FAYETTE COUNTY TENNESSEE - TN...

ANNUAL FINANCIAL REPORT

FAYETTE COUNTY, TENNESSEE FOR THE YEAR ENDED JUNE 30, 2016

DIVISION OF LOCAL GOVERNMENT AUDIT

ANNUAL FINANCIAL REPORT

FAYETTE COUNTY, TENNESSEE

FOR THE YEAR ENDED JUNE 30, 2016

COMPTROLLER OF THE TREASURY JUSTIN P. WILSON

DIVISION OF LOCAL GOVERNMENT AUDIT JAMES R. ARNETTE

Director

LEE ANN WEST, CPA, CGFM Audit Manager JUSTIN NEAL, CPA MEREDITH JAGGARS B. KEITH RICE, CGFM ELISHA CROWELL, CISA, CFE Auditor 4 State Auditors

This financial report is available at www.comptroller.tn.gov

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Exhibit Page(s)

Summary of Audit Findings 6

INTRODUCTORY SECTION 7

Fayette County Officials 8

FINANCIAL SECTION 9

Independent Auditor's Report 10-13Management's Discussion and Analysis 14-20BASIC FINANCIAL STATEMENTS: 21

Government-wide Financial Statements:Statement of Net Position A 22-23Statement of Activities B 24-25

Fund Financial Statements:Governmental Funds:

Balance Sheet C-1 26-27Reconciliation of the Balance Sheet of Governmental Funds

to the Statement of Net Position C-2 28Statement of Revenues, Expenditures, and Changes in

Fund Balances C-3 29-30Reconciliation of the Statement of Revenues, Expenditures,

and Changes in Fund Balances of Governmental Fundsto the Statement of Activities C-4 31

Statements of Revenues, Expenditures, and Changes in FundBalances – Actual (Budgetary Basis) and Budget:

General Fund C-5 32-35Highway/Public Works Fund C-6 36-37

Fiduciary Funds:Statement of Fiduciary Assets and Liabilities D 38

Index and Notes to the Financial Statements 39-86REQUIRED SUPPLEMENTARY INFORMATION: 87

Schedule of Changes in Net Pension Liability (Asset) and Related Ratios Based on Participation in the Public Employee Pension Planof TCRS – Primary Government E-1 88

Schedule of Contributions Based on Participation in the Public EmployeePension Plan of TCRS – Primary Government E-2 89

Schedule of Contributions Based on Participation in the TeacherRetirement Plan of TCRS – Discretely Presented FayetteCounty School Department E-3 90

FAYETTE COUNTY, TENNESSEETABLE OF CONTENTS

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Exhibit Page(s)

Schedule of Contributions Based on Participation in the TeacherLegacy Pension Plan of TCRS – Discretely Presented FayetteCounty School Department E-4 91

Schedule of Proportionate Share of the Net Pension Asset in theTeacher Retirement Plan of TCRS – Discretely PresentedFayette County School Department E-5 92

Schedule of Proportionate Share of the Net Pension Asset in theTeacher Legacy Pension Plan of TCRS – Discretely PresentedFayette County School Department E-6 93

Schedule of Funding Progress – Other Postemployment BenefitsPlan – Primary Government and Discretely Presented FayetteCounty School Department E-7 94

Notes to the Required Supplementary Information 95COMBINING AND INDIVIDUAL FUND FINANCIAL

STATEMENTS AND SCHEDULES: 96Nonmajor Governmental Funds: 97-98

Combining Balance Sheet F-1 99-100Combining Statement of Revenues, Expenditures, and Changes

in Fund Balances F-2 101-104Schedules of Revenues, Expenditures, and Changes in Fund

Balances – Actual and Budget:Solid Waste/Sanitation Fund F-3 105Drug Control Fund F-4 106Adequate Facilities/Development Tax Fund F-5 107

Major Governmental Fund: 108Schedule of Revenues, Expenditures, and Changes in Fund

Balance – Actual and Budget:General Debt Service Fund G 109

Fiduciary Funds: 110Combining Statement of Fiduciary Assets and Liabilities H-1 111Combining Statement of Changes in Assets and Liabilities –

All Agency Funds H-2 112Component Unit:

Discretely Presented Fayette County School Department: 113Statement of Activities I-1 114Balance Sheet – Governmental Funds I-2 115Reconciliation of the Balance Sheet of Governmental Funds

to the Statement of Net Position I-3 116Statement of Revenues, Expenditures, and Changes in Fund

Balances – Governmental Funds I-4 117Reconciliation of the Statement of Revenues, Expenditures,

and Changes in Fund Balances of Governmental Fundsto the Statement of Activities I-5 118

Combining Balance Sheet – Nonmajor Governmental Funds I-6 119

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Exhibit Page(s)

Combining Statement of Revenues, Expenditures, and Changesin Fund Balances – Nonmajor Governmental Funds I-7 120-121

Schedules of Revenues, Expenditures, and Changes in FundBalances – Actual (Budgetary Basis) and Budget:

General Purpose School Fund I-8 122-123School Federal Projects Fund I-9 124Central Cafeteria Fund I-10 125

Miscellaneous Schedules: 126Schedule of Changes in Long-term Notes, Capital Lease,

and Bonds J-1 127Schedule of Long-term Debt Requirements by Year J-2 128Schedule of Transfers – Primary Government and

Discretely Presented Fayette County School Department J-3 129Schedule of Salaries and Official Bonds of Principal Officials –

Primary Government and Discretely Presented FayetteCounty School Department J-4 130

Schedule of Detailed Revenues – All Governmental Fund Types J-5 131-144Schedule of Detailed Revenues – All Governmental Fund Types –

Discretely Presented Fayette County School Department J-6 145-147Schedule of Detailed Expenditures – All Governmental Fund Types J-7 148-168Schedule of Detailed Expenditures – All Governmental Fund Types –

Discretely Presented Fayette County School Department J-8 169-180Schedule of Detailed Receipts, Disbursements, and Changes in

Cash Balance – City Agency Fund J-9 181

SINGLE AUDIT SECTION 182

Auditor's Report on Internal Control Over Financial Reporting and onCompliance and Other Matters Based on an Audit of FinancialStatements Performed in Accordance With GovernmentAuditing Standards 183-184

Auditor's Report on Compliance for Each Major Federal Program; Report onInternal Control Over Compliance; and Report on the Schedule ofExpenditures of Federal Awards Required by Uniform Guidance 185-187

Schedule of Expenditures of Federal Awards and State Grants 188-189Summary Schedule of Prior-year Findings 190-191Schedule of Findings and Questioned Costs 192-195Management's Corrective Action Plan 196-197Best Practice 198

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Summary of Audit Findings Annual Financial Report

Fayette County, Tennessee For the Year Ended June 30, 2016

Scope We have audited the basic financial statements of Fayette County as of and for the year ended June 30, 2016.

Results Our report on Fayette County’s financial statements is unmodified. Our audit resulted in two findings and recommendations, which we have reviewed with Fayette County management. Detailed findings, recommendations, and management’s responses are included in the Single Audit section of this report.

Findings The following are summaries of the audit findings: OFFICE OF DIRECTOR OF SCHOOLS ♦ The office did not implement adequate controls to protect its information resources. OFFICE OF COUNTY CLERK ♦ The office did not review its software audit logs.

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INTRODUCTORY SECTION

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Fayette County OfficialsJune 30, 2016

Officials

Rhea Taylor, County Mayor James Smith, Public Works Superintendent Dr. Marlon King, Director of SchoolsBarbra Parker, Trustee Mark Ward, Assessor of Property Sue Culver, County Clerk Edward Pulliam, Circuit, General Sessions, and Juvenile Courts ClerkVip Lewis, Clerk and Master Sissy Dowdle, Register of Deeds Bobby Riles, Sheriff Board of County Commissioners

Rhea Taylor, County Mayor, Chairman Bill KelleyEd Allen Terry LeggettWalter Brewer David Lillard, Sr.Homer Bunker Sylvester LoganOdis Cox Claude Oglesby, Jr.Charles Dacus, Jr. Steve ReevesBen Farley Ray SealsWillie German, Jr. Bill WalkerTim Goodroe Larry WatkinsReggie Howard Myles Wilson

Board of Education

Bob Doll, Chairman Sally SpencerJim Mitchell Tracy WadeWillie Odeneal Wendell WainwrightDana Pittman Marandy WilkersonRobert Redditt

Board of Public Works

Hank Franck, Chairman Wesley ParksAndrew Avery Russell WickerJimmy Jordan

Audit Committee

Myles Wilson, Chairman David Lillard, Sr.Willie L. German Claude OglesbyBill Kelley

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FINANCIAL SECTION

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STATE OF TENNESSEE COMPTROLLER OF THE TREASURY

DEPARTMENT OF AUDIT DIVISION OF LOCAL GOVERNMENT AUDIT

SUITE 1500 JAMES K. POLK STATE OFFICE BUILDING

NASHVILLE, TENNESSEE 37243-1402 PHONE (615) 401-7841

Independent Auditor's Report

Fayette County Mayor and Board of County Commissioners Fayette County, Tennessee To the County Mayor and Board of County Commissioners: Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Fayette County, Tennessee, as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the county’s basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

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An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Fayette County, Tennessee, as of June 30, 2016, and the respective changes in financial position and the respective budgetary comparisons for the General and Highway/Public Works funds for the year then ended in accordance with accounting principles generally accepted in the United States of America. Change in Accounting Principle As described in Note V.B., Fayette County has adopted the provisions of Governmental Accounting Standards Board (GASB) Statement No. 72, Fair Value Measurement and Application; GASB Statement No. 76, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments; GASB Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets that are not within the Scope of GASB Statement No. 68 and Amendments to Certain Provisions of GASB Statements No. 67 and No. 68; and GASB Statement No. 79, Certain External Investment Pools and Pool Participants. Our opinion is not modified with respect to these matters. Other Matters

Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 14-20 and the schedule of changes in the county’s net pension liability (asset) and related ratios, schedules of county and school contributions, schedule of school’s proportionate share of the net pension asset, and schedule of funding progress - other postemployment benefits plans, etc. on pages 88-95 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial

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statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary and Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise Fayette 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 Fayette County School Department (a discretely presented component unit), and miscellaneous schedules 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 Fayette County School Department (a discretely presented component unit), and miscellaneous schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, based on our audit and the procedures performed as described above, 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 Fayette County School Department (a discretely presented component unit), and miscellaneous schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory section has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 29, 2016, on our consideration of Fayette County’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the

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results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Fayette County’s internal control over financial reporting and compliance. Very truly yours,

Justin P. Wilson Comptroller of the Treasury Nashville, Tennessee November 29, 2016 JPW/kp

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MANAGEMENT’S DISCUSSION AND ANALYSIS

As management of the Fayette County Government (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, 2016.

Accounting principles generally accepted in the Unites States of America for governmental entities are established by the Governmental Accounting Standards Board (GASB). The county follows all GASB standards as well as other authoritative literature known collectively within the accounting profession as “generally accepted accounting principles.”

Management’s Discussion and Analysis (MD&A) serves as an introduction to, and should be read in conjunction with, the financial statements and required supplementary information. The MD&A represents management’s examination of the county’s financial condition and performance.

FINANCIAL HIGHLIGHTS

Management believes that the county’s financial condition is strong. The county as a whole is within its budget, and continues to implement procedures and controls to improve the accuracy and effectiveness of its financial reporting. The following are some key financial highlights:

• Total assets and deferred outflows of resources at year-end exceeded liabilities and deferred inflows of resources by $21,463,188 (i.e., net position).

• Total revenues of the governmental funds were $25,755,612, an increase of $1,465,799 from fiscal year 2015.

• Total expenditures of the governmental funds were $24,773,153, a decrease of $3,136,178 from fiscal year 2015.

OVERVIEW OF THE ANNUAL FINANCIAL REPORT

The Annual Financial Report consists of three sections: 1) the 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. These statements are organized so the reader can understand the county as a financial whole. The statements then proceed to provide an increasingly detailed look at specific financial activities.

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. These statements include all assets and liabilities using the accrual basis of accounting. This basis of accounting takes into account all of the current year’s revenues and expenses regardless of when cash is received or paid. Because these statements are designed to give a broad overview, they use highly summarized information.

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The Statement of Net Position presents information on all of the county’s assets plus deferred outflows of resources and liabilities plus deferred inflows of resources, with the difference between the two reported as net position. Over time, the increases or decreases in net position 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 county’s net position during the fiscal year. All changes in net position 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 only 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, known as governmental activities, from other functions that are intended to recover all or a significant portion of their costs through user fees and charges, known as 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 and natural resources; highways/public works; education; and interest on long-term debt. These services are funded primarily by taxes and intergovernmental revenues including federal and state grants and other shared revenues.

The government-wide financial statements not only include the county, known as the primary government, but also legally separate entities for which the county is financially accountable. These entities, Fayette County School Department and Fayette County Emergency Communications District, are listed as component units and are reported separately from the financial information presented for the primary government itself. This discussion and analysis is devoted to the county rather than the component units.

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 funds of the county can be divided into two categories: governmental and fiduciary.

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

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and the governmental fund statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

Fayette County maintains 12 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, Highway/Public Works, and General Debt Service funds, all of which are considered to be major funds. Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the nonmajor governmental funds combining statements elsewhere in 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 statements because the resources of those funds are not available to support the county’s programs.

Notes to the financial statements. The notes to the financial statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. “Notes” is the traditional term applied to this information; however the term is misleading in that the notes can vary in length from one paragraph to several pages. Please refer to the table of contents to locate these notes.

Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning pension information and other postemployment benefits information. This required information has been presented in the required supplementary information section of this report.

The combining statements referred to earlier in connection with non-major governmental funds are presented immediately following the required supplementary information.

Government-wide Financial Analysis

As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. Fayette County’s assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $21,463,188 at the close of the most recent fiscal year for the governmental activities. The Constitution for the State of Tennessee allows only the local legislative body authorization to issue debt. Therefore, whenever the Fayette County Board of Education requires additional money to fund school construction and equipment, the related debt must be issued by the Fayette County Government. As of June 30, 2016, Fayette County had outstanding debt totaling $20,685,000 for capital purposes for the Fayette County Board of Education, but the capital assets are reported in the financial statements of the Fayette 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 position.

The amount listed under Expenses – Education on the Fayette County Changes in Net Position are contributions of bond funds related to the construction of schools in Fayette County.

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2016 2015

Assets:Current and Other Assets $ 26,062,096 $ 24,341,084Capital Assets 38,504,976 38,599,463

Total Assets $ 64,567,072 $ 62,940,547

Deferred Outflows of Resources:Deferred Charge on Refunding $ 36,256 $ 46,755Pension Changes in Experience 2,928 0Pension Contributions after Measurement Date 611,718 599,672

Total Deferred Outflows of Resources $ 650,902 $ 646,427

Liabilities:Other Liabilities $ 2,366,613 $ 2,257,479Long-term Liabilities Outstanding 31,699,574 33,259,187

Total Liabilities $ 34,066,187 $ 35,516,666

Deferred Inflows of Resources:Deferred Current Property Taxes $ 9,378,963 $ 9,252,894Pension Changes in Experience 18,142 19,334Pension Changes in Investment Earnings 291,494 1,256,361

Total Deferred Inflows of Resources $ 9,688,599 $ 10,528,589

Net Position:Net Investment in Capital Assets $ 27,095,289 $ 26,444,133Restricted 6,656,793 6,653,017Unrestricted (12,288,894) (15,555,431)

Total Net Position $ 21,463,188 $ 17,541,719

Governmental Activities

Fayette County Net Position

By far the largest portion of the county’s net position 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. Fayette County uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although Fayette County’s investments in capital assets are 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.

An additional portion of the county’s net position ($6,656,793) represents resources that are subject to external restrictions on how they may be used.

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2016 2015Revenues: Program Revenues:

Charges for Services $ 5,745,726 $ 5,562,109Operating Grants and Contributions 3,157,185 3,034,080Capital Grants and Contributions 1,653,591 550,657

General Revenues:Property Taxes 9,857,344 9,322,742Other Taxes 4,296,090 4,117,329Grants and Contributions Not Restricted to Specific Programs 1,437,614 1,429,456 Unrestricted Investment Income 63,003 23,618Miscellaneous 18,055 46,507Pension Income 0 104,728

Total Revenues $ 26,228,608 $ 24,191,226

Expenses: General Government $ 853,585 $ 2,438,865 Finance 1,124,148 1,131,461 Administration of Justice 1,241,388 1,177,390 Public Safety 8,029,712 8,046,801 Public Health and Welfare 3,690,670 3,362,507 Social, Cultural, and Recreational Services 1,326,906 323,236 Agriculture and Natural Resources 216,314 198,882 Highway/Public Works 4,734,790 5,174,667 Education 154,889 4,564,930 Interest on Long-term Debt 934,737 952,030Total Expenses $ 22,307,139 $ 27,370,769

Change in Net Position $ 3,921,469 $ (3,179,543)Net Position, July 1 17,541,719 19,666,778Prior-period Adjustments 0 735,942Restatement 0 318,542

Net Position, June 30 $ 21,463,188 $ 17,541,719

Fayette County Changes in Net Position


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Capital Assets and Debt Administration

Capital assets. The county’s investment in capital assets for its governmental activities as of June 30, 2016, totaled $38,504,976 (net of accumulated depreciation). This investment in capital assets includes land, buildings and improvements, other capital assets (includes equipment), and infrastructure (roads, highway, and bridges). The total decrease in Fayette County Government’s investment in capital assets for the current fiscal year was $94,487 (net of accumulated depreciation). This decrease was mainly attributable to depreciation expense for the year.

Long-term debt. At the end of the current fiscal year, Fayette County had notes payable of $1,450,619, of which $385,000 will be the responsibility of the Fayette County Board of Education. Fayette County had a capital lease payable of $44,735 for sheriff’s vehicles, and bonds payable of $30,380,000. Fayette County’s total long-term debt is $31,875,354, of which $20,685,000 was for capital purposes for the Fayette County Board of Education, as previously mentioned. All debt is backed by full faith and credit of the county.

Notes Payable through General Debt Service Fund $ 1,065,619 Notes Payable by Board of Education Contributions 385,000

Total Notes Payable $ 1,450,619

Capital Leases Payable through General Debt Service Fund $ 44,735 Total Capital Lease Payable $ 44,735

Bonds Payable through General Debt Service Fund $ 30,380,000 Total Bonds Payable $ 30,380,000

Total Long-term Debt $ 31,875,354

Fayette County's Outstanding DebtAs of June 30, 2016


ECONOMIC FACTORS

Unemployment: Fayette County vs. Tennessee vs. United States

The unemployment rates for June 2016 were 5.2, 5.0, and 5.1 percent, respectively, for Fayette County, Tennessee, and the United States.

Resident Growth

Fayette County’s population has grown in the past few years. The 2010 census put the county’s population at 38,413, and estimates the population for Fayette County at July 1, 2015, the beginning of the fiscal year for the county at 39,165. This is an increase of 1.96 percent over the five years since the last census.

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An increasing population is beneficial to the financial status of the county as long as the increased revenues associated with increasing property values, increased sales tax revenue, and intergovernmental revenues, exceed the increased demand for services. A steady increase in population is more conducive to allowing the service capacity of the county to grow as the demand for services increases without necessitating a large increase in capacity from one year to the next.

Memphis Regional Megasite

The Memphis Regional Megasite is located on the northern border of the county in Haywood County. This is a 4,100-acre industrial park owned by the State of Tennessee. The goal of the park is to attract an automobile manufacturer/assembly plant. The park is projected to create about 1,500 jobs on site, with another 1,500-3,000 jobs throughout the region. Progress is being made to install the needed utilities and road system. The State of Tennessee is marketing the park. The park is probably two to five years away from having a major tenant.

Memphis Regional Intermodal Facility

The Memphis Regional Intermodal Facility in southern Rossville near the Mississippi state line is a railyard operated by Norfolk Southern Railroad and is the largest one in its system. This railyard transfers containers between rail and truck for delivery in the region and throughout the eastern United States. The yard opened in 2012 and is currently looking to expand with a second phase. The operation employs only 150-200 workers, but offers a service that is expected to create many jobs related to the distribution and logistics industries. Interest is high in the area from businesses, and several have already located across the state line in Mississippi.

Highway 385 Opening

The completion of State Highway 385 from Collierville to the Mississippi state line finishes the Tennessee portion of an interstate quality four lane highway. This connects all of western Fayette County to a transportation network that goes nationwide. This also opens up opportunities for further commercial and residential growth.

REQUESTS FOR INFORMATION

This financial report is designed to provide a general overview of Fayette County’s finances for all those with an interest in the county’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to:

Fayette County Mayor’s Office Attn: Accounting & Budgeting P.O. Box 218 13095 North Main Street Somerville, TN 38068

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BASIC FINANCIAL STATEMENTS

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Exhibit A

Fayette County, TennesseeStatement of Net PositionJune 30, 2016

Primary FayetteGovernment County

Governmental SchoolActivities Department

ASSETS

Cash $ 48,269 $ 0Equity in Pooled Cash and Investments 12,470,732 5,770,334Accounts Receivable 3,170,144 1,033Allowance for Uncollectibles (2,088,972) 0Due from Other Governments 805,740 823,231Due from Component Unit 385,000 0Property Taxes Receivable 10,010,780 6,325,684Allowance for Uncollectible Property Taxes (229,525) (145,136)Cash Shortage 0 7,025Net Pension Asset - Agent Plan 1,489,928 1,052,551Net Pension Asset - Teacher Retirement Plan 0 26,112Capital Assets: Assets Not Depreciated: Land 2,041,595 349,377 Assets Net of Accumulated Depreciation: Buildings and Improvements 13,034,147 18,885,929 Infrastructure 19,906,397 0 Other Capital Assets 3,522,837 1,697,453Total Assets $ 64,567,072 $ 34,793,593

DEFERRED OUTFLOWS OF RESOURCES

Deferred Charge on Refunding $ 36,256 $ 0Pension Changes in Experience 2,928 97,215Pension Contributions after Measurement Date 611,718 1,332,089Total Deferred Outflows of Resources $ 650,902 $ 1,429,304

LIABILITIES

Accounts Payable $ 5,300 $ 38,175Accrued Payroll 0 12,932Payroll Deductions Payable 0 196,017Due to Primary Government 0 385,000Accrued Interest Payable 229,437 0Noncurrent Liabilities: Due Within One Year 2,131,876 80,687 Due in More Than One Year 31,699,574 945,456Total Liabilities $ 34,066,187 $ 1,658,267

(Continued)

Component Unit

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Exhibit A

Fayette County, TennesseeStatement of Net Position (Cont.)

Primary FayetteGovernment County

Governmental SchoolActivities Department

DEFERRED INFLOWS OF RESOURCES

Deferred Current Property Taxes $ 9,378,963 $ 5,925,965Pension Changes in Experience 18,142 1,866,665Pension Changes in Investment Earnings 291,494 969,252Pension Other Deferrals 0 704,967Total Deferred Inflows of Resources $ 9,688,599 $ 9,466,849

NET POSITION

Net Investment in Capital Assets $ 27,095,289 $ 20,932,759Restricted for: General Government 279,142 0 Finance 39,273 0 Administration of Justice 170,120 0 Public Safety 579,126 0 Public Health and Welfare 213,094 0 Highway/Public Works 423,045 0 Capital Outlay 645,013 7,783 Debt Service 2,594,106 0 Other Purposes 1,489,928 0 Education 223,946 1,174,404 Operation of Non-instructional Services 0 763,741Unrestricted (12,288,894) 2,219,094

Total Net Position $ 21,463,188 $ 25,097,781

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

Component Unit

23

Exhibit B

Fayette County, TennesseeStatement of ActivitiesFor the Year Ended June 30, 2016

PrimaryOperating Capital Government

Charges Grants Grants Totalfor and and Governmental

Functions/Programs Expenses Services Contributions Contributions Activities

Primary Government: Governmental Activities: General Government $ 853,585 $ 695,092 $ 25,164 $ 0 $ (133,329) $ 0 Finance 1,124,148 911,106 93,666 0 (119,376) 0 Administration of Justice 1,241,388 811,561 72,942 0 (356,885) 0 Public Safety 8,029,712 1,083,700 138,197 1,111,132 (5,696,683) 0 Public Health and Welfare 3,690,670 2,207,490 265,852 0 (1,217,328) 0 Social, Cultural, and Recreational Services 1,326,906 11,316 37,500 0 (1,278,090) 0 Agriculture and Natural Resources 216,314 0 0 0 (216,314) 0 Highways/Public Works 4,734,790 25,461 2,217,997 542,459 (1,948,873) 0 Education 154,889 0 272,350 0 117,461 0 Interest on Long-term Debt 934,737 0 33,517 0 (901,220) 0

Total Primary Government $ 22,307,139 $ 5,745,726 $ 3,157,185 $ 1,653,591 $ (11,750,637) $ 0

Component Units: Fayette County School Department $ 28,916,390 $ 271,683 $ 4,726,299 $ 154,889 $ 0 $ (23,763,519)

Total Component Units $ 28,916,390 $ 271,683 $ 4,726,299 $ 154,889 $ 0 $ (23,763,519)

(Continued)

Program Revenues

Net (Expense) Revenue and Changes in Net Position

FayetteCountySchool

Department

Component Unit

24

Exhibit B

Fayette County, TennesseeStatement of Activities (Cont.)

PrimaryOperating Capital Government

Charges Grants Grants Totalfor and and Governmental

Functions/Programs Expenses Services Contributions Contributions Activities

General Revenues: Taxes: Property Taxes Levied for General Purposes $ 9,855,591 $ 6,276,247 Property Taxes Levied for Debt Service 1,753 0 Local Option Sales Tax 446,329 3,340,456 Wheel Tax 2,821,651 0 Litigation Tax 162,344 0 Business Tax 237,387 0 Mixed Drink Tax 0 8,036 Adequate Facilities/Development Tax 551,951 0 Wholesale Beer Tax 68,613 0 Interstate Telecommunications Tax 0 3,265 Other Local Taxes 7,815 0 Grants and Contributions Not Restricted to Specific Programs 1,437,614 16,879,979 Unrestricted Investment Income 63,003 3,527 Miscellaneous 18,055 76,764Total General Revenues $ 15,672,106 $ 26,588,274

Change in Net Position $ 3,921,469 $ 2,824,755Net Position, July 1, 2015 17,541,719 22,273,026

Net Position, June 30, 2016 $ 21,463,188 $ 25,097,781


CountySchool

Department

Program Revenues Component Unit

Net (Expense) Revenue and Changes in Net Position

Fayette

25

Exhibit C-1

Fayette County, TennesseeBalance SheetGovernmental FundsJune 30, 2016

OtherHighway / General Govern- Total

Public Debt mental GovernmentalGeneral Works Service Funds Funds

ASSETS

Cash $ 0 $ 0 $ 0 $ 48,269 $ 48,269Equity in Pooled Cash and Investments 6,125,488 2,114,156 2,796,404 1,434,684 12,470,732Accounts Receivable 3,124,179 0 0 45,965 3,170,144Allowance for Uncollectibles (2,088,972) 0 0 0 (2,088,972)Due from Other Governments 328,228 472,147 0 5,365 805,740Due from Other Funds 48,368 0 0 0 48,368Property Taxes Receivable 9,194,835 815,945 0 0 10,010,780Allowance for Uncollectible Property Taxes (209,022) (20,503) 0 0 (229,525)

Total Assets $ 16,523,104 $ 3,381,745 $ 2,796,404 $ 1,534,283 $ 24,235,536

LIABILITIES

Accounts Payable $ 5,300 $ 0 $ 0 $ 0 $ 5,300Due to Other Funds 0 0 0 48,368 48,368Total Liabilities $ 5,300 $ 0 $ 0 $ 48,368 $ 53,668


Deferred Current Property Taxes $ 8,622,964 $ 755,999 $ 0 $ 0 $ 9,378,963Deferred Delinquent Property Taxes 336,368 36,565 0 0 372,933Other Deferred/Unavailable Revenue 1,051,708 247,523 0 0 1,299,231Total Deferred Inflows of Resources $ 10,011,040 $ 1,040,087 $ 0 $ 0 $ 11,051,127

(Continued)

Major FundsNonmajor

Funds

26

Exhibit C-1

Fayette County, TennesseeBalance SheetGovernmental Funds (Cont.)



