CLAIBORNE COUNTY TENNESSEE

ANNUAL FINANCIAL REPORT

CLAIBORNE COUNTY, TENNESSEE FOR THE YEAR ENDED JUNE 30, 2018

DIVISION OF LOCAL GOVERNMENT AUDIT

ANNUAL FINANCIAL REPORT

CLAIBORNE COUNTY, TENNESSEE

FOR THE YEAR ENDED JUNE 30, 2018

COMPTROLLER OF THE TREASURY JUSTIN P. WILSON

DIVISION OF LOCAL GOVERNMENT AUDIT JAMES R. ARNETTE

Director

ANDREW WAY, CPA MARK TREECE, CPA CGFM VERNA DAVIS Audit Manager KALEE TRENT

MARY CLAIBORNE SHARPE AMY SOSVILLE, CPA DOUG SANDIDGE, CISA, CFE Senior Auditor 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

Claiborne County Officials 8-9

FINANCIAL SECTION 10

Independent Auditor's Report 11-14BASIC FINANCIAL STATEMENTS: 15

Government-wide Financial Statements:Statement of Net Position A 16-17Statement of Activities B 18-19

Fund Financial Statements:Governmental Funds:

Balance Sheet C-1 20-23Reconciliation of the Balance Sheet of Governmental Funds

to the Statement of Net Position C-2 24Statement of Revenues, Expenditures, and Changes in

Fund Balances C-3 25-28Reconciliation of the Statement of Revenues, Expenditures,

and Changes in Fund Balances of Governmental Fundsto the Statement of Activities C-4 29

Statements of Revenues, Expenditures, and Changes in FundBalances – Actual and Budget:General Fund C-5 30-31Solid Waste/Sanitation Fund C-6 32Highway/Public Works Fund C-7 33

Fiduciary Funds:Statement of Fiduciary Assets and Liabilities D 34

Index and Notes to the Financial Statements 35-88REQUIRED SUPPLEMENTARY INFORMATION: 89

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 90

Schedule of Contributions Based on Participation in the Public EmployeePension Plan of TCRS – Primary Government E-2 91

Schedule of Contributions Based on Participation in the TeacherRetirement Plan of TCRS – Discretely Presented ClaiborneCounty School Department E-3 92

Schedule of Contributions Based on Participation in the TeacherLegacy Pension Plan of TCRS – Discretely Presented ClaiborneCounty School Department E-4 93

CLAIBORNE COUNTY, TENNESSEETABLE OF CONTENTS

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Exhibit Page(s)

Schedule of Proportionate Share of the Net Pension Asset in the TeacherPension Plan of TCRS – Discretely Presented Claiborne CountySchool Department E-5 94

Schedule of Proportionate Share of the Net Pension Liability/Asset in theTeacher Legacy Pension Plan of TCRS – Discretely PresentedClaiborne County School Department E-6 95

Schedule of Changes in the Total OPEB Liability and Related Ratios -Self-Insured Plan - Discretely Presented Claiborne CountySchool Department E-7 96

Notes to the Required Supplementary Information 97COMBINING AND INDIVIDUAL FUND FINANCIAL

STATEMENTS AND SCHEDULES: 98Nonmajor Governmental Funds: 99

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

in Fund Balances F-2 101-102Schedules of Revenues, Expenditures, and Changes in Fund

Balances – Actual and Budget:Drug Control Fund F-3 103Highway Capital Projects Fund F-4 104

Major Governmental Fund: 105Schedule of Revenues, Expenditures, and Changes in Fund

Balance – Actual and Budget:General Debt Service Fund G 106

Fiduciary Funds: 107Combining Statement of Fiduciary Assets and Liabilities H-1 108Combining Statement of Changes in Assets and Liabilities –

All Agency Funds H-2 109-110Component Unit:

Discretely Presented Claiborne County School Department: 111Statement of Activities I-1 112Balance Sheet – Governmental Funds I-2 113Reconciliation of the Balance Sheet of Governmental Funds

to the Statement of Net Position I-3 114Statement of Revenues, Expenditures, and Changes in Fund

Balances – Governmental Funds I-4 115Reconciliation of the Statement of Revenues, Expenditures,

and Changes in Fund Balances of Governmental Fundsto the Statement of Activities I-5 116

Combining Balance Sheet – Nonmajor Governmental Funds I-6 117Combining Statement of Revenues, Expenditures, and

Changes in Fund Balances – Nonmajor GovernmentalFunds I-7 118

Schedules of Revenues, Expenditures, and Changes in FundBalances – Actual and Budget:

General Purpose School Fund I-8 119-120School Federal Projects Fund I-9 121Central Cafeteria Fund I-10 122

Proprietary Fund:Statement of Net Position I-11 123Statement of Revenues, Expenses, and Changes in Net Position I-12 124Statement of Cash Flows I-13 125

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Exhibit Page(s)

Miscellaneous Schedules: 126Schedule of Changes in Long-term Notes, Other Loans, Capital Leases,

and Bonds J-1 127Schedule of Long-term Debt Requirements by Year J-2 128-129Schedule of Transfers – Primary Government and Discretely

Presented Claiborne County School Department J-3 130Schedule of Salaries and Official Bonds of Principal Officials –

Primary Government and Discretely Presented ClaiborneCounty School Department J-4 131

Schedule of Detailed Revenues – All Governmental Fund Types J-5 132-143Schedule of Detailed Revenues – All Governmental Fund Types –

Discretely Presented Claiborne County School Department J-6 144-146Schedule of Detailed Expenditures – All Governmental Fund Types J-7 147-163Schedule of Detailed Expenditures – All Governmental Fund Types –

Discretely Presented Claiborne County School Department J-8 164-174Schedule of Detailed Receipts, Disbursements, and Changes in

Cash Balance – City Agency Fund J-9 175

SINGLE AUDIT SECTION 176

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 177-178

Auditor's Report on Compliance for Each Major Program; Report on InternalControl Over Compliance; and Report on the Schedule of Expendituresof Federal Awards Required by Uniform Guidance 179-181

Schedule of Expenditures of Federal Awards and State Grants 182-183Summary Schedule of Prior-year Findings 184Schedule of Findings and Questioned Costs 185-190Management's Corrective Action Plan 191-196

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Summary of Audit FindingsAnnual Financial Report

Claiborne County, Tennessee For the Year Ended June 30, 2018

Scope

We have audited the basic financial statements of Claiborne County as of and for the year ended June 30, 2018.

Results

Our report on the financial statements of Claiborne County is unmodified.

Our audit resulted in four findings and recommendations, which we have reviewed with Claiborne 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 SHERIFF – CURRENT SHERIFF BOB BROOKS AND OFFICE OF FINANCE DIRECTOR

♦ The sheriff entered into an agreement to provide healthcare to jail inmates withoutapproval from the finance director.

OFFICE OF SHERIFF – FORMER SHERIFF DAVID RAY AND CURRENT SHERIFF BOB BROOKS

♦ Accrued leave balances exceeded the maximum balance provided by the county’spersonnel policy.

OFFICE OF SHERIFF – FORMER SHERIFF DAVID RAY

♦ The former sheriff and two employees of the Sheriff’s Department were indicted by theClaiborne County Grand Jury.

OFFICES OF COUNTY CLERK, REGISTER OF DEEDS, AND SHERIFF

♦ Duties were not segregated adequately.

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INTRODUCTORY SECTION

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Claiborne County Officials June 30, 2018

Officials

Jack Daniels, County Mayor Ronald Pittman, Road Superintendent Dr. Joseph Miller, Director of Schools Alice Alexander, Trustee Shane Breeding, Assessor of Property Evelyn Hill, County Clerk Jackie Rosenbalm, Circuit, General Sessions, and Juvenile Courts Clerk Frances Cardwell, Clerk and Master Kimberly Harmon-Reece, Register of Deeds David Ray, Sheriff Sam Owens, Finance Director

Board of County Commissioners

David Mundy, Chairman Stacey Crawford William Johnson Zachary Bunch Bill Keck Mike Campbell Danny Longworth Joan Cosby Steve Mason Mitchell Cosby Shawn Peters Nicholas Epperson Gary Poore Dennis Estes Anthony Rowe James Hatmaker Whitt Shuford Juanita Honeycutt Aimee Upton William Jessie Charlton Vass

Board of Education

Neta Munsey, Chairman Wade Breeding Linda Fultz Shane Bunch Michael Jo Gray Justin Cosby Shannon England

Financial Management Committee

Jack Daniels, County Mayor Mike Campbell Ronald Pittman, Road Superintendent Juanita Honeycutt Dr. Joseph Miller, Director of Schools Danny Longworth

David Mundy

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Claiborne County Officials (Cont.)

Audit Committee

Mitchell Cosby, Chairman Aimee Upton Joan Cosby Charlton Vass Mike Campbell

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FINANCIAL SECTION

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Independent Auditor's Report

Claiborne County Mayor and Board of County Commissioners Claiborne 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 Claiborne County, Tennessee, as of and for the year ended June 30, 2018, 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.

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

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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 Claiborne County, Tennessee, as of June 30, 2018, and the respective changes in financial position thereof and the respective budgetary comparison for the General, Solid Waste/Sanitation, 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., Claiborne County has adopted the provisions of Governmental Accounting Standards Board (GASB) Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions and GASB Statement No. 86, Certain Debt Extinguishment Issues. Our opinion is not modified with respect to these matters.

Emphasis of Matter

We draw attention to Note I.D.9. to the financial statements, which describes a restatement reducing the beginning net position of the discretely presented Claiborne County School Department by $19,752,107 on the Government-wide Statement of Activities. This restatement was necessary because of the transitional requirements of GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. Our opinion is not modified with respect to this matter.

Other Matters

Required Supplementary Information

Management has omitted the management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing 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 statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information.

Accounting principles generally accepted in the United States of America require that the schedule of changes in the county and school net pension liability and related ratios, schedule of county and school contributions, schedule of school’s proportionate share of the net pension liability, and schedule of school changes in the total other postemployment benefits liability and related ratios on pages 90-97 be presented to supplement the basic financial statements.

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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 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 Claiborne County’s 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 Claiborne County School Department (a discretely presented component unit), miscellaneous schedules and the other information such as the introductory section and management’s corrective action plans are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedule of expenditures of federal awards is also presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and is 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 Claiborne County School Department (a discretely presented component unit), schedule of expenditures of federal awards, 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, 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 Claiborne County School Department (a discretely presented component unit), schedule of expenditures of federal awards, and miscellaneous schedules are fairly stated in all material respects in relation to the basic financial statements as a whole.

The introductory section and management’s corrective action plans have 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 them.

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Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated January 4, 2019, on our consideration of Claiborne 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 solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of Claiborne County’s 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 Claiborne County’s internal control over financial reporting and compliance.

Very truly yours,

Justin P. Wilson Comptroller of the Treasury Nashville, Tennessee

January 4, 2019

JPW/tg

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BASIC FINANCIAL STATEMENTS

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Exhibit A

Claiborne County, TennesseeStatement of Net PositionJune 30, 2018

ASSETS

Cash $ 146,547 $ 1,060,804Equity in Pooled Cash and Investments 3,923,151 3,794,044Accounts Receivable 96,586 60,546Allowance for Uncollectibles (3,388) 0Due from Other Governments 1,022,068 1,653,318Due from Component Units 118,884 0Property Taxes Receivable 7,980,813 6,754,254Allowance for Uncollectible Property Taxes (337,385) (294,787)Restricted Assets: Other Restricted Assets 1,247,539 0Net Pension Asset - Agent Plan 457,629 371,258Net Pension Asset - Teacher Legacy Plan 0 160,133Net Pension Asset - Teacher Retirement Plan 0 79,007Capital Assets: Assets Not Depreciated: Land 1,054,592 1,224,296 Assets Net of Accumulated Depreciation: Buildings and Improvements 17,693,151 30,575,399 Other Capital Assets 2,307,588 1,626,109 Infrastructure - Roads, Streets, and Bridges 18,022,838 0Total Assets $ 53,730,613 $ 47,064,381

DEFERRED OUTFLOW OF RESOURCES

Deferred Charge on Refunding $ 55,447 $ 0Pension Changes in Experience 0 99,308Pension Changes in Assumptions 670,221 1,906,893Pension Changes in Investment Earnings 8,704 31,369Pension Contributions - Subsequent to Measurement Date 363,883 1,907,863Pension Other Deferrals 0 111,279Total Deferred Outflow of Resources $ 1,098,255 $ 4,056,712

LIABILITIES

Accounts Payable $ 475,822 $ 707,896Accrued Payroll 37,159 0Accrued Interest Payable 263,771 0Due to Primary Government 0 118,884Other Collections 10,776 0Noncurrent Liabilities: Due Within One Year 3,070,070 0 Due in More Than One Year 31,525,607 20,769,050Total Liabilities $ 35,383,205 $ 21,595,830

(Continued)

Component Unit

Governmental SchoolGovernment County

Activities Department

Primary Claiborne

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Exhibit A

Claiborne County, TennesseeStatement of Net Position (Cont.)

DEFERRED INFLOWS OF RESOURCES

Deferred Current Property Taxes $ 7,399,893 $ 6,239,009Pension Changes in Experience 435,148 3,664,935Pension Changes in Investment Earnings 0 4,251Pension Other Deferrals 0 19,902OPEB Changes in Experience 0 13,035Total Deferred Inflows of Resources $ 7,835,041 $ 9,941,132

NET POSITION

Net Investment in Capital Assets $ 33,735,589 $ 33,425,804Restricted for: General Government 64,081 0 Finance 146,147 0 Administration of Justice 117,227 0 Public Safety 188,270 0 Public Health and Welfare 451,821 0 Highways 710,484 0 Debt Service 463,534 0 Education 0 974,914 Capital Projects 144,547 28,992 Pensions 457,629 610,398 Other Purposes 1,247,539 0Unrestricted (26,116,246) (15,455,977)

Total Net Position $ 11,610,622 $ 19,584,131

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

Component Unit

Activities Department

Primary ClaiborneGovernment County

Governmental School

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Exhibit B

Claiborne County, TennesseeStatement of ActivitiesFor the Year Ended June 30, 2018

Primary Component UnitGovernment Claiborne

Operating Capital Total CountyCharges for Grants and Grants and Governmental School

Functions/Programs Expenses Services Contributions Contributions Activities Department

Primary Government: Governmental Activities: General Government $ 1,915,213 $ 186,227 $ 11,373 $ 0 $ (1,717,613) $ 0 Finance 1,301,987 762,254 0 0 (539,733) 0 Administration of Justice 940,752 678,966 0 0 (261,786) 0 Public Safety 5,687,078 953,796 16,219 40,363 (4,676,700) 0 Public Health and Welfare 3,385,486 492,942 140,655 567,581 (2,184,308) 0 Social, Cultural, and Recreational Services 251,883 0 0 0 (251,883) 0 Agriculture and Natural Resources 135,376 0 0 0 (135,376) 0 Highways 4,681,374 2,824 2,271,310 998,411 (1,408,829) 0 Interest on Long-term Debt 1,249,580 0 0 0 (1,249,580) 0

Total Primary Government $ 19,548,729 $ 3,077,009 $ 2,439,557 $ 1,606,355 $ (12,425,808) $ 0

Component Unit: School Department $ 42,502,451 $ 526,811 $ 5,505,079 $ 80,000 $ 0 $ (36,390,561)Total Component Unit $ 42,502,451 $ 526,811 $ 5,505,079 $ 80,000 $ 0 $ (36,390,561)

(Continued)

Net (Expense) Revenue

Program Revenues

and Changes in Net Position

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Exhibit B

Claiborne County, TennesseeStatement of Activities (Cont.)

PrimaryGovernment Claiborne

Operating Capital Total CountyCharges for Grants and Grants and Governmental School

Functions/Programs Expenses Services Contributions Contributions Activities Department

General Revenues: Taxes: Property Taxes Levied for General Purposes $ 5,919,308 $ 6,731,736 Property Taxes Levied for Solid Waste/Sanitation 1,187,162 0 Property Taxes Levied for Highways 55,112 0 Property Taxes Levied for Debt Service 165,326 0 Property Taxes Levied for Highway Capital Projects 107,469 0 Local Option Sales Taxes 0 2,705,161 Wheel Tax 1,397,074 0 Coal Severance Tax 153,596 153,596 General Litigation Tax 140,256 0 Wholesale Beer Tax 62,011 0 Mineral Severance Tax 31,917 0 Hotel/Motel Tax 39,754 0 Other Taxes 350,266 24,117 Grants and Contributions Not Restricted to Specific Programs 4,183,422 27,597,524 Unrestricted Investment Income 160,372 15,690 Miscellaneous 49,688 382,587Total General Revenues $ 14,002,733 $ 37,610,411

Change in Net Position $ 1,576,925 $ 1,219,850Restatement - See Note I.D.9 0 (19,752,107)Net Position, July 1, 2017 10,033,697 38,116,388

Net Position, June 30, 2018 $ 11,610,622 $ 19,584,131


Program RevenuesComponent Unit

and Changes in Net PositionNet (Expense) Revenue

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Exhibit C-1

Claiborne County, TennesseeBalance SheetGovernmental FundsJune 30, 2018

Solid Other Highway / GeneralWaste / Special Public Debt

General Sanitation Revenue Works ServiceASSETS

Cash $ 0 $ 400 $ 0 $ 0 $ 0Equity in Pooled Cash and Investments 1,948,177 601,488 0 410,546 721,883Accounts Receivable 46,018 50,568 0 0 0Allowance for Uncollectibles 0 (3,388) 0 0 0Due from Other Governments 194,151 40 0 827,877 0Property Taxes Receivable 6,396,270 1,241,829 0 57,599 172,797Allowance for Uncollectible Property Taxes (269,523) (53,185) 0 (2,467) (7,400)Restricted Assets 0 0 1,247,539 0 0

Total Assets $ 8,315,093 $ 1,837,752 $ 1,247,539 $ 1,293,555 $ 887,280

LIABILITIES

Accounts Payable $ 126,063 $ 0 $ 0 $ 349,759 $ 0Accrued Payroll 232 0 0 36,927 0Other Collections 0 0 0 0 0Total Liabilities $ 126,295 $ 0 $ 0 $ 386,686 $ 0


Deferred Current Property Taxes $ 5,932,925 $ 1,149,684 $ 0 $ 53,325 $ 159,975Deferred Delinquent Property Taxes 177,178 35,614 0 1,652 4,956Other Deferred/Unavailable Revenue 31,971 2,424 0 454,986 0Total Deferred Inflows of Resources $ 6,142,074 $ 1,187,722 $ 0 $ 509,963 $ 164,931

(Continued)

Major Funds

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Exhibit C-1

Claiborne County, TennesseeBalance SheetGovernmental Funds (Cont.)


General Sanitation Revenue Works ServiceFUND BALANCES

Restricted:Restricted for General Government $ 64,081 $ 0 $ 0 $ 0 $ 0Restricted for Finance 0 0 0 0 0Restricted for Administration of Justice 117,227 0 0 0 0Restricted for Public Safety 99,012 0 0 0 0Restricted for Public Health and Welfare 147,107 266,676 0 0 0Restricted for Highways/Public Works 0 0 0 253,846 0Restricted for Debt Service 0 0 0 0 722,349Restricted for Capital Projects 0 0 0 0 0Restricted for Other Purposes 0 0 1,247,539 0 0

Committed:Committed for Public Health and Welfare 0 383,354 0 0 0Committed for Highways/Public Works 0 0 0 143,060 0

Assigned:Assigned for Other Operations 1,073,326 0 0 0 0

Unassigned 545,971 0 0 0 0Total Fund Balances $ 2,046,724 $ 650,030 $ 1,247,539 $ 396,906 $ 722,349

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 8,315,093 $ 1,837,752 $ 1,247,539 $ 1,293,555 $ 887,280

(Continued)

Major Funds

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Exhibit C-1


OtherGovern- Totalmental GovernmentalFunds Funds

ASSETS

Cash $ 146,147 $ 146,547Equity in Pooled Cash and Investments 241,057 3,923,151Accounts Receivable 0 96,586Allowance for Uncollectibles 0 (3,388)Due from Other Governments 0 1,022,068Property Taxes Receivable 112,318 7,980,813Allowance for Uncollectible Property Taxes (4,810) (337,385)Restricted Assets 0 1,247,539

Total Assets $ 494,712 $ 14,075,931

LIABILITIES

Accounts Payable $ 0 $ 475,822Accrued Payroll 0 37,159Other Collections 10,776 10,776Total Liabilities $ 10,776 $ 523,757


Deferred Current Property Taxes $ 103,984 $ 7,399,893Deferred Delinquent Property Taxes 3,221 222,621Other Deferred/Unavailable Revenue 0 489,381Total Deferred Inflows of Resources $ 107,205 $ 8,111,895

(Continued)

Nonmajor Funds

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Exhibit C-1



FUND BALANCES

Restricted:Restricted for General Government $ 0 $ 64,081Restricted for Finance 146,147 146,147Restricted for Administration of Justice 0 117,227Restricted for Public Safety 89,258 188,270Restricted for Public Health and Welfare 0 413,783Restricted for Highways/Public Works 0 253,846Restricted for Debt Service 0 722,349Restricted for Capital Projects 141,326 141,326Restricted for Other Purposes 0 1,247,539

Committed:Committed for Public Health and Welfare 0 383,354Committed for Highways/Public Works 0 143,060

Assigned:Assigned for Other Operations 0 1,073,326

Unassigned 0 545,971Total Fund Balances $ 376,731 $ 5,440,279

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 494,712 $ 14,075,931


Nonmajor Funds

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Exhibit C-2

Claiborne County, TennesseeReconciliation of the Balance Sheet of Governmental Funds to the Statement of Net PositionJune 30, 2018

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) $ 5,440,279

(1) Capital assets used in governmental activities are not financial resources and therefore are not reported inthe governmental funds. Add: land $ 1,054,592 Add: infrastructure net of accumulated depreciation 18,022,838 Add: buildings and improvements net of accumulated depreciation 17,693,151 Add: other capital assets net of accumulated depreciation 2,307,588 39,078,169

(2) Long-term liabilities are not due and payable in the currentperiod and therefore are not reported in the governmental funds. Less: notes payable $ (132,838) Less: capital leases payable (393,843) Less: bonds payable (32,325,000) Less: other loans payable (118,884) Add: due from component unit for loans payable 118,884 Add: deferred amount on refunding 55,447 Less: compensated absences payable (271,324) Less: landfill closure/postclosure care costs (780,633) Less: accrued interest on bonds, notes, and other loans (263,771) Less: other deferred revenue - premium on debt (573,155) (34,685,117)

(3) Amounts reported as deferred outflows of resources and deferredinflows of resources related to pensions will be amortized andrecognized as components of pension expenses in future years: Add: deferred outflows of resources related to pensions $ 1,042,808 Less: deferred inflows of resources related to pensions (435,148) 607,660

(4) Net pension assets of the agent plan are not currentfinancial resources and therefore are not reported in thegovernmental funds. 457,629

(5) Other long-term assets are not available to pay forcurrent-period expenditures and therefore are deferredin the governmental funds. 712,002

Net position of governmental activities (Exhibit A) $ 11,610,622


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Exhibit C-3

Claiborne County, TennesseeStatement of Revenues, Expenditures,

and Changes in Fund BalancesGovernmental FundsFor the Year Ended June 30, 2018


General Sanitation Revenue Works Service

RevenuesLocal Taxes $ 6,655,493 $ 1,206,641 $ 0 $ 272,000 $ 866,944Licenses and Permits 10,140 0 0 0 0Fines, Forfeitures, and Penalties 167,111 0 0 0 0Charges for Current Services 79,272 483,871 0 0 0Other Local Revenues 560,076 26,578 923 3,562 3,103,026Fees Received From County Officials 899,071 0 0 0 0State of Tennessee 1,613,277 16,219 0 2,989,530 0Federal Government 615,993 0 0 6,551 0Other Governments and Citizens Groups 3,565 0 0 0 0

Total Revenues $ 10,603,998 $ 1,733,309 $ 923 $ 3,271,643 $ 3,969,970

ExpendituresCurrent:

General Government $ 1,063,403 $ 0 $ 0 $ 0 $ 0Finance 981,767 0 0 0 0Administration of Justice 942,221 0 0 0 0Public Safety 5,572,390 0 0 0 0Public Health and Welfare 347,781 1,629,717 269,386 0 0Social, Cultural, and Recreational Services 238,294 0 0 0 0Agriculture and Natural Resources 137,052 0 0 0 0Other Operations 1,300,236 0 0 0 0Highways 0 0 0 3,393,084 0

Debt Service:Principal on Debt 0 0 0 0 2,576,532Interest on Debt 0 0 0 0 1,395,876Other Debt Service 0 0 0 0 7,279

(Continued)

Major Funds

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Exhibit C-3


and Changes in Fund BalancesGovernmental Funds (Cont.)


