2011 Humphreys County Comptroller Report

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    ANNUAL FINANCIAL REPORT

    HUMPHREYS COUNTY, TENNESSEE

    FOR THE YEAR ENDED JUNE 30, 2011

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    ANNUAL FINANCIAL REPORT

    HUMPHREYS COUNTY, TENNESSEE

    FOR THE YEAR ENDED JUNE 30, 2011

    COMPTROLLER OF THE TREASURY

    JUSTIN P. WILSON

    DIVISION OF COUNTY AUDIT

    JAMES R. ARNETTE

    Director

    JAN PAGE, CPA, CFE

    Audit Manager KATINA VALENTINE

    B. KEITH RICE, CGFM

    HORACE B. WISEMAN, CGFM WENDY HEATH, CFE

    Auditor 4 State Auditors

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

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    HUMPHREYS COUNTY, TENNESSEE

    TABLE OF CONTENTS

    Exhibit Page(s)

    Audit Highlights 6-7

    INTRODUCTORY SECTION 8

    Humphreys County Officials 9

    FINANCIAL SECTION 10

    Independent Auditors Report 11-13

    BASIC FINANCIAL STATEMENTS: 14

    Government-wide Financial Statements:

    Statement of Net Assets A 15

    Statement of Activities B 16-17

    Fund Financial Statements:

    Governmental Funds:

    Balance Sheet C-1 18-19

    Reconciliation of the Balance Sheet of Governmental Funds to

    the Statement of Net Assets C-2 20

    Statement of Revenues, Expenditures, and Changes inFund Balances C-3 21-22

    Reconciliation of the Statement of Revenues, Expenditures,

    and Changes in Fund Balances of Governmental Funds to

    the Statement of Activities C-4 23

    Proprietary Fund:

    Statement of Net Assets D-1 24

    Statement of Revenues, Expenses, and Changes in Net Assets D-2 25

    Statement of Cash Flows D-3 26

    Fiduciary Funds:

    Statement of Fiduciary Assets and Liabilities E 27

    Notes to the Financial Statements 28-61

    REQUIRED SUPPLEMENTARY INFORMATION: 62

    Schedules of Revenues, Expenditures, and Changes in Fund

    Balances Actual (Budgetary Basis) and Budget:

    General Fund F-1 63-64

    Solid Waste/Sanitation Fund F-2 65

    Highway/Public Works Fund F-3 66

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    Exhibit Page(s)

    Schedule of Funding Progress Pension Plan Primary

    Government and Discretely Presented Humphreys County

    School Department F-4 67

    Schedule of Funding Progress Other Postemployment

    Benefits Plans Primary Government and Discretely

    Presented Humphreys County School Department F-5 68

    Notes to the Required Supplementary Information 69

    COMBINING AND INDIVIDUAL FUND FINANCIAL

    STATEMENTS AND SCHEDULES: 70

    Nonmajor Governmental Funds: 71

    Combining Balance Sheet G-1 72

    Combining Statement of Revenues, Expenditures, and

    Changes in Fund Balances G-2 73

    Schedules of Revenues, Expenditures, and Changes in

    Fund Balances Actual (Budgetary Basis) and Budget:

    Local Purpose Tax Fund G-3 74Drug Control Fund G-4 75

    General Capital Projects Fund G-5 76

    Major Governmental Fund: 77

    Schedule of Revenues, Expenditures, and Changes in

    Fund Balance Actual and Budget:

    General Debt Service Fund H 78

    Fiduciary Funds: 79

    Combining Statement of Fiduciary Assets and Liabilities I-1 80

    Combining Statement of Changes in Assets and Liabilities

    All Agency Funds I-2 81

    Component Unit:

    Discretely Presented Humphreys County School Department: 82

    Statement of Activities J-1 83

    Balance Sheet Governmental Funds J-2 84

    Reconciliation of the Balance Sheet of Governmental Funds

    to the Statement of Net Assets J-3 85

    Statement of Revenues, Expenditures, and Changes in Fund

    Balances Governmental Funds J-4 86

    Reconciliation of the Statement of Revenues, Expenditures,

    and Changes in Fund Balances of Governmental Funds to

    the Statement of Activities J-5 87

    Schedules of Revenues, Expenditures, and Changes in Fund

    Balances Actual and Budget:General Purpose School Fund J-6 88

    School Federal Projects Fund J-7 89

    Central Cafeteria Fund J-8 90

    Statement of Fiduciary Net Assets J-9 91

    Statement of Changes in Fiduciary Net Assets J-10 92

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    Exhibit Page(s)

