keep usage records on gasoline and did not keep records of maintenance and repairs on equipment.

♦ Formal policies and procedures were not main-tained for computer operations.

ii

OFFICE OF TRUSTEE: ♦ The trustee had unidentified reconciling items totaling $16,512 in a bank clearing ac-

count.

OTHER FINDING: ♦ Duties were not segregated adequately among the officials and employees at the

Transfer Station and Archives Department, and in the Offices of Trustee, County Clerk, and General Sessions Court Clerk – Part II.

State of Tennessee Comptroller of the Treasury

Department of Audit Division of County Audit

INTRODUCTORY SECTION

Maury County OfficialsJune 30, 2004

Jim Bailey, County MayorVan Boshers, Road SuperintendentEdward Hickman, Director of SchoolsSteve Konz, TrusteeJimmy Dooley, Assessor of PropertyNancy Thompson, County ClerkKathy Kelly, Circuit and General Sessions Courts ClerkCheryl Church, Clerk and MasterJohn Fleming, RegisterEnoch George, SheriffMalinda Stanford, Director of Accounts and BudgetsShirely Harmon, Director of Human Resources

Board of County Commissioners:

Sarah Anderson, Chairman Joe RobersonJoe Scott Joe DuncanTom Primm Mack WhitesideDon Harmon Bill BoltonWalter Harlan Dwight VandiverEugene Richardson Bobby HarrisJune Beckum Joe ReischmanBob Duncan Vernon BrooksWayne Hickman John DavisAndy Jackson Jerry ErwinGerald Adkison Cindy Williams

Board of Education:

Lonnie Daniels, Chairman Walter DycusWilliam Muehlbauer Ricky SimsEdie Sutter Judy VickTalvin Barner Richard ThompsonCharles Morrison Vince SpringerWhitney Seaton

Budget Committee:

Jim Bailey, Ex-Officio Mack WhitesideTom Primm John Davis, Jr.Bobby Harris Joe ReischmanAndy Jackson

1

3

FINANCIAL SECTION

5

STATE OF TENNESSEE COMPTROLLER OF THE TREASURY

DEPARTMENT OF AUDIT DIVISION OF COUNTY AUDIT

SUITE 1500 JAMES K. POLK STATE OFFICE BUILDING

NASHVILLE, TENNESSEE 37243-0269 PHONE (615) 401-7841

INDEPENDENT AUDITOR’S REPORT

January 12, 2005

Maury County Mayor and Board of County Commissioners Maury County, Tennessee To the County Mayor and County Commissioners: We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Maury County, Tennessee, as of and for the year ended June 30, 2004, which collectively comprise Maury County’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of Maury County’s management. Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the Maury Regional Hospital’s financial statements, which represent 98 percent and 99 percent, respectively, of the assets and revenues of the business-type activities. The hospital is also a major fund. Also, we did not audit the discretely presented Maury County Board of Public Utilities Water System’s financial statements, which represent 21 percent and four percent, respectively, of the assets and revenues of the aggregate discretely presented component units. Additionally, we did not audit the discretely presented Maury County Emergency Communications District’s financial statements, which represent .6 percent and one percent, respectively, of the assets and revenues of the aggregate discretely presented component units, as of June 30, 2004, and for the year then ended. Those financial statements were audited by other auditors whose reports have been furnished to us, and our opinion on the financial statements, insofar as it relates to the amounts included for the Maury Regional Hospital, the discretely presented Maury County Board of Public Utilities Water System, and the discretely presented Maury County Emergency Communications District, is based on the reports of the other auditors. We conducted our audit in accordance with the auditing standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material

6

misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit and the reports of other auditors provide a reasonable basis for our opinions. In our opinion, based on our audit and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Maury County, Tennessee, as of June 30, 2004, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended, in conformity with accounting principles generally accepted in the United States of America. The management’s discussion and analysis on pages 9 through 24 and budgetary comparison information on pages 95 through 99 are not a required part of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. We and the other auditors have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise Maury County’s basic financial statements. The introductory section, combining and individual nonmajor fund financial statements, budgetary comparison schedules of nonmajor governmental funds and the General Debt Service Fund, combining and individual fund financial statements of the Maury County School Department (a discretely presented component unit), miscellaneous schedules, and statistical tables are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements, budgetary comparison schedules of nonmajor governmental funds and the General Debt Service Fund, combining and individual fund financial statements of the Maury County School Department (a discretely presented component unit), and the miscellaneous schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory section and statistical tables have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we express no opinion on them.

7

In accordance with Government Auditing Standards, we have also issued our report dated January 12, 2005, on our consideration of Maury County’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. Very truly yours,

John G. Morgan Comptroller of the Treasury JGM/yu

9

Management’s Discussion and Analysis

Section 1 – Maury County As management for Maury County, Tennessee (the county), we offer readers of the county’s financial statements this narrative overview and analysis of the financial activities of the county for the fiscal year ended June 30, 2004. This discussion and analysis focuses on the primary government only and does not include discussion of discretely presented component units. The activity of Maury Regional Hospital, an enterprise fund of the primary government, is reflected in business-type activities throughout the following discussion and analysis. A separate discussion and analysis regarding the activity of Maury Regional Hospital is also presented in Section 2. All amounts, unless otherwise indicated, are expressed in thousands of dollars. Financial Highlights

The assets of the county exceeded its liabilities at the close of the most recent fiscal year by $188,475 (net assets). Of this amount, $36,298 may be used to meet the government’s ongoing obligations to citizens and creditors.

The government’s total net assets increased by $16,424.

As of the close of the current fiscal year, the county’s governmental funds

reported combined ending fund balances of $16,341, an increase of $1,198 in comparison with the prior year.

At the end of the current fiscal year, unreserved fund balance for the General

Fund was $4,502, or 31 percent of total General Fund expenditures.

The county’s total debt decreased by $5,646 (eleven percent) during the current fiscal year. The key factor in this decrease was the payment of $55,398 on bonds, loans and notes payable, offset by the issuance of $49,238 in new debt, $20,830 for Maury Regional Hospital and $21,420 for restructuring debt.

Overview of the Financial Statements This discussion and analysis are intended to serve as an introduction to the county’s basic financial statements. The county’s basic financial statements are composed of three components: (1) government-wide financial statements, (2) fund financial statements, and (3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the county’s finances, in a manner similar to a private-sector business. The statement of net assets presents information on all of the county’s assets and liabilities, with the difference between the two reported as net assets. Over time, increases or

10

decreases in net assets may serve as a useful indicator of whether the financial position of the county is improving or deteriorating. The statement of activities presents information illustrating the changes in the government’s net assets during the fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). Both of the government-wide financial statements distinguish functions of the county that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the county include general government, finance, administration of justice, public safety, public health and welfare, social, cultural and recreational services, agriculture & natural resources, highways/public works, education, and debt service on long-term debt. The business-type activities of the county include a regional hospital and a solid waste disposal facility. The government-wide financial statements can be found on Exhibit A and Exhibit B of this report. The government-wide financial statements include not only the county itself (known as the primary government), but also a legally separate school department, a legally separate water system, and a legally separate emergency communications district for which the county is financially accountable. Financial information for these component units is reported separately from the financial information presented for the primary government itself. Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The county, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the county can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between

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governmental funds and governmental activities. The county maintains 10 individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund and the General Debt Service fund, both of which are considered to be major funds. Data from the other eight governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this report. The county adopts an annual budget for its General Fund. A budgetary comparison statement has been provided for the General Fund to demonstrate compliance with this budget. The basic governmental fund financial statements can be found on Exhibit C-1 and Exhibit D-1 of this report. Proprietary funds. The county maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The county uses enterprise funds to account for its solid waste department and its regional hospital. Internal service funds are an accounting device used to accumulate and allocate costs internally among the county’s various functions. The county uses internal service funds to account for its central maintenance garage and its employee prescription drug program. Because these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the solid waste department and the regional hospital. The internal service funds are presented in the proprietary fund financial statements. The basic proprietary fund financial statements can be found in Exhibits E-1, E-2, and E-3 of this report. Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support the county’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statements can be found in Exhibit F of this report. Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the

12

county’s major special revenue fund’s budgetary statement (General Fund). Required supplementary information can be found after the basic financial statements section of this report. The combining statements referred to earlier in connection with nonmajor governmental funds and internal service funds are presented immediately following the notes to the financial statements. Combining and individual fund statements and schedules are Exhibits H-1 through M-14 of this report. Government-wide Financial Analysis As noted earlier, net assets may serve over time as a useful indicator of a government’s financial position. In the case of the county, assets exceeded liabilities by $188,475 at the close of the most recent fiscal year. The Constitution for the State of Tennessee allows only the local legislative body authorization to issue debt. Therefore, whenever the Maury County Board of Education requires additional money to fund school construction and equipment, the related debt must be issued by the county. As of June 30, 2004, the county had outstanding debt totaling $20,550 for capital purposes for the Maury County Board of Education, but the capital assets are reported in the financial statements of the Maury County Board of Education. As a result, the county has incurred the related liability without a corresponding increase in the county’s capital assets, thereby significantly decreasing its unrestricted net assets. By far the largest portion of the county’s net assets (74 percent) reflects its investment in capital assets (e.g., land, buildings, machinery, and equipment); less any related debt used to acquire those assets that is still outstanding. The county uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the county’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay the debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

2003/04 2002/03 2003/04 2002/03 2003/04 2002/03

Current and other Assets $ 31,308 $ 28,432 $ 73,656 $ 65,336 $ 104,964 $ 93,768 Capital Assets 44,606 38,662 126,488 125,786 171,094 164,448

Total Assets $ 75,914 $ 67,094 $ 200,144 $ 191,122 $ 276,058 $ 258,216 Long-term Liabilities $ 30,757 $ 33,830 $ 23,254 $ 23,827 $ 54,011 $ 57,657 Other Liabilities 13,740 11,588 19,832 15,386 33,572 26,974

Total Liabilities $ 44,497 $ 45,418 $ 43,086 $ 39,213 $ 87,583 $ 84,631 Net assets:Invested in capital assets,

net or related debt $ 35,727 $ 29,426 $ 103,904 $ 102,647 $ 139,631 $ 132,073 Restricted 12,547 10,205 0 0 12,547 10,205 Unrestricted (16,857) (17,955) 53,154 49,262 36,297 31,307

Total net assets $ 31,417 $ 21,676 $ 157,058 $ 151,909 $ 188,475 $ 173,585

MAURY COUNTY'S Net Assets

Governmentalactivities

Business-typeactivities Total

13

An additional portion of the county’s net assets (seven percent) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets ($36,297) may be used to meet the government’s ongoing obligations to citizens and creditors.

2003/04 2002/03 2003/04 2002/03 2003/04 2002/03

Revenues:

Program Revenues:

Charges for services $ 5,380 $ 5,872 $ 221,208 $ 205,502 $ 226,588 $ 211,374

Operating grants and contributions 3,567 2,899 0 0 3,567 2,899

Capital grants and contributions 5,672 1,222 0 0 5,672 1,222

General Revenues: 0 0

Property taxes 12,229 11,292 626 7 12,855 11,299

Other taxes 4,914 4,531 0 0 4,914 4,531

Grants and contributions not 0 0

restricted to specific programs 3,320 3,206 124 105 3,444 3,311

Other 832 1,445 579 540 1,411 1,985

Total revenues $ 35,914 $ 30,467 $ 222,537 $ 206,154 $ 258,451 $ 236,621

Expenses:

General government $ 6,262 5,962 $ 0 $ 0 $ 6,262 $ 5,962

Finance 2,280 2,519 0 0 2,280 2,519

Administration of Justice 1,765 1,670 0 0 1,765 1,670

Public safety 7,005 6,455 0 0 7,005 6,455

Public Health and Welfare 420 768 0 0 420 768

Social, Cultural and Rec Services 1,082 932 0 0 1,082 932

Agriculture & Natural Resources 117 122 0 0 117 122

Highway/Public Works 4,470 3,792 0 0 4,470 3,792

Education(Payment to CU) 1,642 2,157 0 0 1,642 2,157

Interest on Long-term Debt 861 1,322 0 0 861 1,322

Other Debt Service 269 193 0 0 269 193

Maury Regional Hospital 0 0 213,731 197,609 213,731 197,609

Solid Waste Disposal 0 0 2,123 2,155 2,123 2,155

Total expenses $ 26,173 $ 25,892 $ 215,854 $ 199,764 $ 242,027 $ 225,656

Increase in net assets $ 9,741 4,575 $ 6,683 6,390 $ 16,424 $ 10,965

Net assets - July 1, 2003 21,676 17,101 150,375 145,519 172,051 162,620

Net assets - June 30, 2004 $ 31,417 $ 21,676 $ 157,058 $ 151,909 $ 188,475 $ 173,585

MAURY COUNTY'S Changes in Net Assets

Governmental

activities

Business-type

activities

Total

Governmental activities. Governmental activities increased the county’s net assets by $9,741, thereby accounting for 59 percent of the total growth in the net assets of the county. Key elements of the increase were as follows:

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Expenses and Program Revenues- Governmental Activities

02,0004,0006,0008,000

Gen

eral

Gov

ernm

ent

Fina

nce

Adm

inis

tratio

n of

Just

ice

Publ

ic S

afet

y

Publ

ic H

ealth

and

Wel

fare

Soci

al,

Cul

tura

l, an

dR

ec S

ervi

ces

Agr

icul

ture

and

Nat

ural

Res

ourc

es

Hig

hway

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Wor

ks

Educ

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aym

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Inte

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Long

-term

Deb

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expensesprogram revenue

Revenues by Source - Governmental Activities

Charges for Services

15%

Operating Grants and contributions

10%

Capital grants and contributions

16%

Property taxes34%

Sales taxes1%

Other taxes13%

Other 2%

Grants and Contributions not

restricted to specific programs

9%

Business-type activities. Business-type activities increased the county’s net assets by $6,683, accounting for 41 percent of the total growth in the government’s net assets.

15

Expenses and Program Revenues – Business-type Activities

050000

100000150000200000250000

Maury RegionalHospital

Solid WasteDisposal

expensesrevenues

Revenue by Source – Business–type Activities

Other (including operating grants,

contributions, property taxes, & other)

0.60%

Charges for Services99.40%

Financial Analysis of the Government’s Funds As noted earlier, the county uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds. The focus of the county’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the county’s financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the county’s governmental funds reported combined ending fund balances of $16,341, an increase of $1,198 in comparison with the prior year. Most of this total amount ($12,811) constitutes unreserved fund balance, which are available for spending at the government’s discretion. The remainder of fund balance is reserved to indicate that it is not readily available for new spending because it has already

16

been committed (1) to liquidate contracts and purchase orders of the prior period ($1,560), and (2) for a variety of other restricted purposes ($1,970). The General Fund is the chief operating fund of the county. At the end of the current fiscal year, unreserved fund balance of the General Fund was $4,502, while total fund balance was $4,804. As a measure of the General Fund’s liquidity, it may be useful to compare both unreserved fund balance and total fund balance to total fund expenditures. Unreserved fund balance represents 30 percent of total General Fund expenditures, while total fund balance represents 32 percent of that same amount. The fund balance of the county’s General Fund increased by $482 during the current fiscal year.

The General Debt Service Fund has a total fund balance of $5,956, all of which is reserved for the payment of debt service.

Proprietary funds. The county’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail.

Unrestricted net assets of the Solid Waste Disposal Fund at the end of the year amounted to $1,487. The decrease in net assets for was $97. Other factors concerning the finances of this fund have already been addressed in the discussion of the county’s business-type activities.

General Fund Budgetary Highlights

Differences between the original budget and the final amended budget were relatively minor. The net effect of the amendments (a $614 increase in appropriations) was primarily a result of the receipt of federal and state grant awards and is summarized as follows: General Administration $ 38Administration of Justice 55Public Safety 450Public Health & Welfare 16Social, Cultural and Recreational Services 15Capital Projects 40Total $ 614

For the fiscal year, revenues exceeded budgetary estimates, and expenditures were less than budgetary estimates. As a result, the anticipated and budgeted draw upon existing fund balance was minimal. Capital Asset and Debt Administration Capital assets. The county’s investment in capital assets for its governmental and business-type activities as of June 30, 2004, amounted to $171,095 (net of accumulated depreciation). This investment in capital assets includes land, buildings, system improvements, machinery and equipment, park facilities, roads, highways, and bridges.

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County’s Capital Assets As of June 30, 2004 (net of depreciation)

2003/04 2002/03 2003/04 2002/03 2003/04 2002/03Land $ 7,101 $ 5,986 $ 6,109 $ 6,109 $ 13,210 $ 12,095Buildings and Improvements 18,113 17,225 92,228 91,902 110,341 109,127Other Fixed Assets 16,807 1,263 24,648 25,491 41,455 26,754Infrastructure 1,542 11,384 0 0 1,542 11,384Construction in Progress 1,044 2,804 3,503 2,284 4,547 5,088

Total $ 44,607 $ 38,662 $ 126,488 $ 125,786 $ 171,095 $ 164,448

TotalBusiness-type

activitiesGovernmental

activities

Long-term debt. At the end of the current fiscal year, the county had total bonded debt outstanding of $45,112, notes payable of $4,328, and other loans payable of $2,011. All debt is backed by the full faith and credit of the county. Of the amount outstanding for governmental activities, $20,550 reflects the balance of borrowings for education capital projects for the Maury County Board of Education. Of the amount outstanding for business-type activities, $22,584 reflects the balance of borrowings for capital projects of the regional hospital.

County’s Outstanding Debt As of June 30, 2004

2003/04 2002/03 2003/04 2002/03 2003/04 2002/03

General obligation bonds $ 25,831 $ 12,370 $ 19,281 $ 19,880 $ 45,112 $ 32,250

Notes payable 3,036 1,937 1,292 1,447 4,328 3,384

Other loans payable 0 19,651 2,011 1,812 2,011 21,463Total $ 28,867 $ 33,958 $ 22,584 $ 23,139 $ 51,451 $ 57,097

Total

Governmental

activities

Business-type

activities

For the fiscal year ended, the county’s total debt decreased by $5,646 (ten percent). Debt service payments of $54,784 were made while the county issued new debt for equipment and public works projects, as follows:

The county issued loans in the amount of $21,420 for the restructuring of debt. The county maintains an “A1” bond rating from Moody’s for general obligation debt.

18

Additional information on the county’s long-term debt can be found in Exhibits M-1 and M-2 of this report. Economic Factors and Next Year’s Budgets and Rates

The unemployment rate for the county is currently 4.6 percent, which is a decrease from a rate of 5.2 percent a year ago. This compares favorably to the state’s average unemployment rate of 5.1 percent and the national average rate of 5.2 percent.

The county experienced limited commercial and industrial growth during the year.

Inflationary trends in the region compare favorably to national indices.

All of these factors were considered in preparing the county’s budget for the 2005 fiscal year. During the current fiscal year, unreserved fund balance in the General Fund increased to $4,502. The county has appropriated $1,714 of this amount for spending in the 2005 fiscal year budget. It is intended that this use of available fund balance will avoid the need to raise taxes or charges for this fund during the 2005 fiscal year. Requests for Information This financial report is designed to provide a general overview of the county’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Director of Accounts & Budgets at One Public Square, Columbia, TN 38401 or [email protected]. Section 2 – Maury Regional Hospital Section 2 is a voluntary presentation of management’s discussion and analysis of the financial performance of the Maury Regional Hospital, an enterprise fund of the primary government, for the fiscal year ended June 30, 2004. This discussion and analysis is classified as supplementary information and is considered unaudited. Please read the discussion in conjunction with the hospital’s financial statements and accompanying footnotes. Using the Annual Financial Report The hospital is operated and maintained by Maury County, Tennessee, under authority of and in compliance with the provisions of Chapter 373 of the Tennessee Private Acts of 1953. For financial reporting purposes, the hospital is considered an enterprise fund of Maury County, Tennessee. The financial statements include the accounts and operations of (i) the hospital; (ii) the hospital’s Medical Office Building Division, which operates three medical office buildings in Columbia, Tennessee (Trotwood Avenue, James Campbell Boulevard and Highway 31 North), one in Lewisburg, Tennessee, one in Spring Hill, Tennessee, one in Clifton,

19

Tennessee, and one in Mt. Pleasant, Tennessee; (iii) the Other Healthcare Facilities Division, which operates Marshall Medical Center, Wayne Medical Center, and certain other medical facilities in Wayne County, Tennessee; (iv) Family Health Group, a physician practice management group; (v) Critical Care Services, which is comprised of South Central Heart Group, Thoracic and Cardiovascular Services, and Pulmonary and Critical Care Associates; and (vi) the Ambulatory Surgery Center. The hospital built the medical office buildings to house certain of its administrative functions and for lease principally to physicians on the hospital’s staff. Marshall Medical Center is an acute care hospital with a 119-bed capacity located in Lewisburg, Tennessee, and was acquired by the hospital in 1995. Wayne Medical Center is an acute care hospital with an 80-bed capacity located in Waynesboro, Tennessee, and has been leased by the hospital since 1995. The hospital follows the accrual method of accounting. Revenues are recognized in the period earned; expenditures are recorded at the time liabilities are incurred.

The financial statements consist of Statements of Net Assets, Statements of Revenues, Expenses, and Changes in Net Assets, and Statements of Cash Flows. The accompanying notes to the financial statements are an integral part of the financial statements and are essential to understanding the data contained in the financial statements. The Statements of Net Assets provide descriptions of the hospital’s assets and liabilities and an indication of the hospital’s financial position. The Statements of Revenues, Expenses, and Changes in Net Assets report the revenues and expenses related to the hospital’s activities. The Statements of Cash Flows report the cash provided and used by operating, capital and related financing, and investing activities. The hospital applies all applicable Governmental Accounting Standards Board (GASB) pronouncements in accounting and reporting as well as the following pronouncements issued on or before November 30, 1989, unless those pronouncements conflict with or contradict GASB pronouncements: Financial Accounting Standards Board Statements and Interpretations, Accounting Principles Board Opinions, and Accounting Research Bulletins. Noteworthy Financial Activity

Total assets for 2004 increased by $11.2 million (6.1%) over prior year; with net capital assets accounting for $725 thousand of the total increase. The growth in current assets of $10.2 million is attributed to the increase in hospital net receivables, which is primarily due to a decrease in the allowances. The estimated uncollectibles and allowances decrease is attributable to additional reimbursement obtained from the new cardiovascular surgery program, coupled with increases in the Medicare inpatient PPS rates, and an overall increase in the inpatient Medicare case mix index. The hospital did recognize a prior period adjustment in the amount of $1.5 million retroactive to July 1, 2002, and June 30, 2003, to correct the Medicare and TennCare contractual allowances previously recorded over several fiscal years prior to July 1, 2002. The prior period adjustment had no effect on the reported results of operations for the year.

Current liabilities increased by $4.8 million, attributed, primarily to the growth in

accounts payable and accrued expenses of $3.1 million and the growth in accrued salaries and wages and paid time off of $1.2 million.

20

Long-term debt decreased by $671 thousand (3.5%) from prior year due to the

refunding of the Series 1997, Series 1998, and Series 2003 bond issues.

Net cash provided by operating activities decreased by $7 million (55%) from prior year.

The hospital’s total net operating revenues increased by $15.5 million (7.6%) over

the prior year. Of the total increase, $7.2 million resulted from the opening of the new cardiovascular surgery program and enhancement of other cardiac services. The remaining increase is related to rate increases (4% inpatient, 6% outpatient) and the increase in overall patient volume.

The hospital’s total operating expenses increased by $16.2 million (8.2%) over the

prior year. Salaries, wages, and benefits increased by $9.6 million as a result of the annual wage increases, and additional employees to staff and support the new cardiovascular surgery program. Fees and professional services increased by $4.4 million, which was primarily attributable to the new cardiovascular surgery program.

The hospital’s non-operating revenue and expense increased by $161,000 from prior

year.

The net excess of revenue over expense for the fiscal year ending June 30, 2004, was $6.8 million, compared to $7.4 million prior year.

(Restated)2004 2003

Assets

Current Assets $ 69,613 $ 59,425Capital and Other Assets 126,709 125,649 Total Assets $ 196,322 $ 185,074

Condensed Statement of Net AssetsAs of June 30, 2004 and 2003

(In thousands)

21

(Restated)2004 2003

Liabilities

Current Liabilities $ 22,922 $ 18,119Long-term Debt 18,676 19,347Other Liabilities 812 476 Total Liabilities $ 42,410 $ 37,942

Investment in Capital Assets, Net of Related Debt $ 102,246 $ 100,966

Unrestricted Assets 51,667 46,166 Total Net Assets $ 153,913 $ 147,132

Condensed Statement of Net AssetsAs of June 30, 2004, and 2003

(In thousands) (Cont.)

In the 2004 fiscal year, the hospital’s current assets of $69.6 million were sufficient to cover current liabilities of $22.9 million (current ratio of 3.04). The increase in capital assets resulted primarily from the build-out of the 3rd and 4th floors of the outpatient pavilion and from cardiology services.

Cash and cash equivalents for the current year decreased by $6.8 million. The decrease in cash and cash equivalents was due to the acquisition of property, plant and equipment, increase in patient accounts receivable, and reduction of long-term debt. The decrease in interest income rates also accounted for some of the current year decline. The 2004 end of year cash and cash equivalents were $6.9 million. Total liabilities totaled $42.4 million for 2004, compared to $37.9 million in 2003, an increase of $4.5 million. Approximately $3.1 million of this increase is due to accounts payable and accrued expenses, and approximately $1.2 million is due to accrued salaries and wages and accrued paid time off. Long-term debt for 2004 decreased $671 thousand to $18.7 million, compared to $19.3 million in 2003. This decrease is due to the refunding of the Series 1997, Series 1998, and Series 2003 bond issues.

The following table provides detail of the long-term debt as of June 30, 2004:

22

AmountDue

June 2004(In thousands)

Bonds Payable

Series 1998 - West Patient Tower $ 1,085Series 2003 Refunding - Refunding of Series 1997 Bonds 1,929Series 2004B Refunding - Refunding of Series 1998 and Series 2003 Bonds 15,130Less Unamortized Loss on Bond Refunding (394)Plus Premium on Bond Refunding 1,531 Total Bonds Payable $ 19,281

Other Long-term Debt

Series 1993 - MRI $ 210Note Payable - Northside 500Capital Lease Obligation - MRI, Linear Accelerator 960Note Payable - FHG Physician Practice 413Note Payable - Ambulatory Surgery Center 170Capital Lease Obligation - Ambulatory Surgery Center Equipment 1,051 Total Other Long-term Debt $ 3,304

Total Long-term Debt $ 22,585Less: Current Portion 3,9092004 Long-term Portion $ 18,676

The hospital’s combined net assets for 2004 increased $6.8 million, or 4.6 percent. The increase in net assets is the result of favorable operating performance in the 2004 fiscal year. The graph below offers the ending net assets by fiscal year over the past five years:

Hospital Net Assets

122,563 132,341 141,297 147,132 153,913

050000

100000150000200000

2000 2001 2002 2003 2004YEAR

DO

LLA

RS

23

2004 2003

Total Operating Revenues $ 219,934 $ 204,455Total Operating Expense 213,731 197,502 Income from Operations $ 6,203 $ 6,953

Non-Operating Revenue (Expense) 578 416Excess Revenues over Expenses $ 6,781 $ 7,369

Condensed Statement of Revenues and ExpensesAs of June 30, 2004 and 2003

(In thousands)

Total operating revenues for 2004 are determined from net patient service revenue ($214.4 million) and other operating revenue ($5.6 million). Net patient service revenue for 2004 represents 58.9 percent of gross service revenues. Charity care and contractual arrangements with third party payors account for the difference between gross and net patient service revenues. Total operating expenses for 2004, including depreciation of $12.2 million, were $213.7 million. The salary, wage and benefits expense accounted for 56.5 percent of the 2004 total operating expenses and was responsible for 59.1 percent of the $16.2 million growth from the 2003 year. The remaining growth can be attributed to volume increases and inflationary costs. The operating income margin to total operating revenue for 2004 was 2.8 percent compared to 3.4 percent for the 2003 year. The graphs below reflect the total operating revenue, total operating expense, and excess of revenue over expense by fiscal year for the past five years:

Revenue & Expense

0

100000

200000

300000

2000 2001 2002 2003 2004

YEAR

DO

LLA

RS

RevenueExpense

24

Income

0

5000

10000

15000

2000 2001 2002 2003 2004YEAR

DO

LLA

RS

Income

Request for Information The basic financial statements and management discussion and analysis are designed to provide a summary and general overview of the hospital’s finances for all those interested. Questions concerning any of the information provided in this report or requests for additional information should be addressed in writing to the chief financial officer of Maury Regional Hospital at 1224 Trotwood Avenue, Columbia, Tennessee, 38401.

25

BASIC FINANCIAL STATEMENTS

Exhibit A

Maury County, TennesseeStatement of Net AssetsJune 30, 2004

Primary Government Board of EmergencyBusiness- Public Utilities Communi-

Governmental type School Water cationsActivities Activities Total Department System District

ASSETS

Cash $ 207,772 $ 6,966,440 $ 7,174,212 $ 9,635 $ 2,141,699 $ 484,290Equity in Pool Cash and Investments 16,341,159 1,939,240 18,280,399 4,293,023 0 0Investments 0 6,044,841 6,044,841 0 2,083,197 0Accounts Receivable 106,844 74,636,300 74,743,144 105,680 183,367 39,818Allowance for Uncollectibles 0 (24,262,635) (24,262,635) 0 0 0Property Taxes Receivable 13,753,316 0 13,753,316 17,535,490 0 0Allowance for Uncollectible Property Taxes (463,912) 0 (463,912) (591,488) 0 0Accrued Interest Receivable 0 32,154 32,154 0 16,397 0Due from Other Governments 957,212 32,350 989,562 2,059,520 0 0Internal Balances 487 (487) 0 0 0 0Prepaid Items 130,818 3,663,124 3,793,942 0 117 298Notes Receivable - Long-term 16,168 0 16,168 0 0 0Deferred Charges - Debt Issuance Costs 257,668 0 257,668 0 0 0Inventories 0 2,391,337 2,391,337 0 0 0Other 0 2,212,843 2,212,843 0 0 0Restricted Assets: Customer Deposits 0 0 0 0 135,355 0Capital Assets: Assets Not Depreciated: Land 7,101,139 6,108,868 13,210,007 2,432,200 80,888 0 Construction in Progress 1,043,558 3,503,119 4,546,677 687,611 0 0 Assets Net of Accumulated Depreciation: Buildings and Improvements 18,112,725 92,227,508 110,340,233 61,750,608 146,233 0 Other Fixed Assets 16,806,843 24,648,494 41,455,337 1,635,940 13,905,345 144,449 Infrastructure 1,542,311 0 1,542,311 0 0 0

Total Assets $ 75,914,108 $ 200,143,496 $ 276,057,604 $ 89,918,219 $ 18,692,598 $ 668,855

LIABILITIES

Accounts Payable $ 196,836 $ 11,795,040 $ 11,991,876 $ 53,631 $ 2,277 $ 11,701Accrued Payroll 0 6,829,616 6,829,616 76,144 9,734 15,903Payroll Deductions Payable 122,520 5,102 127,622 0 0 0Contracts Payable 190,362 0 190,362 17,030 0 0Retainage Payable 21,095 0 21,095 0 0 0Due to State of Tennessee 0 1,093 1,093 0 0 0Other Deferred Revenue 0 145,600 145,600 0 0 0Accrued Interest Payable 338,783 243,219 582,002 0 0 0Other Accrued Liabilities 0 0 0 0 8,608 0Customer Deposits Payable 0 0 0 0 135,355 0Due to Joint Ventures 0 811,875 811,875 0 0 0Deferred Revenue - Current Property Taxes 12,870,651 0 12,870,651 16,410,093 0 0Noncurrent Liabilities: Due Within One Year 5,123,848 3,940,548 9,064,396 170,981 0 1,362 Due In More Than One Year (Net of Deferred Amount on Refunding) 25,632,659 19,313,343 44,946,002 3,248,645 0 0

Total Liabilities $ 44,496,754 $ 43,085,436 $ 87,582,190 $ 19,976,524 $ 155,974 $ 28,966

NET ASSETS

Invested in Capital Assets, Net of Related Debt $ 35,727,087 $ 102,245,404 $ 137,972,491 $ 0 $ 0 $ 143,087Invested in Capital Assets 0 1,658,190 1,658,190 66,506,359 14,132,466 0Restricted for: Capital Projects 1,998,903 0 1,998,903 398,121 0 75,000 Debt Service 6,632,542 0 6,632,542 0 0 0 Other Purposes 3,915,351 0 3,915,351 2,119,446 0 0Unrestricted (16,856,529) 53,154,466 36,297,937 917,769 4,404,158 421,802

Total Net Assets $ 31,417,354 $ 157,058,060 $ 188,475,414 $ 69,941,695 $ 18,536,624 $ 639,889

The notes to the financial statements are an integral part of this statement.

Component Units

27

Exhibit B

Maury County, TennesseeStatement of ActivitiesFor the Year Ended June 30, 2004

Operating Capital Board of EmergencyCharges Grants Grants Primary Government Public Utilities Communi-

for and and Governmental Business-type School Water cationsFunctions/Programs Expenses Services Contributions Contributions Activities Activities Total Department System District

Primary Government: Governmental Activities: General Government $ 6,262,436 $ 1,215,815 $ 81,673 $ 1,098,294 $ (3,866,654) $ 0 $ (3,866,654) $ 0 $ 0 $ 0 Finance 2,279,975 1,598,490 22,004 0 (659,481) 0 (659,481) 0 0 0 Administration of Justice 1,764,634 1,340,148 33,127 0 (391,359) 0 (391,359) 0 0 0 Public Safety 7,005,163 579,165 55,133 178,919 (6,191,946) 0 (6,191,946) 0 0 0 Public Health and Welfare 419,503 0 436,906 238,351 255,754 0 255,754 0 0 0 Social, Cultural and Rec Services 1,082,000 54,411 0 3,600 (1,023,989) 0 (1,023,989) 0 0 0 Agriculture & Natural Resources 116,644 0 0 0 (116,644) 0 (116,644) 0 0 0 Highways/Public Works 4,470,273 0 2,837,446 4,152,992 2,520,165 0 2,520,165 0 0 0 Education 1,642,260 592,210 0 0 (1,050,050) 0 (1,050,050) 0 0 0 Interest on Long-term Debt 861,393 0 100,638 0 (760,755) 0 (760,755) 0 0 0 Other Debt Service 269,100 0 0 0 (269,100) 0 (269,100) 0 0 0Total Governmental Activities $ 26,173,381 $ 5,380,239 $ 3,566,927 $ 5,672,156 $ (11,554,059) $ 0 $ (11,554,059) $ 0 $ 0 $ 0

Business-type Activities: Maury Regional Hospital $ 213,731,145 $ 219,934,346 $ 0 $ 0 $ 0 $ 6,203,201 $ 6,203,201 $ 0 $ 0 $ 0 Solid Waste Disposal 2,123,462 1,274,017 0 0 0 (849,445) (849,445) 0 0 0 Total Business-type Activities $ 215,854,607 $ 221,208,363 $ 0 $ 0 $ 0 $ 5,353,756 $ 5,353,756 $ 0 $ 0 $ 0

Total Primary Government $ 242,027,988 $ 226,588,602 $ 3,566,927 $ 5,672,156 $ (11,554,059) $ 5,353,756 $ (6,200,303) $ 0 $ 0 $ 0

Component Units: School Department $ 71,823,785 $ 2,638,351 $ 6,780,167 $ 1,155,964 $ 0 $ 0 $ 0 $ (61,249,303) $ 0 $ 0 Board of Public Utilities Water System 1,572,190 2,461,136 0 117,983 0 0 0 0 1,006,929 0 Emergency Communications District 724,331 815,231 0 0 0 0 0 0 0 90,900

Total Component Units $ 74,120,306 $ 5,914,718 $ 6,780,167 $ 1,273,947 $ 0 $ 0 $ 0 $ (61,249,303) $ 1,006,929 $ 90,900

(Continued)

Net (Expense) Revenue and Changes in Net Assets Program Revenues Component Units

28

Exhibit BMaury County, TennesseeStatement of Activities (Cont.)