General Sanitation Revenue Works Service

Expenditures (Cont.)Capital Projects $ 270,232 $ 0 $ 0 $ 0 $ 0

Total Expenditures $ 10,853,376 $ 1,629,717 $ 269,386 $ 3,393,084 $ 3,979,687

Excess (Deficiency) of RevenuesOver Expenditures $ (249,378) $ 103,592 $ (268,463) $ (121,441) $ (9,717)

Other Financing Sources (Uses)Insurance Recovery $ 0 $ 0 $ 0 $ 9,649 $ 0Transfers In 51,301 0 0 0 117,357Transfers Out 0 0 0 (51,301) 0

Total Other Financing Sources (Uses) $ 51,301 $ 0 $ 0 $ (41,652) $ 117,357

Net Change in Fund Balances $ (198,077) $ 103,592 $ (268,463) $ (163,093) $ 107,640Fund Balance, July 1, 2017 2,244,801 546,438 1,516,002 559,999 614,709

Fund Balance, June 30, 2018 $ 2,046,724 $ 650,030 $ 1,247,539 $ 396,906 $ 722,349

(Continued)

Major Funds

26

Exhibit C-3




RevenuesLocal Taxes $ 808,215 $ 9,809,293Licenses and Permits 0 10,140Fines, Forfeitures, and Penalties 58,130 225,241Charges for Current Services 430,788 993,931Other Local Revenues 2,500 3,696,665Fees Received From County Officials 0 899,071State of Tennessee 0 4,619,026Federal Government 6,101 628,645Other Governments and Citizens Groups 0 3,565

Total Revenues $ 1,305,734 $ 20,885,577


General Government $ 0 $ 1,063,403Finance 394,128 1,375,895Administration of Justice 46,830 989,051Public Safety 89,081 5,661,471Public Health and Welfare 0 2,246,884Social, Cultural, and Recreational Services 0 238,294Agriculture and Natural Resources 0 137,052Other Operations 0 1,300,236Highways 0 3,393,084

Debt Service:Principal on Debt 0 2,576,532Interest on Debt 0 1,395,876Other Debt Service 0 7,279

(Continued)

Nonmajor Funds

27

Exhibit C-3




Expenditures (Cont.)Capital Projects $ 664,421 $ 934,653

Total Expenditures $ 1,194,460 $ 21,319,710

Excess (Deficiency) of RevenuesOver Expenditures $ 111,274 $ (434,133)

Other Financing Sources (Uses)Insurance Recovery $ 0 $ 9,649Transfers In 0 168,658Transfers Out (117,357) (168,658)

Total Other Financing Sources (Uses) $ (117,357) $ 9,649

Net Change in Fund Balances $ (6,083) $ (424,484)Fund Balance, July 1, 2017 382,814 5,864,763

Fund Balance, June 30, 2018 $ 376,731 $ 5,440,279


Nonmajor Funds

28

Exhibit C-4

Claiborne 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, 2018

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) $ (424,484)

(1) Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of these assets is allocated over their useful 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 $ 488,934 Less: current-year depreciation expense (1,957,175) (1,468,241)

(2) Revenues in the statement of activities that do not provide current financialresources are not reported as revenues in the funds. Add: deferred delinquent property taxes and other deferred June 30, 2018 $ 712,002 Less: deferred delinquent property taxes and other deferred June 30, 2017 (453,188) 258,814

(3) The issuance of long-term debt (e.g., bonds, notes, other loans) provides current financial resources to governmental funds, while the repayment of the principalof long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also,governmental funds report the effect of premiums, discounts, andsimilar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of thesedifferences in the treatment of long-term debt and related items: Add: change in unamortized premium on debt issuances $ 125,968 Add: principal payments on bonds 2,295,000 Add: principal payments on notes 147,033 Add: principal payments on capital leases 106,113 Add: principal payment on other loans 28,386 Less: principal payment on other loans contributed by the School Department (28,386) Less: change in deferred amount on refunding debt (27,378) 2,646,736

(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 $ 20,328 Change in compensated absences payable (19,954) Change in landfill closure/postclosure care costs 62,880 Change in net pension liability/asset - agent plan 492,694 Change in deferred outflows related to pensions (93,921) Change in deferred inflows related to pension 102,073 564,100

Change in net position of governmental activities (Exhibit B) $ 1,576,925


29

Exhibit C-5

Claiborne County, TennesseeStatement of Revenues, Expenditures, and Changes

in Fund Balance - Actual and BudgetGeneral FundFor the Year Ended June 30, 2018

Variancewith FinalBudget -Positive

Actual Original Final (Negative)

RevenuesLocal Taxes $ 6,655,493 $ 6,893,600 $ 6,403,600 $ 251,893Licenses and Permits 10,140 9,400 9,400 740Fines, Forfeitures, and Penalties 167,111 127,900 167,187 (76)Charges for Current Services 79,272 56,800 63,000 16,272Other Local Revenues 560,076 395,192 395,192 164,884Fees Received From County Officials 899,071 1,271,000 839,291 59,780State of Tennessee 1,613,277 1,753,320 1,795,020 (181,743)Federal Government 615,993 71,000 536,000 79,993Other Governments and Citizens Groups 3,565 12,000 12,000 (8,435)

Total Revenues $ 10,603,998 $ 10,590,212 $ 10,220,690 $ 383,308

ExpendituresGeneral Government

County Commission $ 159,829 $ 160,885 $ 178,425 $ 18,596Board of Equalization 6,982 7,125 7,125 143Beer Board 900 1,200 1,200 300Budget and Finance Committee 23,296 33,273 33,273 9,977County Mayor/Executive 163,775 168,304 168,304 4,529County Attorney 51,176 57,210 57,210 6,034Election Commission 164,474 191,486 191,486 27,012Register of Deeds 170,246 193,171 199,371 29,125Development 4,577 5,000 5,000 423Planning 11,272 21,540 23,240 11,968County Buildings 284,435 252,041 295,843 11,408Preservation of Records 22,441 21,495 23,695 1,254

FinanceAccounting and Budgeting 493,159 482,024 516,992 23,833Property Assessor's Office 225,479 237,203 237,203 11,724Reappraisal Program 76,048 85,781 85,781 9,733County Trustee's Office 82,124 273,309 98,576 16,452County Clerk's Office 104,957 363,664 106,688 1,731

Administration of JusticeCircuit Court 402,795 420,699 442,965 40,170General Sessions Court 223,872 228,551 228,551 4,679Chancery Court 252,955 263,255 263,255 10,300District Attorney General 34,019 38,106 38,106 4,087Office of Public Defender 28,580 28,580 28,580 0

Public SafetySheriff's Department 2,341,118 2,436,121 2,441,658 100,540Administration of the Sexual Offender Registry 1,050 1,500 1,500 450Workhouse 2,818,807 2,792,626 2,835,726 16,919Juvenile Services 60,313 61,264 61,264 951Fire Prevention and Control 150,000 150,000 150,000 0Civil Defense 87,981 123,735 123,735 35,754Rescue Squad 22,000 22,000 22,000 0Other Emergency Management 43,688 51,377 51,377 7,689County Coroner/Medical Examiner 47,433 47,600 47,600 167

(Continued)

Budgeted Amounts

30

Exhibit C-5


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



Expenditures (Cont.)Public Health and Welfare

Local Health Center $ 152,796 $ 181,171 $ 202,448 $ 49,652Rabies and Animal Control 20,000 20,000 20,000 0Other Local Health Services 123,180 168,100 182,600 59,420Sanitation Education/Information 51,805 53,342 53,342 1,537

Social, Cultural, and Recreational ServicesAdult Activities 7,500 7,500 7,500 0Senior Citizens Assistance 56,902 61,360 66,305 9,403Libraries 113,892 114,727 114,727 835Parks and Fair Boards 60,000 60,000 60,000 0

Agriculture and Natural ResourcesAgricultural Extension Service 87,915 95,500 96,255 8,340Forest Service 2,000 2,000 2,000 0Soil Conservation 47,137 47,486 47,486 349

Other OperationsIndustrial Development 60,000 60,000 60,000 0Housing and Urban Development 735,532 528,500 735,778 246Other Economic and Community Development 43,511 49,675 49,675 6,164Veterans' Services 19,020 21,222 21,222 2,202Other Charges 401,632 519,101 412,901 11,269Employee Benefits 1,680 1,800 1,800 120Miscellaneous 38,861 45,000 45,000 6,139

Capital ProjectsGeneral Administration Projects 800 0 800 0Public Safety Projects 269,432 257,456 284,956 15,524

Total Expenditures $ 10,853,376 $ 11,514,065 $ 11,430,524 $ 577,148

Excess (Deficiency) of RevenuesOver Expenditures $ (249,378) $ (923,853) $ (1,209,834) $ 960,456

Other Financing Sources (Uses)Transfers In $ 51,301 $ 51,301 $ 51,301 $ 0

Total Other Financing Sources $ 51,301 $ 51,301 $ 51,301 $ 0

Net Change in Fund Balance $ (198,077) $ (872,552) $ (1,158,533) $ 960,456Fund Balance, July 1, 2017 2,244,801 2,028,816 2,028,816 215,985

Fund Balance, June 30, 2018 $ 2,046,724 $ 1,156,264 $ 870,283 $ 1,176,441


Budgeted Amounts

31

Exhibit C-6


in Fund Balance - Actual and BudgetSolid Waste/Sanitation FundFor the Year Ended June 30, 2018



RevenuesLocal Taxes $ 1,206,641 $ 1,228,600 $ 1,228,600 $ (21,959)Charges for Current Services 483,871 440,000 440,000 43,871Other Local Revenues 26,578 22,500 22,500 4,078State of Tennessee 16,219 32,000 32,000 (15,781)

Total Revenues $ 1,733,309 $ 1,723,100 $ 1,723,100 $ 10,209

ExpendituresPublic Health and Welfare

Waste Pickup $ 1,629,717 $ 1,986,531 $ 1,986,531 $ 356,814Total Expenditures $ 1,629,717 $ 1,986,531 $ 1,986,531 $ 356,814

Excess (Deficiency) of RevenuesOver Expenditures $ 103,592 $ (263,431) $ (263,431) $ 367,023

Other Financing Sources (Uses)Transfers In $ 0 $ 263,431 $ 263,431 $ (263,431)

Total Other Financing Sources $ 0 $ 263,431 $ 263,431 $ (263,431)

Net Change in Fund Balance $ 103,592 $ 0 $ 0 $ 103,592Fund Balance, July 1, 2017 546,438 542,598 542,598 3,840

Fund Balance, June 30, 2018 $ 650,030 $ 542,598 $ 542,598 $ 107,432


Budgeted Amounts

32

Exhibit C-7


in Fund Balance - Actual and BudgetHighway/Public Works FundFor the Year Ended June 30, 2018



RevenuesLocal Taxes $ 272,000 $ 485,000 $ 485,000 $ (213,000)Other Local Revenues 3,562 1,600 3,790 (228)State of Tennessee 2,989,530 3,221,941 3,221,941 (232,411)Federal Government 6,551 0 0 6,551

Total Revenues $ 3,271,643 $ 3,708,541 $ 3,710,731 $ (439,088)

ExpendituresHighways

Administration $ 139,489 $ 142,011 $ 142,011 $ 2,522Highway and Bridge Maintenance 1,803,117 1,976,041 1,963,133 160,016Operation and Maintenance of Equipment 310,050 270,650 314,867 4,817Other Charges 68,949 71,700 70,261 1,312Employee Benefits 33,480 50,000 33,480 0Capital Outlay 1,037,999 1,146,838 1,144,138 106,139


Excess (Deficiency) of RevenuesOver Expenditures $ (121,441) $ 51,301 $ 42,841 $ (164,282)

Other Financing Sources (Uses)Insurance Recovery $ 9,649 $ 0 $ 8,460 $ 1,189Transfers Out (51,301) (51,301) (51,301) 0

Total Other Financing Sources $ (41,652) $ (51,301) $ (42,841) $ 1,189

Net Change in Fund Balance $ (163,093) $ 0 $ 0 $ (163,093)Fund Balance, July 1, 2017 559,999 378,498 378,498 181,501



Budgeted Amounts

33

Exhibit D

Claiborne County, TennesseeStatement of Fiduciary Assets and LiabilitiesFiduciary FundsJune 30, 2018

AgencyFunds

ASSETS

Cash $ 1,738,350Equity in Pooled Cash and Investments 552,235Accounts Receivable 46Due from Other Governments 341,201Property Tax Receivable 57,599Allowance for Uncollectible Property Taxes (2,467)

Total Assets $ 2,686,964

LIABILITIES

Due to Other Taxing Units $ 341,201Due to Litigants, Heirs, and Others 1,827,669Other Current Liabilities 518,094

Total Liabilities $ 2,686,964


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Note Page(s)

I. Summary of Significant Accounting PoliciesA. Reporting Entity 37B. Government-wide and Fund Financial Statements 38C. Measurement Focus, Basis of Accounting, and Financial

Statement Presentation 39D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and

Net Position/Fund Balance1. Deposits and Investments 422. Receivables and Payables 433. Restricted Assets 434. Capital Assets 445. Deferred Outflows/Inflows of Resources 446. Compensated Absences 457. Long-term Obligations 458. Net Position and Fund Balance 469. Restatement 48

E. Pension Plans 48F. Other Postemployment Benefit (OPEB) Plans 49

II. Reconciliation of Government-wide and Fund Financial StatementsA. Explanation of Certain Differences Between the Governmental Fund

Balance Sheet and the Government-wide Statement of Net Position 49B. Explanation of Certain Differences Between the Governmental Fund

Statement of Revenues, Expenditures, and Changes in Fund Balancesand the Government-wide Statement of Activities 49

III. Stewardship, Compliance, and AccountabilityA. Budgetary Information 50B. Indictment of Sheriff and Employees 51C. Results of Investigations by Comptroller's Office 51

IV. Detailed Notes on All FundsA. Deposits and Investments 51B. Capital Assets 53C. Interfund Receivables, Payables, and Transfers 55D. Sale/Lease of Claiborne County Hospital and Nursing Home 56E. Capital Leases 57F. Long-term Obligations 58G. Pledges of Receivables and Future Revenues 63

CLAIBORNE COUNTY, TENNESSEEIndex of Notes to the Financial Statements

(Continued)

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Note Page(s)

V. Other InformationA. Risk Management 63B. Accounting Changes 65C. Contingent Liabilities 65D. Change in Administration 66E. Landfill Closure/Postclosure Care Costs 66F. Joint Venture 66G. Jointly Governed Organization 67H. Retirement Commitments 67I. Other Postemployment Benefits (OPEB) 84J. Office of Central Accounting, Budgeting, and Purchasing 88K. Purchasing Laws 88L. Subsequent Events 88

CLAIBORNE COUNTY, TENNESSEEIndex of Notes to the Financial Statements (Cont.)

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CLAIBORNE COUNTY, TENNESSEE NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended June 30, 2018

I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Claiborne 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 Claiborne County:

A. Reporting Entity

Claiborne County is a public municipal corporation governed by an elected 21-member board. As required by GAAP, these financial statements present Claiborne County (the primary government) and its component units. Although required by GAAP, the financial statements of the Claiborne County Economic and Community Development Board and the financial statements of the Claiborne County Emergency Communications District, component units requiring discrete presentation, were excluded from this report due to materiality calculations; therefore the effect of their omission did not affect the independent auditor’s opinion thereon. The component units discussed below are included in the county’s reporting entity because of the significance of their operational or financial relationship 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 Claiborne County School Department operates the public school system in the county, and the voters of Claiborne 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 Claiborne County Economic and Community Development Board (formerly known as the Industrial Development Board) is a non-profit corporation incorporated under the provisions of the State of Tennessee, and the Claiborne County Commission appoints its governing body. The board is funded primarily through the sale and lease of industrial park properties, property taxes, grants, and contributions. Before the issuance of most debt instruments, the board obtains the approval of the County Commission. The function of the board is to attract and promote new industry in the county. The financial statements of the Claiborne County Economic and Community Development Board were not material to the component units’ opinion unit and therefore have been omitted from this report.

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The Claiborne County Emergency Communications District provides a simplified means of securing emergency services through a uniform emergency number for the residents of Claiborne County, and the Claiborne 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 Claiborne County Emergency Communications District were not material to the component units’ opinion unit and therefore have been omitted from this report. The Claiborne 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 Claiborne County Economic and Community Development Board and the Claiborne County Emergency Communications District can be obtained from their administrative offices at the following addresses:

Administrative Offices:

Claiborne County Economic and Community Development Board 3222 Highway 25 East Suite 1 Tazewell, TN 37879

Claiborne County Emergency Communications District P.O. Box 911 Tazewell, TN 37879

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 Claiborne 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 Claiborne County School Department component unit only reports governmental activities in the government-wide financial statements.

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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. Claiborne County issues most debt for the discretely presented Claiborne County School Department. There were no debt issues contributed by the county to the School Department during the year ended June 30, 2018. Separate financial statements are provided for governmental funds, the proprietary fund (internal service), and fiduciary funds. The internal service fund is reported with the governmental activities in the government-wide financial statements, and the fiduciary funds are excluded from the government-wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements.

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

Presentation

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and 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 Claiborne 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/expenses. Funds are organized into three major categories: governmental, proprietary, and fiduciary. An emphasis is placed on major funds within the governmental category. Claiborne County has no proprietary funds to report. The Claiborne County School Department has one proprietary fund, an internal service fund. Separate financial statements are provided for governmental funds, the proprietary fund, 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

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statements. The internal service fund and the fiduciary funds in total are reported in single columns by fund type. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they become both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the county considers revenues other than grants to be available if they are collected within 30 days after year-end. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met and the revenues are available. Claiborne 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 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. The proprietary fund and 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. Claiborne 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. Solid Waste/Sanitation Fund – This special revenue fund accounts for transactions relating to the disposal of Claiborne County’s solid waste. Local taxes and general service charges are the foundational revenues of this fund. Other Special Revenue Fund – This special revenue fund accounts for the proceeds from the sale and lease of assets of the Claiborne County Hospital and Nursing Home.

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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, Claiborne County reports the following fund types:

Capital Projects Fund – The Highway Capital Projects Fund is 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. 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 Claiborne County, assets held in a custodial capacity for the Claiborne County Economic and Community Development Board, and restricted revenues held for the benefit of the Office of the District Attorney General. 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 Claiborne County School Department reports the following major governmental fund:

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

Additionally, the Claiborne 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 expenditure for specified purposes other than debt service or capital projects. Internal Service Fund – The Employee Insurance Fund is used to account for transactions pertaining to the School Department’s self-insured group medical plan.

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

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resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from nonoperating items. The School Department has one proprietary fund, an internal service fund, used to account for the employees’ health insurance. Operating revenues and expenses generally result from providing services in connection with the fund’s principal ongoing operations. The principal operating revenues of the internal service fund are charges for services. Operating expenses for the internal service fund include administrative expenses and employee benefits.

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

Position/Fund Balance

1. Deposits and Investments

For purposes of the Statement of Cash Flows for the School Department’s internal service fund, cash consists of demand deposits. 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 Claiborne 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. Income from these pooled investments is assigned to the General, Solid Waste/Sanitation, General Debt Service, and the School Department’s General Purpose School and Central Cafeteria funds per percentages established in the budgetary process. Claiborne 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 at amortized cost using the 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 were held at the balance sheet date.

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2. Receivables and Payables

Activity between funds for unremitted current collections outstandingat the end of the fiscal year is referred to as due to/from other funds.

Property taxes and solid waste receivables are shown with anallowance for uncollectibles. Solid waste receivables allowance foruncollectibles is based on historical collection data. The allowance foruncollectible property taxes is equal to 2.26 percent of total taxeslevied.

Property taxes receivable are recognized as of the date an enforceablelegal claim to the taxable property arises. This date is January 1 andis referred to as the lien date. However, revenues from property taxesare recognized in the period for which the taxes are levied, which isthe ensuing fiscal year. Since the receivable is recognized before theperiod of revenue recognition, the entire amount of the receivable, lessan estimated allowance for uncollectible taxes, is reported as adeferred inflow of resources as of June 30.

Property taxes receivable are also reported as of June 30 for the taxesthat are levied, collected, and reported as revenue during the currentfiscal year. These property taxes receivable are presented on thebalance sheet as a deferred inflow of resources to reflect amounts notavailable as of June 30. Property taxes collected within 30 days of year-end are considered available and accrued. The allowance foruncollectible taxes represents the estimated amount of the receivablethat will be filed in court for collection. Delinquent taxes filed in courtfor collection are not included in taxes receivable since they are neithermeasurable nor available.

Property taxes are levied as of the first Monday in October. Taxesbecome delinquent and begin accumulating interest and penalty thefollowing March 1. Suit must be filed in Chancery Court between thefollowing February 1 to April 1 for any remaining unpaid taxes.Additional costs attach to delinquent taxes after a court suit has beenfiled.

Most payables are disaggregated on the face of the financial statements.

3. Restricted Assets

Pursuant to terms of the transaction agreement governing the saleand lease of assets of the Claiborne County Hospital and NursingHome, an escrow account was established to account for the netproceeds received by the county. The escrow account was establishedto limit access to the funds and to ensure that the funds are used forpurposes specified in the agreement. The balance in that account atyear end is reported as restricted assets in the Other Special Revenue

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Fund. See Note IV.D., for further discussion of the sale/lease and restrictions on the use of funds in the escrow account.

4. Capital Assets

Governmental funds do not capitalize the cost of capital outlays; these funds report capital outlays as expenditures upon acquisition. Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, and similar items), are reported in the governmental column on 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 two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition 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

Buildings and Improvements 40 Other Capital Assets 5 - 20 Infrastructure:

Roads (based on surface type) 30, 40, or 50 Bridges 40

5. 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. This separate financial statement element, deferred outflows of resources, represents 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 pension changes in assumptions, in experience, and in

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investment earnings, deferred charge on refunding, employer contributions made to the pension plan after the measurement date as well as pension other deferrals. In addition to liabilities, the Statement of Net Position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents 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 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, OPEB changes in experience, pension changes in investment earnings, pension other deferrals, and various receivables for revenues, which do not meet the availability criteria for governmental funds.