FUND BALANCES

Restricted:Restricted for General Government $ 53,832 $ 0 $ 0 $ 225,310 $ 279,142Restricted for Finance 39,273 0 0 0 39,273Restricted for Administration of Justice 170,120 0 0 0 170,120Restricted for Public Safety 436,524 0 0 142,602 579,126Restricted for Public Health and Welfare 213,094 0 0 0 213,094Restricted for Highways/Public Works 0 9,301 0 223,945 233,246Restricted for Education 0 0 0 223,946 223,946Restricted for Capital Outlay 169,720 0 0 475,293 645,013Restricted for Debt Service 0 0 2,787,287 0 2,787,287

Committed:Committed for General Government 278,119 0 0 0 278,119Committed for Public Safety 51,198 0 0 0 51,198Committed for Public Health and Welfare 0 0 0 194,819 194,819Committed for Social, Cultural, and Recreational Services 50,991 0 0 0 50,991Committed for Other Operations 4,800 0 0 0 4,800Committed for Highways/Public Works 0 2,332,357 0 0 2,332,357Committed for Debt Service 0 0 9,117 0 9,117

Assigned:Assigned for General Government 69,791 0 0 0 69,791Assigned for Finance 4,233 0 0 0 4,233Assigned for Public Safety 11,867 0 0 0 11,867Assigned for Public Health and Welfare 313,737 0 0 0 313,737Assigned for Social, Cultural, and Recreational Services 7,049 0 0 0 7,049

Unassigned 4,632,416 0 0 0 4,632,416Total Fund Balances $ 6,506,764 $ 2,341,658 $ 2,796,404 $ 1,485,915 $ 13,130,741

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 16,523,104 $ 3,381,745 $ 2,796,404 $ 1,534,283 $ 24,235,536


Major FundsNonmajor

Funds

27

Exhibit C-2

Fayette County, TennesseeReconciliation of the Balance Sheet of Governmental Funds to the Statement of Net PositionJune 30, 2016

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

Total fund balances - balance sheet - governmental funds (Exhibit C-1) $ 13,130,741

(1) Capital assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds. Add: land $ 2,041,595 Add: buildings and improvements net of accumulated depreciation 13,034,147 Add: infrastructure net of accumulated depreciation 19,906,397 Add: other capital assets net of accumulated depreciation 3,522,837 38,504,976

(2) Long-term liabilities are not due and payable in the current period and therefore are not reported in the governmental funds. Less: notes payable $ (1,450,619) Add: debt to be contributed by the School Department 385,000 Less: bonds payable (30,380,000) Less: capital lease payable (44,735) Add: deferred amount on refunding 36,256 Less: other deferred revenue - premium on debt (526,234) Less: compensated absences payable (351,192) Less: landfill postclosure care costs (717,718) Less: other postemployment benefits liability (360,952) Less: accrued interest on bonds, notes, and capital lease (229,437) (33,639,631)

(3) Amounts reported as deferred outflows of resources and deferredinflows of resources related to pensions will be amortized and recognized as components of pension expense in future years. Add: deferred outflows of resources related to pensions $ 614,646 Less: deferred inflows of resources related to pensions (309,636) 305,010

(4) Net pension assets of the agent plan are not current financialresources and therefore are not reported in the governmentalfunds. 1,489,928

(5) Other long-term assets are not available to pay for current-periodexpenditures and therefore are deferred in the governmental funds. 1,672,164

Net position of governmental activities (Exhibit A) $ 21,463,188


28

Exhibit C-3

Fayette County, TennesseeStatement of Revenues, Expenditures,

and Changes in Fund BalancesGovernmental FundsFor the Year Ended June 30, 2016



RevenuesLocal Taxes $ 9,492,030 $ 2,089,156 $ 1,873,472 $ 551,951 $ 14,006,609Licenses and Permits 237,245 0 0 0 237,245Fines, Forfeitures, and Penalties 309,392 0 0 63,607 372,999Charges for Current Services 1,673,840 0 0 422,701 2,096,541Other Local Revenues 169,386 25,461 0 198,865 393,712Fees Received From County Officials 1,633,012 0 0 0 1,633,012State of Tennessee 2,097,157 2,753,488 0 414,500 5,265,145Federal Government 110,926 0 0 1,111,132 1,222,058Other Governments and Citizens Groups 61,697 0 462,350 4,244 528,291

Total Revenues $ 15,784,685 $ 4,868,105 $ 2,335,822 $ 2,767,000 $ 25,755,612

ExpendituresCurrent:

General Government $ 1,254,653 $ 0 $ 0 $ 0 $ 1,254,653Finance 950,231 0 0 0 950,231Administration of Justice 904,282 0 0 1,002 905,284Public Safety 6,540,254 0 0 53,694 6,593,948Public Health and Welfare 2,398,060 0 0 923,630 3,321,690Social, Cultural, and Recreational Services 210,780 0 0 0 210,780Agriculture and Natural Resources 198,964 0 0 0 198,964Other Operations 2,363,592 0 0 17,759 2,381,351Highways 0 4,897,376 0 0 4,897,376

Debt Service:Principal on Debt 0 0 1,743,731 0 1,743,731Interest on Debt 0 0 935,719 0 935,719Other Debt Service 0 442 22,334 0 22,776

(Continued)

Major FundsNonmajor

Funds

29

Exhibit C-3


and Changes in Fund BalancesGovernmental Funds (Cont.)



Expenditures (Cont.)Capital Projects $ 0 $ 0 $ 0 $ 1,356,650 $ 1,356,650

Total Expenditures $ 14,820,816 $ 4,897,818 $ 2,701,784 $ 2,352,735 $ 24,773,153

Excess (Deficiency) of RevenuesOver Expenditures $ 963,869 $ (29,713) $ (365,962) $ 414,265 $ 982,459

Other Financing Sources (Uses)Notes Issued $ 0 $ 334,889 $ 0 $ 0 $ 334,889Insurance Recovery 27,795 7,879 0 7,254 42,928Transfers In 0 104,010 256,240 0 360,250Transfers Out (48,220) 0 0 (312,030) (360,250)

Total Other Financing Sources (Uses) $ (20,425) $ 446,778 $ 256,240 $ (304,776) $ 377,817

Net Change in Fund Balances $ 943,444 $ 417,065 $ (109,722) $ 109,489 $ 1,360,276Fund Balance, July 1, 2015 5,563,320 1,924,593 2,906,126 1,376,426 11,770,465

Fund Balance, June 30, 2016 $ 6,506,764 $ 2,341,658 $ 2,796,404 $ 1,485,915 $ 13,130,741


Major FundsNonmajor

Funds

30

Exhibit C-4

Fayette 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, 2016

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

Net change in fund balances - total governmental funds (Exhibit C-3) $ 1,360,276

(1) Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of these assets is allocated over theiruseful lives and reported as depreciation expense. The difference between capital outlays and depreciation is itemized as follows: Add: capital assets purchased in the current period $ 3,395,521 Less: current-year depreciation expense (3,490,008) (94,487)

(2) Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. Add: deferred delinquent property taxes and other deferred June 30, 2016 $ 1,672,164 Less: deferred delinquent property taxes and other deferred June 30, 2015 (1,042,685) 629,479

(3) The issuance of long-term debt (e.g., bonds, notes, leases) provides currentfinancial resources to governmental funds, while the repayment of theprincipal of long-term debt consumes the current financial resources ofgovernmental funds. Neither transaction, however, has any effect on netposition. Also, governmental funds report the effect of premiums, discounts,and similar items when debt is first issued, whereas these amounts aredeferred and amortized in the statement of activities. This amount is the effectof these differences in the treatment of long-term debt and related items. Less: note proceeds $ (334,889) Add: change in premium on debt proceeds 33,517 Add: principal payments on bonds 1,315,000 Add: principal payments on notes 375,602 Add: principal payments on capital lease 53,129 Less: contributions from the School Department for notes (190,000) Less: change in deferred amount on refunding debt (10,499) 1,241,860

(4) 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 the governmental funds. Change in accrued interest payable $ 15,347 Change in compensated absences payable 37,107 Change in other postemployment benefits liability (48,649) Change in landfill postclosure care costs 8,540 Change in net pension asset (209,037) Change in deferred outflows related to pensions 14,974 Change in deferred inflows related to pensions 966,059 784,341

Change in net position of governmental activities (Exhibit B) $ 3,921,469


31

Exhibit C-5

Fayette County, TennesseeStatement of Revenues, Expenditures, and Changes

in Fund Balance - Actual (Budgetary Basis) and BudgetGeneral FundFor the Year Ended June 30, 2016

Actual VarianceRevenues/ with Final

Actual Add: Expenditures Budget -(GAAP Encumbrances (Budgetary PositiveBasis) 6/30/2016 Basis) Original Final (Negative)

RevenuesLocal Taxes $ 9,492,030 $ 0 $ 9,492,030 $ 9,229,099 $ 9,229,099 $ 262,931Licenses and Permits 237,245 0 237,245 203,000 203,000 34,245Fines, Forfeitures, and Penalties 309,392 0 309,392 108,950 111,680 197,712Charges for Current Services 1,673,840 0 1,673,840 1,572,000 1,572,000 101,840Other Local Revenues 169,386 0 169,386 202,000 202,000 (32,614)Fees Received From County Officials 1,633,012 0 1,633,012 1,535,000 1,536,000 97,012State of Tennessee 2,097,157 0 2,097,157 2,379,800 2,453,467 (356,310)Federal Government 110,926 0 110,926 102,000 139,926 (29,000)Other Governments and Citizens Groups 61,697 0 61,697 83,500 83,500 (21,803)

Total Revenues $ 15,784,685 $ 0 $ 15,784,685 $ 15,415,349 $ 15,530,672 $ 254,013

ExpendituresGeneral Government

County Commission $ 68,123 $ 337 $ 68,460 $ 74,329 $ 74,950 $ 6,490Beer Board 208 0 208 700 700 492County Mayor/Executive 106,093 0 106,093 108,333 107,712 1,619Personnel Office 69,421 0 69,421 69,778 69,778 357County Attorney 65,063 0 65,063 59,183 72,258 7,195Election Commission 263,659 2,177 265,836 269,947 300,087 34,251Register of Deeds 177,817 0 177,817 181,733 183,349 5,532Development 151,111 0 151,111 213,781 156,253 5,142Building 88,079 0 88,079 86,055 93,180 5,101County Buildings 203,948 2,225 206,173 186,537 213,503 7,330Other Facilities 4,973 0 4,973 2,300 5,100 127Other General Administration 56,158 14,650 70,808 77,929 77,929 7,121

(Continued)

Budgeted Amounts

32

Exhibit C-5


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



Expenditures (Cont.)Finance

Accounting and Budgeting $ 123,092 $ 4,233 $ 127,325 $ 137,695 $ 137,695 $ 10,370Property Assessor's Office 254,229 0 254,229 275,411 278,616 24,387Reappraisal Program 46,763 0 46,763 47,500 47,500 737County Trustee's Office 213,979 0 213,979 214,802 214,802 823County Clerk's Office 312,168 0 312,168 313,923 325,887 13,719

Administration of JusticeCircuit Court 169,921 0 169,921 181,224 185,899 15,978General Sessions Court 144,184 0 144,184 159,716 159,716 15,532General Sessions Judge 214,243 0 214,243 217,168 217,111 2,868General Sessions Court Clerk 67,897 0 67,897 68,744 68,744 847Drug Court 68,340 0 68,340 70,000 70,000 1,660Chancery Court 185,805 0 185,805 198,005 200,466 14,661Juvenile Court 44,267 0 44,267 56,016 56,073 11,806Other Administration of Justice 6,895 0 6,895 36,033 36,033 29,138Victim Assistance Programs 2,730 0 2,730 0 2,730 0

Public SafetySheriff's Department 2,513,968 2,736 2,516,704 2,480,544 2,693,576 176,872Drug Enforcement 210,843 0 210,843 233,367 236,967 26,124Jail 2,873,216 6,240 2,879,456 2,965,076 2,995,814 116,358Fire Prevention and Control 634,921 2,890 637,811 715,877 715,877 78,066Civil Defense 135,356 0 135,356 132,578 154,004 18,648Rescue Squad 1,242 0 1,242 6,618 6,618 5,376Other Emergency Management 1,622 0 1,622 7,000 7,000 5,378County Coroner/Medical Examiner 36,270 0 36,270 36,400 40,600 4,330Other Public Safety 132,816 0 132,816 144,820 140,620 7,804

(Continued)

Budgeted Amounts

33

Exhibit C-5





Expenditures (Cont.)Public Health and Welfare

Local Health Center $ 61,829 $ 0 $ 61,829 $ 83,202 $ 83,992 $ 22,163Rabies and Animal Control 74,176 0 74,176 87,648 87,648 13,472Ambulance/Emergency Medical Services 1,920,390 312,959 2,233,349 2,040,494 2,350,494 117,145Dental Health Program 219,848 778 220,626 288,400 290,400 69,774Alcohol and Drug Programs 2,297 0 2,297 0 8,900 6,603Crippled Children Services 2,216 0 2,216 2,216 2,216 0Other Local Health Services 1,534 0 1,534 1,534 1,534 0Appropriation to State 24,971 0 24,971 25,761 24,971 0Aid to Dependent Children 750 0 750 2,750 2,750 2,000Other Local Welfare Services 7,500 0 7,500 7,500 7,500 0Sanitation Education/Information 82,549 0 82,549 59,276 85,874 3,325

Social, Cultural, and Recreational ServicesSenior Citizens Assistance 11,924 0 11,924 11,925 11,925 1Libraries 198,856 7,049 205,905 208,860 213,464 7,559

Agriculture and Natural ResourcesAgricultural Extension Service 134,462 0 134,462 140,586 140,587 6,125Soil Conservation 64,502 0 64,502 66,146 66,146 1,644

Other OperationsIndustrial Development 39,613 0 39,613 51,730 51,730 12,117Airport 230,645 0 230,645 311,963 314,743 84,098Veterans' Services 14,805 0 14,805 15,585 15,585 780Other Charges 338,904 0 338,904 351,000 403,219 64,315Contributions to Other Agencies 51,062 0 51,062 51,062 51,062 0Employee Benefits 1,681,347 0 1,681,347 1,922,372 1,810,161 128,814Miscellaneous 7,216 0 7,216 1,000 28,000 20,784

Total Expenditures $ 14,820,816 $ 356,274 $ 15,177,090 $ 15,760,132 $ 16,400,048 $ 1,222,958

(Continued)

Budgeted Amounts

34

Exhibit C-5





Excess (Deficiency) of RevenuesOver Expenditures $ 963,869 $ (356,274) $ 607,595 $ (344,783) $ (869,376) $ 1,476,971

Other Financing Sources (Uses)Insurance Recovery $ 27,795 $ 0 $ 27,795 $ 0 $ 2,397 $ 25,398Transfers Out (48,220) 0 (48,220) 0 (48,220) 0

Total Other Financing Sources $ (20,425) $ 0 $ (20,425) $ 0 $ (45,823) $ 25,398

Net Change in Fund Balance $ 943,444 $ (356,274) $ 587,170 $ (344,783) $ (915,199) $ 1,502,369Fund Balance, July 1, 2015 5,563,320 0 5,563,320 3,333,297 3,333,297 2,230,023

Fund Balance, June 30, 2016 $ 6,506,764 $ (356,274) $ 6,150,490 $ 2,988,514 $ 2,418,098 $ 3,732,392


Budgeted Amounts

35

Exhibit C-6


in Fund Balance - Actual (Budgetary Basis) and BudgetHighway/Public Works FundFor the Year Ended June 30, 2016


Actual Less: Add: Expenditures Budget -(GAAP Encumbrances Encumbrances (Budgetary PositiveBasis) 7/1/2015 6/30/2016 Basis) Original Final (Negative)

RevenuesLocal Taxes $ 2,089,156 $ 0 $ 0 $ 2,089,156 $ 2,048,223 $ 1,944,213 $ 144,943Other Local Revenues 25,461 0 0 25,461 31,500 31,500 (6,039)State of Tennessee 2,753,488 0 0 2,753,488 3,404,000 3,404,000 (650,512)

Total Revenues $ 4,868,105 $ 0 $ 0 $ 4,868,105 $ 5,483,723 $ 5,379,713 $ (511,608)

ExpendituresHighways

Administration $ 200,650 $ 0 $ 0 $ 200,650 $ 217,124 $ 217,124 $ 16,474Highway and Bridge Maintenance 1,493,115 0 0 1,493,115 1,579,205 1,633,005 139,890Operation and Maintenance of Equipment 401,437 0 0 401,437 548,000 453,000 51,563Other Charges 217,435 0 0 217,435 215,000 224,848 7,413Employee Benefits 647,624 0 0 647,624 693,500 687,152 39,528Capital Outlay 1,937,115 (254,134) 911,172 2,594,153 2,230,894 2,783,541 189,388

Other Debt ServiceHighways and Streets 442 0 0 442 0 442 0

Total Expenditures $ 4,897,818 $ (254,134) $ 911,172 $ 5,554,856 $ 5,483,723 $ 5,999,112 $ 444,256

Excess (Deficiency) of RevenuesOver Expenditures $ (29,713) $ 254,134 $ (911,172) $ (686,751) $ 0 $ (619,399) $ (67,352)

Other Financing Sources (Uses)Notes Issued $ 334,889 $ 0 $ 0 $ 334,889 $ 0 $ 334,889 $ 0Insurance Recovery 7,879 0 0 7,879 0 0 7,879Transfers In 104,010 0 0 104,010 0 104,010 0

Total Other Financing Sources $ 446,778 $ 0 $ 0 $ 446,778 $ 0 $ 438,899 $ 7,879

(Continued)

Budgeted Amounts

36

Exhibit C-6


in Fund Balance - Actual (Budgetary Basis) and BudgetHighway/Public Works Fund (Cont.)



Net Change in Fund Balance $ 417,065 $ 254,134 $ (911,172) $ (239,973) $ 0 $ (180,500) $ (59,473)Fund Balance, July 1, 2015 1,924,593 (254,134) 0 1,670,459 1,057,798 1,057,798 612,661

Fund Balance, June 30, 2016 $ 2,341,658 $ 0 $ (911,172) $ 1,430,486 $ 1,057,798 $ 877,298 $ 553,188


Budgeted Amounts

37

Exhibit DFayette County, TennesseeStatement of Fiduciary Assets and LiabilitiesFiduciary FundsJune 30, 2016

ASSETS

Cash $ 2,227,976Equity in Pooled Cash and Investments 42,792Accounts Receivable 16,660Due from Other Governments 531,379

Total Assets $ 2,818,807

LIABILITIES

Due to Other Taxing Units $ 574,171Due to Litigants, Heirs, and Others 2,244,636

Total Liabilities $ 2,818,807


AgencyFunds

38

Note Page(s)

I. Summary of Significant Accounting PoliciesA. Reporting Entity 40B. Government-wide and Fund Financial Statements 41C. Measurement Focus, Basis of Accounting, and Financial

Statement Presentation 42D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and

Net Position/Fund Balance1. Deposits and Investments 442. Receivables and Payables 453. Capital Assets 454. Deferred Outflows/Inflows of Resources 465. Compensated Absences 476. Long-term Obligations 477. Net Position and Fund Balance 48

E. Pension Plans 50II. Reconciliation of Government-wide and Fund Financial Statements

A. Explanation of Certain Differences Between the Governmental FundBalance Sheet and the Government-wide Statement of Net Position 50

B. Explanation of Certain Differences Between the Governmental FundStatement of Revenues, Expenditures, and Changes in Fund Balancesand the Government-wide Statement of Activities 51

III. Stewardship, Compliance, and AccountabilityA. Budgetary Information 51B. Cash Shortage - Prior Years 52

IV. Detailed Notes on All FundsA. Deposits and Investments 52B. Capital Assets 53C. Construction Commitments 56D. Interfund Receivables, Payables, and Transfers 56E. Capital Lease 57F. Long-term Obligations 58G. On-Behalf Payments 62H. Short-term Debt 62

V. Other InformationA. Risk Management 63B. Accounting Changes 64C. Contingent Liabilities 65D. Change in Administration 65E. Landfill Closure/Postclosure Care Costs 65F. Joint Venture 65G. Retirement Commitments 66H. Other Postemployment Benefits (OPEB) 83I. Purchasing Laws 85

FAYETTE COUNTY, TENNESSEEIndex of Notes to the Financial Statements

39

FAYETTE COUNTY, TENNESSEE NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended June 30, 2016

I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Fayette 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 Fayette County: A. Reporting Entity

Fayette County is a public municipal corporation governed by an elected 19-member board. As required by GAAP, these financial statements present Fayette County (the primary government) and its component units. The financial statements of the Fayette County Emergency Communications District, a component unit requiring discrete presentation, were excluded from this report due to materiality calculations; therefore, the effect of its omission is not material to the aggregate discretely presented component units’ opinion unit and will not affect our opinion thereon. 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 Discretely Presented Component Units – The following entities meet the criteria for discretely presented component units of the county. They are reported in separate columns in the government-wide financial statements to emphasize that they are legally separate from the county. The Fayette County School Department operates the public school system in the county, and the voters of Fayette County elect its board. The School Department is fiscally dependent on the county because it may not issue debt, 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 Fayette County Emergency Communications District provides a simplified means of securing emergency services through a uniform emergency number for the residents of Fayette County, and the Fayette County Commission appoints its governing body. The district is funded primarily through a service charge levied on telephone services. Before the issuance of most debt instruments, the district must obtain the County Commission’s approval. The financial statements of the Fayette County Emergency Communications District were not material to the component units’ opinion unit and therefore have been omitted from this report.

40

The Fayette County School Department does not issue separate financial statements from those of the county. Therefore, basic financial statements of the School Department are included in this report as listed in the table of contents. Complete financial statements of the Fayette County Emergency Communications District can be obtained from its administrative office at the following address:

Administrative Office: Fayette County Emergency Communications District P.O. Box 159 Somerville, TN 38068

Related Organization – The Fayette County Industrial Development Board is a related organization of Fayette County. The county mayor nominates and the Fayette County Commission confirms the board members, but the county’s accountability for the organization does not extend beyond making the appointments.

B. Government-wide and Fund Financial Statements The government-wide financial statements (i.e., the Statement of Net Position 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. However, when applicable, interfund services provided and used between functions are not eliminated in the process of consolidation in the Statement of Activities. 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. However, the primary government of Fayette County does not have any business-type activities to report. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The Fayette 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.

41

Fayette County issues all debt for the discretely presented Fayette County School Department. Net debt issues totaling $154,889 were contributed by the county to the School Department during the year ended June 30, 2016. Separate financial statements are provided for governmental funds and fiduciary funds. 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 fiduciary funds financial statements, except for agency funds, which have no measurement focus. 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 Fayette 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, deferred outflow of resources, liabilities, deferred inflow of resources, fund equity, revenues, and expenditures. Funds are organized into three major categories: governmental, proprietary, and fiduciary. An emphasis is placed on major funds within the governmental category. Fayette County has no proprietary funds to report. Separate financial statements are provided for governmental funds and fiduciary funds. Major individual governmental funds are reported as separate columns in the fund financial statements. All other governmental funds are aggregated into a single column on the fund financial statements. The fiduciary funds in total are reported in a single column. 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. Fayette County considers grants 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 accounting when the related fund liability is incurred. Principal and interest on long-term debt are

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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. Fiduciary funds financial statements are reported using the economic resources measurement focus, except for agency funds, which have no 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. Fayette 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. Highway/Public Works Fund – This special revenue fund accounts for transactions of the county’s Highway Department. Local and state gasoline/fuel taxes are the foundational revenues of this 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.

Additionally, Fayette County reports the following fund types:

Capital Projects Funds – These funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities. Agency Funds – These funds account for amounts collected in an agency capacity by the constitutional officers, local sales taxes received by the state to be forwarded to the various cities in Fayette County, and assets held in a custodial capacity for a watershed district. 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 Fayette County School Department reports the following major governmental fund:

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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 Fayette County School Department reports the following fund types:

Special Revenue Funds – These funds account for and report the proceeds of specific revenue sources that are restricted or committed to expenditures for specified purposes other than debt service or capital projects. Capital Projects Fund – The Education Capital Projects Fund is used to account for the receipt of debt issued by Fayette County and contributed to the School Department for building construction and renovations.

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.

D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balance

1. Deposits and Investments

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; deposit accounts at state and federal chartered banks and savings and loan associations; repurchase agreements; the State Treasurer’s Investment Pool; bonds of any state or political subdivision rated A or higher by any nationally recognized rating service; nonconvertible debt securities of certain federal government sponsored enterprises; and the county’s own legally issued bonds or notes. The county trustee maintains a cash and internal investment pool that is used by all funds and the discretely presented Fayette County School Department. Each fund’s portion of this pool is displayed on the balance sheets or statements of net position as Equity in Pooled Cash and Investments. Most income from these pooled investments is assigned to the primary government’s Solid Waste/Sanitation Fund. Fayette County and the 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 are reported at cost. Investments in the State Treasurer’s Investment Pool are reported

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at amortized cost using a Stable Net Asset Value. State statutes require the state treasurer to administer the pool under the same terms and conditions, 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 outstanding at the end of the fiscal year is referred to as due to/from other funds. All ambulance and property taxes receivables are shown with an allowance for uncollectibles. Ambulance receivables allowance for uncollectibles is based on historical collection data. The allowance for uncollectible property taxes is equal to 1.21 percent of total taxes levied. 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 a deferred inflow of resources 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 as a deferred inflow of resources 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.

3. Capital Assets Governmental funds do not capitalize the cost of capital outlays; these funds report capital outlays as expenditures upon acquisition.

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Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, and similar items), are reported in the governmental column in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of $5,000 or more and an estimated useful life of more than one year. 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 and the discretely presented School Department are depreciated using the straight-line method over the following estimated useful lives:

Assets Years

Land Improvements 10Buildings and Improvements 25Other Capital Assets 5 - 10Infrastructure: Roads 10 - 20 Bridges 15 - 30

4. Deferred Outflows/Inflows of Resources

In addition to assets, the Statement of Net Position will sometimes report a separate section for deferred outflows of resources. Deferred outflows of resources represent a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The government has items that qualify for reporting in this category. Accordingly, the items are reported in the government-wide Statement of Net Position. These items are for the deferred charge on refunding and for pension changes in experience, and employer contributions made to the pension plan after the measurement date. In addition to liabilities, the Statement of Net Position will sometimes report a separate section for deferred inflows of resources. Deferred inflows of resources, represent an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government has items that

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qualify for reporting in this category. Accordingly, the items are reported in the government-wide Statement of Net Position and the governmental funds balance sheet. These items are from the following sources: current and delinquent property taxes, pension changes in experience and investment earnings, pension changes in proportionate share of contributions, and various receivables for revenues, which do not meet the availability criteria in governmental funds. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available.

5. Compensated Absences Fayette County permits employees to accumulate earned but unused vacation and sick pay benefits. There is no liability for unpaid accumulated sick leave since Fayette County does not have a policy to pay any amounts when employees separate from service with the government. All vacation pay is accrued when incurred in the government-wide financial 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 retirements. The discretely presented Fayette County School Department permits 12-month administrative and supervisory employees to accumulate a limited amount of earned but unused vacation benefits, which will be paid upon separation from service. There is no liability for unpaid accumulated sick leave since the School Department does not have a policy to pay any amounts when employees separate from service with the government. All vacation pay is accrued when incurred in the government-wide financial statements for the School Department. A liability for vacation pay 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, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities Statement of Net Position. Debt premiums and discounts are deferred and amortized over the life of the new debt using the straight-line method. Debt issuance costs are expensed in the period incurred. In refunding transactions, the difference between the reacquisition price and the net carrying amount of the old debt is reported as a deferred outflow of resources or a deferred inflow of resources and recognized as a component of interest expense in a systematic and rational manner over the remaining life of the refunded debt or the life of the new debt issued, whichever is shorter.

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

7. Net Position and Fund Balance In the government-wide financial statements, equity is classified as net position and displayed in three components:

a. Net investment in capital assets – 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 position – Consists of net position 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 position – All other net position that does not meet the definition of restricted or net investment in capital assets.

The government-wide Statement of Net Position reports $6,656,793 of restricted net position for the primary government, of which $673,201 is restricted by enabling legislation. As of June 30, 2016, Fayette County had $20,685,000 in outstanding debt for capital purposes for the discretely presented Fayette County School Department. This debt is a liability of Fayette County, but the capital assets acquired are reported in the financial statements of the School Department. Therefore, Fayette County has incurred a liability significantly decreasing its unrestricted net position with no corresponding increase in the county’s capital assets.

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It is the county’s policy that restricted amounts would be reduced first followed by unrestricted amounts when expenditures are incurred for purposes for which both restricted and unrestricted fund balance is available. Also, it is the county’s policy that committed amounts would be reduced first, followed by assigned amounts, and then unassigned amounts when expenditures are incurred for purposes for which amounts in any of these unrestricted fund balance classifications could be used. In the fund financial statements, governmental funds report fund balance in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in these funds can be spent. These classifications may consist of the following:

Nonspendable Fund Balance – includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. Restricted Fund Balance – includes amounts that have constraints placed on the use of the resources that are either (a) externally imposed by creditors, grantors, contributors or laws and regulations of other governments or (b) imposed by law through constitutional provisions or enabling legislation. Committed Fund Balance – includes amounts that can only be used for specific purposes pursuant to constraints imposed by formal resolutions of the County Commission, the county’s highest level of decision-making authority and the Board of Education, the School Department’s highest level of decision-making authority, and shall remain binding unless removed in the same manner. Assigned Fund Balance – includes amounts that are constrained by the county’s intent to be used for specific purposes, but are neither restricted nor committed (excluding stabilization arrangements). The County Commission has by resolution authorized the county’s Budget Committee to make assignments for the general government. The Board of Education makes assignments for the School Department. Unassigned Fund Balance – the residual classification of the General and General Purpose School funds. This classification represents fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the General and General Purpose School funds.

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E. Pension Plans Primary Government For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of Fayette County’s participation in the Public Employee Retirement Plan of the Tennessee Consolidated Retirement System (TCRS), and additions to/deductions from Fayette County’s fiduciary net position have been determined on the same basis as they are reported by the TCRS for the Public Employee Retirement Plan. For this purpose, benefits (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms of the Public Employee Retirement Plan of TCRS. Investments are reported at fair value. Discretely Presented Fayette County School Department For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Teacher Retirement Plan and the Teacher Legacy Pension Plan in the Tennessee Consolidated Retirement System, and additions to/deductions from fiduciary net position have been determined on the same basis as they are reported by the TCRS. For this purpose, benefits (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms of the Teacher Retirement Plan and the Teacher Legacy Pension Plan. Investments are reported at fair value.

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 Position Primary Government Exhibit C-2 includes explanations of the nature of individual elements of items required to reconcile the balance sheet of governmental funds with the government-wide Statement of Net Position. Discretely Presented Fayette County School Department Exhibit I-3 includes explanations of the nature of individual elements of items required to reconcile the balance sheet of governmental funds with the government-wide Statement of Net Position.

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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 C-4 includes explanations of the nature of individual elements of items required to reconcile the net change in fund balances – total governmental funds with the change in net position of governmental activities reported in the government-wide Statement of Activities. Discretely Presented Fayette County School Department Exhibit I-5 includes explanations of the nature of individual elements of items required to reconcile the net change in fund balances – total governmental funds with the change in net position of governmental activities reported in the government-wide Statement of Activities.

III. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY

A. Budgetary Information

Annual budgets are adopted on a basis consistent with generally accepted accounting principles (GAAP) for all governmental funds except the Constitutional Officers - Fees Fund (special revenue fund), which is not budgeted, and capital projects funds, which adopt project length budgets. All annual appropriations lapse at fiscal year end. 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 County 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, Beer Board, County Mayor/Executive, Personnel Office, etc.). Management may make revisions within major categories, but only the County Commission may transfer appropriations between major categories. During the year, several supplementary appropriations were necessary. The county's budgetary basis of accounting is consistent with GAAP, except instances in which encumbrances are treated as budgeted expenditures. The difference between the budgetary basis and GAAP basis is presented on the face of each budgetary schedule.