Operating Capital Board of EmergencyCharges Grants Grants Public Utilities Communi-

for and and Governmental Business-type School Water cationsFunctions/Programs Expenses Services Contributions Contributions Activities Activities Total Department System District

General Revenues:

Taxes: Property taxes levied for general

purposes $ 8,482,048 $ 626,376 $ 9,108,424 $ 16,387,321 $ 0 $ 0 Property taxes levied for debt service 3,747,412 0 3,747,412 0 0 0 Local option sales tax 401,692 0 401,692 8,538,412 0 0 Other local taxes 4,512,388 0 4,512,388 13,228 0 0Grants & contributions not restricted

for specific programs 3,319,527 124,327 3,443,854 35,338,735 0 0Unrestricted investment earnings 374,118 233,221 607,339 10,759 62,108 3,699Miscellaneous 457,666 345,698 803,364 133,786 0 44,631

Total General Revenues $ 21,294,851 $ 1,329,622 $ 22,624,473 $ 60,422,241 $ 62,108 $ 48,330

Change in net assets $ 9,740,792 $ 6,683,378 $ 16,424,170 $ (827,062) $ 1,069,037 $ 139,230Prior Period Adjustment 0 (1,534,000) (1,534,000) 0 0 0Net assets, July 1, 2003 21,676,562 151,908,682 173,585,244 70,768,757 17,467,587 500,659

Net assets, June 30, 2004 $ 31,417,354 $ 157,058,060 $ 188,475,414 $ 69,941,695 $ 18,536,624 $ 639,889


Program Revenues

Primary Government

Component Units Net (Expense) Revenue and Changes in Net Assets

29

Exhibit C-1

Maury County, TennesseeBalance SheetGovernmental FundsJune 30, 2004

Nonmajor Funds

Major Funds Other TotalGeneral Govern- Govern-

Debt mental mentalGeneral Service Funds Funds

ASSETS

Cash $ 0 $ 0 $ 207,772 $ 207,772Equity in Pooled Cash and Investments 4,849,486 6,109,239 5,242,080 16,200,805Accounts Receivable 56,026 42,760 2,303 101,089Due from Other Governments 383,185 0 574,027 957,212Due from Other Funds 50,903 0 2,604 53,507Property Taxes Receivable 7,908,156 4,011,384 1,833,776 13,753,316Allowance for Uncollectible Property Taxes (266,749) (135,308) (61,855) (463,912)Prepaid Items 104,316 0 23,196 127,512Notes Receivable - Long-term 0 0 16,168 16,168

Total Assets $ 13,085,323 $ 10,028,075 $ 7,840,071 $ 30,953,469

LIABILITIES AND FUND BALANCES

LiabilitiesAccounts Payable $ 176,728 $ 3,600 $ 0 $ 180,328Payroll Deductions Payable 98,332 0 21,049 119,381Contracts Payable 0 0 190,362 190,362Retainage Payable 0 0 21,095 21,095Due to Other Funds 9,540 0 50,903 60,443Due to State of Tennessee 4,580 0 1,150 5,730Deferred Revenue - Current Property Taxes 7,400,624 3,753,940 1,716,087 12,870,651Deferred Revenue - Delinquent Property Taxes 212,249 104,269 47,148 363,666Other Deferred Revenues 379,251 210,150 210,957 800,358

Total Liabilities $ 8,281,304 $ 4,071,959 $ 2,258,751 $ 14,612,014

Fund BalancesReserved for Encumbrances $ 236,554 $ 0 $ 1,323,538 $ 1,560,092Reserved for Litter Enforcement Awards 2,767 0 0 2,767Reserved for Drug Court 8,527 0 0 8,527Reserved for Courthouse and Jail Maintenance 0 1,277,807 0 1,277,807Reserved for Computer System - Register 30,662 0 0 30,662Reserved for Automation Purposes - Circuit Court 1,455 0 0 1,455Reserved for Automation Purposes - General Sessions Court 14,911 0 0 14,911Reserved for Automation Purposes - Chancery Court 1,638 0 0 1,638Reserved for Automation Purposes - Sheriff 5,735 0 0 5,735Reserved for Long-Term Notes Receivable 0 0 16,168 16,168Reserved for Capital Outlay 0 0 611,099 611,099Unreserved, Reported In:

General Fund 4,501,770 0 0 4,501,770Special Revenue Funds 0 0 3,402,573 3,402,573Debt Service Funds 0 4,678,309 0 4,678,309Capital Projects Funds 0 0 227,942 227,942

Total Fund Balances $ 4,804,019 $ 5,956,116 $ 5,581,320 $ 16,341,455

Total Liabilities and Fund Balances $ 13,085,323 $ 10,028,075 $ 7,840,071 $ 30,953,469


30

Exhibit C-2

Maury County, TennesseeReconciliation of the Balance Sheet of Governmental Funds to the Statement of Net AssetsJune 30, 2004

Amounts reported for governmental activities in the statement of net assets (Exhibit A) are different because:

Total fund balances - balance sheet - governmental funds (Exhibit C-1) $ 16,341,455

(1) Capital assets used in governmental activities are not financial resources andtherefore are not reported in the funds. 44,510,846

(2) The internal service funds are used by management to charge the costs of a central maintenance garage and a prescription drug plan to applicable profit due business-typefunds. The assets and liabilities of the internal service funds are includedin governmental activities in the statement of net assets. 238,651

(3) Long-term liabilities are not due in the current period and therefore arenot reported in the funds. (30,837,622)

(4) Other long-term assets are not available to pay for current-periodexpenditures and therefore are deferred in the funds. 1,164,024

Net assets of governmental funds (Exhibit A) $ 31,417,354


31

Exhibit D-1

Maury County, TennesseeStatement of Revenues, Expenditures,

and Changes in Fund BalancesGovernmental FundsFor the Year Ended June 30, 2004

NonmajorFunds

Major Funds Other General Govern- Total

Debt mental Governmental General Service Funds Funds

RevenuesLocal Taxes $ 8,791,643 $ 5,968,778 $ 5,146,370 $ 19,906,791Licenses and Permits 283,185 0 0 283,185Fines, Forfeitures and Penalties 319,027 0 107,187 426,214Charges for Current Services 218,473 0 663,275 881,748Other Local Revenues 533,570 368,501 76,405 978,476Fees Received from County Officials 2,539,433 0 0 2,539,433State of Tennessee 1,069,431 599,749 2,603,690 4,272,870Federal Government 252,364 0 581,100 833,464Other Governments and Citizens Groups 135,834 0 294,549 430,383

Total Revenues $ 14,142,960 $ 6,937,028 $ 9,472,576 $ 30,552,564

ExpendituresCurrent:

General Government $ 2,736,788 $ 0 $ 0 $ 2,736,788Finance 1,621,126 0 633,787 2,254,913Administration of Justice 1,504,485 0 248,845 1,753,330Public Safety 6,313,360 0 63,017 6,376,377Public Health and Welfare 621,297 0 0 621,297Social, Cultural, and Recreational Services 969,858 0 27,099 996,957Agricultural and Natural Resources 127,003 0 0 127,003Other Operations 900,617 0 968,199 1,868,816Highways 0 0 4,476,388 4,476,388

Debt Service:Principal 0 5,554,813 0 5,554,813Interest 0 639,937 0 639,937Other Debt Service 0 403,769 0 403,769

Capital Projects 35,836 0 3,795,326 3,831,162Total Expenditures $ 14,830,370 $ 6,598,519 $ 10,212,661 $ 31,641,550

Excess (Deficiency) of RevenuesOver Expenditures $ (687,410) $ 338,509 $ (740,085) $ (1,088,986)

Other Financing Sources (Uses)Notes Issued $ 0 $ 0 $ 1,840,000 $ 1,840,000Refunding Debt Issued 0 25,241,170 0 25,241,170Premiums on Debt Issued 0 2,227,218 0 2,227,218Other Loans Issued 0 0 250,000 250,000Transfers In 1,178,068 0 8,363 1,186,431Transfers Out (8,363) 0 (1,178,068) (1,186,431)Payments to Refunded Debt Escrow Agent 0 (27,271,247) 0 (27,271,247)

Total Other Financing Sources (Uses) $ 1,169,705 $ 197,141 $ 920,295 $ 2,287,141

Net Change in Fund Balances $ 482,295 $ 535,650 $ 180,210 $ 1,198,155Fund Balance, July 1, 2003 4,321,724 5,420,466 5,401,110 15,143,300

Fund Balance, June 30, 2004 $ 4,804,019 $ 5,956,116 $ 5,581,320 $ 16,341,455


32

Exhibit D-2

Maury County, TennesseeReconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of ActivitiesFor the Year Ended June 30, 2004

Amounts reported for governmental activities in the statement of activities (Exhibit B) are different because:

Net change in fund balances - total governmental funds (Exhibit D-1) $ 1,198,155

(1) Governmental funds report capital outlays as expenditures. However, in the statementof activities the cost of those assets is allocated over their estimated useful livesand reported as depreciation expense. This is the amount by which capital outlaysexceeded depreciation in the current period. 1,407,515

(2) The net effect of various miscellaneous transactions involving capital assets(sales, trade-ins, and donations) was to increase net assets. 4,544,686

(3) Revenues in the statement of activities that do not provide current financial resourcesare not reported as revenues in the funds. (213,728)

(4) The issuance of long-term debt (e.g., bonds, notes, other loans, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-termdebt consumes the current financial resources of governmental funds. Neithertransaction, however, has any effect on net assets. Also, governmental funds reportthe effect of issuance costs, premiums, discounts, and similar items when debt isfirst issued, whereas these amounts are deferred and amortized in the statementof activities. This amount is the net effect of these differences in the treatmentof long-term debt and related items. 3,457,792

(5) Some expenses reported in the statement of activities do not require the use ofcurrent financial resources and therefore are not reported as expenditures ingovernmental funds. (653,684)

(6) The internal service funds are used by management to charge the costs of a central maintenance garage and a prescription drug plan to applicable profit due. business-type funds. The net revenue of certain activities of the internal servicefund is reported with governmental activities. 56

Change in net assets of governmental activities (Exhibit B) $ 9,740,792


33

Exhibit E-1

Maury County, TennesseeStatement of Net AssetsProprietary FundsJune 30, 2004

Business-type ActivitiesMajor Nonmajor GovernmentalFund Fund Activities -

Maury Solid InternalRegional Waste ServiceHospital Disposal Total Funds

ASSETS

Current Assets: Cash $ 6,966,440 $ 0 $ 6,966,440 $ 0 Equity in Pooled Cash and Investments 0 1,939,240 1,939,240 140,354 Investments 6,044,841 0 6,044,841 0 Accounts Receivable 74,450,061 186,239 74,636,300 5,755 Allowance for Uncollectible Accounts (24,262,635) 0 (24,262,635) 0 Due from Other Governments 0 32,350 32,350 0 Due from Other Funds 0 0 0 15,106 Accrued Interest Receivable 32,154 0 32,154 0 Inventories 2,391,337 0 2,391,337 0 Prepaid Items 3,657,769 5,355 3,663,124 3,306 Other 2,212,843 0 2,212,843 0 Total Current Assets $ 71,492,810 $ 2,163,184 $ 73,655,994 $ 164,521

Noncurrent Assets: Capital Assets (Net of Accumulated Depreciation): Land $ 5,290,501 $ 818,367 $ 6,108,868 $ 25,000 Buildings and Improvements 91,670,333 557,175 92,227,508 67,680 Machinery and Equipment 24,386,679 261,815 24,648,494 3,050 Construction in Progress 3,482,286 20,833 3,503,119 0 Total Noncurrent Assets $ 124,829,799 $ 1,658,190 $ 126,487,989 $ 95,730

Total Assets $ 196,322,609 $ 3,821,374 $ 200,143,983 $ 260,251

LIABILITIES

Current Liabilities: Accounts Payable $ 11,795,040 $ 0 $ 11,795,040 $ 10,778 Accrued Payroll 3,823,101 0 3,823,101 0 Payroll Deductions Payable 0 5,102 5,102 3,139 Compensated Absences Payable 3,006,515 0 3,006,515 0 Other Deferred Revenue 145,600 0 145,600 0 Accrued Liability for Landfill Closure/Postclosure Care Cost 0 31,881 31,881 0 Accrued Interest Payable 243,219 0 243,219 0 Due to Other Funds 0 487 487 7,683 Due to State of Tennessee 0 1,093 1,093 0 Due to Joint Ventures 811,875 0 811,875 0 Current Portion of Long-term Debt 3,908,667 0 3,908,667 0 Total Current Liabilities $ 23,734,017 $ 38,563 $ 23,772,580 $ 21,600

Noncurrent Liabilities: Accrued Liability for Landfill Closure/Postclosure Care Cost $ 0 $ 637,615 $ 637,615 $ 0 Bonds and Other Long-term Debt 18,675,728 0 18,675,728 0 Total Noncurrent Liabilities $ 18,675,728 $ 637,615 $ 19,313,343 $ 0 Total Liabilities $ 42,409,745 $ 676,178 $ 43,085,923 $ 21,600

NET ASSETS

Invested in Capital Assets, Net of Related Debt $ 102,245,404 $ 0 $ 102,245,404 $ 0Invested in Capital Assets 0 1,658,190 1,658,190 95,730Unrestricted 51,667,460 1,487,006 53,154,466 142,921

Total Net Assets $ 153,912,864 $ 3,145,196 $ 157,058,060 $ 238,651


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Exhibit E-2

Maury County, TennesseeStatement of Revenues, Expenses, and Changes in Net AssetsProprietary FundsFor the Year Ended June 30, 2004



Operating Revenues Charges for Current Services $ 214,397,535 $ 1,138,450 $ 215,535,985 $ 1,515,908 Loss from Rental Operation (32,704) 0 (32,704) 0 Other Local Revenues 5,569,515 135,567 5,705,082 308

Total Operating Revenues $ 219,934,346 $ 1,274,017 $ 221,208,363 $ 1,516,216

Operating Expenses Salaries and Employee Benefits $ 120,734,735 $ 0 $ 120,734,735 $ 0 Other General Administration 0 0 0 1,186,510 Other Operations 0 0 0 321,850 Fees and Professional Services 12,636,870 0 12,636,870 0 Insurance 2,008,806 0 2,008,806 0 Supplies and Other Expenses 58,891,861 0 58,891,861 0 Waste Pickup 0 64,745 64,745 0 Convenience Centers 0 577,732 577,732 0 Landfill Operation and Maintenance 0 1,320,767 1,320,767 0 Allowances and Uncollectible Accounts 6,833,875 0 6,833,875 0 Interest Expense 447,324 0 447,324 0 Depreciation and Amortization Expense 12,177,674 160,218 12,337,892 7,800

Total Operating Expenses $ 213,731,145 $ 2,123,462 $ 215,854,607 $ 1,516,160

Operating Income (Loss) $ 6,203,201 $ (849,445) $ 5,353,756 $ 56

Nonoperating Revenues (Expenses) Local Taxes $ 0 $ 626,376 $ 626,376 $ 0 General Government Grants 0 124,327 124,327 0 Other Local Revenues 0 1,336 1,336 0 Unrestricted Gifts 91,089 0 91,089 0 Interest Income 233,221 0 233,221 0 Minority Interest in Loss of Family Health Group 110,304 0 110,304 0 Minority Interest in Loss of Ambulatory Surgery Center 116,897 0 116,897 0 Gain on Disposal of Equipment 26,072 0 26,072 0Total Nonoperating Revenues (Expenses) $ 577,583 $ 752,039 $ 1,329,622 $ 0

Change in Net Assets $ 6,780,784 $ (97,406) $ 6,683,378 $ 56Prior Period Adjustment (1,534,000) 0 (1,534,000) 0Net Assets , July 1, 2003 148,666,080 3,242,602 151,908,682 238,595

Nets Assets, June 30, 2004 $ 153,912,864 $ 3,145,196 $ 157,058,060 $ 238,651


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Exhibit E-3

Maury County, TennesseeStatement of Cash FlowsProprietary FundsFor the Year Ended June 30, 2004



CASH FLOWS FROM OPERATING ACTIVITIES Receipts from Customers and Users $ 190,599,407 $ 1,051,863 $ 191,651,270 $ 349,610 Receipts from Interfund Services Provided 0 0 0 1,149,440 Other Cash Receipts (Payments) 6,342,992 135,567 6,478,559 308 Payments to Suppliers (74,308,428) 0 (74,308,428) 0 Payments to Employees (117,002,710) 0 (117,002,710) (308,533) Central Maintenance Garage Activity - Uses 0 0 0 (1,179,652) Waste Collection and Disposal Activity - Uses 0 (1,974,879) (1,974,879) 0

Net Cash Provided By (Used In) Operating Activities $ 5,631,261 $ (787,449) $ 4,843,812 $ 11,173

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Grants Received $ 0 $ 124,327 $ 124,327 $ 0 Local Taxes 0 626,376 626,376 0 Contributions 57,811 1,336 59,147 0

Net Cash Provided By (Used In) Noncapital Financing Activities $ 57,811 $ 752,039 $ 809,850 $ 0

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Acquisition of Capital Assets $ (12,265,326) $ (137,752) $ (12,403,078) $ 0 Proceeds from Sale of Equipment 54,459 0 54,459 0 Proceeds from Issuance of Long-term Debt 1,690,204 0 1,690,204 0 Principal Payments on Revenue Bonds (2,105,303) 0 (2,105,303) 0 Interest Paid on Revenue Bonds (286,810) 0 (286,810) 0 Principal Payments on Other Long-term Debt (1,176,954) 0 (1,176,954) 0 Interest Paid on Other Long-term Debt (163,252) 0 (163,252) 0 Capital Contribution to Abmulatory Surgery Center by Minority Interest 562,763 0 562,763 0

Net Cash Provided By (Used In) Capital and Related Financing Activities $ (13,690,219) $ (137,752) $ (13,827,971) $ 0

CASH FLOWS FROM INVESTING ACTIVITIES Investment Income $ 215,879 $ 0 $ 215,879 $ 0 Proceeds from Sale of Investments 6,578,011 0 6,578,011 0 Purchase of Investments (5,544,841) 0 (5,544,841) 0

Net Cash Provided By (Used In) Investing Activities $ 1,249,049 $ 0 $ 1,249,049 $ 0

Net increase (decrease) in cash and cash equivalents $ (6,752,098) $ (173,162) (6,925,260) $ 11,173Cash and cash equivalents, July 1, 2003 13,718,538 2,112,402 15,830,940 129,181

Cash and cash equivalents, June 30, 2004 $ 6,966,440 $ 1,939,240 $ 8,905,680 $ 140,354

(Continued)

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Exhibit E-3

Maury County, TennesseeStatement of Cash FlowsProprietary Funds (Cont.)

GovernmentalActivities -

Business-type Activities InternalMajor Nonmajor Service

Fund Fund Fund Maury Solid Central Regional Waste Maintenance/

Hospital Disposal Total Garage

RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating income (loss) $ 6,203,201 $ (849,445) $ 5,353,756 $ 56 Adjustments to reconcile net operating income (loss) to net cash provided by (used in) operating activities: Depreciation and Amortization Expense 12,719,378 160,218 12,879,596 7,800 Provision for Uncollectible Accounts 6,833,875 0 6,833,875 0 Interest Expense 447,324 0 447,324 0 Capital Assets Contributed to Wayne County in Lieu of Rent 300,000 0 300,000 0 Supplies Contributed by Auxiliary 33,278 0 33,278 0 (Increase) decrease in Accounts Receivable (24,010,104) (82,076) (24,092,180) (5,755) (Increase) decrease in Due from Other Funds 0 2,373 2,373 (15,106) (Increase) decrease in Due from Other Governments 0 (6,303) (6,303) 4,360 (Increase) decrease in Inventories (267,085) 0 (267,085) 0 (Increase) decrease in Prepaid Items (482,163) (581) (482,744) (357) (Increase) decrease in Other Assets (634,999) 0 (634,999) 0 Increase (decrease) in Accounts Payable 3,146,901 0 3,146,901 10,778 Increase (decrease) in Payroll Deductions Payable 0 4,892 4,892 1,714 Increase (decrease) in Closure/Postclosure Care Costs 0 (18,107) (18,107) 0 Increase (decrease) in Due to Other Funds 0 487 487 7,683 Increase (decrease) in Due to State of Tennessee 0 1,093 1,093 0 Increase (decrease) in Accrued Expenses 1,196,055 0 1,196,055 0 Increase (decrease) in Deferred Revenue 145,600 0 145,600 0

Net cash provided by (used in) operating activities $ 5,631,261 $ (787,449) $ 4,843,812 $ 11,173

Additional Cash Flow Disclosures Debt Issue Costs Deducted from Bond Proceeds $ 106,455 $ 0 $ 106,455 $ 0 Equipment Acquired in Exchange for a Capital Lease or Note Payable 1,016,179 0 1,016,179 0 Bonds Redeemed by Refunding 19,240,000 0 19,240,000 0 Bonds Issued to Refund Outstanding Debt Including Premium of $1,587,135 19,710,965 0 19,710,965 0 Deferred Charge on Refunding 363,388 0 363,388 0


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Exhibit F

Maury County, TennesseeStatement of Fiduciary Assets and LiabilitiesFiduciary FundsJune 30, 2004

ASSETS

Cash $ 1,484,130Investments 34,868Due from Other Governments 1,261,523

Total Assets $ 2,780,521

LIABILITIES

Due to Other Taxing Units $ 1,261,523Due to Litigants, Heirs and Others 1,518,998

Total Liabilities $ 2,780,521


AgencyFunds

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MAURY COUNTY, TENNESSEE NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended June 30, 2004

I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Maury County’s financial statements are presented in accordance with generally accepted accounting principles (GAAP). The Governmental Accounting Standards Board (GASB) is responsible for establishing GAAP for state and local governments.

The following are the more significant accounting policies of Maury County: A. Reporting Entity

Maury County is a public municipal corporation governed by an elected 20-member board. As required by GAAP, these financial statements present Maury County (the primary government) and its component units. The component units discussed below are included in the county's reporting entity because of the significance of their operational or financial relationships with the county.

Blended Component Units – There are no legally separate component units of Maury County that meet the criteria for being reported as part of the primary government by the blending method.

Discretely Presented Component Units – The following entities meet the criteria for discretely presented component units of the county. They are reported in separate columns to emphasize that they are legally separate from the county.

The Maury County School Department operates the public school system in the county, and the voters of Maury County elect its board. The School Department is fiscally dependent on the county because it may not issue debt without county approval, and its budget and property tax levy are subject to the County Commission’s approval. The School Department’s taxes are levied under the taxing authority of the county and are included as part of the county’s total tax levy.

The Maury County Board of Public Utilities Water System provides water supply and distribution lines for county residents outside of the city limits. The county mayor appoints and the County Commission ratifies its governing body. The board’s operating budget is subject to the County Commission’s approval.

The Maury County Emergency Communications District provides a simplified means of securing emergency services through a uniform emergency number for the residents of Maury County, and the Maury County Commission appoints its governing body. The district is funded primarily through a service charge levied on telephone services. Before the issuance of

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most debt instruments, the district must obtain the County Commission’s approval. The Maury County School Department does not issue separate financial statements from those of the county. Therefore, basic financial statements of the Maury County School Department are included in this report as listed in the table of contents. Complete financial statements of the Maury County Board of Public Utilities Water System and the Maury County Emergency Communications District can be obtained from their administrative offices at the following addresses:

Administrative Offices: Maury County Board of Public Utilities Water System 1018 South Garden Street Columbia, TN 38401 Maury County Emergency Communications District 1010 Galloway Street Columbia, TN 38401

B. Government-wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities are normally supported by taxes and intergovernmental revenues. Business-type activities, which rely to a significant extent on fees and charges, are required to be reported separately from governmental activities in government-wide financial statements. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The Maury County School Department component unit only reports governmental activities in the government-wide financial statements. The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. Program revenues include (1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. Taxes and other items not properly included among program revenues are reported instead as general revenues. Maury County issues all debt for the discretely presented Maury County School Department. Net debt issues ($670,000) were contributed by the county to the School Department during the year ended June 30, 2004.

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Separate financial statements are provided for governmental funds, proprietary funds (enterprise and internal service), and fiduciary funds. The internal service funds are reported with the governmental activities in the government-wide financial statements, and the fiduciary funds are excluded from the government-wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements.

C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary funds and fiduciary funds financial statements. Revenues are recorded when earned, and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Fund financial statements of Maury County are organized into funds, each of which is considered to be a separate accounting entity. Each fund is accounted for by providing a separate set of self-balancing accounts that constitute its assets, liabilities, fund equity, revenues, and expenditures/expenses. Funds are organized into three major categories: governmental, proprietary, and fiduciary. An emphasis is placed on major funds within the governmental and proprietary categories. Maury County reports four proprietary funds (two internal service funds and two enterprise funds). Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. All other governmental funds and enterprise funds are aggregated into single columns on the fund financial statements. The internal service funds and the fiduciary funds in total are reported in single columns by fund type. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they become both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the county considers revenues other than grants to be available if they are collected within 30 days after year-end. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met and the revenues are available. Maury County considers grant and similar revenues to be available if they are collected within 60 days after year-end. Expenditures are generally recognized under the modified accrual basis of

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accounting when the related fund liability is incurred. Principal and interest on long-term debt are recognized as fund liabilities when due or when amounts have been accumulated in the General Debt Service Fund for payments to be made early in the following year. Property taxes for the period levied, in-lieu-of-tax payments, sales taxes, interest, and miscellaneous taxes are all considered to be susceptible to accrual and have been recognized as revenues of the current period. Applicable business taxes, litigation taxes, state-shared excise taxes, fines, forfeitures, and penalties are not susceptible to accrual since they are not measurable (reasonably estimable). All other revenue items are considered to be measurable and available only when the county receives cash.

Proprietary fund and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recognized when earned, and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Maury County reports the following major governmental funds:

General Fund – This is the county’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. General Debt Service Fund – This fund accounts for the resources accumulated and payments made for principal and interest on long-term general obligation debt of governmental funds.

Maury County reports the following major proprietary fund:

Maury Regional Hospital Fund – Maury Regional Hospital accounts for the regional hospital under authority of and in compliance with the provisions of Chapter 373 of the Tennessee Private Acts of 1953.

Additionally, Maury County reports the following fund types:

Special Revenue Funds – These funds account for the proceeds of specific revenue sources (other than major capital projects) that are legally restricted to expenditures for specific purposes.

Capital Projects Funds – These funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities.

Internal Service Funds – These funds, the Central Maintenance/Garage Fund and the Employee Insurance –

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Prescriptions Fund, are used to account for the county’s central vehicle maintenance and the county’s self-insured prescription drug programs. Premiums charged to the various county funds and employee payroll deductions are placed in the Employee Insurance – Prescriptions Fund for payment of claims of county employees. Agency Funds – These funds account for amounts collected in an agency capacity by the constitutional officers and local sales taxes received by the state to be forwarded to the various cities in Maury County. Agency funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. They do, however, use the accrual basis of accounting to recognize receivables and payables.

The discretely presented Maury County School Department reports the following major governmental fund:

General Purpose School Fund – This fund is the primary operating fund for the School Department. It is used to account for general operations of the School Department.

Additionally, the Maury County School Department reports the following fund types:

Special Revenue Funds – These funds account for the proceeds of specific revenue sources (other than major capital projects) that are legally restricted to expenditures for specific purposes.

Capital Projects Fund – The Education Capital Projects Fund is used to account for financial resources to be used for the acquisition or construction of major capital facilities.

Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in the government-wide financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Amounts reported as program revenues include (1) charges to customers or applicants for goods, services, or privileges provided; (2) operating grants and contributions; and (3) capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from nonoperating items. The county has four proprietary funds (two enterprise funds and two internal service funds) used to account for solid waste disposal, a regional hospital, a central maintenance garage, and an employees’

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prescription drug program. Operating revenues and expenses generally result from providing services in connection with the funds’ principal ongoing operations. The principal operating revenues of the county’s proprietary funds are charges for services. Operating expenses for the proprietary funds include administrative expenses and employee benefits.

When both restricted and unrestricted resources are available for use, it is the government’s policy to use restricted revenues first, then unrestricted resources as they are needed.

D. Assets, Liabilities, and Net Assets or Equity

1. Deposits and Investments

For purposes of the statement of cash flows of the primary government (excluding the Maury Regional Hospital), cash includes cash on deposit with the county trustee and cash on deposit with the clerks, register, and sheriff. State statutes authorize the government to make direct investments in bonds, notes, or treasury bills of the U.S. government and obligations guaranteed by the U.S. government or any of its agencies; bonds of any state or political subdivision rated A or higher by any nationally recognized rating service; the county’s own legally issued bonds or notes; the State Treasurer’s Investment Pool; and repurchase agreements. The county trustee maintains a cash and internal investment pool that is used by all funds (excluding the Maury Regional Hospital) and the discretely presented Maury County School Department. Each fund’s portion of this pool is displayed on the balance sheets or statements of net assets as Equity in Pooled Cash and Investments. Most income from these pooled investments is assigned to the General Debt Service Fund. In addition, investments are held separately by several of the county’s funds. Maury County (excluding the Maury Regional Hospital) and the Maury County School Department have adopted a policy of reporting U.S. Treasury obligations, U.S. agency obligations, and repurchase agreements with maturities of one year or less when purchased on the balance sheet at amortized cost. Certificates of deposit and investments in the State Treasurer’s Investment Pool are reported at cost. The State Treasurer’s Investment Pool is not registered with the Securities and Exchange Commission (SEC) as an investment company, but nevertheless has a policy that it will, and does, operate in a manner consistent with the SEC’s Rule 2a7 of the Investment Company Act of 1940. Rule 2a7 allows SEC-registered mutual funds to use amortized cost rather than fair value to report net assets to compute share prices if certain conditions are met. State statutes require the state treasurer to administer the pool under the same terms and conditions,

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including collateral requirements, as prescribed for other funds invested by the state treasurer. All other investments are reported at fair value. No investments required to be reported at fair value were held at the balance sheet date.

2. Receivables and Payables

Activity between funds for unremitted current collections or that is representative of lending/borrowing arrangements outstanding at the end of the fiscal year is referred to as either due to/from other funds (i.e., the current portion of interfund loans) or advances to/from other funds (i.e., the non-current portion of interfund loans). All property taxes receivable are shown with an allowance for uncollectibles. The allowance for uncollectible property taxes is equal to 1.784 percent of total taxes levied. Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned.

Property taxes receivable are recognized as of the date an enforceable legal claim to the taxable property arises. This date is January 1 and is referred to as the lien date. However, revenues from property taxes are recognized in the period for which the taxes are levied, which is the ensuing fiscal year. Since the receivable is recognized before the period of revenue recognition, the entire amount of the receivable, less an estimated allowance for uncollectible taxes, is reported as deferred revenue as of June 30.

Property taxes receivable are also reported as of June 30 for the taxes

that are levied, collected, and reported as revenue during the current fiscal year. These property taxes receivable are presented on the balance sheet with offsetting deferred revenue to reflect amounts not available as of June 30. Property taxes collected within 30 days of year-end are considered available and accrued. The allowance for uncollectible taxes represents the estimated amount of the receivable that will be filed in court for collection. Delinquent taxes filed in court for collection are not included in taxes receivable since they are neither measurable nor available. Property taxes are levied as of the first Monday in October. Taxes become delinquent and begin accumulating interest and penalty the following March 1. Suit must be filed in Chancery Court between the following February 1 to April 1 for any remaining unpaid taxes. Additional costs attach to delinquent taxes after a court suit has been filed.

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3. Prepaid Items

Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both the government-wide and fund financial statements. Prepaid items in the General, Highway/Public Works, Solid Waste Disposal, and Central Maintenance/Garage Funds represent insurance prepayments.

4. Capital Assets

Governmental funds do not capitalize the cost of capital outlays; these funds report capital outlays as expenditures upon acquisition. Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, and similar items), are reported in the governmental and business-type columns in the government-wide financial statements. Capital assets are defined by the government (excluding the Maury Regional Hospital) as assets with an initial, individual cost of $5,000 (infrastructure $50,000) or more and an estimated useful life of more than two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Property, plant, equipment, and infrastructure of the primary government (excluding Maury Regional Hospital) and the discretely presented School Department are depreciated using the straight-line method over the following estimated useful lives:

Assets Years

Buildings and Improvements 10-50Other Fixed Assets 5-7Infrastructure: Roads 5-15 Bridges 50

5. Compensated Absences

The policy of Maury County (with the exception of the Maury Regional Hospital) permits employees to accumulate earned but unused

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vacation and sick pay benefits. There is no liability for unpaid accumulated sick leave since Maury County does not have a policy to pay amounts when employees separate from service with the government. All vacation pay is accrued when incurred in the government-wide statements for the county. A liability for vacation pay is reported in governmental funds only if amounts have matured, for example, as a result of employee resignations and retirement. It is the policy of the discretely presented Maury County School Department to permit its employees to accumulate varying amounts of earned but unused vacation leave which will be paid upon retirement, resignation, or termination. It is also the policy of the discretely presented Maury County School Department to permit its employees to accumulate varying amounts of earned but unused sick leave. Upon retirement from the School Department, an employee will be paid either $50 (professional employee) or $10 (certain nonprofessional employees) per day for unused sick leave. This payment will be made after the employee’s retirement has been approved by the Tennessee Consolidated Retirement System. All vacation and sick leave is accrued when incurred in the government-wide statements for the School Department. A liability for vacation and sick leave is reported in governmental funds only if amounts have matured, for example, as a result of employee resignations and retirements.

6. Long-term Obligations

In the government-wide financial statements and the proprietary fund type in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities (or proprietary fund type) statement of net assets. Debt premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the debt using the straight-line method. Debt issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental funds recognize debt premiums and discounts, as well as debt issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources, while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Only the matured portion (the portion that has come due for payment) of long-term indebtedness, including bonds payable, is recognized as a liability and expenditure in the governmental fund financial statements. Liabilities and expenditures for other long-term obligations, including compensated absences, claims and judgments,

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special termination benefits, and landfill closure/postclosure care costs, are recognized to the extent that the liabilities have matured (come due for payment) each period.

7. Fund Equity

In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designations of fund balance represent tentative management plans that are subject to change. At June 30, 2004, the General Fund had the following designations: Libraries ($50,428), Archives ($27,510), Veteran’s Service ($7,769), and Non-Qualified Retirement ($587,732).

In the government-wide financial statements and the proprietary funds in the fund financial statements, equity is classified as net assets and displayed in three components:

a. Invested in capital assets, net of related debt – Consists of

capital assets, including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets.

b. Restricted net assets – Consists of net assets with constraints

placed on the use either by (1) external groups such as creditors, grantors, contributors, or laws or regulations of other governments or (2) law through constitutional provisions or enabling legislation.

c. Unrestricted net assets – All other net assets that do not meet

the definition of restricted or invested in capital assets, net of related debt.

As of June 30, 2004, Maury County had $20,550,483 in outstanding debt for capital purposes for the discretely presented Maury County School Department. The debt is a liability of Maury County, but the capital assets acquired are reported in the financial statements of the School Department. Therefore, Maury County has incurred a liability significantly decreasing its unrestricted net assets with no corresponding increase in the county’s capital assets.

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II. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL

STATEMENTS

A. Explanation of certain differences between the governmental fund balance sheet and the government-wide statement of net assets

Primary Government Exhibit C-2 presents a reconciliation between fund balance – total governmental funds and net assets – governmental activities as reported in the government-wide statement of net assets. One element of that reconciliation explains that long-term liabilities, including debt payable, are not due and payable in the current period and therefore are not reported in the funds. The details of the $30,837,622 difference are as follows:

Bonds payable $ (25,831,473)Notes payable (3,035,871)Compensated absences payable (463,373)Accrued interest on bonds (287,890)Accrued interest on notes (50,893)Other deferred revenue - premium on debt (2,126,580)Deferred charges - debt issuance costs 257,668Deferred amount on refunding debt 700,790

Net adjustment to reduce fund balance - total governmental funds to arrive at net assets - governmental activities $ (30,837,622)

B. Explanation of certain differences between the governmental fund

statement of revenues, expenditures, and changes in fund balances and the government-wide statement of activities

Primary Government

Exhibit D-2 is a reconciliation between net changes in fund balances – total governmental funds and changes in net assets of governmental activities as reported in the government-wide statement of activities. One element of that reconciliation explains that governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. The details of this $1,407,515 difference are as follows:

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Capital outlay $ 4,066,110Depreciation expense (excluding Internal Service Fund) (2,658,595)

Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities $ 1,407,515

Another element of that reconciliation states that the net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins, and donations) is to increase net assets. The details of this $4,544,686 difference are as follows:

Donations of capital assets $ 4,896,531Capital assets disposals (351,845)

Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities $ 4,544,686

Another element of that reconciliation states that the issuance of long-term debt (e.g., bonds, notes, other loans, and leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. The details of this $3,457,792 difference are as follows:

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Debt issued or incurred: Issuance of capital outlay notes $ (1,840,000) Issuance of other loan (250,000) Issuance of refunding bonds (25,241,170)Related items: Premium on debt to defer (2,126,580) Current debt issuance costs to defer 257,668 Payment to refunding agent 26,530,093 Amortization of deferred amount on refunding 572,968Principal repayments: Bonds 2,284,697 Other loans 2,529,000 Notes 741,116

Net adjustment to increase net changes in fund balances – total governmental funds to arrive at changes in net assets of governmental activities $ 3,457,792

Another element of that reconciliation states that some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. The details of this $653,684 difference are as follows:

Net change in compensated absences $ (463,373)Net change in accrued interest on bonds (190,311)

Net adjustment to decrease net changes in fund balances – total governmental funds to arrive at changes in net assets of governmental activities $ (653,684)

Discretely Presented Maury County School Department The discretely presented Maury County School Department’s Exhibit L-5 presents a reconciliation between net changes in fund balances – total governmental funds and changes in net assets of governmental activities as reported in the government-wide statement of activities. One element of that reconciliation explains that governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. The details of this $1,329,452 difference are as follows:

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Capital outlay $ 1,504,757Depreciation expense (2,834,209)

Net adjustment to decrease net changes in fund balances – total governmental funds to arrive at changes in net assets of governmental activities $ (1,329,452)

III. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY Expenditures Exceeded Appropriations

Expenditures exceeded appropriations in the Election Commission major category (the legal level of control) of the General Fund by $28,029. Also, expenditures exceeded appropriations in the Director of Schools ($9,876) and the Operation of Plant ($74,735) major categories of the discretely presented General Purpose School Fund. Such overexpenditures are a violation of state statutes. These overexpenditures were funded by available fund balance.

IV. DETAILED NOTES ON ALL FUNDS

A. Deposits and Investments

The captions on the statement of net assets in the government-wide statement (Exhibit A) and the statement of fiduciary assets and liabilities (Exhibit F) related to cash and investments are as follows for Maury County (excluding the Maury Regional Hospital) and the discretely presented Maury County School Department component unit:

Exhibit A - Exhibit A - Exhibit F -Governmental Business-type Fiduciary

Activities Activities Funds

Cash $ 207,772 $ 0 $ 1,484,130Equity in Pooled Cash and Investments 16,341,159 1,939,240 0Investments 0 0 34,868

Total $ 16,548,931 $ 1,939,240 $ 1,518,998

(Excluding Maury Regional Hospital) Maury County

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Exhibit A

Cash $ 9,635Equity in Pooled Cash and Investments 4,293,023

Total $ 4,302,658

SchoolDepartment

MauryCounty

Maury County (excluding the Maury Regional Hospital) and the Maury County School Department participate in an internal cash and investment pool through the Office of Trustee. The county trustee is the treasurer of the county and in this capacity is responsible for receiving, disbursing, depositing, and investing most county funds. Each fund’s portion of this pool is displayed on the balance sheets or statements of net assets as Equity in Pooled Cash and Investments. Cash and investments reflected on the balance sheets or statements of net assets represent nonpooled amounts held separately by individual funds.

Cash on the balance sheets or statements of net assets includes cash on hand, demand deposits, certificates of deposit, passbook savings accounts, and paying agent accounts and is analyzed as follows:

Exhibit A -

Maury County MauryExhibit A - Exhibit F - County

Governmental Fiduciary SchoolActivities Funds Department

Cash on Hand $ 1,120 $ 246 $ 500Cash in Bank 206,652 1,483,884 8,421Cash with Paying Agent 0 0 714

Total $ 207,772 $ 1,484,130 $ 9,635

Investments on the balance sheets or statements of net assets (excluding the Maury Regional Hospital) consist of litigant funds ($34,868) held in court and reflected in the Constitutional Officers - Agency Fund. Deposits – All deposits with financial institutions must be secured by one of two methods. One method involves financial institutions that participate in the bank collateral pool administered by the state treasurer. Participating banks determine the aggregate balance of their public fund accounts for the

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State of Tennessee and its political subdivisions. The amount of collateral required to secure these public deposits must equal at least 105 percent of the average daily balance of public deposits held. Collateral securities required to be pledged by the participating banks to protect their public fund accounts are pledged to the state treasurer on behalf of the bank collateral pool. The securities pledged to protect these accounts are pledged in the aggregate rather than against each account. The members of the pool may be required by agreement to pay an assessment to cover any deficiency. Under this additional assessment agreement, public fund accounts covered by the pool are considered to be insured for the purposes of credit risk disclosure. For deposits with financial institutions that do not participate in the bank collateral pool, state statutes require that all deposits be collateralized with collateral whose market value is equal to 105 percent of the uninsured amount of the deposits. The collateral must be placed by the depository bank in an escrow account in a second bank for the benefit of the county. Separate disclosures concerning carrying amounts and bank balances of pooled deposits cannot be made for Maury County (excluding the Maury Regional Hospital) and the discretely presented Maury County School Department since both pool their deposits and investments through the county trustee. The carrying amount of Maury County's (excluding the Maury Regional Hospital) and the Maury County School Department's deposits with financial institutions was $24,039,747, and the bank balance was $27,373,211. These deposits are categorized as follows to give an indication of the level of risk assumed at year-end. Category 1 includes deposits insured or collateralized with securities held by the entity or its agent in the entity's name. Category 2 includes deposits collateralized with securities held by the pledging financial institution’s agent or trust department in the entity's name. Category 3 includes deposits uncollateralized or collateralized with securities held by the pledging financial institution or by its trust department or agent but not in the entity's name. Category 1 deposits were $27,338,390, and Category 3 deposits were $34,821. Investments – Counties are authorized to make direct investments in bonds, notes, or treasury bills of the U.S. government and obligations guaranteed by the U.S. government or any of its agencies; bonds of any state or political subdivision rated A or higher by any nationally recognized rating service; and the county’s own legally issued bonds or notes. These investments may not have a maturity greater than two years. The county may make investments with longer maturities if various restrictions set out in state law are followed. Counties are also authorized to make investments in the State Treasurer’s Investment Pool and in repurchase agreements. Repurchase agreements must be approved by the state director of Local Finance and executed in accordance with procedures established by the State Funding Board. Securities purchased under a repurchase agreement must be obligations of the U.S. government or obligations guaranteed by the U.S. government or any of its agencies. When repurchase agreements are executed, the purchase

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of the securities must be priced at least two percent below the market value of the securities on the day of purchase. Pooled and nonpooled investments are separately categorized as follows to give an indication of the level of risk assumed at year-end. Category 1 includes investments that are insured or registered or for which the securities are held by the entity or its agent in the entity’s name. Category 2 includes uninsured and unregistered investments for which the securities are held by the counterparty’s trust department or agent in the entity’s name. Category 3 includes uninsured and unregistered investments for which the securities are held by the counterparty, or by its trust department or agent, but not in the entity’s name. Funds invested in the State Treasurer’s Investment Pool are not required to be categorized by generally accepted accounting principles. The county had no pooled investments at June 30, 2004. The county’s nonpooled investments (excluding Maury Regional Hospital) consisted of a Category 3 NOW account administered by Merrill Lynch per a court order for litigants in the Constitutional Officers-Agency Fund.