6. Compensated Absences

Primary Government It is the county’s policy to permit employees to accumulate earned but unused vacation and sick pay benefits. There is no liability for unpaid accumulated sick leave since Claiborne 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. 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. Discretely Presented Claiborne County School Department Vacation for employees of the School Department does not vest or accumulate and must be used within the year. The granting of sick leave has no guaranteed payment attached and therefore requires no accrual.

7. 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

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systematic and rational manner over the remaining life of the refunded debt or the life of the new debt issued, whichever is shorter. 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, other postemployment benefits, and landfill closure/postclosure care costs are recognized to the extent that the liabilities have matured (come due for payment) each period.

8. Net Position and Fund Balance

In the government-wide financial statements and the proprietary fund (internal service fund) in the fund 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.

On the government-wide Statement of Net Position (Exhibit A), the amount Restricted for Other Purposes for the primary government ($1,247,539), represents proceeds from the sale and lease of assets of

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the Claiborne County Hospital and Nursing Home, which are restricted for specific uses set forth in the transaction agreement. As of June 30, 2018, Claiborne County had $27,818,884 in outstanding debt for capital purposes for the discretely presented Claiborne County School Department. This debt is a liability of Claiborne County, but the capital assets acquired are reported in the financial statements of the School Department. Therefore, Claiborne County has incurred a liability significantly decreasing its unrestricted net position with no corresponding increase in the county’s capital assets. 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

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stabilization arrangements). The County Commission has by resolution authorized the county’s Finance Committee to make assignments for the general government. The Board of Education makes assignments for the School Department. Assigned fund balance in the General Fund represents amounts appropriated for use in the 2018-19 fiscal year budget ($1,073,326). Assigned fund balance in the General Purpose School Fund of the discretely presented School Department consists primarily of amounts appropriated for use in the 2018-19 fiscal year budget ($596,486) and an amount assigned for debt service ($565,104). 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 has not been restricted, committed, or assigned to specific purposes within the General and General Purpose School funds.

9. Restatement

In prior years, the government was required to recognize a liability for its other postemployment benefits plans under Governmental Accounting Standards Board (GASB) Statement No. 45. As of July 1, 2017, Claiborne County has adopted the provisions of GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. A restatement reducing the beginning net position of the discretely presented Claiborne County School Department by $19,752,107 has been recognized to account for the transitional requirements.

E. Pensions 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 Claiborne County’s participation in the Public Employee Retirement Plan of the Tennessee Consolidated Retirement System (TCRS), and additions to/deductions from Claiborne 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.

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Discretely Presented Claiborne 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.

F. Other Postemployment Benefit (OPEB) Plans


For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, have been determined on the same basis as they are reported by the discretely presented Claiborne County School Department. For this purpose, the School Department recognizes benefit payments when due and payable in accordance with benefit terms. The School Department’s OPEB plan is not administered through a trust.

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 Claiborne 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.

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

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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.


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 acceptedaccounting principles (GAAP) for all governmental funds except theConstitutional Officers - Fees Fund (special revenue fund) and the OtherSpecial Revenue Fund, which are not budgeted. All annual appropriationslapse at fiscal year-end.

The county is required by state statute to adopt annual budgets. Annualbudgets are prepared on the basis in which current available funds must besufficient to meet current expenditures. Expenditures and encumbrances maynot legally exceed appropriations authorized by the county commission andany authorized revisions. Unencumbered appropriations lapse at the end ofeach fiscal year.

The budgetary level of control is at the major category level established by theCounty Uniform Chart of Accounts, as prescribed by the Comptroller of theTreasury of the State of Tennessee. Major categories are at the departmentlevel (examples of General Fund major categories: County Commission, Boardof Equalization, County Mayor, County Attorney, etc.). Management maymake revisions within major categories, but only the County Commission maytransfer appropriations between major categories. During the year, severalsupplementary appropriations were necessary.

The county's budgetary basis of accounting is consistent with GAAP, exceptinstances in which encumbrances are treated as budgeted expenditures. Thedifference between the budgetary basis and GAAP basis is presented on theface of each budgetary schedule.

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B. Indictment of Sheriff and Employees As disclosed in the Schedule of Findings and Questioned Costs in the Single Audit section of this report, on August 22, 2018, Claiborne County Sheriff David Ray was indicted by the Claiborne County Grand Jury and charged with seven counts of official misconduct, one count of use of inmates for personal gain, one count of forgery, and six counts of attempted sales tax evasion. Sheriff Ray left office on August 31, 2018, and was succeeded by newly elected Sheriff Bob Brooks. Also, on August 22, 2018, Sheriff’s Department employee Larry Martin was indicted on three counts of unlawful possession of a handgun (after having been convicted of a felony), and Sheriff’s Department employee Larry Roberts was indicted on two counts of official misconduct.

C. Results of Investigations by Comptroller’s Office The Comptroller of the Treasury, Division of Investigations, has conducted multiple investigations related to allegations received involving various offices and departments in Claiborne County. One investigation resulted in a report dated March 22, 2018, regarding questionable transactions by Claiborne County and a Claiborne County Commissioner for the purchase and repair of equipment for the Sanitation Department. That report is available on the Comptroller of the Treasury’s website, http://www.comptroller.tn.gov/repository/ia/claibornecounty.pdf. Another investigation that involved Claiborne High School resulted in a report dated December 13, 2018. That report contains findings and recommendations regarding improper use of maintenance employees for private purposes, the use of the School Department’s sales tax exemption for personal purchases, use of questionable practices when renting a room to outside groups, use of private vehicles for school purposes without written approval of the director of schools, and deficiencies in the operation of the school coffee shop. That report is available on the Comptroller of the Treasury’s website, http://www.comptroller.tn.gov/repository/ia/claibornehighschool.pdf. Other investigations are pending and reports, if any, resulting from these investigations can be found on the Comptroller of the Treasury’s website, https://www.comptroller.tn.gov/ia/.

IV. DETAILED NOTES ON ALL FUNDS

A. Deposits and Investments Claiborne County and the Claiborne 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

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http://www.comptroller.tn.gov/repository/ia/claibornecounty.pdf

http://www.comptroller.tn.gov/repository/ia/claibornehighschool.pdf

https://www.comptroller.tn.gov/ia/

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 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, 2018.

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B. Capital Assets

Capital assets activity for the year ended June 30, 2018, was as follows: Primary Government - Governmental Activities:

Balance Balance7-1-17 Increases Decreases 6-30-18

Capital Assets Not Depreciated:Land $ 1,054,592 $ 0 $ 0 $ 1,054,592Total Capital Assets Not Depreciated $ 1,054,592 $ 0 $ 0 $ 1,054,592

Capital Assets Depreciated:Buildings and Improvements $ 33,577,732 $ 0 $ 0 $ 33,577,732Roads and Bridges 29,189,986 0 0 29,189,986Other Capital Assets 6,096,232 488,934 (105,399) 6,479,767Total Capital Assets Depreciated $ 68,863,950 $ 488,934 $ (105,399) $ 69,247,485

Less Accumulated Depreciation For:Buildings and Improvements $ 15,045,701 $ 838,880 $ 0 $ 15,884,581Roads and Bridges 10,470,814 696,334 0 11,167,148Other Capital Assets 3,855,617 421,961 (105,399) 4,172,179

Total Accumulated Depreciation $ 29,372,132 $ 1,957,175 $ (105,399) $ 31,223,908

Total Capital Assets Depreciatied, Net $ 39,491,818 $ (1,468,241) $ 0 $ 38,023,577

Governmental Activities Capital Assets, Net $ 40,546,410 $ (1,468,241) $ 0 $ 39,078,169

Depreciation expense was charged to functions of the primary government as

follows:

Governmental Activities:

General Government $ 312,508Public Safety 134,835Public Health and Welfare 623,704Highways/Public Works 886,128

Total Depreciation Expense - Governmental Activities $ 1,957,175

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Discretely Presented Claiborne County School Department - Governmental Activitites:

Balance Balance7-1-17 Increases Decreases 6-30-18

Capital Assets Not Depreciated:Land $ 1,224,296 $ 0 $ 0 $ 1,224,296

Total Capital Assets Not Depreciated $ 1,224,296 $ 0 $ 0 $ 1,224,296

Capital Assets Depreciated:Buildings and Improvements $ 52,700,245 $ 44,023 $ 0 $ 52,744,268Other Capital Assets 3,625,125 315,352 (50,652) 3,889,825Total Capital Assets Depreciated $ 56,325,370 $ 359,375 $ (50,652) $ 56,634,093

Less Accumulated Depreciated For:Buildings and Improvements $ 20,833,636 $ 1,335,233 $ 0 $ 22,168,869Other Capital Assets 2,103,768 202,721 (42,773) 2,263,716

Total Accumulated Depreciation $ 22,937,404 $ 1,537,954 $ (42,773) $ 24,432,585

Total Capital Assets Depreciated, Net $ 33,387,966 $ (1,178,579) $ (7,879) $ 32,201,508

Governmental Activities Capital Assets, Net $ 34,612,262 $ (1,178,579) $ (7,879) $ 33,425,804

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


Instruction $ 1,296,422Support Services 241,532

Total Depreciation Expense - Governmental Activities $ 1,537,954

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C. Interfund Receivables, Payables, and Transfers Due to/from Primary Government and Component Units: The amount reflected on the government-wide financial statements as Due to Primary Government from the discretely presented School Department represents $118,884 for debt issued by the primary government, which is being retired by the School Department. Of that amount, $89,790 is not expected to be received within one year.

Interfund Transfers: Interfund transfers for the year ended June 30, 2018, consisted of the following

amounts: Primary Government

GeneralDebt

General ServiceTransfers Out Fund Fund

Highway/Public Works Fund $ 51,301 $ 0Nonmajor governmental funds 0 117,357

Total $ 51,301 $ 117,357

Transfers In

Transfers to the General Debt Service Fund represent contributions toward retirement of long-term debt principal and interest. Discretely Presented Claiborne County School Department

Transfer In

InternalService

Transfer Out Fund

General Purpose School Fund $ 350,000

Total $ 350,000

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Transfers to the internal service fund represent contributions in excess of premiums for the self-insured heath program.

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.

D. Sale/Lease of Claiborne County Hospital and Nursing Home

On March 25, 2014, the county entered into a transaction agreement withClaiborne Medical Center (CMC) related to the assets, liabilities, andoperation of Claiborne County Hospital and Nursing Home. The agreementprovided for the purchase of certain hospital and nursing home assets andliabilities by CMC, and an operating lease agreement for the land andbuildings associated with the hospital and nursing home. The combined saleand lease price was paid at the time of closing and no other payments of rentare due during the entire lease term, including renewal terms. A portion of theproceeds from the sale/lease was used to defease outstanding county hospitaland nursing home bonds as discussed in Note IV.F. Long-term Obligations.Pursuant to the agreement, the sale/lease proceeds were placed in an escrowaccount in the name of the county (see Note I.D.3. Restricted Assets).Disbursements are made from the escrow account to Claiborne County, CMC,or their designees for certain agreed upon healthcare related costs provided forin the transaction agreement. When escrow funds are no longer sufficient tocover such agreed upon costs, amounts due to CMC, pursuant to theagreement, shall be payable from the general revenues of the county.

The lease agreement for the land and buildings was effective April 1, 2014, foran initial term of ten years with automatic extension for three additional five-year extension terms, unless CMC gives written notice of non-renewal no lessthan 18 months prior to the expiration of the lease term or the renewal term,as applicable. At the end of the 3rd, 4th, and 5th years during the lease term,25 percent of the then-existing balance of the escrow funds, less the amount ofthe then-existing pending/future obligations, will be released to the county fordeposit into a Healthcare Fund to be used exclusively for financial obligationsof the county specified in the transaction agreement, and for the promotion andadvancement of health-related needs of residents of Claiborne County. At theend of the ten-year term, any remaining balance in escrow will be released anddeposited into the Healthcare Fund.

Terms of the transaction agreement included requirements for CMC to assumeoperations of the Claiborne County Ambulance Service with the county toprovide, from the escrow account, $165,000 per year, and one new ambulanceper year in subsidy for the Ambulance Service operations. Upon exhaustion ofthe escrow funds and Healthcare Fund, the Ambulance Service subsidy shallbe payable from general county revenues. CMC may elect to discontinue theiroperation of the Ambulance Service at any time during the lease term with90 days’ notice.

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The aggregate amount of unpaid ambulance subsidy over the remaining lease term is considered a pending/future obligation. The estimate of the aggregate amount of unpaid ambulance subsidy for the remaining seven years of the lease term exceeds the escrow balance as of June 30, 2018. Therefore, 25 percent of the escrow was not released to the county.

The carrying value of the leased property was $9,634,021 at June 30, 2018. The original cost was $20,702,557 and accumulated depreciation was $11,068,536. There are no future minimum lease payments associated with this agreement.

E. Capital Leases

On October 22, 2015, Claiborne County entered into a three-year lease-purchase agreement for a Highway Department grader. The terms of the leaserequire total lease payments of $243,563 plus interest of 2.5 percent.

On January 24, 2016, Claiborne County entered into a three-year lease-purchase agreement for a second Highway Department grader. The terms ofthe lease require total lease payments of $231,560 plus interest of 2.5 percent.

On January 24, 2017, Claiborne County entered into a three-year lease-purchase agreement for a Highway Department excavator. The terms of thelease require total lease payments of $142,803 plus interest of 2.5 percent.

Title to the equipment in these agreements transferred to Claiborne Countywhen the leases were signed. The lease payments are made from the GeneralDebt Service Fund.

The assets acquired through capital leases are as follows:

GovernmentalAsset Activities

Machinery and Equipment $ 632,135 Less: Accumulated Depreciation (143,275)

Total Book Value $ 488,860

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Future minimum lease payments and the net present value of these minimum lease payments as of June 30, 2018, were as follows: Year Ending GovernmentalJune 30 Funds

2019 $ 336,790 2020 63,803 Total Minimum Lease Payments $ 400,593 Less: Amount Representing Interest (6,750)

Present Value of Minimum Lease Payments $ 393,843

F. Long-term Obligations

Primary Government General Obligation Bonds, Notes, and Other Loans Claiborne County issues general obligation bonds and other loans 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 debt. Capital outlay notes are also issued to fund capital facilities and other capital outlay purchases, such as equipment. General obligation bonds, capital outlay notes, and other loans are direct obligations and pledge the full faith and credit of the government. General obligation bonds, capital outlay notes, and other loans outstanding were issued for original terms of up to 20 years for bonds, up to five years for notes, and up to 15 years for other loans. Repayment terms are generally structured with increasing amounts of principal maturing as interest requirements decrease over the term of the debt. All bonds, notes, and other loans included in long-term debt as of June 30, 2018, will be retired from the General Debt Service Fund. General obligation bonds, capital outlay notes, other loans, and capital leases outstanding as of June 30, 2018, for governmental activities are as follows:

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OriginalInterest Final Amount Balance

Type Rate Maturity of Issue 6-30-18

General Obligation Bonds 1 to 5.3 % 6-1-25 $ 5,010,000 $ 2,905,000General Obligation Bonds - Refunding 2 to 4.125 4-1-30 39,425,000 29,420,000Capital Outlay Notes 2.63 to 2.85 10-2-18 713,013 132,838Other Loans Fixed Rate 2.5 4-30-22 335,732 118,884Capital Leases 2.5 1-24-20 617,926 393,843

Included in amounts outstanding are various general obligation debts Claiborne County has issued for the benefit of the Claiborne County School Department component unit. The Claiborne County School Department contributes funds annually to the county to apply toward retirement of debt based on budgetary appropriations. During the year, the School Department contributed $3,099,143 to the county’s General Debt Service Fund for retirement of those general obligation debt issues.

The annual requirements to amortize all general obligation bonds, notes, and other loans outstanding as of June 30, 2018, including interest payments are presented in the following tables:

Year EndingJune 30 Interest Total

2019 $ 2,330,000 $ 1,291,548 $ 3,621,5482020 2,340,000 1,209,822 3,549,8222021 2,455,000 1,122,662 3,577,6622022 2,455,000 1,029,587 3,484,5872023 2,410,000 930,463 3,340,4632024-2028 14,100,000 2,999,737 17,099,7372029-2030 6,235,000 384,550 6,619,550

Total $ 32,325,000 $ 8,968,369 $ 41,293,369

BondsPrincipal

Year EndingJune 30 Interest Total

2019 $ 132,838 $ 3,626 $ 136,464

Total $ 132,838 $ 3,626 $ 136,464

NotesPrincipal

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Year EndingJune 30 Principal Interest Total

2019 $ 29,094 $ 2,583 $ 31,6772020 29,820 1,857 31,6772021 30,564 1,084 31,6482022 29,406 352 29,758

Total $ 118,884 $ 5,876 $ 124,760

Other Loans

There is $722,349 available in the General Debt Service Fund to service long-term debt. Bonded debt per capita totaled $1,003, based on the 2010 federal census. Total debt per capita, including bonds, notes, other loans, capital leases, and unamortized debt premiums, totaled $1,041, based on the 2010 federal census. In addition to the annual contributions made by the School Department to the General Debt Service Fund, which are dependent upon budgetary appropriations discussed previously, the School Department has committed to service certain other debt issued by the county. The School Department is currently committed to contributing funds to service specific debt instruments 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 Department and as Due from Component Units in the financial statements of the primary government.

OutstandingDescription of Indebtedness 6-30-18

Other Loans Payable Contributions from the General Purpose School Fund Ball field lighting projects at schools $ 118,884

Changes in Long-term Obligations Long-term obligations activity for the year ended June 30, 2018, was as follows:

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Governmental Activities: OtherBonds Notes Loans

Balance, July 1, 2017 $ 34,620,000 $ 279,871 $ 147,270Reductions (2,295,000) (147,033) (28,386)

Balance, June 30, 2018 $ 32,325,000 $ 132,838 $ 118,884

Balance Due Within One Year $ 2,330,000 $ 132,838 $ 29,094

LandfillClosure/

Capital PostclosureLeases Care Costs

Balance, July 1, 2017 $ 499,956 $ 251,370 $ 843,513Additions 0 193,248 0Reductions (106,113) (173,294) (62,880)

Balance, June 30, 2018 $ 393,843 $ 271,324 $ 780,633

Balance Due Within One Year $ 330,740 $ 176,360 $ 71,038

Balance, July 1, 2017 $ 35,065Additions 0Reductions (35,065)

Balance, June 30, 2018 $ 0

Balance Due Within One Year $ 0

NetPensionLiability

CompensatedAbsences

Analysis of Noncurrent Liabilities Presented on Exhibit A:

Total Noncurrent Liabilities, June 30, 2018 $ 34,022,522Less: Balance Due Within One Year (3,070,070)Add: Unamortized Premium on Debt 573,155

Noncurrent Liabilities - Due in More Than One Year - Exhibit A $ 31,525,607

Compensated absences will be paid from the employing funds, primarily the General and Highway/Public Works funds. Landfill closure/postclosure care costs will be paid from the Solid Waste/Sanitation Fund.

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Defeasance of Prior Debt In prior years, Claiborne County defeased certain hospital refunding bonds by placing a portion of the proceeds received from the sale/lease of the Claiborne County Hospital and Nursing home into an irrevocable trust to provide for all future debt service payments on the debt. The trustee is empowered and required to pay all principal and interest on the defeased bonds as originally scheduled. Accordingly, the trust accounts and the defeased debt are not included in the county’s financial statements. At June 30, 2018, the following outstanding bonds were considered defeased:

CallAmount Date

Refunding Series 2010A - Hospital $ 2,795,000 4-1-20Refunding Series 2010B - Hospital 250,000 4-1-20


Changes in Long-term Obligations Long-term obligations activity for the discretely presented Claiborne County School Department for the year ended June 30, 2018, was as follows:


*Other Net Pension Net PensionPostemployment Liability - Teacher Liability -

Benefits Legacy Plan Agent Plan

Balance, July 1, 2017 $ 20,567,018 $ 3,042,979 $ 30,246Additions 1,069,797 0 0Reductions (867,765) (3,042,979) (30,246)

Balance, June 30, 2018 $ 20,769,050 $ 0 $ 0

Balance Due Within One Year $ 0 $ 0 $ 0

*Restated to comply with GASB Statement No. 75. See Note I.D.9.

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Analysis of Noncurrent Liabilities Presented on Exhibit A:

Total Noncurrent Liabilities, June 30, 2018 $ 20,769,050Less: Balance Due Within One Year 0

Noncurrent Liabilities - Due in More Than One Year - Exhibit A $ 20,769,050

Other postemployment benefits will be paid from the employing funds, primarily the General Purpose School, School Federal Projects and Central Cafeteria funds.

G. Pledges of Receivables and Future Revenues

In 2003, the Claiborne County Commission voted to levy a motor vehicle privilege tax. The county pledged the tax revenues for jail construction and ADA required renovations to the courthouse. Proceeds of the tax are placed in the General Debt Service Fund and are currently being expended to retire principal and interest on debt associated with the construction of the judicial complex. During the year, revenues generated by the wheel tax totaled $698,412, and principal and interest expenditures funded by the wheel tax totaled $601,544. Since its inception, wheel tax revenues for jail debt totals $9,701,960 and expenditures for jail debt totals $9,540,964. In 2017, the County Commission voted to levy an additional motor vehicle privilege tax. The county pledged the tax revenues for paving roads and the purchase of highway equipment.

Proceeds of the additional vehicle privilege tax are placed in the Highway Capital Projects Fund and are currently being expended to fund highway paving projects and purchases of highway equipment. During the year, revenues generated by the wheel tax totaled $698,662 and expenditures of the Highway Capital Projects Fund for paving roads and equipment purchases totaled $664,421. Since its inception, wheel tax revenues for paving roads and the purchase of highway equipment totals $1,751,122 and expenditures for paving roads and equipment purchases totals $1,718,912.

V. OTHER INFORMATION

A. Risk Management

Primary Government

It is the policy of the county to purchase commercial insurance for the risks of losses to which it is exposed. These risks include general liability, property, casualty, workers’ compensation, employee health and accident, and

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environmental. Settled claims have not exceeded this commercial coverage in any of the past three fiscal years. Retirees are not permitted to remain on the county’s health insurance program.


The School Department has chosen to establish the Employee Health Insurance Fund for risks associated with the employees’ health insurance plan. The Employee Health Insurance Fund is accounted for as an internal service fund where assets are set aside for claim settlements. Certified employees are covered under one plan, while non-certified employees can choose between two plans. The School Department has purchased excess risk insurance coverage for claims exceeding $95,000 per claimant and $7,382,502 for all claims in a single year. All three plans are covered by this excess risk plan. The stop loss policy has a maximum reimbursement of $1,000,000 per claim year. All full-time certified employees and certain other employees of the Claiborne County School Department are eligible to participate. A premium charge is allocated to each fund that accounts for covered employees. This charge is based on actuarial estimates of the amounts needed to pay prior- and current-year claims and to establish a reserve for catastrophic losses. That reserve was $430,625 at June 30, 2018, and is reported as net position of the Employee Health Insurance Fund. Liabilities of the fund are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. The Employee Health Insurance Fund establishes claims liabilities based on estimates of the ultimate cost of claims that have been reported but not settled and of claims that have been incurred but not reported. Claims liabilities include incremental claim adjustment expenditures/expenses, if any. In addition, estimated recoveries, if any, on settled claims have been deducted from the liability for unpaid claims. The process used to compute claims liabilities does not necessarily result in an exact amount. Changes in the balance of claims liabilities during the past two fiscal years are as follows:

Beginning Currentof Fiscal Year Balance

Year Claims and at FiscalLiability Estimates Payments Year-end

2016-2017 $ 550,426 $ 4,343,232 $ (4,214,031) $ 679,627 2017-2018 679,627 4,142,523 (4,191,971) 630,179

The School Department continues to carry commercial insurance for all other risks of loss, including general liability, property, casualty, and workers’ compensation. Settled claims from these risks have not exceeded commercial insurance coverage in any of the past three fiscal years.