    Miscellaneous Schedules: 93

    Schedule of Changes in Long-term Notes, Other Loans, and

    Bonds Primary Government and Discretely Presented

    Humphreys County School Department K-1 94

    Schedule of Long-term Debt Requirements by Year Primary

    Government and Discretely Presented Humphreys County

    School Department K-2 95-96

    Schedule of Notes Receivable K-3 97

    Schedule of Transfers Primary Government and Discretely

    Presented Humphreys County School Department K-4 98

    Schedule of Salaries and Official Bonds of Principal

    Officials Primary Government and Discretely

    Presented Humphreys County School Department K-5 99

    Schedule of Detailed Revenues All Governmental

    Fund Types K-6 100-104

    Schedule of Detailed Revenues All GovernmentalFund Types Discretely Presented Humphreys County

    School Department K-7 105-106

    Schedule of Detailed Expenditures All Governmental

    Fund Types K-8 107-121

    Schedule of Detailed Expenditures All Governmental

    Fund Types Discretely Presented Humphreys County

    School Department K-9 122-132

    Schedule of Detailed Receipts, Disbursements, and

    Changes in Cash Balance City Agency Fund K-10 133

    SINGLE AUDIT SECTION 134

    Auditors 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 135-137

    Auditors Report on Compliance With Requirements

    Applicable to Each Major Program and Internal

    Control Over Compliance in Accordance

    With OMB Circular A-133 138-140

    Schedule of Expenditures of Federal Awards and State Grants 141-142

    Schedule of Audit Findings Not Corrected 143-144

    Schedule of Findings and Questioned Costs 145-156Auditee Reporting Responsibilities 157

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    Audit HighlightsAnnual Financial Report

    Humphreys County, Tennessee

    For the Year Ended June 30, 2011

    Scope

    We have audited the basic financial statements of Humphreys County as of and for the

    year ended June 30, 2011.

    Results

    Our report on the aggregate discretely presented component units is qualified because the

    financial statements do not include one component unit whose financial statements were

    not available from other auditors at the date of this report. Our report on thegovernmental activities, the business-type activities, each major fund, and the aggregate

    remaining fund information is unqualified.

    Our audit resulted in ten findings and recommendations, which we have reviewed with

    Humphreys County management. Detailed findings, recommendations, and managements

    responses are included in the Single Audit section of this report.

    Findings and Best Practice

    The following are summaries of the audit findings and best practice:

    HUMPHREYS COUNTY AND HUMPHREYS COUNTY SCHOOL DEPARTMENT

    Material audit adjustments were required for proper financial statement presentation.

    OFFICE OF COUNTY EXECUTIVE

    The office had not established a formal purchase order system.

    OFFICE OF DIRECTOR OF SCHOOLS

    The School Federal Projects Fund had cash overdrafts at the end of every month duringthe year.

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    OFFICE OF TRUSTEE

    Bank statements were not accurately reconciled with the general ledger. The trustee paid checks issued from the School Federal Projects Fund that exceeded

    available funds.

    OFFICE OF SHERIFF

    Some funds were not deposited within three days of collection. The office had deficiencies in the administration of drug control funds.

    OTHER FINDINGS

    The county used a questionable method of funding workers compensation expenses,employees dental insurance, general liability insurance, officials corporate suretybonds, and employees dishonesty bonds.

    Humphreys County has material recurring audit findings. Duties were not segregated adequately among the officials and employees in the Offices

    of County Executive, County Clerk, Circuit and General Sessions Courts Clerk, and

    Clerk and Master.

    BEST PRACTICE

    Humphreys County does not have a central system of accounting, budgeting, and

    purchasing. The Division of County Audit strongly believes that a central system ofaccounting, budgeting, and purchasing 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 Humphreys County.

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    INTRODUCTORYSECTION

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    Humphreys County Officials

    June 30, 2011

    Officials

    Jessie Wallace, County Executive

    Ronald Carter, Road Supervisor

    James Long, Director of Schools

    Leigh Ann Waggoner, Trustee

    Vickie Cowell, Assessor of Property

    Betty Etheridge, County Clerk

    Elaine Choate, Circuit and General Sessions Courts Clerk

    Michael Bullion, Clerk and Master

    Jan Crowell, Register

    Chris Davis, Sheriff

    Boa