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At June 30, 2016, Fayette County and the Fayette County School Department reported the following significant encumbrances: Fund Description

Primary Government: Major Fund: General Ambulances $ 309,250 Highway/Public Works Bridge Construction 747,053 " Paving Project 164,119 School Department: Major Fund: General Purpose School School buses 245,300 " Building Improvements 219,591

Amount

B. Cash Shortage – Prior Years

On April 27, 2010, a special report was issued on the Fayette County School Food Service Department for the period July 1, 2007, through December 15, 2009. This report disclosed that the food service supervisor circumvented purchasing procedures, resulting in a cash shortage of $142,433. In addition, the food service supervisor altered time sheets of a part-time cafeteria worker, resulting in a cash shortage of $35,196.93. In May 2010, the School Department’s insurance carrier paid the department $149,500. Three individuals entered into plea agreements. As of June 30, 2016, the restitution outstanding totaled $7,025.

IV. DETAILED NOTES ON ALL FUNDS

A. Deposits and Investments Fayette County and the Fayette 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, and investing most county funds. Each fund’s portion of this pool is displayed on the balance sheets or statements of net position as Equity in Pooled Cash and Investments. Cash reflected on the balance sheets or statements of net position represents nonpooled amounts held separately by individual funds. Deposits Legal Provisions. 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 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

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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 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. Investments Legal Provisions. 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; deposits at state and federal chartered banks and savings and loan associations; bonds of any state or political subdivision rated A or higher by any nationally recognized rating service; nonconvertible debt securities of certain federal government sponsored enterprises; 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 Comptroller’s Office 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 of the securities must be priced at least two percent below the fair value of the securities on the day of purchase. The county had no pooled and nonpooled investments as of June 30, 2016.

B. Capital Assets Capital assets activity for the year ended June 30, 2016, was as follows:

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Primary Government Governmental Activities:

Balance Balance7-1-15 Increases 6-30-16

Capital Assets Not Depreciated:Land $ 2,041,595 $ 0 $ 2,041,595Total Capital Assets Not Depreciated $ 2,041,595 $ 0 $ 2,041,595

Capital Assets Depreciated:Buildings and Improvements $ 21,333,829 $ 1,180,816 $ 22,514,645 Infrastructure 117,936,871 1,326,865 119,263,736 Other Capital Assets 10,510,653 887,840 11,398,493 Total Capital Assets Depreciated $ 149,781,353 $ 3,395,521 $ 153,176,874

Less Accumulated Depreciation For:Buildings and Improvements $ 8,703,452 $ 777,046 $ 9,480,498 Infrastructure 97,545,308 1,812,031 99,357,339 Other Capital Assets 6,974,725 900,931 7,875,656 Total Accumulated Depreciation $ 113,223,485 $ 3,490,008 $ 116,713,493

Total Capital Assets Depreciated, Net $ 36,557,868 $ (94,487) $ 36,463,381

Governmental Activities Capital Assets, Net $ 38,599,463 $ (94,487) $ 38,504,976

There were no decreases in capital assets to report during the year ended June 30, 2016. Depreciation expense was charged to functions of the primary government as follows: Governmental Activities:

General Government $ 314,261 Finance 3,482 Administration of Justice 154,821 Public Safety 911,314 Public Health and Welfare 170,196 Social, Cultural, and Recreational Services 10,200 Highway/Public Works 1,925,734 Total Depreciation Expense - Governmental Activities $ 3,490,008

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Discretely Presented Fayette County School Department

Governmental Activities:

Balance Balance7-1-15 Increases Decreases 6-30-16

Capital Assets Not Depreciated: Land $ 349,377 $ 0 $ 0 $ 349,377 Construction in Progress 12,717,996 0 (12,717,996) 0Total Capital Assets Not Depreciated $ 13,067,373 $ 0 $ (12,717,996) $ 349,377

Capital Assets Depreciated: Buildings and Improvements 34,473,725 13,008,810 (195,181) 47,287,354 Infrastructure 394,280 0 0 394,280 Other Capital Assets 7,147,804 138,922 (86,079) 7,200,647 Total Capital Assets Depreciated $ 42,015,809 $ 13,147,732 $ (281,260) $ 54,882,281

Less Accumulated Depreciation For: Buildings and Improvements 27,355,628 1,228,988 (183,191) 28,401,425 Infrastructure 394,280 0 0 394,280 Other Capital Assets 5,165,499 404,679 (66,984) 5,503,194 Total Accumulated Depreciation $ 32,915,407 $ 1,633,667 $ (250,175) $ 34,298,899

Total Capital Assets Depreciated, Net $ 9,100,402 $ 11,514,065 $ (31,085) $ 20,583,382

Governmental Activities Capital Assets, Net $ 22,167,775 $ 11,514,065 $ (12,749,081) $ 20,932,759

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

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Governmental Activities:

Instruction $ 980,364 Support Services 495,754 Operation of Non-instructional Services 157,549

Total Depreciation Expense - Governmental Activities $ 1,633,667

C. Construction Commitments At June 30, 2016, the Highway Department had uncompleted construction contracts of approximately $911,172 for bridge and paving projects. Funding has been received for these future expenditures.

D. Interfund Receivables, Payables, and Transfers The composition of interfund balances as of June 30, 2016, was as follows: Due to/from Other Funds:

Receivable Fund Payable Fund Amount

Primary Government: General Nonmajor governmental $ 48,368

Discretely Presented School Department: General Purpose School Nonmajor governmental 146,392

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. The receivable in the General Purpose School Fund totaling $146,392 was in transit from the Central Cafeteria Fund at June 30, 2016. Due to/from Primary Government and Component Unit:

Receivable Fund Payable Fund

Component Unit:Primary Government: School Department: Governmental Activities Governmental Activities $ 385,000

Amount

The due to the primary government is the balance of a note issued by the county for the School Department. The School Department has agreed to

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contribute the funds necessary to retire this debt obligation from the General Purpose School Fund to the county’s General Debt Service Fund. Interfund Transfers: Interfund transfers for the year ended June 30, 2016, consisted of the following amounts: Primary Government

Transfers Out

General Fund $ 0 $ 48,220 Nonmajor governmental funds 104,010 208,020

Total $ 104,010 $ 256,240

Transfers InHighway/

PublicWorksFund

GeneralDebt

ServiceFund

Discretely Presented Fayette County School Department

Transfers Out

General Purpose School Fund $ 0 $ 210,991 Nonmajor governmental funds 167,993 0

Total $ 167,993 $ 210,991

Transfers InGeneral PurposeSchoolFund

NonmajorGovernmental

Fund

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.

E. Capital Lease On November 2, 2011, Fayette County entered into a five-year lease-purchase agreement for ten patrol cars. The terms of the agreement require total lease payments of $233,180 plus interest of 3.27 percent. Title to the patrol cars

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transfers to Fayette County at the end of the lease period. The lease payments are made by the General Debt Service Fund. The assets acquired through the capital lease are as follows:

GovernmentalAssets Activities

Other Capital Assets $ 233,180 Less: Accumulated Depreciation (219,188)

Total Book Value $ 13,992

Future minimum lease payments and the net present value of this minimum lease payments as of June 30, 2016, were as follows: Year Ending GovernmentalJune 30 Funds

2017 $ 46,222 Total Minimum Lease Payments $ 46,222 Less: Amount Representing Interest (1,487)

Present Value of Minimum Lease Payments $ 44,735

F. Long-term Obligations Primary Government General Obligation Bonds and Notes Fayette County issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities for the primary government and the discretely presented School Department. 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 23 years for bonds and up to nine 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, 2016, will be retired from the General Debt Service Fund.

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General obligation bonds, capital outlay notes, and the capital lease outstanding as of June 30, 2016, for governmental activities are as follows:

OriginalInterest Final Amount Balance

Type Rate Maturity of Issue 6-30-16

General Obligation Bonds 2 to 4 % 4-1-36 $ 13,585,000 $ 12,690,000 General Obligation Bonds - Refunding 1.25 to 3.5 4-1-30 21,090,000 17,690,000 Capital Outlay Notes 1.73 to 2.66 3-1-25 1,660,069 1,450,619 Capital Lease 3.27 11-10-16 233,180 44,735

The annual requirements to amortize all general obligation bonds and notes outstanding as of June 30, 2016, including interest payments, are presented in the following tables: Year EndingJune 30 Total

2017 $ 1,500,000 $ 865,530 $ 2,365,5302018 1,540,000 835,533 2,375,5332019 1,500,000 801,480 2,301,4802020 1,555,000 768,282 2,323,2822021 1,625,000 734,032 2,359,0322022-2026 8,980,000 3,035,939 12,015,9392027-2031 8,800,000 1,695,727 10,495,7272032-2036 4,880,000 558,300 5,438,300

Total $ 30,380,000 $ 9,294,823 $ 39,674,823

Principal InterestBonds

Year EndingJune 30 Total

2017 $ 232,688 $ 33,664 $ 266,3522018 235,823 28,336 264,1592019 243,962 22,953 266,9152020 249,120 17,375 266,4952021 191,296 11,682 202,9782022-2025 297,730 15,541 313,271

Total $ 1,450,619 $ 129,551 $ 1,580,170

Principal InterestNotes

There is $2,796,404 available in the General Debt Service Fund to service long-term debt. Debt per capita, including bonds, notes, and the capital lease totaled $830, based on the 2010 federal census. The School Department is currently contributing funds to service some of the debt issued on its behalf by the primary government as noted in the table below. This debt is reflected in the government-wide financial statements as Due to the Primary Government in the financial statements of the School

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Department and as Due from Component Units in the financial statements of the primary government.

OutstandingDescription of Indebtedness 6-30-16

Note Payable Contributions from the General Purpose School Fund School Buses $ 385,000

Total $ 385,000

Changes in Long-term Obligations Long-term obligations activity for the year ended June 30, 2016, was as follows: Governmental Activities: Capital

Bonds Notes Lease

Balance, July 1, 2015 $ 31,695,000 $ 1,491,332 $ 97,864Additions 0 334,889 0Reductions (1,315,000) (375,602) (53,129)

Balance, June 30, 2016 $ 30,380,000 $ 1,450,619 $ 44,735

Balance Due Within One Year $ 1,500,000 $ 232,688 $ 44,735

Landfill OtherCompensated Postclosure Postemployment

Absences Care Costs Benefits

Balance, July 1, 2015 $ 388,299 $ 726,258 $ 312,303Additions 362,396 8,510 57,953Reductions (399,503) (17,050) (9,304)

Balance, June 30, 2016 $ 351,192 $ 717,718 $ 360,952Balance Due Within One Year $ 337,403 $ 17,050 $ 0

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Analysis of Noncurrent Liabilities Presented on Exhibit A:

Total Noncurrent Liabilities, June 30, 2016 $ 33,305,216Less: Balance Due Within One Year (2,131,876)Add: Unamortized Premium on Debt 526,234

Noncurrent Liabilities - Due in More Than One Year - Exhibit A $ 31,699,574

Compensated absences will be paid from the employing funds, primarily the General, Solid Waste/Sanitation, and Highway/Public Works funds. Landfill postclosure care costs will be paid from the Solid Waste/Sanitation Fund. Other postemployment benefits will be paid from the employing funds, primarily the General and Highway/Public Works funds. Discretely Presented Fayette County School Department Changes in Long-term Obligations Long-term obligations activity for the discretely presented Fayette County School Department for the year ended June 30, 2016, was as follows: Governmental Activities:

Other

Balance, July 1, 2015 $ 104,029 $ 792,824 $ (51,435)Additions 74,690 162,881 4,018,158Reductions (96,865) (129,973) (3,848,166)

Balance, June 30, 2016 $ 81,854 $ 825,732 $ 118,557

Balance Due Within One Year $ 80,687 $ 0 $ 0

Net PensionLiability - Teacher

Legacy Pension Plan*Postemployment

BenefitsCompensated

Absences

*At July 1, 2015, the teacher legacy pension plan had a net pension asset. Analysis of Noncurrent Liabilities Presented on Exhibit A:

Total Noncurrent Liabilities, June 30, 2016 $ 1,026,143Less: Balance Due Within One Year (80,687)

Noncurrent Liabilities - Due in More Than One Year - Exhibit A $ 945,456

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Compensated absences will be paid from the employing funds, primarily the General Purpose School and School Federal Projects funds. Other postemployment benefits will be paid from the employing funds, primarily the General Purpose School Fund.

G. On-Behalf Payments Primary Government The State of Tennessee pays health insurance premiums for retired employees on-behalf of Fayette County. These payments are made by the state to the Medicare Supplement Plan. This plan is administered by the State of Tennessee and reported in the State’s Comprehensive Annual Financial Report. Payments by the State to the Medicare Supplement Plan for the year ended June 30, 2016, were $2,550. The county has recognized these on-behalf payments as revenues and expenditures in the General Fund. Discretely Presented Fayette County School Department The State of Tennessee pays health insurance premiums for retired teachers on-behalf of the Fayette County School Department. These payments are made by the state to the Local Education Group Insurance Plan and the Medicare Supplement Plan. Both of these plans are administered by the State of Tennessee and reported in the state’s Comprehensive Annual Financial Report. Payments by the state to the Local Education Group Insurance Plan and the Medicare Supplement Plan for the year ended June 30, 2016, were $33,647 and $29,175, respectively. The School Department has recognized these on-behalf payments as revenues and expenditures in the General Purpose School Fund.

H. Short-term Debt Fayette County issued a tax anticipation note in advance of property tax collections and deposited the proceeds in the General Purpose School Fund. These notes were necessary because funds were not available to meet operating expenses coming due before current tax collections. Short-term debt activity for the year ended June 30, 2016, was as follows:

Tax Anticipation Notes 0$ $ 50,000 $ (50,000) 0$

Balance7-1-15 Issued Paid

Balance6-30-16

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V. OTHER INFORMATION

A. Risk Management Primary Government Liability, Property, and Casualty Fayette County participates in 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 in excess of $100,000 for each insured event. Workers' Compensation Insurance Fayette County participates in the Local Government Workers’ Compensation Fund (LGWCF), a public entity risk pool established under the provisions of Section 29-20-401, Tennessee Code Annotated (TCA), by the Tennessee County Services Association to provide a program of workers’ compensation coverage to employees of local governments. The county pays an annual premium to the LGWCF for its workers’ compensation insurance coverage. The LGWCF is to be self-sustaining through member premiums and reinsures through commercial insurance companies for claims exceeding $300,000. Employee Health Insurance Fayette County participates in the Local Government Group Insurance Fund (LGGIF), a public entity risk pool established to provide a program of health insurance coverage for employees of local governments and quasi-governmental entities that was established for the primary purpose of providing services for or on behalf of state and local governments. In accordance with Section 8-27-207, TCA, all local governments and quasi-governmental entities described above are eligible to participate. The LGGIF is included in the Comprehensive Annual Financial Report of the State of Tennessee, but the state does not retain any risk for losses by this fund. The state statute provides for the LGGIF to be self-sustaining through member premiums. Discretely Presented Fayette County School Department Liability, Property, Casualty, and Workers’ Compensation Insurance The School Department participates in the Tennessee Risk Management Trust (TN-RMT), which is a public entity risk pool created under the auspices of the Tennessee Governmental Tort Liability Act to provide governmental insurance

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coverage. The School Department pays an annual premium to the TN-RMT for its general liability, property, casualty, and workers’ compensation insurance coverage. The creation of TN-RMT provides for it to be self-sustaining through member premiums. Employee Health Insurance The School Department participates in the Local Education Group Insurance Fund (LEGIF), a public entity risk pool established to provide a program of health insurance coverage for employees of local education agencies. In accordance with Section 8-27-301, TCA, all local education agencies are eligible to participate. The LEGIF is included in the Comprehensive Annual Financial Report of the State of Tennessee, but the state does not retain any risk of losses by this fund. Section 8-27-303, TCA, provides for the LEGIF to be self-sustaining through member premiums.

B. Accounting Changes Provisions of Governmental Accounting Standards Board (GASB) Statement No. 72, Fair Value Measurement and Application; Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets that are not within the Scope of GASB Statement No. 68, and Amendments to Certain Provisions of GASB Statements No. 67 and No. 68; Statement No. 76, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments; and Statement No. 79, Certain External Investment Pools and Pool Participants became effective for the year ended June 30, 2016. GASB Statement No. 72, establishes general principles for measuring fair value and standards of accounting and financial reporting for assets and liabilities measured at fair value. This standard supersedes previous statements as they relate to measuring fair value of certain assets and liabilities. GASB Statement No. 73, established accounting and reporting requirements for pensions that are not administered through a trust account and also addresses changes made to Statements No. 67 and No. 68. The changes to Statements No. 67 and No. 68 require new RSI disclosures concerning plan investments and address specific payables to defined benefit plans. GASB Statement No. 76, addresses changes made to the hierarchy of generally accepted accounting principles. This standard supersedes Statement No. 55 and reduces the hierarchy from four to two categories. GASB Statement No. 79, addresses issues related to certain external investment pools and pool participants because of changes in Security and Exchange rules relative to money market funds. This standard establishes criteria for an external investment pool to qualify for making the election to measure all of its investments at amortized cost rather than fair value for financial reporting purposes.

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C. Contingent Liabilities The county and School Department are involved in several pending lawsuits. Management estimates that any potential claims not covered by insurance resulting from such litigation would not materially affect the county’s or School Department’s financial statements.

D. Change in Administration On July 2, 2015, James Teague left the Office of Director of Schools and was succeeded by Dr. Marlon King on August 1, 2015.

E. Landfill Closure/Postclosure Care Costs Fayette County has active permits on file with the State Department of Environment and Conservation for a sanitary landfill and a demolition landfill. The county has provided financial assurances for estimated postclosure liabilities as required by the State of Tennessee. These financial assurances are on file with the Department of Environment and Conservation. State and federal laws and regulations require the county to place a final cover on its sanitary 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 county 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. Fayette County closed its sanitary landfill in 1998. The $717,718 reported as postclosure care liability at June 30, 2016, represents amounts based on what it would cost to perform all postclosure care in 2016. Actual costs may be higher due to inflation, changes in technology, or changes in regulations.

F. Joint Venture The Twenty-fifth Judicial District Drug Task Force (DTF) is a joint venture formed by an interlocal agreement between the district attorney general of the Twenty-fifth Judicial District, Fayette, Lauderdale, and Tipton counties, and various cities within these counties. The purpose of the DTF is to provide multi-jurisdictional law enforcement to promote the investigation and prosecution of drug-related activities. Funds for the operations of the DTF come primarily from federal grants, drug fines, and the forfeiture of drug-related assets to the DTF. The DTF is overseen by the district attorney general and is governed by a board of directors including the district attorney general, sheriffs, and police chiefs of participating law enforcement agencies within each judicial district. Fayette County made no contributions to the DTF during the year ended June 30, 2016. Complete financial statements for the DTF can be obtained from its administrative office at the following address:

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Administrative Office: Office of District Attorney General Twenty-fifth Judicial District Drug Task Force 121 North Main Ripley, TN 38063

G. Retirement Commitments

Tennessee Consolidated Retirement System (TCRS) Primary Government General Information About the Pension Plan Plan Description. Employees of Fayette County and non-certified employees of the discretely presented Fayette County School Department are provided a defined benefit pension plan through the Public Employee Retirement Plan, an agent multiple-employer pension plan administered by the TCRS. The primary government employees comprised 58.6 percent and the non-certified employees of the discretely presented School Department comprised 41.4 percent of the plan based on contribution data. The TCRS was created by state statute under Tennessee Code Annotated (TCA), Title 8, Chapters 34-37. The TCRS Board of Trustees is responsible for the proper operation and administration of the TCRS. The Tennessee Treasury Department, an agency in the legislative branch of state government, administers the plans of the TCRS. The TCRS issues a publicly available financial report that can be obtained at www.treasury.tn.gov/tcrs.

Benefits Provided. TCA, Title 8, Chapters 34-37 establish the benefit terms and can be amended only by the Tennessee General Assembly. The chief legislative body may adopt the benefit terms permitted by statute. Members are eligible to retire with an unreduced benefit at age 60 with five years of service credit or after 30 years of service credit regardless of age. Benefits are determined by a formula using the member’s highest five consecutive year average compensation and the member’s years of service credit. Reduced benefits for early retirement are available to vested members at age 55. Members vest with five years of service credit. Service related disability benefits are provided regardless of length of service. Five years of service is required for non-service related disability eligibility. The service related and non-service related disability benefits are determined in the same manner as a service retirement benefit but are reduced ten percent and include projected service credits. A variety of death benefits is available under various eligibility criteria.

Member and beneficiary annuitants are entitled to an automatic cost of living adjustment (COLA) after retirement. A COLA is granted each July for annuitants retired prior to the second of July of the previous year. The COLA

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http://www.treasury.tn.gov/tcrs

is based on the change in the consumer price index (CPI) during the prior calendar year, capped at three percent, and applied to the current benefit. No COLA is granted if the change in the CPI is less than one-half percent. A one percent COLA is granted if the CPI change is between one-half percent and one percent. A member who leaves employment may withdraw their employee contributions, plus any accumulated interest. Employees Covered by Benefit Terms. At the measurement date of June 30, 2015, the following employees were covered by the benefit terms: Inactive Employees or Beneficiaries Currently Receiving Benefits 285Inactive Employees Entitled to But Not Yet Receiving Benefits 295Active Employees 450

Total 1,030

Contributions. Contributions for employees are established in the statutes governing the TCRS and may only be changed by the Tennessee General Assembly. Employees contribute five percent of their salary. Fayette County makes employer contributions at the rate set by the Board of Trustees as determined by an actuarial valuation. For the year ended June 30, 2015, the Actuarial Determined Contribution (ADC) for Fayette County was $962,826 based on a rate of 7.36 percent of covered payroll. By law, employer contributions are required to be paid. The TCRS may intercept Fayette County’s state shared taxes if required employer contributions are not remitted. The employer’s ADC and member contributions are expected to finance the costs of benefits earned by members during the year, the cost of administration, as well as an amortized portion of any unfunded liability. Net Pension Liability (Asset) Fayette County’s net pension liability (asset) was measured as of June 30, 2015, and the total pension liability (asset) used to calculate net pension liability (asset) was determined by an actuarial valuation as of that date. Actuarial Assumptions. The total pension liability as of the June 30, 2015, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:

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Inflation 3%Salary Increases Graded Salary Ranges from 8.97%

to 3.71% Based on Age, Including Inflation, Averaging 4.25%

Investment Rate of Return 7.5%, Net of Pension Plan Investment Expenses, Including Inflation

Cost of Living Adjustment 2.5%

Mortality rates were based on actual experience from the June 30, 2012, actuarial experience study, adjusted for some of the expected future improvement in life expectancy. The actuarial assumptions used in the June 30, 2015, actuarial valuation were based on the results of an actuarial experience study performed for the period July 1, 2008, through June 30, 2012. The demographic assumptions were adjusted to more closely reflect actual and expected future experience. The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees in conjunction with the June 30, 2012, actuarial experience study by considering the following three techniques: (1) the 25-year historical return of the TCRS at June 30, 2012, (2) the historical market returns of asset classes from 1926 to 2012 using the TCRS investment policy asset allocation, and (3) capital market projections that were utilized as a building-block method in which best-estimate ranges of expected future real rate of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. Four sources of capital market projections were blended and utilized in the third technique. The blended capital market projection established the long-term expected rate of return by weighting the expected future real rate of return by the target asset allocation percentage and by adding inflation of three percent. The target allocation and best estimate of arithmetic real rates of return for each major asset class are summarized in the following table:

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PercentageLong-termExpected PercentageReal Rate Target

Asset Class of Return Allocations

U.S. Equity 6.46 % 33 %Developed Market International Equity 6.26 17Emerging Market International Equity 6.40 5Private Equity and Strategic Lending 4.61 8U.S. Fixed Income 0.98 29Real Estate 4.73 7Short-term Securities 0.00 1

Total 100 %

The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees as 7.5 percent based on a blending of the three factors described above. Discount Rate. The discount rate used to measure the total pension liability was 7.5 percent. The projection of cash flows used to determine the discount rate assumes that employee contributions will be made at the current rate and that contributions from Fayette County will be made at the actuarially determined contribution rate pursuant to an actuarial valuation in accordance with the funding policy of the TCRS Board of Trustees and as required to be paid by state statute. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make projected future benefit payments of current active and inactive members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

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Changes in the Net Pension Liability (Asset)

Total Plan NetPension Fiduciary PensionLiability Net Position Liability

(a) (b) (a)-(b)

Balance, July 1, 2014 $ 39,421,261 $ 43,048,429 $ (3,627,168)

Changes for the year: Service Cost $ 1,033,190 $ 0 $ 1,033,190 Interest 2,957,446 0 2,957,446 Differences Between Expected and Actual Experience 6,245 0 6,245 Contributions-Employer 0 962,826 (962,826) Contributions-Employees 0 653,631 (653,631) Net Investment Income 0 1,318,917 (1,318,917) Benefit Payments, Including Refunds of Employee Contributions (2,043,676) (2,043,676) 0 Administrative Expense 0 (23,182) 23,182 Other Changes 0 0 0Net Changes $ 1,953,205 $ 868,516 $ 1,084,689

Balance, June 30, 2015 $ 41,374,466 $ 43,916,945 $ (2,542,479)

Increase (Decrease)

Allocation of Agent Plan Changes in the Net Pension Liability (Asset)

Plan NetTotal Fiduciary Pension

Pension Net LiabilityLiability Position (Asset)

Primary Government 58.6% $ 24,245,437 $ 25,735,365 $ (1,489,928)

School Department 41.4% 17,129,029 18,181,580 (1,052,551)

Total $ 41,374,466 $ 43,916,945 $ (2,542,479)

Sensitivity of the Net Position Liability (Asset) to Changes in the Discount Rate. The following presents the net pension liability (asset) of Fayette County calculated using the discount rate of 7.5 percent, as well as what the net pension liability (asset) would be if it was calculated using a discount rate that is one percentage point lower (6.5%) or one percentage point higher (8.5%) than the current rate:

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Fayette County

Net Pension Liability (Asset) $ 2,551,804 $ (2,542,479) $ (6,789,577)

1%Increase

8.5%

1%Decrease

6.5%

CurrentDiscount

Rate7.5%

Negative Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources to Pensions Negative Pension Expense. For the year ended June 30, 2016, Fayette County recognized negative pension expense of $152,620. Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2016, Fayette County reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred DeferredOutflows Inflows

of of Resources Resources

Difference Between Expected and Actual Experience $ 4,996 $ 30,958Net Difference Between Projected and Actual Earnings on Pension Plan Investments 1,514,260 2,011,679Contributions Subsequent to the Measurement Date of June 30, 2015 (1) 1,016,473 N/A

Total $ 2,535,729 $ 2,042,637 (1) The amount shown above for “Contributions Subsequent to the

Measurement Date of June 30, 2015,” will be recognized as a reduction (increase) to net pension liability (asset) in the following measurement period.

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Allocation of Agent Plan Deferred Outflows of Resources and Deferred Inflows of Resources

Deferred DeferredOutflows of Inflows ofResources Resources

Primary Government $ 1,502,023 $ 1,197,014

School Department 1,033,706 845,623

Total $ 2,535,729 $ 2,042,637

Amounts reported as deferred outflows of resources, with the exception of contributions subsequent to the measurement date, and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Year EndingJune 30 Amount

2017 $ (301,065)2018 (301,065)2019 (301,065)2020 379,8142021 0Thereafter 0

In the table shown above, positive amounts will increase pension expense while negative amounts will decrease pension expense. Discretely Presented Fayette County School Department Non-certified Employees General Information About the Pension Plan Plan Description. As noted above under the primary government, employees of Fayette County and non-certified employees of the discretely presented Fayette County School Department are provided a defined benefit pension plan through the Public Employee Retirement Plan, an agent multiple-employer pension plan administered by the TCRS. The primary government employees comprised 58.6 percent and the non-certified employees of the discretely presented School Department comprised 41.4 percent of the plan based on contribution data.

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Certified Employees Teacher Retirement Plan General Information About the Pension Plan Plan Description. Teachers of the Fayette County School Department with membership in the TCRS before July 1, 2014, are provided with pensions through the Teacher Legacy Pension Plan, a cost-sharing multiple-employer pension plan administered by the TCRS. The Teacher Legacy Pension Plan is closed to new membership. Teachers with membership in the TCRS after June 30, 2014, are provided with pensions through a legally separate plan referred to as the Teacher Retirement Plan, a cost-sharing multiple-employer pension plan administered by the TCRS. The TCRS was created by state statute under Tennessee Code Annotated (TCA), Title 8, Chapters 34-37. The TCRS Board of Trustees is responsible for the proper operation and administration of all employer pension plans in the TCRS. The Tennessee Treasury Department, an agency in the legislative branch of state government, administers the plans of the TCRS. The TCRS issues a publically available financial report that can be obtained at www.treasury.tn.gov/tcrs. Benefits Provided. TCA, Title 8, Chapters 34-37 establish the benefit terms and can be amended only by the Tennessee General Assembly. Members are eligible to retire with an unreduced benefit at age 65 with five years of service credit or pursuant to the rule of 90 in which the member’s age and service credit total 90. Benefits are determined by a formula using the member’s highest five consecutive year average compensation and the member’s years of service credit. A reduced early retirement benefit is available to vested members at age 60 or pursuant to the rule of 80. Members are vested with five years of service credit. Service related disability benefits are provided regardless of length of service. Five years of service is required for non-service related disability eligibility. The service related and non-service related disability benefits are determined in the same manner as a service retirement benefit but are reduced ten percent and include projected service credits. A variety of death benefits is available under various eligibility criteria. Member and beneficiary annuitants are entitled to an automatic cost of living adjustment (COLA) after retirement. A COLA is granted each July for annuitants retired prior to the second of July of the previous year. The COLA is based on the change in the consumer price index (CPI) during the prior calendar year, capped at three percent, and applied to the current benefit. No COLA is granted if the change in the CPI is less than one-half percent. A one percent COLA is granted if the CPI change is between one-half percent and one percent. Members who leave employment may withdraw their employee contributions, plus any accumulated interest. Under the Teacher Retirement Plan, benefit terms and conditions, including COLA, can be adjusted on a prospective basis. Moreover, there are defined cost controls and unfunded liability controls that provide for the adjustment of benefit terms and conditions on an automatic basis.