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B. Accounting Changes Provisions of Governmental Accounting Standards Board (GASB) Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions; Statement No. 81, Irrevocable Split-Interest Agreements; Statement No. 85, Omnibus 2017; and Statement No. 86, Certain Debt Extinguishment Issues became effective for the year ended June 30, 2018. GASB Statement No. 75, establishes accounting and reporting requirements for postemployment benefits other than pensions (other postemployment benefits or OPEB), which are included in the general purpose financial reports of state and local governmental OPEB plans. This statement replaces GASB Statements No. 45 and No. 57. The scope of this statement establishes standards for recognizing and measuring liabilities, deferred outflows of resources, deferred inflows of resources, and expense/expenditures. For defined benefit OPEB, this statement identifies the methods and assumptions that are required to be used to project benefit payments, discount projected benefit payments to their actuarial present value, and attribute that present value to periods of employee service. Note disclosure and required supplementary information requirements about defined benefit OPEB also are addressed. GASB Statement No. 81, establishes accounting and financial reporting guidance for irrevocable split-interest agreements in which a government is a beneficiary. GASB Statement No. 85, addresses practice issues that have been identified during implementation and application of certain GASB Statements. This statement addresses a variety of topics including issues related to blending component units, goodwill, fair value measurement and application, and postemployment benefits (pensions and other postemployment benefits [OPEB]). GASB Statement No. 86, establishes guidance for transactions in which cash and other monetary assets acquired with only existing resources—resources other than the proceeds of refunding debt—are placed in an irrevocable trust for the sole purpose of extinguishing debt. This statement also provides guidance for accounting and financial reporting for prepaid insurance on debt that is extinguished and notes to financial statements for debt that is defeased in substance.

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

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D. Change in Administration On July 1, 2017, Connie Holdway left the Office of Director of Schools and was succeeded by Dr. Joseph Miller.

E. Landfill Closure/Postclosure Care Costs

Claiborne County has an active permit on file with the state Department of Environment and Conservation for a sanitary landfill. The county has provided financial assurances for estimated closure and 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. Claiborne County closed its sanitary landfill in 1998. The $780,633 reported as postclosure care liability at June 30, 2018, represents amounts based on what it would cost to perform all postclosure care in 2018. Actual costs may be higher due to inflation, changes in technology, or changes in regulations.

F. Joint Venture The Eighth Judicial District Drug Task Force (DTF) is a joint venture formed by an interlocal agreement between the district attorney general of the Eighth Judicial District; Scott, Campbell, Fentress, Claiborne, and Union 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 the board of directors including the district attorney general, sheriffs, and police chiefs of participating law enforcement agencies within the judicial district. Claiborne County made no contributions to the DTF for the year ended June 30, 2018, and does not have an equity interest in the joint venture. Complete financial statements for the DTF can be obtained from its administrative office at the following address:

Administrative Office:

Office of District Attorney General Eighth Judicial District Drug Task Force P.O. Box 10 Huntsville, TN 37756

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G. Jointly Governed Organization The East Tennessee Regional Agribusiness Marketing Authority was established through Title 64, Tennessee Code Annotated (TCA), and includes the counties of Claiborne, Cocke, Grainger, Greene, Hamblen, Hancock, Hawkins, Jefferson, Johnson, Sullivan, Unicoi, and Washington. The purpose of the authority is to establish and operate a market for agricultural products of the region through a food distribution center. The authority is governed by a board of directors consisting of the county mayors of each county or the county mayor’s designee and one nonvoting member representing each of the following: the Tennessee Department of Agriculture and the University of Tennessee’s Agriculture Extension Service. An executive committee, consisting of the chairman, vice chairman, secretary, and treasurer of the board of directors, along with the center’s manager as an ex officio member, is in charge of the daily operation of the center.

H. Retirement Commitments 1. Tennessee Consolidated Retirement System (TCRS)

Primary Government General Information About the Pension Plan Plan Description. Employees of Claiborne County and non-certified employees of the discretely presented Claiborne 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 comprise 55.21 percent, the non-certified employees of the discretely presented School Department comprise 44.79 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.state.tn.us/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

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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. 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, 2017, the following employees were covered by the benefit terms: Inactive Employees or Beneficiaries Currently Receiving Benefits 429Inactive Employees Entitled to But Not Yet Receiving Benefits 839Active Employees 532

Total 1,800

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 salary. Claiborne 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, 2018, the employer contribution for Claiborne County was $628,376 based on a rate of 5.52 percent of covered payroll. By law, employer contributions are required to be paid. The TCRS may intercept Claiborne County’s state shared taxes if required employer contributions are not remitted. The employer’s actuarially determined contributions (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) Claiborne County’s net pension liability (asset) was measured as of June 30, 2017, and the total pension liability (asset) used to calculate net pension liability (asset) was determined by an actuarial valuation as of that date.

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Actuarial Assumptions. The total pension liability as of the June 30, 2017, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:

Inflation 2.5%Salary Increases Graded Salary Ranges from 8.72%

to 3.46% Based on Age, Including Inflation, Averaging 4%

Investment Rate of Return 7.25%, Net of Pension Plan Investment Expenses, Including Inflation

Mortality rates were based on actual experience including an adjustment for some anticipated improvement.

The actuarial assumptions used in the June 30, 2017, actuarial valuation were based on the results of an actuarial experience study performed for the period July 1, 2012, through June 30, 2016. 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, 2016, actuarial experience study. A blend of future capital market projections and historic market returns was used in a building-block method in which a best-estimate of expected future real rates of return (expected returns, net of pension plan investments expense and inflation) is developed for each major asset class. These best-estimates are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target allocation percentage and by adding expected inflation of 2.5 percent. The best-estimates of geometric real rates of return and the TCRS investment policy target asset allocation for each major class are summarized in the following table:

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PercentageLong-termExpected PercentageReal Rate Target

Asset Class of Return Allocations

U.S. Equity 5.69 % 31 %Developed Market International Equity 5.29 14Emerging Market International Equity 6.36 4Private Equity and Strategic Lending 5.79 20U.S. Fixed Income 2.01 20Real Estate 4.32 10Short-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 7.25 percent based on a blending of the factors described above.

Changes of Assumptions. In 2017, the following assumptions were changed: decreased inflation rate from 3.0 percent to 2.5 percent; decreased the investment rate of return from 7.5 percent to 7.25 percent; decreased the cost-of-living adjustment from 2.5 to 2.25 percent; decreased salary growth graded ranges from an average of 4.25 percent to an average of 4.0 percent; and modified the mortality assumptions.

Discount Rate. The discount rate used to measure the total pension liability was 7.25 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 Claiborne 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 Net PensionPension Fiduciary LiabilityLiability Net Position (Asset)

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

Balance, July 1, 2016 $ 45,670,835 $ 45,605,524 $ 65,311

Changes for the Year: Service Cost $ 875,275 $ 0 $ 875,275 Interest 3,375,465 0 3,375,465 Differences Between Expected and Actual Experience (564,586) 0 (564,586) Changes in Assumptions 1,618,598 0 1,618,598 Contributions-Employer 0 621,480 (621,480) Contributions-Employees 0 564,884 (564,884) Net Investment Income 0 5,058,415 (5,058,415) Benefit Payments, Including Refunds of Employee Contributions (3,079,830) (3,079,830) 0 Administrative Expense 0 (45,829) 45,829 Other Changes 0 0 0Net Changes $ 2,224,922 $ 3,119,120 $ (894,198)

Balance, June 30, 2017 $ 47,895,757 $ 48,724,644 $ (828,887)

Increase (Decrease)

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

Plan NetTotal Fiduciary Pension

Pension Net LiabilityLiability Position (Asset)

Primary Government 55.21% $ 26,443,247 $ 26,900,876 $ (457,629)

School Department 44.79% 21,452,510 21,823,768 (371,258)

Total $ 47,895,757 $ 48,724,644 $ (828,887)

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Sensitivity of the Net Pension Liability (Asset) to Changes in the Discount Rate. The following presents the net pension liability (asset) of Claiborne County calculated using the discount rate of 7.25 percent, as well as what the net pension liability (asset) would be if it were calculated using a discount rate that is one percentage point lower (6.25%) or one percentage point higher (8.25%) than the current rate:

Current1% Discount 1%

Decrease Rate IncreaseClaiborne County 6.25% 7.25% 8.25%

Net Pension Liability $ 4,213,233 $ (828,887) $ (4,943,860)

Pension Expense (Income) and Deferred Outflows of Resources and Deferred Inflows of Resources to Pensions Pension Expense or Negative Pension Expense. For the year ended June 30, 2018, Claiborne County recognized pension expense of $232,074. Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2018, Claiborne 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 $ 0 $ 788,168Net Difference Between Projected and Actual Earnings on Pension Plan Investments 15,765 0Changes in Assumptions 1,213,948 0Contributions Subsequent to the Measurement Date of June 30, 2017 (1) 628,376 N/A

Total $ 1,858,089 $ 788,168

(1) The amount shown above for “Contributions Subsequent to

the Measurement Date of June 30, 2017,” 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 $ 1,042,808 $ 435,148

School Department 815,281 353,020

Total $ 1,858,089 $ 788,168

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

2019 $ (181,834)2020 604,4442021 361,0752022 (342,145)2023 0Thereafter 0

In the table shown above, positive amounts will increase pension expense while negative amounts will decrease pension expense.

Discretely Presented Claiborne County School Department Non-certified Employees General Information About the Pension Plan Plan Description. As noted above under the primary government, employees of Claiborne County and non-certified employees of the discretely presented Claiborne 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 comprise 55.21 percent and the non-certified employees of the discretely presented School Department comprise 44.79 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 Claiborne 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 publicly available financial report that can be obtained at www.treasury.state.tn.us/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

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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 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, 2018, to the Teacher Retirement Plan were $90,222, 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, 2018, the School Department reported a liability (asset) of ($79,007) for its proportionate share of the net pension liability (asset). The net pension liability (asset) was measured as of June 30, 2017, and the total pension liability (asset) used to calculate the net pension liability (asset) was determined by an actuarial valuation as of that date. The School Department’s proportion of the net pension liability (asset) was based on the 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, 2017, the School Department’s proportion was .299465 percent. The proportion as of June 30, 2016, was .359434 percent. Pension Expense. For the year ended June 30, 2018, the School Department recognized pension expense of $36,292.

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Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2018, the School Department reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:



Difference Between Expected and Actual Experience $ 2,769 $ 5,942Net Difference Between Projected and Actual Earnings on Pension Plan Investments 0 4,251Changes in Assumptions 6,941 0Changes in Proportion of Net Pension Liability (Asset) 6,640 208LEA's Contributions Subsequent to the Measurement Date of June 30, 2017 (1) 90,222 N/A

Total $ 106,572 $ 10,401

The School Department’s employer contributions of $90,222, reported as pension related deferred outflows of resources subsequent to the measurement date, will be recognized as an increase of net pension asset in the year ending June 30, 2019. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:


2019 $ 772020 772021 (166)2022 (1,260)2023 745Thereafter 6,475

In the table above, positive amounts will increase pension expense, while negative amounts will decrease pension expense.

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Actuarial Assumptions. The total pension liability in the June 30, 2017, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:




Cost of Living Adjustment 2.25%

Mortality rates are based on actual experience including an adjustment for some anticipated improvement. The actuarial assumptions used in the June 30, 2017, actuarial valuation were based on the results of an actuarial experience study performed for the period July 1, 2012, through June 30, 2016. 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, 2016, actuarial experience study. A blend of future capital market projections and historic market returns was used in a building-block method in which a best-estimate of expected future real rates of return (expected returns, net of pension plan investments expense and inflation) is developed for each major asset class. These best-estimates are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target allocation percentage and by adding expected inflation of 2.5 percent. The best-estimates of geometric real rates of return and the TCRS investment policy target asset allocation for each major class are summarized in the following table:

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Total 100 %

The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees as 7.25 percent based on a blending of the factors described above. Changes of Assumptions. In 2017, the following assumptions were changed: decreased inflation rate from 3.0 percent to 2.5 percent; decreased the investment rate of return from 7.5 percent to 7.25 percent; decreased the cost-of-living adjustment from 2.5 percent to 2.25 percent; decreased salary growth graded ranges from an average of 4.25 percent to an average of 4.0 percent; and modified the mortality assumptions. Discount Rate. The discount rate used to measure the total pension liability was 7.25 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.

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Sensitivity of the Proportionate Share of Net Pension Liability (Asset) to Changes in the Discount Rate. The following presents the School Department’s proportionate share of the net pension liability (asset) calculated using the discount rate of 7.25 percent, as well as what the School Department’s proportionate share of the net pension liability (asset) would be if it were calculated using a discount rate that is one percentage point lower (6.25%) or one percentage point higher (8.25%) than the current rate:

School Department's Current Proportionate Share of 1% Discount 1% the Net Pension Decrease Rate Increase Liability (Asset) 6.25% 7.25% 8.25%

Net Pension Liability $ 15,763 $ (79,007) $ (148,526)

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 Claiborne 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 publicly available financial report that can be obtained at www.treasury.state.tn.us/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

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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 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 Claiborne County School Department for the year ended June 30, 2018, to the Teacher Legacy Pension Plan were $1,553,148, which is 9.08 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, 2018, the School Department reported a liability (asset) of ($160,133) for its proportionate share of the net pension liability (asset). The net pension liability (asset) was measured as of June 30, 2017, and the total pension liability used to calculate the net pension liability (asset) was determined by an

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actuarial valuation as of that date. The School Department’s proportion of the net pension liability (asset) was based on the 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, 2017, the School Department’s proportion was .489426 percent. The proportion measured at June 30, 2016, was .486920 percent. Pension Expense. For the year ended June 30, 2018, the School Department recognized pension expense of $34,462. Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2018, the School Department reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:



Difference Between Expected and Actual Experience $ 96,539 $ 3,305,973Changes in Assumptions 1,356,225 0Net Difference Between Projected and Actual Earnings on Pension Plan Investments 24,308 0Changes in Proportion of Net Pension Liability (Asset) 104,639 19,694LEA's Contributions Subsequent to the Measurement Date of June 30, 2017 1,553,148 N/A

Total $ 3,134,859 $ 3,325,667

The School Department’s employer contributions of $1,553,148 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, 2019. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

81


2019 $ (1,113,216)2020 524,9652021 (380,071)2022 (775,635)2023 0Thereafter 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, 2017, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:





Mortality rates are based actual experience including an adjustment for some anticipated improvement. The actuarial assumptions used in the June 30, 2017, actuarial valuation were based on the results of an actuarial experience study performed for the period July 1, 2012, through June 30, 2016. 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, 2016, actuarial experience study. A blend of future capital market projections and historic market returns was used in a building-block method in which a best-estimate of expected future real rates of return (expected returns, net of pension plan investments expense and inflation) is developed for each major asset class. These best-estimates are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target allocation percentage and by adding expected inflation of 2.5 percent. The best-estimates of geometric real rates of return and the TCRS

82

investment policy target asset allocation for each major class are summarized in the following table:




Total 100 %

The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees as 7.25 percent based on a blending of the factors described above. Changes of Assumptions. In 2017, the following assumptions were changed: decreased inflation rate from 3.0 percent to 2.5 percent; decreased the investment rate of return from 7.5 percent to 7.25 percent; decreased the cost-of-living adjustment from 2.5 percent to 2.25 percent; decreased salary growth graded ranges from an average of 4.25 percent to an average of 4.0 percent; and modified the mortality assumptions. Discount Rate. The discount rate used to measure the total pension liability was 7.25 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.

83

Sensitivity of the Proportionate Share of Net Pension Liability (Asset) to Changes in the Discount Rate. The following presents the School Department’s proportionate share of the net pension liability (asset) calculated using the discount rate of 7.25 percent, as well as what the School Department’s proportionate share of the net pension liability (asset) would be if it were calculated using a discount rate that is one percentage point lower (6.25%) or one percentage point higher (8.25%) than the current rate:

School Department's Current Proportionate Share of 1% Discount 1% the Net Pension Decrease Rate Increase Liability (Asset) 6.25% 7.25% 8.25%

Net Pension Liability $ 14,368,404 $ (160,133) $ (12,168,924)

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

2. Deferred Compensation

Teachers hired after July 1, 2014, by the School Department arerequired to participate in a hybrid pension plan consisting of a definedbenefit portion, which is detailed in the pensions footnote above and ismanaged by the Tennessee Consolidated Retirement System, and adefined contribution portion which is placed into the state’s 401 (K) planand is managed by the employee. The defined contribution portion ofthe plan requires that the School Department contribute five percent ofeach teacher’s salary into their deferred compensation plan. Inaddition, teachers are required to contribute two percent of theirsalaries into this deferred compensation plan, unless they opt out of theemployee portion. During the year the School Department contributed$115,952 and teachers contributed $56,984 to this deferredcompensation pension plan.

I. Other Postempolyment Benefits

Claiborne County primary government does not offer other postemploymentbenefits to its retirees.


Plan Description. Claiborne County School Department provides self-insuredpostemployment benefits for health care and commercial postemploymentbenefits for life insurance for its retirees and their eligible dependents. Thisplan is administered by Shafer Insurance. For reporting purposes the plan isconsidered to be a single employer defined benefit OPEB plan based on criteria

84

in Statement No. 75 of the Governmental Accounting Standards Board (GASB). The plan is funded on a pay-as-you-go basis and there are no assets accumulating in a trust that meets the criteria of paragraph 4 of GASB Statement No. 75. The Board of Education is a member of the Tennessee School Board Association (TSBA) OPEB Trust. The TSBA OPEB Trust was established to manage investment of funds contributed by member employers to fund their OPEB liability. As of June 30, 2018, the Claiborne County Board of Education has not placed any funds with TSBA OPEB Trust. Benefits Provided. Retirees must have 20 years of service to qualify for benefits. For pre-65 retirees, the School Department pays 100 percent of the premium for single coverage medical benefits for retirees with 30 or more years of service. The premium is prorated for employees with 20 years of service up to 29 years of service. The retiree pays 100 percent of the difference between the premiums of single and family medical coverage. The School Department pays 100 percent of the premiums to provide $30,000 of life insurance for eligible pre-65 retirees. For post-65 retirees electing supplemental Medicare coverage, the retirees pay from $150 per month to $395 per month depending on coverage selected. Surviving spouses pay $291 per month for the supplemental coverage. Post-65 retirees pay 100 percent of any life insurance coverage. Employees Covered by Benefit Terms At the measurement date of June 30, 2018, the following employees were covered by the benefit terms: Inactive Employees or Beneficiaries Currently Receiving Benefits 234Inactive Employees Entitled to But Not Yet Receiving Benefits 0Active Employees 405

Total 639

Total OPEB Liability The plan’s total OPEB liability of $20,769,050 was measured as of June 30, 2018, and was determined by an actuarial valuation as of July 1, 2018. Actuarial Assumptions and Other Inputs. The total OPEB liability in the actuarial valuation was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified:

85

Discount Rate 3.05%Healthcare Cost Trend Rates 7% initially decreasing to 5% by 2022Salary Increases 3% annuallyRetirees share of Benefit-related Cost See discussion under Benefits Provided

The discount rate was based on market yields for AA rated municipal bonds compiled by fmsbonds, inc. as of June 30, 2018. The mortality assumption is based on RP-2014 Mortality Fully Generational using Projection Scale MP-2017. The actuarial assumptions used in the valuation were based on plan data and costs presented by the county with concurrence by the actuary. Changes in the Total OPEB Liability

Total OPEBLiability

Balance July 1, 2017 $ 20,567,018Changes for the Year: Service Cost $ 442,055 Interest 627,742 Changes in Benefit Terms 0 Difference between Expected and Actual (13,035) Experience Changes in Assumption and Other Inputs 0

Benefit Payments (854,730)Net Changes $ 202,032

Balance June 30, 2018 $ 20,769,050

The mortality assumption has been updated from RP-2014 Mortality Fully Generational using Projection Scale MP-2015 to RP-2014 Mortality Fully Generational using Projection Scale MP-2017. OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2018, the School Department recognized OPEB expense of $1,069,797. At June 30, 2018, the School Department reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

86



Difference Between Expected and Actual Experience $ 0 $ 13,035Changes of Assumptions/Inputs 0Net Difference Between Projected and Actual Investments 0 0Benefit Payment Subsequent to the Measurement Date 0 0

Total $ 0 $ 13,035

Amounts reported as deferred outflows and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Year EndingJune 30 Amount

2019 $ (2,123)2020 (2,123)2021 (2,123)2022 (2,123)2023 (2,123)Thereafter (2,420)

In the table shown above, positive amounts will increase OPEB expense while negative amounts will decrease OPEB expense. Sensitivity of the Total OPEB Liability to Changes in the Discount Rate. The following presents the total OPEB liability of the School Department calculated using the current discount rate, as well as what the OPEB liability would be if it was calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate:

Current1% Discount 1%

Decrease Rate Increase2.05% 3.05% 4.05%

Total OPEB Liability $ 24,183,172 $ 20,769,050 $ 18,058,153

87

Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rate. The following presents the total OPEB liability of the county calculated using the current healthcare cost trend rate as well as what the OPEB liability would be if it was calculated using a trend rate that is one percentage point lower or one percentage point higher than the current rate:

Current1% Trend 1%

Decrease Rate Increase6% 7% 8%

Decreasing Decreasing Decreasingto 4% to 5% to 6%

Total OPEB Liability $ 17,833,963 $ 20,769,050 $ 24,515,814

J. Office of Central Accounting, Budgeting, and Purchasing

Claiborne County operates under the provisions of the County FinancialManagement System of 1981. This act provides for a central system ofaccounting, budgeting, and purchasing for all county departments. The actalso provides for the creation of a Finance Department operated under thedirection of the finance director.

K. Purchasing Laws

The County Financial Management System of 1981 provides for the financedirector or a deputy appointed by him to serve as the county purchasing agent.The finance director serves as the purchasing agent for Claiborne County. Allpurchase orders are issued by the Finance Department. Purchases exceeding$10,000 are required to be competitively bid.

L. Subsequent Events

On July 13, 2018 Frances Cardwell left the Office of Clerk and Master and wassucceeded by Rita Jones.

On August 31, 2018, Jack Daniels left the Office of County Mayor and wassucceeded by Joe Brooks; David Ray left the Office of Sheriff and was succeededby Bob Brooks; and Evelyn Hill left the Office of County Clerk and wassucceeded by Karen Hurst.

On November 18, 2018, Sam Owens left his position as Finance Director. Asof the date of this report, Angelia Tucker, Deputy Finance Director, is actingas Finance Director.