B. Notes Receivable

Notes receivable in the Special Purpose Fund resulted from the use of idle county funds to finance various projects of the Maury County Arts Guild and are offset by a reservation of fund balance. The amount of the notes that is not expected to be collected within one year is $16,168.

C. Capital Assets

Capital asset activity for the year ended June 30, 2004, was as follows: Primary Government (excluding the Maury Regional Hospital)

Governmental Activities (Includes Internal Service Fund):

Balance BalanceJuly 1, 2003 Increases Decreases June 30, 2004

Capital Assets Not Depreciated:Land $ 5,986,328 $ 1,114,811 $ 0 $ 7,101,139Construction in Progress 2,804,463 542,366 (2,303,271) 1,043,558

Total Capital Assets Not Depreciated $ 8,790,791 $ 1,657,177 $ (2,303,271) $ 8,144,697

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Governmental Activities (Includes Internal Service Fund) (Cont.):


Capital Assets Depreciated:Buildings and Improvements $ 21,779,812 $ 1,672,885 $ (471,200) $ 22,981,497Infrastructure 17,550,945 7,127,439 0 24,678,384Other Fixed Assets 5,599,308 808,411 (305,254) 6,102,465

Total Capital Assets Depreciated $ 44,930,065 $ 9,608,735 $ (776,454) $ 53,762,346

Less Accumulated Depreciation For:Buildings and Improvements $ 4,554,793 $ 436,490 $ (122,511) $ 4,868,772Infrastructure 6,167,094 1,704,447 0 7,871,541Other Fixed Assets 4,336,795 525,457 (302,098) 4,560,154

Total Accumulated Depreciation $ 15,058,682 $ 2,666,394 $ (424,609) $ 17,300,467

Total Capital Assets Depreciated, Net $ 29,871,383 $ 6,942,341 $ (351,845) $ 36,461,879

Governmental Activities Capital Assets, Net $ 38,662,174 $ 8,599,518 $ (2,655,116) $ 44,606,576

Business-type Activities (Excluding Maury Regional Hospital):

Balance BalanceJuly 1, 2003 Increases June 30, 2004

Capital Assets Not Depreciated:Land $ 818,367 $ 0 $ 818,367Construction in Progress 0 20,833 20,833

Total Capital Assets Not Depreciated $ 818,367 $ 20,833 $ 839,200

Capital Assets Depreciated:Buildings and Improvements $ 1,196,971 $ 0 $ 1,196,971Other Fixed Assets 1,425,257 116,919 1,542,176

Total Capital Assets Depreciated $ 2,622,228 $ 116,919 $ 2,739,147

L A l d

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Business-type Activities (Excluding Maury Regional Hospital) (Cont.):

Balance BalanceJuly 1, 2003 Increases June 30, 2004

Less Accumulated Depreciation For:Buildings and Improvements $ 564,509 $ 75,287 $ 639,796Other Fixed Assets 1,195,430 84,931 1,280,361

Total Accumulated Depreciation $ 1,759,939 $ 160,218 $ 1,920,157

Total Capital Assets Depreciated, Net $ 862,289 $ (43,299) $ 818,990

Governmental Activities Capital Assets, Net $ 1,680,656 $ (22,466) $ 1,658,190

Depreciation expense was charged to functions of the primary government

(excluding the Maury Regional Hospital) as follows:

Governmental Activities: General Government $ 177,905 Finance 51,110 Administration of Justice 38,674 Public Safety 387,709 Public Health and Welfare 16,092 Social, Cultural & Recreational Services 107,461 Agriculture & Natural Resources 4,975 Other Operations 15,607 Highways 1,866,861Total Depreciation Expense - Governmental Activities $ 2,666,394

Business-type Activities: Solid Waste Disposal $ 160,218

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Discretely Presented Maury County School Department

Governmental Activities:


Capital Assets Not Depreciated:Land $ 2,432,200 $ 0 $ 0 $ 2,432,200Construction in Progress 515,645 464,524 (292,558) 687,611

Total Capital Assets Not Depreciated $ 2,947,845 $ 464,524 $ (292,558) $ 3,119,811

Capital Assets Depreciated:Buildings and Improvements $ 94,694,688 $ 814,673 $ 0 $ 95,509,361Other Fixed Assets 8,041,900 518,118 (175,881) 8,384,137

Total Capital Assets Depreciated $ 102,736,588 $ 1,332,791 $ (175,881) $ 103,893,498

Less Accumulated Depreciation For:Buildings and Improvements $ 31,489,111 $ 2,269,642 $ 0 $ 33,758,753Other Fixed Assets 6,355,398 564,567 (171,768) 6,748,197

Total Accumulated Depreciation $ 37,844,509 $ 2,834,209 $ (171,768) $ 40,506,950

Total Capital Assets Depreciated, Net $ 64,892,079 $ (1,501,418) $ (4,113) $ 63,386,548

Governmental Activities Capital Assets, Net $ 67,839,924 $ (1,036,894) $ (296,671) $ 66,506,359

Depreciation expense was charged to functions of the discretely presented Maury County School Department as follows:


Instruction $ 2,330,871Support Services 413,247Operation of Noninstructional Services 90,091

Total Depreciation Expense - Governmental Activities $ 2,834,209

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D. Construction Commitments At June 30, 2004, the county (excluding the Maury Regional Hospital) had uncompleted construction contracts of approximately $73,156 in the Special Purpose Fund, $913,295 in the Adequate Facilities/Development Fund, $189,190 in the Highway/Public Works Fund, and $121,681 for the school building program in the discretely presented Maury County School Department’s Education Capital Projects Fund. Funding that has not already been received for these future expenditures will be obtained from the issuance of debt.

E. Interfund Receivables, Payables, and Transfers

The composition of interfund balances as of June 30, 2004, is as follows:

Due to/from other funds:

Receivable Fund Payable Fund Amount

Primary Government: General Nonmajor governmental $ 50,903 Internal Service General 9,540 Nonmajor governmental Internal Service 2,604 Internal Service Internal Service 5,079 Internal Service Nonmajor enterprise 487

These balances resulted from the time lag between the dates that interfund goods and services are provided or reimbursable expenditures occur and payments between funds are made.

Interfund Transfers:

Interfund transfers for the year ended June 30, 2004, consisted of the

following amounts:

Primary Government

Transfers InNonmajor

General GovernmentalTransfers Out Fund Funds

General Fund $ 0 $ 8,363Nonmajor governmental funds 1,178,068 0

Total $ 1,178,068 $ 8,363

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Transfers InGeneralPurpose NonmajorSchool Governmental

Transfers Out Fund Funds

General Purpose School Fund $ 0 $ 93,677Nonmajor governmental funds 39,303 0

Total $ 39,303 $ 93,677

Transfers are used to move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them and to use unrestricted revenues collected in the General Fund to finance various programs accounted for in other funds in accordance with budgetary authorizations.

F. Long-term Debt

Primary Government (Excluding the Maury Regional Hospital) General Obligation Bonds, Other Loans, and Notes The county issues general obligation bonds and other loans to provide funds for the acquisition and construction of major capital facilities. In addition, general obligation bonds have been issued to refund other general obligation bonds. Capital outlay notes are also issued to fund capital facilities and other capital outlay purchases, such as equipment. General obligation bonds and capital outlay notes are direct obligations and pledge the full faith and credit of the government. General obligation bonds and capital outlay notes outstanding were issued for original terms of up to seven years for bonds and 20 years for notes. Repayment terms are generally structured with increasing amounts of principal maturing as interest requirements decrease over the term of the debt. All bonds and notes included in long-term debt as of June 30, 2004, will be retired from the General Debt Service Fund. General obligation bonds and capital outlay notes outstanding as of June 30, 2004, are as follows:

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OriginalInterest Amount Balance

Type Rate of Issue 6-30-04

General Obligation Bonds 4.1 to 4.5% $ 11,975,000 $ 1,950,000General Obligation Bonds - Refunding 2 to 5 25,241,170 23,881,473Capital Outlay Notes 0 to 5 7,375,098 3,035,871

The annual requirements to amortize all general obligation bonds and notes outstanding as of June 30, 2004, including interest payments, are presented in the following table:

Year Ending Bonds NotesJune 30 Principal Interest Principal Interest

2005 $ 3,291,025 $ 1,188,775 $ 1,369,450 $ 95,7012006 3,461,626 998,004 1,046,406 38,3582007 3,558,822 870,118 620,015 14,0542008 4,000,000 736,000 0 02009 3,700,000 576,000 0 02010-2011 7,820,000 584,500 0 0

Total $ 25,831,473 $ 4,953,397 $ 3,035,871 $ 148,113

There is $4,678,309 available in the General Debt Service Fund to service long-term debt. General bonded debt per capita amounted to $372, based on the 2000 federal census. Total debt per capita, including bonds and notes, amounted to $415, based on the 2000 federal census. Changes in Long-term Liabilities Long-term liability activity for the primary government (excluding the Maury Regional Hospital) for the year ended June 30, 2004, was as follows:

BondsGovernmental Activities:

Balance, July 1, 2003 $ 12,370,000 $ 1,936,987Additions 25,241,170 1,840,000Deductions (11,779,697) (741,116)Balance, June 30, 2004 $ 25,831,473 $ 3,035,871

Balance Due Within One Year $ 3,291,025 $ 1,369,450

Notes

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Compensated OtherAbsences Loans

Balance, July 1, 2003 $ 0 $ 19,651,000Additions 1,077,040 250,000Deductions (613,667) (19,901,000)Balance, June 30, 2004 $ 463,373 $ 0

Balance Due Within One Year $ 463,373 $ 0

Compensated absences payable will be paid from the employing funds,

primarily the General Fund and the Highway/Public Works Fund. Advance and Current Refunding

During the year, Maury County currently refunded two other loans and advance refunded two general obligation bonds with separate general obligation bond issues. The county issued $3,821,170 and $21,420,000 of general obligation refunding bonds to provide resources to retire the other loans and to purchase U.S. government securities that were placed in an irrevocable trust to generate resources for all future debt service payments of the refunded bonded debt. As a result, the refunded bonds are considered defeased, and the liability has been removed from the county’s long-term debt. As a result of the $3,821,170 advance refunding, total debt service payments over the next three years will be reduced by $287,273, and an economic gain (difference between the present value of the debt service payments of the refunded and refunding bonds) of $275,908 was obtained. The estimated net present value benefit of the $21,420,000 refunding was $941,089.

Maury County Solid Waste Disposal Fund (Enterprise Fund)

Changes in Long-term Liabilities Long-term liability activity for the Solid Waste Disposal Fund (enterprise fund) for the year ended June 30, 2004, was as follows:

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Business-type Activities:Closure/

PostclosureCareCosts

Balance, July 1, 2003 $ 687,603Additions 0Deductions (18,107)Balance, June 30, 2004 $ 669,496

Balance Due Within One Year $ 31,881


Changes in Long-term Liabilities Long-term liability activity for the discretely presented Maury County School Department for the year ended June 30, 2004, was as follows:


CompensatedAbsences

Balance, July 1, 2003 $ 3,464,211Additions 964,943Deductions (1,009,528)Balance, June 30, 2004 $ 3,419,626

Balance Due Within One Year $ 170,981

Compensated absences payable will be paid from the employing funds, primarily the General Purpose School Fund.

G. Short-term Debt

Maury County issued tax anticipation notes in advance of property tax collections and deposited the proceeds in the discretely presented General Purpose School Fund. These notes were necessary for cash flow. Short-term debt activity for the year ended June 30, 2004, was as follows:

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Balance Balance7-1-03 Issued Redeemed 6-30-04

Tax Anticipation Notes $ 0 $ 1,750,000 $ 1,750,000 $ 0

V. OTHER INFORMATION A. Risk Management

The county is exposed to various risks related to general liability, property, and casualty losses. During 2003, the county decided it was more economically feasible to join a public entity risk pool instead of purchasing commercial insurance for general liability, property, and casualty coverage. The county joined the Local Government Property and Casualty Fund (LGPCF), which is a public entity risk pool established by the Tennessee County Services Association, an association of member counties. The county pays an annual premium to the LGPCF for its general liability, property, and casualty insurance coverage. The creation of the LGPCF provides for it to be self-sustaining through member premiums. The LGPCF reinsures through commercial insurance companies for claims exceeding $100,000 for each insured event. Maury County (excluding the Maury Regional Hospital) and the discretely presented Maury County School Department participate in the Local Government Workers’ Compensation Fund (LGWCF), a public entity risk pool established by the Tennessee County Services Association, an association of member counties, to provide for liabilities arising under the workers’ compensation law. In accordance with Sections 12-9-101 through 12-9-109, Tennessee Code Annotated, inclusive, local governments are eligible to participate. The state statutes provide for the LGWCF to be self-sustaining through member premiums.

The county has chosen to establish the Employee Insurance – Prescriptions Fund for risks associated with the employees’ prescription drug insurance plan. The Employee Insurance – Prescriptions Fund is accounted for as an Internal Service Fund where assets are set aside for claim settlements. All full-time employees of the primary government (excluding the Maury Regional Hospital) are eligible to participate. A premium charge is allocated to each fund that accounts for full-time employees. Also, employees who elect to have prescription drug coverage on dependants contribute a set premium to the fund. This charge is based on estimates of the amounts needed to pay prior- and current-year claims and to establish a reserve for catastrophic losses. Liabilities of the fund are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. The Employee Insurance – Prescriptions Fund established claims liabilities based on estimates of the ultimate cost of claims that have been reported but not

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settled and of claims that have been insured but not reported. Claims liabilities include incremental claim adjustment expenditures/expenses, if any. The process used to compute claims liabilities does not necessarily result in an exact amount. Changes in the balance of claims liabilities during the past fiscal year are as follows: Employee Insurance - Prescriptions Fund

Beginning Current-of Fiscal Year BalanceYear Claims and at FiscalLiability Estimates Payments Year-end

2003-04 $ 0 $ 321,850 $ (311,137) $ 10,713

The county continues to carry commercial insurance for employee health. The discretely presented Maury County School Department continues to carry commercial insurance for all other risks of loss, including general liability, property, casualty, employee health, and accident. Settled claims have not exceeded this commercial coverage in any of the past three fiscal years.

B. Contingent Liabilities

The county is involved in several pending lawsuits. The county attorney estimates that the potential claims against the county not covered by insurance resulting from such litigation would not materially affect the county’s financial statements.

C. Subsequent Events

On October 1, 2004, Maury County issued $3,000,000 in tax anticipation notes on behalf of the General Purpose School Fund. On November 17, 2004, Maury County sold general obligation school and public improvement bonds totaling $16,000,000 for construction of schools and a Health Department.

The director of human resources resigned effective January 31, 2005, to accept a similar position with a city government.

D. Changes in Administration Director of accounts and budgets, Kerry Massey, resigned August 15, 2003, and was succeeded by Malinda Stanford effective November 1, 2003. Director of schools, George Reel, resigned May 31, 2004, and was succeeded by Edward Hickman effective June 1, 2004.

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E. Landfill Closure/Postclosure Care Costs

State and federal laws and regulations require the county to place a final cover on its Industrial Park Road landfill site when it stops accepting waste and to perform certain maintenance and monitoring functions at the site for 30 years after closure. Although closure and postclosure care costs will be paid only near or after the date that the landfill stops accepting waste, the Solid Waste Disposal Fund reports a portion of these closure and postclosure care costs as an operating expense in each period based on landfill capacity used as of each balance sheet date. The $669,496 reported as landfill closure and postclosure care liability at June 30, 2004, represents the cumulative amount reported to date based on the use of 100 percent of the estimated capacity of the landfill. This amount is based on what it would cost to perform all closure and postclosure care in 2004. The county closed the landfill effective October 1, 1996. Actual costs may be higher due to inflation, changes in technology, or changes in regulations.

F. Joint Ventures

The Maury County Regional Airport Authority is a joint venture in which the county, the City of Columbia, and the City of Mount Pleasant participate. The authority is governed by a three member-board comprising one appointee from the county and one appointee from each city. During the year ended June 30, 2004, Maury County contributed $30,000 to the authority. The Maury County School Department participates in the Volunteer State Cooperative. The cooperative was established through a contractual cost-sharing arrangement between the Boards of Education of Bedford County, Coffee County, Dickson County, Manchester City, Maury County, Stewart County, and Sumner County. The cooperative was authorized through Chapter 49 of Tennessee Code Annotated. The cooperative was established to obtain lower prices for food supplies, materials, equipment, and services by combining the purchasing requirements of each member’s school food service systems. The cooperative has contracted with a coordinating district (Bedford County School Department) and a service provider to provide these services. The cooperative is governed by a Representative Committee, including one representative from each of the member districts and an executive council, consisting of the chair, vice-chair, secretary, treasurer, and a member-at-large from the Representative Committee. Maury County and the discretely presented Maury County School Department do not have equity interests in any of the above-noted joint ventures. Complete financial statements for the Maury County Regional Airport Authority and the Volunteer State Cooperative can be obtained from their administrative offices at the following addresses:

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Administrative Offices:

Maury County Regional Airport Authority 1200 N. Main Street Mt. Pleasant, TN 38474

Volunteer State Cooperative Bedford County Board of Education 500 Madison Street Shelbyville, Tennessee 37160

G. Jointly Governed Organization

The Tennessee Southern Railroad Authority (TSRA) was created by the county, in conjunction with Giles and Lawrence Counties. The TSRA’s board includes the county mayors and a representative appointed by the respective County Commissions from each of the three counties, and a representative from the Cities of Mt. Pleasant and Lawrenceburg. However, the counties and cities do not have any ongoing financial interest or responsibility for the entity. The majority of TSRA’s funding is received from various grants from the Tennessee Department of Transportation. Maury County made no appropriations to the Tennessee Southern Railroad Authority during the year ended June 30, 2004.

H. Retirement Commitments

Plan Description Employees of Maury County are members of the Political Subdivision Pension Plan (PSPP), an agent multiple-employer defined benefit pension plan administered by the Tennessee Consolidated Retirement System (TCRS). TCRS provides retirement benefits as well as death and disability benefits. Benefits are determined by a formula using the member’s high five-year average salary and years of service. Members become eligible to retire at the age of 60 with five years of service, or at any age with 30 years of service. A reduced retirement benefit is available to vested members at the age of 55. Disability benefits are available to active members with five years of service who become disabled and cannot engage in gainful employment. There is no service requirement for disability that is the result of an accident or injury occurring while the member was in the performance of duty. Members joining the system after July 1, 1979, become vested after five years of service, and members joining prior to July 1, 1979, were vested after four years of service. Benefit provisions are established in state statute found in Title 8, Chapters 34-37 of Tennessee Code Annotated. State statutes are amended by the Tennessee General Assembly. Political subdivisions such as Maury County participate in the TCRS as individual entities and are liable for all costs associated with the operation and administration of their plan.

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Benefit improvements are not applicable to a political subdivision unless approved by the chief governing body. The TCRS issues a publicly available financial report that includes financial statements and required supplementary information for the PSPP. That report may be obtained by writing to the Tennessee Treasury Department, Consolidated Retirement System, 10th Floor, Andrew Jackson Building, Nashville, TN 37243-0230 or can be accessed at www.treasury.state.tn.us. Funding Policy Maury County requires employees to contribute 5.0 percent of earnable compensation. The county is required to contribute at an actuarially determined rate; the rate for the fiscal year ended June 30, 2004, was 7.96 percent of annual covered payroll. The contribution requirement of plan members is set by state statute. The contribution requirement for Maury County is established and may be amended by the TCRS Board of Trustees. Annual Pension Cost For the year ended June 30, 2004, Maury County’s annual pension cost of $1,372,273 to TCRS was equal to the county’s required and actual contributions. The required contribution was determined as part of the July 1, 2001, actuarial valuation using the frozen entry age actuarial cost method. Significant actuarial assumptions used in the valuation include (a) rate of return on investment of present and future assets of 7.5 percent a year compounded annually, (b) projected salary increases of 4.75 percent (graded) annual rate (no explicit assumption is made regarding the portion attributable to the effects of inflation on salaries), (c) projected 3.5 percent annual increase in the Social Security wage base, and (d) projected post-retirement increases of 3.0 percent annually. The actuarial value of assets was determined using techniques that smooth the effect of short-term volatility in the market value of total investments over a five-year period. Maury County’s unfunded actuarial accrued liability is being amortized as a level dollar amount on a closed basis. The remaining amortization period at July 1, 2001, was 19 years. An actuarial valuation was performed as of July 1, 2003, which established contribution rates effective July 1, 2004.

Trend Information Fiscal Year Ended

Annual Pension

Cost(APC)

Percentage of APC

Contributed

Net Pension

Obligation June 30, 2004 $ 1,372,273 100% $ 0 June 30, 2003 1,342,713 100 0 June 30, 2002 1,281,666 100 0

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Required Supplementary Information Schedule of Funding Progress for Maury County (Dollar amounts in thousands) Actuarial Valuation Date

Actuarial Value of Assets

(a)

Actuarial Accrued Liability

(AAL) (b)

Unfunded AAL

(UAAL)

(b) - (a)

Funded Ratio (a/b)

Covered Payroll

(c)

UAAL as a Percentage of Covered

Payroll ((b-a)/c)

6/30/2003 $ 14,359 $ 14,423 $ 64 99.56% $ 16,720 0.38% 6/30/2001 8,914 8,914 0 100.00 14,380 0.00 SCHOOL TEACHERS Plan Description The Maury County School Department contributes to the State Employees, Teachers, and Higher Education Employees Pension Plan (SETHEEPP), a cost-sharing multiple employer defined benefit pension plan administered by the Tennessee Consolidated Retirement System (TCRS). TCRS provides retirement benefits as well as death and disability benefits to plan members and their beneficiaries. Benefits are determined by a formula using the member’s high five-year average salary and years of service. Members become eligible to retire at the age of 60 with five years of service, or at any age with 30 years of service. A reduced retirement benefit is available to vested members who are at least 55 years of age or have 25 years of service. Disability benefits are available to active members with five years of service who become disabled and cannot engage in gainful employment. There is no service requirement for disability that is the result of an accident or injury occurring while the member was in the performance of duty. Members joining the plan on or after July 1, 1979, are vested after five years of service. Members joining prior to July 1, 1979, are vested after four years of service. Benefit provisions are established in state statute found in Title 8, Chapters 34-37 of Tennessee Code Annotated. State statutes are amended by the Tennessee General Assembly. A cost of living adjustment (COLA) is provided to retirees each July based on the percentage change in the Consumer Price Index (CPI) during the previous calendar year. No COLA is granted if the CPI increases less than one-half percent. The annual COLA is capped at three percent. The TCRS issues a publicly available financial report that includes financial statements and required supplementary information for the SETHEEPP. That report may be obtained by writing to the Tennessee Treasury Department, Consolidated Retirement System, 10th Floor, Andrew Jackson

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Building, Nashville, TN 37243-0230 or can be accessed at www.treasury.state.tn.us. Funding Policy Most teachers are required by state statute to contribute 5.0 percent of their salaries to the plan. The employer contribution rate for the Maury County School Department is established at an actuarially determined rate. The employer rate for the fiscal year ended June 30, 2004, was 3.39 percent of annual covered payroll. The employer contribution requirement for the Maury County School Department is established and may be amended by the TCRS Board of Trustees. The employer’s contributions to TCRS for the years ended June 30, 2004, 2003, and 2002, were $1,259,659, $1,248,853, and $1,352,314, respectively, equal to the required contributions for each year.

I. Office of Central Accounting, Budgeting, and Purchasing and the

Office of Human Resources

Maury County operates under provisions of Chapter 233, Private Acts of 1963, which provide for a system of central accounting and budgeting covering funds administered by the county mayor and the road superintendent. These funds were maintained in the Office of Central Accounting, Budgeting, and Purchasing under the supervision of the director of accounts and budgets. Maury County also operates under provisions of Chapter 91, Private Acts of 2004, which provide for an Office of Human Resources under the direction of the administrative committee of the County Commission. The human resources office preaudits all payrolls, generates the payroll transactions which are directly recorded in the general ledgers of the various funds, and handles all human resource duties and responsibilities. The Human Resources Office is administered by the human resources director.

J. Purchasing Laws

Offices of County Mayor and Road Superintendent Purchasing procedures for the Offices of County Mayor and Road Superintendent are governed by provisions of Section 5-14-101, et seq., Tennessee Code Annotated. Purchasing procedures for the Highway Department are also governed by the Uniform Road Law, Section 54-7-113, Tennessee Code Annotated. These statutes require that purchase orders be issued for all purchases and that sealed bids be solicited on purchases exceeding $5,000.

Office of Director of Schools

Purchasing procedures for the discretely presented Maury County School Department are governed by purchasing laws applicable to schools, as set

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forth in Section 49-2-203, Tennessee Code Annotated, which provides for the county Board of Education, through its executive committee (director of schools and chairman of the Board of Education), to make all purchases. This statute also requires competitive bids to be solicited through newspaper advertisement on all purchases exceeding $5,000.

VI. OTHER NOTE – MAURY REGIONAL HOSPITAL FUND (ENTERPRISE

FUND)

A. General

Maury Regional Hospital is operated and maintained by Maury County, Tennessee, under authority of and in compliance with the provisions of Chapter 373 of the Tennessee Private Acts of 1953. The federal, state, and local governments participated in the cost of constructing and equipping the hospital under the Hill-Burton Act. For financial reporting purposes, the hospital is considered an enterprise fund of Maury County, Tennessee.

The hospital is under the direct supervision of an administrator with overall responsibility vested in a Board of Trustees, composed of local citizens who are appointed by the Maury County Commission. The hospital, located in Columbia, Tennessee, has been in operation since 1953 and presently has a 275-bed capacity with 20 beds designated for skilled nursing care. The financial statements include the accounts and operations of the hospital, which also includes seven medical office buildings in its service area, Marshall Medical Center, Wayne Medical Center, and certain other medical facilities in Wayne County, Tennessee, physician practice management groups, and an Ambulatory Surgery Center. The hospital built the medical office buildings to house some of its administrative functions and for lease principally to physicians on the hospital’s staff. Marshall Medical Center is an acute care hospital with a 119-bed capacity located in Lewisburg, Tennessee, and was acquired by the hospital in 1995. Wayne Medical Center is an acute care hospital with an 80-bed capacity located in Waynesboro, Tennessee, and has been leased by the hospital since 1995.

B. Summary of Significant Accounting Policies Basis of Presentation – The financial statements include the accounts of all wholly owned subsidiaries and majority-owned joint ventures. Ownership interests of minority participants in joint ventures are reported as minority interests. Intercompany transactions are eliminated in consolidation. Method of Accounting – The hospital follows the accrual method of accounting. Revenues are recognized in the period earned; expenditures are recorded at the time liabilities are incurred. The hospital applies all applicable Governmental Accounting Standards Board (GASB) pronouncements in accounting and reporting as well as the

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following pronouncements issued on or before November 30, 1989, unless those pronouncements conflict with or contradict GASB pronouncements: Financial Accounting Standards Board Statements and Interpretations, Accounting Principles Board Opinions, and Accounting Research Bulletins. Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash Equivalents and Investments – Certificates of deposit with original maturities of three months or less when acquired are considered to be cash equivalents. Statutes authorize the hospital to invest in: (1) U.S. government securities and obligations guaranteed by the U.S. government, (2) deposit accounts at state and federal chartered banks and savings and loan associations, and (3) the Local Government Investment Pool of the State of Tennessee. During the current fiscal year, the hospital invested funds that were not immediately needed in certificates of deposit. All certificates of deposit were recorded at cost. Deposits in financial institutions are required by state statute to be secured and collateralized by the institutions. The collateral must meet certain requirements and must have a total minimum market value of 105 percent of the value of the deposits placed in the institutions less the amount protected by federal depository insurance. Collateral requirements are not applicable for financial institutions that participate in the State of Tennessee’s collateral pool. Patient Accounts Receivable – The hospital’s primary concentration of credit risk is patient accounts receivable, which consist of amounts owed by various governmental agencies, insurance companies, and private patients. The hospital manages the receivables by regularly reviewing its accounts and contracts and by providing appropriate allowances for uncollectible amounts. Concentration of credit risk relating to accounts receivable is limited to some extent by the diversity and number of patients and payers. Inventories – Inventories are reported at lower of cost or market, with cost determined by the average cost method. Paid Time Off and Sick Days – An accrual for paid time off is recognized in the period in which the employee’s right to the compensation is earned. Sick pay is expensed when paid or payable since it does not vest. Properties and Depreciation – Properties are reported at cost (or fair market value at date of gift, if donated) and include improvements that significantly add to utility or extend useful lives. Costs of maintenance and repairs are

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charged to expense. When depreciable assets are disposed of, the cost and related accumulated depreciation are removed from the accounts, and any gain (except on trade-ins) or loss is included in earnings for the period. Gains on trade-ins are applied to reduce the cost of the new acquisition. Depreciation is calculated principally by the straight-line method to allocate the cost of the assets over their estimated useful lives. The depreciation expense on assets acquired under capital leases is included with depreciation expense on owned assets. Interest expense incurred on applicable borrowings outstanding during the construction of plant and equipment is capitalized at an average rate as part of the cost of the asset financed and amortized on the same basis as related depreciation. Income Taxes – The hospital is a not-for-profit entity in accordance with Section 501(c)(3) of the Internal Revenue Code and is exempt from federal income taxes on related income pursuant to Section 501(a) of the code. The hospital meets the Internal Revenue Service definition of a governmental unit and is exempt from filing a Form 990 based on Revenue Procedure 95-48. Donated Supplies, Property, and Equipment – Significant donations of supplies, property, and equipment are recorded at fair market value at date of gift and recognized as nonoperating revenue.

Contractual Adjustments and Discounts – Provision is made currently for estimated settlements under the terms of various contractual agreements with certain government-funded programs and other third-party payers including the effects of any overpayment resulting from changing rules relating to the proper coding and billing of patient services. Such settlements may be subject to audit and adjustment by the respective programs.

Intangible Assets – Debt issue costs are capitalized and amortized on the straight-line method over the life of the related obligation.

Patient Service Revenue – Net patient service revenue is reported as services are rendered at estimated net realizable amounts from patients, third-party payers, and others for services rendered and includes estimated retroactive revenue adjustments due to future audits, reviews, and investigations. Estimated settlements under third-party reimbursement agreements are accrued in the period the related services are rendered and adjusted in future periods as final settlements are determined. The provision for bad debts is included in operating expenses. The hospital’s policy does not require collateral or other security for accounts receivable. The hospital routinely accepts assignment of, or is otherwise entitled to receive, patient benefits payable under health insurance programs, plans, or policies.

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Operating Activities – The hospital defines operating activities as reported on the Statement of Revenues, Expenses, and Changes in Net Assets as those that generally result from exchange transactions, such as payments for providing goods and services and payments for goods and services received. Substantially all of the hospital’s revenues and expenses are from exchange transactions. Other revenue is considered nonoperating revenue. Deferred Revenue – Grant income is deferred and recognized in the period a liability is incurred for eligible expenditures under the terms of the grant.

C. Uncollectible Accounts and Allowances Estimated uncollectible accounts and allowances consist of the following as of June 30, 2004.

Allowance for bad debts $ 13,001,336Allowance for contractural adjustments 11,261,299Total $ 24,262,635

D. Inventories

A summary of inventories as of June 30, 2004, follows:

General $ 1,241,718Pharmacy 1,132,205Fuel and Gasoline 17,414Total $ 2,391,337

E. Property, Plant, and Equipment

A summary of changes in properties and related accumulated depreciation for the year ended June 30, 2004, follows:

Additions Retirements

Balance and and Balance

Cost July 1, 2003 Transfers Transfers June 30, 2004

Land $ 5,290,501 $ 0 $ 0 $ 5,290,501

Land Improvements 6,297,001 218,471 0 6,515,472

Buildings 124,073,923 5,345,857 0 129,419,780

Equipment 84,620,800 6,927,655 (2,570,953) 88,977,502

Construction in

Progress 2,283,576 1,417,901 (219,191) 3,482,286

Total $ 222,565,801 $ 13,909,884 $ (2,790,144) $ 233,685,541

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Additions Retirements

Balance and and Balance

Cost July 1, 2003 Transfers Transfers June 30, 2004

Accumulated Depreciation

Land Improvements $ 2,149,771 $ 245,273 $ 0 $ 2,395,044

Buildings 36,951,900 4,917,975 0 41,869,875

Equipment 59,359,201 7,278,604 (2,046,982) 64,590,823

Total $ 98,460,872 $ 12,441,852 $ (2,046,982) $ 108,855,742

Depreciation is determined on the straight-line basis, computed over the estimated useful lives of the assets recommended by American Hospital Association guidelines, which range from three to 20 years for equipment and ten to 40 years for buildings and land improvements. Construction in progress at June 30, 2004, consists of a new outpatient building and several other facilities. Total estimated costs required to complete construction projects in progress as of June 30, 2004, amounted to approximately $2,365,000. Properties and accumulated depreciation as of June 30, 2004, include fully depreciated assets of approximately amount of $48,055,000. Constructed assets include capitalized interest of $180,131 in 2004.

F. Long-term Debt

Long-term debt consists of the following as of June 30, 2004:

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Bonds Payable

Series 1998 – a $12,100,000 Maury County General Obligation Bond issued on behalf of the hospital, with interest rates from 4.25% to 4.5%, maturing over an 11-year period, with the final payment due June 1, 2005, partially refunded in 2004. $ 1,085,000

Series 2003 Refunding - represents the hospital's share of a $6,815,000Maury County General Obligation Bond issue, with interest rates from2% to 2.75%, maturing over a four year period, with the final payment dueJune 30, 2007. 1,928,527

Series 2004B Refunding - a $15,130,000 Maury County General ObligationRefunding Bond issued on behalf of the hospital, with interest rates from4% to 5%, maturing over a ten year period, with the final payment due June 30, 2014. 15,130,000Total $ 18,143,527

Less unamortized loss on bond refunding (394,073)Plus premium on bond refunding 1,531,335Total Bonds Payable $ 19,280,789

Notes Payable

Series 1993 – represents the hospital's share of a $5,945,000 Maury County Various Purpose Capital Outlay Notes issue, with interest rates from 2.7% to 5%, maturing over an eleven year period, with the final payment due July 1, 2005. $ 210,000

8.94% note payable on Northside property, requiring monthly payments of $5,000, with a final payment of $250,000 due August 1, 2014. 499,777

5.25% note payable on purchase of physician practice, requiring quarterly payments of $27,500 with final payment due January 2008. 412,500

Note payable related to the Ambulatory Surgery Center with monthly payments of $3,254 beginning May 2007, interest rate variable at three-month LIBOR plus 3.75% 169,850Total Notes Payable $ 1,292,127

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Capitalized Leases Payable

Capital lease obligation $ 2,011,479Total Capitalized Leases $ 2,011,479

Total Long-term Debt $ 22,584,395Less Current Portion (3,908,667)

Long-term Portion $ 18,675,728

A schedule, by year, of aggregate principal maturities on all long-term debt as of June 30, 2004, (including the capital lease obligation) follows: Year Ending June 302005 $ 3,908,6672006 2,884,4382007 2,736,2422008 2,327,2472009 2,324,2662010-2015 7,266,273

Total $ 21,447,133

Other Total

Bonds Long-term Long-termPayable Debt Debt

Balance, July 1, 2003 $ 19,879,857 $ 3,259,320 $ 23,139,177Additions and Refundings 19,608,973 1,221,240 20,830,213Maturities and Refundings (21,345,303) (1,017,113) (22,362,416)Premium/Discount 1,137,262 (159,841) 977,421Balance, June 30, 2004 $ 19,280,789 $ 3,303,606 $ 22,584,395

Due Within One Year $ 2,628,976 $ 1,279,691 $ 3,908,667

During the year, the hospital issued $15,130,000 in general obligation bonds with interest rates ranging from four percent to five percent to refund $10,000,000 general obligation bonds with an adjustable interest rate and $6,210,000 general obligation bonds with interest rates ranging from 4.25 percent to 4.5 percent. The refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of $351,779. This difference, reported in the accompanying financial statements as a reduction of bonds payable, is amortized to operations through the year 2014 using the effective-interest method. The hospital completed the advance refunding to reduce its total debt service payments over the next ten years by

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$1,116,171 and to obtain an economic gain (difference between the present value of the old debt and the new debt service payments) of $772,233. During the year, the hospital also issued $2,998,829 in general obligation bonds with interest rates ranging from 2.0 percent to 2.75 percent to refund $3,030,000 in general obligation bonds with interest rates ranging from 4.25 percent to 4.5 percent. The refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of $11,609. This difference, reported in the accompanying financial statements as a reduction of bonds payable, is amortized to operations through the year 2008 using the effective-interest method. The hospital completed the advance refunding to reduce its total debt service payments over the next ten years by $221,557 and to obtain an economic gain (difference between the present value of the old and new debt service payments) of $208,516.

G. Employee Benefit Plans Defined Benefit Plan Plan Description

Prior to May 1, 1997, all employees of the hospital were eligible to participate in the Maury Regional Hospital Retirement Plan (the plan), a single-employer public retirement system (PERS), accounted for as a separate entity from the hospital. The purpose of the plan is to provide retirement, death, and certain other benefits to such employees as specified in the plan. The actuarial method employed to determine contributions to the plan is the entry age actuarial cost method. Although it has not expressed any intention to do so, the hospital has the right under the plan to discontinue its contributions at any time and to terminate the plan subject to the provisions set forth in ERISA. The plan issues separate financial statements which may be obtained from the hospital. The plan was amended effective May 1, 1997, to stop accrual of benefit service on April 30, 1997, for participants who made an irrevocable election to participate in the Maury Regional Healthcare System 403(b) Plan on May 1, 1997. Employees hired after May 1, 1997, are not eligible to participate in the plan. Funding Policy

Voluntary contributions may not be made by participants. The hospital’s contributions are based on an actuarially determined rate. The hospital’s annual pension cost and net pension obligation to the plan for the 2004 year were zero.

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The annual required contribution for the current year was determined as part of the April 30, 2004, actuarial valuation using the entry age actuarial cost method. The actuarial assumptions used included the following: (1) 8 percent investment rate of return

(2) projected salary increases ranging from 4 percent to 7.5 percent per year

(3) amortization method – level dollar amount The assumptions listed above included an inflation rate of three percent per year. Three-Year Trend Information

AnnualFiscal Required Percentage PensionYear Contribution Contributed Obligation

6-30-02 $ 0 100% $ 06-30-03 0 100 06-30-04 0 100 0

A schedule of funding progress for the plan follows:

# UnfundedActuarial Unfunded ActuarialAccrued Actuarial Accrued

Actuarial Liability Accrued * Liability as aActuarial Value (AAL) Liability Funded Covered % of CoveredValuation of Assets Entry Age (UAAL) Ratio Payroll Payroll

Date (a) (b) (b-a) (a/b) ( c ) (b-a)/c

5-1-02 $ 35,267,323 $ 35,267,323 $ 0 100% $ 9,663,726 0%5-1-03 35,227,794 35,227,794 0 100 9,501,280 05-1-04 36,426,153 36,426,153 0 100 8,973,971 0

* Includes compensation only for participants accruing benefit service on May 1, 1997.