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Contributions. Contributions for teachers are established in the statutes governing the TCRS and may only be changed by the Tennessee General Assembly or by automatic cost controls set out in law. Teachers are required to contribute five percent of their salary to the plan. The Local Education Agencies (LEAs) make employer contributions at the rate set by the Board of Trustees as determined by an actuarial valuation. Per the statutory provisions governing TCRS, the employer contribution rate cannot be less than four percent, except in years when the maximum funded level, approved by the TCRS Board of Trustees, is reached. By law, employer contributions for the Teacher Retirement Plan are required to be paid. The TCRS may intercept the state shared taxes of the sponsoring governmental entity of the LEA if the required employer contributions are not remitted. Employer contributions for the year ended June 30, 2016, to the Teacher Retirement Plan were $90,348, which is four percent of covered payroll. The employer rate, when combined with member contributions, is expected to finance the costs of benefits earned by members during the year, the cost of administration, as well as an amortized portion of any unfunded liability. Pension Liabilities (Assets), Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions Pension Liabilities (Assets). At June 30, 2016, the Fayette County School Department reported an asset of $26,112 for its proportionate share of the net pension asset. The net pension asset was measured as of June 30, 2015, and the total pension liability used to calculate the net pension asset was determined by an actuarial valuation as of that date. The Fayette County School Department’s proportion of the net pension asset was based on the Fayette County School Department’s share of contributions to the pension plan relative to the contributions of all participating LEAs. At the measurement date of June 30, 2015, the Fayette County School Department’s proportion was .649085 percent. Pension Expense. For the year ended June 30, 2016, the Fayette County School Department recognized pension expense of $34,221. Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2016, the Fayette County School Department reported deferred outflows of resources related to pensions from the following sources:

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Deferred DeferredOutflows Inflows

of of Resources Resources

Difference Between Expected and Actual Experience $ 0 $ 8,499Net Difference Between Projected and Actual Earnings on Pension Plan Investments 2,111 0LEA's Contributions Subsequent to the Measurement Date of June 30, 2015 90,348 N/A

Total $ 92,459 $ 8,499

The Fayette County School Department’s employer contributions of $90,348, reported as pension related deferred outflows of resources subsequent to the measurement date, will be recognized as an increase of net pension liability (asset) in the year ending June 30, 2017. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:


2017 $ (181)2018 (181)2019 (181)2020 (181)2021 (708)Thereafter (4,956)

In the table above, positive amounts will increase pension expense, while negative amounts will decrease pension expense. Actuarial Assumptions. The total pension liability in the June 30, 2015, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:

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Mortality rates are customized based on the June 30, 2012, actuarial experience study and some included adjustment for expected future improvement in life expectancy. The actuarial assumptions used in the June 30, 2015, actuarial valuation were based on the results of an actuarial experience study performed for the period July 1, 2008, through June 30, 2012. The demographic assumptions were adjusted to more closely reflect actual and expected future experience. The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees in conjunction with the June 30, 2012, actuarial experience study by considering the following three techniques: (1) the 25-year historical return of the TCRS at June 30, 2012, (2) the historical market returns of asset classes from 1926 to 2012 using the TCRS investment policy asset allocation, and (3) capital market projections that were utilized as a building-block method in which best-estimate ranges of expected future real rate of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. Four sources of capital market projections were blended and utilized in the third technique. The blended capital market projection established the long-term expected rate of return by weighting the expected future real rate of return by the target asset allocation percentage and by adding inflation of three percent. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

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Asset Class


Total 100 %

Long-termPercentage

PercentageTarget

Allocationsof ReturnReal RateExpected

The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees as 7.5 percent based on a blending of the three factors described above. Discount Rate. The discount rate used to measure the total pension liability was 7.5 percent. The projection of cash flows used to determine the discount rate assumes that employee contributions will be made at the current rate and that contributions from all the LEAs will be made at the actuarially determined contribution rate pursuant to an actuarial valuation in accordance with the funding policy of the TCRS Board of Trustees and as required to be paid by state statute. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make projected future benefit payments of current active and inactive members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the Proportionate Share of Net Pension Liability (Asset) to Changes in the Discount Rate. The following presents the Fayette County School Department’s proportionate share of the net pension liability (asset) calculated using the discount rate of 7.5 percent, as well as what the Fayette County School Department’s proportionate share of the net pension liability (asset) would be if it was calculated using a discount rate that is one percentage point lower (6.5%) or one percentage point higher (8.5%) than the current rate:

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School Department's Proportionate Share of the Net Pension Liability (Asset)

Net Pension Liability (Asset) $ 4,630 $ (26,112) $ (48,660)

1%Decrease

6.5%

CurrentDiscount

Rate7.5%

1%Increase

8.5%

Pension Plan Fiduciary Net Position. Detailed information about the pension plan’s fiduciary net position is available in a separately issued TCRS financial report. Teacher Legacy Pension Plan General Information About the Pension Plan Plan Description. Teachers of the Fayette County School Department with membership in the TCRS before July 1, 2014, are provided with pensions through the Teacher Legacy Pension Plan, a cost-sharing multiple-employer pension plan administered by the TCRS. The Teacher Legacy Pension Plan closed to new membership on June 30, 2014, but will continue providing benefits to existing members and retirees. Beginning July 1, 2014, the Teacher Retirement Plan became effective for teachers employed by LEAs after June 30, 2014. The Teacher Retirement Plan is a separate cost-sharing, multiple-employer defined benefit plan. The TCRS was created by state statute under Tennessee Code Annotated (TCA), Title 8, Chapters 34-37. The TCRS Board of Trustees is responsible for the proper operation and administration of all employer pension plans in the TCRS. The Tennessee Treasury Department, an agency in the legislative branch of state government, administers the plans of the TCRS. The TCRS issues a publically available financial report that can be obtained at www.treasury.tn.gov/tcrs. Benefits Provided. TCA, Title 8, Chapters 34-37 establish the benefit terms and can be amended only by the Tennessee General Assembly. Members of the Teacher Legacy Pension Plan are eligible to retire with an unreduced benefit at age 60 with five years of service credit or after 30 years of service credit regardless of age. Benefits are determined by a formula using the member’s highest five consecutive year average compensation and the member’s years of service credit. A reduced early retirement benefit is available to vested members at age 55. Members are vested with five years of service credit. Service related disability benefits are provided regardless of length of service. Five years of service is required for non-service related disability eligibility. The service related and non-service related disability benefits are determined in the same manner as a service retirement benefit but are reduced ten percent and include projected service credits. A variety of death benefits is available under various eligibility criteria. Member and beneficiary annuitants are entitled to an automatic cost of living adjustment (COLA) after retirement. A COLA is granted each July for annuitants retired prior to the second of July of the previous year. The COLA is based on the change in the consumer price

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index (CPI) during the prior calendar year, capped at three percent, and applied to the current benefit. No COLA is granted if the change in the CPI is less than one-half percent. A one percent COLA is granted if the CPI change is between one-half and one percent. A member who leaves employment may withdraw their employee contributions, plus any accumulated interest. Under the Teacher Legacy Pension Plan, benefit terms and conditions, including COLAs, can be adjusted on a prospective basis. Moreover, there are defined cost controls and unfunded liability controls that provide for the adjustment of benefit terms and conditions on an automatic basis. Contributions. Contributions for teachers are established in the statutes governing the TCRS and may only be changed by the Tennessee General Assembly. Teachers are required to contribute five percent of their salaries. The Local Education Agencies (LEAs) make employer contributions at the rate set by the Board of Trustees as determined by an actuarial valuation. By law, employer contributions for the Teacher Legacy Pension Plan are required to be paid. The TCRS may intercept the state shared taxes of the sponsoring governmental entity of the LEA if the required employer contributions are not remitted. Employer contributions by the Fayette County School Department for the year ended June 30, 2016, to the Teacher Legacy Pension Plan were $836,986, which is 9.04 percent of covered payroll. The employer rate, when combined with member contributions, is expected to finance the costs of benefits earned by members during the year, the cost of administration, as well as an amortized portion of any unfunded liability. Pension Liabilities (Assets), Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions Pension Liability (Assets). At June 30, 2016, the Fayette County School Department reported a liability of $118,557 for its proportionate share of the net pension liability (asset). The net pension liability (asset) was measured as of June 30, 2015, and the total pension liability used to calculate the net pension liability (asset) was determined by an actuarial valuation as of that date. The Fayette County School Department’s proportion of the net pension liability (asset) was based on the Fayette County School Department’s long-term share of contributions to the pension plan relative to the contributions of all participating LEAs. At the measurement date of June 30, 2015, the Fayette County School Department’s proportion was .28942 percent. The proportion measured at June 30, 2014, was .31654 percent. Negative Pension Expense. For the year ended June 30, 2016, the Fayette County School Department recognized negative pension expense of $241,085. Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2016, the Fayette County School Department reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

79

Difference Between Expected and Actual Experience $ 95,147 $ 1,845,350Net Difference Between Projected and Actual Earnings on Pension Plan Investments 2,140,759 2,906,197Changes in Proportion of Net Pension Liability (Asset) 0 704,967LEAs Contributions Subsequent to the Measurement Date of June 30, 2015 836,986 N/A

Total $ 3,072,892 $ 5,456,514

DeferredOutflows

ofResources

DeferredInflows

of Resources

The Fayette County School Department’s employer contributions of $836,986 reported as pension related deferred outflows of resources subsequent to the measurement date, will be recognized as an increase in net pension asset in the year ending June 30, 2017. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:


2017 $ (924,577)2018 (924,577)2019 (924,577)2020 44,1562021 (491,033)Thereafter 0

In the table above, positive amounts will increase pension expense, while negative amounts will decrease pension expense. Actuarial Assumptions. The total pension liability in the June 30, 2015, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:

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Mortality rates are customized based on the June 30, 2012, actuarial experience study and some included adjustment for expected future improvement in life expectancy. The actuarial assumptions used in the June 30, 2015, actuarial valuation were based on the results of an actuarial experience study performed for the period July 1, 2008, through June 30, 2012. The demographic assumptions were adjusted to more closely reflect actual and expected future experience. The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees in conjunction with the June 30, 2012, actuarial experience study by considering the following three techniques: (1) the 25-year historical return of the TCRS at June 30, 2012, (2) the historical market returns of asset classes from 1926 to 2012 using the TCRS investment policy asset allocation, and (3) capital market projections that were utilized as a building-block method in which best-estimate ranges of expected future real rate of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. Four sources of capital market projections were blended and utilized in the third technique. The blended capital market projection established the long-term expected rate of return by weighting the expected future real rate of return by the target asset allocation percentage and by adding inflation of three percent. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

81

PercentageLong-termExpectedReal Rate

Asset Class of Return


Total 100 %

PercentageTarget

Allocations

The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees as 7.5 percent based on a blending of the four factors described above. Discount Rate. The discount rate used to measure the total pension liability was 7.5 percent. The projection of cash flows used to determine the discount rate assumes that employee contributions will be made at the current rate and that contributions from all the LEAs will be made at the actuarially determined contribution rate pursuant to an actuarial valuation in accordance with the funding policy of the TCRS Board of Trustees and as required to be paid by state statute. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make projected future benefit payments of current active and inactive members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the Proportionate Share of Net Pension Liability (Asset) to Changes in the Discount Rate. The following presents the Fayette County School Department’s proportionate share of the net pension liability (asset) calculated using the discount rate of 7.5 percent, as well as what the Fayette County School Department’s proportionate share of the net pension liability (asset) would be if it was calculated using a discount rate that is one percentage point lower (6.5%) or one percentage point higher (8.5%) than the current rate:

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School Department's Proportionate Share of the Net Pension Liability (Asset)

Net Pension Liability (Asset) $ 8,082,784 $ 118,557 $ (6,474,884)

CurrentDiscount

Rate7.5%

1%Increase

8.5%

1%Decrease

6.5%

Pension Plan Fiduciary Net Position. Detailed information about the pension plan’s fiduciary net position is available in a separately issued TCRS financial report.

H. Other Postemployment Benefits (OPEB) Plan Description Fayette County and the School Department participate in the state-administered Local Government Group Insurance Plan and the Local Education Group Insurance Plan for healthcare benefits. For accounting purposes, the plans are agent multiple-employer defined benefit OPEB plans. Benefits are established and amended by an insurance committee created by Section 8-27-207, Tennessee Code Annotated (TCA), for local governments and Section 8-27-302, TCA, for local education employees. Prior to reaching the age of 65, all members have the option of choosing between the standard or partnership preferred provider organization plan for healthcare benefits. Subsequent to age 65, members who are also in the state’s retirement system may participate in a state-administered Medicare Supplement Plan that does not include pharmacy. The plans are reported in the State of Tennessee Comprehensive Annual Financial Report (CAFR). The CAFR is available on the state’s website at http://tn.gov/finance/article/fa-accfin-cafr. Funding Policy The premium requirements of plan members are established and may be amended by the insurance committee. The plans are self-insured and financed on a pay-as-you-go basis with the risk shared equally among the participants. Claims liabilities of the plans are periodically computed using actuarial and statistical techniques to establish premium rates. The employers in each plan develop a contribution policy in terms of subsidizing active employees or retired employees’ premiums since the committee is not prescriptive on that issue. The state does not provide a subsidy for local government participants; however, the state does provide a partial subsidy to Local Education Agency pre-65 teachers and a full subsidy based on years of service for post-65 teachers in the Medicare Supplement Plan. During the year ended June 30, 2016, Fayette County and the School Department contributed $9,304 and $129,973, respectively, for postemployment health care.

83

http://tn.gov/finance/article/fa-accfin-cafr

Annual OPEB Cost and Net OPEB Obligation

ARC $ 163,000 $ 58,000Interest on the NOPEBO 29,731 11,711Adjustment to the ARC (29,850) (11,758)Annual OPEB cost $ 162,881 $ 57,953Less: Amount of contribution (129,973) (9,304)Increase/decrease in NOPEBO $ 32,908 $ 48,649Net OPEB obligation, 7-1-15 792,824 312,303

Net OPEB obligation, 6-30-16 $ 825,732 $ 360,952

LocalEducation

GroupPlan

LocalGovernment

GroupPlan

FiscalYear

Ended Plans

6-30-14 Local Education Group $ 141,790 104 % $ 762,0936-30-15 " 146,786 79 792,8246-30-16 " 162,881 80 825,7326-30-14 Local Government Group 32,283 17 301,0486-30-15 " 33,310 66 312,3036-30-16 " 57,953 16 360,952

Percentageof Annual

OPEB CostContributed

Net OPEBObligation

at Year End

AnnualOPEBCost

Funded Status and Funding Progress

The funded status of the plan as of July 1, 2015, was as follows:

Local LocalEducation Government

Group GroupPlan Plan

Actuarial valuation date 7-1-15 7-1-15Actuarial accrued liability (AAL) $ 1,416,000 $ 416,000Actuarial value of plan assets $ 0 $ 0Unfunded actuarial accrued liability (UAAL) $ 1,416,000 $ 416,000Actuarial value of assets as a % of the AAL 0% 0%Covered payroll (active plan members) $ 17,672,569 $ 6,934,150UAAL as a % of covered payroll 8% 6%

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Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future, and actuarially determined amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. The Schedule of Funding Progress, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. Actuarial Methods and Assumptions Calculations are based on the types of benefits provided under the terms of the substantive plan at the time of each valuation and on the pattern of sharing of costs between the employer and plan members to that point. Actuarial calculations reflect a long-term perspective. Consistent with that perspective, actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets. In the July 1, 2015, actuarial valuation for the Local Government Plan and the Local Education Plan, the projected unit credit actuarial cost method was used. The actuarial assumptions included a 3.75 percent investment rate of return (net of administrative expenses) and an annual health care cost trend rate of 6.5 percent initially. The trend rate will decrease to six percent in 2016, and then be reduced by decrements to an ultimate rate of 4.7 percent by fiscal year 2050. Both rates include a 2.5 percent inflation assumption. The unfunded actuarial accrued liability is being amortized as a level percentage of payroll on a closed basis over a 30-year period beginning with July 1, 2007. Payroll is assumed to grow at a rate of three percent.

I. Purchasing Laws Office of County Mayor Purchasing procedures for the County Mayor’s Office are governed by the County Purchasing Law of 1983, Sections 5-14-201 through 5-14-206, Tennessee Code Annotated (TCA), which provide for purchases exceeding $10,000 to be made after public advertisement and solicitation of competitive bids. Office of Public Works Superintendent Chapter 234, Private Acts of 1974 and Section 54-7-113, TCA (Uniform Road Law), govern purchasing procedures for the Highway Department. These statutes require all purchases exceeding $10,000 to be made on the basis of publicly advertised competitive bids.

85

Office of Director of Schools Purchasing procedures for the discretely presented Fayette County School Department are governed by purchasing laws applicable to schools as set forth in Section 49-2-203, TCA, 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 $10,000.

86

REQUIRED SUPPLEMENTARY INFORMATION

87

Exhibit E-1

Fayette County, TennesseeSchedule of Changes in Net Pension Liability (Asset) and Related Ratios Based on Participation in the Public Employee Pension Plan of TCRSPrimary GovernmentFor the Fiscal Year Ended June 30

2014 2015

Total Pension Liability (Asset)Service Cost $ 1,031,073 $ 1,033,190Interest 2,815,322 2,957,446Differences Between Actual and Expected Experience (51,596) 6,245Benefit Payments, Including Refunds of Employee Contributions (1,760,198) (2,043,676)Net Change in Total Pension Liability (Asset) $ 2,034,601 $ 1,953,205Total Pension Liability (Asset), Beginning 37,386,660 39,421,261

Total Pension Liability (Asset), Ending (a) $ 39,421,261 $ 41,374,466

Plan Fiduciary Net PositionContributions - Employer $ 1,022,512 $ 962,826Contributions - Employee 633,135 653,631Net Investment Income 6,126,528 1,318,917Benefit Payments, Including Refunds of Employee Contributions (1,760,198) (2,043,676)Administrative Expense (17,761) (23,182)Net Change in Plan Fiduciary Net Position $ 6,004,216 $ 868,516Plan Fiduciary Net Position, Beginning 37,044,213 43,048,429

Plan Fiduciary Net Position, Ending (b) $ 43,048,429 $ 43,916,945

Net Pension Liability (Asset), Ending (a - b) $ (3,627,168) $ (2,542,479)

Plan Fiduciary Net Position as a Percentage of Total Pension Liability 109.20% 106.15%Covered Payroll $ 12,607,687 $ 13,081,874Net Pension Liability (Asset) as a Percentage of Covered Payroll (28.77)% (19.44)%

Note: ten years of data will be presented when available.

Note: data presented includes primary government and the non-certified employees of the discretely presented School Department.

88

Exhibit E-2

Fayette County, TennesseeSchedule of Contributions Based on Participation in the Public Employee Pension Plan of TCRSPrimary GovernmentFor the Fiscal Year Ended June 30

2014 2015 2016

Actuarially Determined Contribution $ 1,022,512 $ 962,826 $ 1,016,473Less Contributions in Relation to the Actuarially Determined Contribution (1,022,512) (962,826) (1,016,473)

Contribution Deficiency (Excess) $ 0 $ 0 $ 0

Covered Payroll $ 12,607,687 $ 13,081,874 $ 13,810,774

Contributions as a Percentage of Covered Payroll 8.11% 7.36% 7.36%


Note: data presented includes primary government and the non-certified employees of the discretely presented School Department.

89

Exhibit E-3Fayette County, TennesseeSchedule of Contributions Based on Participation in the Teacher Retirement Plan of TCRSDiscretely Presented Fayette County School DepartmentFor the Fiscal Year Ended June 30

2015 2016

Contractually Determined Contribution $ 33,716 $ 56,468Less Contributions in Relation to the Contractually Determined Contribution (53,945) (90,348)

Contribution Deficiency (Excess) $ (20,229) $ (33,880)

Covered Payroll $ 1,348,622 $ 2,258,700

Contributions as a Percentage of Covered Payroll 4.00% 4.00%


90

Exhibit E-4

Fayette County, TennesseeSchedule of Contributions Based on Participation in the Teacher Legacy Pension Plan of TCRSDiscretely Presented Fayette County School DepartmentFor the Fiscal Year Ended June 30

2014 2015 2016

Contractually Determined Contribution $ 1,103,265 $ 979,435 $ 836,986Less Contributions in Relation to the Contractually Determined Contribution (1,103,265) (979,435) (836,986)

Contribution Deficiency (Excess) $ 0 $ 0 $ 0

Covered Payroll $ 12,424,156 $ 10,834,481 $ 9,258,695

Contributions as a Percentage of Covered Payroll 8.88% 9.04% 9.04%


91

Exhibit E-5Fayette County, TennesseeSchedule of Proportionate Share of the Net Pension Asset in the Teacher Retirement Plan of TCRSDiscretely Presented Fayette County School DepartmentFor the Fiscal Year Ended June 30 *

2016

School Department's Proportion of the Net Pension Liability (Asset) 0.649085%

School Department's Proportionate Share of the Net Pension Liability (Asset) $ (26,112)

Covered Payroll $ 1,348,622

School Department's Proportionate Share of the Net Pension Liability (Asset) as a Percentage of its Covered Payroll (1.94)%

Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 127.46%

* The amounts presented were determined as of June 30 of the prior fiscal year.


92

Exhibit E-6

Fayette County, TennesseeSchedule of Proportionate Share of the Net Pension Asset in the Teacher Legacy Pension Plan of TCRSDiscretely Presented Fayette County School DepartmentFor the Fiscal Year Ended June 30 *

2015 2016

School Department's Proportion of the Net Pension Liability (Asset) 0.31654% 0.28942%

School Department's Proportionate Share of the Net Pension Liability (Asset) $ (51,435) $ 118,557

Covered Payroll $ 12,424,156 $ 10,834,481

School Department's Proportionate Share of the Net Pension Asset as a Percentage of its Covered Payroll (.414002)% 1.094252%

Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 100.08% 99.81%

* The amounts presented were determined as of June 30 of the prior fiscal year.


93

Exhibit E-7

Fayette County, TennesseeSchedule of Funding Progress – Other Postemployment Benefits PlansPrimary Government and Discretely Presented Fayette County School DepartmentJune 30, 2016

(Dollar amounts in thousands)

ActuarialAccrued Liability

(AAL)Actuarial Projected Unfunded

Actuarial Value of Unit AAL Covered Valuation Assets Credit (UAAL) Payroll

Plans Date (a) (b) (b)-(a) (c)

PRIMARY GOVERNMENT

Local Government Group 7-1-11 $ 0 $ 423 $ 423 0 % $ 7,753 5 %" 7-1-13 0 202 202 0 8,482 2" 7-1-15 0 416 416 0 6,934 6

DISCRETELY PRESENTED FAYETTE COUNTY SCHOOL DEPARTMENT

Local Education Group 7-1-11 0 2,132 2,132 0 19,426 11" 7-1-13 0 1,110 1,110 0 19,245 6" 7-1-15 0 1,416 1,416 0 17,673 8

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

UAAL as a Percentage

Funded of CoveredRatio Payroll

94

FAYETTE COUNTY, TENNESSEE NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION


I. TENNESSEE CONSOLIDATED RETIREMENT SYSTEM

Valuation Date: Actuarially determined contribution rates for 2016 were calculated based on the July 1, 2013, actuarial valuation. Methods and assumptions used to determine contribution rates: Actuarial Cost Method Frozen Initial LiabilityAmortization Method Level Dollar, Closed (Not to Exceed 20 Years)Remaining Amortization Period One YearAsset Valuation 10-Year Smoothed Within a 20%

Corridor to Market ValueInflation 3%Salary Increases Graded Salary Ranges from 8.97% to

3.71% Based on Age, Including InflationInvestment Rate of Return 7.5%, Net of Investment Expense,

Including InflationRetirement Age Pattern of Retirement Determined by

Experience StudyMortality Customized Table Based on Actual

Experience Including an Adjustment for Some Anticipated Improvement

Cost of Living Adjustments 2.5%

95

COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES

96

Nonmajor Governmental Funds Special Revenue Funds _________________________________________

Special Revenue Funds are used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects.

_________________________________________ Solid Waste/Sanitation Fund – The Solid Waste/Sanitation Fund is used to account for Fayette County’s garbage collection and convenience center operations. 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 operations funded from the local development tax. 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 of deeds, and sheriff.

97

Capital Projects Funds ______________________________________

Capital Projects Funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets.

______________________________________

General Capital Projects Fund – The General Capital Projects Fund is used to account for general capital expenditures of the county. Community Development/Industrial Park Fund – The Community Development/Industrial Park Fund is used to account for grant proceeds and capital expenditures for jail renovation. HUD Grant Projects Fund – The HUD Grant Projects Fund is used to account for grant proceeds and capital expenditures for sewer improvements. Education Capital Projects Fund – The Education Capital Projects Fund is used to account for debt issued by Fayette County that is subsequently contributed to the discretely presented Fayette County School Department for construction and renovation projects. Other Capital Projects Fund – The Other Capital Projects Fund is used to account for grant proceeds and capital expenditures of the Fayette County Airport.

98

Exhibit F-1

Fayette County, TennesseeCombining Balance SheetNonmajor Governmental FundsJune 30, 2016

Adequate Constitu -Solid Facilities/ tional General

Waste / Drug Development Officers - CapitalSanitation Control Tax Fees Total Projects

ASSETS

Cash $ 100 $ 0 $ 0 $ 48,169 $ 48,269 $ 0Equity in Pooled Cash and Investments 148,953 142,602 673,201 0 964,756 20,185Accounts Receivable 45,766 0 0 199 45,965 0Due from Other Governments 0 0 0 0 0 0

Total Assets $ 194,819 $ 142,602 $ 673,201 $ 48,368 $ 1,058,990 $ 20,185

LIABILITIES

Due to Other Funds $ 0 $ 0 $ 0 $ 48,368 $ 48,368 $ 0Total Liabilities $ 0 $ 0 $ 0 $ 48,368 $ 48,368 $ 0

FUND BALANCES

Restricted:Restricted for General Government $ 0 $ 0 $ 225,310 $ 0 $ 225,310 $ 0Restricted for Public Safety 0 142,602 0 0 142,602 0Restricted for Highways/Public Works 0 0 223,945 0 223,945 0Restricted for Education 0 0 223,946 0 223,946 0Restricted for Capital Outlay 0 0 0 0 0 20,185

Committed:Committed for Public Health and Welfare 194,819 0 0 0 194,819 0

Total Fund Balances $ 194,819 $ 142,602 $ 673,201 $ 0 $ 1,010,622 $ 20,185

Total Liabilities and Fund Balances $ 194,819 $ 142,602 $ 673,201 $ 48,368 $ 1,058,990 $ 20,185

(Continued)

Special Revenue Funds

Capital Projects Funds

99

Exhibit F-1

Fayette County, TennesseeCombining Balance SheetNonmajor Governmental Funds (Cont.)

Community TotalDevelopment/ Education Other Nonmajor

Industrial Capital Capital GovernmentalPark Projects Projects Total Funds

ASSETS

Cash $ 0 $ 0 $ 0 $ 0 $ 48,269Equity in Pooled Cash and Investments 0 360,329 89,414 469,928 1,434,684Accounts Receivable 0 0 0 0 45,965Due from Other Governments 5,365 0 0 5,365 5,365

Total Assets $ 5,365 $ 360,329 $ 89,414 $ 475,293 $ 1,534,283

LIABILITIES

Due to Other Funds $ 0 $ 0 $ 0 $ 0 $ 48,368Total Liabilities $ 0 $ 0 $ 0 $ 0 $ 48,368

FUND BALANCES

Restricted:Restricted for General Government $ 0 $ 0 $ 0 $ 0 $ 225,310Restricted for Public Safety 0 0 0 0 142,602Restricted for Highways/Public Works 0 0 0 0 223,945Restricted for Education 0 0 0 0 223,946Restricted for Capital Outlay 5,365 360,329 89,414 475,293 475,293

Committed:Committed for Public Health and Welfare 0 0 0 0 194,819

Total Fund Balances $ 5,365 $ 360,329 $ 89,414 $ 475,293 $ 1,485,915

Total Liabilities and Fund Balances $ 5,365 $ 360,329 $ 89,414 $ 475,293 $ 1,534,283

Capital Projects Funds (Cont.)

100

Exhibit F-2

Fayette County, TennesseeCombining Statement of Revenues, Expenditures,

and Changes in Fund BalancesNonmajor Governmental FundsFor the Year Ended June 30, 2016



RevenuesLocal Taxes $ 0 $ 0 $ 551,951 $ 0 $ 551,951 $ 0Fines, Forfeitures, and Penalties 0 63,607 0 0 63,607 0Charges for Current Services 421,699 0 0 1,002 422,701 0Other Local Revenues 198,865 0 0 0 198,865 0State of Tennessee 325,000 0 0 0 325,000 89,500Federal Government 0 0 0 0 0 0Other Governments and Citizens Groups 0 0 0 0 0 0

Total Revenues $ 945,564 $ 63,607 $ 551,951 $ 1,002 $ 1,562,124 $ 89,500


Administration of Justice $ 0 $ 0 $ 0 $ 1,002 $ 1,002 $ 0Public Safety 0 53,694 0 0 53,694 0Public Health and Welfare 923,630 0 0 0 923,630 0Other Operations 0 0 17,759 0 17,759 0

Capital Projects 0 0 0 0 0 89,500Total Expenditures $ 923,630 $ 53,694 $ 17,759 $ 1,002 $ 996,085 $ 89,500

Excess (Deficiency) of RevenuesOver Expenditures $ 21,934 $ 9,913 $ 534,192 $ 0 $ 566,039 $ 0

Other Financing Sources (Uses)Insurance Recovery $ 7,254 $ 0 $ 0 $ 0 $ 7,254 $ 0Transfers Out 0 0 (312,030) 0 (312,030) 0

Total Other Financing Sources (Uses) $ 7,254 $ 0 $ (312,030) $ 0 $ (304,776) $ 0

(Continued)

Special Revenue FundsCapital

Projects Funds

101

Exhibit F-2


and Changes in Fund BalancesNonmajor Governmental Funds (Cont.)