88

REQUIRED SUPPLEMENTARY INFORMATION

89

Exhibit E-1

Claiborne 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 2016 2017

Total Pension LiabilityService Cost $ 1,439,339 $ 714,275 $ 744,708 $ 875,275Interest 3,355,422 3,275,640 3,336,404 3,375,465Changes in Benefit Terms 0 0 0 0Differences Between Actual and Expected Experience (1,736,936) (154,148) (652,386) (564,586)Changes in Assumptions 0 0 0 1,618,598Benefit Payments, Including Refunds of Employee Contributions (3,678,157) (3,114,892) (2,997,136) (3,079,830)Net Change in Total Pension Liability $ (620,332) $ 720,875 $ 431,590 $ 2,224,922Total Pension Liability, Beginning 45,138,702 44,518,370 45,239,245 45,670,835

Total Pension Liability, Ending (a) $ 44,518,370 $ 45,239,245 $ 45,670,835 $ 47,895,757

Plan Fiduciary Net PositionContributions - Employer $ 913,895 $ 507,315 $ 577,354 $ 621,480Contributions - Employee 857,440 457,428 541,088 564,884Net Investment Income 6,829,354 1,416,525 1,203,284 5,058,415Benefit Payments, Including Refunds of Employee Contributions (3,678,157) (3,114,892) (2,997,136) (3,079,830)Administrative Expense (25,669) (23,931) (40,988) (45,829)Other 0 0 7,695 0Net Change in Plan Fiduciary Net Position $ 4,896,863 $ (757,555) $ (708,703) $ 3,119,120Plan Fiduciary Net Position, Beginning 42,174,919 47,071,782 46,314,227 45,605,524

Plan Fiduciary Net Position, Ending (b) $ 47,071,782 $ 46,314,227 $ 45,605,524 $ 48,724,644

Net Pension Liability (Asset), Ending (a - b) $ (2,553,412) $ (1,074,982) $ 65,311 $ (828,887)

Plan Fiduciary Net Position as a Percentage of Total Pension Liability 105.74% 102.38% 99.86% 101.73%Covered Payroll $ 16,892,704 $ 9,190,482 $ 10,459,286 $ 11,264,351Net Pension Liability (Asset) as a Percentage of Covered Payroll (15.12)% (11.7)% 0.62% (7.36)%

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

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

90

Exhibit E-2

Claiborne 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 2017 2018

Actuarially Determined Contribution $ 913,895 $ 507,315 $ 577,354 $ 621,480 $ 628,376Less Contributions in Relation to the Actuarially Determined Contribution (913,895) (507,315) (577,354) (621,480) (628,376)

Contribution Deficiency (Excess) $ 0 $ 0 $ 0 $ 0 $ 0

Covered Payroll $ 16,829,704 $ 9,190,482 $ 10,459,286 $ 11,264,351 $ 11,389,667

Contributions as a Percentage of Covered Payroll 5.41% 5.52% 5.52% 5.52% 5.52%

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

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

91

Exhibit E-3

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

2015 2016 2017 2018

Contractually Required Contribution $ 29,816 $ 63,261 $ 78,620 $ 90,222Less Contributions in Relation to the Contractually Required Contribution (29,816) (63,261) (78,620) (90,222)

Contribution Deficiency (Excess) $ 0 $ 0 $ 0 $ 0

Covered Payroll $ 745,396 $ 1,581,516 $ 1,965,490 $ 2,255,575

Contributions as a Percentage of Covered Payroll 4.00% 4.00% 4.00% 4.00%


92

Exhibit E-4

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

2014 2015 2016 2017 2018

Contractually Required Contribution $ 1,645,756 $ 1,596,791 $ 1,588,945 $ 1,564,008 $ 1,553,148Less Contributions in Relation to the Contractually Required Contribution (1,645,756) (1,596,791) (1,588,945) (1,564,008) (1,553,148)

Contribution Deficiency (Excess) $ 0 $ 0 $ 0 $ 0 $ 0

Covered Payroll $ 18,533,289 $ 17,663,641 $ 17,576,842 $ 17,300,987 $ 17,104,835

Contributions as a Percentage of Covered Payroll 8.88% 9.04% 9.04% 9.04% 9.08%


93

Exhibit E-5

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

2016 2017 2018

School Department's Proportion of the Net Pension Asset 0.358755% 0.359434% 0.299465%

School Department's Proportionate Share of the Net Pension Liability (Asset) ($14,433) ($37,418) ($79,007)

Covered Payroll $745,396 $1,581,516 $1,965,490

School Department's Proportionate Share of the Net Pension Liability (Asset) as a Percentage of its Covered Payroll (1.94) (2.37) (4.02)

Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 127.46% 121.88% 126.81%

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


94

Exhibit E-6

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

2015 2016 2017 2018

School Department's Proportion of the Net Pension Liability/Asset 0.472187% 0.471847% 0.486920% 0.489426%

School Department's Proportionate Share of the Net Pension Liability (Asset) $ (76,728) $ 193,285 $ 3,042,979 $ (160,133)

Covered Payroll $ 18,533,289 $ 17,663,641 $ 17,576,842 $ 17,300,987

School Department's Proportionate Share of the Net Pension Liability (Asset) as a Percentage of its Covered Payroll (0.41)% 1.09% 17.31% (0.93)%

Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 100.08% 99.81% 97.14% 100.14%

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


95

Exhibit E-7

Claiborne County, TennesseeSchedule of Changes in the Total OPEB Liability and Related Ratios - Self-Insured PlanDiscretely Presented Claiborne County School DepartmentFor the Fiscal Year Ended June 30

2018Total OPEB LiabilityService Cost $ 442,055 Interest 627,742 Changes in Benefit Terms 0Differences Between Actual and Expected Experience (13,035)Changes in Assumptions or Other Inputs 0Benefit Payments (854,730) Net Change in Total OPEB Liability $ 202,032 Total OPEB Liability, Beginning 20,567,018

Total OPEB Liability, Ending $ 20,769,050

Covered Employee Payroll $ 19,047,813 Net OPEB Liability as a Percentage of Covered Employee Payroll 109.04%

Note 1: ten years of data will be presented when available.

Note 2: no assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75.

96

CLAIBORNE COUNTY, TENNESSEE NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION


TENNESSEE CONSOLIDATED RETIREMENT SYSTEM

Valuation Date: Actuarially determined contribution rates for fiscal year 2017 were calculated based on the June 30, 2016, actuarial valuation.

Methods and assumptions used to determine contribution rates:

Actuarial Cost Method Entry Age NormalAmortization Method Level Dollar, Closed (Not to Exceed 20 Years)Remaining Amortization Period Varies by 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 Inflation,Investment 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


97

COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES

98

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 specific purposes other than debt service or capital projects.

________________________________________

Drug Control Fund – The Drug Control Fund is used to account for revenues received from drug-related fines, forfeitures, and seizures.

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.

Capital Projects Fund________________________________________

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.

________________________________________

Highway Capital Projects Fund – The Highway Capital Projects Fund is used to account for major paving projects and the purchase of some equipment for the Highway Department.

99

Exhibit F-1

Claiborne County, TennesseeCombining Balance SheetNonmajor Governmental FundsJune 30, 2018

Constitu - Totaltional Highway Nonmajor

Drug Officers - Capital GovernmentalControl Fees Total Projects Funds

ASSETS

Cash $ 0 $ 146,147 $ 146,147 $ 0 $ 146,147Equity in Pooled Cash and Investments 100,034 0 100,034 141,023 241,057Property Taxes Receivable 0 0 0 112,318 112,318Allowance for Uncollectible Property Taxes 0 0 0 (4,810) (4,810)

Total Assets $ 100,034 $ 146,147 $ 246,181 $ 248,531 $ 494,712

LIABILITIES

Other Collections $ 10,776 $ 0 $ 10,776 $ 0 $ 10,776Total Liabilities $ 10,776 $ 0 $ 10,776 $ 0 $ 10,776


Deferred Current Property Taxes $ 0 $ 0 $ 0 $ 103,984 $ 103,984Deferred Delinquent Property Taxes 0 0 0 3,221 3,221Total Deferred Inflows of Resources $ 0 $ 0 $ 0 $ 107,205 $ 107,205

FUND BALANCES

Restricted:Restricted for Finance $ 0 $ 146,147 $ 146,147 $ 0 $ 146,147Restricted for Public Safety 89,258 0 89,258 0 89,258Restricted for Capital Projects 0 0 0 141,326 141,326

Total Fund Balances $ 89,258 $ 146,147 $ 235,405 $ 141,326 $ 376,731

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 100,034 $ 146,147 $ 246,181 $ 248,531 $ 494,712

Special Revenue Funds

Capital Projects

Fund

100

Exhibit F-2

Claiborne County, TennesseeCombining Statement of Revenues, Expenditures,

and Changes in Fund BalancesNonmajor Governmental FundsFor the Year Ended June 30, 2018



RevenuesLocal Taxes $ 0 $ 0 $ 0 $ 808,215 $ 808,215Fines, Forfeitures, and Penalties 58,130 0 58,130 0 58,130Charges for Current Services 0 430,788 430,788 0 430,788Other Local Revenues 2,500 0 2,500 0 2,500Federal Government 6,101 0 6,101 0 6,101

Total Revenues $ 66,731 $ 430,788 $ 497,519 $ 808,215 $ 1,305,734


Finance $ 0 $ 394,128 $ 394,128 $ 0 $ 394,128Administration of Justice 0 46,830 46,830 0 46,830Public Safety 89,081 0 89,081 0 89,081

Capital Projects 0 0 0 664,421 664,421Total Expenditures $ 89,081 $ 440,958 $ 530,039 $ 664,421 $ 1,194,460

Excess (Deficiency) of RevenuesOver Expenditures $ (22,350) $ (10,170) $ (32,520) $ 143,794 $ 111,274

Other Financing Sources (Uses)Transfers Out $ 0 $ 0 $ 0 $ (117,357) $ (117,357)

Total Other Financing Sources (Uses) $ 0 $ 0 $ 0 $ (117,357) $ (117,357)

(Continued)


Capital Projects

Fund

101

Exhibit F-2


and Changes in Fund BalancesNonmajor Governmental Funds (Cont.)



Net Change in Fund Balances $ (22,350) $ (10,170) $ (32,520) $ 26,437 $ (6,083)Fund Balance, July 1, 2017 111,608 156,317 267,925 114,889 382,814

Fund Balance, June 30, 2018 $ 89,258 $ 146,147 $ 235,405 $ 141,326 $ 376,731


Capital Projects

Fund

102

Exhibit F-3

Claiborne County, TennesseeSchedule of Revenues, Expenditures, and Changes

in Fund Balance - Actual and BudgetDrug Control FundFor the Year Ended June 30, 2018



RevenuesFines, Forfeitures, and Penalties $ 58,130 $ 45,500 $ 64,925 $ (6,795)Other Local Revenues 2,500 0 0 2,500Federal Government 6,101 0 0 6,101

Total Revenues $ 66,731 $ 45,500 $ 64,925 $ 1,806

ExpendituresPublic Safety

Drug Enforcement $ 89,081 $ 88,000 $ 107,425 $ 18,344Total Expenditures $ 89,081 $ 88,000 $ 107,425 $ 18,344

Excess (Deficiency) of RevenuesOver Expenditures $ (22,350) $ (42,500) $ (42,500) $ 20,150

Net Change in Fund Balance $ (22,350) $ (42,500) $ (42,500) $ 20,150Fund Balance, July 1, 2017 111,608 79,608 79,608 32,000


Budgeted Amounts

103

Exhibit F-4


in Fund Balance - Actual and BudgetHighway Capital Projects FundFor the Year Ended June 30, 2018



RevenuesLocal Taxes $ 808,215 $ 830,200 $ 830,200 $ (21,985)

Total Revenues $ 808,215 $ 830,200 $ 830,200 $ (21,985)

ExpendituresCapital Projects

Highway and Street Capital Projects $ 664,421 $ 830,200 $ 712,843 $ 48,422Total Expenditures $ 664,421 $ 830,200 $ 712,843 $ 48,422

Excess (Deficiency) of RevenuesOver Expenditures $ 143,794 $ 0 $ 117,357 $ 26,437

Other Financing Sources (Uses)Transfers Out $ (117,357) $ 0 $ (117,357) $ 0

Total Other Financing Sources $ (117,357) $ 0 $ (117,357) $ 0

Net Change in Fund Balance $ 26,437 $ 0 $ 0 $ 26,437Fund Balance, July 1, 2017 114,889 115,271 115,271 (382)


Budgeted Amounts

104

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.

____________________________________

105

Exhibit G


in Fund Balance - Actual and BudgetGeneral Debt Service FundFor the Year Ended June 30, 2018



RevenuesLocal Taxes $ 866,944 $ 869,800 $ 869,800 $ (2,856)Other Local Revenues 3,103,026 3,091,561 3,123,589 (20,563)

Total Revenues $ 3,969,970 $ 3,961,361 $ 3,993,389 $ (23,419)

ExpendituresPrincipal on Debt

General Government $ 435,000 $ 637,033 $ 490,000 $ 55,000Highways and Streets 253,146 105,971 253,146 0Education 1,888,386 1,860,000 1,888,387 1

Interest on DebtGeneral Government 166,544 230,467 222,086 55,542Highways and Streets 18,925 11,386 18,925 0Education 1,210,407 1,227,561 1,230,852 20,445

Other Debt ServiceGeneral Government 7,279 6,300 7,350 71


Excess (Deficiency) of RevenuesOver Expenditures $ (9,717) $ (117,357) $ (117,357) $ 107,640

Other Financing Sources (Uses)Transfers In $ 117,357 $ 117,357 $ 117,357 $ 0

Total Other Financing Sources $ 117,357 $ 117,357 $ 117,357 $ 0

Net Change in Fund Balance $ 107,640 $ 0 $ 0 $ 107,640Fund Balance, July 1, 2017 614,709 621,150 621,150 (6,441)


Budgeted Amounts

106

Fiduciary Funds_______________________________

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

_______________________________

Cities - Sales Tax Fund – The Cities - Sales Tax Fund is used to account for the second half of the sales tax revenues collected inside incorporated areas of the county. These revenues are received by the county from the State of Tennessee and forwarded to the various cities on a monthly basis.

Constitutional Officers - Agency Fund – The Constitutional Officers - Agency Fund is used to account for amounts collected in an agency capacity by the county clerk; circuit, 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.

Other Agency Fund – The Other Agency Fund is used to account for transactions of the discretely presented Claiborne County Economic and Community Development Board that are channeled through the county Trustee’s Office.

District Attorney General Fund – The District Attorney General Fund is used to account for restricted revenue held for the benefit of the Office of the District Attorney General.

107

Exhibit H-1

Claiborne County, TennesseeCombining Statement of Fiduciary Assets and LiabilitiesFiduciary FundsJune 30, 2018

Constitu-Cities - tional DistrictSales Officers - Other AttorneyTax Agency Agency General Total

ASSETS

Cash $ 0 $ 1,738,350 $ 0 $ 0 $ 1,738,350Equity in Pooled Cash and Investments 0 0 462,962 89,273 552,235Accounts Receivable 0 46 0 0 46Due from Other Governments 341,201 0 0 0 341,201Property Taxes Receivable 0 0 57,599 0 57,599Allowance for Uncollectible Property Taxes 0 0 (2,467) 0 (2,467)

Total Assets $ 341,201 $ 1,738,396 $ 518,094 $ 89,273 $ 2,686,964

LIABILITIES

Due to Other Taxing Units $ 341,201 $ 0 $ 0 $ 0 $ 341,201Due to Litigants, Heirs, and Others 0 1,738,396 0 89,273 1,827,669Other Current Liabilities 0 0 518,094 0 518,094

Total Liabilities $ 341,201 $ 1,738,396 $ 518,094 $ 89,273 $ 2,686,964

Agency Funds

108

Exhibit H-2

Claiborne County, TennesseeCombining Statement of Changes in Assets and Liabilities - All Agency FundsFor the Year Ended June 30, 2018

Beginning EndingBalance Additions Deductions Balance

Cities - Sales Tax Fund Assets Equity in Pooled Cash and Investments $ 0 $ 1,899,502 $ 1,899,502 $ 0 Due from Other Governments 316,061 341,201 316,061 341,201

Total Assets $ 316,061 $ 2,240,703 $ 2,215,563 $ 341,201

Liabilities Due to Other Taxing Units $ 316,061 $ 2,240,703 $ 2,215,563 $ 341,201

Total Liabilities $ 316,061 $ 2,240,703 $ 2,215,563 $ 341,201

Constitutional Officers - Agency Fund Assets Cash $ 1,480,629 $ 8,405,280 $ 8,147,559 $ 1,738,350 Accounts Receivable 419 46 419 46

Total Assets $ 1,481,048 $ 8,405,326 $ 8,147,978 $ 1,738,396

Liabilities Due to Litigants, Heirs, and Others $ 1,481,048 $ 8,405,326 $ 8,147,978 $ 1,738,396

Total Liabilities $ 1,481,048 $ 8,405,326 $ 8,147,978 $ 1,738,396

Other Agency Fund Assets Equity in Pooled Cash and Investments $ 706,641 $ 306,528 $ 550,207 $ 462,962 Property Taxes Receivable 57,642 57,599 57,642 57,599 Allowance for Uncollectible Property Taxes (2,593) (2,467) (2,593) (2,467)

Total Assets $ 761,690 $ 361,660 $ 605,256 $ 518,094

Liabilities Other Current Liabilities $ 761,690 $ 361,660 $ 605,256 $ 518,094

Total Liabilities $ 761,690 $ 361,660 $ 605,256 $ 518,094

(Continued)

109

Exhibit H-2

Claiborne County, TennesseeCombining Statement of Changes in Assets and Liabilities - All Agency Funds (Cont.)

Beginning EndingBalance Additions Deductions Balance

District Attorney General Assets Equity in Pooled Cash and Investments $ 84,235 $ 40,856 $ 35,818 $ 89,273

Total Assets $ 84,235 $ 40,856 $ 35,818 $ 89,273

Liabilities Due to Litigants, Heirs and Others $ 84,235 $ 40,856 $ 35,818 $ 89,273

Total Liabilities $ 84,235 $ 40,856 $ 35,818 $ 89,273

Totals - All Agency Funds Assets Cash $ 1,480,629 $ 8,405,280 $ 8,147,559 $ 1,738,350 Equity in Pooled Cash and Investments 790,876 2,246,886 2,485,527 552,235 Accounts Receivable 419 46 419 46 Due from Other Governments 316,061 341,201 316,061 341,201 Property Taxes Receivable 57,642 57,599 57,642 57,599 Allowance for Uncollectible Property Taxes (2,593) (2,467) (2,593) (2,467)

Total Assets $ 2,643,034 $ 11,048,545 $ 11,004,615 $ 2,686,964

Liabilities Due to Other Taxing Units $ 316,061 $ 2,240,703 $ 2,215,563 $ 341,201 Due to Litigants, Heirs, and Others 1,565,283 8,446,182 8,183,796 1,827,669 Other Current Liabilities 761,690 361,660 605,256 518,094

Total Liabilities $ 2,643,034 $ 11,048,545 $ 11,004,615 $ 2,686,964

110

Claiborne County School Department _______________________________

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

Employee Insurance Fund – The Employee Insurance Fund is used to account for transactions pertaining to the School Department’s self-insured group medical plan.

111

Exhibit I-1

Claiborne County, TennesseeStatement of ActivitiesDiscretely Presented Claiborne County School DepartmentFor the Year Ended June 30, 2018

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 $ 22,787,293 $ 98,852 $ 2,174,610 $ 80,000 $ (20,433,831) Support Services 15,821,697 0 0 0 (15,821,697) Operation of Non-instructional Services 3,893,461 427,959 3,330,469 0 (135,033)

Total Governmental Activities $ 42,502,451 $ 526,811 $ 5,505,079 $ 80,000 $ (36,390,561)

General Revenues: Taxes: Property Taxes Levied for General Purposes $ 6,731,736 Local Option Sales Taxes 2,705,161 Coal Severence Tax 153,596 Other Taxes 24,117 Grants and Contributions Not Restricted for Specific Programs 27,597,524 Unrestricted Investment Income 15,690 Miscellaneous 382,587Total General Revenues $ 37,610,411

Change in Net Position $ 1,219,850Restatement - See Note I.D.9 (19,752,107)Net Position, July 1, 2017 38,116,388

Net Position, June 30, 2018 $ 19,584,131

Program Revenues

112

Exhibit I-2

Claiborne County, TennesseeBalance Sheet - Governmental FundsDiscretely Presented Claiborne County School DepartmentJune 30, 2018

OtherGeneral Govern- TotalPurpose mental GovernmentalSchool Funds Funds

ASSETS

Equity in Pooled Cash and Investments $ 2,632,438 $ 1,161,606 $ 3,794,044Accounts Receivable 14,356 46,190 60,546Due from Other Governments 1,506,127 147,191 1,653,318Property Taxes Receivable 6,754,254 0 6,754,254Allowance for Uncollectible Property Taxes (294,787) 0 (294,787)

Total Assets $ 10,612,388 $ 1,354,987 $ 11,967,375

LIABILITIES

Accounts Payable $ 47,644 $ 30,073 $ 77,717Total Liabilities $ 47,644 $ 30,073 $ 77,717


Deferred Current Property Taxes $ 6,239,009 $ 0 $ 6,239,009Deferred Delinquent Property Taxes 201,526 0 201,526Other Deferred/Unavailable Revenue 244,084 0 244,084Total Deferred Inflows of Resources $ 6,684,619 $ 0 $ 6,684,619

FUND BALANCES

Restricted:Restricted for Education $ 0 $ 974,914 $ 974,914Restricted for Capital Outlay 28,992 0 28,992

Committed:Committed for Education 0 350,000 350,000

Assigned:Assigned for Education 602,307 0 602,307Assigned for Debt Service 565,104 0 565,104

Unassigned 2,683,722 0 2,683,722Total Fund Balances $ 3,880,125 $ 1,324,914 $ 5,205,039

Total Liabilities, Deferred Inflows of Resources, and Fund Balances$ 10,612,388 $ 1,354,987 $ 11,967,375

Nonmajor Funds

Major Fund

113

Exhibit I-3

Claiborne County, TennesseeReconciliation of the Balance Sheet of Governmental Funds to the Statement of Net PositionDiscretely Presented Claiborne County School DepartmentJune 30, 2018

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) $ 5,205,039

(1) Capital assets used in governmental activities are not financial resources and therefore are not reported inthe governmental funds. Add: land $ 1,224,296 Add: buildings and improvements net of accumulated depreciation 30,575,399 Add: other capital assets net of accumulated depreciation 1,626,109 33,425,804

(2) Internal service funds are used by management to charge thecost of employee health insurance to individual funds. Theassets and liabilities of the internal service funds areincluded in governmental activities in the statementof net position. 430,625

(3) Long-term liabilities are not due and payable in the currentperiod and therefore are not reported in the governmental funds. Less: contributions due to the primary government for other loans payable $ (118,884) Less: other postemployment benefits liability (20,769,050) (20,887,934)

(4) Amounts reported as deferred outflows of resources and deferredinflows of resources related to pensions will be amoritized andrecognized as components of pension expenses in future years: Add: deferred outflows of resources related to pensions $ 4,056,712 Less: deferred inflows of resources related to pensions (3,689,088) Less: deferred inflows of resources related to OPEB (13,035) 354,589

(5) Net pension assets are not current financial resources andtherefore are not reported in the governmental funds: Add: net pension assets - agent plan $ 371,258 Add: net pension assets - teacher legacy plan 160,133 Add: net pension assets - teacher retirement plan 79,007 610,398

(6) Other long-term assets are not available to pay forcurrent-period expenditures and therefore are deferredin the governmental funds. 445,610

Net position of governmental activities (Exhibit A) $ 19,584,131

114

Exhibit I-4


and Changes in Fund Balances - Governmental Funds

Discretely Presented Claiborne County School DepartmentFor the Year Ended June 30, 2018