# An unfunded liability is not identified under the aggregate actuarial cost

method. Defined Contribution Plan Effective May 1, 1997, the hospital implemented a defined contribution plan, which includes a 403(b) feature and an employer-matching provision and covers substantially all hourly and salaried employees. Voluntary contributions may be made by the participants as a percentage of annual compensation not to exceed $13,000. The hospital’s contribution consists of a

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base contribution of three percent of annual covered compensation and a matching contribution equal to 50 percent of the employees’ first five percent of annual compensation contributed. The hospital’s total contributions for 2004 amounted to $2,566,962. Such contributions are expensed currently.

H. Third-Party Payer Reimbursement and Adjustment Contingency Approximately 44 percent of 2004 net patient service revenues were derived under contractual agreements with certain government-funded programs (principally Medicare and TennCare) and other third-party payers. Revenues for services rendered under these programs are recorded initially at established rates and reduced to the estimated amounts due from the third-party payers through recording of contractual allowances. Laws and regulations governing the Medicare and TennCare programs are extremely complex and subject to interpretation. As a result, there is at least a reasonable possibility that recorded estimates may change by a material amount in the near term. Patient charges under government-funded reimbursement agreements, amounting to $94,914,275 for the year ended June 30, 2004, are subject to audit and retroactive adjustment by third-party payers. Provisions for estimated retroactive adjustments under these agreements have been made in the accompanying financial statements. In an effort to further ensure its compliance with Medicare and other third-party payer rules and requirements, as well as other applicable laws and regulations, Maury Regional Hospital has adopted a comprehensive compliance program. This initiative has served to strengthen the hospital’s policies and procedures, to reinforce the compliance responsibilities of its management and staff, and to promote awareness of its zero tolerance level for non-compliant activities. The compliance program also includes various mechanisms intended to monitor the hospital’s ongoing compliance with complex and ever-changing rules relating to the proper billing and coding of patient services. Tennessee’s Medicaid Program, TennCare, has operated under a Section 1115 waiver from the federal government since 1994. The State of Tennessee is facing budgetary challenges related to rapidly increasing expenditures for the current TennCare program. In order to curb these increased expenditures, the State of Tennessee has proposed modifications to the current program to limit enrollment, limit patient eligibility requirements, and limit covered services to enrollees. Recently, the State of Tennessee also proposed eliminating the TennCare program and reverting to an as-yet-unspecified Medicaid program. Maury Regional Hospital is unable to determine the impact of these changes, as the specifics of either proposal have not been fully published. Future legislation or other changes or interpretations of TennCare or a replacement program could have adverse effects on reimbursement for this population.

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I. Capital Leases During 2001, the hospital entered into a long-term agreement, accounted for as a capital lease, for three pieces of medical equipment. Under the agreement, ownership of the equipment is transferred to the hospital at the end of the lease term. The equipment and the related liability were recorded at the present value of the future minimum payments due under the lease, in the amount of $64,254 per month, through December 2005. The following is a schedule, by year, of the future minimum lease payments required under the lease, together with the present value of the net minimum lease payments, as of June 30, 2004:

Year Ending June 30

2005 $ 771,0482006 385,524Total minimum lease payments $ 1,156,572Less: Discount for interest (4.81% imputed rate) (196,483)Present value of lease payments $ 960,089

A summary as of June 30, 2004, of the leased equipment, which is included in property, plant, and equipment, follows:

Equipment acquired under capital lease $ 3,422,787Less: accumulated depreciation (2,201,268)Total $ 1,221,519

On December 10, 2003, the Ambulatory Surgery Center entered into a capital lease agreement for the purchase of medical equipment up to $1,400,000. Under the agreement, ownership of the equipment is transferred to the Ambulatory Surgery Center at the end of the lease term. The total of all draws executed under the agreement during the year is $1,089,792. The equipment and the related liability were recorded at the present value of the future minimum payments due under the lease. The following is a schedule, by year, of the future minimum lease payments required under the lease, together with the present value of the net minimum lease payments, as of June 30, 2004:

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Year ending June 30

2005 $ 222,0922006 227,6542007 173,8792008 173,8792009 173,8792010-2011 348,778Total minimum lease payments $ 1,320,161Less: Discount for interest (6.02% imputed rate) (268,771)Present value of lease payments $ 1,051,390

A summary as of June 30, 2004, of the leased equipment, which is included in property, plant, and equipment, follows:

Equipment acquired under capital lease $ 1,089,792Less: accumulated depreciation (78,697)Total $ 1,011,095

J. Uncombined Entity

The Maury Regional Hospital Auxiliary was established to raise funds to support the operation of Maury Regional Hospital. The auxiliary’s bylaws provide that all funds raised, except for funds required for operations, be distributed to or held for the benefit of the hospital. The auxiliary’s general funds represent unrestricted resources and are distributed to the hospital in amounts and at times determined by the auxiliary’s Board of Trustees, which may also restrict the use of general funds for hospital plant replacement or expansion or other specific purposes. The auxiliary contributed cash and supplies totaling $73,084 to the hospital in 2004, which is included under non-operating revenue.

K. Cash and Certificates of Deposit At June 30, 2004, the hospital’s cash and certificates of deposit amounted to $13,011,281. Bank balances for such amounts totaled $15,790,469, of which $35,187 was not covered by the Federal Depository Insurance Corporation (FDIC), by the bank’s participation in the State of Tennessee’s collateral pool, or by collateral held by the hospital’s agent in the hospital’s name. The hospital holds no investments other than certificates of deposit as of June 30, 2004, which are summarized below:

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InterestRate Maturity Amount

1.85% July, 2004 $ 1,000,0002.75 August, 2004 500,0001.63 August, 2004 1,000,0001.59 October, 2004 1,000,0001.58 October, 2004 1,000,0001.79 November, 2004 1,000,0002.13 December, 2004 60,0002.13 December, 2004 95,0002.13 December, 2004 95,0002 January, 2005 294,841

Total $ 6,044,841

L. Rental Operation

The hospital leases space in its medical office buildings to staff physicians and occupies a portion of the buildings for its administrative offices. Leases with physicians are generally for a three-year period, with two three-year renewal options (year-to-year thereafter), and with all utilities, taxes, insurance, and maintenance paid by the hospital. Future rental commitments from staff physicians for leases in effect at June 30, 2004, are $895,799 per year for each of the next five years. A summary of rental income and related expenses applicable to the rental operations, which are netted and reported under operating revenues, follows for the year ended June 30, 2004: Rental Income $ 1,013,689

Expenses: Salaries $ 167,443 Utilities 178,194 Other Expenses 159,052 Depreciation Expense 541,704

Total Expenses $ 1,046,393

Loss from Rental Operation $ (32,704)

No allocation of interest expense has been made in computing the loss from rental operations.

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M. Leased Healthcare Facilities

On July 1, 1995, the hospital entered into a five-year lease arrangement with the Board of Trustees of Wayne County General Hospital for the operation of several Wayne County healthcare facilities, including the county hospital, nursing home, ambulance service, and medical office buildings. The lease also extended to all equipment, improvements, fixtures, and related personal property, and provided for options to renew for two additional five-year terms. A new lease was executed February 12, 2001, effective July 1, 2000. The new lease also provides for options to renew for two additional five-year terms. The annual lease expense consists of a base rent of $150,000 and a capital improvement commitment of $150,000. The hospital may terminate the lease at any time upon 180 days’ notice and the payment of $500,000 as liquidated damages.

N. Charity Care The hospital maintains records to identify and monitor the level of charity care it provides. These records include the amount of charges foregone for services and supplies furnished under its charity care policy, the estimated cost of those services and supplies, and equivalent service statistics. Charges excluded from revenue under the hospital’s charity care policy were $4,432,245 for the 2004 year.

O. Net Patient Service Revenue The hospital has agreements with third-party payers that provide for payments to the hospital at amounts different from its established rates. A summary of the payment arrangements with major third-party payers follows:

Medicare – Inpatient acute care services rendered to Medicare program beneficiaries are paid at prospectively determined rates per diagnosis related group (DRG). These DRG rates vary according to a patient classification system that is based on clinical, diagnostic, and other factors. Outpatient services are generally reimbursed under the outpatient prospective payment system which pays a fixed rate for a given bundle of outpatient services. These bundles are known as Ambulatory Payment Classifications (APC’s). Inpatient nonacute services, related to Medicare beneficiaries are paid based on a cost-reimbursement methodology subject to various cost limits. The hospital is reimbursed for cost based services at a tentative rate, with final settlement determined after submission of annual cost reports by the hospital and audits thereof by the Medicare fiscal intermediary. The hospital’s classification of patients under the Medicare program and the appropriateness of their admission are subject to an independent review. The hospital’s Medicare cost reports have been audited by the Medicare intermediary through June 30, 2000.

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TennCare – Under the TennCare Program, the hospital contracts with several managed care organizations for payment of services rendered to participants. Although the specific details of the contracts vary, the inpatient payments are based on a contracted rate per diagnosis or a prospectively determined per-diem rate. Outpatient payments generally are reimbursed at a percentage discount from approved charges.

Other – The hospital has also entered into payment agreements with certain commercial insurance carriers and preferred provider organizations. The basis for payment to the hospital under these agreements includes prospectively determined daily rates, discounts from established charges, and prospectively determined rates per discharge. The hospital’s net patient service revenue consisted of the following for the year ended June 30, 2004:

Patient Service Revenue $ 364,517,357Charity Care (4,432,245)Contractual Adjustments (145,687,577)

Net Patient Service Revenue $ 214,397,535

P. Investment in Physician Practice Management Groups The hospital owns and operates an 80 percent joint venture interest in Family Health Group, a not-for-profit corporation that acquires, owns, operates, and manages physician practices. Accordingly, the accounts and operations of Family Health Group are consolidated with the hospital, and a minority interest has been recognized representing the interest of St. Thomas Hospital, the other joint venturer, in the operations and net assets of the Family Health Group. During 2003, the hospital established South Central Heart Group, a not-for-profit corporation, to operate a physicians’ practice specializing in cardiology. The corporation began operation in September of 2003. During 2004, two additional practices were added to provide critical care services to patients at the hospital, Thoracic and Cardiovascular Associates and Pulmonary and Critical Care Associates. The accounts and operations are consolidated with the hospital.

Q. Investment in Ambulatory Surgery Center During 2004, the hospital entered into a joint venture with a third party to operate an Ambulatory Surgery Center. The hospital initially owned 65 percent but transferred six percent to other parties during the year. Accordingly, the accounts and operations of the Ambulatory Surgery Center are consolidated with the hospital and a minority interest has been

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recognized representing the interests of the other ventures in the operations of the Ambulatory Surgery Center.

R. Risk Management The hospital 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 hospital maintains commercial insurance coverage for each of those risks of loss. Management believes such coverage is sufficient to preclude any significant uninsured losses to the hospital. Settled claims have not exceeded this commercial coverage in any of the past three fiscal years. The hospital is also subject to claims and suits arising in the ordinary course of business, including claims for damages for personal injuries, employment-related claims, and interference with a physician’s business efforts. In certain of these actions damages may be sought which exceed the hospital’s insurance coverage. In management’s opinion, the hospital is currently not a party to any proceeding that would have a material adverse effect on the hospital’s results or financial condition.

S. Prior-period Adjustment A prior-period adjustment has been made as of July 1, 2002, and June 30, 2003, to correct the Medicare and TennCare contractual allowances previously recorded over several fiscal years prior to July 1, 2002. The effect of the adjustment was to reduce net accounts receivable and net assets reported as of the beginning and end of the 2003 fiscal year by $1,534,000, with no effect on reported results of operations for the year.

VII. OTHER NOTE – DISCRETELY PRESENTED MAURY COUNTY BOARD OF PUBLIC UTILITIES WATER SYSTEM

A. Summary of Significant Accounting Policies

General – The Maury County Board of Public Utilities Water System is a discrete component unit of Maury County, Tennessee. The system is governed by a Board of Directors appointed by the county mayor and ratified by the County Commission. In addition, the County Commission approves the annual budget of the system.

Accounting Method – The system generally uses the accrual basis of accounting, except that revenue from water sales is recognized when billed.

The system applies Financial Accounting Standards Board (FASB) pronouncements and Accounting Principles Board (APB) Opinions issued on or before November 30, 1989, unless those pronouncements conflict with or contradict GASB pronouncements, in which case, GASB prevails.

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Organization – The system is operated as an enterprise fund with self-balancing accounting records. The system does not receive any operating revenues from Maury County, Tennessee. Utility Plant and Equipment – The utility plant and equipment are recorded at cost. Depreciation is provided on the straight-line method over the estimated useful lives of the respective assets. Maintenance and repairs are charged to expense as incurred; major renewals and improvements are capitalized. When items of property or equipment are sold or retired, the related costs and accumulated depreciation are removed from the accounts, and any gain or loss is included in income. Cash and Cash Equivalents – For purposes of the statement of cash flows, the system considers all investment instruments purchased with an original maturity of three months or less to be cash equivalents. There were no cash equivalents at June 30, 2004. Restricted assets are not treated as part of the entity’s cash and cash equivalents.

Use of Estimates – The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

B. Accounts Receivable Customer receivables are composed of the following aged categories:

Current billings $ 165,82430 days past due 12,00560 days past due 1,956Over 90 days past due 3,582

Total $ 183,367

Bad debts are determined and expensed only by direct action of the system’s board. The expense of $3,848 was incurred for 2004, net of collections of $1,022 for previously expensed bad debts.

C. Deposits and Investments

Cash on the balance sheet includes cash on hand of $180 and deposits with financial institutions, including demand deposits and certificates of deposits with an original maturity of three months or less. Deposits – All deposits with financial institutions other than savings and loan associations must be collateralized in an amount equal to 105 percent of the market value of uninsured deposits. The collateral must be placed by the depository bank in an escrow account in a second bank for the benefit of the

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system. Deposits with savings and loan associations must be collateralized by one of the following methods: (1) by an amount equal to the same character as that required for other financial institutions, (2) by an irrevocable letter of credit issued by the Federal Home Loan Bank, or (3) by providing notes secured by first mortgages or first deeds of trust upon residential real property located in Tennessee. The promissory notes must be in an amount equal to 150 percent of the amount of uninsured deposits. The book balance of the system’s deposits with financial institutions was $4,360,072. The bank balance was $4,458,226 and is collateralized as follows:

Risk

Category Amount

Deposits secured under the State of Tennessee Collateral Pool 1 $ 4,163,226Amount insured by FDIC 1 295,000

Total $ 4,458,226

The system’s deposits are categorized to give an indication of the level of risk assumed by the system at June 30, 2004. The categories are described as follows: Category 1 – Insured or collateralized with securities held by the system or

by its agent in the system’s name Category 2 – Collateralized with securities held by the pledging financial

institution’s trust department or agent in the system’s name Category 3 – Uncollateralized There was no Category 2 or Category 3 credit risk at June 30, 2004.

D. Restricted Assets

The restricted assets represent investment of construction reserves and customer deposits. The customer deposits are not available for operation of the system and are held in trust. The deposits at June 30, 2004, included $84,670 for meter deposits of current customers, and $50,685 for meter deposits on lines under construction at the end of the year.

E. Utility Plant, Property, and Equipment

Major classifications of the utility plant and equipment and their respective depreciable lives are summarized below:

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Depreciable Lives (In Years) Water grid and improvements 100 Water mains 40 Water towers and stations 40 Water meters 40-50 Casting and valves 40 Other capitalized costs 40 Equipment and fixtures: Trucks 3 Small tools and equipment 3-5-10 Office furniture and equipment 5-10

F. Accrued Leave

Accumulated annual leave at June 30, 2004, amounts to $6,341. It is the system’s policy to accrue vacation annually for full-time personnel and charge employee benefits. The policy provides two weeks of annual leave for personnel with one to five years of continuous county service, three weeks for six to 11 years of service, and increasing amounts up to five weeks for service up to 25 years.

G. Risk Management

The system is exposed to losses that could arise from torts; asset theft, damage, or destruction; business interruption; errors or omissions; job-related illnesses or injuries to employees; acts of nature; and accident, health, dental, and other medical benefits to employees. Potential losses are covered by commercial insurance. The system has not been involved in any litigation during the last four fiscal years.

H. Commitments

On May 10, 2004, the board approved a contract with Hughes Excavating, LLC, for water line extensions of $292,235 on Cole Bend/Carpentar Bridge Gene Fitzgerald roads. No work had begun as of June 30, 2004. On April 12, 2004, the board approved a contract of $536,770 with King Pipeline for Carters Creek Station/Butler Road upgrade. This is a shared contract with Columbia Power and Water System. Maury County Water System is obligated to pay one-half or $268,385. No work had begun as of June 30, 2004. On May 10, 2004, the Maury County Commission passed resolution #04-04-28 allowing Maury County Water System to seek funding up to $6.9 million for water system improvements. The system board has also approved applications for state revolving and rural development funds to finance this project.

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VIII. OTHER NOTE – DISCRETELY PRESENTED MAURY COUNTY EMERGENCY COMMUNICATIONS DISTRICT

A. Nature of Activities and Summary of Significant Accounting Policies

Nature of Activities – Maury County Emergency Communications District is a nonprofit organization, established under Tennessee law. The district was organized to provide emergency 911 service to the residents of Maury County. While 911 has been in use for several years for emergency services, the enhanced 911 was adopted for Maury County by public referendum on August 4, 1988. The voters of Maury County voted for E911 with an approval majority of 92 percent. Although the district is considered a municipality under its enabling legislation, it cannot levy or collect taxes, and the charges for services shall not be considered or classified as taxes. The district is managed by a volunteer board of directors who are appointed by the district’s primary government.

The district is a discretely presented component unit of Maury County, Tennessee, and the financial statements are presented in both the district’s separate financial report and within the Maury County, Tennessee, financial report. The district is considered a discretely presented component unit of Maury County as defined under the criteria set forth in Governmental Accounting Standards Board Statement 14, because the district would be unable to issue debt without going through Maury County, Tennessee.

Basis of Accounting and Financial Statement Presentation – The term basis of accounting is used to determine when a transaction or event is recognized on the district’s operating statement. The district uses the full accrual basis of accounting. Under this basis, revenues are recorded when earned and expenses are recorded when incurred, even though actual payment or receipt may not occur until after the period ends.

The Governmental Accounting Standards Board (GASB) exercises jurisdiction over accounting and financial reporting for governments. The Financial Accounting Standards Board (FASB) exercises jurisdiction over private enterprises and nonprofits. The Office of Comptroller of the Treasury requires Tennessee emergency communications districts to follow option one of GASB Statement No. 20. This option requires the district to follow only GASB guidance after November 30, 1989, and not follow any FASB guidance after that date.

Use of Estimates – Preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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Cash and Cash Equivalents – For purposes of the statement of net assets and the statement of cash flows, Maury County Emergency Communications District considers all highly liquid investments available for current use with an initial maturity of three months or less to be cash equivalents.

Capital Assets – Capital assets are defined by the district as assets with an initial cost of more than $500 and an estimated useful life of more than one year. Additions to capital assets are recorded at acquisition cost or estimated market value at the date of donation in the case of donated property. Depreciation and amortization are provided for in amounts sufficient to relate the cost of the assets to operations over their estimated service lives using the straight-line method of depreciation.

Income Taxes – Maury County Emergency Communications District is a tax-exempt organization under Section 115 of the Internal Revenue Code, and accordingly, no provision for federal income taxes has been made.

B. Deposits

The carrying amount of Maury County Emergency Communications District’s deposits was $484,290 as of June 30, 2004. The district’s policy requires deposits to be 100 percent secured by collateral valued at market or par, whichever is lower, less the amount of Federal Deposit Insurance Corporation insurance. The deposits of the district are categorized to give an indication of the level of risk assumed by the district. The categories are described as follows:

Category 1 – Insured or collateralized with securities held by the entity or by

its agent in the entity’s name Category 2 – Collateralized with securities held by the pledging financial

institution’s trust department or agent in the entity’s name Category 3 – Uncollateralized The district’s deposits categorized by the level of risk are as follows:

Amount insured by the FDIC (Category 1) $ 100,000

Amount collateralized with securities held by the pledging financial institution's trust department in the district's name (Category 2) 384,290

Uncollateralized (Category 3) 0

Total $ 484,290

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C. Major Revenue Source

Revenue for the operation and maintenance of the Maury County Emergency Communications District is generated by a surcharge placed on residential and business telephone lines. The surcharge is collected by Bellsouth Telephone Company and remitted to the district monthly less a one-percent administrative fee. In fiscal year 2000, the district began collecting revenue generated by wireless telephone users. The Tennessee Emergency Communication Board collects the revenue and distributes 25 percent of the funds to the Emergency Communications Districts based on the proportion of the population of each district to that of the state, according to the latest census.

D. Operating Lease

The district leases a copy machine from Xerox. The term of the lease is one year with future minimum lease payments of $1,456.

E. Notes Payable

The district entered into an agreement to purchase new telecommunications equipment from Motorola on April 2, 1996. The district financed $57,184 of the purchase with payments of $1,117 per month to begin January 1997, at an interest rate of six percent. On October 1, 1999, the district purchased additional telecommunications equipment for $25,620 and added the purchase to the existing note and continued to make payments of $1,117 per month. Current maturities are $1,362 for the year ending June 30, 2005, at which time the note will be paid in full.

F. Risk Management

The district 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. For the year ended June 30, 2004, the district was insured against potential losses associated with these risks through the purchase of commercial insurance for management liability and through a blanket general liability policy purchased by Maury County. There have been no losses that exceeded insurance coverage during the last three years.

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REQUIRED SUPPLEMENTARY INFORMATION

Exhibit G

Maury County, TennesseeSchedule of Revenues, Expenditures, and Changes

in Fund Balance - Actual (Budgetary Basis) and BudgetGeneral FundFor the Year Ended June 30, 2004

Actual VarianceRevenues/ with Final

Actual Less: Add: Expenditures Budget -(GAAP Encumbrances Encumbrances (Budgetary Budgeted Amounts PositiveBasis) 7/1/2003 6/30/2004 Basis) Original Final (Negative)

RevenuesLocal Taxes $ 8,791,643 $ 0 $ 0 $ 8,791,643 $ 8,353,300 $ 8,353,300 $ 438,343Licenses and Permits 283,185 0 0 283,185 243,000 243,000 40,185Fines, Forfeitures and Penalties 319,027 0 0 319,027 236,925 241,232 77,795Charges for Current Services 218,473 0 0 218,473 112,750 112,750 105,723Other Local Revenues 533,570 0 0 533,570 250,300 657,550 (123,980)Fees Received from County Officials 2,539,433 0 0 2,539,433 2,250,000 2,250,000 289,433State of Tennessee 1,069,431 0 0 1,069,431 1,280,694 1,317,577 (248,146)Federal Government 252,364 0 0 252,364 24,581 420,580 (168,216)Other Governments and Citizens Groups 135,834 0 0 135,834 37,243 87,743 48,091

Total Revenues $ 14,142,960 $ 0 $ 0 $ 14,142,960 $ 12,788,793 $ 13,683,732 $ 459,228

ExpendituresGeneral Government

County Commission $ 48,903 $ 0 $ 0 $ 48,903 $ 61,378 $ 57,445 $ 8,542Board of Equalization 772 0 0 772 1,615 1,615 843Other Boards and Committees 646 0 0 646 2,153 2,153 1,507County Mayor 166,565 0 0 166,565 173,499 173,499 6,934Personnel Office 201,963 0 0 201,963 212,608 212,608 10,645County Attorney 55,757 0 0 55,757 56,231 56,231 474Election Commission (Including Voter Registration) 257,087 (950) 0 256,137 228,108 228,108 (28,029)Register of Deeds 261,525 0 330 261,855 294,965 288,365 26,510Development 352,978 0 75 353,053 362,937 362,937 9,884County Buildings 660,283 0 0 660,283 758,682 758,682 98,399Other General Administration 567,738 (11,887) 9,125 564,976 634,845 634,845 69,869Preservation of Records 162,571 (30) 10,000 172,541 133,850 182,450 9,909

FinanceAccounting and Budgeting 408,616 0 1,600 410,216 435,633 434,733 24,517Purchasing 54,773 0 427 55,200 54,874 55,774 574Property Assessor's Office 446,551 (26,294) 21,849 442,106 484,006 484,006 41,900Reappraisal Program 138,630 0 0 138,630 150,528 150,528 11,898

(Continued)

95

Exhibit G


in Fund Balance - Actual (Budgetary Basis) and BudgetGeneral Fund (Cont.)



Expenditures (Cont.)Finance (Cont.)

County Trustee's Office $ 253,205 $ 0 $ 0 $ 253,205 $ 258,644 $ 258,644 $ 5,439County Clerk's Office 119,833 0 0 119,833 140,219 140,219 20,386Data Processing 199,518 (670) 646 199,494 223,818 223,818 24,324

Administration of JusticeCircuit Court 760,964 (90) 0 760,874 862,137 862,597 101,723General Sessions Court 618,603 0 0 618,603 597,392 636,239 17,636Chancery Court 79,753 0 0 79,753 91,055 91,055 11,302District Attorney General 45,165 0 0 45,165 35,000 50,500 5,335

Public SafetySheriff's Department 3,644,839 (873) 65 3,644,031 3,707,480 3,700,525 56,494Jail 2,211,148 0 1,072 2,212,220 2,318,253 2,310,846 98,626Juvenile Services 157,756 (6,109) 0 151,647 204,574 204,574 52,927Civil Defense 85,794 0 77,575 163,369 164,485 166,286 2,917Other Emergency Management 125,825 0 113,790 239,615 50,000 378,620 139,005County Coroner/Medical Examiner 14,675 0 0 14,675 8,000 19,500 4,825Public Safety Grant Programs 73,323 0 0 73,323 0 122,423 49,100

Public Health and WelfareLocal Health Center 473,191 (1,189) 0 472,002 663,080 669,083 197,081Rabies and Animal Control 95,420 0 0 95,420 114,652 114,652 19,232Other Local Health Services 6,813 0 0 6,813 0 9,833 3,020Regional Mental Health Center 9,000 0 0 9,000 9,000 9,000 0Appropriation to State 18,987 0 0 18,987 23,750 23,750 4,763Other Local Welfare Services 17,886 0 0 17,886 18,250 18,250 364

Social, Cultural and Recreational ServicesSenior Citizens Assistance 38,800 0 0 38,800 31,550 38,800 0Libraries 446,328 0 0 446,328 466,486 474,686 28,358Parks and Fair Boards 484,730 0 0 484,730 524,451 524,251 39,521

Agriculture & Natural ResourcesAgriculture Extension Service 92,109 0 0 92,109 96,186 96,186 4,077

(Continued)

96

Exhibit G


in Fund Balance - Actual (Budgetary Basis) and BudgetGeneral Fund (Cont.)



Expenditures (Cont.)Agriculture & Natural Resources (Cont.)

Forest Service $ 2,000 $ 0 $ 0 $ 2,000 $ 2,000 $ 2,000 $ 0Soil Conservation 32,894 0 0 32,894 32,961 33,304 410

Other OperationsTourism 306,366 0 0 306,366 314,508 314,508 8,142Industrial Development 157,710 (40) 0 157,670 161,400 161,400 3,730Other Economic and Community Development 3,340 0 0 3,340 12,000 12,000 8,660Airport 30,000 0 0 30,000 30,000 30,000 0Veterans' Services 43,938 0 0 43,938 44,505 44,505 567Other Charges 0 0 0 0 200 200 200Contributions to Other Agencies 104,210 0 0 104,210 105,110 105,110 900Employee Benefits 10,298 0 0 10,298 20,560 20,560 10,262Miscellaneous 244,755 0 0 244,755 253,449 253,449 8,694

Capital ProjectsGeneral Administration Projects 35,836 0 0 35,836 0 40,000 4,164

Total Expenditures $ 14,830,370 $ (48,132) $ 236,554 $ 15,018,792 $ 15,631,067 $ 16,245,352 $ 1,226,560

Excess (Deficiency) of RevenuesOver Expenditures $ (687,410) $ 48,132 $ (236,554) $ (875,832) $ (2,842,274) $ (2,561,620) $ 1,685,788

Other Financing Sources (Uses)Transfers In $ 1,178,068 $ 0 $ 0 $ 1,178,068 $ 2,078,068 $ 1,178,068 $ 0Transfers Out (8,363) 0 0 (8,363) (513,600) (13,600) 5,237

Total Other Financing Sources (Uses) $ 1,169,705 $ 0 $ 0 $ 1,169,705 $ 1,564,468 $ 1,164,468 $ 5,237

Net Change in Fund Balance $ 482,295 $ 48,132 $ (236,554) $ 293,873 $ (1,277,806) $ (1,397,152) $ 1,691,025Fund Balance, July 1, 2003 4,321,724 (48,132) 0 4,273,592 3,602,933 3,602,933 670,659

Fund Balance, June 30, 2004 $ 4,804,019 $ 0 $ (236,554) $ 4,567,465 $ 2,325,127 $ 2,205,781 $ 2,361,684

97

99

MAURY COUNTY, TENNESSEE NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION

For the Year Ended June 30, 2004 A. BUDGETARY INFORMATION

The county is required by state statute to adopt annual budgets. Annual budgets are prepared on the basis in which current available funds must be sufficient to meet current expenditures. Expenditures and encumbrances may not legally exceed appropriations authorized by the County Commission and any authorized revisions. Unencumbered appropriations lapse at the end of each fiscal year. The budgetary level of control is at the major category level established by the State Uniform Chart of Accounts, as prescribed by the Comptroller of the Treasury of the State of Tennessee. Major categories are at the department level (examples of General Fund major categories: County Commission, Board of Equalization, County Mayor, County Attorney, etc.). Management may make revisions within major categories, but only the governing body may transfer appropriations between major categories. During the year, several supplementary appropriations were necessary. The county's budgetary basis of accounting is consistent with generally accepted accounting principles (GAAP), except instances in which encumbrances are treated as budgeted expenditures. The difference between the budgetary basis and the GAAP basis is presented on the face of each budgetary statement.

B. EXPENDITURES EXCEEDED APPROPRIATIONS

Expenditures exceeded appropriations in the Election Commission major category (the legal level of control) of the General Fund by $28,029. Such overexpenditures are a violation of state statutes. These overexpenditures were funded by available fund balance.

101

COMBINING AND INDIVIDUAL FUND

FINANCIAL STATEMENTS AND SCHEDULES

103

Nonmajor Governmental Funds

Special Revenue Funds _______________________________

Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than major capital projects) that are legally restricted to expenditures for specific purposes.

_______________________________

Special Purpose Fund – The Special Purpose Fund is used primarily to account for in-lieu-of taxes paid by the Saturn Corporation. Drug Control Fund – The Drug Control Fund is used to account for revenues received from drug-related fines, forfeitures, and seizures. Adequate Facilities/Development Tax Fund – The Adequate Facilities/Development Tax Fund is used to account for the fee assessed on square footage on all new residential and commercial buildings. Other Special Revenue Fund – The Other Special Revenue Fund is used to account for unemployment benefits paid to the State of Tennessee under a reimbursement plan. Constitutional Officers - Fees Fund – The Constitutional Officers - Fees Fund is used to account for operating expenses paid directly from the fee and commission accounts of the trustee, clerks, register, and sheriff. Highway/Public Works Fund – The Highway/Public Works Fund is used to account for transactions of the county Highway Department.

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Capital Projects Funds _______________________________

Capital Projects Funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities.

_______________________________ General Capital Projects Fund – The General Capital Projects Fund is used to account for general capital expenditures of the county. Other Capital Projects Fund – The Other Capital Projects Fund is used to account for expenditures for road equipment and improvements and the construction of a jail facility.

Exhibit H-1

Maury County, TennesseeCombining Balance SheetNonmajor Governmental FundsJune 30, 2004

Adequate Constitu - TotalFacilities/ Other tional Highway/ General Nonmajor

Special Drug Development Special Officers - Public Capital GovernmentalPurpose Control Tax Revenue Fees Works Total Projects Funds

ASSETS

Cash $ 0 $ 0 $ 0 $ 0 $ 207,772 $ 0 $ 207,772 $ 0 $ 207,772Equity in Pooled Cash and Investments 917,693 128,179 1,254,489 58,323 0 2,037,901 4,396,585 845,495 5,242,080Accounts Receivable 0 0 0 13 2,290 0 2,303 0 2,303Due from Other Governments 0 4,327 110,376 0 0 459,324 574,027 0 574,027Due from Other Funds 0 0 0 0 0 2,604 2,604 0 2,604Property Taxes Receivable 0 0 0 0 0 1,833,776 1,833,776 0 1,833,776Allowance for Uncollectible Property Taxes 0 0 0 0 0 (61,855) (61,855) 0 (61,855)Prepaid Items 0 0 0 0 0 23,196 23,196 0 23,196Notes Receivable - Long-term 16,168 0 0 0 0 0 16,168 0 16,168

Total Assets $ 933,861 $ 132,506 $ 1,364,865 $ 58,336 $ 210,062 $ 4,294,946 $ 6,994,576 $ 845,495 $ 7,840,071


LiabilitiesPayroll Deductions Payable $ 0 $ 0 $ 0 $ 0 $ 0 $ 21,049 $ 21,049 $ 0 $ 21,049Contracts Payable 0 0 190,362 0 0 0 190,362 0 190,362Retainage Payable 0 0 21,095 0 0 0 21,095 0 21,095Due to Other Funds 0 0 0 0 50,903 0 50,903 0 50,903Due to State of Tennessee 0 0 0 0 0 1,150 1,150 0 1,150Deferred Revenue - Current Property Taxes 0 0 0 0 0 1,716,087 1,716,087 0 1,716,087Deferred Revenue - Delinquent Property Taxes 0 0 0 0 0 47,148 47,148 0 47,148Other Deferred Revenues 0 0 0 0 0 210,957 210,957 0 210,957

Total Liabilities $ 0 $ 0 $ 211,457 $ 0 $ 50,903 $ 1,996,391 $ 2,258,751 $ 0 $ 2,258,751

Fund BalancesReserved for Encumbrances $ 103,256 $ 0 $ 913,295 $ 0 $ 0 $ 300,533 $ 1,317,084 $ 6,454 $ 1,323,538Reserved for Long-term Notes Receivable 16,168 0 0 0 0 0 16,168 0 16,168Reserved for Capital Outlay 0 0 0 0 0 0 0 611,099 611,099Unreserved 814,437 132,506 240,113 58,336 159,159 1,998,022 3,402,573 227,942 3,630,515

Total Fund Balances $ 933,861 $ 132,506 $ 1,153,408 $ 58,336 $ 159,159 $ 2,298,555 $ 4,735,825 $ 845,495 $ 5,581,320

Total Liabilities and Fund Balances $ 933,861 $ 132,506 $ 1,364,865 $ 58,336 $ 210,062 $ 4,294,946 $ 6,994,576 $ 845,495 $ 7,840,071

Special Revenue Funds

Capital Projects

Fund

105

Exhibit H-2

Maury County, TennesseeCombining Statement of Revenues, Expenditures,

and Changes in Fund BalancesNonmajor Governmental FundsFor the Year Ended June 30, 2004

Adequate Constitu- Facilities/ Other tional

Special Drug Development Special Officers - Purpose Control Tax Revenue Fees

RevenuesLocal Taxes $ 2,143,983 $ 0 $ 1,026,413 $ 0 $ 0Fines, Forfeitures and Penalties 0 107,187 0 0 0Charges for Current Services 0 0 0 0 663,275Other Local Revenues 34,423 0 0 539 0State of Tennessee 0 0 0 0 0Federal Government 0 0 0 0 0Other Governments and Citizens Groups 5,000 0 238,351 50,148 0

Total Revenues $ 2,183,406 $ 107,187 $ 1,264,764 $ 50,687 $ 663,275


Finance $ 207,674 $ 0 $ 0 $ 0 $ 426,113Administration of Justice 0 0 0 0 248,845Public Safety 0 63,017 0 0 0Social, Cultural, and Recreational Services 27,099 0 0 0 0Other Operations 930,807 0 0 37,392 0Highways 0 0 0 0 0

Capital Projects 163,221 0 1,272,635 0 0Total Expenditures $ 1,328,801 $ 63,017 $ 1,272,635 $ 37,392 $ 674,958

Excess (Deficiency) of RevenuesOver Expenditures $ 854,605 $ 44,170 $ (7,871) $ 13,295 $ (11,683)

Other Financing Sources (Uses)Notes Issued $ 0 $ 0 $ 0 $ 0 $ 0Other Loans Issued 0 0 0 0 0Transfers In 0 3,600 0 0 0Transfers Out (1,178,068) 0 0 0 0

Total Other Financing Sources (Uses) $ (1,178,068) $ 3,600 $ 0 $ 0 $ 0

Net Change in Fund Balances $ (323,463) $ 47,770 $ (7,871) $ 13,295 $ (11,683)Fund Balance, July 1, 2003 1,257,324 84,736 1,161,279 45,041 170,842

Fund Balance, June 30, 2004 $ 933,861 $ 132,506 $ 1,153,408 $ 58,336 $ 159,159

(Continued)


106

Exhibit H-2


and Changes in Fund BalancesNonmajor Governmental Funds (Cont.)