Net Change in Fund Balances $ 29,188 $ 9,913 $ 222,162 $ 0 $ 261,263 $ 0Fund Balance, July 1, 2015 165,631 132,689 451,039 0 749,359 20,185

Fund Balance, June 30, 2016 $ 194,819 $ 142,602 $ 673,201 $ 0 $ 1,010,622 $ 20,185

(Continued)


Projects Funds

102

Exhibit F-2



Community TotalDevelopment/ HUD Education Other Nonmajor

Industrial Grant Capital Capital GovernmentalPark Projects Projects Projects Total Funds

RevenuesLocal Taxes $ 0 $ 0 $ 0 $ 0 $ 0 $ 551,951Fines, Forfeitures, and Penalties 0 0 0 0 0 63,607Charges for Current Services 0 0 0 0 0 422,701Other Local Revenues 0 0 0 0 0 198,865State of Tennessee 0 0 0 0 89,500 414,500Federal Government 1,082,936 28,196 0 0 1,111,132 1,111,132Other Governments and Citizens Groups 0 4,244 0 0 4,244 4,244

Total Revenues $ 1,082,936 $ 32,440 $ 0 $ 0 $ 1,204,876 $ 2,767,000


Administration of Justice $ 0 $ 0 $ 0 $ 0 $ 0 $ 1,002Public Safety 0 0 0 0 0 53,694Public Health and Welfare 0 0 0 0 0 923,630Other Operations 0 0 0 0 0 17,759

Capital Projects 1,079,821 32,440 154,889 0 1,356,650 1,356,650Total Expenditures $ 1,079,821 $ 32,440 $ 154,889 $ 0 $ 1,356,650 $ 2,352,735

Excess (Deficiency) of RevenuesOver Expenditures $ 3,115 $ 0 $ (154,889) $ 0 $ (151,774) $ 414,265

Other Financing Sources (Uses)Insurance Recovery $ 0 $ 0 $ 0 $ 0 $ 0 $ 7,254Transfers Out 0 0 0 0 0 (312,030)

Total Other Financing Sources (Uses) $ 0 $ 0 $ 0 $ 0 $ 0 $ (304,776)

(Continued)


103

Exhibit F-2



Community TotalDevelopment/ HUD Education Other Nonmajor

Industrial Grant Capital Capital GovernmentalPark Projects Projects Projects Total Funds

Net Change in Fund Balances $ 3,115 $ 0 $ (154,889) $ 0 $ (151,774) $ 109,489Fund Balance, July 1, 2015 2,250 0 515,218 89,414 627,067 1,376,426

Fund Balance, June 30, 2016 $ 5,365 $ 0 $ 360,329 $ 89,414 $ 475,293 $ 1,485,915


104

Exhibit F-3

Fayette County, TennesseeSchedule of Revenues, Expenditures, and Changes

in Fund Balance - Actual and BudgetSolid Waste/Sanitation FundFor the Year Ended June 30, 2016

Variancewith FinalBudget -Positive

Actual Original Final (Negative)

RevenuesCharges for Current Services $ 421,699 $ 320,000 $ 320,000 $ 101,699Other Local Revenues 198,865 203,000 203,000 (4,135)State of Tennessee 325,000 350,000 350,000 (25,000)

Total Revenues $ 945,564 $ 873,000 $ 873,000 $ 72,564

ExpendituresPublic Health and Welfare

Convenience Centers $ 331,305 $ 280,000 $ 338,500 $ 7,195Landfill Operation and Maintenance 592,325 593,772 620,609 28,284

Total Expenditures $ 923,630 $ 873,772 $ 959,109 $ 35,479

Excess (Deficiency) of RevenuesOver Expenditures $ 21,934 $ (772) $ (86,109) $ 108,043

Other Financing Sources (Uses)Insurance Recovery $ 7,254 $ 0 $ 0 $ 7,254

Total Other Financing Sources $ 7,254 $ 0 $ 0 $ 7,254

Net Change in Fund Balance $ 29,188 $ (772) $ (86,109) $ 115,297Fund Balance, July 1, 2015 165,631 178,299 178,299 (12,668)

Fund Balance, June 30, 2016 $ 194,819 $ 177,527 $ 92,190 $ 102,629

Budgeted Amounts

105

Exhibit F-4


in Fund Balance - Actual and BudgetDrug Control FundFor the Year Ended June 30, 2016



RevenuesFines, Forfeitures, and Penalties $ 63,607 $ 33,000 $ 33,000 $ 30,607

Total Revenues $ 63,607 $ 33,000 $ 33,000 $ 30,607

ExpendituresPublic Safety

Drug Enforcement $ 53,694 $ 33,000 $ 72,079 $ 18,385Total Expenditures $ 53,694 $ 33,000 $ 72,079 $ 18,385

Excess (Deficiency) of RevenuesOver Expenditures $ 9,913 $ 0 $ (39,079) $ 48,992

Net Change in Fund Balance $ 9,913 $ 0 $ (39,079) $ 48,992Fund Balance, July 1, 2015 132,689 114 39,193 93,496

Fund Balance, June 30, 2016 $ 142,602 $ 114 $ 114 $ 142,488

Budgeted Amounts

106

Exhibit F-5


in Fund Balance - Actual and BudgetAdequate Facilities/ Development Tax FundFor the Year Ended June 30, 2016



RevenuesLocal Taxes $ 551,951 $ 250,000 $ 383,227 $ 168,724

Total Revenues $ 551,951 $ 250,000 $ 383,227 $ 168,724

ExpendituresOther Operations

Other Charges $ 17,759 $ 10,000 $ 30,000 $ 12,241Total Expenditures $ 17,759 $ 10,000 $ 30,000 $ 12,241

Excess (Deficiency) of RevenuesOver Expenditures $ 534,192 $ 240,000 $ 353,227 $ 180,965

Other Financing Sources (Uses)Transfers Out $ (312,030) $ (312,030) $ (316,536) $ 4,506

Total Other Financing Sources $ (312,030) $ (312,030) $ (316,536) $ 4,506

Net Change in Fund Balance $ 222,162 $ (72,030) $ 36,691 $ 185,471Fund Balance, July 1, 2015 451,039 309,939 309,939 141,100


Budgeted Amounts

107

Major Governmental Fund

General Debt Service Fund _________________________________________

The General Debt Service Fund is used to account for and report financial resources that are restricted, committed, or assigned to expenditure for principal and interest.

__________________________________________

108

Exhibit G


in Fund Balance - Actual and BudgetGeneral Debt Service FundFor the Year Ended June 30, 2016



RevenuesLocal Taxes $ 1,873,472 $ 2,012,020 $ 1,804,000 $ 69,472Other Governments and Citizens Groups 462,350 309,520 462,350 0

Total Revenues $ 2,335,822 $ 2,321,540 $ 2,266,350 $ 69,472

ExpendituresPrincipal on Debt

General Government $ 988,731 $ 809,083 $ 989,231 $ 500Education 755,000 764,450 779,298 24,298

Interest on DebtGeneral Government 306,729 302,745 314,594 7,865Education 628,990 653,646 642,731 13,741

Other Debt ServiceGeneral Government 20,269 23,000 32,359 12,090Education 2,065 2,000 2,706 641

Total Expenditures $ 2,701,784 $ 2,554,924 $ 2,760,919 $ 59,135

Excess (Deficiency) of RevenuesOver Expenditures $ (365,962) $ (233,384) $ (494,569) $ 128,607

Other Financing Sources (Uses)Transfers In $ 256,240 $ 0 $ 256,240 $ 0

Total Other Financing Sources $ 256,240 $ 0 $ 256,240 $ 0

Net Change in Fund Balance $ (109,722) $ (233,384) $ (238,329) $ 128,607Fund Balance, July 1, 2015 2,906,126 2,594,160 2,594,160 311,966

Fund Balance, June 30, 2016 $ 2,796,404 $ 2,360,776 $ 2,355,831 $ 440,573

Budgeted Amounts

109

Fiduciary Funds _________________________________

Agency Funds are used to account for assets held by the county in a trustee capacity or 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. Watershed District Fund – The Watershed District Fund is used to account for prior years’ acreage assessments collected on drainage district properties and held in trust for the watershed district. 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, general sessions, and juvenile courts clerk; clerk and master; register of deeds; and sheriff. Such collections include amounts due the state, cities, other county funds, litigants, heirs, and others.

110

Exhibit H-1

Fayette County, TennesseeCombining Statement of Fiduciary Assets and LiabilitiesFiduciary FundsJune 30, 2016

Constitu-Cities - tional

Sales Watershed Officers -Tax District Agency Total

ASSETS

Cash $ 0 $ 0 $ 2,227,976 $ 2,227,976Equity in Pooled Cash and Investments 0 42,792 0 42,792Accounts Receivable 0 0 16,660 16,660Due from Other Governments 531,379 0 0 531,379

Total Assets $ 531,379 $ 42,792 2,244,636 $ 2,818,807

LIABILITIES

Due to Other Taxing Units $ 531,379 $ 42,792 $ 0 $ 574,171Due to Litigants, Heirs, and Others 0 0 2,244,636 2,244,636

Total Liabilities $ 531,379 $ 42,792 $ 2,244,636 $ 2,818,807

Agency Funds

111

Exhibit H-2

Fayette County, TennesseeCombining Statement of Changes in Assets and Liabilities - All Agency FundsFor the Year Ended June 30, 2016

Beginning Ending Balance Additions Deductions Balance

Cities - Sales Tax Fund Assets Equity in Pooled Cash and Investments $ 0 $ 2,884,655 $ 2,884,655 $ 0 Due from Other Governments 476,948 531,379 476,948 531,379

Total Assets $ 476,948 $ 3,416,034 $ 3,361,603 $ 531,379

Liabilities Due to Other Taxing Units $ 476,948 $ 3,416,034 $ 3,361,603 $ 531,379

Total Liabilities $ 476,948 $ 3,416,034 $ 3,361,603 $ 531,379

Watershed District Fund Assets Equity in Pooled Cash and Investments $ 42,792 $ 0 $ 0 $ 42,792

Total Assets $ 42,792 $ 0 $ 0 $ 42,792

Liabilities Due to Other Taxing Units $ 42,792 $ 0 $ 0 $ 42,792

Total Liabilities $ 42,792 $ 0 $ 0 $ 42,792

Constitutional Officers - Agency Fund Assets Cash $ 2,566,927 $ 10,281,907 $ 10,620,858 $ 2,227,976 Accounts Receivable 12,479 16,660 12,479 16,660

Total Assets $ 2,579,406 $ 10,298,567 $ 10,633,337 $ 2,244,636

Liabilities Due to Litigants, Heirs, and Others $ 2,579,406 $ 10,298,567 $ 10,633,337 $ 2,244,636

Total Liabilities $ 2,579,406 $ 10,298,567 $ 10,633,337 $ 2,244,636

Totals - All Agency Funds Assets Cash $ 2,566,927 $ 10,281,907 $ 10,620,858 $ 2,227,976 Equity in Pooled Cash and Investments 42,792 2,884,655 2,884,655 42,792 Accounts Receivable 12,479 16,660 12,479 16,660 Due from Other Governments 476,948 531,379 476,948 531,379

Total Assets $ 3,099,146 $ 13,714,601 $ 13,994,940 $ 2,818,807

Liabilities Due to Other Taxing Units $ 519,740 $ 3,416,034 $ 3,361,603 $ 574,171 Due to Litigants, Heirs, and Others 2,579,406 10,298,567 10,633,337 2,244,636

Total Liabilities $ 3,099,146 $ 13,714,601 $ 13,994,940 $ 2,818,807

112

Fayette County School Department

______________________________________

This section presents combining and individual fund financial statements for the Fayette County School Department, a discretely presented component unit. The School Department uses a General Fund, two Special Revenue Funds, and a 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.

113

Exhibit I-1

Fayette County, TennesseeStatement of ActivitiesDiscretely Presented Fayette County School DepartmentFor the Year Ended June 30, 2016

Net (Expense) Revenue andChanges in

Operating Capital Net PositionCharges Grants Grants Total

for and and GovernmentalFunctions/Programs Expenses Services Contributions Contributions Activities

Governmental Activities: Instruction $ 15,523,416 $ 62,574 $ 1,189,242 $ 96,031 $ (14,175,569) Support Services 10,259,458 4,775 574,075 34,076 (9,646,532) Operation of Non-instructional Services 3,133,405 204,334 2,962,982 24,782 58,693 Interest on Long-term Debt 111 0 0 0 (111)

Total Governmental Activities $ 28,916,390 $ 271,683 $ 4,726,299 $ 154,889 $ (23,763,519)

General Revenues: Taxes: Property Taxes Levied for General Purposes $ 6,276,247 Local Option Sales Taxes 3,340,456 Mixed Drink Tax 8,036 Interstate Telecommunications Tax 3,265 Grants and Contributions Not Restricted to Specific Programs 16,879,979 Unrestricted Investment Income 3,527 Miscellaneous 76,764Total General Revenues $ 26,588,274

Change in Net Position $ 2,824,755Net Position, July 1, 2015 22,273,026

Net Position, June 30, 2016 $ 25,097,781

Program Revenues

114

Exhibit I-2

Fayette County, TennesseeBalance Sheet - Governmental FundsDiscretely Presented Fayette County School DepartmentJune 30, 2016

OtherGeneral Govern- TotalPurpose mental GovernmentalSchool Funds Funds

ASSETS

Equity in Pooled Cash and Investments $ 4,797,932 $ 826,010 $ 5,623,942Accounts Receivable 262 771 1,033Due from Other Governments 683,336 139,895 823,231Due from Other Funds 146,392 0 146,392Property Taxes Receivable 6,325,684 0 6,325,684Allowance for Uncollectible Property Taxes (145,136) 0 (145,136)Cash Shortage 0 7,025 7,025

Total Assets $ 11,808,470 $ 973,701 $ 12,782,171

LIABILITIES

Accounts Payable $ 38,175 $ 0 $ 38,175Accrued Payroll 0 12,932 12,932Payroll Deductions Payable 190,758 5,259 196,017Total Liabilities $ 228,933 $ 18,191 $ 247,124


Deferred Current Property Taxes $ 5,925,965 $ 0 $ 5,925,965Deferred Delinquent Property Taxes 236,004 0 236,004Other Deferred/Unavailable Revenue 317,594 0 317,594Total Deferred Inflows of Resources $ 6,479,563 $ 0 $ 6,479,563

FUND BALANCES

Restricted:Restricted for Education $ 95,741 $ 0 $ 95,741Restricted for Operation of Non-instructional Services 0 763,741 763,741Restricted for Capital Outlay 0 7,783 7,783

Committed:Committed for Education 68,954 0 68,954

Assigned:Assigned for Education 605,063 183,986 789,049

Unassigned 4,330,216 0 4,330,216Total Fund Balances $ 5,099,974 $ 955,510 $ 6,055,484

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 11,808,470 $ 973,701 $ 12,782,171

Nonmajor Funds

Major Fund

115

Exhibit I-3

Fayette County, TennesseeReconciliation of the Balance Sheet of Governmental Funds to the Statement of Net PositionDiscretely Presented Fayette County School DepartmentJune 30, 2016

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

Total fund balances - balance sheet - governmental funds (Exhibit I-2) $ 6,055,484

(1) Capital assets used in governmental activities are not financial resources and therefore are not reported inthe governmental funds. Add: land $ 349,377 Add: buildings and improvements net of accumulated depreciation 18,885,929 Add: other capital assets net of accumulated depreciation 1,697,453 20,932,759

(2) Long-term liabilities are not due and payable in the current period and therefore are not reported in the governmental funds. Less: contributions due on primary government debt for note $ (385,000) Less: compensated absences payable (81,854) Less: net pension liability - teacher legacy pension plan (118,557) Less: other postemployment benefits liability (825,732) (1,411,143)

(3) Amounts reported as deferred outflows of resources and deferred inflowsof resources related to pensions will be amortized and recognized as a component of pension expense in future years. Add: deferred outflows of resources related to pensions $ 1,429,304 Less: deferred inflows of resources related to pensions (3,540,884) (2,111,580)

(4)

Add: net pension asset - agent plan $ 1,052,551 Add: net pension asset - teacher retirement plan 26,112 1,078,663

(5) Other long-term assets are not available to pay for current-periodexpenditures and therefore are deferred in the governmental funds. 553,598

Net position of governmental activities (Exhibit A) $ 25,097,781

Net pension assets are not current financial resources and therefore are not reported in the governmental funds.

116

Exhibit I-4


and Changes in Fund Balances - Governmental Funds

Discretely Presented Fayette County School DepartmentFor the Year Ended June 30, 2016

OtherGeneral Govern- TotalPurpose mental GovernmentalSchool Funds Funds

RevenuesLocal Taxes $ 9,488,673 $ 0 $ 9,488,673Licenses and Permits 2,452 0 2,452Charges for Current Services 65,604 204,334 269,938Other Local Revenues 50,764 3,527 54,291State of Tennessee 16,919,507 16,801 16,936,308Federal Government 323,717 4,708,724 5,032,441Other Governments and Citizens Groups 26,000 154,889 180,889

Total Revenues $ 26,876,717 $ 5,088,275 $ 31,964,992


Instruction $ 13,580,426 $ 1,542,453 $ 15,122,879Support Services 9,559,768 800,552 10,360,320Operation of Non-Instructional Services 876,513 2,195,260 3,071,773Capital Outlay 271,109 0 271,109

Debt Service:Interest on Debt 111 0 111Other Debt Service 469,450 0 469,450

Capital Projects 0 151,834 151,834Total Expenditures $ 24,757,377 $ 4,690,099 $ 29,447,476

Excess (Deficiency) of RevenuesOver Expenditures $ 2,119,340 $ 398,176 $ 2,517,516

Other Financing Sources (Uses)Insurance Recovery $ 55,646 $ 0 $ 55,646Transfers In 167,993 210,991 378,984Transfers Out (210,991) (167,993) (378,984)

Total Other Financing Sources (Uses) $ 12,648 $ 42,998 $ 55,646

Net Change in Fund Balances $ 2,131,988 $ 441,174 $ 2,573,162Fund Balance, July 1, 2015 2,967,986 514,336 3,482,322

Fund Balance, June 30, 2016 $ 5,099,974 $ 955,510 $ 6,055,484

Nonmajor Funds

Major Fund

117

Exhibit I-5

Fayette County, TennesseeReconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of ActivitiesDiscretely Presented Fayette County School DepartmentFor the Year Ended June 30, 2016

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

Net change in fund balances - total governmental funds (Exhibit I-4) $ 2,573,162

(1) Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of these assets is allocated over theiruseful lives and reported as depreciation expense. The differencebetween capital outlays and depreciation is itemized as follows: Add: capital assets purchased in the current period $ 429,736 Less: current-year depreciation expense (1,633,667) (1,203,931)

(2) The net effect of various miscellaneous transactions involving capitalassets (sales, trade-ins, and donations) is to decrease net position. Less: book value of capital assets disposed (31,085)

(3) Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. Add: deferred delinquent property taxes and other deferred June 30, 2016 $ 553,598 Less: deferred delinquent property taxes and other deferred June 30, 2015 (777,445) (223,847)

(4) The contributions of long-term debt (e.g., notes) by the primary government provide current financial resources to governmental funds, while the contributions by the School Department of the principal of long-term debt consume the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Add: principal contributions on note to primary government 190,000

(5) Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported asexpenditures in the governmental funds. Change in compensated absences payable $ 22,175 Change in other postemployment benefits liability (32,908) Change in net pension asset - agent plan (875,652) Change in net pension asset - teacher retirement plan 26,112 Change in net pension liability - teacher legacy pension plan (169,992) Change in deferred outflows related to pensions (92,212) Change in deferred inflows related to pensions 2,642,933 1,520,456

Change in net position of governmental activities (Exhibit B) $ 2,824,755

118

Exhibit I-6

Fayette County, TennesseeCombining Balance Sheet - Nonmajor Governmental FundsDiscretely Presented Fayette County School DepartmentJune 30, 2016

TotalSchool Education Nonmajor

Federal Central Capital GovernmentalProjects Cafeteria Total Projects Funds

ASSETS

Equity in Pooled Cash and Investments $ 129,647 $ 688,580 $ 818,227 $ 7,783 $ 826,010Accounts Receivable 771 0 771 0 771Due from Other Governments 53,718 86,177 139,895 0 139,895Cash Shortage 0 7,025 7,025 0 7,025

Total Assets $ 184,136 $ 781,782 $ 965,918 $ 7,783 $ 973,701

LIABILITIES

Accrued Payroll $ 0 $ 12,932 $ 12,932 $ 0 $ 12,932Payroll Deductions Payable 150 5,109 5,259 0 5,259Total Liabilities $ 150 $ 18,041 $ 18,191 $ 0 $ 18,191

FUND BALANCES

Restricted:Restricted for Operation of Non-instructional Services $ 0 $ 763,741 $ 763,741 $ 0 $ 763,741Restricted for Capital Outlay 0 0 0 7,783 7,783

Assigned:Assigned for Education 183,986 0 183,986 0 183,986

Total Fund Balances $ 183,986 $ 763,741 $ 947,727 $ 7,783 $ 955,510

Total Liabilities and Fund Balances $ 184,136 $ 781,782 $ 965,918 $ 7,783 $ 973,701


Projects Fund

119

Exhibit I-7


and Changes in Fund Balances - Nonmajor Governmental Funds

Discretely Presented Fayette County School DepartmentFor the Year Ended June 30, 2016



RevenuesCharges for Current Services $ 0 $ 204,334 $ 204,334 $ 0 $ 204,334Other Local Revenues 0 3,527 3,527 0 3,527State of Tennessee 0 16,801 16,801 0 16,801Federal Government 2,462,840 2,245,884 4,708,724 0 4,708,724Other Governments and Citizens Groups 0 0 0 154,889 154,889

Total Revenues $ 2,462,840 $ 2,470,546 $ 4,933,386 $ 154,889 $ 5,088,275


Instruction $ 1,542,453 $ 0 $ 1,542,453 $ 0 $ 1,542,453Support Services 800,552 0 800,552 0 800,552Operation of Non-Instructional Services 0 2,195,260 2,195,260 0 2,195,260

Capital Projects 0 0 0 151,834 151,834Total Expenditures $ 2,343,005 $ 2,195,260 $ 4,538,265 $ 151,834 $ 4,690,099

Excess (Deficiency) of RevenuesOver Expenditures $ 119,835 $ 275,286 $ 395,121 $ 3,055 $ 398,176

Other Financing Sources (Uses)Transfers In $ 210,991 $ 0 $ 210,991 $ 0 $ 210,991Transfers Out (21,601) (146,392) (167,993) 0 (167,993)

Total Other Financing Sources (Uses) $ 189,390 $ (146,392) $ 42,998 $ 0 $ 42,998

(Continued)


Projects Fund

120

Exhibit I-7


and Changes in Fund Balances - Nonmajor Governmental Funds

Discretely Presented Fayette County School Department (Cont.)



Net Change in Fund Balances $ 309,225 $ 128,894 $ 438,119 $ 3,055 $ 441,174Fund Balance, July 1, 2015 (125,239) 634,847 509,608 4,728 514,336

Fund Balance, June 30, 2016 $ 183,986 $ 763,741 $ 947,727 $ 7,783 $ 955,510


Projects Fund

121

Exhibit I-8


in Fund Balance - Actual (Budgetary Basis) and BudgetDiscretely Presented Fayette County School DepartmentGeneral Purpose School FundFor the Year Ended June 30, 2016



RevenuesLocal Taxes $ 9,488,673 $ 0 $ 0 $ 9,488,673 $ 9,352,215 $ 9,352,215 $ 136,458Licenses and Permits 2,452 0 0 2,452 2,750 2,750 (298)Charges for Current Services 65,604 0 0 65,604 53,188 53,188 12,416Other Local Revenues 50,764 0 0 50,764 43,000 43,000 7,764State of Tennessee 16,919,507 0 0 16,919,507 16,777,932 16,914,047 5,460Federal Government 323,717 0 0 323,717 404,952 412,960 (89,243)Other Governments and Citizens Groups 26,000 0 0 26,000 0 26,000 0

Total Revenues $ 26,876,717 $ 0 $ 0 $ 26,876,717 $ 26,634,037 $ 26,804,160 $ 72,557

ExpendituresInstruction

Regular Instruction Program $ 10,985,690 $ 0 $ 241,548 $ 11,227,238 $ 11,485,882 $ 11,731,356 $ 504,118Special Education Program 1,949,825 (37,589) 0 1,912,236 1,965,626 1,965,626 53,390Vocational Education Program 644,911 0 60,900 705,811 654,148 719,148 13,337

Support ServicesAttendance 103,347 0 0 103,347 159,697 159,697 56,350Health Services 339,400 (779) 0 338,621 262,303 345,052 6,431Other Student Support 546,843 0 28,503 575,346 595,675 595,675 20,329Regular Instruction Program 569,362 0 24,714 594,076 640,240 639,121 45,045Special Education Program 247,840 0 0 247,840 239,211 257,745 9,905Vocational Education Program 117,538 0 0 117,538 122,295 132,845 15,307Adult Programs 355,969 0 0 355,969 375,747 383,755 27,786Other Programs 62,822 0 0 62,822 0 62,822 0Board of Education 776,848 0 0 776,848 918,592 918,592 141,744Director of Schools 370,327 0 0 370,327 295,057 388,993 18,666Office of the Principal 1,192,538 0 0 1,192,538 1,285,259 1,285,259 92,721Fiscal Services 268,691 (26) 0 268,665 311,439 311,439 42,774Human Services/Personnel 73,099 0 0 73,099 68,877 77,826 4,727Operation of Plant 1,575,506 (11,097) 0 1,564,409 1,767,322 1,702,322 137,913

(Continued)

Budgeted Amounts

122

Exhibit I-8


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



Expenditures (Cont.)Support Services (Cont.)