OtherGeneral Govern- TotalPurpose mental GovernmentalSchool Funds Funds

RevenuesLocal Taxes $ 10,195,425 $ 0 $ 10,195,425Licenses and Permits 2,432 0 2,432Charges for Current Services 100,452 426,359 526,811Other Local Revenues 389,506 7,814 397,320State of Tennessee 26,960,857 26,525 26,987,382Federal Government 32,165 5,579,250 5,611,415

Total Revenues $ 37,680,837 $ 6,039,948 $ 43,720,785


Instruction $ 20,090,605 $ 2,475,162 $ 22,565,767Support Services 12,722,519 468,202 13,190,721Operation of Non-Instructional Services 1,300,290 2,724,605 4,024,895Capital Outlay 57,629 0 57,629

Debt Service:Other Debt Service 3,099,143 0 3,099,143

Total Expenditures $ 37,270,186 $ 5,667,969 $ 42,938,155

Excess (Deficiency) of RevenuesOver Expenditures $ 410,651 $ 371,979 $ 782,630

Other Financing Sources (Uses)Insurance Recovery $ 16,393 $ 0 $ 16,393Transfers Out (350,000) 0 (350,000)

Total Other Financing Sources (Uses) $ (333,607) $ 0 $ (333,607)

Net Change in Fund Balances $ 77,044 $ 371,979 $ 449,023Fund Balance, July 1, 2017 3,803,081 952,935 4,756,016

Fund Balance, June 30, 2018 $ 3,880,125 $ 1,324,914 $ 5,205,039

Nonmajor Funds

Major Fund

115

Exhibit I-5

Claiborne County, TennesseeReconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of ActivitiesDiscretely Presented Claiborne County School DepartmentFor the Year Ended June 30, 2018

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) $ 449,023

(1) Governmental funds report capital outlays as expenditures. However,in the statement of activities, the cost of these assets is allocated over their useful lives and reported as depreciation expense. The difference between capital outlays and depreciation is itemized asfollows: Add: capital assets purchased in the current period $ 359,375 Less: current-year depreciation expense (1,537,954) (1,178,579)

(2) The net effect of various miscellaneous transactions involving capitalassets (sales, trade-ins, and donations) is to decrease net assets. Less: book value of capital assets disposed (7,879)

(3) Revenues in the statement of activities that do not provide currentfinancial resources are not reported as revenues in the funds. Add: deferred delinquent property taxes and other deferred June 30, 2018 $ 445,610 Less: deferred delinquent property taxes and other deferred June 30, 2017 (445,051) 559

(4) The contributions of long-term debt (e.g., notes, bonds, leases) by the primarygovernment provide current financial resources to governmental funds, whilethe contributions by the School Department of the principal of long-term debt consume the current financial resources of governmental funds. Neithertransaction, however, has any effect on net position. Add: principal contributions on other loans to the primary government 28,386

(5) Some expenses reported in the statement of activities do not requirethe use of current financial resources and therefore are not reportedas expenditures in the governmental funds. Change in OPEB liability (net of restatement) $ (202,032) Change in net pension asset/liability - agent plan 401,504 Change in net pension asset - teacher hybrid plan 41,589 Change in net pension liability - teacher legacy plan 3,203,112 Change in deferred outflows related to pensions (2,198,795) Change in deferred inflows related to pensions 489,126 Change in deferred inflows related to OPEB (13,035) 1,721,469

(6) Internal service funds are used by management to charge the cost ofemployee health benefits to individual funds. The net revenue (expense)of certain activities of the internal service fund is reported withgovernmental activities in the statement of activities. 206,871

Change in net position of governmental activities (Exhibit B) $ 1,219,850

116

Exhibit I-6

Claiborne County, TennesseeCombining Balance Sheet - Nonmajor Governmental FundsDiscretely Presented Claiborne County School DepartmentJune 30, 2018

TotalSchool Nonmajor

Federal Central GovernmentalProjects Cafeteria Funds

ASSETS

Equity in Pooled Cash and Investments $ 233,036 $ 928,570 $ 1,161,606Accounts Receivable 27 46,163 46,190Due from Other Governments 147,191 0 147,191

Total Assets $ 380,254 $ 974,733 $ 1,354,987

LIABILITIES

Accounts Payable $ 29,588 $ 485 $ 30,073Total Liabilities $ 29,588 $ 485 $ 30,073

FUND BALANCES

Restricted:Restricted for Education $ 666 $ 974,248 $ 974,914

Committed:Committed for Education 350,000 0 350,000

Total Fund Balances $ 350,666 $ 974,248 $ 1,324,914

Total Liabilities and Fund Balances $ 380,254 $ 974,733 $ 1,354,987


117

Exhibit I-7


and Changes in Fund Balances - Nonmajor Governmental Funds

Discretely Presented Claiborne County School DepartmentFor the Year Ended June 30, 2018

TotalSchool NonmajorFederal Central GovernmentalProjects Cafeteria Funds

RevenuesCharges for Current Services $ 0 $ 426,359 $ 426,359Other Local Revenues 5,002 2,812 7,814State of Tennessee 0 26,525 26,525Federal Government 3,141,037 2,438,213 5,579,250

Total Revenues $ 3,146,039 $ 2,893,909 $ 6,039,948


Instruction $ 2,475,162 $ 0 $ 2,475,162Support Services 468,202 0 468,202Operation of Non-Instructional Services 202,009 2,522,596 2,724,605

Total Expenditures $ 3,145,373 $ 2,522,596 $ 5,667,969

Excess (Deficiency) of RevenuesOver Expenditures $ 666 $ 371,313 $ 371,979

Net Change in Fund Balances $ 666 $ 371,313 $ 371,979Fund Balance, July 1, 2017 350,000 602,935 952,935

Fund Balance, June 30, 2018 $ 350,666 $ 974,248 $ 1,324,914


118

Exhibit I-8


in Fund Balance - Actual and BudgetDiscretely Presented Claiborne County School DepartmentGeneral Purpose School FundFor the Year Ended June 30, 2018



RevenuesLocal Taxes $ 10,195,425 $ 10,368,300 $ 10,368,300 $ (172,875)Licenses and Permits 2,432 2,200 2,200 232Charges for Current Services 100,452 211,000 163,213 (62,761)Other Local Revenues 389,506 266,000 340,375 49,131State of Tennessee 26,960,857 26,432,512 27,063,622 (102,765)Federal Government 32,165 0 32,046 119

Total Revenues $ 37,680,837 $ 37,280,012 $ 37,969,756 $ (288,919)

ExpendituresInstruction

Regular Instruction Program $ 15,946,136 $ 16,270,781 $ 16,252,475 $ 306,339Special Education Program 2,959,402 2,919,858 3,062,487 103,085Career and Technical Education Program 1,185,067 1,141,377 1,198,877 13,810Adult Education Program 0 109,861 0 0

Support ServicesAttendance 160,720 160,813 162,817 2,097Health Services 349,244 362,932 362,932 13,688Other Student Support 661,366 678,277 678,277 16,911Regular Instruction Program 1,046,743 1,094,453 1,092,574 45,831Special Education Program 609,496 629,504 629,504 20,008Career and Technical Education Program 86,064 88,135 88,135 2,071Technology 380,739 353,776 396,251 15,512Board of Education 1,724,998 1,751,734 1,751,734 26,736Director of Schools 414,532 476,172 474,572 60,040Office of the Principal 1,538,195 1,444,665 1,538,369 174Fiscal Services 279,149 0 290,192 11,043Operation of Plant 2,007,922 2,133,615 2,133,615 125,693Maintenance of Plant 1,853,674 2,001,931 1,970,431 116,757Transportation 1,504,333 1,601,491 1,611,281 106,948Central and Other 105,344 114,476 114,476 9,132

Operation of Non-Instructional ServicesCommunity Services 668,739 240,612 742,737 73,998Early Childhood Education 631,551 708,837 631,553 2

Capital OutlayRegular Capital Outlay 57,629 188,100 215,000 157,371

Principal on DebtEducation 0 1,887,500 0 0

Interest on DebtEducation 0 1,237,562 0 0

Other Debt ServiceEducation 3,099,143 2,500 3,127,562 28,419

Total Expenditures $ 37,270,186 $ 37,598,962 $ 38,525,851 $ 1,255,665

Excess (Deficiency) of RevenuesOver Expenditures $ 410,651 $ (318,950) $ (556,095) $ 966,746

(Continued)

Budgeted Amounts

119

Exhibit I-8


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



Other Financing Sources (Uses)Insurance Recovery $ 16,393 $ 0 $ 16,394 $ (1)Transfers In 0 8,745 0 0Transfers Out (350,000) (298,937) (350,000) 0

Total Other Financing Sources $ (333,607) $ (290,192) $ (333,606) $ (1)

Net Change in Fund Balance $ 77,044 $ (609,142) $ (889,701) $ 966,745Fund Balance, July 1, 2017 3,803,081 3,173,362 3,173,362 629,719

Fund Balance, June 30, 2018 $ 3,880,125 $ 2,564,220 $ 2,283,661 $ 1,596,464

Budgeted Amounts

120

Exhibit I-9


in Fund Balance - Actual and BudgetDiscretely Presented Claiborne County School DepartmentSchool Federal Projects FundFor the Year Ended June 30, 2018



RevenuesOther Local Revenues $ 5,002 $ 0 $ 5,000 $ 2Federal Government 3,141,037 4,022,881 3,550,443 (409,406)

Total Revenues $ 3,146,039 $ 4,022,881 $ 3,555,443 $ (409,404)

ExpendituresInstruction

Regular Instruction Program $ 1,381,900 $ 1,732,534 $ 1,435,062 $ 53,162Special Education Program 1,035,248 1,153,337 1,148,693 113,445Career and Technical Education Program 58,014 62,181 58,014 0

Support ServicesOther Student Support 55,372 41,742 226,426 171,054Regular Instruction Program 288,832 341,944 329,482 40,650Special Education Program 116,638 119,462 143,864 27,226Career and Technical Education Program 6,048 4,448 6,048 0Transportation 1,312 0 1,665 353

Operation of Non-Instructional ServicesCommunity Services 202,009 561,400 202,680 671


Excess (Deficiency) of RevenuesOver Expenditures $ 666 $ 5,833 $ 3,509 $ (2,843)

Other Financing Sources (Uses)Transfers Out $ 0 $ (5,832) $ (3,509) $ 3,509

Total Other Financing Sources $ 0 $ (5,832) $ (3,509) $ 3,509

Net Change in Fund Balance $ 666 $ 1 $ 0 $ 666Fund Balance, July 1, 2017 350,000 257,617 257,617 92,383


Budgeted Amounts

121

Exhibit I-10


in Fund Balance - Actual and BudgetDiscretely Presented Claiborne County School DepartmentCentral Cafeteria FundFor the Year Ended June 30, 2018



RevenuesCharges for Current Services $ 426,359 $ 191,881 $ 191,881 $ 234,478Other Local Revenues 2,812 846 846 1,966State of Tennessee 26,525 26,000 26,000 525Federal Government 2,438,213 2,526,798 2,644,748 (206,535)

Total Revenues $ 2,893,909 $ 2,745,525 $ 2,863,475 $ 30,434

ExpendituresOperation of Non-Instructional Services

Food Service $ 2,522,596 $ 2,745,525 $ 2,863,475 $ 340,879Total Expenditures $ 2,522,596 $ 2,745,525 $ 2,863,475 $ 340,879

Excess (Deficiency) of RevenuesOver Expenditures $ 371,313 $ 0 $ 0 $ 371,313

Other Financing Sources (Uses)Transfers In $ 0 $ 8,745 $ 0 $ 0Transfers Out 0 (8,745) 0 0

Total Other Financing Sources $ 0 $ 0 $ 0 $ 0

Net Change in Fund Balance $ 371,313 $ 0 $ 0 $ 371,313Fund Balance, July 1, 2017 602,935 594,448 594,448 8,487


Budgeted Amounts

122

Exhibit I-11

Claiborne County, TennesseeStatement of Net PositionDiscretely Presented Claiborne County School DepartmentProprietary FundJune 30, 2018

ASSETS

Current Assets: Cash in Bank $ 1,060,804Total Assets $ 1,060,804

LIABILITIES

Current Liabilities: Accounts Payable $ 630,179Total Liabilities $ 630,179

NET POSITIONUnrestricted $ 430,625

Health

GovernmentalActivities -

InternalService Fund

EmployeeInsurance -

123

Exhibit I-12

Claiborne County, TennesseeStatement of Revenues, Expenses, and Changes in Net PositionDiscretely Presented Claiborne County School DepartmentProprietary FundFor the Year Ended June 30, 2018

Operating Revenues Charges for Current Services Self-Insurance Premiums/Contributions $ 4,795,104Total Operating Revenues $ 4,795,104

Operating Expenses Handling Charges and Administrative Costs $ 275,779 Excess Risk Insurance 520,888 Medical Claims 4,142,523Total Operating Expenses $ 4,939,190

Operating Income (Loss) $ (144,086)

Nonoperating Revenues (Expenses) Investment Income $ 957 Total Nonoperating Revenues (Expenses) $ 957

Income (Loss) Before Operating Transfers $ (143,129)Transfers In 350,000Changes in Net Position $ 206,871Net Position, July 1, 2017 223,754

Net Position, June 30, 2018 $ 430,625

Health

GovernmentalActivities -

InternalService Fund

Employee Insurance -

124

Exhibit I-13

Claiborne County, TennesseeStatement of Cash FlowsDiscretely Presented Claiborne County School DepartmentProprietary FundFor the Year Ended June 30, 2018

Cash Flows from Operating Activities Receipts for Self-Insurance Premiums $ 4,795,104 Payments for Excess Risk Insurance (520,888) Payments for Medical Claims (4,191,971) Payments for Administrative Costs (275,779)Net Cash Provided By (Used In) Operating Activities $ (193,534)

Cash Flows from Investment Activities Interest on Investments $ 957Net Cash Provided By (Used In) Investing Activities $ 957

Cash Flow from Noncapital Financing Activities: Transfers from other funds $ 350,000Net cash provided by (used in) noncapital financing activities $ 350,000

Net Increase (Decrease) in Cash $ 157,423Cash, July 1, 2017 903,381

Cash, June 30, 2018 $ 1,060,804

Reconciliation of Operating Income to Net Cash Provided By (Used In) Operating Activities Operating Income (Loss) $ (144,086) Adjustments to Reconcile Net Operating Income (Loss) to Net Cash Provided By (Used In) Operating Activities: Changes in Assets and Liabilities: Increase (Decrease) in Accounts Payable (49,448)

Net Cash Provided By (Used In) Operating Activities $ (193,534)

Health

GovernmentalActivities -Internal

Service FundEmployee

Insurance -

125

MISCELLANEOUS SCHEDULES

126

Exhibit J-1

Claiborne County, TennesseeSchedule of Changes in Long-term Notes, Other Loans, Capital Leases, and BondsFor the Year Ended June 30, 2018

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

Description of Indebtedness of Issue Rate Issue Date 7-1-17 Period 6-30-18

NOTES PAYABLE Payable through General Debt Service Fund Capital Outlay - Highway Equipment $ 128,013 2.63 % 10-2-13 10-2-18 $ 35,819 $ 26,744 $ 9,075 Capital Outlay - Highway Projects 2014 585,000 2.85 10-2-13 10-2-18 244,052 120,289 123,763Total Notes Payable $ 279,871 $ 147,033 $ 132,838

OTHER LOANS PAYABLE Payable by Contributions from the School Department through the General Purpose School Fund to the General Debt Service Fund Powell Valley Electric Cooperative: Ball Field Lighting Project at Schools 147,722 2.5 5-1-07 4-30-22 $ 64,799 $ 12,490 $ 52,309 Ball Field Lighting Project at Schools 188,010 2.5 5-1-07 4-30-22 82,471 15,896 66,575Total Other Loans Payable $ 147,270 $ 28,386 $ 118,884

CAPITAL LEASES PAYABLE Payable through General Debt Service Fund Highway Equipment - Grader 243,563 2.5 10-22-15 12-10-18 $ 185,928 $ 37,588 $ 148,340 Highway Equipment - Grader 231,560 2.5 1-24-16 1-24-19 186,771 36,847 149,924 Highway Equipment - Excavator 142,803 2.5 1-24-17 1-24-20 127,257 31,678 95,579Total Capital Leases Payable $ 499,956 $ 106,113 $ 393,843

BONDS PAYABLE Payable through General Debt Service Fund School Refunding Bonds, Series 2009 2,425,000 2 to 3.15 11-12-09 4-1-18 $ 415,000 $ 415,000 $ 0 School Bonds, Series 2010 5,010,000 1 to 5.3 5-12-10 6-1-25 3,200,000 295,000 2,905,000 Refunding Judicial and Series 1998, Series 2010A 3,370,000 2.5 to 4.125 3-30-10 4-1-30 3,230,000 0 3,230,000 Refunding Schools, Series 2010A 27,900,000 2.5 to 4.125 3-30-10 4-1-30 21,725,000 1,150,000 20,575,000 Refunding Series 2012 - Judicial Complex 3,935,000 2 7-26-12 6-30-22 1,830,000 435,000 1,395,000 General Refunding Bonds, Series 2017 4,220,000 4 5-22-17 5-1-21 4,220,000 0 4,220,000Total Bonds Payable $ 34,620,000 $ 2,295,000 $ 32,325,000

127

Exhibit J-2

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

YearEnding NotesJune 30 Principal Interest Total

2019 $ 132,838 $ 3,626 $ 136,464

Total $ 132,838 $ 3,626 $ 136,464

YearEnding Other LoansJune 30 Principal Interest Total

2019 $ 29,094 $ 2,583 $ 31,6772020 29,820 1,857 31,6772021 30,564 1,084 31,6482022 29,406 352 29,758

Total $ 118,884 $ 5,876 $ 124,760

YearEnding Capital LeasesJune 30 Principal Interest Total

2019 $ 330,740 $ 6,050 $ 336,7902020 63,103 700 63,803

Total $ 393,843 $ 6,750 $ 400,593

(Continued)

128

Exhibit J-2

Claiborne County, TennesseeSchedule of Long-term Debt Requirements by Year (Cont.)

YearEndingJune 30 Principal Interest Total

2019 $ 2,330,000 $ 1,291,548 $ 3,621,5482020 2,340,000 1,209,822 3,549,8222021 2,455,000 1,122,662 3,577,6622022 2,455,000 1,029,587 3,484,5872023 2,410,000 930,463 3,340,4632024 2,515,000 829,337 3,344,3372025 3,110,000 723,275 3,833,2752026 2,715,000 592,375 3,307,3752027 2,820,000 483,775 3,303,7752028 2,940,000 370,975 3,310,9752029 3,055,000 253,375 3,308,3752030 3,180,000 131,175 3,311,175

Total $ 32,325,000 $ 8,968,369 $ 41,293,369

Bonds

129

Exhibit J-3

Claiborne County, TennesseeSchedule of TransfersPrimary Government and Discretely Presented Claiborne County School DepartmentFor the Year Ended June 30, 2018

From Fund To Fund Purpose Amount

PRIMARY GOVERNMENT

Highway/Public Works General Bookkeeper's salary $ 51,301Highway Capital Projects General Debt Service Debt retirement 117,357

Total Transfers Primary Government $ 168,658

DISCRETELY PRESENTED CLAIBORNE COUNTY SCHOOL DEPARTMENT

General Purpose School Employee Insurance - Health Contribution in excess of premiums $ 350,000

Total Transfers Discretely Presented Claiborne County School Department $ 350,000

130

Exhibit J-4

Claiborne County, TennesseeSchedule of Salaries and Official Bonds of Principal OfficialsPrimary Government and Discretely Presented Claiborne County School DepartmentFor the Year Ended June 30, 2018

SalaryPaid

DuringOfficial Authorization for Salary Period Bond Surety

County Mayor Section 8-24-102, TCA, $ 94,448 $ (4)Road Superintendent Section 8-24-102, TCA 79,950 (4)Director of Schools State Board of Education and

Claiborne County Board of Education 100,625 (1) (4)Trustee Section 8-24-102, TCA 72,682 1,405,666 Western Surety

Assessor of Property Section 8-24-102, TCA 72,682 (4)County Clerk Section 8-24-102, TCA 72,682 (4)Circuit, General Sessions, and Juvenile Courts Clerk Section 8-24-102, TCA 72,682 (4)Clerk and Master Section 8-24-102, TCA

and Chancery Court Judge 72,682 (2) (4)Register of Deeds Section 8-24-102, TCA 72,682 (4)Sheriff Section 8-24-102, TCA,

and County Commission 90,550 (3) (4)Director of Finance Board of County Commissioners 65,920 (4)

Employee Blanket Bonds: Public Employee Dishonesty - County Departments 400,000 Local Government Property and

Casualty Fund Public Employee Dishonesty - School Departments 400,000 Tennesee Risk Management Trust

(1) Includes a chief executive officer training supplement of $1,000 and $1,625 for serving as secretary to the board.(2) Does not include special commissioner fees of $18,456.(3) Includes a supplement of $10,000 for serving as workhouse superintendent and $600 for a law enforcement training supplement.(4) Officials were covered by the $400,000 employee blanket bond.

131

Exhibit J-5

Claiborne County, TennesseeSchedule of Detailed Revenues -

All Governmental Fund TypesFor the Year Ended June 30, 2018

Constitu -Solid Other tional Highway /

Waste / Drug Special Officers - PublicGeneral Sanitation Control Revenue Fees Works

Local TaxesCounty Property Taxes

Current Property Tax $ 5,527,165 $ 1,112,842 $ 0 $ 0 $ 0 $ 51,535Trustee's Collections - Prior Year 217,506 37,433 0 0 0 1,986Circuit Clerk/Clerk and Master Collections - Prior Years 154,637 29,315 0 0 0 1,375Interest and Penalty 37,753 6,781 0 0 0 345Payments in-Lieu-of Taxes - Local Utilities 18,805 3,780 0 0 0 175Payments in-Lieu-of Taxes - Other 82,991 16,490 0 0 0 765

County Local Option TaxesHotel/Motel Tax 39,754 0 0 0 0 0Wheel Tax 0 0 0 0 0 0Litigation Tax - General 140,256 0 0 0 0 0Litigation Tax - Jail, Workhouse, or Courthouse 29,628 0 0 0 0 0Business Tax 240,746 0 0 0 0 0Mixed Drink Tax 5,916 0 0 0 0 0Mineral Severance Tax 0 0 0 0 0 31,917

Statutory Local TaxesBank Excise Tax 54,655 0 0 0 0 0Wholesale Beer Tax 62,011 0 0 0 0 0Beer Privilege Tax 8,681 0 0 0 0 0Coal Severance Tax 0 0 0 0 0 153,596Interstate Telecommunications Tax 34,989 0 0 0 0 0Other Statutory Local Taxes 0 0 0 0 0 30,306

Total Local Taxes $ 6,655,493 $ 1,206,641 $ 0 $ 0 $ 0 $ 272,000

(Continued)


132

Exhibit J-5


All Governmental Fund Types (Cont.)