Total Highway/ General Other Nonmajor

Public Capital Capital Governmental Works Total Projects Projects Total Funds

RevenuesLocal Taxes $ 1,975,974 $ 5,146,370 $ 0 $ 0 $ 0 $ 5,146,370Fines, Forfeitures and Penalties 0 107,187 0 0 0 107,187Charges for Current Services 0 663,275 0 0 0 663,275Other Local Revenues 26,275 61,237 15,168 0 15,168 76,405State of Tennessee 2,603,690 2,603,690 0 0 0 2,603,690Federal Government 579,225 579,225 1,875 0 1,875 581,100Other Governments and Citizens Groups 1,050 294,549 0 0 0 294,549

Total Revenues $ 5,186,214 $ 9,455,533 $ 17,043 $ 0 $ 17,043 $ 9,472,576


Finance $ 0 $ 633,787 $ 0 $ 0 $ 0 $ 633,787Administration of Justice 0 248,845 0 0 0 248,845Public Safety 0 63,017 0 0 0 63,017Social, Cultural, and Recreational Services 0 27,099 0 0 0 27,099Other Operations 0 968,199 0 0 0 968,199Highways 4,476,388 4,476,388 0 0 0 4,476,388

Capital Projects 166,421 1,602,277 2,035,641 157,408 2,193,049 3,795,326Total Expenditures $ 4,642,809 $ 8,019,612 $ 2,035,641 $ 157,408 $ 2,193,049 $ 10,212,661

Excess (Deficiency) of RevenuesOver Expenditures $ 543,405 $ 1,435,921 $ (2,018,598) $ (157,408) $ (2,176,006) $ (740,085)

Other Financing Sources (Uses)Notes Issued $ 0 $ 0 $ 1,840,000 $ 0 $ 1,840,000 $ 1,840,000Other Loans Issued 0 0 250,000 0 250,000 250,000Transfers In 0 3,600 4,763 0 4,763 8,363Transfers Out 0 (1,178,068) 0 0 0 (1,178,068)

Total Other Financing Sources (Uses) $ 0 $ (1,174,468) $ 2,094,763 $ 0 $ 2,094,763 $ 920,295

Net Change in Fund Balances $ 543,405 $ 261,453 $ 76,165 $ (157,408) $ (81,243) $ 180,210Fund Balance, July 1, 2003 1,755,150 4,474,372 769,330 157,408 926,738 5,401,110

Fund Balance, June 30, 2004 $ 2,298,555 $ 4,735,825 $ 845,495 $ 0 $ 845,495 $ 5,581,320

Special Revenue Funds (Cont.) Capital Projects Funds

107

Exhibit H-3


in Fund Balance - Actual (Budgetary Basis) and BudgetSpecial Purpose FundFor the Year Ended June 30, 2004



RevenuesLocal Taxes $ 2,143,983 $ 0 $ 0 $ 2,143,983 $ 2,000,000 $ 2,143,983 $ 0Other Local Revenues 34,423 0 0 34,423 42,800 42,800 (8,377)State of Tennessee 0 0 0 0 359,000 359,000 (359,000)Other Governments and Citizens Groups 5,000 0 0 5,000 0 0 5,000

Total Revenues $ 2,183,406 $ 0 $ 0 $ 2,183,406 $ 2,401,800 $ 2,545,783 $ (362,377)

ExpendituresFinance

Data Processing $ 207,674 $ (13,015) $ 13,354 $ 208,013 $ 228,800 $ 228,800 $ 20,787Social, Cultural and Recreational Services

Parks and Fair Boards 27,099 (14,776) 0 12,323 13,000 13,000 677Other Operations

Contributions to Other Agencies 195,000 0 0 195,000 195,000 195,000 0Payments to Cities 256,932 0 0 256,932 256,932 256,932 0Miscellaneous 478,875 (87,641) 16,746 407,980 201,000 454,949 46,969

Capital ProjectsGeneral Administration Projects 163,221 (76,089) 73,156 160,288 694,967 699,152 538,864

Total Expenditures $ 1,328,801 $ (191,521) $ 103,256 $ 1,240,536 $ 1,589,699 $ 1,847,833 $ 607,297

Excess (Deficiency) of RevenuesOver Expenditures $ 854,605 $ 191,521 $ (103,256) $ 942,870 $ 812,101 $ 697,950 $ 244,920

Other Financing Sources (Uses)Transfers Out $ (1,178,068) $ 0 $ 0 $ (1,178,068) $ (1,178,068) $ (1,178,068) $ 0

Total Other Financing Sources (Uses) $ (1,178,068) $ 0 $ 0 $ (1,178,068) $ (1,178,068) $ (1,178,068) $ 0

Net Change in Fund Balance $ (323,463) $ 191,521 $ (103,256) $ (235,198) $ (365,967) $ (480,118) $ 244,920Fund Balance, July 1, 2003 1,257,324 (191,521) 0 1,065,803 915,667 915,667 150,136

Fund Balance, June 30, 2004 $ 933,861 $ 0 $ (103,256) $ 830,605 $ 549,700 $ 435,549 $ 395,056

108

Exhibit H-4


in Fund Balance - Actual and BudgetDrug Control FundFor the Year Ended June 30, 2004

Variancewith FinalBudget -

Budgeted Amounts PositiveActual Original Final (Negative)

RevenuesFines, Forfeitures and Penalties $ 107,187 $ 51,000 $ 51,000 $ 56,187

Total Revenues $ 107,187 $ 51,000 $ 51,000 $ 56,187

ExpendituresPublic Safety

Drug Enforcement $ 63,017 $ 80,000 $ 80,000 $ 16,983Total Expenditures $ 63,017 $ 80,000 $ 80,000 $ 16,983

Excess (Deficiency) of RevenuesOver Expenditures $ 44,170 $ (29,000) $ (29,000) $ 73,170

Other Financing Sources (Uses)Transfers In $ 3,600 $ 3,600 $ 3,600 $ 0

Total Other Financing Sources (Uses) $ 3,600 $ 3,600 $ 3,600 $ 0

Net Change in Fund Balance $ 47,770 $ (25,400) $ (25,400) $ 73,170Fund Balance, July 1, 2003 84,736 61,668 61,668 23,068

Fund Balance, June 30, 2004 $ 132,506 $ 36,268 $ 36,268 $ 96,238

109

Exhibit H-5


in Fund Balance - Actual (Budgetary Basis) and BudgetAdequate Facilities/Development Tax FundFor the Year Ended June 30, 2004



RevenuesLocal Taxes $ 1,026,413 $ 0 $ 0 $ 1,026,413 $ 700,000 $ 700,000 $ 326,413Other Governments and Citizens Groups 238,351 0 0 238,351 0 607,416 (369,065)

Total Revenues $ 1,264,764 $ 0 $ 0 $ 1,264,764 $ 700,000 $ 1,307,416 $ (42,652)

ExpendituresCapital Projects

General Administration Projects $ 447,467 $ (7,250) $ 727,890 $ 1,168,107 $ 372,743 $ 1,207,977 $ 39,870Social, Cultural and Recreation Projects 82,763 (15,250) 17,692 85,205 162,109 162,109 76,904Public Utility Projects 117,983 0 0 117,983 117,983 117,983 0Other General Government Projects 0 0 99,000 99,000 0 99,000 0Highway & Street Capital Projects 138,458 0 68,713 207,171 249,980 249,980 42,809Education Capital Projects 485,964 0 0 485,964 235,964 485,964 0


Excess (Deficiency) of RevenuesOver Expenditures $ (7,871) $ 22,500 $ (913,295) $ (898,666) $ (438,779) $ (1,015,597) $ 116,931

Net Change in Fund Balance $ (7,871) $ 22,500 $ (913,295) $ (898,666) $ (438,779) $ (1,015,597) $ 116,931Fund Balance, July 1, 2003 1,161,279 (22,500) 0 1,138,779 1,138,779 1,138,779 0

Fund Balance, June 30, 2004 $ 1,153,408 $ 0 $ (913,295) $ 240,113 $ 700,000 $ 123,182 $ 116,931

110

Exhibit H-6


in Fund Balance - Actual and BudgetOther Special Revenue FundFor the Year Ended June 30, 2004



RevenuesOther Local Revenues $ 539 $ 0 $ 0 $ 539Other Governments and Citizens Groups 50,148 0 50,148 0

Total Revenues $ 50,687 $ 0 $ 50,148 $ 539

ExpendituresOther Operations

Employee Benefits $ 37,392 $ 90,000 $ 90,000 $ 52,608Total Expenditures $ 37,392 $ 90,000 $ 90,000 $ 52,608


Other Financing Sources (Uses)Transfers In $ 0 $ 90,000 $ 39,852 $ (39,852)

Total Other Financing Sources (Uses) $ 0 $ 90,000 $ 39,852 $ (39,852)

Net Change in Fund Balance $ 13,295 $ 0 $ 0 $ 13,295Fund Balance, July 1, 2003 45,041 45,046 45,046 (5)

Fund Balance, June 30, 2004 $ 58,336 $ 45,046 $ 45,046 $ 13,290

111

Exhibit H-7


in Fund Balance - Actual (Budgetary Basis) and BudgetHighway/Public Works FundFor the Year Ended June 30, 2004



RevenuesLocal Taxes $ 1,975,974 $ 0 $ 0 $ 1,975,974 $ 1,841,600 $ 1,841,600 $ 134,374Other Local Revenues 26,275 0 0 26,275 0 7,050 19,225State of Tennessee 2,603,690 0 0 2,603,690 2,554,129 2,624,129 (20,439)Federal Government 579,225 0 0 579,225 0 579,225 0Other Governments and Citizens Groups 1,050 0 0 1,050 0 0 1,050

Total Revenues $ 5,186,214 $ 0 $ 0 $ 5,186,214 $ 4,395,729 $ 5,052,004 $ 134,210

ExpendituresHighways

Administration $ 163,786 $ (438) $ 0 $ 163,348 $ 170,649 $ 170,649 $ 7,301Highway and Bridge Maintenance 2,781,338 (3,804) 97,824 2,875,358 2,509,158 3,150,383 275,025Operation and Maintenance of Equipment 631,561 (267) 9,116 640,410 724,000 724,000 83,590Other Charges 431,724 0 0 431,724 528,929 466,929 35,205Employee Benefits 3,604 0 0 3,604 8,500 8,500 4,896Capital Outlay 464,375 (154,906) 189,190 498,659 563,752 640,802 142,143

Capital ProjectsHighway & Street Capital Projects 166,421 0 4,403 170,824 175,000 323,000 152,176


Excess (Deficiency) of RevenuesOver Expenditures $ 543,405 $ 159,415 $ (300,533) $ 402,287 $ (284,259) $ (432,259) $ 834,546

Other Financing Sources (Uses)Transfers Out $ 0 $ 0 $ 0 $ 0 $ (5,000) $ (5,000) $ 5,000

Total Other Financing Sources (Uses) $ 0 $ 0 $ 0 $ 0 $ (5,000) $ (5,000) $ 5,000

Net Change in Fund Balance $ 543,405 $ 159,415 $ (300,533) $ 402,287 $ (289,259) $ (437,259) $ 839,546Fund Balance, July 1, 2003 1,755,150 (159,415) 0 1,595,735 1,290,163 1,290,163 305,572

Fund Balance, June 30, 2004 $ 2,298,555 $ 0 $ (300,533) $ 1,998,022 $ 1,000,904 $ 852,904 $ 1,145,118

112

113

Major Governmental Fund

General Debt Service Fund _______________________________

The General Debt Service Fund is used to account for the accumulation of resources for, and the payment of, debt principal, interest, and related costs.

_______________________________

Exhibit I


in Fund Balance - Actual and BudgetGeneral Debt Service FundFor the Year Ended June 30, 2004



RevenuesLocal Taxes $ 5,968,778 $ 5,690,500 $ 5,690,500 $ 278,278Other Local Revenues 368,501 500,000 514,042 (145,541)State of Tennessee 599,749 475,000 475,000 124,749

Total Revenues $ 6,937,028 $ 6,665,500 $ 6,679,542 $ 257,486

ExpendituresPrincipal

General Government $ 909,250 $ 9,203,119 $ 1,273,461 $ 364,211Highways and Streets 814,490 0 888,536 74,046Education 3,831,073 0 4,828,819 997,746

InterestGeneral Government 84,838 1,883,331 361,183 276,345Highways and Streets 72,204 0 103,083 30,879Education 482,895 0 988,221 505,326

Other Debt ServiceGeneral Government 403,769 183,613 460,994 57,225

Total Expenditures $ 6,598,519 $ 11,270,063 $ 8,904,297 $ 2,305,778

Excess (Deficiency) of RevenuesOver Expenditures $ 338,509 $ (4,604,563) $ (2,224,755) $ 2,563,264

Other Financing Sources (Uses)Refunding Debt Issued $ 25,241,170 $ 0 $ 25,241,170 $ 0Premiums on Debt Issued 2,227,218 0 2,227,218 0Transfers In 0 2,784,733 141,586 (141,586)Payments to Refunded Debt Escrow Agent (27,271,247) 0 (27,271,247) 0

Total Other Financing Sources (Uses) $ 197,141 $ 2,784,733 $ 338,727 $ (141,586)

Net Change in Fund Balance $ 535,650 $ (1,819,830) $ (1,886,028) $ 2,421,678Fund Balance, July 1, 2003 5,420,466 5,519,134 5,519,134 (98,668)

Fund Balance, June 30, 2004 $ 5,956,116 $ 3,699,304 $ 3,633,106 $ 2,323,010

115

117

Internal Service Funds _______________________________

Internal Service Funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the county, or other governments, on a cost-reimbursed basis.

_______________________________ Central Maintenance/Garage Fund – The Central Maintenance Garage Fund is used to account for the county’s central vehicle maintenance program. Employee Insurance - Prescriptions Fund – The Employee Insurance - Prescriptions Fund is used to account for the county’s self-insured prescription drugs program.

Exhibit J-1

Maury County, TennesseeCombining Statement of Net AssetsInternal Service FundsJune 30, 2004

Governmental ActivitiesCentral Employee

Maintenance/ Insurance -Garage Prescriptions Total

ASSETS

Current Assets: Equity in Pooled Cash and Investments $ 99,277 $ 41,077 $ 140,354 Accounts Receivable 5,755 0 5,755 Due from Other Funds 0 15,106 15,106 Prepaid Items 3,306 0 3,306 Total Current Assets $ 108,338 $ 56,183 $ 164,521

Noncurrent Assets: Capital Assets (Net of Accumulated Depreciation): Land $ 25,000 $ 0 $ 25,000 Buildings and Improvements 67,680 0 67,680 Machinery and Equipment 3,050 0 3,050 Total Noncurrent Assets $ 95,730 $ 0 $ 95,730

Total Assets $ 204,068 $ 56,183 $ 260,251

LIABILITIES

Current Liabilities: Accounts Payable $ 65 $ 10,713 $ 10,778 Payroll Deductions Payable 3,139 0 3,139 Due to Other Funds 5,079 2,604 7,683 Total Current Liabilities $ 8,283 $ 13,317 $ 21,600

Total Liabilities $ 8,283 $ 13,317 $ 21,600

NET ASSETS

Invested in Capital Assets $ 95,730 $ 0 $ 95,730Unrestricted 100,055 42,866 142,921

Total Net Assets $ 195,785 $ 42,866 $ 238,651

119

Exhibit J-2

Maury County, TennesseeCombining Statement of Revenues, Expenses, and Changes in Net AssetsInternal Service FundsFor the Year Ended June 30, 2004

Central EmployeeMaintenance/ Insurance -

Garage Prescriptions Total

Operating Revenues Charges for Current Services $ 1,151,192 $ 364,716 $ 1,515,908 Other Local Revenues 308 0 308

Total Operating Revenues $ 1,151,500 $ 364,716 $ 1,516,216

Operating Expenses Other General Administration $ 1,186,510 $ 0 $ 1,186,510 Other Operations 0 321,850 321,850 Depreciation and Amortization Expense 7,800 0 7,800

Total Operating Expenses $ 1,194,310 $ 321,850 $ 1,516,160

Operating Income (Loss) $ (42,810) $ 42,866 $ 56

Change in Net Assets $ (42,810) $ 42,866 $ 56Net Assets , July 1, 2003 238,595 0 238,595

Nets Assets, June 30, 2004 $ 195,785 $ 42,866 $ 238,651

Governmental Activities

120

Exhibit J-3

Maury County, TennesseeCombining Statement of Cash FlowsInternal Service FundsFor the Year Ended June 30, 2004

Central EmployeeMaintenance/ Insurance -

Garage Prescriptions Total

CASH FLOWS FROM OPERATING ACTIVITIES Receipts from Customers and Users $ 0 $ 349,610 $ 349,610 Receipts from Interfund Services Provided 1,149,440 0 1,149,440 Other Cash Receipts (Payments) 308 0 308 Payments to Employees 0 (308,533) (308,533) Central Maintenance Garage Activity - Uses (1,179,652) 0 (1,179,652)

Net cash provided by (used in) operating activities $ (29,904) $ 41,077 $ 11,173

Net increase (decrease) in cash and cash equivalents $ (29,904) $ 41,077 11,173Cash and cash equivalents, July 1, 2003 129,181 0 129,181

Cash and cash equivalents, June 30, 2004 $ 99,277 $ 41,077 $ 140,354

RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating income (loss) $ (42,810) $ 42,866 $ 56 Adjustments to reconcile net operating income (loss) to net cash provided by (used in) operating activities: Depreciation and Amortization Expense 7,800 0 7,800 (Increase) decrease in Accounts Receivable (5,755) 0 (5,755) (Increase) decrease in Due from Other Funds 0 (15,106) (15,106) (Increase) decrease in Due from Other Governments 4,360 0 4,360 (Increase) decrease in Prepaid Items (357) 0 (357) Increase (decrease) in Accounts Payable 65 10,713 10,778 Increase (decrease) in Payroll Deductions Payable 1,714 0 1,714 Increase (decrease) in Due to Other Funds 5,079 2,604 7,683

Net cash provided by (used in) operating activities $ (29,904) $ 41,077 $ 11,173

Governmental Activities

121

123

Agency Funds _______________________________

Agency Funds are used to account for assets held by the county as an agent for individuals, private organizations, other governments, and/or other funds. Agency Funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations.

_______________________________ Cities - Sales Tax Fund – The Cities - Sales Tax Fund is used to account for the second half of the sales tax revenues collected inside incorporated cities of the county. These revenues are received by the county from the State of Tennessee and forwarded to the various cities on a monthly basis. Constitutional Officers - Agency Fund – The Constitutional Officers - Agency Fund is used to account for amounts collected in an agency capacity by the county clerk; circuit and general sessions courts clerk; clerk and master; register; and sheriff. Such collections include amounts due the state, cities, other county funds, litigants, heirs, and others.

Exhibit K-1

Maury County, TennesseeCombining Statement of Fiduciary Assets and LiabilitiesFiduciary FundsJune 30, 2004

Constitu-Cities - tionalSales Officers -Tax Agency Total

ASSETSCash $ 0 $ 1,484,130 $ 1,484,130Investments 0 34,868 34,868Due from Other Governments 1,261,523 0 1,261,523

Total Assets $ 1,261,523 $ 1,518,998 $ 2,780,521

LIABILITIESDue to Other Taxing Units $ 1,261,523 $ 0 $ 1,261,523Due to Litigants, Heirs and Others 0 1,518,998 1,518,998

Total Liabilities $ 1,261,523 $ 1,518,998 $ 2,780,521

Agency Funds

125

Maury County, TennesseeCombining Statement of Changes in Assets and Liabilities - All Agency FundsFor the Year Ended June 30, 2004

Beginning EndingBalance Additions Deductions Balance

Cities - Sales Tax Fund Assets Equity in Pooled Cash and Investments $ 0 $ 7,233,382 $ 7,233,382 $ 0 Due From Other Governments 1,161,568 1,261,523 1,161,568 1,261,523

Total Assets $ 1,161,568 $ 8,494,905 $ 8,394,950 $ 1,261,523

Liabilities Due to Other Taxing Units $ 1,161,568 $ 8,494,905 $ 8,394,950 $ 1,261,523


Constitutional Officers - Agency Fund Assets Cash $ 1,526,852 $ 14,783,223 $ 14,825,945 $ 1,484,130 Investments 35,021 0 153 34,868

Total Assets $ 1,561,873 $ 14,783,223 $ 14,826,098 $ 1,518,998

Liabilities Due to Litigants, Heirs and Others $ 1,561,873 $ 14,783,223 $ 14,826,098 $ 1,518,998


Totals - All Agency Funds Assets Equity in Pooled Cash and Investments $ 0 $ 7,233,382 $ 7,233,382 $ 0 Cash 1,526,852 14,783,223 14,825,945 1,484,130 Due From Other Governments 1,161,568 1,261,523 1,161,568 1,261,523 Investments 35,021 0 153 34,868

Total Assets $ 2,723,441 $ 23,278,128 $ 23,221,048 $ 2,780,521

Liabilities Due to Other Taxing Units $ 1,161,568 $ 8,494,905 $ 8,394,950 $ 1,261,523 Due to Litigants, Heirs and Others 1,561,873 14,783,223 14,826,098 1,518,998


Exhibit K-2

126

127

Maury County School Department _______________________________

This section presents fund financial statements for the Maury County School Department, a discretely presented component unit. The School Department uses a General Fund, two Special Revenue Funds, and one Capital Projects Fund.

_______________________________ General Purpose School Fund – The General Purpose School Fund is used to account for general operations of the School Department. School Federal Projects Fund – The School Federal Projects Fund is used to account for restricted federal revenues which must be expended on specific education programs. Central Cafeteria Fund – The Central Cafeteria Fund is used to account for the cafeteria operations in each of the schools. Education Capital Projects Fund – The Education Capital Projects Fund is used to account for building construction and renovations of the School Department.

Exhibit L-1

Maury County, TennesseeStatement of ActivitiesDiscretely Presented Maury County School DepartmentFor the Year Ended June 30, 2004

Net (Expenses)Revenues and

Changes inOperating Capital Net Assets

Charges Grants Grants Totalfor and and Governmental

Functions/Programs Expenses Services Contributions Contributions Activities

Component Unit: Governmental Activities: Instruction $ 46,334,795 $ 66,022 $ 4,818,066 $ 0 $ (41,450,707) Support Services 21,292,090 223,796 2,925 1,155,964 (19,909,405) Operation of Noninstructional Services 4,196,900 2,348,533 1,959,176 0 110,809

Total Governmental Activities $ 71,823,785 $ 2,638,351 $ 6,780,167 $ 1,155,964 $ (61,249,303)

General Revenues:

Taxes: Property taxes levied for general purposes $ 16,387,321 Local option sales tax 8,538,412 Other local taxes 13,228Grants & contributions not restricted for specific programs 35,338,735Unrestricted investment earnings 10,759Miscellaneous 133,786

Total General Revenues $ 60,422,241

Change in net assets $ (827,062)Net assets, July 1, 2003 70,768,757

Net assets, June 30, 2004 $ 69,941,695

Program Revenues

129

Exhibit L-2

Maury County, TennesseeBalance Sheet - Governmental FundsDiscretely Presented Maury County School DepartmentJune 30, 2004

Nonmajor Major FundsFund Other Total

General Govern- Govern-Purpose mental mentalSchool Funds Funds

ASSETS

Cash $ 0 $ 9,635 $ 9,635Equity in Pooled Cash and Investments 2,665,296 1,627,727 4,293,023Accounts Receivable 100,824 4,856 105,680Due from Other Governments 1,854,622 204,898 2,059,520Property Taxes Receivable 17,535,490 0 17,535,490Allowance for Uncollectible Property Taxes (591,488) 0 (591,488)

Total Assets $ 21,564,744 $ 1,847,116 $ 23,411,860


LiabilitiesAccounts Payable $ 49,468 $ 0 $ 49,468Accrued Payroll 76,144 0 76,144Contracts Payable 0 17,030 17,030Due to State of Tennessee 0 4,163 4,163Deferred Revenue - Current Property Taxes 16,410,093 0 16,410,093Deferred Revenue - Delinquent Property Taxes 462,541 0 462,541Other Deferred Revenues 885,891 4,856 890,747

Total Liabilities $ 17,884,137 $ 26,049 $ 17,910,186

Fund BalancesReserved for Encumbrances $ 515,164 $ 121,681 $ 636,845Reserved for Vocational Projects 0 763 763Reserved for Career Ladder - Extended Contract 46,803 0 46,803Reserved for Career Ladder Program 32,424 0 32,424Reserved for BEP Non-Classroom 673,939 0 673,939Reserved for Title I Grants to Local Education Agencies 0 146,842 146,842Reserved for Innovative Education Program Strategies 0 23,279 23,279Reserved for Special Education - Grants to States 0 130,178 130,178Other Federal Reserves 0 96,933 96,933Unreserved, Reported In:

General Fund 2,412,277 0 2,412,277Special Revenue Funds 0 1,024,951 1,024,951Capital Projects Funds 0 276,440 276,440

Total Fund Balances $ 3,680,607 $ 1,821,067 $ 5,501,674

Total Liabilities and Fund Balances $ 21,564,744 $ 1,847,116 $ 23,411,860

130

Exhibit L-3

Maury County, TennesseeReconciliation of the Balance Sheet of Governmental Funds to the Statement of Net AssetsDiscretely Presented Maury County School DepartmentJune 30, 2004

Amounts reported for governmental activities in the statement of net assets (Exhibit A) are different because:

Total fund balances - balance sheet - governmental funds (Exhibit L-2) $ 5,501,674

(1) Capital assets used in governmental activities are not financial resources andtherefore are not reported in the funds. 66,506,359

(2) Long-term liabilities are not due in the current period and therefore arenot reported in the funds. (3,419,626)

(3) Other long-term assets are not available to pay for current-periodexpenditures and therefore are deferred in the funds. 1,353,288

Net assets of governmental funds (Exhibit A) $ 69,941,695

131

Exhibit L-4

Maury County, TennesseeStatement of Revenues, Expenditures,

and Changes in Fund Balances -Governmental Funds

Discretely Presented Maury County School DepartmentFor the Year Ended June 30, 2004

NonmajorMajor FundsFund Other

General Govern- Total Purpose mental Governmental School Funds Funds

RevenuesLocal Taxes $ 25,111,616 $ 0 $ 25,111,616Licenses and Permits 5,500 0 5,500Charges for Current Services 262,159 2,348,167 2,610,326Other Local Revenues 141,954 27,783 169,737State of Tennessee 35,551,904 54,277 35,606,181Federal Government 765,416 6,133,445 6,898,861Other Governments and Citizens Groups 0 1,155,964 1,155,964

Total Revenues $ 61,838,549 $ 9,719,636 $ 71,558,185


Instruction $ 40,840,652 $ 3,218,550 $ 44,059,202Support Services 19,828,286 1,044,525 20,872,811Operation of Non-Instructional Services 0 3,987,720 3,987,720

Capital Projects 0 1,454,171 1,454,171Total Expenditures $ 60,668,938 $ 9,704,966 $ 70,373,904

Excess (Deficiency) of RevenuesOver Expenditures $ 1,169,611 $ 14,670 $ 1,184,281

Other Financing Sources (Uses)Transfers In $ 39,303 $ 93,677 $ 132,980Transfers Out (93,677) (39,303) (132,980)

Total Other Financing Sources (Uses) $ (54,374) $ 54,374 $ 0

Net Change in Fund Balances $ 1,115,237 $ 69,044 $ 1,184,281Fund Balance, July 1, 2003 2,565,370 1,752,023 4,317,393

Fund Balance, June 30, 2004 $ 3,680,607 $ 1,821,067 $ 5,501,674

132

Exhibit L-5

Maury County, TennesseeReconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of ActivitiesDiscretely Presented Maury County School DepartmentFor the Year Ended June 30, 2004

Amounts reported for governmental activities in the statement of activities (Exhibit B) are different because:

Net change in fund balances - total governmental funds (Exhibit L-4) $ 1,184,281

(1) Governmental funds report capital outlays as expenditures. However, in the statementof activities the cost of those assets is allocated over their estimated useful livesand reported as depreciation expense. This is the amount by which depreciationexceeded capital outlays in the current period. (1,329,452)

(2) The net effect of various miscellaneous transactions involving capital assets (sales,trade-ins, and donations) was to decrease net assets. (4,113)

(3) Revenues in the statement of activities that do not provide current financial resourcesare not reported as revenues in the funds. (722,363)

(4) Some expenses reported in the statement of activities do not require the use ofcurrent financial resources and therefore are not reported as expenditures ingovernmental funds. 44,585

Change in net assets of governmental activities (Exhibit B) $ (827,062)

133

Exhibit L-6

Maury County, TennesseeCombining Balance Sheet - Nonmajor Governmental FundsDiscretely Presented Maury County School DepartmentJune 30, 2004

TotalSchool Education NonmajorFederal Central Capital GovernmentalProjects Cafeteria Total Projects Funds

ASSETS

Cash $ 0 $ 9,635 $ 9,635 $ 0 $ 9,635Equity in Pooled Cash and Investments 213,967 998,609 1,212,576 415,151 1,627,727Accounts Receivable 0 4,856 4,856 0 4,856Due from Other Governments 184,028 20,870 204,898 0 204,898

Total Assets $ 397,995 $ 1,033,970 $ 1,431,965 $ 415,151 $ 1,847,116


LiabilitiesContracts Payable $ 0 $ 0 $ 0 $ 17,030 $ 17,030Due to State of Tennessee 0 4,163 4,163 0 4,163Other Deferred Revenues 0 4,856 4,856 0 4,856

Total Liabilities $ 0 $ 9,019 $ 9,019 $ 17,030 $ 26,049

Fund BalancesReserved for Encumbrances $ 0 $ 0 $ 0 $ 121,681 $ 121,681Reserved for Vocational Projects 763 0 763 0 763Reserved for Title I Grants to Local Education Agencies 146,842 0 146,842 0 146,842Reserved for Innovative Education Program Strategies 23,279 0 23,279 0 23,279Reserved for Special Education - Grants to States 130,178 0 130,178 0 130,178Other Federal Reserves 96,933 0 96,933 0 96,933Unreserved 0 1,024,951 1,024,951 276,440 1,301,391

Total Fund Balances $ 397,995 $ 1,024,951 $ 1,422,946 $ 398,121 $ 1,821,067

Total Liabilities and Fund Balances $ 397,995 $ 1,033,970 $ 1,431,965 $ 415,151 $ 1,847,116

Capital Projects

FundSpecial Revenue Funds

134

Exhibit L-7


and Changes in Fund Balances -Nonmajor Governmental Funds

Discretely Presented Maury County School DepartmentFor the Year Ended June 30, 2004

Total School Education Nonmajor

Federal Central Capital Governmental Projects Cafeteria Total Projects Funds

RevenuesCharges for Current Services $ 0 $ 2,348,167 $ 2,348,167 $ 0 $ 2,348,167Other Local Revenues 0 27,783 27,783 0 27,783State of Tennessee 0 54,277 54,277 0 54,277Federal Government 4,389,447 1,743,998 6,133,445 0 6,133,445Other Governments and Citizens Groups 0 0 0 1,155,964 1,155,964

Total Revenues $ 4,389,447 $ 4,174,225 $ 8,563,672 $ 1,155,964 $ 9,719,636


Instruction $ 3,218,550 $ 0 $ 3,218,550 $ 0 $ 3,218,550Support Services 999,284 45,241 1,044,525 0 1,044,525Operation of Non-Instructional Services 0 3,987,720 3,987,720 0 3,987,720

Capital Projects 0 0 0 1,454,171 1,454,171Total Expenditures $ 4,217,834 $ 4,032,961 $ 8,250,795 $ 1,454,171 $ 9,704,966

Excess (Deficiency) of RevenuesOver Expenditures $ 171,613 $ 141,264 $ 312,877 $ (298,207) $ 14,670

Other Financing Sources (Uses)Transfers In $ 0 $ 93,677 $ 93,677 $ 0 $ 93,677Transfers Out (39,303) 0 (39,303) 0 (39,303)

Total Other Financing Sources (Uses) $ (39,303) $ 93,677 $ 54,374 $ 0 $ 54,374

Net Change in Fund Balances $ 132,310 $ 234,941 $ 367,251 $ (298,207) $ 69,044Fund Balance, July 1, 2003 265,685 790,010 1,055,695 696,328 1,752,023

Fund Balance, June 30, 2004 $ 397,995 $ 1,024,951 $ 1,422,946 $ 398,121 $ 1,821,067


Capital Projects

Fund

135

Exhibit L-8


in Fund Balance - Actual (Budgetary Basis) and BudgetDiscretely Presented Maury County School DepartmentGeneral Purpose School FundFor the Year Ended June 30, 2004



RevenuesLocal Taxes $ 25,111,616 $ 0 $ 0 $ 25,111,616 $ 24,347,300 $ 24,347,300 $ 764,316Licenses and Permits 5,500 0 0 5,500 7,000 7,000 (1,500)Charges for Current Services 262,159 0 0 262,159 200,000 200,000 62,159Other Local Revenues 141,954 0 0 141,954 179,000 268,921 (126,967)State of Tennessee 35,551,904 0 0 35,551,904 35,597,559 35,921,861 (369,957)Federal Government 765,416 0 0 765,416 1,012,941 1,226,285 (460,869)

Total Revenues $ 61,838,549 $ 0 $ 0 $ 61,838,549 $ 61,343,800 $ 61,971,367 $ (132,818)

ExpendituresInstruction

Regular Instruction Program $ 32,850,187 $ (75,701) $ 148,768 $ 32,923,254 $ 33,746,392 $ 33,763,756 $ 840,502Alternative Instruction Program 153,571 0 0 153,571 221,591 221,591 68,020Special Education Program 5,655,711 (39,758) 62,144 5,678,097 5,766,561 5,849,020 170,923Vocational Education Program 2,081,225 (13,511) 14,424 2,082,138 2,119,573 2,190,627 108,489Adult Education Program 99,958 (1,993) 36 98,001 118,128 115,412 17,411

Support ServicesAttendance 402,503 (17,585) 4,283 389,201 291,034 401,034 11,833Health Services 209,046 (2,505) 2,941 209,482 247,667 247,667 38,185Other Student Support 1,339,994 (7,458) 1,911 1,334,447 1,373,792 1,385,780 51,333Regular Instruction Program 2,349,298 (143,778) 54,928 2,260,448 2,421,361 2,529,394 268,946Alternative Instruction Program 181,213 (28,472) 4,356 157,097 158,913 183,914 26,817Special Education Program 776,997 (2,152) 3,353 778,198 874,685 860,575 82,377Vocational Education Program 112,942 (4,015) 3,427 112,354 110,163 142,676 30,322Adult Programs 145,864 (2,095) 952 144,721 150,017 152,938 8,217Board of Education 1,334,666 (8,930) 25,263 1,350,999 1,411,765 1,435,327 84,328Director of Schools 221,838 (13,752) 10,432 218,518 208,642 208,642 (9,876)Office of the Principal 4,105,296 (14,486) 4,250 4,095,060 4,320,364 4,210,364 115,304Fiscal Services 375,240 (8,951) 11,078 377,367 383,828 383,828 6,461Operation of Plant 4,218,739 (7,001) 44,127 4,255,865 3,907,631 4,181,130 (74,735)

(Continued)

136

Exhibit L-8


in Fund Balance - Actual (Budgetary Basis) and BudgetDiscretely Presented Maury County School DepartmentGeneral Purpose School Fund (Cont.)



Expenditures (Cont.)Support Services (Cont.)

Maintenance of Plant $ 1,041,157 $ (79,718) $ 92,599 $ 1,054,038 $ 1,164,642 $ 1,107,142 $ 53,104Transportation 2,292,460 (1,455) 8,813 2,299,818 2,344,225 2,343,225 43,407Central and Other 721,033 (20,834) 17,079 717,278 684,477 731,977 14,699

Total Expenditures $ 60,668,938 $ (494,150) $ 515,164 $ 60,689,952 $ 62,025,451 $ 62,646,019 $ 1,956,067

Excess (Deficiency) of RevenuesOver Expenditures $ 1,169,611 $ 494,150 $ (515,164) $ 1,148,597 $ (681,651) $ (674,652) $ 1,823,249

Other Financing Sources (Uses)Transfers In $ 39,303 $ 0 $ 0 $ 39,303 $ 30,000 $ 30,000 $ 9,303Transfers Out (93,677) 0 0 (93,677) (96,849) (103,848) 10,171

Total Other Financing Sources (Uses) $ (54,374) $ 0 $ 0 $ (54,374) $ (66,849) $ (73,848) $ 19,474

Net Change in Fund Balance $ 1,115,237 $ 494,150 $ (515,164) $ 1,094,223 $ (748,500) $ (748,500) $ 1,842,723Fund Balance, July 1, 2003 2,565,370 (494,150) 0 2,071,220 748,500 748,500 1,322,720

Fund Balance, June 30, 2004 $ 3,680,607 $ 0 $ (515,164) $ 3,165,443 $ 0 $ 0 $ 3,165,443

137

Exhibit L-9


in Fund Balance - Actual and BudgetDiscretely Presented Maury County School DepartmentSchool Federal Projects FundFor the Year Ended June 30, 2004



RevenuesFederal Government $ 4,389,447 $ 6,529,691 $ 6,529,691 $ (2,140,244)

Total Revenues $ 4,389,447 $ 6,529,691 $ 6,529,691 $ (2,140,244)

ExpendituresInstruction

Regular Instruction Program $ 1,987,239 $ 2,489,027 $ 2,489,027 $ 501,788Special Education Program 1,030,942 2,312,657 2,312,657 1,281,715Vocational Education Program 200,369 200,369 200,369 0

Support ServicesOther Student Support 40,518 77,158 77,158 36,640Regular Instruction Program 453,827 913,174 913,174 459,347Special Education Program 152,721 273,392 273,392 120,671Maintenance of Plant 519 19,924 19,924 19,405Transportation 351,699 441,430 441,430 89,731

Total Expenditures $ 4,217,834 $ 6,727,131 $ 6,727,131 $ 2,509,297


Other Financing Sources (Uses)Transfers Out $ (39,303) $ (68,245) $ (68,245) $ 28,942

Total Other Financing Sources (Uses) $ (39,303) $ (68,245) $ (68,245) $ 28,942

Net Change in Fund Balance $ 132,310 $ (265,685) $ (265,685) $ 397,995Fund Balance, July 1, 2003 265,685 265,685 265,685 0

Fund Balance, June 30, 2004 $ 397,995 $ 0 $ 0 $ 397,995

138

Exhibit L-10


in Fund Balance - Actual (Budgetary Basis) and BudgetDiscretely Presented Maury County School DepartmentCentral Cafeteria FundFor the Year Ended June 30, 2004


Actual Less: Expenditures Budget -(GAAP Encumbrances (Budgetary Budgeted Amounts PositiveBasis) 7/1/2003 Basis) Original Final (Negative)

RevenuesCharges for Current Services $ 2,348,167 $ 0 $ 2,348,167 $ 2,323,100 $ 2,320,823 $ 27,344Other Local Revenues 27,783 0 27,783 24,100 24,100 3,683State of Tennessee 54,277 0 54,277 52,000 54,277 0Federal Government 1,743,998 0 1,743,998 1,481,500 1,481,500 262,498

Total Revenues $ 4,174,225 $ 0 $ 4,174,225 $ 3,880,700 $ 3,880,700 $ 293,525

ExpendituresSupport Services

Board of Education $ 45,241 $ 0 $ 45,241 $ 90,000 $ 90,000 $ 44,759Operation of Non-Instructional Services

Food Service 3,987,720 (199) 3,987,521 4,172,325 4,172,325 184,804Total Expenditures $ 4,032,961 $ (199) $ 4,032,762 $ 4,262,325 $ 4,262,325 $ 229,563

Excess (Deficiency) of RevenuesOver Expenditures $ 141,264 $ 199 $ 141,463 $ (381,625) $ (381,625) $ 523,088

Other Financing Sources (Uses)Transfers In $ 93,677 $ 0 $ 93,677 $ 96,849 $ 96,849 $ (3,172)

Total Other Financing Sources (Uses) $ 93,677 $ 0 $ 93,677 $ 96,849 $ 96,849 $ (3,172)

Net Change in Fund Balance $ 234,941 $ 199 $ 235,140 $ (284,776) $ (284,776) $ 519,916Fund Balance, July 1, 2003 790,010 (199) 789,811 655,300 655,300 134,511

Fund Balance, June 30, 2004 $ 1,024,951 $ 0 $ 1,024,951 $ 370,524 $ 370,524 $ 654,427

139

141

MISCELLANEOUS SCHEDULES

Exhibit M-1

Maury County, TennesseeSchedule of Changes in Long-term Notes, Other Loans, and BondsFor the Year Ended June 30, 2004

PaidOriginal and/orAmount Date Last Issued Matured

of Interest of Maturity Outstanding During During Debt OutstandingDescription of Indebtedness Issue Rate Issue Date 7-1-03 Period Period Refunded 6-30-04

NOTES PAYABLE Payable through General Debt Service Fund Asbestos Removal - EPA #1 $ 349,599 0 % 7-28-86 7-28-06 $ 48,556 $ 0 $ 19,422 $ 0 $ 29,134 Asbestos Removal - EPA #2 240,499 0 6-11-87 6-11-07 46,764 0 13,361 0 33,403 County Buildings, Roads and Bridges, Landfill, Schools, Real and Personal Property Acquisition 3,945,000 2.7 to 5 1-1-94 7-1-05 1,175,000 0 375,000 0 800,000 Equipment 1,000,000 3.65 9-12-01 9-12-04 666,667 0 333,333 0 333,334 County Equipment, Highway, School Buses 1,840,000 2.26 9-22-03 12-28-06 0 1,840,000 0 0 1,840,000

Total Notes Payable $ 1,936,987 $ 1,840,000 $ 741,116 $ 0 $ 3,035,871

OTHER LOANS PAYABLE Payable through General Debt Service Fund Public Works Projects 5,000,000 variable various 3-1-04 $ 4,398,000 $ 250,000 $ 0 $ 4,648,000 $ 0 Refunding Loan 15,253,000 variable 3-28-03 3-1-04 15,253,000 0 2,529,000 12,724,000 0

Total Other Loans Payable $ 19,651,000 $ 250,000 $ 2,529,000 $ 17,372,000 $ 0

GENERAL BONDED DEBT Payable through General Debt Service Fund Highway, Jail, and Schools 10,695,000 4.375 to 4.8 6-1-97 6-1-07 $ 3,770,000 $ 0 $ 0 $ 3,770,000 $ 0 Highway and Schools 11,975,000 4.1 to 4.5 4-1-99 4-1-06 8,600,000 0 925,000 5,725,000 1,950,000 Refunding Bond 3,821,170 2 to 2.75 8-15-03 6-1-07 0 3,821,170 1,359,697 0 2,461,473 Refunding Bond 21,420,000 4 to 5 3-1-04 4-1-11 0 21,420,000 0 0 21,420,000

Total General Bonded Debt $ 12,370,000 $ 25,241,170 $ 2,284,697 $ 9,495,000 $ 25,831,473

143

Exhibit M-2

Maury County, TennesseeSchedule of Bond and Interest Requirements by YearGeneral Bonded Debt

Bond Interest TotalYear Requirements Requirements Requirements

7-1-04 to 6-30-05 $ 3,291,025 $ 1,188,775 $ 4,479,8007-1-05 6-30-06 3,461,626 998,004 4,459,6307-1-06 6-30-07 3,558,822 870,118 4,428,9407-1-07 6-30-08 4,000,000 736,000 4,736,0007-1-08 6-30-09 3,700,000 576,000 4,276,0007-1-09 6-30-10 3,950,000 391,000 4,341,0007-1-10 6-30-11 3,870,000 193,500 4,063,500

Total $ 25,831,473 $ 4,953,397 $ 30,784,870

144

Exhibit M-3

Maury County, TennesseeSchedule of Investments - All FundsJune 30, 2004

Date of Date of InterestFund and Type Purchase Maturity Rates Amount

Constitutional Officers - Agency Fund Clerk and Master Merrill Lynch - NOW Account various none varies $ 34,868

Maury Regional Hospital - Enterprise Fund Certificates of Deposit various various various 6,044,841

Total Investments $ 6,079,709

145

Exhibit M-4

Maury County, TennesseeSchedule of Notes Receivable - All FundsJune 30, 2004

OriginalAmountof Date of Date of Interest

Description Debtor Notes Issue Maturity Balance

Special Purpose Fund Maury County Arts Guild $ 45,268 6-14-96 12-14-08 0 % $ 16,168

Total $ 16,168

Rate

146

Exhibit M-5

Maury County, TennesseeSchedule of Transfers - All Funds and Discretely Presented Maury County School DepartmentFor the Year Ended June 30, 2004

From Fund To Fund Purpose Amount

General Drug Control Budgeted allocation of telephone commissions $ 3,600General General Capital Projects Provide state health funds for operations 4,763Special Purpose General Provide funds for operations 900,000Special Purpose General Provide funds for industrial development 160,000Special Purpose General Provide funds for library operations 118,068General Purpose School (School Dept.) Central Cafeteria (School Dept.) Provide funds for operations 93,677School Federal Projects (School Dept.) General Purpose School (School Dept.) Indirect costs 39,303

Total Transfers $ 1,319,411

147

Exhibit M-6

Maury County, TennesseeSchedule of Salaries and Official Bonds of Principal OfficialsFor the Year Ended June 30, 2004

SalaryPaidDuring

Official Authorization for Salary Period Bond Surety

County Mayor Section 8-24-102, TCA $ 74,178 $ 50,000 Cincinnati Insurance CompanyRoad Superintendent Section 8-24-102, TCA 67,620 100,000 Travelers Casualty & Surety CompanyDirector of Schools: G.C. Reel (7/1/03 through 5/31/04) State Board of Education and

Local Board of Education 101,172 (1) 100,000 " Edward A. Hickman (6/1/04 through 6/30/04) State Board of Education and Local Board of Education 7,833 100,000 "Trustee Section 8-24-102, TCA 61,470 1,885,200 Cincinnati Insurance CompanyAssessor of Property Section 8-24-102, TCA 61,470 10,000 Western Surety CompanyCounty Clerk Section 8-24-102, TCA 61,470 50,000 Cincinnati Insurance CompanyCircuit Court Clerk Section 8-24-102, TCA 61,470 50,000 "Clerk and Master Section 8-24-102, TCA, and Chancery Court

Orders 66,910 (2) 70,000 Travelers Casualty & Surety CompanyRegister Section 8-24-102, TCA 61,470 25,000 Cincinnati Insurance CompanySheriff Section 8-24-102, TCA, and

County Commission 71,190 (3) 25,000 "Director of Accounts and Budgets: Kerry Massey (7/1/03 through 8/15/03) Chapter 233, Private Acts of 1963, as amended 9,106 25,000 Travelers Casualty & Surety Company Malinda Stanford (11-1-03 through 6/30/04) Chapter 233, Private Acts of 1963,

as amended 46,245 25,000 Cincinnati Insurance CompanyDirector of Human Resources Chapter 91, Private Acts of 2004 66,072 150,000 (4)

Other Bonds Public Employee Dishonesty 150,000 Local Government Insurance Pool School Employee Blanket Bond 50,000 Indiana Insurance Company

(1) Includes $12,104 in vacation pay.(2) Includes special commissioner fees totaling $5,440.(3) Includes $3,024 received as superintendent of the workhouse and $546 for a law enforcement training supplement.(4) Covered under county's blanket bond.