Maintenance of Plant $ 662,671 $ (3,404) $ 0 $ 659,267 $ 590,890 $ 673,460 $ 14,193Transportation 2,085,027 (400) 245,300 2,329,927 2,359,115 2,359,115 29,188Central and Other 211,940 0 0 211,940 240,611 224,811 12,871

Operation of Non-Instructional ServicesCommunity Services 31,360 0 0 31,360 47,181 47,181 15,821Early Childhood Education 845,153 0 4,098 849,251 849,278 849,277 26

Capital OutlayRegular Capital Outlay 271,109 (146,763) 0 124,346 553,654 696,005 571,659

Principal on DebtEducation 0 0 0 0 280,000 0 0

Interest on DebtEducation 111 0 0 111 282,034 6,925 6,814

Other Debt ServiceEducation 469,450 0 0 469,450 7,100 469,474 24

Total Expenditures $ 24,757,377 $ (200,058) $ 605,063 $ 25,162,382 $ 26,357,233 $ 27,003,521 $ 1,841,139

Excess (Deficiency) of RevenuesOver Expenditures $ 2,119,340 $ 200,058 $ (605,063) $ 1,714,335 $ 276,804 $ (199,361) $ 1,913,696

Other Financing Sources (Uses)Insurance Recovery $ 55,646 $ 0 $ 0 $ 55,646 $ 41,949 $ 41,949 $ 13,697Transfers In 167,993 0 0 167,993 168,404 168,404 (411)Transfers Out (210,991) 0 0 (210,991) (120,607) (210,991) 0

Total Other Financing Sources $ 12,648 $ 0 $ 0 $ 12,648 $ 89,746 $ (638) $ 13,286

Net Change in Fund Balance $ 2,131,988 $ 200,058 $ (605,063) $ 1,726,983 $ 366,550 $ (199,999) $ 1,926,982Fund Balance, July 1, 2015 2,967,986 (200,058) 0 2,767,928 2,869,472 2,869,472 (101,544)

Fund Balance, June 30, 2016 $ 5,099,974 $ 0 $ (605,063) $ 4,494,911 $ 3,236,022 $ 2,669,473 $ 1,825,438

Budgeted Amounts

123

Exhibit I-9


in Fund Balance - Actual (Budgetary Basis) and BudgetDiscretely Presented Fayette County School DepartmentSchool Federal Projects FundFor the Year Ended June 30, 2016



RevenuesFederal Government $ 2,462,840 $ 0 $ 0 $ 2,462,840 $ 2,398,173 $ 2,618,501 $ (155,661)

Total Revenues $ 2,462,840 $ 0 $ 0 $ 2,462,840 $ 2,398,173 $ 2,618,501 $ (155,661)

ExpendituresInstruction

Regular Instruction Program $ 916,023 $ (17,604) $ 0 $ 898,419 $ 881,769 $ 964,608 $ 66,189Special Education Program 573,203 0 0 573,203 760,400 603,910 30,707Vocational Education Program 53,227 (490) 2,476 55,213 56,625 55,361 148

Support ServicesHealth Services 123,056 0 0 123,056 127,310 127,774 4,718Other Student Support 78,607 0 0 78,607 88,949 128,042 49,435Regular Instruction Program 330,943 0 0 330,943 379,194 417,401 86,458Special Education Program 92,703 0 0 92,703 30,648 108,904 16,201Vocational Education Program 1,197 0 0 1,197 3,000 1,404 207Transportation 174,046 0 0 174,046 55,600 184,788 10,742

Total Expenditures $ 2,343,005 $ (18,094) $ 2,476 $ 2,327,387 $ 2,383,495 $ 2,592,192 $ 264,805

Excess (Deficiency) of RevenuesOver Expenditures $ 119,835 $ 18,094 $ (2,476) $ 135,453 $ 14,678 $ 26,309 $ 109,144

Other Financing Sources (Uses)Transfers In $ 210,991 $ 0 $ 0 $ 210,991 $ 0 $ 0 $ 210,991Transfers Out (21,601) 0 0 (21,601) (14,678) (26,309) 4,708

Total Other Financing Sources $ 189,390 $ 0 $ 0 $ 189,390 $ (14,678) $ (26,309) $ 215,699

Net Change in Fund Balance $ 309,225 $ 18,094 $ (2,476) $ 324,843 $ 0 $ 0 $ 324,843Fund Balance, July 1, 2015 (125,239) (18,094) 0 (143,333) 0 0 (143,333)

Fund Balance, June 30, 2016 $ 183,986 $ 0 $ (2,476) $ 181,510 $ 0 $ 0 $ 181,510

Budgeted Amounts

124

Exhibit I-10


in Fund Balance - Actual and BudgetDiscretely Presented Fayette County School DepartmentCentral Cafeteria FundFor the Year Ended June 30, 2016



RevenuesCharges for Current Services $ 204,334 $ 320,000 $ 320,000 $ (115,666)Other Local Revenues 3,527 2,000 2,000 1,527State of Tennessee 16,801 16,150 16,150 651Federal Government 2,245,884 1,923,225 1,923,225 322,659

Total Revenues $ 2,470,546 $ 2,261,375 $ 2,261,375 $ 209,171

ExpendituresOperation of Non-Instructional Services

Food Service $ 2,195,260 $ 2,053,841 $ 2,214,044 $ 18,784Total Expenditures $ 2,195,260 $ 2,053,841 $ 2,214,044 $ 18,784

Excess (Deficiency) of RevenuesOver Expenditures $ 275,286 $ 207,534 $ 47,331 $ 227,955

Other Financing Sources (Uses)Transfers Out $ (146,392) $ (146,392) $ (146,392) $ 0

Total Other Financing Sources $ (146,392) $ (146,392) $ (146,392) $ 0

Net Change in Fund Balance $ 128,894 $ 61,142 $ (99,061) $ 227,955Fund Balance, July 1, 2015 634,847 603,125 603,125 31,722


Budgeted Amounts

125

MISCELLANEOUS SCHEDULES

126

Exhibit J-1

Fayette County, TennesseeSchedule of Changes in Long-term Notes, Capital Lease, and BondsFor the Year Ended June 30, 2016

Paid and/orOriginal Date Last Issued MaturedAmount Interest of Maturity Outstanding During During

Description of Indebtedness of Issue Rate Issue Date 7-1-15 Period Period

NOTES PAYABLE Payable through General Debt Service Fund Sheriff's Department Maintenance Shop $ 139,789 4.25 % 7-29-10 6-30-16 $ 86,152 $ 0 $ 86,152 $ 0 General Obligation Capital Outlay Notes, Series 2014 830,180 2.66 11-21-14 3-1-25 830,180 0 99,450 730,730 General Obligation Capital Outlay Notes, Series 2015 334,889 1.73 11-30-15 11-30-20 0 334,889 0 334,889 Total Payable through General Debt Service Fund $ 916,332 $ 334,889 $ 185,602 $ 1,065,619

Contributions Due by the School Department from the General Purpose School Fund to the General Debt Service Fund School Capital Outlay Note 1,080,000 3.86 9-16-08 6-1-16 $ 135,000 $ 0 $ 135,000 $ 0 School Buses 495,000 2.49 11-18-13 12-1-21 440,000 0 55,000 385,000 Total Contributions Due by the School Department from the General Purpose School Fund to the General Debt Service Fund $ 575,000 $ 0 $ 190,000 $ 385,000

Total Notes Payable $ 1,491,332 $ 334,889 $ 375,602 $ 1,450,619

CAPITAL LEASE PAYABLE Payable through General Debt Service Fund Ten Sheriff Cars 233,180 3.27 11-2-11 11-10-16 $ 97,864 $ 0 $ 53,129 $ 44,735

Total Capital Lease Payable $ 97,864 $ 0 $ 53,129 $ 44,735

BONDS PAYABLE Payable through General Debt Service Fund General Obligation Refunding Bonds, Series 2011 9,585,000 1.25 to 3.5 9-15-11 4-1-30 $ 8,270,000 $ 0 $ 340,000 $ 7,930,000 General Obligation Refunding Bonds, Series 2012A 7,240,000 2 to 3 5-1-12 4-1-29 6,310,000 0 335,000 5,975,000 General Obligation Bonds, Series 2012B 4,575,000 2 to 3 12-12-12 4-1-36 4,225,000 0 175,000 4,050,000 General Obligation Bonds, Series 2013 8,715,000 2 to 4 12-20-13 4-1-36 8,640,000 0 150,000 8,490,000 General Obligation and Refunding Bonds, Series 2014 4,560,000 2 to 3 4-25-14 4-1-29 4,250,000 0 315,000 3,935,000

Total Bonds Payable $ 31,695,000 $ 0 $ 1,315,000 $ 30,380,000

Outstanding6-30-16

127

Exhibit J-2

Fayette County, TennesseeSchedule of Long-term Debt Requirements by Year

YearEndingJune 30 Principal Interest Total

2017 $ 232,688 $ 33,664 $ 266,3522018 235,823 28,336 264,1592019 243,962 22,953 266,9152020 249,120 17,375 266,4952021 191,296 11,682 202,9782022 129,000 7,437 136,4372023 60,000 4,218 64,2182024 62,000 2,718 64,7182025 46,730 1,168 47,898

Total $ 1,450,619 $ 129,551 $ 1,580,170


2017 $ 44,735 $ 1,487 $ 46,222

Total $ 44,735 $ 1,487 $ 46,222


2017 $ 1,500,000 $ 865,530 $ 2,365,5302018 1,540,000 835,533 2,375,5332019 1,500,000 801,480 2,301,4802020 1,555,000 768,282 2,323,2822021 1,625,000 734,032 2,359,0322022 1,715,000 694,131 2,409,1312023 1,735,000 650,942 2,385,9422024 1,775,000 610,012 2,385,0122025 1,845,000 565,524 2,410,5242026 1,910,000 515,330 2,425,3302027 1,980,000 461,280 2,441,2802028 2,050,000 403,168 2,453,1682029 2,100,000 341,354 2,441,3542030 1,770,000 276,025 2,046,0252031 900,000 213,900 1,113,9002032 920,000 181,350 1,101,3502033 935,000 148,150 1,083,1502034 980,000 113,200 1,093,2002035 1,000,000 76,500 1,076,5002036 1,045,000 39,100 1,084,100

Total $ 30,380,000 $ 9,294,823 $ 39,674,823

Notes

Capital Lease

Bonds

128

Exhibit J-3

Fayette County, TennesseeSchedule of TransfersPrimary Government and Discretely Presented Fayette County School DepartmentFor the Year Ended June 30, 2016

From Fund To Fund Purpose Amount

PRIMARY GOVERNMENT

General General Debt Service Debt retirement $ 48,220Adequate Facilities/Development Tax Highway/Public Works Road paving 104,010" General Debt Service Debt retirement 208,020

Total Transfers Primary Government $ 360,250

DISCRETELY PRESENTED FAYETTE COUNTY SCHOOL DEPARTMENT

General Purpose School School Federal Projects Maintenance of effort $ 10,991" " Cash flow funds 200,000School Federal Projects General Purpose School Indirect costs 21,601 Central Cafeteria " " 146,392

Total Transfers Discretely Presented Fayette County School Department $ 378,984

129

Exhibit J-4

Fayette County, TennesseeSchedule of Salaries and Official Bonds of Principal OfficialsPrimary Government and Discretely Presented Fayette County School DepartmentFor the Year Ended June 30, 2016

SalaryPaid

DuringOfficial Authorization for Salary Period Bond Surety

County Mayor Section 8-24-102, TCA $ 84,483 $ 100,000 Western Surety CompanyPublic Works Superintendent Chapter 234, Private Acts of 1974 84,199 (1) 100,000 "

and Section 8-24-102, TCADirector of Schools: James Teague (7-1-15 through 7-2-15) State Board of Education 8,809 (2) 100,000 "

and County Board of Education Dr. Marlon King (8-1-15 through 6-30-16) State Board of Education 96,850 100,000 "

and County Board of EducationTrustee Section 8-24-102, TCA 70,263 1,212,380 "Assessor of Property Section 8-24-102, TCA 70,263 50,000 "County Clerk Section 8-24-102, TCA 70,263 100,000 "Circuit, General Sessions, and Juvenile Courts Clerk Section 8-24-102, TCA 70,263 100,000 "Clerk and Master Section 8-24-102, TCA 70,263 (3) 100,000 "

and Chancery Court JudgeRegister of Deeds Section 8-24-102, TCA 70,263 100,000 "Sheriff Section 8-24-102, TCA 80,459 (4) 100,000 "

Employees Blanket Bond: Office: County Mayor: All Employees 150,000 Local Government Property and Casualty Public Works Superintendent: All Employees 150,000 " Director of Schools: All Employees 150,000 Tennessee Risk Management Trust

(1) Includes a certified public administrator supplement of $1,399. (2) Does not include a contract payout of $50,000. (3) Does not include special commissioner fees of $1,002. (4) Does not include a law enforcement training supplement of $600.

130

Exhibit J-5

Fayette County, TennesseeSchedule of Detailed Revenues -

All Governmental Fund TypesFor the Year Ended June 30, 2016

Adequate Constitu -Solid Facilities/ tional

Waste / Drug Development Officers -General Sanitation Control Tax Fees

Local TaxesCounty Property Taxes

Current Property Tax $ 8,301,823 $ 0 $ 0 $ 0 $ 0Trustee's Collections - Prior Year 176,479 0 0 0 0Circuit Clerk/Clerk and Master Collections - Prior Years 111,908 0 0 0 0Interest and Penalty 34,697 0 0 0 0Pickup Taxes 6,053 0 0 0 0Payments in-Lieu-of Taxes - Local Utilities 4,505 0 0 0 0Payments in-Lieu-of Taxes - Other 62,053 0 0 0 0

County Local Option TaxesLocal Option Sales Tax 0 0 0 0 0Hotel/Motel Tax 5,699 0 0 0 0Wheel Tax 187,144 0 0 0 0Litigation Tax - General 86,337 0 0 0 0Litigation Tax - Jail, Workhouse, or Courthouse 76,007 0 0 0 0Business Tax 240,763 0 0 0 0Mixed Drink Tax 67 0 0 0 0Adequate Facilities/Development Tax 0 0 0 551,951 0

Statutory Local TaxesBank Excise Tax 127,822 0 0 0 0Wholesale Beer Tax 68,613 0 0 0 0Interstate Telecommunications Tax 2,060 0 0 0 0

Total Local Taxes $ 9,492,030 $ 0 $ 0 $ 551,951 $ 0

Licenses and PermitsLicenses

Animal Registration $ 21,877 $ 0 $ 0 $ 0 $ 0Cable TV Franchise 145,453 0 0 0 0

(Continued)


131

Exhibit J-5


All Governmental Fund Types (Cont.)



Licenses and Permits (Cont.)Permits

Beer Permits $ 950 $ 0 $ 0 $ 0 $ 0Building Permits 68,965 0 0 0 0

Total Licenses and Permits $ 237,245 $ 0 $ 0 $ 0 $ 0

Fines, Forfeitures, and PenaltiesCircuit Court

Fines $ 7,064 $ 0 $ 0 $ 0 $ 0Officers Costs 17,849 0 0 0 0Drug Control Fines 30,504 0 0 0 0Drug Court Fees 3,703 0 0 0 0Jail Fees 700 0 0 0 0DUI Treatment Fines 1,795 0 0 0 0Data Entry Fee - Circuit Court 3,283 0 0 0 0Courtroom Security Fee 44 0 0 0 0Victims Assistance Assessments 546 0 0 0 0

General Sessions CourtFines 23,275 0 0 0 0Fines for Littering 142 0 0 0 0Officers Costs 43,335 0 0 0 0Game and Fish Fines 1,157 0 0 0 0Drug Control Fines 6,763 0 7,774 0 0Drug Court Fees 37,521 0 0 0 0Jail Fees 4,997 0 0 0 0Judicial Commissioner Fees 68,449 0 0 0 0DUI Treatment Fines 6,563 0 0 0 0

(Continued)


132

Exhibit J-5





Fines, Forfeitures, and Penalties (Cont.)General Sessions Court (Cont.)

Data Entry Fee - General Sessions Court $ 10,779 $ 0 $ 0 $ 0 $ 0Courtroom Security Fee 2,357 0 0 0 0Victims Assistance Assessments 3,486 0 0 0 0

Juvenile CourtFines 1,392 0 0 0 0Officers Costs 1,972 0 0 0 0

Chancery CourtOfficers Costs 1,608 0 0 0 0Data Entry Fee - Chancery Court 1,364 0 0 0 0

Judicial District Drug ProgramCourtroom Security Fee 6 0 0 0 0

Other Fines, Forfeitures, and PenaltiesProceeds from Confiscated Property 0 0 55,833 0 0Other Fines, Forfeitures, and Penalties 28,738 0 0 0 0

Total Fines, Forfeitures, and Penalties $ 309,392 $ 0 $ 63,607 $ 0 $ 0

Charges for Current ServicesGeneral Service Charges

Other Employee Benefit Charges/Contributions $ 146,600 $ 0 $ 0 $ 0 $ 0Residential Waste Collection Charge 11,500 0 0 0 0Solid Waste Disposal Fee 0 407,295 0 0 0Surcharge - Waste Tire Disposal 0 14,404 0 0 0Patient Charges 1,258,128 0 0 0 0Other General Service Charges 152 0 0 0 0

(Continued)


133

Exhibit J-5





Charges for Current Services (Cont.)Fees

Airport Fees $ 128,334 $ 0 $ 0 $ 0 $ 0Copy Fees 5 0 0 0 0Library Fees 11,316 0 0 0 0Telephone Commissions 88,180 0 0 0 0Vending Machine Collections 1,215 0 0 0 0Constitutional Officers' Fees and Commissions 0 0 0 0 1,002Data Processing Fee - Register 14,958 0 0 0 0Data Processing Fee - Sheriff 2,990 0 0 0 0Sexual Offender Registration Fee - Sheriff 6,350 0 0 0 0Data Processing Fee - County Clerk 4,112 0 0 0 0

Total Charges for Current Services $ 1,673,840 $ 421,699 $ 0 $ 0 $ 1,002

Other Local RevenuesRecurring Items

Investment Income $ 0 $ 63,003 $ 0 $ 0 $ 0Lease/Rentals 11,542 0 0 0 0Sale of Materials and Supplies 334 0 0 0 0Commissary Sales 35,575 0 0 0 0Sale of Gasoline 119,477 0 0 0 0Sale of Recycled Materials 0 121,504 0 0 0Cobra Insurance Payments 10 0 0 0 0Miscellaneous Refunds 1,137 14,358 0 0 0

Nonrecurring ItemsSale of Equipment 662 0 0 0 0Contributions and Gifts 450 0 0 0 0

(Continued)


134

Exhibit J-5





Other Local Revenues (Cont.)Other Local Revenues

Other Local Revenues $ 199 $ 0 $ 0 $ 0 $ 0Total Other Local Revenues $ 169,386 $ 198,865 $ 0 $ 0 $ 0

Fees Received From County OfficialsFees In-Lieu-of Salary

County Clerk $ 384,344 $ 0 $ 0 $ 0 $ 0Circuit Court Clerk 132,858 0 0 0 0General Sessions Court Clerk 189,552 0 0 0 0Clerk and Master 144,836 0 0 0 0Juvenile Court Clerk 29,800 0 0 0 0Register 215,461 0 0 0 0Sheriff 21,507 0 0 0 0Trustee 514,654 0 0 0 0

Total Fees Received From County Officials $ 1,633,012 $ 0 $ 0 $ 0 $ 0

State of TennesseeGeneral Government Grants

Airport Maintenance Program $ 4,166 $ 0 $ 0 $ 0 $ 0On-behalf Contributions for OPEB 2,550 0 0 0 0Other General Government Grants 4,604 0 0 0 0

Public Safety GrantsLaw Enforcement Training Programs 25,200 0 0 0 0Other Public Safety Grants 32,865 0 0 0 0

Health and Welfare GrantsHealth Department Programs 200,673 0 0 0 0

(Continued)


135

Exhibit J-5





State of Tennessee (Cont.)Public Works Grants

Bridge Program $ 0 $ 0 $ 0 $ 0 $ 0Litter Program 38,932 0 0 0 0

Other State RevenuesIncome Tax 189,109 0 0 0 0Beer Tax 39,414 0 0 0 0Vehicle Certificate of Title Fees 12,420 0 0 0 0Alcoholic Beverage Tax 69,314 0 0 0 0State Revenue Sharing - T.V.A. 653,614 325,000 0 0 0Prisoner Transportation 1,904 0 0 0 0Contracted Prisoner Boarding 662,115 0 0 0 0Gasoline and Motor Fuel Tax 0 0 0 0 0Petroleum Special Tax 0 0 0 0 0Registrar's Salary Supplement 15,164 0 0 0 0Other State Grants 68,338 0 0 0 0Other State Revenues 76,775 0 0 0 0

Total State of Tennessee $ 2,097,157 $ 325,000 $ 0 $ 0 $ 0

Federal GovernmentFederal Through State

Community Development $ 0 $ 0 $ 0 $ 0 $ 0Civil Defense Reimbursement 52,000 0 0 0 0Homeland Security Grants 21,426 0 0 0 0

Direct Federal RevenueOther Direct Federal Revenue 37,500 0 0 0 0

Total Federal Government $ 110,926 $ 0 $ 0 $ 0 $ 0

(Continued)


136

Exhibit J-5





Other Governments and Citizens GroupsOther Governments

Prisoner Board $ 23,168 $ 0 $ 0 $ 0 $ 0Contributions 10,000 0 0 0 0Contracted Services 22,870 0 0 0 0

OtherOther 5,659 0 0 0 0

Total Other Governments and Citizens Groups $ 61,697 $ 0 $ 0 $ 0 $ 0

Total $ 15,784,685 $ 945,564 $ 63,607 $ 551,951 $ 1,002

(Continued)


137

Exhibit J-5



CommunityHighway / General General Development/ HUD

Public Debt Capital Industrial GrantWorks Service Projects Park Projects Total


Current Property Tax $ 890,490 $ 0 $ 0 $ 0 $ 0 $ 9,192,313Trustee's Collections - Prior Year 18,410 67 0 0 0 194,956Circuit Clerk/Clerk and Master Collections - Prior Years 13,481 1,635 0 0 0 127,024Interest and Penalty 3,446 51 0 0 0 38,194Pickup Taxes 656 0 0 0 0 6,709Payments in-Lieu-of Taxes - Local Utilities 490 0 0 0 0 4,995Payments in-Lieu-of Taxes - Other 5,097 0 0 0 0 67,150

County Local Option TaxesLocal Option Sales Tax 394,298 0 0 0 0 394,298Hotel/Motel Tax 0 0 0 0 0 5,699Wheel Tax 762,788 1,871,719 0 0 0 2,821,651Litigation Tax - General 0 0 0 0 0 86,337Litigation Tax - Jail, Workhouse, or Courthouse 0 0 0 0 0 76,007Business Tax 0 0 0 0 0 240,763Mixed Drink Tax 0 0 0 0 0 67Adequate Facilities/Development Tax 0 0 0 0 0 551,951

Statutory Local TaxesBank Excise Tax 0 0 0 0 0 127,822Wholesale Beer Tax 0 0 0 0 0 68,613Interstate Telecommunications Tax 0 0 0 0 0 2,060

Total Local Taxes $ 2,089,156 $ 1,873,472 $ 0 $ 0 $ 0 $ 14,006,609


Animal Registration $ 0 $ 0 $ 0 $ 0 $ 0 $ 21,877Cable TV Franchise 0 0 0 0 0 145,453

(Continued)

Special Revenue

FundDebt Service

Fund Capital Projects Funds

138

Exhibit J-5





Licenses and Permits (Cont.)Permits

Beer Permits $ 0 $ 0 $ 0 $ 0 $ 0 $ 950Building Permits 0 0 0 0 0 68,965

Total Licenses and Permits $ 0 $ 0 $ 0 $ 0 $ 0 $ 237,245

Fines, Forfeitures, and PenaltiesCircuit Court

Fines $ 0 $ 0 $ 0 $ 0 $ 0 $ 7,064Officers Costs 0 0 0 0 0 17,849Drug Control Fines 0 0 0 0 0 30,504Drug Court Fees 0 0 0 0 0 3,703Jail Fees 0 0 0 0 0 700DUI Treatment Fines 0 0 0 0 0 1,795Data Entry Fee - Circuit Court 0 0 0 0 0 3,283Courtroom Security Fee 0 0 0 0 0 44Victims Assistance Assessments 0 0 0 0 0 546

General Sessions CourtFines 0 0 0 0 0 23,275Fines for Littering 0 0 0 0 0 142Officers Costs 0 0 0 0 0 43,335Game and Fish Fines 0 0 0 0 0 1,157Drug Control Fines 0 0 0 0 0 14,537Drug Court Fees 0 0 0 0 0 37,521Jail Fees 0 0 0 0 0 4,997Judicial Commissioner Fees 0 0 0 0 0 68,449DUI Treatment Fines 0 0 0 0 0 6,563

(Continued)

Special Revenue

FundDebt Service


139

Exhibit J-5





Fines, Forfeitures, and Penalties (Cont.)General Sessions Court (Cont.)

Data Entry Fee - General Sessions Court $ 0 $ 0 $ 0 $ 0 $ 0 $ 10,779Courtroom Security Fee 0 0 0 0 0 2,357Victims Assistance Assessments 0 0 0 0 0 3,486

Juvenile CourtFines 0 0 0 0 0 1,392Officers Costs 0 0 0 0 0 1,972

Chancery CourtOfficers Costs 0 0 0 0 0 1,608Data Entry Fee - Chancery Court 0 0 0 0 0 1,364

Judicial District Drug ProgramCourtroom Security Fee 0 0 0 0 0 6

Other Fines, Forfeitures, and PenaltiesProceeds from Confiscated Property 0 0 0 0 0 55,833Other Fines, Forfeitures, and Penalties 0 0 0 0 0 28,738

Total Fines, Forfeitures, and Penalties $ 0 $ 0 $ 0 $ 0 $ 0 $ 372,999

Charges for Current ServicesGeneral Service Charges

Other Employee Benefit Charges/Contributions $ 0 $ 0 $ 0 $ 0 $ 0 $ 146,600Residential Waste Collection Charge 0 0 0 0 0 11,500Solid Waste Disposal Fee 0 0 0 0 0 407,295Surcharge - Waste Tire Disposal 0 0 0 0 0 14,404Patient Charges 0 0 0 0 0 1,258,128Other General Service Charges 0 0 0 0 0 152

(Continued)

Special Revenue

FundDebt Service


140

Exhibit J-5





Charges for Current Services (Cont.)Fees

Airport Fees $ 0 $ 0 $ 0 $ 0 $ 0 $ 128,334Copy Fees 0 0 0 0 0 5Library Fees 0 0 0 0 0 11,316Telephone Commissions 0 0 0 0 0 88,180Vending Machine Collections 0 0 0 0 0 1,215Constitutional Officers' Fees and Commissions 0 0 0 0 0 1,002Data Processing Fee - Register 0 0 0 0 0 14,958Data Processing Fee - Sheriff 0 0 0 0 0 2,990Sexual Offender Registration Fee - Sheriff 0 0 0 0 0 6,350Data Processing Fee - County Clerk 0 0 0 0 0 4,112

Total Charges for Current Services $ 0 $ 0 $ 0 $ 0 $ 0 $ 2,096,541


Investment Income $ 0 $ 0 $ 0 $ 0 $ 0 $ 63,003Lease/Rentals 0 0 0 0 0 11,542Sale of Materials and Supplies 0 0 0 0 0 334Commissary Sales 0 0 0 0 0 35,575Sale of Gasoline 0 0 0 0 0 119,477Sale of Recycled Materials 0 0 0 0 0 121,504Cobra Insurance Payments 0 0 0 0 0 10Miscellaneous Refunds 0 0 0 0 0 15,495

Nonrecurring ItemsSale of Equipment 0 0 0 0 0 662Contributions and Gifts 25,461 0 0 0 0 25,911

(Continued)

Special Revenue

FundDebt Service


141

Exhibit J-5





Other Local Revenues (Cont.)Other Local Revenues

Other Local Revenues $ 0 $ 0 $ 0 $ 0 $ 0 $ 199Total Other Local Revenues $ 25,461 $ 0 $ 0 $ 0 $ 0 $ 393,712

Fees Received From County OfficialsFees In-Lieu-of Salary

County Clerk $ 0 $ 0 $ 0 $ 0 $ 0 $ 384,344Circuit Court Clerk 0 0 0 0 0 132,858General Sessions Court Clerk 0 0 0 0 0 189,552Clerk and Master 0 0 0 0 0 144,836Juvenile Court Clerk 0 0 0 0 0 29,800Register 0 0 0 0 0 215,461Sheriff 0 0 0 0 0 21,507Trustee 0 0 0 0 0 514,654

Total Fees Received From County Officials $ 0 $ 0 $ 0 $ 0 $ 0 $ 1,633,012


Airport Maintenance Program $ 0 $ 0 $ 89,500 $ 0 $ 0 $ 93,666On-behalf Contributions for OPEB 0 0 0 0 0 2,550Other General Government Grants 0 0 0 0 0 4,604

Public Safety GrantsLaw Enforcement Training Programs 0 0 0 0 0 25,200Other Public Safety Grants 0 0 0 0 0 32,865

Health and Welfare GrantsHealth Department Programs 0 0 0 0 0 200,673

(Continued)

Special Revenue

FundDebt Service


142

Exhibit J-5





State of Tennessee (Cont.)Public Works Grants

Bridge Program $ 542,459 $ 0 $ 0 $ 0 $ 0 $ 542,459Litter Program 0 0 0 0 0 38,932

Other State RevenuesIncome Tax 0 0 0 0 0 189,109Beer Tax 0 0 0 0 0 39,414Vehicle Certificate of Title Fees 0 0 0 0 0 12,420Alcoholic Beverage Tax 0 0 0 0 0 69,314State Revenue Sharing - T.V.A. 0 0 0 0 0 978,614Prisoner Transportation 0 0 0 0 0 1,904Contracted Prisoner Boarding 0 0 0 0 0 662,115Gasoline and Motor Fuel Tax 2,183,312 0 0 0 0 2,183,312Petroleum Special Tax 27,717 0 0 0 0 27,717Registrar's Salary Supplement 0 0 0 0 0 15,164Other State Grants 0 0 0 0 0 68,338Other State Revenues 0 0 0 0 0 76,775

Total State of Tennessee $ 2,753,488 $ 0 $ 89,500 $ 0 $ 0 $ 5,265,145


Community Development $ 0 $ 0 $ 0 $ 1,082,936 $ 28,196 $ 1,111,132Civil Defense Reimbursement 0 0 0 0 0 52,000Homeland Security Grants 0 0 0 0 0 21,426

Direct Federal RevenueOther Direct Federal Revenue 0 0 0 0 0 37,500

Total Federal Government $ 0 $ 0 $ 0 $ 1,082,936 $ 28,196 $ 1,222,058

(Continued)

Special Revenue

FundDebt Service


143

Exhibit J-5






Prisoner Board $ 0 $ 0 $ 0 $ 0 $ 0 $ 23,168Contributions 0 462,350 0 0 4,244 476,594Contracted Services 0 0 0 0 0 22,870

OtherOther 0 0 0 0 0 5,659

Total Other Governments and Citizens Groups $ 0 $ 462,350 $ 0 $ 0 $ 4,244 $ 528,291

Total $ 4,868,105 $ 2,335,822 $ 89,500 $ 1,082,936 $ 32,440 $ 25,755,612

Special Revenue

FundDebt Service


144

Exhibit J-6


All Governmental Fund TypesDiscretely Presented Fayette County School DepartmentFor the Year Ended June 30, 2016

General School EducationPurpose Federal Central CapitalSchool Projects Cafeteria Projects Total


Current Property Tax $ 5,836,775 $ 0 $ 0 $ 0 $ 5,836,775Trustee's Collections - Prior Year 156,914 0 0 0 156,914Circuit Clerk/Clerk and Master Collections - Prior Years 112,135 0 0 0 112,135Interest and Penalty 28,878 0 0 0 28,878Pickup Taxes 4,249 0 0 0 4,249Payments in-Lieu-of Taxes - Local Utilities 3,161 0 0 0 3,161Payments in-Lieu-of Taxes - Other 33,262 0 0 0 33,262

County Local Option TaxesLocal Option Sales Tax 3,302,038 0 0 0 3,302,038Mixed Drink Tax 8,036 0 0 0 8,036

Statutory Local TaxesInterstate Telecommunications Tax 3,225 0 0 0 3,225

Total Local Taxes $ 9,488,673 $ 0 $ 0 $ 0 $ 9,488,673


Marriage Licenses $ 2,452 $ 0 $ 0 $ 0 $ 2,452Total Licenses and Permits $ 2,452 $ 0 $ 0 $ 0 $ 2,452

Charges for Current ServicesEducation Charges

Tuition - Other $ 62,574 $ 0 $ 0 $ 0 $ 62,574Lunch Payments - Adults 0 0 12,748 0 12,748Income from Breakfast 0 0 637 0 637

(Continued)


Projects Fund

145

Exhibit J-6


All Governmental Fund TypesDiscretely Presented Fayette County School Department (Cont.)


Charges for Current Services (Cont.)Education Charges (Cont.)