Licenses and PermitsPermits

Building Permits $ 10,140 $ 0 $ 0 $ 0 $ 0 $ 0Total Licenses and Permits $ 10,140 $ 0 $ 0 $ 0 $ 0 $ 0

Fines, Forfeitures, and PenaltiesCircuit Court

Fines $ 23,986 $ 0 $ 0 $ 0 $ 0 $ 0Officers Costs 52,709 0 0 0 0 0Drug Control Fines 0 0 4,117 0 0 0Jail Fees 15,238 0 0 0 0 0DUI Treatment Fines 5,947 0 0 0 0 0Data Entry Fee - Circuit Court 1,424 0 0 0 0 0Courtroom Security Fee 1,834 0 0 0 0 0

General Sessions CourtGame and Fish Fines 236 0 0 0 0 0Drug Control Fines 0 0 4,649 0 0 0DUI Treatment Fines 713 0 0 0 0 0Data Entry Fee - General Sessions Court 10,805 0 0 0 0 0

Juvenile CourtFines 2,551 0 0 0 0 0Officers Costs 4,416 0 0 0 0 0Data Entry Fee - Juvenile Court 752 0 0 0 0 0

Chancery CourtOfficers Costs 2,313 0 0 0 0 0Data Entry Fee - Chancery Court 4,602 0 0 0 0 0Courtroom Security Fee 772 0 0 0 0 0

(Continued)


133

Exhibit J-5





Fines, Forfeitures, and Penalties (Cont.)Other Fines, Forfeitures, and Penalties

Proceeds from Confiscated Property $ 38,813 $ 0 $ 49,364 $ 0 $ 0 $ 0Total Fines, Forfeitures, and Penalties $ 167,111 $ 0 $ 58,130 $ 0 $ 0 $ 0

Charges for Current ServicesGeneral Service Charges

Tipping Fees $ 0 $ 483,871 $ 0 $ 0 $ 0 $ 0Fees

Copy Fees 937 0 0 0 0 0Greenbelt Late Application Fee 50 0 0 0 0 0Telephone Commissions 62,895 0 0 0 0 0Vending Machine Collections 718 0 0 0 0 0Constitutional Officers' Fees and Commissions 0 0 0 0 412,332 0Special Commissioner Fees/Special Master Fees 0 0 0 0 18,456 0Data Processing Fee - Register 7,694 0 0 0 0 0Data Processing Fee - Sheriff 3,378 0 0 0 0 0Sexual Offender Registration Fee - Sheriff 3,600 0 0 0 0 0

Total Charges for Current Services $ 79,272 $ 483,871 $ 0 $ 0 $ 430,788 $ 0

Other Local RevenuesRecurring Items

Investment Income $ 146,912 $ 8,879 $ 0 $ 698 $ 0 $ 0Sale of Materials and Supplies 0 0 0 0 0 79Commissary Sales 84,912 0 0 0 0 0Sale of Recycled Materials 0 17,699 0 0 0 0Cobra Insurance Payments 604 0 0 0 0 0Miscellaneous Refunds 33,148 0 2,500 225 0 3,483

(Continued)


134

Exhibit J-5





Other Local Revenues (Cont.)Nonrecurring Items

Sale of Equipment $ 2,824 $ 0 $ 0 $ 0 $ 0 $ 0Contributions and Gifts 279,676 0 0 0 0 0

Other Local RevenuesOther Local Revenues 12,000 0 0 0 0 0

Total Other Local Revenues $ 560,076 $ 26,578 $ 2,500 $ 923 $ 0 $ 3,562

Fees Received From County OfficialsExcess Fees

County Clerk $ 101,978 $ 0 $ 0 $ 0 $ 0 $ 0Juvenile Court Clerk 15,888 0 0 0 0 0Trustee 276,318 0 0 0 0 0

Fees In-Lieu-of SalaryCircuit Court Clerk 91,067 0 0 0 0 0General Sessions Court Clerk 174,280 0 0 0 0 0Clerk and Master 120,145 0 0 0 0 0Juvenile Court Clerk 5,515 0 0 0 0 0Register 103,843 0 0 0 0 0Sheriff 10,037 0 0 0 0 0

Total Fees Received From County Officials $ 899,071 $ 0 $ 0 $ 0 $ 0 $ 0

State of TennesseeGeneral Government Grants

Other General Government Grants $ 0 $ 16,219 $ 0 $ 0 $ 0 $ 0Health and Welfare Grants

Other Health and Welfare Grants 104,780 0 0 0 0 0

(Continued)


135

Exhibit J-5





State of Tennessee (Cont.)Public Works Grants

State Aid Program $ 0 $ 0 $ 0 $ 0 $ 0 $ 738,992Litter Program 23,329 0 0 0 0 0

Other State RevenuesIncome Tax 28,323 0 0 0 0 0Beer Tax 17,839 0 0 0 0 0Alcoholic Beverage Tax 71,515 0 0 0 0 0State Revenue Sharing - T.V.A. 485,724 0 0 0 0 0State Revenue Sharing - Telecommunications 2,709 0 0 0 0 0Contracted Prisoner Boarding 831,168 0 0 0 0 0Gasoline and Motor Fuel Tax 0 0 0 0 0 2,220,864Petroleum Special Tax 0 0 0 0 0 23,243Registrar's Salary Supplement 11,373 0 0 0 0 0State Shared Sales Tax - Cities 5,076 0 0 0 0 0Other State Grants 31,115 0 0 0 0 6,431Other State Revenues 326 0 0 0 0 0

Total State of Tennessee $ 1,613,277 $ 16,219 $ 0 $ 0 $ 0 $ 2,989,530

Federal GovernmentFederal Through State

Community Development $ 561,030 $ 0 $ 0 $ 0 $ 0 $ 0Disaster Relief 0 0 0 0 0 6,551Homeland Security Grants 40,363 0 0 0 0 0

Direct Federal RevenueOther Direct Federal Revenue 14,600 0 6,101 0 0 0

Total Federal Government $ 615,993 $ 0 $ 6,101 $ 0 $ 0 $ 6,551

(Continued)


136

Exhibit J-5





Other Governments and Citizens GroupsOther Governments

Contracted Services $ 3,565 $ 0 $ 0 $ 0 $ 0 $ 0Total Other Governments and Citizens Groups $ 3,565 $ 0 $ 0 $ 0 $ 0 $ 0

Total $ 10,603,998 $ 1,733,309 $ 66,731 $ 923 $ 430,788 $ 3,271,643

(Continued)


137

Exhibit J-5



General HighwayDebt Capital

Service Projects Total


Current Property Tax $ 154,826 $ 100,829 $ 6,947,197Trustee's Collections - Prior Year 5,739 3,534 266,198Circuit Clerk/Clerk and Master Collections - Prior Years 4,125 2,681 192,133Interest and Penalty 1,022 676 46,577Payments in-Lieu-of Taxes - Local Utilities 526 342 23,628Payments in-Lieu-of Taxes - Other 2,294 1,491 104,031

County Local Option TaxesHotel/Motel Tax 0 0 39,754Wheel Tax 698,412 698,662 1,397,074Litigation Tax - General 0 0 140,256Litigation Tax - Jail, Workhouse, or Courthouse 0 0 29,628Business Tax 0 0 240,746Mixed Drink Tax 0 0 5,916Mineral Severance Tax 0 0 31,917

Statutory Local TaxesBank Excise Tax 0 0 54,655Wholesale Beer Tax 0 0 62,011Beer Privilege Tax 0 0 8,681Coal Severance Tax 0 0 153,596Interstate Telecommunications Tax 0 0 34,989Other Statutory Local Taxes 0 0 30,306

Total Local Taxes $ 866,944 $ 808,215 $ 9,809,293

(Continued)

Debt Service Fund

Capital Projects

Fund

138

Exhibit J-5





Licenses and PermitsPermits

Building Permits $ 0 $ 0 $ 10,140Total Licenses and Permits $ 0 $ 0 $ 10,140

Fines, Forfeitures, and PenaltiesCircuit Court

Fines $ 0 $ 0 $ 23,986Officers Costs 0 0 52,709Drug Control Fines 0 0 4,117Jail Fees 0 0 15,238DUI Treatment Fines 0 0 5,947Data Entry Fee - Circuit Court 0 0 1,424Courtroom Security Fee 0 0 1,834

General Sessions CourtGame and Fish Fines 0 0 236Drug Control Fines 0 0 4,649DUI Treatment Fines 0 0 713Data Entry Fee - General Sessions Court 0 0 10,805

Juvenile CourtFines 0 0 2,551Officers Costs 0 0 4,416Data Entry Fee - Juvenile Court 0 0 752

Chancery CourtOfficers Costs 0 0 2,313Data Entry Fee - Chancery Court 0 0 4,602Courtroom Security Fee 0 0 772

(Continued)

Debt Service Fund

Capital Projects

Fund

139

Exhibit J-5





Fines, Forfeitures, and Penalties (Cont.)Other Fines, Forfeitures, and Penalties

Proceeds from Confiscated Property $ 0 $ 0 $ 88,177Total Fines, Forfeitures, and Penalties $ 0 $ 0 $ 225,241

Charges for Current ServicesGeneral Service Charges

Tipping Fees $ 0 $ 0 $ 483,871Fees

Copy Fees 0 0 937Greenbelt Late Application Fee 0 0 50Telephone Commissions 0 0 62,895Vending Machine Collections 0 0 718Constitutional Officers' Fees and Commissions 0 0 412,332Special Commissioner Fees/Special Master Fees 0 0 18,456Data Processing Fee - Register 0 0 7,694Data Processing Fee - Sheriff 0 0 3,378Sexual Offender Registration Fee - Sheriff 0 0 3,600

Total Charges for Current Services $ 0 $ 0 $ 993,931


Investment Income $ 3,883 $ 0 $ 160,372Sale of Materials and Supplies 0 0 79Commissary Sales 0 0 84,912Sale of Recycled Materials 0 0 17,699Cobra Insurance Payments 0 0 604Miscellaneous Refunds 0 0 39,356

(Continued)

Debt Service Fund

Capital Projects

Fund

140

Exhibit J-5





Other Local Revenues (Cont.)Nonrecurring Items

Sale of Equipment $ 0 $ 0 $ 2,824Contributions and Gifts 3,099,143 0 3,378,819

Other Local RevenuesOther Local Revenues 0 0 12,000

Total Other Local Revenues $ 3,103,026 $ 0 $ 3,696,665

Fees Received From County OfficialsExcess Fees

County Clerk $ 0 $ 0 $ 101,978Juvenile Court Clerk 0 0 15,888Trustee 0 0 276,318

Fees In-Lieu-of SalaryCircuit Court Clerk 0 0 91,067General Sessions Court Clerk 0 0 174,280Clerk and Master 0 0 120,145Juvenile Court Clerk 0 0 5,515Register 0 0 103,843Sheriff 0 0 10,037

Total Fees Received From County Officials $ 0 $ 0 $ 899,071

State of TennesseeGeneral Government Grants

Other General Government Grants $ 0 $ 0 $ 16,219Health and Welfare Grants

Other Health and Welfare Grants 0 0 104,780

(Continued)

Debt Service Fund

Capital Projects

Fund

141

Exhibit J-5





State of Tennessee (Cont.)Public Works Grants

State Aid Program $ 0 $ 0 $ 738,992Litter Program 0 0 23,329

Other State RevenuesIncome Tax 0 0 28,323Beer Tax 0 0 17,839Alcoholic Beverage Tax 0 0 71,515State Revenue Sharing - T.V.A. 0 0 485,724State Revenue Sharing - Telecommunications 0 0 2,709Contracted Prisoner Boarding 0 0 831,168Gasoline and Motor Fuel Tax 0 0 2,220,864Petroleum Special Tax 0 0 23,243Registrar's Salary Supplement 0 0 11,373State Shared Sales Tax - Cities 0 0 5,076Other State Grants 0 0 37,546Other State Revenues 0 0 326

Total State of Tennessee $ 0 $ 0 $ 4,619,026


Community Development $ 0 $ 0 $ 561,030Disaster Relief 0 0 6,551Homeland Security Grants 0 0 40,363

Direct Federal RevenueOther Direct Federal Revenue 0 0 20,701

Total Federal Government $ 0 $ 0 $ 628,645

(Continued)

Debt Service Fund

Capital Projects

Fund

142

Exhibit J-5





Other Governments and Citizens GroupsOther Governments

Contracted Services $ 0 $ 0 $ 3,565Total Other Governments and Citizens Groups $ 0 $ 0 $ 3,565

Total $ 3,969,970 $ 808,215 $ 20,885,577

Debt Service Fund

Capital Projects

Fund

143

Exhibit J-6


All Governmental Fund TypesDiscretely Presented Claiborne County School DepartmentFor the Year Ended June 30, 2018

General SchoolPurpose Federal CentralSchool Projects Cafeteria Total


Current Property Tax $ 6,287,154 $ 0 $ 0 $ 6,287,154Trustee's Collections - Prior Year 242,357 0 0 242,357Circuit Clerk/Clerk and Master Collections - Prior Years 175,703 0 0 175,703Interest and Penalty 42,201 0 0 42,201Payments in-Lieu-of Taxes - T.V.A. 466,676 0 0 466,676Payments in-Lieu-of Taxes - Local Utilities 21,389 0 0 21,389Payments in-Lieu-of Taxes - Other 93,309 0 0 93,309

County Local Option TaxesLocal Option Sales Tax 2,688,923 0 0 2,688,923

Statutory Local TaxesCoal Severance Tax 153,596 0 0 153,596Interstate Telecommunications Tax 20,677 0 0 20,677Other Statutory Local Taxes 3,440 0 0 3,440

Total Local Taxes $ 10,195,425 $ 0 $ 0 $ 10,195,425

Licenses and PermitsLicenses

Marriage Licenses $ 2,432 $ 0 $ 0 $ 2,432Total Licenses and Permits $ 2,432 $ 0 $ 0 $ 2,432

Charges for Current ServicesEducation Charges

Tuition - Other $ 98,852 $ 0 $ 0 $ 98,852Lunch Payments - Adults 0 0 62,847 62,847

(Continued)


144

Exhibit J-6


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


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

A la Carte Sales $ 0 $ 0 $ 56,918 $ 56,918Other Charges for Services 1,600 0 306,594 308,194

Total Charges for Current Services $ 100,452 $ 0 $ 426,359 $ 526,811


Investment Income $ 13,127 $ 0 $ 1,606 $ 14,733Retirees' Insurance Payments 250,025 0 0 250,025Miscellaneous Refunds 94,241 0 1,206 95,447

Nonrecurring ItemsContributions and Gifts 31,900 5,002 0 36,902

Other Local RevenuesOther Local Revenues 213 0 0 213

Total Other Local Revenues $ 389,506 $ 5,002 $ 2,812 $ 397,320

State of TennesseeState Education Funds

Basic Education Program $ 24,964,280 $ 0 $ 0 $ 24,964,280Early Childhood Education 631,553 0 0 631,553School Food Service 0 0 26,525 26,525Other State Education Funds 1,128,851 0 0 1,128,851Career Ladder Program 98,672 0 0 98,672Vocational Equipment 80,000 0 0 80,000

(Continued)


145

Exhibit J-6




State of Tennessee (Cont.)Other State Revenues

Other State Grants $ 57,501 $ 0 $ 0 $ 57,501Total State of Tennessee $ 26,960,857 $ 0 $ 26,525 $ 26,987,382


USDA School Lunch Program $ 0 $ 0 $ 1,601,233 $ 1,601,233USDA - Commodities 0 0 232,198 232,198Breakfast 0 0 578,288 578,288USDA - Other 0 0 26,494 26,494Vocational Education - Basic Grants to States 0 84,306 0 84,306Title I Grants to Local Education Agencies 0 1,417,885 0 1,417,885Special Education - Grants to States 32,046 1,106,588 0 1,138,634Special Education Preschool Grants 0 45,300 0 45,300Rural Education 0 77,678 0 77,678Eisenhower Professional Development State Grants 0 194,445 0 194,445Disaster Relief 119 0 0 119Other Federal through State 0 214,835 0 214,835

Total Federal Government $ 32,165 $ 3,141,037 $ 2,438,213 $ 5,611,415

Total $ 37,680,837 $ 3,146,039 $ 2,893,909 $ 43,720,785


146

Exhibit J-7

Claiborne County, TennesseeSchedule of Detailed Expenditures -

All Governmental Fund TypesFor the Year Ended June 30, 2018

General FundGeneral Government

County CommissionBoard and Committee Members Fees $ 93,131Social Security 5,748Pensions 2,675Medical Insurance 26,963Unemployment Compensation 2Employer Medicare 1,344Audit Services 11,919Dues and Memberships 1,700Workers' Compensation Insurance 16,347

Total County Commission $ 159,829

Board of EqualizationBoard and Committee Members Fees $ 6,875Travel 107

Total Board of Equalization 6,982

Beer BoardBoard and Committee Members Fees $ 900

Total Beer Board 900

Budget and Finance CommitteeBoard and Committee Members Fees $ 20,825Social Security 1,290Pensions 879Employer Medicare 302

Total Budget and Finance Committee 23,296

County Mayor/ExecutiveCounty Official/Administrative Officer $ 94,448Secretary(ies) 27,724Other Salaries and Wages 554Social Security 7,479Pensions 6,774Medical Insurance 10,447Unemployment Compensation 59Employer Medicare 1,749Communication 6,121Dues and Memberships 3,296Operating Lease Payments 1,737Travel 731Office Supplies 1,681Office Equipment 975

Total County Mayor/Executive 163,775

County AttorneyCounty Official/Administrative Officer $ 39,583Other Salaries and Wages 792

(Continued)

147

Exhibit J-7



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

County Attorney (Cont.)Social Security $ 2,434Pensions 2,229Medical Insurance 5,224Unemployment Compensation 70Employer Medicare 569Dues and Memberships 275

Total County Attorney $ 51,176

Election CommissionCounty Official/Administrative Officer $ 65,414Clerical Personnel 30,804Other Salaries and Wages 3,166Election Commission 9,625In-service Training 7,955Social Security 6,687Pensions 5,442Medical Insurance 5,319Unemployment Compensation 70Employer Medicare 1,564Communication 6,344Operating Lease Payments 1,576Maintenance and Repair Services - Buildings 688Other Contracted Services 18,030Office Supplies 1,790

Total Election Commission 164,474

Register of DeedsCounty Official/Administrative Officer $ 72,682Clerical Personnel 48,348Other Salaries and Wages 770Social Security 7,384Pensions 5,746Medical Insurance 10,449Unemployment Compensation 240Employer Medicare 1,727Communication 2,983Dues and Memberships 578Operating Lease Payments 1,316Maintenance and Repair Services - Office Equipment 14,968Office Supplies 3,055

Total Register of Deeds 170,246

DevelopmentContracts with Other Public Agencies $ 4,577

Total Development 4,577

(Continued)

148

Exhibit J-7



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

PlanningBoard and Committee Members Fees $ 5,250Social Security 326Unemployment Compensation 5Employer Medicare 76Other Contracted Services 5,615

Total Planning $ 11,272

County BuildingsCustodial Personnel $ 46,247Maintenance Personnel 24,313Other Salaries and Wages 461Social Security 4,265Pensions 3,920Medical Insurance 10,507Unemployment Compensation 253Employer Medicare 998Communication 8,665Maintenance and Repair Services - Buildings 66,447Maintenance and Repair Services - Vehicles 5,308Postal Charges 25,831Rentals 1,200Custodial Supplies 5,622Electricity 60,337Gasoline 2,215Office Supplies 7,227Utilities 3,641Water and Sewer 5,877Other Supplies and Materials 862Other Charges 239

Total County Buildings 284,435

Preservation of RecordsClerical Personnel $ 11,461Other Salaries and Wages 229Social Security 689Pensions 645Unemployment Compensation 35Employer Medicare 161Communication 1,993Operating Lease Payments 303Travel 695Other Contracted Services 4,860Office Supplies 1,370

Total Preservation of Records 22,441

(Continued)

149

Exhibit J-7



General Fund (Cont.)Finance

Accounting and BudgetingSupervisor/Director $ 65,920Accountants/Bookkeepers 281,199Other Salaries and Wages 2,692Social Security 18,239Pensions 22,635Life Insurance 720Medical Insurance 31,227Unemployment Compensation 486Employer Medicare 4,781Communication 6,605Maintenance Agreements 3,979Travel 961Other Contracted Services 18,640Office Supplies 2,387Other Supplies and Materials 98Workers' Compensation Insurance 32,590

Total Accounting and Budgeting $ 493,159

Property Assessor's OfficeCounty Official/Administrative Officer $ 72,682Clerical Personnel 78,601In-service Training 616Social Security 9,070Pensions 8,351Medical Insurance 20,279Unemployment Compensation 309Employer Medicare 2,121Audit Services 11,701Communication 4,445Data Processing Services 7,673Dues and Memberships 1,735Operating Lease Payments 300Legal Notices, Recording, and Court Costs 1,524Maintenance Agreements 1,377Travel 1,654Office Supplies 2,181Other Supplies and Materials 264Office Equipment 596

Total Property Assessor's Office 225,479

Reappraisal ProgramLaborers $ 50,891Other Salaries and Wages 1,083In-service Training 799Social Security 3,157Pensions 2,869Medical Insurance 5,065

(Continued)

150

Exhibit J-7



General Fund (Cont.)Finance (Cont.)