148

Exhibit M-7

Maury County, TennesseeSchedule of Detailed Revenues -

All Governmental Fund TypesFor the Year Ended June 30, 2004

Adequate Facilities/ Other

Special Drug Development Special General Purpose Control Tax Revenue

Local TaxesCounty Property Taxes

Current Property Tax $ 6,390,741 $ 0 $ 0 $ 0 $ 0Trustee's Collections - Prior Year 256,886 0 0 0 0Circuit/Clerk & Master Collections - Prior Years 116,924 0 0 0 0Interest and Penalty 40,842 0 0 0 0Pick-up Taxes 29,893 0 0 0 0Payments in Lieu of Taxes - T.V.A. 0 0 0 0 0Payments in Lieu of Taxes - Local Utilities 0 0 0 0 0Payments in Lieu of Taxes - Other 0 2,143,983 0 0 0

County Local Option TaxesLocal Option Sales Tax 401,031 0 0 0 0Hotel/Motel Tax 283,830 0 0 0 0Wheel Tax 0 0 0 0 0Litigation Tax - General 373,796 0 0 0 0Litigation Tax - Jail, Workhouse, or Courthouse 0 0 0 0 0Business Tax 656,657 0 0 0 0Mineral Severance Tax 0 0 0 0 0Adequate Facilities/Development Tax 0 0 0 1,026,413 0

Statutory Local TaxesBank Excise Tax 0 0 0 0 0Wholesale Beer Tax 238,555 0 0 0 0Interstate Telecommunications Tax 2,488 0 0 0 0

Total Local Taxes $ 8,791,643 $ 2,143,983 $ 0 $ 1,026,413 $ 0

Licenses and PermitsLicenses

Cable TV Franchise $ 71,800 $ 0 $ 0 $ 0 $ 0Permits

Beer Permits 1,664 0 0 0 0Building Permits 199,458 0 0 0 0Other Permits 10,263 0 0 0 0

Total Licenses and Permits $ 283,185 $ 0 $ 0 $ 0 $ 0

(Continued)


149

Exhibit M-7


All Governmental Fund Types (Cont.)



Fines, Forfeitures and PenaltiesCircuit Court

Fines $ 10,674 $ 0 $ 0 $ 0 $ 0Officers Costs 16,846 0 0 0 0Drug Control Fines 0 0 2,281 0 0Drug Court Fees 8,527 0 0 0 0DUI Treatment Fines 4,154 0 0 0 0Data Entry Fee - Circuit Court 2,090 0 0 0 0

General Sessions CourtFines 97,337 0 0 0 0Officers Costs 109,699 0 0 0 0Game and Fish Fines 2,796 0 0 0 0Drug Control Fines 0 0 8,446 0 0DUI Treatment Fines 16,668 0 0 0 0Data Entry Fee - General Sessions Court 24,144 0 0 0 0

Chancery CourtOfficers Costs 23,951 0 0 0 0Data Entry Fee - Chancery Court 2,141 0 0 0 0

Other Fines, Forfeitures, and PenaltiesProceeds from Confiscated Property 0 0 96,460 0 0

Total Fines, Forfeitures and Penalties $ 319,027 $ 0 $ 107,187 $ 0 $ 0

Charges for Current ServicesFees

Subdivision Lot Fees $ 69,704 $ 0 $ 0 $ 0 $ 0Recreation Fees 39,955 0 0 0 0Copy Fees 3,371 0 0 0 0Library Fees 14,456 0 0 0 0Telephone Commissions 14,180 0 0 0 0Vending Machine Collections 2,369 0 0 0 0Tourism Fees 11,191 0 0 0 0Constitutional Officers' Fees and Commissions 0 0 0 0 0Data Processing Fee - Register 40,946 0 0 0 0Data Processing Fee - Sheriff 10,301 0 0 0 0

(Continued)


150

Exhibit M-7





Charges for Current Services (Cont.)Other Charges for Services

Other Charges for Services $ 12,000 $ 0 $ 0 $ 0 $ 0Total Charges for Current Services $ 218,473 $ 0 $ 0 $ 0 $ 0

Other Local RevenuesRecurring Items

Investment Income $ 740 $ 14,723 $ 0 $ 0 $ 539Lease/Rentals 107,996 19,200 0 0 0Sale of Materials and Supplies 481 0 0 0 0Miscellaneous Refunds 1,281 500 0 0 0

Nonrecurring ItemsAccrued Interest on Debt Issues 0 0 0 0 0Insurance Recovery 2,276 0 0 0 0Sale of Equipment 3,500 0 0 0 0Sale of Property 10,833 0 0 0 0Contributions & Gifts 4,873 0 0 0 0

Other Local RevenuesOther Local Revenues 401,590 0 0 0 0

Total Other Local Revenues $ 533,570 $ 34,423 $ 0 $ 0 $ 539

Fees Received from County OfficialsExcess Fees

County Clerk $ 123,471 $ 0 $ 0 $ 0 $ 0Clerk and Master 93,319 0 0 0 0

Fees In Lieu of SalaryCircuit Court Clerk 678,284 0 0 0 0Register 588,491 0 0 0 0Sheriff 64,149 0 0 0 0Trustee 991,719 0 0 0 0

Total Fees Received from County Officials $ 2,539,433 $ 0 $ 0 $ 0 $ 0

State of TennesseeGeneral Government Grants

Juvenile Services Program $ 10,170 $ 0 $ 0 $ 0 $ 0

(Continued)


151

Exhibit M-7





State of Tennessee (Cont.)General Government Grants (Cont.)

State Reappraisal Grant $ 22,004 $ 0 $ 0 $ 0 $ 0Other General Government Grants 2,000 0 0 0 0

Public Safety GrantsLaw Enforcement Training Programs 32,760 0 0 0 0Other Public Safety Grants 31,283 0 0 0 0

Health and Welfare GrantsOther Health and Welfare Grants 429,759 0 0 0 0

Public Works GrantsBridge Program 0 0 0 0 0

Other State RevenuesIncome Tax 33,005 0 0 0 0Beer Tax 16,881 0 0 0 0Alcoholic Beverage Tax 71,682 0 0 0 0State Revenue Sharing - T.V.A. 0 0 0 0 0Board of Jurors 938 0 0 0 0Contracted Prisoner Boarding 387,779 0 0 0 0Gasoline and Motor Fuel Tax 0 0 0 0 0Petroleum Special Tax 0 0 0 0 0Registrar's Salary Supplement 16,380 0 0 0 0Other State Grants 3,600 0 0 0 0Other State Revenues 11,190 0 0 0 0

Total State of Tennessee $ 1,069,431 $ 0 $ 0 $ 0 $ 0

Federal GovernmentFederal Through State

Disaster Relief $ 1,801 $ 0 $ 0 $ 0 $ 0Law Enforcement Grants 62,341 0 0 0 0Other Federal through State 183,048 0 0 0 0

Direct Federal RevenuePublic Safety Partnership and Community Policing - COPS 3,574 0 0 0 0Other Direct Federal Revenue 1,600 0 0 0 0

Total Federal Government $ 252,364 $ 0 $ 0 $ 0 $ 0

(Continued)


152

Exhibit M-7





Other Governments and Citizens GroupsOther Governments

Prisoner Board $ 5,246 $ 0 $ 0 $ 0 $ 0Paving and Maintenance 0 0 0 0 0Contributions 191 0 0 238,351 50,148Contracted Services 1,743 0 0 0 0

Citizens GroupsDonations 88,581 0 0 0 0

OtherOther 40,073 5,000 0 0 0

Total Other Governments and Citizens Groups $ 135,834 $ 5,000 $ 0 $ 238,351 $ 50,148

Total $ 14,142,960 $ 2,183,406 $ 107,187 $ 1,264,764 $ 50,687

(Continued)


153

Exhibit M-7



Constitu- tional Highway/ General General

Officers - Public Debt Capital Fees Works Service Projects Total


Current Property Tax $ 0 $ 1,633,902 $ 3,573,025 $ 0 $ 11,597,668Trustee's Collections - Prior Year 0 66,711 137,355 0 460,952Circuit/Clerk & Master Collections - Prior Years 0 29,757 65,045 0 211,726Interest and Penalty 0 11,989 24,953 0 77,784Pick-up Taxes 0 7,592 16,607 0 54,092Payments in Lieu of Taxes - T.V.A. 0 0 9,360 0 9,360Payments in Lieu of Taxes - Local Utilities 0 0 230,204 0 230,204Payments in Lieu of Taxes - Other 0 0 87,609 0 2,231,592

County Local Option TaxesLocal Option Sales Tax 0 0 0 0 401,031Hotel/Motel Tax 0 0 0 0 283,830Wheel Tax 0 0 1,627,225 0 1,627,225Litigation Tax - General 0 0 0 0 373,796Litigation Tax - Jail, Workhouse, or Courthouse 0 0 105,047 0 105,047Business Tax 0 0 0 0 656,657Mineral Severance Tax 0 226,023 0 0 226,023Adequate Facilities/Development Tax 0 0 0 0 1,026,413

Statutory Local TaxesBank Excise Tax 0 0 92,348 0 92,348Wholesale Beer Tax 0 0 0 0 238,555Interstate Telecommunications Tax 0 0 0 0 2,488

Total Local Taxes $ 0 $ 1,975,974 $ 5,968,778 $ 0 $ 19,906,791


Cable TV Franchise $ 0 $ 0 $ 0 $ 0 $ 71,800Permits

Beer Permits 0 0 0 0 1,664Building Permits 0 0 0 0 199,458Other Permits 0 0 0 0 10,263

Total Licenses and Permits $ 0 $ 0 $ 0 $ 0 $ 283,185

(Continued)


Debt Service Fund

Capital Projects

Fund

154

Exhibit M-7





Fines, Forfeitures and PenaltiesCircuit Court

Fines $ 0 $ 0 $ 0 $ 0 $ 10,674Officers Costs 0 0 0 0 16,846Drug Control Fines 0 0 0 0 2,281Drug Court Fees 0 0 0 0 8,527DUI Treatment Fines 0 0 0 0 4,154Data Entry Fee - Circuit Court 0 0 0 0 2,090

General Sessions CourtFines 0 0 0 0 97,337Officers Costs 0 0 0 0 109,699Game and Fish Fines 0 0 0 0 2,796Drug Control Fines 0 0 0 0 8,446DUI Treatment Fines 0 0 0 0 16,668Data Entry Fee - General Sessions Court 0 0 0 0 24,144

Chancery CourtOfficers Costs 0 0 0 0 23,951Data Entry Fee - Chancery Court 0 0 0 0 2,141

Other Fines, Forfeitures, and PenaltiesProceeds from Confiscated Property 0 0 0 0 96,460

Total Fines, Forfeitures and Penalties $ 0 $ 0 $ 0 $ 0 $ 426,214


Subdivision Lot Fees $ 0 $ 0 $ 0 $ 0 $ 69,704Recreation Fees 0 0 0 0 39,955Copy Fees 0 0 0 0 3,371Library Fees 0 0 0 0 14,456Telephone Commissions 0 0 0 0 14,180Vending Machine Collections 0 0 0 0 2,369Tourism Fees 0 0 0 0 11,191Constitutional Officers' Fees and Commissions 663,275 0 0 0 663,275Data Processing Fee - Register 0 0 0 0 40,946Data Processing Fee - Sheriff 0 0 0 0 10,301

(Continued)


Debt Service Fund

Capital Projects

Fund

155

Exhibit M-7





Charges for Current Services (Cont.)Other Charges for Services

Other Charges for Services $ 0 $ 0 $ 0 $ 0 $ 12,000Total Charges for Current Services $ 663,275 $ 0 $ 0 $ 0 $ 881,748


Investment Income $ 0 $ 0 $ 354,120 $ 3,996 $ 374,118Lease/Rentals 0 0 0 0 127,196Sale of Materials and Supplies 0 300 0 0 781Miscellaneous Refunds 0 0 339 0 2,120

Nonrecurring ItemsAccrued Interest on Debt Issues 0 0 14,042 0 14,042Insurance Recovery 0 7,050 0 11,172 20,498Sale of Equipment 0 18,925 0 0 22,425Sale of Property 0 0 0 0 10,833Contributions & Gifts 0 0 0 0 4,873

Other Local RevenuesOther Local Revenues 0 0 0 0 401,590

Total Other Local Revenues $ 0 $ 26,275 $ 368,501 $ 15,168 $ 978,476

Fees Received from County OfficialsExcess Fees

County Clerk $ 0 $ 0 $ 0 $ 0 $ 123,471Clerk and Master 0 0 0 0 93,319

Fees In Lieu of SalaryCircuit Court Clerk 0 0 0 0 678,284Register 0 0 0 0 588,491Sheriff 0 0 0 0 64,149Trustee 0 0 0 0 991,719

Total Fees Received from County Officials $ 0 $ 0 $ 0 $ 0 $ 2,539,433

State of TennesseeGeneral Government Grants

Juvenile Services Program $ 0 $ 0 $ 0 $ 0 $ 10,170

(Continued)


Debt Service Fund

Capital Projects

Fund

156

Exhibit M-7





State of Tennessee (Cont.)General Government Grants (Cont.)

State Reappraisal Grant $ 0 $ 0 $ 0 $ 0 $ 22,004Other General Government Grants 0 0 0 0 2,000

Public Safety GrantsLaw Enforcement Training Programs 0 0 0 0 32,760Other Public Safety Grants 0 0 0 0 31,283

Health and Welfare GrantsOther Health and Welfare Grants 0 0 0 0 429,759

Public Works GrantsBridge Program 0 137,807 0 0 137,807

Other State RevenuesIncome Tax 0 0 0 0 33,005Beer Tax 0 0 0 0 16,881Alcoholic Beverage Tax 0 0 0 0 71,682State Revenue Sharing - T.V.A. 0 0 599,749 0 599,749Board of Jurors 0 0 0 0 938Contracted Prisoner Boarding 0 0 0 0 387,779Gasoline and Motor Fuel Tax 0 2,193,029 0 0 2,193,029Petroleum Special Tax 0 55,906 0 0 55,906Registrar's Salary Supplement 0 0 0 0 16,380Other State Grants 0 6,510 0 0 10,110Other State Revenues 0 210,438 0 0 221,628

Total State of Tennessee $ 0 $ 2,603,690 $ 599,749 $ 0 $ 4,272,870


Disaster Relief $ 0 $ 536,184 $ 0 $ 1,875 $ 539,860Law Enforcement Grants 0 0 0 0 62,341Other Federal through State 0 0 0 0 183,048

Direct Federal RevenuePublic Safety Partnership and Community Policing - COPS 0 0 0 0 3,574Other Direct Federal Revenue 0 43,041 0 0 44,641

Total Federal Government $ 0 $ 579,225 $ 0 $ 1,875 $ 833,464

(Continued)


Debt Service Fund

Capital Projects

Fund

157

Exhibit M-7






Prisoner Board $ 0 $ 0 $ 0 $ 0 $ 5,246Paving and Maintenance 0 1,050 0 0 1,050Contributions 0 0 0 0 288,690Contracted Services 0 0 0 0 1,743

Citizens GroupsDonations 0 0 0 0 88,581

OtherOther 0 0 0 0 45,073

Total Other Governments and Citizens Groups $ 0 $ 1,050 $ 0 $ 0 $ 430,383

Total $ 663,275 $ 5,186,214 $ 6,937,028 $ 17,043 $ 30,552,564


Debt Service Fund

Capital Projects

Fund

158

Exhibit M-8


All Governmental Fund TypesDiscretely Presented Maury County School DepartmentFor the Year Ended June 30, 2004

General School Education Purpose Federal Central Capital School Projects Cafeteria Projects Total


Current Property Tax $ 15,612,353 $ 0 $ 0 $ 0 $ 15,612,353Trustee's Collections - Prior Year 549,098 0 0 0 549,098Circuit/Clerk & Master Collections - Prior Years 284,583 0 0 0 284,583Interest and Penalty 101,517 0 0 0 101,517Pick-up Taxes 72,598 0 0 0 72,598

County Local Option TaxesLocal Option Sales Tax 8,478,239 0 0 0 8,478,239

Statutory Local TaxesInterstate Telecommunications Tax 13,228 0 0 0 13,228

Total Local Taxes $ 25,111,616 $ 0 $ 0 $ 0 $ 25,111,616


Marriage Licenses $ 5,500 $ 0 $ 0 $ 0 $ 5,500Total Licenses and Permits $ 5,500 $ 0 $ 0 $ 0 $ 5,500


Vending Machine Collections $ 366 $ 0 $ 0 $ 0 $ 366Education Charges

Tuition - Regular Day Students 44,031 0 0 0 44,031Tuition - Summer School 21,991 0 0 0 21,991Lunch Payments - Children 0 0 1,374,856 0 1,374,856Lunch Payments - Adults 0 0 129,760 0 129,760Income from Breakfast 0 0 121,347 0 121,347A la carte Sales 0 0 638,526 0 638,526Receipts from Individual Schools 195,771 0 0 0 195,771

Other Charges for ServicesOther Charges for Services 0 0 83,678 0 83,678

Total Charges for Current Services $ 262,159 $ 0 $ 2,348,167 $ 0 $ 2,610,326


Investment Income $ 0 $ 0 $ 10,757 $ 0 $ 10,757Lease/Rentals 28,025 0 0 0 28,025Miscellaneous Refunds 99,722 0 14,546 0 114,268

Nonrecurring ItemsInsurance Recovery 6,978 0 0 0 6,978Sale of Equipment 3,830 0 2,480 0 6,310Damages Recovered from Individuals 3,089 0 0 0 3,089

Other Local RevenuesOther Local Revenues 310 0 0 0 310

Total Other Local Revenues $ 141,954 $ 0 $ 27,783 $ 0 $ 169,737

State of TennesseeState Education Funds

Basic Education Program $ 34,273,094 $ 0 $ 0 $ 0 $ 34,273,094School Food Service 0 0 54,277 0 54,277Other State Education Funds 238,747 0 0 0 238,747Career Ladder Program 716,240 0 0 0 716,240Career Ladder - Extended Contract 251,457 0 0 0 251,457Other Vocational 2,620 0 0 0 2,620

Other State RevenuesMixed Drink Tax 42,307 0 0 0 42,307Other State Grants 27,439 0 0 0 27,439

Total State of Tennessee $ 35,551,904 $ 0 $ 54,277 $ 0 $ 35,606,181

(Continued)

159

Exhibit M-8


All Governmental Fund TypesDiscretely Presented Maury County School Department (Cont.)

General School Education Purpose Federal Central Capital School Projects Cafeteria Projects Total


USDA School Lunch Program $ 0 $ 0 $ 1,455,367 $ 0 $ 1,455,367Breakfast 0 0 284,132 0 284,132USDA - Other 0 0 4,499 0 4,499Adult Education State Grant Program 126,360 0 0 0 126,360Vocational Education - Basic Grants to States 0 223,349 0 0 223,349Other Vocational 24,500 0 0 0 24,500Title I Grants to Local Education Agencies 0 1,593,126 0 0 1,593,126Innovative Education Program Strategies 0 101,006 0 0 101,006Special Education - Grants to States 128,908 1,580,391 0 0 1,709,299Special Education Preschool Grants 0 111,363 0 0 111,363Eisenhower Professional Development State Grants 0 700,334 0 0 700,334Disaster Relief 2,925 0 0 0 2,925Other Federal through State 289,692 79,878 0 0 369,570

Direct Federal RevenueROTC Reimbursement 32,441 0 0 0 32,441Other Direct Federal Revenue 160,590 0 0 0 160,590

Total Federal Government $ 765,416 $ 4,389,447 $ 1,743,998 $ 0 $ 6,898,861


Contributions $ 0 $ 0 $ 0 $ 1,155,964 $ 1,155,964Total Other Governments and Citizens Groups $ 0 $ 0 $ 0 $ 1,155,964 $ 1,155,964

Total $ 61,838,549 $ 4,389,447 $ 4,174,225 $ 1,155,964 $ 71,558,185

160

Exhibit M-9

Maury County, TennesseeSchedule of Detailed Expenditures -

All Governmental Fund TypesFor the Year Ended June 30, 2004

General FundGeneral Government

County CommissionBoard and Committee Members Fees $ 41,825 Social Security 2,556 Employer Medicare 598 Dues and Memberships 1,850 Legal Notices, Recording and Court Costs 251 Travel 775 Food Supplies 175 Office Supplies 111 Furniture and Fixtures 762

Total County Commission $ 48,903

Board of EqualizationBoard and Committee Members Fees $ 720 Social Security 42 Employer Medicare 10

Total Board of Equalization 772

Other Boards and CommitteesOther Per Diem & Fees $ 600 Social Security 37 Employer Medicare 9

Total Other Boards and Committees 646

County MayorCounty Official/Administrative Officer $ 74,178 Assistant(s) 26,179 Clerical Personnel 26,481 Longevity Pay 1,150 Social Security 7,971 State Retirement 10,188 Employee and Dependent Insurance 1,917 Life Insurance 216 Medical Insurance 7,166 Dental Insurance 458 Disability Insurance 692 Unemployment Compensation 210 Employer Medicare 1,861 Communication 679 Dues and Memberships 1,747 Maintenance Agreements 653

(Continued)

161

Exhibit M-9



General Fund (Cont.)General Government (Cont.)

County Mayor (Cont.)Postal Charges $ 461 Printing, Stationery and Forms 805 Travel 1,049 Office Supplies 1,103 Periodicals 840 Other Charges 7 Office Equipment 554

Total County Mayor $ 166,565

Personnel OfficeCounty Official/Administrative Officer $ 66,072 Clerical Personnel 83,958 Longevity Pay 500 Social Security 9,314 State Retirement 11,939 Employee and Dependent Insurance 3,061 Life Insurance 235 Medical Insurance 10,375 Dental Insurance 662 Disability Insurance 734 Unemployment Compensation 523 Employer Medicare 2,178 Communication 538 Dues and Memberships 390 Legal Notices, Recording and Court Costs 1,514 Maintenance Agreements 465 Maintenance & Repair Services- Office Equipment 41 Postal Charges 717 Printing, Stationery and Forms 394 Travel 5,150 Office Supplies 1,039 Periodicals 654 Other Charges 90 Furniture and Fixtures 1,181 Office Equipment 239

Total Personnel Office 201,963

County AttorneyCounty Official/Administrative Officer $ 43,224 Longevity Pay 900

(Continued)

162

Exhibit M-9




County Attorney (Cont.)Social Security $ 2,736 State Retirement 3,513 Employee and Dependent Insurance 880 Life Insurance 68 Medical Insurance 3,248 Dental Insurance 205 Disability Insurance 238 Unemployment Compensation 105 Employer Medicare 640

Total County Attorney $ 55,757

Election Commission (Including Voter Registration)County Official/Administrative Officer $ 55,326 Clerical Personnel 46,034 Part-time Personnel 10,857 Longevity Pay 900 Overtime Pay 922 Other Salaries & Wages 1,227 Election Commission 2,805 Election Workers 21,460 Social Security 6,978 State Retirement 8,311 Employee and Dependent Insurance 2,641 Life Insurance 216 Medical Insurance 9,743 Dental Insurance 613 Disability Insurance 549 Unemployment Compensation 315 Employer Medicare 1,632 Communication 2,224 Contracts with Public Carriers 1,000 Data Processing Services 3,600 Dues and Memberships 200 Legal Notices, Recording and Court Costs 2,128 Maintenance Agreements 2,100 Maintenance & Repair Services- Buildings 875 Maintenance & Repair Services- Equipment 1,207 Pest Control 171 Postal Charges 7,680 Printing, Stationery and Forms 57,213

(Continued)

163

Exhibit M-9




Election Commission (Including Voter Registration) (Cont.)Rentals $ 500 Travel 721 Other Contracted Services 950 Data Processing Supplies 428 Electricity 3,018 Natural Gas 1,185 Office Supplies 1,183 Furniture and Fixtures 175

Total Election Commission (Including Voter Registration) $ 257,087

Register of DeedsCounty Official/Administrative Officer $ 61,470 Clerical Personnel 110,705 Part-time Personnel 1,670 Longevity Pay 1,550 Social Security 10,864 State Retirement 13,829 Employee and Dependent Insurance 4,356 Life Insurance 360 Medical Insurance 15,951 Dental Insurance 796 Disability Insurance 910 Unemployment Compensation 445 Employer Medicare 2,541 Data Processing Services 18,949 Dues and Memberships 560 Maintenance Agreements 8,574 Postal Charges 3,887 Travel 687 Office Supplies 3,191 Office Equipment 230

Total Register of Deeds 261,525

DevelopmentCounty Official/Administrative Officer $ 88,354 Secretary(s) 33,343 Clerical Personnel 23,576 Longevity Pay 3,500 Other Salaries & Wages 79,165 Social Security 14,082

(Continued)

164

Exhibit M-9




Development (Cont.)State Retirement $ 12,071 Employee and Dependent Insurance 5,281 Life Insurance 432 Medical Insurance 19,485 Dental Insurance 1,226 Disability Insurance 1,215 Unemployment Compensation 630 Employer Medicare 3,293 Communication 1,295 Consultants 52,489 Dues and Memberships 650 Legal Notices, Recording and Court Costs 1,759 Maintenance Agreements 513 Maintenance & Repair Services- Vehicles 1,268 Postal Charges 1,400 Printing, Stationery and Forms 231 Travel 678 Gasoline 3,237 Lubricants 28 Office Supplies 1,898 Periodicals 1,367 Vehicle Parts 34 Other Charges 84 Furniture and Fixtures 329 Other Equipment 65

Total Development $ 352,978

County BuildingsSupervisor/Director $ 36,175 Custodial Personnel 56,155 Temporary Personnel 355 Longevity Pay 3,600 Overtime Pay 2,681 Other Salaries & Wages 131,223 Social Security 14,170 State Retirement 15,386 Employee and Dependent Insurance 7,053 Life Insurance 568 Medical Insurance 25,908 Dental Insurance 1,634

(Continued)

165

Exhibit M-9




County Buildings (Cont.)Disability Insurance $ 1,104 Unemployment Compensation 1,058 Employer Medicare 3,314 Communication 3,662 Consultants 500 Janitorial Services 950 Laundry Service 4,614 Licenses 1,380 Maintenance Agreements 14,324 Maintenance & Repair Services- Buildings 52,585 Maintenance & Repair Services- Equipment 1,802 Maintenance & Repair Services- Vehicles 1,209 Pest Control 2,289 Printing, Stationery and Forms 41 Rentals 176 Travel 1,150 Disposal Fees 5,988 Other Contracted Services 25,214 Custodial Supplies 6,017 Electricity 126,038 Equipment and Machinery Parts 227 Fertilizer, Lime and Seed 401 Gasoline 3,035 General Construction Materials 1,562 Natural Gas 27,489 Office Supplies 359 Small Tools 385 Uniforms 839 Boiler Insurance 10,191 Building and Contents Insurance 56,410 Building Improvements 8,038 Furniture and Fixtures 536 Office Equipment 35 Other Equipment 2,453

Total County Buildings $ 660,283

Other General AdministrationAudit Services $ 15,678 Dues and Memberships 2,345 Legal Services 66,344

(Continued)

166

Exhibit M-9




Other General Administration (Cont.)Maintenance & Repair Services- Vehicles $ 2,249 Gasoline 835 Judgments 5,944 Liability Insurance 210,212 Premiums on Corporate Surety Bonds 293 Refunds 620 Vehicle and Equipment Insurance 76,223 Worker's Compensation Insurance 168,513 Other Charges 1,501 Other Construction 16,981

Total Other General Administration $ 567,738

Preservation of RecordsCounty Official/Administrative Officer $ 40,560 Assistant(s) 30,264 Social Security 4,384 State Retirement 5,638 Employee and Dependent Insurance 1,759 Life Insurance 144 Medical Insurance 6,495 Dental Insurance 409 Disability Insurance 382 Unemployment Compensation 210 Employer Medicare 1,027 Communication 1,014 Data Processing Services 30 Janitorial Services 4,622 Licenses 30 Maintenance Agreements 3,574 Postal Charges 74 Printing, Stationery and Forms 288 Travel 415 Maintenance and Repair Services - Records 38 Office Supplies 2,723 Periodicals 164 Furniture and Fixtures 533 Other Capital Outlay 57,794

Total Preservation of Records 162,571

(Continued)

167

Exhibit M-9



General Fund (Cont.)Finance

Accounting and BudgetingCounty Official/Administrative Officer $ 55,351 Assistant(s) 54,088 Accountants/Bookkeepers 111,512 Clerical Personnel 85,405 Longevity Pay 3,250 Social Security 18,981 State Retirement 24,677 Employee and Dependent Insurance 6,742 Life Insurance 544 Medical Insurance 24,604 Dental Insurance 1,544 Disability Insurance 1,588 Unemployment Compensation 945 Employer Medicare 4,439 Communication 653 Dues and Memberships 1,165 Legal Notices, Recording and Court Costs 1,002 Maintenance Agreements 1,608 Postal Charges 2,870 Printing, Stationery and Forms 252 Travel 1,970 Office Supplies 4,294 Periodicals 176 Office Equipment 956

Total Accounting and Budgeting $ 408,616

PurchasingAssistant(s) $ 43,481 Social Security 2,672 State Retirement 3,461 Life Insurance 72 Dental Insurance 205 Disability Insurance 230 Unemployment Compensation 105 Employer Medicare 625 Communication 250 Legal Notices, Recording and Court Costs 1,581 Postal Charges 365 Office Supplies 726 Periodicals 100

(Continued)

168

Exhibit M-9



General Fund (Cont.)Finance (Cont.)

Purchasing (Cont.)Office Equipment $ 900

Total Purchasing $ 54,773

Property Assessor's OfficeCounty Official/Administrative Officer $ 61,470 Clerical Personnel 98,307 Longevity Pay 5,150 Other Salaries & Wages 139,312 In-Service Training 2,250 Social Security 18,292 State Retirement 15,489 Employee and Dependent Insurance 8,298 Life Insurance 644 Medical Insurance 30,888 Dental Insurance 1,943 Disability Insurance 1,469 Unemployment Compensation 1,071 Employer Medicare 4,278 Communication 1,039 Data Processing Services 19,954 Dues and Memberships 1,683 Maintenance Agreements 719 Maintenance & Repair Services- Vehicles 2,313 Postal Charges 2,344 Printing, Stationery and Forms 556 Travel 1,369 Other Contracted Services 19,445 Gasoline 1,985 Office Supplies 2,757 Other Charges 299 Data Processing Equipment 2,000 Furniture and Fixtures 512 Office Equipment 300 Other Equipment 415

Total Property Assessor's Office 446,551

Reappraisal ProgramClerical Personnel $ 25,207 Temporary Personnel 9,293 Longevity Pay 1,000

(Continued)

169

Exhibit M-9




Reappraisal Program (Cont.)Other Salaries & Wages $ 57,130 In-Service Training 1,445 Social Security 5,724 State Retirement 6,634 Employee and Dependent Insurance 2,640 Life Insurance 216 Medical Insurance 9,743 Dental Insurance 613 Disability Insurance 447 Unemployment Compensation 420 Employer Medicare 1,339 Communication 751 Data Processing Services 11,702 Maintenance Agreements 314 Maintenance & Repair Services- Vehicles 568 Postal Charges 370 Travel 1,454 Gasoline 399 Office Supplies 1,193 Other Charges 28

Total Reappraisal Program $ 138,630

County Trustee's OfficeCounty Official/Administrative Officer $ 61,470 Clerical Personnel 111,566 Temporary Personnel 4,595 Longevity Pay 3,400 Social Security 11,119 State Retirement 14,044 Employee and Dependent Insurance 4,420 Life Insurance 352 Medical Insurance 15,713 Dental Insurance 1,033 Disability Insurance 914 Unemployment Compensation 500 Employer Medicare 2,600 Communication 251 Data Processing Services 7,648 Dues and Memberships 575 Legal Notices, Recording and Court Costs 152

(Continued)

170

Exhibit M-9




County Trustee's Office (Cont.)Maintenance Agreements $ 446 Postal Charges 7,725 Printing, Stationery and Forms 22 Travel 1,407 Office Supplies 1,422 Periodicals 317 Other Charges 100 Furniture and Fixtures 1,414

Total County Trustee's Office $ 253,205

County Clerk's OfficeSocial Security $ 22 State Retirement 31,580 Employee and Dependent Insurance 10,984 Life Insurance 933 Medical Insurance 39,310 Dental Insurance 2,699 Disability Insurance 2,073 Unemployment Compensation 1,361 Communication 295 Data Processing Services 3,702 Dues and Memberships 525 Legal Notices, Recording and Court Costs 25 Maintenance Agreements 1,210 Postal Charges 11,134 Printing, Stationery and Forms 8,002 Travel 688 Office Supplies 4,337 Periodicals 218 Other Charges 98 Furniture and Fixtures 637

Total County Clerk's Office 119,833

Data ProcessingCounty Official/Administrative Officer $ 57,914 Data Processing Personnel 64,365 Longevity Pay 600 Overtime Pay 1,527 Other Salaries & Wages 31,668 Social Security 9,639

(Continued)

171

Exhibit M-9




Data Processing (Cont.)State Retirement $ 12,424 Employee and Dependent Insurance 1,800 Life Insurance 283 Medical Insurance 6,794 Dental Insurance 613 Disability Insurance 876 Unemployment Compensation 420 Employer Medicare 2,254 Communication 1,517 Dues and Memberships 150 Postal Charges 228 Printing, Stationery and Forms 84 Travel 1,646 Data Processing Supplies 1,020 Office Supplies 360 Periodicals 86 Other Charges 387 Data Processing Equipment 391 Furniture and Fixtures 2,472

Total Data Processing $ 199,518

Administration of JusticeCircuit Court

County Official/Administrative Officer $ 61,470 Clerical Personnel 432,712 Part-time Personnel 14,929 Longevity Pay 5,550 Jury and Witness Fees 35,390 In-Service Training 150 Other Per Diem & Fees 3,050 Social Security 32,089 State Retirement 35,634 Employee and Dependent Insurance 14,198 Life Insurance 1,154 Medical Insurance 51,773 Dental Insurance 3,267 Disability Insurance 2,636 Unemployment Compensation 2,080 Employer Medicare 7,505 Communication 930

(Continued)

172

Exhibit M-9



General Fund (Cont.)Administration of Justice (Cont.)