TBI Criminal Background Fee $ 3,030 $ 0 $ 0 $ 0 $ 3,030Other Charges for Services 0 0 190,949 0 190,949

Total Charges for Current Services $ 65,604 $ 0 $ 204,334 $ 0 $ 269,938


Investment Income $ 0 $ 0 $ 3,527 $ 0 $ 3,527Lease/Rentals 35,200 0 0 0 35,200Miscellaneous Refunds 3,628 0 0 0 3,628

Nonrecurring ItemsSale of Equipment 11,046 0 0 0 11,046Damages Recovered from Individuals 890 0 0 0 890

Total Other Local Revenues $ 50,764 $ 0 $ 3,527 $ 0 $ 54,291


On-behalf Contributions for OPEB $ 62,822 $ 0 $ 0 $ 0 $ 62,822State Education Funds

Basic Education Program 15,646,000 0 0 0 15,646,000Early Childhood Education 838,779 0 0 0 838,779School Food Service 0 0 16,801 0 16,801Energy Efficient School Initiative 2,600 0 0 0 2,600Other State Education Funds 305,422 0 0 0 305,422Career Ladder Program 62,139 0 0 0 62,139

(Continued)


Projects Fund

146

Exhibit J-6




State of Tennessee (Cont.)Other State Revenues

Other State Grants $ 1,745 $ 0 $ 0 $ 0 $ 1,745Total State of Tennessee $ 16,919,507 $ 0 $ 16,801 $ 0 $ 16,936,308


USDA School Lunch Program $ 0 $ 0 $ 1,479,080 $ 0 $ 1,479,080USDA - Commodities 0 0 79,702 0 79,702Breakfast 0 0 617,220 0 617,220USDA - Other 0 0 69,882 0 69,882Vocational Education - Basic Grants to States 0 64,098 0 0 64,098Title I Grants to Local Education Agencies 0 1,195,104 0 0 1,195,104Special Education - Grants to States 0 922,378 0 0 922,378Special Education Preschool Grants 0 31,307 0 0 31,307English Language Acquisition Grants 0 6,165 0 0 6,165Eisenhower Professional Development State Grants 0 243,788 0 0 243,788Job Training Partnership Act 323,717 0 0 0 323,717

Total Federal Government $ 323,717 $ 2,462,840 $ 2,245,884 $ 0 $ 5,032,441


Contributions $ 0 $ 0 $ 0 $ 154,889 $ 154,889Other

Other 26,000 0 0 0 26,000Total Other Governments and Citizens Groups $ 26,000 $ 0 $ 0 $ 154,889 $ 180,889

Total $ 26,876,717 $ 2,462,840 $ 2,470,546 $ 154,889 $ 31,964,992


Projects Fund

147

Exhibit J-7

Fayette County, TennesseeSchedule of Detailed Expenditures -

All Governmental Fund TypesFor the Year Ended June 30, 2016

General FundGeneral Government

County CommissionBoard and Committee Members Fees $ 50,602Pensions 2,001Communication 958Contracts with Private Agencies 7,200Legal Services 2,084Rentals 1,013Duplicating Supplies 2,335Office Supplies 1,195Other Charges 735

Total County Commission $ 68,123

Beer BoardBoard and Committee Members Fees $ 208

Total Beer Board 208

County Mayor/ExecutiveCounty Official/Administrative Officer $ 84,483Communication 2,419Legal Notices, Recording, and Court Costs 862Maintenance and Repair Services - Office Equipment 65Printing, Stationery, and Forms 540Rentals 506Travel 675Other Contracted Services 15,825Office Supplies 718

Total County Mayor/Executive 106,093

Personnel OfficeSupervisor/Director $ 43,286Part-time Personnel 25,387In-service Training 195Travel 553

Total Personnel Office 69,421

County AttorneyOther Salaries and Wages $ 20,358Board and Committee Members Fees 1,853Other Per Diem and Fees 38,568Social Security 3,472Employer Medicare 812

Total County Attorney 65,063

Election CommissionAssistant(s) $ 33,116Supervisor/Director 61,399Deputy(ies) 29,399Part-time Personnel 9,736

(Continued)

148

Exhibit J-7



General Fund (Cont.)General Government (Cont.)

Election Commission (Cont.)Election Commission $ 6,130Election Workers 30,388In-service Training 3,350Communication 1,842Data Processing Services 16,735Dues and Memberships 200Janitorial Services 2,475Legal Notices, Recording, and Court Costs 3,745Maintenance and Repair Services - Buildings 3,533Maintenance and Repair Services - Office Equipment 2,802Postal Charges 6,510Printing, Stationery, and Forms 7,700Rentals 2,732Travel 6,342Office Supplies 7,305Other Supplies and Materials 1,540Data Processing Equipment 26,207Office Equipment 473

Total Election Commission $ 263,659

Register of DeedsCounty Official/Administrative Officer $ 70,263Assistant(s) 32,151Deputy(ies) 49,405Part-time Personnel 3,170Communication 802Data Processing Services 16,097Postal Charges 131Printing, Stationery, and Forms 1,268Rentals 843Travel 175Office Supplies 2,412Office Equipment 1,100

Total Register of Deeds 177,817

DevelopmentAssistant(s) $ 15,318Supervisor/Director 58,401Secretary(ies) 40,724Board and Committee Members Fees 3,176Communication 3,220Consultants 4,562Data Processing Services 13,442Dues and Memberships 100Legal Notices, Recording, and Court Costs 3,782Maintenance and Repair Services - Buildings 1,416Rentals 2,664

(Continued)

149

Exhibit J-7




Development (Cont.)Travel $ 1,904Gasoline 67Office Supplies 1,454Data Processing Equipment 881

Total Development $ 151,111

BuildingSupervisor/Director $ 44,157Deputy(ies) 34,723In-service Training 30Communication 1,580Contracts with Private Agencies 2,762Dues and Memberships 345Maintenance and Repair Services - Vehicles 1,519Printing, Stationery, and Forms 55Gasoline 2,250Other Supplies and Materials 640Motor Vehicles 18

Total Building 88,079

County BuildingsCustodial Personnel $ 28,102Temporary Personnel 5,360Communication 1,215Contracts with Government Agencies 13,500Contracts with Other Public Agencies 5,716Contracts with Private Agencies 4,238Maintenance and Repair Services - Buildings 43,871Maintenance and Repair Services - Vehicles 1,803Postal Charges 21,284Rentals 27,888Custodial Supplies 3,367Gasoline 1,264Small Tools 696Uniforms 683Utilities 44,445Other Supplies and Materials 516

Total County Buildings 203,948

Other FacilitiesCommunication $ 1,319Maintenance and Repair Services - Buildings 420Electricity 1,647Propane Gas 1,587

Total Other Facilities 4,973

(Continued)

150

Exhibit J-7




Other General AdministrationDues and Memberships $ 56,158

Total Other General Administration $ 56,158

FinanceAccounting and Budgeting

Supervisor/Director $ 55,000Purchasing Personnel 32,000In-service Training 915Audit Services 11,524Communication 1,210Data Processing Services 15,276Legal Notices, Recording, and Court Costs 546Maintenance and Repair Services - Office Equipment 100Printing, Stationery, and Forms 713Rentals 602Travel 1,456Duplicating Supplies 758Office Supplies 2,992

Total Accounting and Budgeting 123,092

Property Assessor's OfficeCounty Official/Administrative Officer $ 70,263Assistant(s) 33,116Deputy(ies) 86,915Investigator(s) 36,975Communication 2,063Consultants 9,850Data Processing Services 5,633Dues and Memberships 442Maintenance Agreements 3,000Maintenance and Repair Services - Vehicles 205Postal Charges 1,137Printing, Stationery, and Forms 288Rentals 1,038Gasoline 600Office Supplies 458Other Supplies and Materials 385Data Processing Equipment 934Office Equipment 927

Total Property Assessor's Office 254,229

Reappraisal ProgramConsultants $ 30,000Data Processing Services 12,368Postal Charges 3,300Gasoline 1,095

Total Reappraisal Program 46,763

(Continued)

151

Exhibit J-7



General Fund (Cont.)Finance (Cont.)

County Trustee's OfficeCounty Official/Administrative Officer $ 70,263Assistant(s) 33,116Deputy(ies) 56,852Part-time Personnel 14,406In-service Training 3,226Communication 1,342Data Processing Services 10,901Dues and Memberships 800Legal Notices, Recording, and Court Costs 55Maintenance and Repair Services - Office Equipment 250Postal Charges 7,410Printing, Stationery, and Forms 7,979Rentals 822Travel 2,548Office Supplies 883Other Supplies and Materials 1,102Data Processing Equipment 1,520Office Equipment 504

Total County Trustee's Office $ 213,979

County Clerk's OfficeCounty Official/Administrative Officer $ 70,263Assistant(s) 33,116Deputy(ies) 139,751Part-time Personnel 12,624Other Salaries and Wages 1,525In-service Training 375Communication 7,022Data Processing Services 27,978Dues and Memberships 725Legal Notices, Recording, and Court Costs 304Maintenance and Repair Services - Office Equipment 152Printing, Stationery, and Forms 1,375Rentals 2,540Travel 1,440Other Contracted Services 272Office Supplies 6,477Other Supplies and Materials 26Data Processing Equipment 5,905Office Equipment 298

Total County Clerk's Office 312,168

Administration of JusticeCircuit Court

County Official/Administrative Officer $ 70,263Assistant(s) 33,116Deputy(ies) 31,185

(Continued)

152

Exhibit J-7



General Fund (Cont.)Administration of Justice (Cont.)

Circuit Court (Cont.)Jury and Witness Expense $ 9,961In-service Training 275Communication 5,930Data Processing Services 8,001Dues and Memberships 670Maintenance and Repair Services - Buildings 600Postal Charges 98Printing, Stationery, and Forms 2,394Travel 651Office Supplies 2,752Furniture and Fixtures 4,025

Total Circuit Court $ 169,921

General Sessions CourtAssistant(s) $ 33,116Deputy(ies) 97,807Data Processing Services 3,480Postal Charges 44Printing, Stationery, and Forms 3,390Rentals 2,363Office Supplies 3,984

Total General Sessions Court 144,184

General Sessions JudgeJudge(s) $ 170,352Assistant(s) 33,116In-service Training 165Communication 1,483Contracts with Private Agencies 6,310Dues and Memberships 250Legal Services 240Travel 1,509Office Supplies 410Other Supplies and Materials 408

Total General Sessions Judge 214,243

General Sessions Court ClerkAssistant(s) $ 32,576Deputy(ies) 27,598Data Processing Services 4,210Printing, Stationery, and Forms 560Rentals 2,048Travel 185Office Supplies 720

Total General Sessions Court Clerk 67,897

(Continued)

153

Exhibit J-7




Drug CourtTemporary Personnel $ 43,000Social Security 2,662Pensions 3,165Employee and Dependent Insurance 6,408Employer Medicare 623Contracts with Private Agencies 4,800Travel 1,661Other Contracted Services 2,400Library Books/Media 1,434Office Supplies 2,005Workers' Compensation Insurance 182

Total Drug Court $ 68,340

Chancery CourtCounty Official/Administrative Officer $ 70,263Assistant(s) 51,010Deputy(ies) 36,249Communication 1,180Data Processing Services 7,314Dues and Memberships 575Legal Notices, Recording, and Court Costs 4,556Maintenance and Repair Services - Office Equipment 257Postal Charges 144Printing, Stationery, and Forms 2,357Rentals 1,813Office Supplies 1,447Communication Equipment 5,942Office Equipment 2,698

Total Chancery Court 185,805

Juvenile CourtYouth Service Officer(s) $ 41,741In-service Training 165Contracts with Private Agencies 1,057Dues and Memberships 125Travel 470Other Supplies and Materials 709

Total Juvenile Court 44,267

Other Administration of JusticeEvaluation and Testing $ 4,925Other Contracted Services 312Library Books/Media 195Office Supplies 1,240Office Equipment 223

Total Other Administration of Justice 6,895

(Continued)

154

Exhibit J-7




Victim Assistance ProgramsContracts with Private Agencies $ 2,730

Total Victim Assistance Programs $ 2,730

Public SafetySheriff's Department

County Official/Administrative Officer $ 80,459Supervisor/Director 124,363Deputy(ies) 796,507Investigator(s) 171,555Captain(s) 90,255Lieutenant(s) 149,404Sergeant(s) 211,591Salary Supplements 22,200Part-time Personnel 11,200Overtime Pay 31,180In-service Training 7,736Employee and Dependent Insurance 206,458Communication 46,132Maintenance and Repair Services - Buildings 1,769Maintenance and Repair Services - Office Equipment 2,660Maintenance and Repair Services - Vehicles 41,657Medical and Dental Services 10,905Postal Charges 1,176Printing, Stationery, and Forms 2,622Rentals 5,911Travel 7,959Other Contracted Services 292Duplicating Supplies 1,720Gasoline 152,779Office Supplies 11,190Uniforms 33,650Utilities 23Other Supplies and Materials 16,654Liability Insurance 70,636Liability Claims 500Communication Equipment 4,834Data Processing Equipment 18,648Law Enforcement Equipment 4,093Motor Vehicles 175,250

Total Sheriff's Department 2,513,968

Drug EnforcementSupervisor/Director $ 43,116Investigator(s) 95,980Salary Supplements 2,400Overtime Pay 21,591Social Security 9,487

(Continued)

155

Exhibit J-7



General Fund (Cont.)Public Safety (Cont.)

Drug Enforcement (Cont.)Pensions $ 11,855Employee and Dependent Insurance 24,195Employer Medicare 2,219

Total Drug Enforcement $ 210,843

JailAssistant(s) $ 44,855Supervisor/Director 10,682Lieutenant(s) 86,359Sergeant(s) 39,110Data Processing Personnel 54,118Salary Supplements 600Dispatchers/Radio Operators 357,328Guards 660,121Secretary(ies) 33,116Maintenance Personnel 63,890Part-time Personnel 13,881Overtime Pay 163,087In-service Training 1,596Employee and Dependent Insurance 248,009Contracts with Private Agencies 40,550Data Processing Services 7,010Maintenance and Repair Services - Buildings 113,295Maintenance and Repair Services - Vehicles 1,004Medical and Dental Services 296,819Printing, Stationery, and Forms 826Travel 3,102Custodial Supplies 39,863Diesel Fuel 1,489Food Supplies 240,745Gasoline 3,304Office Supplies 1,242Prisoners Clothing 7,541Uniforms 8,453Utilities 260,586Other Supplies and Materials 6,815Liability Insurance 56,496Communication Equipment 1,231Law Enforcement Equipment 5,000Other Equipment 1,093

Total Jail 2,873,216

Fire Prevention and ControlAssistant(s) $ 35,303Supervisor/Director 42,920Part-time Personnel 52,734In-service Training 4,292

(Continued)

156

Exhibit J-7




Fire Prevention and Control (Cont.)Communication $ 11,451Contracts with Government Agencies 131,000Dues and Memberships 919Forest Resource Services 2,000Operating Lease Payments 10,200Maintenance and Repair Services - Buildings 8,448Maintenance and Repair Services - Equipment 9,820Maintenance and Repair Services - Vehicles 37,123Postal Charges 144Printing, Stationery, and Forms 197Travel 606Data Processing Supplies 1,485Diesel Fuel 11,999Drugs and Medical Supplies 176Gasoline 8,612Natural Gas 2,825Office Supplies 1,016Propane Gas 3,354Uniforms 3,022Utilities 12,049Other Supplies and Materials 89,800Building and Contents Insurance 17,263Liability Insurance 6,244Vehicle and Equipment Insurance 54,153Workers' Compensation Insurance 11,072Other Charges 9,587Administration Equipment 1,305Communication Equipment 14,715Office Equipment 327Other Equipment 38,760

Total Fire Prevention and Control $ 634,921

Civil DefenseAssistant(s) $ 13,621Supervisor/Director 45,163Deputy(ies) 16,659Communication 4,402Legal Notices, Recording, and Court Costs 98Maintenance and Repair Services - Vehicles 1,993Postal Charges 193Rentals 734Travel 340Gasoline 3,511Office Supplies 470Uniforms 503Utilities 6,510Other Supplies and Materials 21,127

(Continued)

157

Exhibit J-7




Civil Defense (Cont.)Liability Insurance $ 14,789Other Charges 736Office Equipment 2,937Other Equipment 1,570

Total Civil Defense $ 135,356

Rescue SquadCommunication $ 483Maintenance and Repair Services - Vehicles 376Liability Insurance 383

Total Rescue Squad 1,242

Other Emergency ManagementOther Contracted Services $ 1,575Other Supplies and Materials 47

Total Other Emergency Management 1,622

County Coroner/Medical ExaminerContracts with Government Agencies $ 31,815Medical and Dental Services 880Transportation - Other than Students 3,575

Total County Coroner/Medical Examiner 36,270

Other Public SafetyMechanic(s) $ 65,658Employee and Dependent Insurance 12,032Communication 642Maintenance and Repair Services - Vehicles 975Equipment Parts - Light 45,795Gasoline 2,734Uniforms 849Utilities 3,131Other Supplies and Materials 1,000

Total Other Public Safety 132,816

Public Health and WelfareLocal Health Center

Board and Committee Members Fees $ 150Communication 3,908Janitorial Services 12,389Maintenance and Repair Services - Buildings 9,279Postal Charges 138Drugs and Medical Supplies 739Office Supplies 1,270Utilities 11,485Other Charges 22,471

Total Local Health Center 61,829

(Continued)

158

Exhibit J-7



General Fund (Cont.)Public Health and Welfare (Cont.)

Rabies and Animal ControlDeputy(ies) $ 29,350Investigator(s) 31,203Communication 1,935Maintenance and Repair Services - Buildings 156Maintenance and Repair Services - Vehicles 1,109Animal Food and Supplies 178Gasoline 6,052Uniforms 698Utilities 2,255Other Supplies and Materials 1,240

Total Rabies and Animal Control $ 74,176

Ambulance/Emergency Medical ServicesSupervisor/Director $ 51,629Secretary(ies) 33,117Attendants 709,871Part-time Personnel 66,708Overtime Pay 368,845In-service Training 1,925Social Security 76,005Pensions 79,385Employee and Dependent Insurance 156,500Employer Medicare 17,775Communication 6,944Debt Collection Services 67,393Licenses 2,220Maintenance and Repair Services - Buildings 2,081Maintenance and Repair Services - Office Equipment 1,362Maintenance and Repair Services - Vehicles 76,347Postal Charges 2,236Printing, Stationery, and Forms 70Rentals 951Custodial Supplies 1,908Diesel Fuel 39,192Drugs and Medical Supplies 86,015Gasoline 1,352Office Supplies 3,437Uniforms 3,438Utilities 8,159Other Supplies and Materials 17,766Building and Contents Insurance 673Vehicle and Equipment Insurance 36,364Communication Equipment 384Furniture and Fixtures 338

Total Ambulance/Emergency Medical Services 1,920,390

(Continued)

159

Exhibit J-7




Dental Health ProgramMedical Personnel $ 124,782Paraprofessionals 22,884Clerical Personnel 22,395Longevity Pay 1,300Social Security 10,244Pensions 9,998Employee and Dependent Insurance 10,369Employer Medicare 2,476Other Fringe Benefits 2,622Communication 136Travel 3,948Drugs and Medical Supplies 6,194Workers' Compensation Insurance 2,500

Total Dental Health Program $ 219,848

Alcohol and Drug ProgramsTravel $ 1,726Drugs and Medical Supplies 571

Total Alcohol and Drug Programs 2,297

Crippled Children ServicesContracts with Government Agencies $ 2,216

Total Crippled Children Services 2,216

Other Local Health ServicesContracts with Other Public Agencies $ 1,534

Total Other Local Health Services 1,534

Appropriation to StateContracts with Government Agencies $ 24,971

Total Appropriation to State 24,971

Aid to Dependent ChildrenOther Supplies and Materials $ 750

Total Aid to Dependent Children 750

Other Local Welfare ServicesContributions $ 7,500

Total Other Local Welfare Services 7,500

Sanitation Education/InformationForemen $ 33,131Social Security 2,049Pensions 2,427Employee and Dependent Insurance 6,408Employer Medicare 479Maintenance and Repair Services - Vehicles 214

(Continued)

160

Exhibit J-7




Sanitation Education/Information (Cont.)Other Supplies and Materials $ 2,016Workers' Compensation Insurance 2,030Other Charges 7,197Motor Vehicles 26,598

Total Sanitation Education/Information $ 82,549

Social, Cultural, and Recreational ServicesSenior Citizens Assistance

Matching Share $ 11,924Total Senior Citizens Assistance 11,924

LibrariesAssistant(s) $ 50,388Supervisor/Director 34,112Librarians 19,609Part-time Personnel 6,725Social Security 6,951Pensions 7,007Employee and Dependent Insurance 19,223Employer Medicare 1,626Communication 4,040Janitorial Services 4,800Maintenance and Repair Services - Buildings 701Maintenance and Repair Services - Office Equipment 24Matching Share 9,214Travel 510Library Books/Media 19,333Office Supplies 1,589Utilities 8,573Other Supplies and Materials 561Other Charges 1,149Data Processing Equipment 2,721

Total Libraries 198,856

Agriculture and Natural ResourcesAgricultural Extension Service

Part-time Personnel $ 7,495Board and Committee Members Fees 1,853Social Security 339Employer Medicare 79Communication 6,134Contracts with Government Agencies 86,354Contributions 2,000Dues and Memberships 440Maintenance and Repair Services - Buildings 3,243Rentals 14,212Travel 4,931

(Continued)

161

Exhibit J-7



General Fund (Cont.)Agriculture and Natural Resources (Cont.)

Agricultural Extension Service (Cont.)Custodial Supplies $ 350Utilities 4,603Office Equipment 2,429

Total Agricultural Extension Service $ 134,462

Soil ConservationSecretary(ies) $ 28,073Educational Assistants 31,572Dues and Memberships 520Rentals 1,352Travel 2,921Office Supplies 64

Total Soil Conservation 64,502

Other OperationsIndustrial Development

Contracts with Other Public Agencies $ 38,835Engineering Services 20Utilities 758

Total Industrial Development 39,613

AirportSupervisor/Director $ 38,193Part-time Personnel 30,957Advertising 501Communication 7,680Maintenance and Repair Services - Buildings 12,681Matching Share 50,850Travel 1,255Other Contracted Services 248Custodial Supplies 200Diesel Fuel 762Gasoline 58,170Office Supplies 2,867Small Tools 106Utilities 18,218Liability Insurance 6,574Airport Improvement 1,383

Total Airport 230,645

Veterans' ServicesSupervisor/Director $ 9,888Communication 1,492Travel 183Office Supplies 2,492Other Supplies and Materials 750

Total Veterans' Services 14,805

(Continued)

162

Exhibit J-7



General Fund (Cont.)Other Operations (Cont.)

Other ChargesBoiler Insurance $ 50Liability Insurance 73,319Premiums on Corporate Surety Bonds 15,818Trustee's Commission 210,834Tax Relief Program 38,883

Total Other Charges $ 338,904

Contributions to Other AgenciesContracts with Other Public Agencies $ 6,800Contributions 44,262

Total Contributions to Other Agencies 51,062

Employee BenefitsLongevity Pay $ 77,200Social Security 354,144Pensions 379,701Employee and Dependent Insurance 323,409Unemployment Compensation 8,354Employer Medicare 83,550Termination Benefits 87On-behalf Payments to OPEB 2,550Medical and Dental Services 7,397Workers' Compensation Insurance 444,955

Total Employee Benefits 1,681,347

MiscellaneousRefunds $ 7,216

Total Miscellaneous 7,216

Total General Fund $ 14,820,816

Solid Waste/Sanitation FundPublic Health and Welfare

Convenience CentersContracts with Public Carriers $ 331,305

Total Convenience Centers $ 331,305

Landfill Operation and MaintenanceSupervisor/Director $ 56,331Accountants/Bookkeepers 34,324Equipment Operators - Heavy 143,575Temporary Personnel 14,360Longevity Pay 4,800Overtime Pay 16,609Board and Committee Members Fees 346In-service Training 929Social Security 16,540

(Continued)

163

Exhibit J-7



Solid Waste/Sanitation Fund (Cont.)Public Health and Welfare (Cont.)

Landfill Operation and Maintenance (Cont.)Pensions $ 18,815Employee and Dependent Insurance 38,446Employer Medicare 3,868Communication 7,358Contracts with Government Agencies 4,974Data Processing Services 6,237Evaluation and Testing 5,740Legal Notices, Recording, and Court Costs 458Licenses 5,372Maintenance and Repair Services - Buildings 2,735Maintenance and Repair Services - Equipment 5,837Travel 8Diesel Fuel 5,317Equipment and Machinery Parts 40,710Gasoline 6,869Lubricants 864Tires and Tubes 6,294Utilities 9,122Other Supplies and Materials 4,069Liability Insurance 42,921Trustee's Commission 7,836Workers' Compensation Insurance 30,405Other Charges 5,878Site Development 7,067Solid Waste Equipment 37,311

Total Landfill Operation and Maintenance $ 592,325

Total Solid Waste/Sanitation Fund $ 923,630

Drug Control FundPublic Safety

Drug EnforcementCommunication $ 6,136Confidential Drug Enforcement Payments 2,000Veterinary Services 840Instructional Supplies and Materials 4,747Trustee's Commission 637Motor Vehicles 27,094Other Equipment 12,240

Total Drug Enforcement $ 53,694

Total Drug Control Fund 53,694

Adequate Facilities/ Development Tax FundOther Operations

Other ChargesRefunds $ 12,239Trustee's Commission 5,520

Total Other Charges $ 17,759

Total Adequate Facilities/ Development Tax Fund 17,759

(Continued)

164

Exhibit J-7



Constitutional Officers - Fees FundAdministration of Justice

Chancery CourtConstitutional Officers' Operating Expenses $ 1,002

Total Chancery Court $ 1,002

Total Constitutional Officers - Fees Fund $ 1,002

Highway/Public Works FundHighways

AdministrationCounty Official/Administrative Officer $ 82,800Accountants/Bookkeepers 68,195Educational Incentive - Official/Admin Officer 1,399Educational Incentive - Other County Employees 1,399Board and Committee Members Fees 6,840In-service Training 2,230Data Processing Services 17,955Dues and Memberships 3,699Rentals 2,905Office Supplies 2,830Other Charges 10,398

Total Administration $ 200,650

Highway and Bridge MaintenanceSupervisor/Director $ 153,477Foremen 114,410Equipment Operators 200,946Equipment Operators - Light 61,568Truck Drivers 287,116Laborers 225,037Clerical Personnel 7,584Longevity Pay 26,200Overtime Pay 23,749Freight Expenses 115,246Other Contracted Services 104,400Asphalt - Liquid 100,638Crushed Stone 47,891Road Signs 17,892Small Tools 496Other Supplies and Materials 6,465

Total Highway and Bridge Maintenance 1,493,115

Operation and Maintenance of EquipmentMechanic(s) $ 145,875Maintenance and Repair Services - Equipment 8,356Diesel Fuel 68,800Equipment and Machinery Parts 90,774Garage Supplies 5,325Gasoline 32,708

(Continued)

165

Exhibit J-7



Highway/Public Works Fund (Cont.)Highways (Cont.)

Operation and Maintenance of Equipment (Cont.)Lubricants $ 7,547Small Tools 1,451Tires and Tubes 30,856Other Supplies and Materials 5,035Other Capital Outlay 4,710

Total Operation and Maintenance of Equipment $ 401,437

Other ChargesCommunication $ 6,360Utilities 16,811Liability Insurance 141,348Trustee's Commission 50,256Liability Claims 2,660

Total Other Charges 217,435

Employee BenefitsSocial Security $ 105,440Pensions 97,278Employee and Dependent Insurance 277,642Evaluation and Testing 1,234Workers' Compensation Insurance 166,030

Total Employee Benefits 647,624

Capital OutlayBridge Construction $ 148,623Highway Equipment 805,337State Aid Projects 530,233Other Construction 452,922

Total Capital Outlay 1,937,115

Other Debt ServiceHighways and Streets

Other Debt Issuance Charges $ 442Total Highways and Streets 442

Total Highway/Public Works Fund $ 4,897,818

General Debt Service FundPrincipal on Debt

General GovernmentPrincipal on Bonds $ 750,000Principal on Notes 185,602Principal on Capital Leases 53,129

Total General Government $ 988,731

EducationPrincipal on Bonds $ 565,000Principal on Notes 190,000

Total Education 755,000

(Continued)

166

Exhibit J-7



General Debt Service Fund (Cont.)Interest on Debt

General GovernmentInterest on Bonds $ 273,891Interest on Notes 29,640Interest on Capital Leases 3,198

Total General Government $ 306,729

EducationInterest on Bonds $ 617,940Interest on Notes 11,050


Other Debt ServiceGeneral Government

Trustee's Commission $ 18,910Other Debt Service 1,359

Total General Government 20,269

EducationOther Debt Service $ 2,065


Total General Debt Service Fund $ 2,701,784

General Capital Projects FundCapital Projects

General Administration ProjectsArchitects $ 89,500

Total General Administration Projects $ 89,500

Total General Capital Projects Fund 89,500

Community Development/Industrial Park FundCapital Projects

Other General Government ProjectsSite Development $ 1,079,821

Total Other General Government Projects $ 1,079,821

Total Community Development/Industrial Park Fund 1,079,821

HUD Grant Projects FundCapital Projects

Other General Government ProjectsSite Development $ 32,440

Total Other General Government Projects $ 32,440

Total HUD Grant Projects Fund 32,440

(Continued)

167

Exhibit J-7



Education Capital Projects FundCapital Projects

Education Capital ProjectsContributions $ 154,889

Total Education Capital Projects $ 154,889

Total Education Capital Projects Fund $ 154,889

Total Governmental Funds - Primary Government $ 24,773,153

168

Exhibit J-8


All Governmental Fund TypesDiscretely Presented Fayette County School DepartmentFor the Year Ended June 30, 2016

General Purpose School FundInstruction

Regular Instruction ProgramTeachers $ 7,417,575Career Ladder Program 28,000Homebound Teachers 3,716Educational Assistants 377,410Other Salaries and Wages 99,225Certified Substitute Teachers 30Non-certified Substitute Teachers 129,900Social Security 453,245Pensions 691,390Medical Insurance 773,578Employer Medicare 106,161Other Contracted Services 303,469Instructional Supplies and Materials 78,604Textbooks 440,974Other Supplies and Materials 25,288Other Charges 240Regular Instruction Equipment 56,885

Total Regular Instruction Program $ 10,985,690

Special Education ProgramTeachers $ 1,026,694Career Ladder Program 5,425Homebound Teachers 24,833Educational Assistants 114,525Speech Pathologist 124,109Other Salaries and Wages 63Non-certified Substitute Teachers 15,300Social Security 77,457Pensions 118,635Medical Insurance 128,680Employer Medicare 18,118Other Fringe Benefits 54,209Contracts with Private Agencies 106,137Maintenance and Repair Services - Equipment 779Instructional Supplies and Materials 86,113Other Supplies and Materials 6,082Special Education Equipment 42,666

Total Special Education Program 1,949,825

Vocational Education ProgramTeachers $ 491,294Career Ladder Program 1,000Non-certified Substitute Teachers 7,320Social Security 29,028Pensions 45,724Medical Insurance 41,942

(Continued)

169

Exhibit J-8



General Purpose School Fund (Cont.)Instruction (Cont.)