Circuit Court (Cont.)Data Processing Services $ 11,748 Dues and Memberships 545 Legal Notices, Recording and Court Costs 351 Maintenance Agreements 4,038 Maintenance & Repair Services- Office Equipment 946 Postal Charges 12,978 Printing, Stationery and Forms 12,115 Travel 80 Office Supplies 7,261 Periodicals 311 Other Charges 2,024 Data Processing Equipment 1,425 Furniture and Fixtures 701 Office Equipment 1,924

Total Circuit Court $ 760,964

General Sessions CourtJudge(s) $ 319,896 Clerical Personnel 55,271 Temporary Personnel 12,485 Longevity Pay 1,400 Other Salaries & Wages 80,530 Social Security 25,540 State Retirement 27,897 Employee and Dependent Insurance 7,042 Life Insurance 540 Medical Insurance 26,433 Dental Insurance 1,629 Disability Insurance 2,480 Unemployment Compensation 701 Employer Medicare 6,594 Communication 7,886 Dues and Memberships 50 Maintenance Agreements 725 Maintenance & Repair Services- Buildings 65 Pest Control 291 Printing, Stationery and Forms 287 Travel 1,658 Electricity 4,231 Office Supplies 397

(Continued)

173

Exhibit M-9



General Fund (Cont.)Administration of Justice (Cont.)

General Sessions Court (Cont.)Periodicals $ 226 Data Processing Equipment 34,349

Total General Sessions Court $ 618,603

Chancery CourtState Retirement $ 15,963 Employee and Dependent Insurance 6,161 Life Insurance 504 Medical Insurance 22,733 Dental Insurance 1,426 Disability Insurance 1,219 Unemployment Compensation 630 Communication 362 Data Processing Services 4,354 Dues and Memberships 545 Maintenance Agreements 650 Postal Charges 14,204 Printing, Stationery and Forms 4,599 Travel 75 Office Supplies 3,554 Periodicals 352 Data Processing Equipment 2,326 Office Equipment 96

Total Chancery Court 79,753

District Attorney GeneralContributions $ 2,500 Medical and Dental Services 42,665

Total District Attorney General 45,165

Public SafetySheriff's Department

County Official/Administrative Officer $ 67,620 Deputy(ies) 1,291,461 Investigator(s) 261,664 Captain(s) 106,104 Lieutenant(s) 124,083 Sergeant(s) 271,574 Dispatchers/Radio Operators 135,255 Clerical Personnel 130,983

(Continued)

174

Exhibit M-9



General Fund (Cont.)Public Safety (Cont.)

Sheriff's Department (Cont.)Part-time Personnel $ 17,848 Longevity Pay 21,600 Overtime Pay 118,420 In-Service Training 34,940 Social Security 158,565 State Retirement 192,009 Employee and Dependent Insurance 61,330 Life Insurance 5,048 Medical Insurance 227,583 Dental Insurance 14,097 Disability Insurance 13,017 Unemployment Compensation 7,547 Employer Medicare 37,084 Other Fringe Benefits 150 Communication 26,021 Data Processing Services 80,375 Dues and Memberships 3,432 Legal Notices, Recording and Court Costs 181 Maintenance Agreements 10,824 Maintenance & Repair Services- Equipment 564 Maintenance & Repair Services- Office Equipment 208 Maintenance & Repair Services- Vehicles 24,076 Medical and Dental Services 590 Postal Charges 2,244 Printing, Stationery and Forms 2,034 Travel 12,767 Data Processing Supplies 1,801 Drugs and Medical Supplies 90 Food Supplies 19 Gasoline 74,299 Law Enforcement Supplies 14,421 Lubricants 2,863 Office Supplies 7,698 Periodicals 1,785 Tires and Tubes 7,938 Uniforms 19,523 Vehicle Parts 27,686 Other Charges 1,231 Communication Equipment 3,240 Data Processing Equipment 10,714

(Continued)

175

Exhibit M-9




Sheriff's Department (Cont.)Law Enforcement Equipment $ 9,840 Office Equipment 393

Total Sheriff's Department $ 3,644,839

JailCounty Official/Administrative Officer $ 3,024 Maintenance Personnel 24,222 Longevity Pay 5,200 Overtime Pay 128,593 Other Salaries & Wages 1,071,219 Social Security 75,529 State Retirement 83,982 Employee and Dependent Insurance 33,871 Life Insurance 2,738 Medical Insurance 121,969 Dental Insurance 7,696 Disability Insurance 5,411 Unemployment Compensation 5,282 Employer Medicare 17,664 Communication 13,583 Contracts with Government Agencies 51,823 Contracts with Private Agencies 135 Maintenance Agreements 18,172 Maintenance & Repair Services- Buildings 39,353 Maintenance & Repair Services- Equipment 481 Maintenance & Repair Services- Vehicles 2,327 Medical and Dental Services 44,911 Pest Control 2,850 Postal Charges 1,850 Printing, Stationery and Forms 3,596 Travel 3,939 Disposal Fees 1,937 Custodial Supplies 23,200 Drugs and Medical Supplies 102,665 Electricity 84,764 Food Supplies 164,388 Gasoline 10,020 Law Enforcement Supplies 2,608 Lubricants 274 Natural Gas 29,555

(Continued)

176

Exhibit M-9




Jail (Cont.)Periodicals $ 300 Prisoners Clothing 7,509 Tires and Tubes 645 Uniforms 771 Vehicle Parts 3,395 Food Service Equipment 2,297 Law Enforcement Equipment 2,000 Other Equipment 5,400

Total Jail $ 2,211,148

Juvenile ServicesAssistant(s) $ 16,709 Probation Officer(s) 15,920 Youth Service Officer(s) 35,028 Longevity Pay 350 Social Security 4,197 State Retirement 2,522 Employee and Dependent Insurance 1,014 Life Insurance 157 Medical Insurance 6,813 Dental Insurance 407 Disability Insurance 320 Unemployment Compensation 338 Employer Medicare 982 Communication 689 Dues and Memberships 120 Postal Charges 74 Travel 7,531 Other Contracted Services 58,140 Office Supplies 156 Periodicals 170 Communication Equipment 10 Data Processing Equipment 6,109

Total Juvenile Services 157,756

Civil DefenseContributions $ 58,600 Vehicle and Equipment Insurance 24,989 Other Equipment 404 Other Capital Outlay 1,801

Total Civil Defense 85,794

(Continued)

177

Exhibit M-9




Other Emergency ManagementCommunication $ 1,911 Dues and Memberships 105 Maintenance Agreements 64 Maintenance & Repair Services- Vehicles 2,620 Postal Charges 20 Printing, Stationery and Forms 270 Travel 826 Other Contracted Services 503 Gasoline 71 Office Supplies 712 Periodicals 96 Uniforms 1,293 Vehicle Parts 26 Other Supplies and Materials 401 Other Charges 6 Communication Equipment 7,700 Data Processing Equipment 2,272 Other Equipment 5,424 Other Capital Outlay 101,505

Total Other Emergency Management $ 125,825

County Coroner/Medical ExaminerMedical and Dental Services $ 14,675

Total County Coroner/Medical Examiner 14,675

Public Safety Grant ProgramsOvertime Pay $ 3,684 Uniforms 20,336 Law Enforcement Equipment 7,593 Other Equipment 41,710

Total Public Safety Grant Programs 73,323

Public Health and WelfareLocal Health Center

Medical Personnel $ 227,725 Clerical Personnel 63,208 Part-time Personnel 24,041 Longevity Pay 700 Social Security 19,345 State Retirement 23,214

(Continued)

178

Exhibit M-9



General Fund (Cont.)Public Health and Welfare (Cont.)

Local Health Center (Cont.)Employee and Dependent Insurance $ 11,140 Life Insurance 878 Medical Insurance 42,586 Dental Insurance 2,444 Disability Insurance 1,408 Unemployment Compensation 2,245 Employer Medicare 4,524 Communication 8,120 Dues and Memberships 100 Janitorial Services 10,200 Maintenance Agreements 608 Maintenance & Repair Services- Buildings 869 Maintenance & Repair Services- Equipment 207 Maintenance & Repair Services- Office Equipment 225 Medical and Dental Services 1,346 Pest Control 377 Printing, Stationery and Forms 319 Travel 5,527 Other Contracted Services 338 Electricity 9,046 Natural Gas 1,830 Office Supplies 1,719 Other Supplies and Materials 406 Liability Insurance 183 Worker's Compensation Insurance 2,509 Other Charges 355 Data Processing Equipment 149 Office Equipment 5,300

Total Local Health Center $ 473,191

Rabies and Animal ControlPart-time Personnel $ 9,846 Longevity Pay 200 Other Salaries & Wages 48,920 Social Security 3,650 State Retirement 2,008 Employee and Dependent Insurance 1,481 Life Insurance 114 Medical Insurance 5,553 Dental Insurance 363

(Continued)

179

Exhibit M-9



General Fund (Cont.)Public Health and Welfare (Cont.)

Rabies and Animal Control (Cont.)Disability Insurance $ 217 Unemployment Compensation 366 Employer Medicare 854 Advertising 385 Communication 1,663 Licenses 100 Maintenance Agreements 11 Maintenance & Repair Services- Vehicles 2,647 Printing, Stationery and Forms 240 Disposal Fees 198 Animal Food and Supplies 147 Drugs and Medical Supplies 1,026 Electricity 7,186 Gasoline 4,263 Law Enforcement Supplies 289 Natural Gas 3,394 Office Supplies 79 Uniforms 220

Total Rabies and Animal Control $ 95,420

Other Local Health ServicesAdvertising $ 1,841 Contributions 3,933 Postal Charges 85 Other Charges 954

Total Other Local Health Services 6,813

Regional Mental Health CenterContributions $ 9,000

Total Regional Mental Health Center 9,000

Appropriation to StateContracts with Government Agencies $ 18,987

Total Appropriation to State 18,987

Other Local Welfare ServicesOther Contracted Services $ 17,886

Total Other Local Welfare Services 17,886

(Continued)

180

Exhibit M-9



General Fund (Cont.)Social, Cultural and Recreational Services

Senior Citizens AssistanceContributions $ 38,800

Total Senior Citizens Assistance $ 38,800

LibrariesCounty Official/Administrative Officer $ 41,064 Librarians 153,265 Part-time Personnel 42,823 Longevity Pay 2,550 Social Security 14,517 State Retirement 16,104 Employee and Dependent Insurance 8,051 Life Insurance 659 Medical Insurance 30,426 Dental Insurance 1,905 Disability Insurance 1,081 Unemployment Compensation 1,497 Employer Medicare 3,395 Communication 5,472 Data Processing Services 1,354 Dues and Memberships 50 Janitorial Services 8,490 Licenses 430 Maintenance Agreements 9,724 Maintenance & Repair Services- Buildings 5,561 Maintenance & Repair Services- Equipment 797 Pest Control 657 Postal Charges 1,484 Printing, Stationery and Forms 822 Travel 75 Custodial Supplies 964 Electricity 20,729 Food Supplies 19 Instructional Supplies and Materials 848 Library Books/Media 25,790 Natural Gas 3,829 Office Supplies 4,688 Periodicals 5,058 Furniture and Fixtures 99 Office Equipment 691 Other Capital Outlay 31,360

Total Libraries 446,328

(Continued)

181

Exhibit M-9



General Fund (Cont.)Social, Cultural and Recreational Services (Cont.)

Parks and Fair BoardsCounty Official/Administrative Officer $ 53,490 Assistant(s) 38,028 Laborers 101,005 Clerical Personnel 24,877 Temporary Personnel 56,607 Longevity Pay 1,600 Overtime Pay 4,024 Social Security 17,260 State Retirement 16,886 Employee and Dependent Insurance 6,206 Life Insurance 490 Medical Insurance 23,019 Dental Insurance 1,443 Disability Insurance 1,126 Unemployment Compensation 1,732 Employer Medicare 4,037 Communication 3,028 Dues and Memberships 260 Laundry Service 4,113 Licenses 300 Maintenance Agreements 528 Maintenance & Repair Services- Buildings 1,283 Maintenance & Repair Services- Equipment 5,776 Maintenance & Repair Services- Vehicles 6,750 Pest Control 741 Postal Charges 37 Printing, Stationery and Forms 538 Rentals 852 Travel 389 Other Contracted Services 16,872 Custodial Supplies 5,517 Electricity 49,355 Equipment Parts - Light 632 Fertilizer, Lime and Seed 5,491 Gasoline 9,636 Lubricants 899 Natural Gas 6,151 Office Supplies 325 Uniforms 14 Other Supplies and Materials 9,775

(Continued)

182

Exhibit M-9



General Fund (Cont.)Social, Cultural and Recreational Services (Cont.)

Parks and Fair Boards (Cont.)Other Charges $ 898 Building Improvements 1,284 Furniture and Fixtures 670 Site Development 786

Total Parks and Fair Boards $ 484,730

Agriculture & Natural ResourcesAgriculture Extension Service

Board and Committee Members Fees $ 175 Social Security 11 Employer Medicare 3 Communication 2,114 Contracts with Government Agencies 89,670 Postal Charges 136

Total Agriculture Extension Service 92,109

Forest ServiceContributions $ 2,000

Total Forest Service 2,000

Soil ConservationOther Salaries & Wages $ 24,465 Social Security 1,517 State Retirement 1,948 Employee and Dependent Insurance 834 Life Insurance 66 Medical Insurance 3,188 Dental Insurance 187 Disability Insurance 124 Unemployment Compensation 210 Employer Medicare 355

Total Soil Conservation 32,894

Other OperationsTourism

County Official/Administrative Officer $ 58,296 Part-time Personnel 12,346 Longevity Pay 850 Other Salaries & Wages 59,910 Social Security 8,174

(Continued)

183

Exhibit M-9



General Fund (Cont.)Other Operations (Cont.)

Tourism (Cont.)State Retirement $ 9,477 Employee and Dependent Insurance 2,641 Life Insurance 216 Medical Insurance 9,743 Dental Insurance 613 Disability Insurance 641 Unemployment Compensation 467 Employer Medicare 1,912 Advertising 37,691 Communication 2,224 Data Processing Services 45 Dues and Memberships 2,750 Maintenance Agreements 555 Maintenance & Repair Services- Vehicles 840 Postal Charges 2,655 Printing, Stationery and Forms 13,811 Rentals 3,784 Travel 10,674 Other Contracted Services 36,502 Gasoline 1,395 Office Supplies 1,606 Periodicals 260 Other Supplies and Materials 10,980 Other Charges 10,400 Furniture and Fixtures 1,978 Other Equipment 2,930

Total Tourism $ 306,366

Industrial DevelopmentContributions $ 150,000 Other Contracted Services 6,500 Electricity 1,170 Other Charges 40

Total Industrial Development 157,710

Other Economic and Community DevelopmentTravel $ 442 Other Contracted Services 2,452 Other Charges 446

Total Other Economic and Community Development 3,340

(Continued)

184

Exhibit M-9



General Fund (Cont.)Other Operations (Cont.)

AirportContributions $ 30,000

Total Airport $ 30,000

Veterans' ServicesClerical Personnel $ 22,878 Part-time Personnel 11,232 Longevity Pay 650 Social Security 2,156 State Retirement 1,873 Employee and Dependent Insurance 866 Life Insurance 70 Medical Insurance 3,177 Dental Insurance 199 Disability Insurance 122 Unemployment Compensation 210 Employer Medicare 505

Total Veterans' Services 43,938

Contributions to Other AgenciesContributions $ 104,210

Total Contributions to Other Agencies 104,210

Employee BenefitsSocial Security $ 24 Local Retirement 390 Employer Medicare 8 Medical and Dental Services 9,876

Total Employee Benefits 10,298

MiscellaneousOther Contracted Services $ 13,466 Trustee's Commission 168,405 Tax Relief Program 62,884

Total Miscellaneous 244,755

Capital ProjectsGeneral Administration Projects

Other Construction $ 35,836 Total General Administration Projects 35,836

Total General Fund $ 14,830,370

(Continued)

185

Exhibit M-9



Special Purpose FundFinance

Data ProcessingIn-Service Training $ 2,398 Communication 48,734 Data Processing Services 3,243 Maintenance Agreements 9,602 Maintenance & Repair Services- Equipment 14,294 Data Processing Supplies 13,591 Other Charges 269 Communication Equipment 3,446 Data Processing Equipment 107,746 Furniture and Fixtures 826 Office Equipment 3,525

Total Data Processing $ 207,674

Social, Cultural and Recreational ServicesParks and Fair Boards

Other Equipment $ 12,294 Other Capital Outlay 14,805

Total Parks and Fair Boards 27,099

Other OperationsContributions to Other Agencies

Contributions $ 195,000 Total Contributions to Other Agencies 195,000

Payments to CitiesContracts with Government Agencies $ 256,932

Total Payments to Cities 256,932

MiscellaneousConsultants $ 426,127 Engineering Services 5,969 Judgments 25,000 Trustee's Commission 21,779

Total Miscellaneous 478,875

Capital ProjectsGeneral Administration Projects

Engineering Services $ 9,592 Other Equipment 2,058 Other Capital Outlay 151,571

Total General Administration Projects 163,221

Total Special Purpose Fund $ 1,328,801

(Continued)

186

Exhibit M-9



Drug Control FundPublic Safety

Drug EnforcementCommunication $ 6,227 Data Processing Services 43 Confidential Drug Enforcement Payments 8,000 Maintenance Agreements 889 Maintenance & Repair Services- Vehicles 2,358 Postal Charges 62 Printing, Stationery and Forms 105 Rentals 16,800 Travel 2,262 Electricity 3,208 Gasoline 5,355 Instructional Supplies and Materials 5,686 Law Enforcement Supplies 618 Lubricants 46 Office Supplies 316 Tires and Tubes 465 Uniforms 1,425 Vehicle Parts 796 Trustee's Commission 785 Vehicle and Equipment Insurance 1,740 Other Charges 5,157 Law Enforcement Equipment 674

Total Drug Enforcement $ 63,017

Total Drug Control Fund $ 63,017

Adequate Facilities/Development Tax FundCapital Projects

General Administration ProjectsBuilding Construction $ 447,467

Total General Administration Projects $ 447,467

Social, Cultural and Recreation ProjectsOther Capital Outlay $ 82,763

Total Social, Cultural and Recreation Projects 82,763

Public Utility ProjectsOther Construction $ 117,983

Total Public Utility Projects 117,983

(Continued)

187

Exhibit M-9



Adequate Facilities/Development Tax Fund (Cont.)Capital Projects (Cont.)

Highway & Street Capital ProjectsHighway Construction $ 138,458

Total Highway & Street Capital Projects $ 138,458

Education Capital ProjectsEngineering Services $ 250,000 Other Capital Outlay 235,964

Total Education Capital Projects 485,964

Total Adequate Facilities/Development Tax Fund $ 1,272,635

Other Special Revenue FundOther Operations

Employee BenefitsUnemployment Compensation $ 37,392

Total Employee Benefits $ 37,392

Total Other Special Revenue Fund 37,392

Constitutional Officers - Fees FundFinance

County Clerk's OfficeConstitutional Officers' Operating Expenses $ 426,113

Total County Clerk's Office $ 426,113

Administration of JusticeCircuit Court

Constitutional Officers' Operating Expenses $ 329 Total Circuit Court 329

Chancery CourtConstitutional Officers' Operating Expenses $ 248,516

Total Chancery Court 248,516

Total Constitutional Officers - Fees Fund 674,958

Highway/Public Works FundHighways

AdministrationCounty Official/Administrative Officer $ 67,620 Clerical Personnel 21,125

(Continued)

188

Exhibit M-9



Highway/Public Works Fund (Cont.)Highways (Cont.)

Administration (Cont.)Longevity Pay $ 1,000 Overtime Pay 11 Other Salaries & Wages 33,501 Social Security 7,654 State Retirement 9,813 Employee and Dependent Insurance 2,641 Life Insurance 216 Medical Insurance 10,708 Dental Insurance 613 Disability Insurance 665 Unemployment Compensation 210 Employer Medicare 1,788 Dues and Memberships 2,938 Postal Charges 370 Printing, Stationery and Forms 336 Travel 352 Office Supplies 1,255 Other Charges 154 Furniture and Fixtures 816

Total Administration $ 163,786

Highway and Bridge MaintenanceForemen $ 55,416 Mechanic(s) 167,779 Equipment Operators - Heavy 366,176 Equipment Operators - Light 194,648 Truck Drivers 366,092 Laborers 59,489 Guards 52,207 Longevity Pay 19,800 Overtime Pay 19,159 Other Salaries & Wages 134,798 Social Security 87,380 State Retirement 102,301 Employee and Dependent Insurance 44,732 Life Insurance 3,578 Medical Insurance 174,832 Dental Insurance 10,178 Disability Insurance 7,382 Unemployment Compensation 5,996

(Continued)

189

Exhibit M-9




Highway and Bridge Maintenance (Cont.)Employer Medicare $ 20,436 Rentals 1,208 Asphalt 493,217 Concrete 16,497 Crushed Stone 324,662 Other Road Supplies 5,908 Pipe 27,034 Road Signs 16,095 Wood Products 1,788 Geotextile Materials 2,550

Total Highway and Bridge Maintenance $ 2,781,338

Operation and Maintenance of EquipmentCommunication $ 691 Maintenance Agreements 4,668 Maintenance & Repair Services- Buildings 3,678 Maintenance & Repair Services- Equipment 23,494 Maintenance & Repair Services- Vehicles 14,657 Diesel Fuel 178,764 Equipment and Machinery Parts 153,828 Garage Supplies 9,328 Gasoline 24,540 Lubricants 21,010 Small Tools 6,038 Tires and Tubes 54,473 Vehicle Parts 101,346 Other Supplies and Materials 18,955 Right-of-Way 16,091

Total Operation and Maintenance of Equipment 631,561

Other ChargesCommunication $ 4,015 Contributions 20,000 Laundry Service 15,478 Pest Control 475 Disposal Fees 6,572 Electricity 10,068 Natural Gas 3,210 Uniforms 830 Building and Contents Insurance 1,834

(Continued)

190

Exhibit M-9




Other Charges (Cont.)Liability Insurance $ 81,371 Trustee's Commission 59,607 Vehicle and Equipment Insurance 62,371 Worker's Compensation Insurance 165,024 Other Charges 869

Total Other Charges $ 431,724

Employee BenefitsMedical and Dental Services $ 3,604

Total Employee Benefits 3,604

Capital OutlayBridge Construction $ 171,979 Data Processing Equipment 6,945 Highway Construction 246,233 Highway Equipment 6,028 Motor Vehicles 26,680 Traffic Control Equipment 6,510

Total Capital Outlay 464,375

Capital ProjectsHighway & Street Capital Projects

Other Capital Outlay $ 166,421 Total Highway & Street Capital Projects 166,421

Total Highway/Public Works Fund $ 4,642,809

General Debt Service FundPrincipal

General GovernmentPrincipal on Bonds $ 135,314 Principal on Notes 217,556 Principal on Other Loans Payable 556,380

Total General Government $ 909,250

Highways and StreetsPrincipal on Bonds $ 366,265 Principal on Notes 271,195 Principal on Other Loans Payable 177,030

Total Highways and Streets 814,490

(Continued)

191

Exhibit M-9



General Debt Service Fund (Cont.)Principal (Cont.)

EducationPrincipal on Bonds $ 1,783,118 Principal on Notes 252,365 Principal on Other Loans Payable 1,795,590

Total Education $ 3,831,073

InterestGeneral Government

Interest on Bonds $ 12,212 Interest on Notes 21,965 Interest on Other Loans Payable 50,661

Total General Government 84,838

Highways and StreetsInterest on Bonds $ 38,583 Interest on Notes 22,477 Interest on Other Loans Payable 11,144

Total Highways and Streets 72,204

EducationInterest on Bonds $ 313,256 Interest on Notes 28,409 Interest on Other Loans Payable 141,230

Total Education 482,895

Other Debt ServiceGeneral Government

Bank Charges $ 2,460 Trustee's Commission 107,544 Underwriter's Discount 138,024 Other Debt Issuance Charges 139,357 Other Debt Service 16,384

Total General Government 403,769

Total General Debt Service Fund $ 6,598,519

General Capital Projects FundCapital Projects

General Administration ProjectsBuilding Construction $ 13,206 Communication Equipment 263,280

(Continued)

192

Exhibit M-9



General Capital Projects Fund (Cont.)Capital Projects (Cont.)

General Administration Projects (Cont.)Data Processing Equipment $ 61,000 Motor Vehicles 21,890 Other Capital Outlay 73,185

Total General Administration Projects $ 432,561

Public Safety ProjectsBuilding Construction $ 78,967 Motor Vehicles 306,123

Total Public Safety Projects 385,090

Public Health and Welfare ProjectsLegal Notices, Recording and Court Costs $ 35

Total Public Health and Welfare Projects 35

Other General Government ProjectsMotor Vehicles $ 21,902

Total Other General Government Projects 21,902

Highway & Street Capital ProjectsHighway Construction $ 326,053 Highway Equipment 100,000 Motor Vehicles 100,000

Total Highway & Street Capital Projects 526,053

Education Capital ProjectsContributions $ 670,000

Total Education Capital Projects 670,000

Total General Capital Projects Fund $ 2,035,641

Other Capital Projects FundCapital Projects

Highway & Street Capital ProjectsHighway Construction $ 157,408

Total Highway & Street Capital Projects $ 157,408

Total Other Capital Projects Fund 157,408

Total Governmental Funds - Primary Government $ 31,641,550

193

Exhibit M-10


All Governmental Fund TypesDiscretely Presented Maury County School DepartmentFor the Year Ended June 30, 2004

General Purpose School FundInstruction

Regular Instruction ProgramTeachers $ 23,977,904 Career Ladder Program 457,204 Career Ladder Extended Contracts 235,614 Homebound Teachers 49,927 Educational Assistants 597,804 Substitute Teachers 346,458 Social Security 1,542,680 State Retirement 877,053 Life Insurance 44,750 Medical Insurance 3,215,940 Dental Insurance 131,550 Employer Medicare 360,604 Instructional Supplies and Materials 306,343 Textbooks 416,952 Other Supplies and Materials 95,457 Fee Waivers 118,360 Other Charges 13,625 Regular Instruction Equipment 61,962

Total Regular Instruction Program $ 32,850,187

Alternative Instruction ProgramTeachers $ 94,416 Educational Assistants 23,550 Other Salaries & Wages 306 Social Security 7,303 State Retirement 5,500 Life Insurance 550 Medical Insurance 19,105 Dental Insurance 1,133 Employer Medicare 1,708

Total Alternative Instruction Program 153,571

Special Education ProgramTeachers $ 3,683,429 Career Ladder Program 59,665 Homebound Teachers 50,165 Educational Assistants 487,810 Other Salaries & Wages 31,696 Substitute Teachers 26,200

(Continued)

194

Exhibit M-10



General Purpose School Fund (Cont.)Instruction (Cont.)

Special Education Program (Cont.)Social Security $ 260,809 State Retirement 161,898 Life Insurance 6,647 Medical Insurance 469,407 Dental Insurance 17,278 Employer Medicare 60,996 Contracts with Government Agencies 22,641 Contracts with Other Public Agencies 59,475 Contracts with Private Agencies 120,636 Maintenance & Repair Services- Equipment 2,187 Other Contracted Services 53,822 Instructional Supplies and Materials 56,585 Other Supplies and Materials 8,796 Other Charges 2,844 Special Education Equipment 12,725

Total Special Education Program $ 5,655,711

Vocational Education ProgramTeachers $ 1,566,160 Career Ladder Program 17,465 Substitute Teachers 22,525 Social Security 95,972 State Retirement 53,687 Life Insurance 2,049 Medical Insurance 166,774 Dental Insurance 4,489 Employer Medicare 22,446 Maintenance & Repair Services- Equipment 15,575 Travel 3,118 Instructional Supplies and Materials 72,674 Textbooks 7,500 Other Supplies and Materials 843 Other Charges 1,142 Vocational Instruction Equipment 28,806

Total Vocational Education Program 2,081,225

Adult Education ProgramTeachers $ 77,549 Social Security 4,772

(Continued)

195

Exhibit M-10



General Purpose School Fund (Cont.)Instruction (Cont.)

Adult Education Program (Cont.)State Retirement $ 2,430 Life Insurance 50 Medical Insurance 4,090 Dental Insurance 189 Unemployment Compensation 700 Employer Medicare 1,117 Instructional Supplies and Materials 9,061

Total Adult Education Program $ 99,958

Support ServicesAttendance

Supervisor/Director $ 63,906 Career Ladder Program 1,000 Social Workers 31,303 Clerical Personnel 92,309 Other Salaries & Wages 68,818 Social Security 15,157 State Retirement 15,672 Life Insurance 600 Medical Insurance 36,118 Dental Insurance 1,233 Employer Medicare 3,545 Travel 7,550 Other Contracted Services 22,614 Other Supplies and Materials 10,795 In Service/Staff Development 9,280 Other Charges 7,128 Attendance Equipment 15,475

Total Attendance 402,503

Health ServicesMedical Personnel $ 157,442 Social Security 9,701 State Retirement 7,551 Life Insurance 300 Medical Insurance 22,250 Dental Insurance 755 Employer Medicare 2,269 Travel 2,471

(Continued)

196

Exhibit M-10



General Purpose School Fund (Cont.)Support Services (Cont.)

Health Services (Cont.)Drugs and Medical Supplies $ 4,662 Other Supplies and Materials 1,645

Total Health Services $ 209,046

Other Student SupportCareer Ladder Program $ 15,300 Guidance Personnel 1,092,554 Social Security 67,085 State Retirement 37,321 Life Insurance 1,250 Medical Insurance 85,676 Dental Insurance 2,365 Employer Medicare 15,718 Contracts with Government Agencies 191 Evaluation and Testing 15,436 Travel 273 Other Contracted Services 1,600 Other Supplies and Materials 2,000 Other Charges 3,225

Total Other Student Support 1,339,994

Regular Instruction ProgramSupervisor/Director $ 257,479 Career Ladder Program 31,195 Librarians 783,214 Education Media Personnel 199,140 Instructional Computer Personnel 58,914 Secretary(s) 27,816 Clerical Personnel 26,784 Educational Assistants 129,228 Other Salaries & Wages 123,413 Social Security 98,463 State Retirement 72,149 Life Insurance 2,149 Medical Insurance 184,929 Dental Insurance 5,317 Employer Medicare 23,028 Consultants 5,000 Travel 25,921

(Continued)

197

Exhibit M-10




Regular Instruction Program (Cont.)Other Contracted Services $ 57,479 Library Books/Media 58,210 Other Supplies and Materials 57,776 In Service/Staff Development 23,823 Other Charges 17,938 Other Equipment 79,933


Alternative Instruction ProgramSupervisor/Director $ 56,270 Career Ladder Program 1,000 Guidance Personnel 30,368 Career Ladder Extended Contracts 2,000 Clerical Personnel 23,994 Social Security 7,015 State Retirement 5,958 Life Insurance 267 Medical Insurance 17,275 Dental Insurance 425 Employer Medicare 1,641 Travel 2,520 Other Supplies and Materials 5,889 In Service/Staff Development 1,015 Other Charges 20,000 Other Equipment 5,576

Total Alternative Instruction Program 181,213

Special Education ProgramSupervisor/Director $ 68,475 Career Ladder Program 10,000 Psychological Personnel 222,739 Assessment Personnel 179,166 Secretary(s) 46,617 Clerical Personnel 12,314 Other Salaries & Wages 75,874 Social Security 37,331 State Retirement 24,539 Life Insurance 650 Medical Insurance 48,066

(Continued)

198

Exhibit M-10




Special Education Program (Cont.)Dental Insurance $ 1,555 Employer Medicare 8,731 Consultants 3,900 Travel 23,233 Other Supplies and Materials 7,056 In Service/Staff Development 4,842 Other Charges 1,909

Total Special Education Program $ 776,997

Vocational Education ProgramCareer Ladder Program $ 3,600 Clerical Personnel 17,870 Other Salaries & Wages 54,522 Social Security 4,712 State Retirement 3,206 Life Insurance 100 Medical Insurance 8,055 Dental Insurance 378 Employer Medicare 1,102 Travel 5,254 Other Contracted Services 1,200 Other Supplies and Materials 3,945 In Service/Staff Development 2,956 Other Charges 6,042

Total Vocational Education Program 112,942

Adult ProgramsSupervisor/Director $ 63,446 Other Salaries & Wages 36,784 Social Security 6,184 State Retirement 3,455 Life Insurance 100 Medical Insurance 8,180 Dental Insurance 378 Employer Medicare 1,447 Travel 1,377 Other Supplies and Materials 7,955 In Service/Staff Development 3,401 Other Charges 7,455

(Continued)

199

Exhibit M-10




Adult Programs (Cont.)Other Capital Outlay $ 5,702

Total Adult Programs $ 145,864

Board of EducationSecretary to Board $ 1,386 Other Salaries & Wages 556 Board and Committee Members Fees 10,950 Social Security 799 State Retirement 137 Unemployment Compensation 202,254 Employer Medicare 187 Other Fringe Benefits 207,671 Audit Services 18,522 Legal Services 48,682 Travel 346 Other Contracted Services 4,750 Liability Insurance 16,183 Trustee's Commission 540,391 Worker's Compensation Insurance 267,750 Other Charges 14,102

Total Board of Education 1,334,666

Director of SchoolsCounty Official/Administrative Officer $ 109,005 Secretary(s) 27,816 Clerical Personnel 26,784 Social Security 9,399 State Retirement 7,411 Life Insurance 150 Medical Insurance 11,998 Dental Insurance 378 Employer Medicare 2,280 Dues and Memberships 3,000 Postal Charges 14,837 Other Contracted Services 1,412 Office Supplies 3,649 Other Charges 3,719

Total Director of Schools 221,838

(Continued)

200

Exhibit M-10




Office of the PrincipalPrincipals $ 1,239,054 Career Ladder Program 46,495 Career Ladder Extended Contracts 6,513 Assistant Principals 799,514 Secretary(s) 464,711 Clerical Personnel 546,146 Social Security 189,410 State Retirement 146,079 Life Insurance 4,348 Medical Insurance 347,501 Dental Insurance 7,963 Employer Medicare 44,300 Communication 157,697 Office Supplies 20,194 Other Supplies and Materials 8,856 Other Charges 45,149 Administration Equipment 31,366

Total Office of the Principal $ 4,105,296

Fiscal ServicesSupervisor/Director $ 64,605 Accountants/Bookkeepers 102,629 Clerical Personnel 104,448 Social Security 16,729 State Retirement 21,267 Life Insurance 400 Medical Insurance 29,908 Dental Insurance 1,053 Employer Medicare 3,912 Maintenance & Repair Services- Equipment 335 Travel 617 Data Processing Supplies 5,472 Office Supplies 2,580 Other Charges 12,912 Administration Equipment 8,373

Total Fiscal Services 375,240

Operation of PlantCustodial Personnel $ 1,160,608

(Continued)

201

Exhibit M-10




Operation of Plant (Cont.)Social Security $ 60,590 State Retirement 58,553 Life Insurance 4,248 Medical Insurance 276,249 Dental Insurance 5,153 Employer Medicare 16,738 Rentals 23,731 Other Contracted Services 30,557 Custodial Supplies 133,819 Electricity 1,521,760 Natural Gas 504,102 Water and Sewer 169,131 Building and Contents Insurance 223,101 Other Charges 30,399

Total Operation of Plant $ 4,218,739

Maintenance of PlantSupervisor/Director $ 52,959 Maintenance Personnel 486,187 Social Security 32,676 State Retirement 41,302 Life Insurance 1,150 Medical Insurance 76,339 Dental Insurance 1,044 Employer Medicare 7,642 Communication 4,459 Laundry Service 13,020 Maintenance & Repair Services- Buildings 25,647 Maintenance & Repair Services- Equipment 40,650 Other Contracted Services 80,597 General Construction Materials 13,524 Other Supplies and Materials 149,125 Other Charges 9,836 Maintenance Equipment 5,000

Total Maintenance of Plant 1,041,157

TransportationSupervisor/Director $ 28,392 Career Ladder Program 1,610

(Continued)

202

Exhibit M-10




Transportation (Cont.)Bus Drivers $ 968,548 Clerical Personnel 26,312 Other Salaries & Wages 62,388 In-Service Training 249 Social Security 66,688 State Retirement 65,676 Life Insurance 5,098 Medical Insurance 349,462 Dental Insurance 6,394 Employer Medicare 15,599 Other Contracted Services 174,683 Diesel Fuel 211,263 Tires and Tubes 50,316 Vehicle Parts 102,222 Vehicle and Equipment Insurance 117,717 Other Charges 29,842 Transportation Equipment 10,001

Total Transportation $ 2,292,460

Central and OtherSupervisor/Director $ 68,475 Clerical Personnel 77,057 Other Salaries & Wages 151,550 Social Security 26,989 State Retirement 18,377 Life Insurance 233 Medical Insurance 11,454 Dental Insurance 755 Employer Medicare 6,313 Other Fringe Benefits 310,000 Maintenance & Repair Services- Equipment 5,244 Travel 558 Other Contracted Services 23,019 Data Processing Supplies 2,293 Office Supplies 1,263 Other Supplies and Materials 5,482 Other Charges 7,324 Data Processing Equipment 4,647

Total Central and Other 721,033

Total General Purpose School Fund $ 60,668,938

(Continued)

203

Exhibit M-10



School Federal Projects FundInstruction

Regular Instruction ProgramTeachers $ 1,212,874 Educational Assistants 157,299 Substitute Teachers 69,865 Social Security 87,898 State Retirement 41,608 Life Insurance 2,146 Medical Insurance 111,582 Dental Insurance 4,625 Unemployment Compensation 7,611 Employer Medicare 20,559 Maintenance & Repair Services- Equipment 300 Instructional Supplies and Materials 206,772 Other Supplies and Materials 6,986 Other Charges 280 Regular Instruction Equipment 56,834


Special Education ProgramTeachers $ 44,180 Educational Assistants 389,231 Other Salaries & Wages 95,908 Substitute Teachers 15,935 Social Security 33,180 State Retirement 27,713 Life Insurance 2,559 Medical Insurance 111,191 Dental Insurance 4,916 Unemployment Compensation 5,489 Employer Medicare 7,763 Contracts with Private Agencies 85,862 Other Contracted Services 2,831 Instructional Supplies and Materials 105,119 Other Supplies and Materials 15,925 Other Charges 5,438 Special Education Equipment 77,702

Total Special Education Program 1,030,942

Vocational Education ProgramInstructional Supplies and Materials $ 73,369

(Continued)

204

Exhibit M-10



School Federal Projects Fund (Cont.)Instruction (Cont.)

Vocational Education Program (Cont.)Other Charges $ 1,000 Vocational Instruction Equipment 126,000

Total Vocational Education Program $ 200,369

Support ServicesOther Student Support

Evaluation and Testing $ 1,245 Travel 15,500 Other Contracted Services 2,393 Other Supplies and Materials 13,859 In Service/Staff Development 6,500 Other Charges 1,021

Total Other Student Support 40,518

Regular Instruction ProgramSupervisor/Director $ 64,994 Clerical Personnel 4,771 Other Salaries & Wages 153,348 Social Security 13,405 State Retirement 7,329 Life Insurance 259 Medical Insurance 18,444 Dental Insurance 669 Unemployment Compensation 505 Employer Medicare 3,136 Consultants 25,134 Travel 9,640 Library Books/Media 5,551 Other Supplies and Materials 16,394 In Service/Staff Development 119,074 Other Charges 10,128 Other Equipment 1,046

Total Regular Instruction Program 453,827

Special Education ProgramPsychological Personnel $ 7,705 Clerical Personnel 19,759 Other Salaries & Wages 42,648 Social Security 4,331

(Continued)

205

Exhibit M-10



School Federal Projects Fund (Cont.)Support Services (Cont.)

Special Education Program (Cont.)State Retirement $ 3,279 Life Insurance 148 Medical Insurance 6,813 Dental Insurance 204 Unemployment Compensation 495 Employer Medicare 703 Consultants 15,600 Travel 7,760 Other Supplies and Materials 4,567 In Service/Staff Development 34,042 Other Charges 4,667

Total Special Education Program $ 152,721

Maintenance of PlantOther Charges $ 519

Total Maintenance of Plant 519

TransportationBus Drivers $ 135,685 Other Salaries & Wages 103,848 Social Security 14,416 State Retirement 14,016 Life Insurance 1,776 Medical Insurance 73,335 Dental Insurance 2,902 Unemployment Compensation 2,348 Employer Medicare 3,373

Total Transportation 351,699

Total School Federal Projects Fund $ 4,217,834

Central Cafeteria FundSupport Services

Board of EducationWorker's Compensation Insurance $ 45,241

Total Board of Education $ 45,241

(Continued)

206

Exhibit M-10



Central Cafeteria Fund (Cont.)Operation of Non-Instructional Services

Food ServiceSupervisor/Director $ 59,499 Accountants/Bookkeepers 25,788 Clerical Personnel 26,784 Cafeteria Personnel 885,645 Temporary Personnel 28,634 Longevity Pay 45,900 Other Salaries & Wages 413,557 Social Security 90,835 State Retirement 93,677 Life Insurance 8,499 Medical Insurance 325,229 Dental Insurance 13,229 Unemployment Compensation 15,060 Employer Medicare 21,243 Communication 552 Maintenance & Repair Services- Equipment 60,769 Travel 6,500 Other Contracted Services 32,534 Food Preparation Supplies 145,099 Food Supplies 1,640,916 Office Supplies 6,686 Other Supplies and Materials 499 In Service/Staff Development 5,530 Other Charges 1,441 Food Service Equipment 33,615

Total Food Service $ 3,987,720

Total Central Cafeteria Fund $ 4,032,961

Education Capital Projects FundCapital Projects

Education Capital ProjectsBuilding Construction $ 10,669 Building Improvements 834,351 Transportation Equipment 420,000 Other Capital Outlay 189,151

Total Education Capital Projects $ 1,454,171

Total Education Capital Projects Fund 1,454,171

Total Governmental Funds - Maury County School Department $ 70,373,904

207

Exhibit M-11

Maury County, TennesseeSchedule of Detailed Revenues and ExpensesCentral Maintenance/Garage Fund (Internal Service Fund)For the Year Ended June 30, 2004

Primary GovernmentProprietaryFund Type

CentralMaintenance/

GarageFund

Revenues Charges for Current Services General Service Charges Other General Service Charges $ 1,151,192

Total Charges for Current Services $ 1,151,192

Other Local Revenues Recurring Items Sale of Materials and Supplies $ 308

Total Other Local Revenues $ 308

Total Revenues $ 1,151,500

Expenses General Administration Other General Administration County Official/Administrative Office $ 54,336 Mechanic(s) 180,623 Clerical Personnel 33,342 Custodial Personnel 7,213 Longevity Pay 4,450 Overtime 1,738 Social Security 17,145 State Retirement 21,849 Employee and Dependent Insurance 7,042 Life Insurance 576 Medical Insurance 27,792 Dental Insurance 1,629 Disability Insurance 1,459 Unemployment Compensation 943 Employer Medicare 4,010 Communication 1,617 Laundry Service 4,616 Maintenance Agreements 2,631 Maintenance & Repair Services - Building 577 Maintenance & Repair Services - Equipment 1,033

(Continued)

208

Exhibit M-11

Maury County, TennesseeSchedule of Detailed Revenues and ExpensesCentral Maintenance/Garage Fund (Internal Service Fund) (Cont.)

Primary GovernmentProprietaryFund Type

CentralMaintenance/

GarageFund

Expenses (Cont.) General Administration (Cont.) Other General Administration (Cont.) Postal Charges $ 331 Printing, Stationery and Forms 54 Disposal Fees 480 Other Contracted Services 31,091 Custodial Supplies 616 Diesel Fuel 312,312 Electricity 21,021 Equipment and Machinery Parts 166,629 Garage Supplies 1,299 Gasoline 185,010 Lubricants 11,328 Natural Gas 7,555 Office Supples 591 Small Tools 1,043 Tires and Tubes 68,170 Depreciation 7,800 Other Charges 87 Furniture and Fixtures 432 Other Equipment 3,395 Other Capital Outlay 445


209

Exhibit M-12

Maury County, TennesseeSchedule of Detailed Revenues and ExpensesEmployee Insurance - Prescriptions Fund (Internal Service Fund)For the Year Ended June 30, 2004

Primary GovernmentProprietaryFund TypeEmployee

Insurance -Prescriptions

Fund

Revenues Charges for Current Services General Service Charges Other General Service Charges $ 364,716

Total Revenues $ 364,716

Expenses Other Operations Employee Benefits Other Self-Insured Claims $ 321,850

Total Expenses $ 321,850

210

Exhibit M-13

Maury County, TennesseeSchedule of Detailed Revenues and ExpensesSolid Waste Disposal Fund (Enterprise Fund)For the Year Ended June 30, 2004

Primary GovernmentProprietaryFundTypeSolidWasteDisposal Fund

Revenues Operating Revenues Charges for Current Services General Service Charges Residential Waste Collection Charge $ 124,539 Tipping Fees 360,083 Solid Waste Disposal Fee 572,846 Other General Service Charges 80,982

Total Charges for Current Services $ 1,138,450

Other Local Revenues Recurring Items Sale of Recycled Materials $ 135,567

Total Other Local Revenues $ 135,567

Total Operating Revenues $ 1,274,017

Nonoperating Revenues Local Taxes County Property Taxes Current Property Tax $ 609,444 Trustee's Collections - Prior Year 35 Circuit/Clerk & Master Collections - Prior Years 11,016 Interest and Penalty 3,034 Pick-up Taxes 2,847 Other Local Revenues Nonrecurring Items Damages Recovered from Individuals 63 Other Local Revenues 1,273 State of Tennessee General Government Grants Solid Waste Grants 49,493 Public Works Grants Litter Program 64,744 Other State Revenues Other State Grants 10,090

Total Nonoperating Revenues $ 752,039

Total Revenues $ 2,026,056

(Continued)

211

Exhibit M-13

Maury County, TennesseeSchedule of Detailed Revenues and ExpensesSolid Waste Disposal Fund (Enterprise Fund) (Cont.)


Expenses Operating Expenses Waste Pickup Foremen $ 23,691

Longevity Pay 150 Social Security 1,478 Life Insurance 72 Unemployment Compensation 105 Employer Medicare 346 Contributions 12,000 Laundry Service 386 Maintenance & Repair Services - Vehicles 6,947 Travel 89 Disposal Fee 881 Food Supplies 574 Gasoline 928 Vehicle Parts 46 Other Supplies and Materials 13,536 Indirect Costs 31 Vehicle and Equipment Insurance 1,834 Workers' Compensation Insurance 1,651

Total Waste Pickup $ 64,745

Convenience Centers Equipment Operators $ 151,684 Laborers 244,095 Longevity Pay 2,900 Overtime Pay 7,861 Social Security 24,827 State Retirement 14,158 Employee and Dependent Insurance 4,569 Life Insurance 358 Medical Insurance 17,552 Dental Insurance 1,026 Disability Insurance 826 Unemployment Compensation 3,327 Employer Medicare 5,806 Communication 4,473 Operating Lease Payments 5,000 Maintenance & Repair Services - Equipment 25,491 Maintenance & Repair Services - Vehicles 12,008 Pest Control 1,203 Postal Charges 395 Other Contracted Services 5,447

(Continued)

212

Exhibit M-13



Expenses (Cont.) Operating Expenses (Cont.) Convenience Centers (Cont.) Crushed Stone $ 204 Diesel Fuel 23,868 Electricity 7,264 Equipment and Machinery Parts 4,276 Gasoline 2,355 Vehicle Parts 190 Other Supplies and Materials 6,569 Depreciation 17,051

Total Convenience Centers $ 594,783

Landfill Operation and Maintenance County Official/Administrative Officer $ 44,682 Equipment Operators 63,687 Laborers 72,385 Clerical Personnel 52,037 Longevity Pay 4,000 Overtime 5,865 Social Security 15,013 State Retirement 18,008 Employee and Dependent Insurance 6,649 Life Insurance 571 Medical Insurance 27,324 Dental Insurance 1,604 Disability Insurance 1,243 Unemployment Compensation 842 Employer Medicare 3,511 Communication 4,407 Dues and Memberships 240 Laundry Service 5,916 Licenses 6,147 Maintenance Agreements 938 Maintenance & Repair Services - Buildings 982 Maintenance & Repair Services - Equipment 28,017 Maintenance & Repair Services - Vehicles 26,539 Medical and Dental Services 1,045 Pest Control 285 Postal Charges 3,886 Printing, Stationery and Forms 1,362 Travel 812

(Continued)

213

Exhibit M-13



Expenses (Cont.) Operating Expenses (Cont.) Landfill Operation and Maintenance (Cont.) Disposal Fees $ 710,431 Other Contracted Services 25,172 Crushed Stone 1,770 Custodial Supplies 298 Data Processing Supplies 4,234 Diesel Fuel 6,345 Electricity 25,248 Equipment and Machinery Parts 8,715 Gasoline 3,645 Lubricants 2,333 Natural Gas 13,032 Office Supplies 683 Tires and Tubes 2,919 Vehicle Parts 3,079 Other Supplies and Materials 7,176 Building and Contents Insurance 3,057 Liability Insurance 25,661 Trustee's Commission 21,175 Vehicle and Equipment Insurance 14,675 Workers' Compensation Insurance 38,921 Depreciation 143,167 Other Charges 2,816 Office Equipment 310 Solid Waste Equipment 975 Other Capital Outlay 100

Total Landfill Operation and Maintenance $ 1,463,934

Total Operating Expenses $ 2,123,462


214

Exhibit M-14

Maury County, TennesseeSchedule of Detailed Receipts, Disbursements, and Changes in Cash Balance - City Agency FundFor the Year Ended June 30, 2004

Cities -Sales Tax

Fund

Cash Receipts Local Option Sales Tax $ 7,233,382

Total Cash Receipts $ 7,233,382

Cash Disbursements Remittance of Revenues Collected $ 7,161,048 Trustee's Commission 72,334

Total Cash Disbursements $ 7,233,382

Excess of Cash Receipts Over (Under) Cash Disbursements $ 0Cash Balance, July 1, 2003 0

Cash Balance, June 30, 2004 $ 0

215

217

STATISTICAL SECTION

Table 1

Maury County, TennesseeUncollected Taxes Filed in Chancery CourtJune 30, 2004

Year Amount

1993 $ 2,9141994 1,9021995 8,5401996 12,0141997 16,9831998 22,4701999 32,8082000 49,1562001 32,8602002 314,934

Total $ 494,581

219

Table 2

Maury County, TennesseeTax Rates and AssessmentsLast Ten Years

Fund 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

General $ 0.64 $ 0.64 $ 0.66 $ 0.73 $ 0.61 $ 0.58 $ 0.59 $ 0.59 $ 0.56 $ 0.63Solid Waste/Sanitation 0.05 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00Highway/Public Works 0.12 0.12 0.12 0.12 0.10 0.10 0.15 0.20 0.17 0.16General Purpose School 1.18 1.18 1.18 1.23 1.16 1.30 1.41 1.55 1.40 1.53General Debt Service 0.50 0.52 0.50 0.57 0.44 0.44 0.44 0.44 0.35 0.35Solid Waste Disposal 0.00 0.24 0.24 0.24 0.21 0.10 0.05 0.00 0.00 0.06

Total Tax Rate $ 2.49 $ 2.70 $ 2.70 $ 2.89 $ 2.52 $ 2.52 $ 2.64 $ 2.78 $ 2.48 $ 2.73

Assessed Valuation Real and Personal $ 583,245,385 $ 606,877,813 $ 619,063,278 $ 639,196,205 $ 771,985,528 $ 802,019,193 $ 833,443,243 $ 852,040,827 $ 985,821,193 $ 1,024,156,526 Public Utilities 46,111,297 47,630,934 44,171,937 42,233,308 46,483,971 49,528,070 49,628,443 52,877,502 55,186,846 53,926,146

Total Assessed Valuation $ 629,356,682 $ 654,508,747 $ 663,235,215 $ 681,429,513 $ 818,469,499 $ 851,547,263 $ 883,071,686 $ 904,918,329 $ 1,041,008,039 $ 1,078,082,672

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SINGLE AUDIT SECTION

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REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER

FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

January 12, 2005

Maury County Mayor and Board of County Commissioners Maury County, Tennessee To the County Mayor and County Commissioners: We have audited the financial statements of Maury County, Tennessee, as of and for the year ended June 30, 2004, and have issued our report thereon dated January 12, 2005. We conducted our audit in accordance with the auditing 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 Maury County’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grants, noncompliance with which could have a direct and material 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 material instances of noncompliance that are required to be reported under Government Auditing Standards. We did note other instances of noncompliance, which are described in the accompanying Schedule of Findings and Questioned Costs as items 04.02(B) and 04.03. We also noted certain other, less significant instances of noncompliance that we have reported to management in separate communications.

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Internal Control Over Financial Reporting In planning and performing our audit, we considered Maury County’s internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted certain matters involving the internal control over financial reporting and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial reporting that, in our judgment, could adversely affect Maury County’s ability to record, process, summarize, and report financial data consistent with the assertions of management in the financial statements. Reportable conditions are described in the accompanying Schedule of Findings and Questioned Costs as items 04.01, 04.02(A), 04.04, 04.05, 04.06, 04.07, 04.08, and 04.09. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we believe none of the reportable conditions described above are material weaknesses. We also noted other matters involving the internal control over financial reporting that we have reported to management in separate communications. This report is intended solely for the information and use of the Board of County Commissioners, management, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. However, this report is a matter of public record. Very truly yours,


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REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO

EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133

January 12, 2005

Maury County Mayor and Board of County Commissioners Maury County, Tennessee To the County Mayor and County Commissioners: Compliance We have audited the compliance of Maury County with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended June 30, 2004. Maury County’s major federal programs are identified in the Summary of Auditor’s Results section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal programs is the responsibility of Maury County’s management. Our responsibility is to express an opinion on Maury County’s compliance based on our audit. We conducted our audit of compliance in accordance with the auditing standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Maury County’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on Maury County’s compliance with those requirements.

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In our opinion, Maury County complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended June 30, 2004. Internal Control Over Compliance The management of Maury County is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered Maury County’s internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that noncompliance with applicable requirements of laws, regulations, contracts, and grants that would be material in relation to a major federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses. We have audited the financial statements of Maury County, Tennessee, as of and for the year ended June 30, 2004, and have issued our report thereon dated January 12, 2005. Our audit was performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying Schedule of Expenditures of Federal Awards and State Grants is presented for purposes of additional analysis, as required by OMB Circular A-133, and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. This report is intended solely for the information and use of the Board of County Commissioners, management, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. However, this report is a matter of public record. Very truly yours,


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OTHER AUDITOR’S REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

For the Maury Regional Hospital

Board of Directors Maury Regional Hospital Columbia, Tennessee We have audited the financial statements of Maury Regional Hospital as of and for the year ended June 30, 2004, and have issued our report thereon. 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. Internal Control Over Financial Reporting In planning and performing our audit, we considered the hospital’s internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide an opinion on the internal control over financial reporting. However, we noted certain matters involving the internal control over financial reporting and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial reporting that, in our judgment, could adversely affect the hospital’s ability to record, process, summarize, and report financial data consistent with the assertions of management in the financial statements. Reportable conditions are described in the accompanying Schedule of Findings as items 04.01, 04.02, and 04.03. A material weakness is a reportable condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we believe none of the reportable conditions referred to above is a material weakness. Compliance As part of obtaining reasonable assurance about whether the hospital’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, and contracts, noncompliance with which could have a direct and material 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

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instances of noncompliance or other matters that are required to be reported under Government Auditing Standards and are described in the accompanying Schedule of Findings. This report is intended solely for the information and use of the Board of Directors, management, and the Comptroller of the Treasury, Department of Audit of the State of Tennessee, and is not intended to be and should not be used by anyone other than these specified parties.

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Maury Regional Hospital Schedule of Findings

Year Ended June 30, 2004

FINDING 04.01 The controller at each of the hospitals can post journal entries without review by another member of management. In most instances, unusual or inappropriate journal entries would be detected by the detailed review of the financial statements conducted by management; however, certain entries could be disguised and not be detected in such a review. RECOMMENDATION We recommend that the hospital implement a system requiring that all journal entries be approved by a member of management not responsible for posting the journal entry. MANAGEMENT’S RESPONSE Any journal entry posted by the controller or accounting manager at each Maury Regional Healthcare System hospital will be approved by the chief financial officer or other finance member of management not responsible for posting the journal entry.

____________________ FINDING 04.02 In prior years, the contractual expense was calculated based solely on revenue and charge-off activity in the current period. In a review of accounts written off in 2004, management noted that many of the accounts had been charged to inappropriate transaction codes, causing an incorrect calculation of the contractual allowance in prior years. RECOMMENDATION Procedures should be implemented to require management approval of any new transaction codes and to require evaluation of the contractual allowance based on the remaining balance in the related receivables on a periodic basis. MANAGEMENT’S RESPONSE The hospital will have processes and controls in place effective February 1, 2005, to ensure that all charges to transaction A codes (adjustments) are properly documented, reviewed, and approved by the appropriate parties prior to entry into the McKesson HBOC STAR System. Additionally, a complete review of all transaction A codes has been initiated to streamline the number of available codes, prepare a master list of transaction A codes, document the purpose and use of each code, and confirm appropriate general ledger interfaces. Given the number of transaction codes identified during this initial review, it is

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anticipated that this review will be fully completed by March 31, 2005. Once completed, this master list will be the source document referenced by business office personnel when posting adjustments to accounts. Evaluation of the contractual allowance based on the remaining balance was initiated during September 2004 and will be performed on a quarterly basis.

____________________ FINDING 04.03 The information technology department has programmers on staff and does development in a program called Microscript. After a review of the current project list, we noted that most projects do not pose implications to the core system. However, there was one project that altered patient account information due to Medicare write-offs. This altered information ultimately affects general ledger account balances. Adequate segregation of duties does not exist in the application development process. Programmers and developers have access to production libraries. This provides the ability for unauthorized or erroneous transactions to occur on the core system that can affect account balances. RECOMMENDATION Develop and implement an application development process that clearly segregates programmers from accessing production code, libraries, and/or executables. This is especially necessary for development projects that affect general ledger account balances. MANAGEMENT’S RESPONSE The HIPAA Security Rule, which becomes effective on April 20, 2005, requires us to ensure privacy, integrity, and availability of electronic protected health information (EPHI)(45CFR & 164.312(c)(1)). This will require us to implement the policies and procedures recommended by auditors, along with other controls, such as checksums, digital signatures, hashing algorithms, change control, audit logs, activity review, incident response procedures, and data encryption. While HIPAA requires these protections only for EPHI, information systems will protect all Maury Regional Hospital proprietary data.

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For the Maury County Board of Public Utilities Water System

Maury County Board of Public Utilities Water System Maury County, Tennessee We have audited the financial statements of Maury County Board of Public Utilities Water System, a discrete component unit of Maury County, Tennessee, and have issued our report thereon. 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. Compliance As part of obtaining reasonable assurance about whether the system’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grants, noncompliance with which could have a direct and material 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. Internal Control Over Financial Reporting In planning and performing our audit, we considered the system’s internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control over financial reporting that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses. This report is intended solely for the information and use of the Board of Directors, management, the Maury County Commissioners, others within the organization, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified.

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For the Maury County Emergency Communications District To the Board of Directors Maury County Emergency Communications District Columbia, Tennessee We have audited the financial statements of Maury County Emergency Communications District as of and for the year ended June 30, 2004, and have issued our report thereon. 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. Compliance As part of obtaining reasonable assurance about whether Maury County Emergency Communications District’s financial statements are free of material misstatement, we performed tests of its compliance with provisions of laws, regulations, contracts, and grants, noncompliance with which could have a direct and material 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. Internal Control Over Financial Reporting In planning and performing our audit, we considered Maury County Emergency Communications District’s internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and accordingly would not necessarily disclose all reportable conditions that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses. This report is intended for the information of the management and the Board of Directors and is not intended to be and should not be used by anyone other than these specified parties.

Maury County, TennesseeSchedule of Expenditures of Federal Awards and State Grants (1)For the Year Ended June 30, 2004

Pass-throughFederal Entity

Federal/Pass-through Agency/State CFDA IdentifyingGrantor Program Title Number Number Expenditures

U.S. Department of Agriculture: Direct Program: Watershed Protection and Flood Prevention 10.904 N/A $ 43,041

Passed-through State Department of Education: Child Nutrition Cluster: School Breakfast Program 10.553 (2) $ 284,132 National School Lunch Program 10.555 (2) 1,455,367 Summer Food Service Program for Children 10.559 (2) 4,499

Total Passed-through State Department of Education $ 1,743,998

Passed-through State Department of Agriculture: Food Donation (Noncash Assistance) 10.550 (2) $ 160,901

Total U.S. Department of Agriculture $ 1,947,940

U.S. Department of Justice: Direct Programs: Local Law Enforcement Block Grants Program 16.592 N/A $ 41,812 State Criminal Alien Assistance Program 16.606 N/A 3,133 Bulletproof Vest Partnership Program 16.607 N/A 9,862 Public Safety Partnership and Community Policing Grants 16.710 N/A 3,574

Total Direct Programs $ 58,381

Passed-through State Commission on Children and Youth: Juvenile Accountability Incentive Block Grant 16.523 GG-04-01481-00 $ 15,127 Juvenile Justice and Delinquency Prevention - Allocation to States 16.540 Z-04-015577-00 7,830

Total Passed-through State Commission on Children and Youth $ 22,957

Total U.S. Department of Justice $ 81,338

U.S. Department of Labor: Passed-through State Department of Labor and Workforce Development: WIA Youth Activities 17.259 (2) $ 59,668

Total U.S. Department of Labor $ 59,668

U.S. Department of Transportation: Passed-through State Department of Transportation: State and Community Highway Safety 20.600 Z-04-016805-00 $ 7,534

Total U.S. Department of Transportation $ 7,534

U.S. Department of Education: Direct Program: Safe and Drug-Free Schools and Communities National Programs 84.184 N/A $ 160,590 (3)

Passed-through State Department of Education: Adult Education - State Grant Program 84.002 Z-04-016690-00 $ 126,360 (4) Adult Education - State Grant Program 84.002 (2) 11,285 (4) Adult Education - State Grant Program 84.002 GG-04-10619-00 24,500 (4) Title 1 Grant to Local Educational Agencies 84.010 N/A 1,658,455 Special Education Cluster: Special Education - Grants to States 84.027 N/A 1,531,588 (5) Special Education - Grants to States 84.027 GG-04-10158-00 25,000 (5) Special Education - Grants to States 84.027 GG-04-10758-00 35,000 (5) Special Education - Preschool Grants 84.173 N/A 88,019 Vocational Education - Basic Grants to States 84.048 N/A 222,586 Safe and Drug Free Schools and Communities National Programs 84.184 Z-03-015098-00 7,522 (3) Safe and Drug Free Schools and Communities - State Grants 84.186 (2) 51,363 (6) Safe and Drug Free Schools and Communities - State Grants 84.186 Z-04-019520-00 4,250 (6) Fund for the Improvement of Education 84.215 Z-04-019306-00 25,000 State Grants for Innovative Programs 84.298 N/A 80,914 Education Technology State Grants 84.318 (2) 64,226 Reading First State Grants 84.357 GG-04-10989-00 141,576 English Language Acquisition Grants 84.365 N/A 24,563 Improving Teacher Quality State Grants 84.367 N/A 600,080

Total Passed-through State Department of Education $ 4,722,287

(Continued)

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Maury County, TennesseeSchedule of Expenditures of Federal Awards and State Grants (1) (Cont.)

Pass-throughFederal Entity

Federal/Pass-through Agency/State CFDA IdentifyingGrantor Program Title Number Number Expenditures

Passed-through State Department of Human Services: Rehabilitation Services - Vocational Rehabilitation Grants to States 84.126 N/A $ 78,204

Total U.S. Department of Education $ 4,961,081

U.S. Department of Health and Human Services: Passed-through State Department of Education: Temporary Assistance for Needy Families 93.558 Z-04-018357-00 $ 74,350 (7) Temporary Assistance for Needy Families 93.558 Z-04-016532-00 14,378 (7) Child Welfare Services - State Grants 93.645 Z-04-017588-00 19,285

Total U.S. Department of Health and Human Services $ 108,013

U.S. Department of Homeland Security: Passed-through State Department of Military: State Domestic Preparedness Equipment Support Program 97.004 Z-03-014455-00 $ 404 (8) State Domestic Preparedness Equipment Support Program 97.004 Z-03-017779-00 7,700 (8) State Domestic Preparedness Equipment Support Program 97.004 Z-04-020124-00 72,400 (8) Public Assistance Grants 97.036 Z-03-017927-00 2,925 (9) Public Assistance Grants 97.036 Z-02-010509-00 127,807 (9) Public Assistance Grants 97.036 Z-03-017926-00 412,053 (9) Hazard Mitigation Grant 97.039 GG-04-11141-00 1,704 State and Local All Hazards Emergency Operations Planning 97.051 Z-03-015192-01 19,835 Community Emergency Response Teams 97.054 Z-03-019274-00 10,621

Total U.S. Department of Homeland Security $ 655,449

Total Expenditures of Federal Awards $ 7,821,023

State Grants State Reappraisal Program - Comptroller of the Treasury N/A (2) $ 22,004 Health Department Program - State Department of Health N/A (2) 429,759 Archives Grant - State Library and Archives N/A (2) 2,000 Library Grant - State Library and Archives N/A (2) 3,600 Fingerprint Live-Scan Machine - State Department of Finance and Administration N/A Z-01-098948-00 31,283 Hazard Elimination Program - State Department of Transportation N/A STP-H-373(6) 6,510 Optional Tire Waste Grant - State Department of Environment and Conservation N/A (2) 49,493 Waste Reduction Grant - State Department of Environment and Conservation N/A (2) 10,090 Litter Program - State Department of Transportation N/A (2) 64,744 Adult Education - High Schools that Work - State Department of Education N/A GG-04-10619-00 24,500 Adult Education - Basic Grant - State Department of Education N/A Z-04-016690-00 33,669 Safe Schools Act 1998 - State Department of Education N/A (2) 67,302 Families First - State Department of Education N/A Z-04-016532-00 6,766 Early Childhood Education - State Department of Education N/A Z-04-018357-00 86,510 Family Resource Center - State Department of Education N/A Z-04-017588-00 20,273 Juvenile Justice and Delinquency Prevention - State Commission on Children and Youth N/A (2) 10,170 Vocational Technical Education Incentive Grant - State Department of Education N/A (2) 20,000

Total State Grants $ 888,673

CFDA - Catalog of Federal Domestic AssistanceN/A - Not Applicable(1) Presented in conformity with generally accepted accounting principles using the modified accrual basis of accounting.(2) Number not available.(3) Total Safe and Drug-Free Schools and Communities National Porgrams (CFDA Number 84.184) from the U.S. Department of Education $168,112.(4) Total Adult Education - State Grants (CFDA 84.002) from the U.S. Department of Education $162,145.(5) Total Special Education - Grants to States (CFDA Number 84.027) from the U.S. Department of Education $1,591,588.(6) Total Safe and Drug-Free Schools and Communities State Grants (CFDA Number 84.186) from the U.S. Department of Education $55,613.(7) Total Temoprary Assistance for Needy Families (CFDA Number 93.558) from the U.S. Department of Health and Human Services $88,728.(8) Total State Domestic Preparedness Equipment Support Program (CFDA Number 97.004) from the U.S. Department of Homeland Security $80,504.(9) Total Public Assistance Grants (CFDA Number 97.036) from the U.S. Department of Homeland Security $542,785.

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Maury County, Tennessee Schedule of Audit Findings Not Corrected June 30, 2004 Government Auditing Standards require auditors to report the status of uncorrected findings from prior audits. Presented below are findings from the Annual Financial Report for Maury County, Tennessee, for the year ended June 30, 2003, which have not been corrected. OFFICE OF DIRECTOR OF SCHOOLS Finding Number

Page Number

Subject

03.02 218 Several Invoices Were Paid Without

Documentation That Goods Were Received 03.03 219 The Maintenance Department Did Not Maintain

Adequate Inventory Records 03.04 220 The Office Did Not Have Formal Policies and

Procedures for Computer Operations OFFICE OF TRUSTEE Finding Number

Page Number

Subject

03.06 221 A Bank Reconciliation Contained an

Unreconciled Amount OTHER FINDING AND RECOMMENDATION Finding Number

Page Number

Subject

03.08 223 Duties Were Not Segregated Adequately in the

Offices of Trustee and General Sessions Court Clerk-Part II

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SCHEDULE OF FINDINGS AND QUESTIONED COSTS

For the Year Ended June 30, 2004

PART I, SUMMARY OF AUDITOR’S RESULTS

1. An unqualified opinion was issued on the financial statements of Maury County. 2. Reportable conditions in internal control were disclosed by the audit of the financial

statements. None of these conditions was considered to be a material weakness. 3. The audit disclosed no instances of noncompliance that are material to the financial

statements of Maury County. 4. No reportable condition in internal control over major programs was disclosed by the

audit. 5. An unqualified opinion was issued on compliance for major programs. 6. The audit disclosed no audit findings that are required to be reported under Section

510(a) of OMB Circular A-133. 7. Title I Grants to Local Educational Agencies (CFDA No. 84.010) and Public

Assistance Grants (CFDA No. 97.036) were determined to be major programs. 8. A threshold of $300,000 was used to distinguish between Type A and Type B federal

programs. 9. Maury County did qualify as a low-risk auditee.

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PART II, FINDINGS RELATING TO THE FINANCIAL STATEMENTS Findings and recommendations resulting from our examination are presented below. We have reviewed these findings and recommendations with management to provide an opportunity for their response. The written responses of the director of schools are included in this report. Other officials offered oral responses to certain findings and recommendations; however, these oral responses have not been included in this report. OFFICE OF COUNTY MAYOR

FINDING 04.01 MAURY COUNTY DID NOT ENTER INTO AN INTERLOCAL

AGREEMENT WITH THE CITY OF COLUMBIA TO BUILD AN ANIMAL CONTROL FACILITY

(Internal Control – Reportable Condition Under Government Auditing Standards)

The Maury County Commission and Columbia City Council adopted separate resolutions to fund the building of an animal control facility on land leased by Maury County from the Tennessee Valley Authority. The resolutions provided that the county would fund 48 percent and the city would fund 52 percent of the building project and then lease the operations of the facility to a nonprofit organization. However, the county and city did not enter into a written interlocal agreement detailing the responsibilities and potential liabilities of each party, such as building ownership, building maintenance, insurance, contingent liabilities, and dissolution of assets at termination. RECOMMENDATION Maury County and the City of Columbia should enter into a written interlocal agreement that specifically addresses the on-going responsibilities and liabilities of each government.

_____________________________ OFFICE OF HUMAN RESOURCES FINDING 04.02 THE COUNTY HAD AN UNRECORDED AND UNAUTHORIZED

INVESTMENT (A. Internal Control – Reportable Condition Under Government

Auditing Standards; B. Noncompliance Under Government Auditing Standards)

During our audit, we discovered that Maury County was receiving dividend checks on 1,850 shares of common stock. This stock was obtained in prior years by the county’s agent in charge of cashing out the county’s nonqualified retirement plan. The following deficiencies were noted concerning this investment:

A. This investment was not recorded in the county’s financial records. County officials stated to us that they had no knowledge of this investment or the

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origin of the investment until we began to question the source of the dividend.

B. Common stock is not an investment type permitted by Section 5-8-301,

Tennessee Code Annotated. This statute requires that public funds be invested in bonds, notes, treasury bills, certificates of deposit, the Local Government Investment Pool, or other securities guaranteed by the federal government.

RECOMMENDATION All investments should be recorded on the county’s financial records and officials should convert the common stock into an investment authorized by state statute.

_____________________________ FINDING 04.03 SOME EMPLOYEES RECEIVED BOTH WORKERS’

COMPENSATION AND PAYROLL CHECKS FOR THE SAME PERIOD (Noncompliance Under Government Auditing Standards)

Maury County participates in the Local Government Workers’ Compensation Fund (LGWCF) for workers’ compensation coverage. Employees entitled to workers’ compensation payments under this LGWCF plan should receive 66 2/3 percent of their county payroll from LGWCF while absent from work, in lieu of receiving payroll checks from the county. However, during the year, several employees receiving workers’ compensation checks from LGWCF also received their regular payroll checks from the county. The director of human resources stated that the county had no policy addressing this issue. In several instances, the employees endorsed the LGWCF checks over to the county, and the checks were placed in the county’s General Fund. However, many employees kept both their LGWCF checks and their payroll checks from Maury County. Our review noted that these overpayments cost Maury County approximately $13,900 for the year ended June 30, 2004; however, this number does not consider some employees who received one-time settlement checks in addition to receiving payroll checks. The director of human resources stated that as of August 1, 2004, the county has adopted a policy that employees will no longer receive a payroll check while drawing a check through the LGWCF. RECOMMENDATION Maury County officials should review these payments in an attempt to recover any overpayment made to employees.

_____________________________

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OFFICE OF DIRECTOR OF SCHOOLS FINDING 04.04 THE OFFICE PAID SEVERAL INVOICES WITHOUT

DOCUMENTATION OF THE RECEIPT OF THE GOODS OR SERVICES (Internal Control – Reportable Condition Under Government Auditing Standards)

Several invoices were paid without documentation that goods had been received or services rendered. We extended our audit procedures, and it appears that these goods had been received and services had been rendered. RECOMMENDATION To strengthen internal controls over the purchasing process, the office should obtain documentation indicating that goods have been received or services have been rendered before invoices are paid. MANAGEMENT’S RESPONSE – DIRECTOR OF SCHOOLS EDWARD HICKMAN We concur with the finding and continue to examine possible options which will improve control in this area. We will make every effort to ensure that individuals who receive goods and services document appropriateness and submit these documents to the accounting office to confirm payment obligations.

______________________________ FINDING 04.05 ACCOUNTING RECORDS WERE NOT CLOSED IN A TIMELY

MANNER (Internal Control – Reportable Condition Under Government Auditing Standards)

The School Federal Projects Fund accounting records were not closed until December 2004. This delay prevents the current presentation of the School Federal Projects Fund’s financial statements to the Board of Education, County Commission, citizens, and other interested parties. RECOMMENDATION The office should close its accounting records within 60 days following the end of the accounting period to provide the public with current financial information. MANAGEMENT’S RESPONSE – DIRECTOR OF SCHOOLS EDWARD HICKMAN We concur with the finding and will close every fund appropriately in the future. There were mitigating circumstances with staff changes contributing to our failure to note the problem, but all funds were not closed within the prescribed time period.

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FINDING 04.06 THE MAINTENANCE DEPARTMENT DID NOT MAINTAIN

ADEQUATE INVENTORY RECORDS (Internal Control – Reportable Condition Under Government Auditing Standards)

We noted the following inventory control deficiencies at the School Department’s maintenance garage:

A. Pumps for gasoline and diesel fuel were maintained for the department’s maintenance and other vehicles. All maintenance employees and two Central Office employees had keys to the fuel pumps. Maintenance employees documented their fuel usage; however, the Central Office employees did not document their usage. Fuel was not reconciled with fuel purchased, used, and on hand. These fuel pumps had a Gasboy system with the capability to track usage by employee; however, this system was not used. The department discontinued the use of fuel pumps on June 30, 2004, and adopted employee fuel cards.

B. The maintenance garage did not keep records of maintenance and repair

work performed on all equipment. RECOMMENDATION Fuel usage should be reconciled with purchases, and fuel cards should be controlled. Furthermore, records of maintenance and repairs on equipment should be maintained. MANAGEMENT’S RESPONSE – DIRECTOR OF SCHOOLS EDWARD HICKMAN The director stated the following:

A. We concur with the finding. We have already discontinued gasoline dispensation at the school maintenance garage and require all staff to obtain gasoline at the county maintenance garage or an oil company by using a magnetic card to record purchases. Reports of purchases are received in the accounting office and reviewed.

B. We concur with the finding and have revised our monthly vehicle mileage

report/travel log to accumulate information on gasoline purchases, maintenance and repairs for review. Staff will be instructed in the process of reporting information to include all vehicles.

_____________________________

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FINDING 04.07 THE OFFICE DID NOT HAVE FORMAL POLICIES AND

PROCEDURES FOR COMPUTER OPERATIONS (Internal Control – Reportable Condition Under Government Auditing Standards)

The Office of Director of Schools did not have written policies and procedures for routine computer operations. Routine operations include system startup/shutdown, application access, system access security, system backup and retention schedules, hardware/software maintenance, output distribution, and other general data processing functions. Formal policies and procedures are necessary to ensure adequate management control over computer operations. RECOMMENDATION Management should prepare a computer policies and procedures manual that defines policies and procedures for operations such as system backups, security measures, and other general data processing functions. Upon completion, the manual should be distributed to all appropriate personnel. MANAGEMENT’S RESPONSE – DIRECTOR OF SCHOOLS EDWARD HICKMAN Due to changes in personnel at the central office, including the director, manager of budget and finance, and other key staff members, the procedures to comply with the recommendation were not adopted by the previous administration. The present administration was unaware that those recommendations were not enacted. Our staff will make every necessary effort to comply with the recommendation before the end of FY 2005.

______________________________ OFFICE OF TRUSTEE FINDING 04.08 ONE OF THE TRUSTEE’S CLEARING ACCOUNTS WAS NOT

RECONCILED PROPERLY (Internal Control – Reportable Condition Under Government Auditing Standards)

Bank reconciliations prepared by the trustee for a clearing account contained an unreconciled amount of $16,512. The trustee could not specifically identify this amount or provide an explanation for the unreconciled amount. RECOMMENDATION Bank statements should be reconciled with accounting records on a current basis. Unreconciled balances in clearing accounts should be identified, investigated, and corrected.

______________________________

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OTHER FINDING AND RECOMMENDATION FINDING 04.09 DUTIES WERE NOT SEGREGATED ADEQUATELY AT THE

TRANSFER STATION AND ARCHIVES DEPARTMENT, AND IN THE OFFICES OF TRUSTEE, COUNTY CLERK, AND GENERAL SESSIONS COURT CLERK – PART II (Internal Control – Reportable Condition Under Government Auditing Standards)

Duties were not segregated adequately among officials and employees at the transfer station, Archives Department, and in the Offices of Trustee, County Clerk, and General Sessions Court Clerk – Part II. Officials and employees who were responsible for maintaining accounting records were also involved in receipting, depositing, and/or disbursing funds. RECOMMENDATION To strengthen internal controls over operations and automated accounting functions, officials should segregate duties adequately among employees.

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PART III, FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS

There were no findings and questioned costs for federal awards.

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MAURY COUNTY, TENNESSEE AUDITEE REPORTING RESPONSIBILITIES

For the Year Ended June 30, 2004 There were no audit findings relative to federal awards presented in the prior audit’s Schedule of Findings and Questioned Costs or the current year’s Schedule of Findings and Questioned Costs.

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