Vocational Education Program (Cont.)Employer Medicare $ 6,789Travel 4,570Other Contracted Services 3,300Instructional Supplies and Materials 8,305Vocational Instruction Equipment 5,639

Total Vocational Education Program $ 644,911

Support ServicesAttendance

Supervisor/Director $ 55,760Career Ladder Program 1,000Clerical Personnel 14,292Social Security 4,258Pensions 6,242Medical Insurance 7,383Employer Medicare 1,114Travel 1,695Other Contracted Services 8,791Other Supplies and Materials 920In Service/Staff Development 969Attendance Equipment 923

Total Attendance 103,347

Health ServicesSupervisor/Director $ 36,000Medical Personnel 196,237Other Salaries and Wages 15,184Social Security 13,969Pensions 18,066Medical Insurance 30,509Employer Medicare 3,267Communication 542Travel 2,584Other Contracted Services 4,435Drugs and Medical Supplies 829Other Supplies and Materials 16,873In Service/Staff Development 905

Total Health Services 339,400

Other Student SupportCareer Ladder Program $ 2,000Guidance Personnel 372,138Clerical Personnel 18,100Social Security 22,190Pensions 35,220Medical Insurance 46,699

(Continued)

170

Exhibit J-8



General Purpose School Fund (Cont.)Support Services (Cont.)

Other Student Support (Cont.)Employer Medicare $ 5,190Contracts with Government Agencies 2,826Contracts with Other School Systems 6,928Evaluation and Testing 10,772Other Contracted Services 21,542Other Supplies and Materials 1,444In Service/Staff Development 1,794

Total Other Student Support $ 546,843

Regular Instruction ProgramSupervisor/Director $ 14,583Career Ladder Program 5,500Librarians 322,784Instructional Computer Personnel 54,619Social Security 23,069Pensions 35,015Medical Insurance 34,695Employer Medicare 5,393Travel 5,847Other Contracted Services 15,182Library Books/Media 29,131Periodicals 4,371Other Supplies and Materials 2,540In Service/Staff Development 75Other Charges 9,040Other Equipment 7,518

Total Regular Instruction Program 569,362

Special Education ProgramSupervisor/Director $ 58,516Career Ladder Program 2,000Psychological Personnel 45,686Assessment Personnel 43,466Other Salaries and Wages 26,600Social Security 9,927Pensions 15,488Medical Insurance 22,156Employer Medicare 2,322Other Fringe Benefits 5,734Communication 3,951Travel 16Other Supplies and Materials 11,594In Service/Staff Development 384

Total Special Education Program 247,840

(Continued)

171

Exhibit J-8




Vocational Education ProgramSupervisor/Director $ 55,901Secretary(ies) 30,600Social Security 4,998Pensions 7,388Medical Insurance 10,703Employer Medicare 1,169Maintenance and Repair Services - Equipment 345Travel 1,592Other Contracted Services 3,000Other Supplies and Materials 1,842


Adult ProgramsSupervisor/Director $ 63,715Other Salaries and Wages 155,922Social Security 13,101Pensions 16,580Medical Insurance 27,871Employer Medicare 3,064Travel 705Other Contracted Services 50,999Other Charges 24,012

Total Adult Programs 355,969

Other ProgramsOn-behalf Payments to OPEB $ 62,822

Total Other Programs 62,822

Board of EducationLongevity Pay $ 29,800Other Salaries and Wages 62,500Board and Committee Members Fees 25,800Social Security 7,257Pensions 2,379Medical Insurance 1,981Unemployment Compensation 41,644Employer Medicare 1,697Audit Services 8,000Dues and Memberships 6,470Legal Services 73,119Travel 3,077Other Contracted Services 46,512Other Supplies and Materials 463Judgments 10,000Liability Insurance 74,489Premiums on Corporate Surety Bonds 14,707

(Continued)

172

Exhibit J-8




Board of Education (Cont.)Trustee's Commission $ 191,416Workers' Compensation Insurance 162,050In Service/Staff Development 5,151Criminal Investigation of Applicants - TBI 4,854Other Charges 3,482

Total Board of Education $ 776,848

Director of SchoolsCounty Official/Administrative Officer $ 105,659Assistant(s) 15,037Secretary(ies) 49,950Clerical Personnel 27,883Other Salaries and Wages 5,625Social Security 12,394Pensions 16,965Medical Insurance 31,784Employer Medicare 2,899Communication 74,469Dues and Memberships 4,006Travel 6,557Office Supplies 5,037In Service/Staff Development 2,065Other Charges 7,095Administration Equipment 2,902

Total Director of Schools 370,327

Office of the PrincipalPrincipals $ 408,638Career Ladder Program 2,000Assistant Principals 257,940Secretary(ies) 136,500Clerical Personnel 142,143Social Security 55,554Pensions 80,948Medical Insurance 65,781Employer Medicare 12,992Communication 24,997Other Contracted Services 2,506Other Charges 825Administration Equipment 1,714

Total Office of the Principal 1,192,538

Fiscal ServicesSupervisor/Director $ 115,297Accountants/Bookkeepers 32,507Other Salaries and Wages 36,600

(Continued)

173

Exhibit J-8




Fiscal Services (Cont.)Social Security $ 10,725Pensions 13,887Medical Insurance 23,057Employer Medicare 2,508Operating Lease Payments 2,394Travel 1,349Other Contracted Services 10,853Data Processing Supplies 1,065Office Supplies 4,281In Service/Staff Development 1,137Other Charges 11,122Administration Equipment 1,909

Total Fiscal Services $ 268,691

Human Services/PersonnelSupervisor/Director $ 51,600Other Salaries and Wages 4,399Social Security 3,404Pensions 4,217Medical Insurance 6,093Employer Medicare 796Travel 880Office Supplies 584In Service/Staff Development 994Other Charges 132

Total Human Services/Personnel 73,099

Operation of PlantCustodial Personnel $ 381,847Other Salaries and Wages 38,600Social Security 25,207Pensions 26,633Medical Insurance 34,304Employer Medicare 5,895Rentals 10,450Travel 680Disposal Fees 16,567Other Contracted Services 37,790Custodial Supplies 50,614Electricity 556,872Natural Gas 64,445Water and Sewer 51,061Other Supplies and Materials 1,897Boiler Insurance 11,628Building and Contents Insurance 211,841Other Charges 1,756Plant Operation Equipment 47,419

Total Operation of Plant 1,575,506

(Continued)

174

Exhibit J-8




Maintenance of PlantSupervisor/Director $ 52,600Mechanic(s) 155,783Other Salaries and Wages 130,775Social Security 20,551Pensions 23,070Medical Insurance 48,889Employer Medicare 4,806Maintenance and Repair Services - Buildings 36,835Maintenance and Repair Services - Equipment 34,153Other Contracted Services 45,518General Construction Materials 66,401Other Supplies and Materials 27,121In Service/Staff Development 200Other Charges 1,638Administration Equipment 12,637Maintenance Equipment 1,694

Total Maintenance of Plant $ 662,671

TransportationSupervisor/Director $ 43,100Mechanic(s) 204,332Bus Drivers 985,090Other Salaries and Wages 23,977Social Security 76,339Pensions 76,882Medical Insurance 55,176Employer Medicare 17,878Other Fringe Benefits 16,858Communication 11,290Maintenance and Repair Services - Vehicles 6,108Rentals 1,919Travel 1,133Other Contracted Services 40,359Diesel Fuel 192,373Equipment and Machinery Parts 1,970Gasoline 57,561Lubricants 9,405Tires and Tubes 34,411Vehicle Parts 106,721Other Supplies and Materials 10,900Vehicle and Equipment Insurance 65,405In Service/Staff Development 711Other Charges 2,816Transportation Equipment 42,313

Total Transportation 2,085,027

(Continued)

175

Exhibit J-8




Central and OtherOther Salaries and Wages $ 183,803Social Security 10,754Pensions 11,479Medical Insurance 1,211Employer Medicare 2,570Other Contracted Services 1,625In Service/Staff Development 398Other Charges 100

Total Central and Other $ 211,940

Operation of Non-Instructional ServicesCommunity Services

Supervisor/Director $ 6,600Other Salaries and Wages 21,933Social Security 1,071Pensions 1,048Employer Medicare 414Other Supplies and Materials 294

Total Community Services 31,360

Early Childhood EducationSupervisor/Director $ 55,431Teachers 324,796Career Ladder Program 3,000Educational Assistants 150,662Other Salaries and Wages 5,227Non-certified Substitute Teachers 10,860Social Security 32,154Pensions 46,123Medical Insurance 38,403Employer Medicare 7,521Other Fringe Benefits 2,745Travel 344Instructional Supplies and Materials 25,918Other Supplies and Materials 15,446In Service/Staff Development 4,693Other Charges 813Regular Instruction Equipment 95,285Other Equipment 25,732

Total Early Childhood Education 845,153

Capital OutlayRegular Capital Outlay

Building Improvements $ 110,900Other Capital Outlay 160,209

Total Regular Capital Outlay 271,109

(Continued)

176

Exhibit J-8



General Purpose School Fund (Cont.)Interest on Debt

EducationInterest on Notes $ 111

Total Education $ 111

Other Debt ServiceEducation

Legal Services $ 7,100Debt Service Contribution to Primary Government 462,350


Total General Purpose School Fund $ 24,757,377

School Federal Projects FundInstruction

Regular Instruction ProgramTeachers $ 347,357Other Salaries and Wages 10,326Social Security 20,189Pensions 32,032Medical Insurance 32,350Employer Medicare 4,725Maintenance and Repair Services - Equipment 6,586Other Contracted Services 17,895Instructional Supplies and Materials 116,011Other Supplies and Materials 581Regular Instruction Equipment 327,971

Total Regular Instruction Program $ 916,023

Special Education ProgramEducational Assistants $ 380,234Social Security 23,298Pensions 28,016Medical Insurance 13,125Employer Medicare 5,449Other Contracted Services 73,069Instructional Supplies and Materials 21,001Other Supplies and Materials 22,940Special Education Equipment 6,071


Vocational Education ProgramInstructional Supplies and Materials $ 1,000Vocational Instruction Equipment 52,227

Total Vocational Education Program 53,227

(Continued)

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Exhibit J-8



School Federal Projects Fund (Cont.)Support Services

Health ServicesMedical Personnel $ 60,467Social Security 3,588Pensions 4,456Medical Insurance 4,210Employer Medicare 839Other Contracted Services 47,865Other Supplies and Materials 1,631

Total Health Services $ 123,056

Other Student SupportOther Salaries and Wages $ 675Social Security 42Pensions 61Employer Medicare 10Travel 10,902Other Contracted Services 13,104Other Supplies and Materials 18,811In Service/Staff Development 35,002

Total Other Student Support 78,607

Regular Instruction ProgramSupervisor/Director $ 64,951Secretary(ies) 40,943Other Salaries and Wages 110,200Non-certified Substitute Teachers 2,550Social Security 13,415Pensions 18,328Medical Insurance 16,779Employer Medicare 3,137Travel 1,956Other Supplies and Materials 5,078In Service/Staff Development 52,979Other Charges 627

Total Regular Instruction Program 330,943

Special Education ProgramClerical Personnel $ 31,500Social Security 1,919Pensions 2,414Medical Insurance 1,433Employer Medicare 449Travel 11,677Other Supplies and Materials 18,858In Service/Staff Development 21,453Other Charges 3,000


(Continued)

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Exhibit J-8



School Federal Projects Fund (Cont.)Support Services (Cont.)

Vocational Education ProgramIn Service/Staff Development $ 1,197


TransportationBus Drivers $ 1,530Other Salaries and Wages 127,464Social Security 7,967Pensions 6,957Medical Insurance 868Employer Medicare 1,863Contracts with Parents 17,734Maintenance and Repair Services - Vehicles 1,488Diesel Fuel 2,250Tires and Tubes 2,932Vehicle Parts 2,993

Total Transportation 174,046

Total School Federal Projects Fund $ 2,343,005

Central Cafeteria FundOperation of Non-Instructional Services

Food ServiceSupervisor/Director $ 43,484Accountants/Bookkeepers 31,484Cafeteria Personnel 663,401Maintenance Personnel 39,144Longevity Pay 4,750Social Security 48,023Pensions 50,023Medical Insurance 25,843Unemployment Compensation 1,626Employer Medicare 11,009Communication 5,890Maintenance and Repair Services - Equipment 423Travel 574Other Contracted Services 29,145Food Supplies 964,776USDA - Commodities 79,702Other Supplies and Materials 80,591Workers' Compensation Insurance 26,767In Service/Staff Development 1,620Other Charges 1,627Food Service Equipment 85,358

Total Food Service $ 2,195,260

Total Central Cafeteria Fund 2,195,260

(Continued)

179

Exhibit J-8



Education Capital Projects FundCapital Projects

Education Capital ProjectsArchitects $ 889Consultants 1,600Other Contracted Services 2,914Building Construction 146,431

Total Education Capital Projects $ 151,834

Total Education Capital Projects Fund $ 151,834

Total Governmental Funds - Fayette County School Department $ 29,447,476

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Exhibit J-9Fayette County, TennesseeSchedule of Detailed Receipts, Disbursements, and Changes in Cash Balance - City Agency FundFor the Year Ended June 30, 2016

Cities -Sales Tax

Fund

Cash Receipts Local Option Sales Tax $ 2,884,655Total Cash Receipts $ 2,884,655

Cash Disbursements Remittance of Revenues Collected $ 2,855,794 Trustee's Commission 28,861Total Cash Disbursements $ 2,884,655 Excess of Cash Receipts Over (Under) Cash Disbursements $ 0Cash Balance, July 1, 2015 0 Cash Balance, June 30, 2016 $ 0

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SINGLE AUDIT SECTION

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Independent Auditor’s Report on Internal Control Over Financial Reporting and

on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards

Fayette County Mayor and Board of County Commissioners Fayette County, Tennessee To the County Mayor and Board of County Commissioners: We have audited, in accordance with the 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, the financial statements of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Fayette County, Tennessee, as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise Fayette County's basic financial statements, and have issued our report thereon dated November 29, 2016. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered Fayette County's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Fayette County's internal control. Accordingly, we do not express an opinion on the effectiveness of Fayette County's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

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Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. We did identify certain deficiencies in internal control, described in the accompanying Schedule of Findings and Questioned Costs that we consider to be significant deficiencies: 2016-001 and 2016-002. Compliance and Other Matters As part of obtaining reasonable assurance about whether Fayette County’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, 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 or other matters that are required to be reported under Government Auditing Standards. Fayette County’s Responses to Findings Fayette County’s responses to the findings identified in our audit are described in the accompanying Schedule of Findings and Questioned Costs. Fayette County's responses were not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on them. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the result of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Fayette County’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Very truly yours, Justin P. Wilson Comptroller of the Treasury Nashville, Tennessee November 29, 2016 JPW/kp

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Independent Auditor’s Report on Compliance for Each Major Federal Program;

Report on Internal Control Over Compliance; and Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance

Fayette County Mayor and Board of County Commissioners Fayette County, Tennessee To the County Mayor and Board of County Commissioners: Report on Compliance for Each Major Federal Program We have audited Fayette County’s compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of Fayette County’s major federal programs for the year ended June 30, 2016. Fayette County’s major federal programs are identified in the summary of auditor's results section of the accompanying Schedule of Findings and Questioned Costs.

Management's Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Auditor's Responsibility Our responsibility is to express an opinion on compliance for each of Fayette County’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether

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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 Fayette 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 on compliance for each major federal program. However, our audit does not provide a legal determination of Fayette County’s compliance. Opinion on Each Major Federal Program In our opinion, Fayette County complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2016. Report on Internal Control Over Compliance Management of Fayette County is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered Fayette County’s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of Fayette County’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

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The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Fayette County, Tennessee, as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise Fayette County’s basic financial statements. We issued our report thereon dated November 29, 2016, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Schedule of Expenditures of Federal Awards is fairly stated in all material respects in relation to the basic financial statements as a whole. Very truly yours, Justin P. Wilson Comptroller of the Treasury Nashville, Tennessee November 29, 2016 JPW/kp

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Fayette County, TennesseeSchedule of Expenditures of Federal Awards and State Grants (1) (2)For the Year-Ended June 30, 2016

Federal Pass-throughFederal/Pass-through Agency/State CFDA Entity IdentifyingGrantor Program Title Number Number Expenditures

U.S. Department of Agriculture: Passed-through State Department of Education: Child Nutrition Cluster: School Breakfast Program 10.553 N/A $ 617,220 National School Lunch Program 10.555 N/A 1,479,080 (4) Fresh Fruit and Vegetable Program 10.582 N/A 69,882 Passed-through State Department of Agriculture: National School Lunch Program (Commodities - Noncash Assistance) 10.555 N/A 79,702 (4)Total U.S. Department of Agriculture $ 2,245,884

U.S. Department of Housing and Urban Development: Passed-through State Department of Economic and Community Development: Community Development Block Grants/State's Program 14.228 (3) $ 1,111,132 Total U.S. Department of Housing and Urban Development $ 1,111,132

U.S. Department of Labor: Passed-through City of Memphis, Tennessee: WIA Cluster: WIA/WIOA Adult Program 17.258 31369 $ 226,302 WIA/WIOA Dislocated Worker Formula Grants 17.278 31369 97,415 Total U.S. Department of Labor $ 323,717

U.S. Department of Transportation: Passed-through State Department of Transportation: Alcohol Open Container Requirements 20.607 (3) $ 32,865 Total U.S. Department of Transportation $ 32,865

U.S. Department of Education: Passed-through State Department of Education: Title I Grants to Local Educational Agencies 84.010 N/A $ 1,186,354 Special Education Cluster: Special Education - Grants to States 84.027 N/A 921,159 Special Education - Preschool Grants 84.173 N/A 28,712 Career and Technical Education - Basic Grants to States 84.048 N/A 71,464 English Language Acquisition State Grants 84.365 N/A 5,945 Supporting Effective Instruction State Grant 84.367 N/A 150,972 Total U.S. Department of Education $ 2,364,606

Delta Regional Authority: Passed-through State Department of Labor: Delta Regional Development 90.200 (3) $ 37,500 Total Delta Regional Authority $ 37,500

U.S. Department of Homeland Security: Passed-through State Department of Military: Emergency Management Performance Grants 97.042 (3) $ 52,000 Homeland Security Grant Program 97.067 (3) 21,426 Total U.S. Department of Homeland Security $ 73,426

Total Expenditures of Federal Awards $ 6,189,130

(Continued)

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Fayette County, TennesseeSchedule of Expenditures of Federal Awards and State Grants (1) (2) (Cont.)

FederalFederal/Pass-through Agency/State CFDA ContractGrantor Program Title Number Number Expenditures

State Grants: Airport Maintenance - State Department of Transportation N/A (3) $ 4,166 Airport Layout Plan - State Department of Transportation N/A AERO-15-211-00 89,500 Custodial Parents Access and Visitation - Administrative Office of the Courts N/A (3) 4,604 Local Health Services - State Department of Health N/A (3) 200,673 Litter Program - State Department of Transportation N/A (3) 38,932 Certified Drug Court Program - State Department of Mental Health and Substance Abuse Services N/A (3) 68,338 Early Childhood Education - State Department of Education N/A (3) 838,779 Energy Efficient School Initiative - State Department of Education N/A (3) 2,600 Coordinated School Health - State Department of Education N/A (3) 84,901 Safe Schools - State Department of Education N/A (3) 19,169 ConnecTenn - State Department of Education N/A (3) 8,775 ACT/Explore - State Department of Education N/A (3) 5,638 Art Students - State Department of Education N/A (3) 1,745

Total State Grants $ 1,367,820

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) Fayette County elected not to use the 10% de minimus cost rate permitted in the Uniform Guidance.(3) Information not available.(4) Total CFDA No. 10.555 is $1,558,782.

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Fayette County, TennesseeSummary Schedule of Prior-year FindingsFor the Year Ended June 30, 2016

Fiscal Page Finding CFDAYear Number Number Number

OFFICE OF COUNTY MAYOR

2015 196 2015-001 N/A

2015 197 2015-002 N/A

2015 198 2015-003 N/A

2015 198 2015-004 N/A

OFFICE OF DIRECTOR OF SCHOOLS

2015 199 2015-005 N/A

2015 200 2015-006 N/A

2015 201 2015-007 N/A

2015 202 2015-008 N/A

2015 202 2015-009 N/A

OFFICE OF TRUSTEE

2015 202 2015-010 N/A

2015 203 2015-011 N/A

Corrected

Corrected

Corrected

The School Federal Projects Fund had a Cash Overdraft and a Deficit in Unassigned Fund Balance at June 30, 2015

Title of Finding Current Status

Government Auditing Standards require auditors to report the status of uncorrected findings from prior audits. In addition,OMB's Uniform Guidance requires auditees to report the status of all prior-year findings whether corrected or uncorrected.Presented below are financial statement findings along with their current status from the Annual Financial Report forFayette County, Tennessee, for the year ended June 30, 2016

Prior-year Financial Statement Findings

Corrected

Corrected

Corrected

Corrected

Corrected

Corrected

Corrected

Corrected

The General and General Debt Service Funds Required Material Audit Adjustments for Proper Financial Statement Presentation

The Office had Deficiencies in Purchasing Procedures

The Office had Accounting Deficiencies

General Ledger Cash Accounts were not Properly Reconciled with County Trustee Reports

Expenditures Exceeded Appropriations

The School Department had Deficiencies in Budget Operations

Some Invoices Were Not Paid Timely

The Trustee Paid Warrants Issued by the School Federal Projects Fund that Exceeded Available Funds

The Office did not Review its Software Audit Logs

General Ledger Payroll Deduction Accounts were not Reconciled with Payroll Reports and Payments

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Fayette County, TennesseeSummary Schedule of Prior-year Findings (Cont.)

Fiscal Page Finding CFDAYear Number Number Number

OFFICE OF REGISTER OF DEEDS

2015 203 2015-012 N/A

OFFICE OF SHERIFF

2015 204 2015-013 N/A

FAYETTE COUNTY

2015 204 2015-014 N/A

There were no prior-year federal award findings to report.

Corrected

Corrected

Corrected

Title of Finding Current Status

Prior-year Federal Awards Findings

Duties were not Segregated Adequately

Fayette County has a Material Recurring Audit Finding

Bank Statements were not Reconciled with the General Ledger, and Lists of Outstanding Checks were not Prepared

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Financial Statements:

1. Our report on the financial statements of Fayette County is unmodified.

2. Internal Control Over Financial Reporting:

* Material weakness identified? NO

* Significant deficiency identified? YES

3. Noncompliance material to the financial statements noted? NO

Federal Awards:

4. Internal Control Over Major Federal Programs:

* Material weakness identified? NO

* Significant deficiency identified? NONE REPORTED

5. Type of report auditor issued on compliance for major programs: UNMODIFIED

6. Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? NO

7. Identification of Major Federal Programs:

* CFDA Numbers: 10.553 and 10.555 Nutrition Cluster: School Breakfast Program and National School Lunch Program

* CFDA Number 14.228 Community Development Block Grants/State's Program

* CFDA Numbers: 84.027 and 84.173 Special Education Cluster: SpecialEducation - Grants to States and SpecialEducation - Preschool Grants

8. Dollar threshold used to distinguish between Type A and Type B Programs: $750,000

9. Auditee qualified as low-risk auditee? NO

FAYETTE COUNTY, TENNESSEE

SCHEDULE OF FINDINGS AND QUESTIONED COSTS


PART I, SUMMARY OF AUDITOR'S RESULTS

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PART II, FINDINGS RELATING TO THE FINANCIAL STATEMENTS

Findings and recommendations, as a result of our audit, are presented below. We reviewed these findings and recommendations with management to provide an opportunity for their response. Written responses are paraphrased and presented following each finding and recommendation. The director of schools and county clerk provided corrective action plans for these findings, which are paraphrased and presented separately in the Management’s Corrective Action Plan in the Single Audit Section of this report. Findings relating specifically to the audit of federal awards, if any, are separately presented under Part III, Findings and Questioned Costs for Federal Awards. OFFICE OF DIRECTOR OF SCHOOLS FINDING 2016-001 THE OFFICE DID NOT IMPLEMENT ADEQUATE

CONTROLS TO PROTECT ITS INFORMATION RESOURCES (Internal Control – Significant Deficiency Under Government Auditing Standards)

The office did not implement adequate controls to protect its information resources. This finding does not identify specific vulnerabilities that could allow someone to exploit the office’s information system or misuse county funds. Disclosing those vulnerabilities could present a potential security risk by providing the readers with information that might be confidential pursuant to Section 10-7-504(i), Tennessee Code Annotated. Sound business practices dictate that proper controls be implemented. This deficiency was corrected after it was brought to management’s attention in April 2016. RECOMMENDATION The office should continue to ensure that adequate controls over its information systems and the resources associated with those systems are implemented. MANAGEMENT’S RESPONSE – DIRECTOR OF SCHOOLS We concur. Appropriate action has been taken to correct the finding.

________________________________ OFFICE OF COUNTY CLERK FINDING 2016-002 THE OFFICE DID NOT REVIEW ITS SOFTWARE AUDIT

LOGS (Internal Control – Significant Deficiency Under Government Auditing Standards)

The software application used by the office generated a log that displayed changes made by users. This log provided the only audit trail of these changes and should be reviewed for inappropriate activity. Although the official was aware of the importance of this log, it was

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not reviewed. When the importance of this log was brought to management’s attention again in April 2016, the review process was resumed. Procedures for reviewing this log are currently in place. RECOMMENDATION Management should continue to review the audit log on a routine basis. Any unusual transactions should be investigated. MANAGEMENT’S RESPONSE – COUNTY CLERK In January 2016, I was given a finding on my software audit regarding reviewing a software audit log. I disagree with this finding due to a misunderstanding either on my part or on the part of the auditor. We discussed the audit log, and I was told to continue monitoring it as I had in the past. The audit log was mentioned the year before and I was told to 'just review it daily" to keep up with who was opening and closing the program every day. I explained why sometimes someone other than the bookkeeper would open the invoices, (employees at satellite offices checkup for the day earlier than the employees at the main office, and must open another invoice to continue working), but rarely would anyone other than the bookkeeper close or re-open an invoice. I either was not told to start printing the logs and signing them, or I misunderstood, and continued to just check the log to be sure as to who opened and closed the invoices, and there was never any unusual activity, so I was unaware that I was not doing everything I was supposed to be doing. As soon as it was brought to my attention, corrective action was taken. But in all fairness, I just could not believe or accept that I did not follow instructions. In the past there has never been a time that there has been a finding in this office. Our auditor is very good, very thorough, and as a rule, we communicate well. However, I disagree with this finding, and will continue to do so. AUDITOR COMMENT The auditor discussed the finding with the official in April 2016. At that time, the auditor had to provide instructions for obtaining the audit logs. The official at no time during the conversation indicated that the log was being reviewed.

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PART III, FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS There were no findings and questioned costs related to federal awards for the year ended June 30, 2016.

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Fayette County, Tennessee Management’s Corrective Action Plan


We reviewed the financial statement and federal award findings and recommendations with management to provide an opportunity for their response as required by the auditee requirements within Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Management’s corrective action plans for all financial statement findings and federal awards are presented below:

Corrective Action - Financial Statement Findings

OFFICE OF DIRECTOR OF SCHOOLS

FINDING 2016-001 THE OFFICE DID NOT IMPLEMENT ADEQUATE CONTROLS TO PROTECT ITS INFORMATION RESOURCES

Response and Corrective Action Plan Prepared by: Dr. Marlon King, Director of Schools

Person Responsible for Implementing the Corrective Action: Richard England, Director of Technology, and Sherry Batchelor, Director of Fiscal Services

Anticipated Completion Date of Corrective Action: April 2016 Repeat Finding: No Reason Why Corrective Action was Not Taken – PY N/A

Planned Corrective Action:

Richard England, Director of Technology, and Sherry Batchelor, Director of Fiscal Services, working with our information system provider, reviewed the areas in which we were out of compliance. A plan of correction was initiated and the reported weakness was corrected in April 2016.

________________________________________

OFFICE OF COUNTY CLERK

FINDING 2016-002 THE OFFICE DID NOT REVIEW ITS SOFTWARE AUDIT LOGS

Response and Corrective Action Plan Prepared by: Sue Culver, County Clerk Person Responsible for Implementing the Corrective Action: Sue Culver, County Clerk Anticipated Completion Date of Corrective Action: April 2016 Repeat Finding: No Reason Why Corrective Action was Not Taken – PY N/A

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Planned Corrective Action:

For every program in our software that has an audit log- that audit is printed out daily and reviewed by me personally. I initial each page of the log and date it. The log is then filed in a separate binder for each program. If a program is closed by anyone other than the bookkeeper, or if an invoice is re-opened after it has been closed, a full explanation as to why is entered on that log. This corrective action was put in place in April 2016, immediately after I was told of the finding.

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BEST PRACTICE

Accounting literature describes a best practice as a recommended policy, procedure, or technique that aids management in improving financial performance. Historically, a best practice has consistently shown superior results over conventional methods.

The Division of Local Government Audit strongly believes that the item noted below is a best practice that should be adopted by the governing body as a means of significantly improving accountability and the quality of services provided to the citizens of Fayette County.

FAYETTE COUNTY SHOULD ADOPT A CENTRAL SYSTEM OF ACCOUNTING, BUDGETING, AND PURCHASING

Fayette County does not have a central system of accounting, budgeting, and purchasing. Sound business practices dictate that establishing a central system would significantly improve internal controls over the accounting, budgeting, and purchasing processes. The absence of a central system of accounting, budgeting, and purchasing has been a management decision by the County Commission resulting in decentralization and some duplication of effort. We recommend the adoption of the County Financial Management System of 1981 or a private act, which would provide for a central system of accounting, budgeting, and purchasing covering all county departments.

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