Reappraisal Program (Cont.)Unemployment Compensation $ 133Employer Medicare 738Communication 2,415Data Processing Services 6,000Travel 898Office Supplies 2,000

Total Reappraisal Program $ 76,048

County Trustee's OfficeSocial Security $ 10,514Pensions 9,361Medical Insurance 15,810Unemployment Compensation 305Employer Medicare 2,459Communication 4,641Data Processing Services 10,219Dues and Memberships 713Operating Lease Payments 1,689Legal Notices, Recording, and Court Costs 36Maintenance Agreements 16,547Office Supplies 2,552Premiums on Corporate Surety Bonds 7,278

Total County Trustee's Office 82,124

County Clerk's OfficeSocial Security $ 14,336Pensions 13,224Medical Insurance 38,720Unemployment Compensation 520Employer Medicare 3,353Communication 9,246Dues and Memberships 578Operating Lease Payments 1,402Maintenance Agreements 18,966Office Supplies 4,612

Total County Clerk's Office 104,957

Administration of JusticeCircuit Court

County Official/Administrative Officer $ 72,682Clerical Personnel 180,076Jury and Witness Expense 8,367Social Security 15,129Pensions 13,349Medical Insurance 28,532Unemployment Compensation 585Employer Medicare 3,538

(Continued)

151

Exhibit J-7



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

Circuit Court (Cont.)Communication $ 4,047Dues and Memberships 578Operating Lease Payments 11,242Maintenance Agreements 17,480Postal Charges 7,683Office Supplies 19,197Workers' Compensation Insurance 20,310

Total Circuit Court $ 402,795

General Sessions CourtJudge(s) $ 153,904Secretary(ies) 30,804Other Salaries and Wages 616Social Security 10,006Pensions 10,230Medical Insurance 10,452Unemployment Compensation 70Employer Medicare 2,655Communication 2,425Travel 351Other Contracted Services 750Office Supplies 343Periodicals 976Office Equipment 290

Total General Sessions Court 223,872

Chancery CourtCounty Official/Administrative Officer $ 72,682Clerical Personnel 108,586Social Security 10,827Pensions 10,006Medical Insurance 20,926Unemployment Compensation 280Employer Medicare 2,532Communication 6,362Dues and Memberships 578Operating Lease Payments 2,333Maintenance Agreements 13,585Other Contracted Services 225Office Supplies 3,778Office Equipment 255

Total Chancery Court 252,955

District Attorney GeneralSecretary(ies) $ 28,229Other Salaries and Wages 565Social Security 1,774

(Continued)

152

Exhibit J-7



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

District Attorney General (Cont.)Pensions $ 1,589Medical Insurance 1,377Unemployment Compensation 70Employer Medicare 415

Total District Attorney General $ 34,019

Office of Public DefenderContributions $ 28,580

Total Office of Public Defender 28,580

Public SafetySheriff's Department

County Official/Administrative Officer $ 79,950Assistant(s) 35,315Deputy(ies) 1,175,078Investigator(s) 31,340Lieutenant(s) 31,491Salary Supplements 20,400Secretary(ies) 27,269School Resource Officer 84,510Overtime Pay 1,916Other Salaries and Wages 22,663Social Security 90,132Pensions 79,312Medical Insurance 202,688Unemployment Compensation 3,610Employer Medicare 21,079Communication 40,155Dues and Memberships 2,715Operating Lease Payments 8,100Maintenance and Repair Services - Buildings 9,747Maintenance and Repair Services - Equipment 2,996Maintenance and Repair Services - Vehicles 59,278Travel 10,742Tuition 4,685Other Contracted Services 4,448Gasoline 165,350Law Enforcement Supplies 4,589Office Supplies 9,581Tires and Tubes 20,351Uniforms 11,820Other Supplies and Materials 22,439Workers' Compensation Insurance 9,156Communication Equipment 2,988Law Enforcement Equipment 45,225

Total Sheriff's Department 2,341,118

(Continued)

153

Exhibit J-7



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

Administration of the Sexual Offender RegistryOther Contracted Services $ 1,050

Total Administration of the Sexual Offender Registry $ 1,050

WorkhouseCounty Official/Administrative Officer $ 10,000Supervisor/Director 41,194Medical Personnel 31,491Guards 1,093,975Maintenance Personnel 83,720Other Salaries and Wages 90,227Social Security 81,527Pensions 74,281Medical Insurance 167,862Unemployment Compensation 4,306Employer Medicare 19,067Communication 8,126Operating Lease Payments 3,592Maintenance and Repair Services - Buildings 7,751Medical and Dental Services 191,214Travel 3,181Tuition 325Other Contracted Services 48,000Custodial Supplies 47,551Drugs and Medical Supplies 58,569Electricity 102,253Food Supplies 527,208Natural Gas 23,806Office Supplies 2,044Uniforms 5,558Water and Sewer 46,151Other Supplies and Materials 29,836Other Charges 15,992

Total Workhouse 2,818,807

Juvenile ServicesSocial Workers $ 36,771Other Salaries and Wages 735Social Security 2,219Pensions 2,070Medical Insurance 5,221Unemployment Compensation 70Employer Medicare 519Communication 1,987Travel 461Other Contracted Services 10,100Office Supplies 160

Total Juvenile Services 60,313

(Continued)

154

Exhibit J-7



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

Fire Prevention and ControlContributions $ 150,000

Total Fire Prevention and Control $ 150,000

Civil DefenseSupervisor/Director $ 40,170Part-time Personnel 11,461Other Salaries and Wages 1,033Social Security 3,160Pensions 2,907Medical Insurance 10,449Unemployment Compensation 105Employer Medicare 739Communication 5,669Dues and Memberships 105Maintenance and Repair Services - Vehicles 1,155Travel 270Other Contracted Services 795Gasoline 1,661Office Supplies 1,496Other Equipment 6,806

Total Civil Defense 87,981

Rescue SquadContributions $ 22,000

Total Rescue Squad 22,000

Other Emergency ManagementContributions $ 7,688Other Contracted Services 36,000

Total Other Emergency Management 43,688

County Coroner/Medical ExaminerOther Per Diem and Fees $ 37,433Other Contracted Services 10,000

Total County Coroner/Medical Examiner 47,433

Public Health and WelfareLocal Health Center

Clerical Personnel $ 18,183Custodial Personnel 14,400Social Security 1,058Pensions 1,004Medical Insurance 3,469Unemployment Compensation 87Employer Medicare 248Communication 9,506Contracts with Government Agencies 35,250

(Continued)

155

Exhibit J-7



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

Local Health Center (Cont.)Contracts with Private Agencies $ 3,258Maintenance and Repair Services - Buildings 20,723Postal Charges 1,952Travel 113Other Contracted Services 629Custodial Supplies 1,874Instructional Supplies and Materials 3,976Office Supplies 1,743Utilities 15,169Workers' Compensation Insurance 19,831Office Equipment 323

Total Local Health Center $ 152,796

Rabies and Animal ControlContributions $ 20,000

Total Rabies and Animal Control 20,000

Other Local Health ServicesMedical Personnel $ 93,882Social Security 5,618Pensions 4,530Medical Insurance 5,858Unemployment Compensation 374Employer Medicare 1,314Travel 4,948Instructional Supplies and Materials 6,627Other Charges 29

Total Other Local Health Services 123,180

Sanitation Education/InformationLaborers $ 25,189Clerical Personnel 4,800Other Salaries and Wages 504Social Security 1,880Pensions 1,683Medical Insurance 94Unemployment Compensation 81Employer Medicare 440Gasoline 4,653Instructional Supplies and Materials 12,301Other Supplies and Materials 180

Total Sanitation Education/Information 51,805

Social, Cultural, and Recreational ServicesAdult Activities

Contributions $ 7,500Total Adult Activities 7,500

(Continued)

156

Exhibit J-7



General Fund (Cont.)Social, Cultural, and Recreational Services (Cont.)

Senior Citizens AssistanceLaborers $ 9,650Communication 5,602Contracts with Other Public Agencies 7,000Contributions 10,000Maintenance and Repair Services - Buildings 6,819Printing, Stationery, and Forms 53Other Contracted Services 316Electricity 9,419Gasoline 2,897Water and Sewer 1,954Workers' Compensation Insurance 2,279Food Service Equipment 913

Total Senior Citizens Assistance $ 56,902

LibrariesLibrarians $ 30,755Clerical Personnel 1,402Attendants 22,495Part-time Personnel 19,113Social Security 4,382Pensions 3,946Medical Insurance 10,540Unemployment Compensation 234Employer Medicare 1,025Contributions 20,000

Total Libraries 113,892

Parks and Fair BoardsOther Contracted Services $ 60,000

Total Parks and Fair Boards 60,000

Agriculture and Natural ResourcesAgricultural Extension Service

Communication $ 2,836Contracts with Other Public Agencies 80,564Dues and Memberships 590Workers' Compensation Insurance 703Other Charges 644Office Equipment 2,578

Total Agricultural Extension Service 87,915

Forest ServiceContributions $ 2,000

Total Forest Service 2,000

Soil ConservationSecretary(ies) $ 21,630

(Continued)

157

Exhibit J-7



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

Soil Conservation (Cont.)Other Salaries and Wages $ 433Social Security 1,266Pensions 1,218Medical Insurance 5,224Unemployment Compensation 70Employer Medicare 296Contributions 17,000

Total Soil Conservation $ 47,137

Other OperationsIndustrial Development

Contracts with Other Public Agencies $ 20,000Contributions 40,000

Total Industrial Development 60,000

Housing and Urban DevelopmentOther Construction $ 735,532

Total Housing and Urban Development 735,532

Other Economic and Community DevelopmentAssistant(s) $ 33,472Social Security 2,028Pensions 1,848Medical Insurance 2,614Unemployment Compensation 216Employer Medicare 474Communication 1,514Travel 1,159Other Charges 186

Total Other Economic and Community Development 43,511

Veterans' ServicesCounty Official/Administrative Officer $ 15,499Other Salaries and Wages 310Social Security 980Unemployment Compensation 73Employer Medicare 229Communication 876Travel 127Office Supplies 926

Total Veterans' Services 19,020

Other ChargesContributions $ 97,064Legal Notices, Recording, and Court Costs 555Trustee's Commission 134,865Vehicle and Equipment Insurance 153,073

(Continued)

158

Exhibit J-7



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

Other Charges (Cont.)Liability Claims $ 2,500Other Charges 13,575

Total Other Charges $ 401,632

Employee BenefitsMedical Insurance $ 1,680

Total Employee Benefits 1,680

MiscellaneousTax Relief Program $ 38,861

Total Miscellaneous 38,861

Capital ProjectsGeneral Administration Projects

Crushed Stone $ 800Total General Administration Projects 800

Public Safety ProjectsLaw Enforcement Equipment $ 125,300Motor Vehicles 144,132

Total Public Safety Projects 269,432

Total General Fund $ 10,853,376

Solid Waste/Sanitation FundPublic Health and Welfare

Waste PickupForemen $ 59,663Equipment Operators 431,859Secretary(ies) 30,804Other Salaries and Wages 7,825Board and Committee Members Fees 9,975Social Security 32,449Pensions 27,126Medical Insurance 69,716Unemployment Compensation 1,986Employer Medicare 7,589Communication 9,204Contracts with Private Agencies 534,557Engineering Services 12,368Evaluation and Testing 12,762Operating Lease Payments 2,200Maintenance and Repair Services - Vehicles 73,734Postal Charges 337Permits 5,862Other Contracted Services 11,991Crushed Stone 12,275

(Continued)

159

Exhibit J-7



Solid Waste/Sanitation Fund (Cont.)Public Health and Welfare (Cont.)

Waste Pickup (Cont.)Diesel Fuel $ 46,107Electricity 15,519Fertilizer, Lime, and Seed 1,735Gasoline 4,542Lubricants 1,431Office Supplies 1,446Tires and Tubes 16,093Water and Sewer 1,115Other Supplies and Materials 1,447Trustee's Commission 28,516Vehicle and Equipment Insurance 9,637Workers' Compensation Insurance 21,760Site Development 16,310Other Equipment 109,777

Total Waste Pickup $ 1,629,717

Total Solid Waste/Sanitation Fund $ 1,629,717

Drug Control FundPublic Safety

Drug EnforcementConfidential Drug Enforcement Payments $ 5,000Travel 6,548Tuition 1,475Other Supplies and Materials 6,406Trustee's Commission 750Law Enforcement Equipment 15,309Motor Vehicles 53,593

Total Drug Enforcement $ 89,081

Total Drug Control Fund 89,081

Other Special Revenue FundPublic Health and Welfare

Ambulance/Emergency Medical ServicesContributions $ 269,386

Total Ambulance/Emergency Medical Services $ 269,386

Total Other Special Revenue Fund 269,386

Constitutional Officers - Fees FundFinance

County Trustee's OfficeConstitutional Officers' Operating Expenses $ 175,352

Total County Trustee's Office $ 175,352

(Continued)

160

Exhibit J-7



Constitutional Officers - Fees Fund (Cont.)Finance (Cont.)

County Clerk's OfficeConstitutional Officers' Operating Expenses $ 218,776

Total County Clerk's Office $ 218,776

Administration of JusticeChancery Court

Special Commissioner Fees/Special Master Fees $ 18,456Constitutional Officers' Operating Expenses 28,374

Total Chancery Court 46,830

Total Constitutional Officers - Fees Fund $ 440,958

Highway/Public Works FundHighways

AdministrationCounty Official/Administrative Officer $ 79,950Secretary(ies) 28,444Social Security 6,385Pensions 5,805Medical Insurance 10,416Disability Insurance 262Unemployment Compensation 210Employer Medicare 1,493Dues and Memberships 2,788Legal Services 461Postal Charges 47Office Supplies 3,228

Total Administration $ 139,489

Highway and Bridge MaintenanceLaborers $ 730,205Social Security 44,026Pensions 37,553Medical Insurance 98,862Disability Insurance 3,931Unemployment Compensation 6,336Employer Medicare 10,296Other Contracted Services 30,735Asphalt - Hot Mix 380,025Crushed Stone 370,952Pipe - Metal 19,068Road Signs 5,054Wood Products 9,955Other Supplies and Materials 56,119

Total Highway and Bridge Maintenance 1,803,117

Operation and Maintenance of EquipmentMechanic(s) $ 12,248

(Continued)

161

Exhibit J-7



Highway/Public Works Fund (Cont.)Highways (Cont.)

Operation and Maintenance of Equipment (Cont.)Social Security $ 732Pensions 676Medical Insurance 4,085Disability Insurance 262Unemployment Compensation 75Employer Medicare 171Rentals 26,817Diesel Fuel 89,454Equipment and Machinery Parts 92,494Garage Supplies 2,755Gasoline 42,218Lubricants 8,274Tires and Tubes 24,682Other Supplies and Materials 5,107

Total Operation and Maintenance of Equipment $ 310,050

Other ChargesCommunication $ 5,638Electricity 7,389Water and Sewer 2,007Building and Contents Insurance 1,900Liability Insurance 3,000Trustee's Commission 25,654Vehicle and Equipment Insurance 23,361

Total Other Charges 68,949

Employee BenefitsWorkers' Compensation Insurance $ 33,480

Total Employee Benefits 33,480

Capital OutlayBridge Construction $ 242,688Highway Equipment 82,300State Aid Projects 713,011

Total Capital Outlay 1,037,999

Total Highway/Public Works Fund $ 3,393,084

General Debt Service FundPrincipal on Debt

General GovernmentPrincipal on Bonds $ 435,000

Total General Government $ 435,000

Highways and StreetsPrincipal on Notes $ 147,033Principal on Capital Leases 106,113

Total Highways and Streets 253,146

(Continued)

162

Exhibit J-7



General Debt Service Fund (Cont.)Principal on Debt (Cont.)

EducationPrincipal on Bonds $ 1,860,000Principal on Other Loans 28,386

Total Education $ 1,888,386

Interest on DebtGeneral Government

Interest on Bonds $ 166,544Total General Government 166,544

Highways and StreetsInterest on Notes $ 7,681Interest on Capital Leases 11,244

Total Highways and Streets 18,925

EducationInterest on Bonds $ 1,207,115Interest on Other Loans 3,292

Total Education 1,210,407

Other Debt ServiceGeneral Government

Trustee's Commission $ 3,338Other Debt Service 3,941

Total General Government 7,279

Total General Debt Service Fund $ 3,979,687

Highway Capital Projects FundCapital Projects

Highway and Street Capital ProjectsAsphalt - Hot Mix $ 193,749Asphalt - Liquid 220,579Crushed Stone 1,139Gravel and Chert 133,586Trustee's Commission 2,104Highway Equipment 113,264

Total Highway and Street Capital Projects $ 664,421

Total Highway Capital Projects Fund 664,421

Total Governmental Funds - Primary Government $ 21,319,710

163

Exhibit J-8


All Governmental Fund TypesDiscretely Presented Claiborne County School DepartmentFor the Year Ended June 30, 2018

General Purpose School FundInstruction

Regular Instruction ProgramTeachers $ 11,080,333Career Ladder Program 45,082Educational Assistants 756,112Certified Substitute Teachers 176,261Social Security 699,202Pensions 1,030,875Life Insurance 57,907Medical Insurance 1,557,409Unemployment Compensation 1,862Employer Medicare 165,291Tuition 13,858Instructional Supplies and Materials 117,353Textbooks - Electronic 186,528Textbooks - Bound 50,921Other Supplies and Materials 7,142

Total Regular Instruction Program $ 15,946,136

Special Education ProgramTeachers $ 1,888,697Career Ladder Program 8,350Educational Assistants 144,146Speech Pathologist 174,323Other Salaries and Wages 27,087Certified Substitute Teachers 17,215Social Security 131,381Pensions 195,084Life Insurance 10,497Medical Insurance 279,997Employer Medicare 31,093Maintenance and Repair Services - Equipment 7,085Instructional Supplies and Materials 10,234Other Supplies and Materials 22,536Special Education Equipment 11,677

Total Special Education Program 2,959,402

Career and Technical Education ProgramTeachers $ 818,726Career Ladder Program 2,500Certified Substitute Teachers 16,885Social Security 47,714Pensions 72,169Life Insurance 4,320Medical Insurance 109,870Unemployment Compensation 1,501Employer Medicare 11,539Instructional Supplies and Materials 11,017

(Continued)

164

Exhibit J-8



General Purpose School Fund (Cont.)Instruction (Cont.)

Career and Technical Education Program (Cont.)Other Supplies and Materials $ 2,247Other Charges 6,354Vocational Instruction Equipment 80,225

Total Career and Technical Education Program $ 1,185,067

Support ServicesAttendance

Supervisor/Director $ 71,825Career Ladder Program 1,600Clerical Personnel 26,350Other Salaries and Wages 32,989Social Security 5,750Pensions 8,067Life Insurance 240Medical Insurance 7,740Unemployment Compensation 202Employer Medicare 1,770Travel 3,813Other Supplies and Materials 374

Total Attendance 160,720

Health ServicesSupervisor/Director $ 54,733Medical Personnel 207,705Other Salaries and Wages 17,052Social Security 16,582Pensions 23,264Life Insurance 480Medical Insurance 11,472Unemployment Compensation 867Employer Medicare 3,878Travel 9,294Drugs and Medical Supplies 2,796Other Supplies and Materials 1,121

Total Health Services 349,244

Other Student SupportCareer Ladder Program $ 2,000Guidance Personnel 447,235Social Security 25,372Pensions 40,790Life Insurance 2,240Medical Insurance 68,250Unemployment Compensation 632Employer Medicare 5,934Evaluation and Testing 21,650

(Continued)

165

Exhibit J-8



General Purpose School Fund (Cont.)Support Services (Cont.)

Other Student Support (Cont.)Travel $ 3,588Other Contracted Services 33,083Other Supplies and Materials 4,445Other Charges 6,147

Total Other Student Support $ 661,366

Regular Instruction ProgramSupervisor/Director $ 141,982Career Ladder Program 7,650Librarians 325,410Educational Assistants 28,523Other Salaries and Wages 224,139Social Security 42,538Pensions 63,989Life Insurance 2,911Medical Insurance 76,679Unemployment Compensation 1,007Employer Medicare 10,104Travel 2,847Other Contracted Services 9,578Library Books/Media 60,000Other Supplies and Materials 2,513In Service/Staff Development 14,725Other Charges 4,991Other Equipment 27,157

Total Regular Instruction Program 1,046,743

Special Education ProgramSupervisor/Director $ 71,825Career Ladder Program 2,500Psychological Personnel 81,392Secretary(ies) 21,111Other Salaries and Wages 270,576Social Security 24,972Pensions 37,263Life Insurance 1,780Medical Insurance 46,550Employer Medicare 6,255Communication 5,272Consultants 5,908Travel 25,043Other Supplies and Materials 362In Service/Staff Development 7,007Other Charges 1,680

Total Special Education Program 609,496

(Continued)

166

Exhibit J-8




Career and Technical Education ProgramSupervisor/Director $ 68,252Social Security 4,039Pensions 6,197Life Insurance 217Medical Insurance 6,095Unemployment Compensation 61Employer Medicare 945Other Supplies and Materials 258

Total Career and Technical Education Program $ 86,064

TechnologySupervisor/Director $ 68,252Career Ladder Program 1,000Other Salaries and Wages 41,357Social Security 6,543Pensions 10,010Life Insurance 480Medical Insurance 13,476Unemployment Compensation 134Employer Medicare 1,530Maintenance and Repair Services - Equipment 37,856Internet Connectivity 54,580Travel 5,460Cabling 23,936Software 39,928Other Supplies and Materials 3,169Other Charges 33Other Equipment 72,995

Total Technology 380,739

Board of EducationSecretary to Board $ 1,625Board and Committee Members Fees 11,050Social Security 579Pensions 643Life Insurance 1,420Medical Insurance 28,680Unemployment Compensation 94Employer Medicare 160Other Fringe Benefits 948,341Audit Services 15,200Dues and Memberships 14,476Legal Services 23,379Travel 6,280Other Contracted Services 10,500Liability Insurance 223,461

(Continued)

167

Exhibit J-8




Board of Education (Cont.)Trustee's Commission $ 231,676Workers' Compensation Insurance 206,215Other Charges 1,219

Total Board of Education $ 1,724,998

Director of SchoolsCounty Official/Administrative Officer $ 98,000Career Ladder Program 2,000Secretary(ies) 54,804Other Salaries and Wages 134,377Social Security 17,291Pensions 24,306Life Insurance 703Medical Insurance 19,567Unemployment Compensation 348Employer Medicare 4,044Communication 39,541Dues and Memberships 2,435Postal Charges 1,092Travel 4,572Other Contracted Services 664Office Supplies 8,564In Service/Staff Development 227Other Charges 1,997

Total Director of Schools 414,532

Office of the PrincipalPrincipals $ 916,288Career Ladder Program 13,333Assistant Principals 286,021Social Security 67,926Pensions 110,426Life Insurance 4,220Medical Insurance 122,090Unemployment Compensation 1,204Employer Medicare 16,687

Total Office of the Principal 1,538,195

Fiscal ServicesContributions $ 279,149

Total Fiscal Services 279,149

Operation of PlantCustodial Personnel $ 501,094Social Security 28,459Pensions 24,720

(Continued)

168

Exhibit J-8




Operation of Plant (Cont.)Unemployment Compensation $ 2,849Employer Medicare 6,976Disposal Fees 68,299Other Contracted Services 20,792Custodial Supplies 119,789Electricity 1,026,439Fuel Oil 4,915Natural Gas 65,968Water and Sewer 137,622

Total Operation of Plant $ 2,007,922

Maintenance of PlantMaintenance Personnel $ 470,601Social Security 28,333Pensions 25,977Life Insurance 66,324Medical Insurance 1,077,852Unemployment Compensation 1,193Employer Medicare 6,626Maintenance and Repair Services - Equipment 174,807Uniforms 1,761Other Charges 200

Total Maintenance of Plant 1,853,674

TransportationSupervisor/Director $ 61,052Mechanic(s) 42,597Bus Drivers 559,289Other Salaries and Wages 46,589Social Security 40,941Pensions 40,659Life Insurance 480Medical Insurance 11,472Unemployment Compensation 2,077Employer Medicare 10,215Other Fringe Benefits 6,510Contracts with Parents 10,956Contracts with Vehicle Owners 115,585Maintenance and Repair Services - Vehicles 2,756Other Contracted Services 36,466Garage Supplies 3,188Gasoline 127,797Tires and Tubes 20,156Uniforms 2,600Vehicle Parts 51,812Other Charges 784Transportation Equipment 310,352

Total Transportation 1,504,333

(Continued)

169

Exhibit J-8




Central and OtherCommunication $ 19,883Other Contracted Services 53,786Data Processing Supplies 27,766Data Processing Equipment 3,909

Total Central and Other $ 105,344

Operation of Non-Instructional ServicesCommunity Services

Supervisor/Director $ 10,772Teachers 185,731Educational Assistants 95,535Part-time Personnel 6,880Other Salaries and Wages 208,915Social Security 31,027Pensions 40,155Life Insurance 447Medical Insurance 11,681Unemployment Compensation 1,116Employer Medicare 7,267Travel 1,069Other Contracted Services 4,375Instructional Supplies and Materials 5,643Other Supplies and Materials 56,551In Service/Staff Development 662Other Charges 913

Total Community Services 668,739

Early Childhood EducationTeachers $ 341,469Clerical Personnel 18,479Educational Assistants 75,986Other Salaries and Wages 30,061Social Security 27,252Pensions 36,515Life Insurance 1,771Medical Insurance 51,071Unemployment Compensation 1,167Employer Medicare 6,374Communication 5,528Travel 1,436Instructional Supplies and Materials 27,210Other Supplies and Materials 7,232

Total Early Childhood Education 631,551

(Continued)

170

Exhibit J-8



General Purpose School Fund (Cont.)Capital Outlay

Regular Capital OutlayArchitects $ 3,029Building Construction 9,562Building Improvements 28,447Other Capital Outlay 16,591

Total Regular Capital Outlay $ 57,629

Other Debt ServiceEducation

Debt Service Contribution to Primary Government $ 3,099,143Total Education 3,099,143

Total General Purpose School Fund $ 37,270,186

School Federal Projects FundInstruction

Regular Instruction ProgramTeachers $ 676,717Educational Assistants 385,384Certified Substitute Teachers 22,550Social Security 63,106Pensions 82,677Life Insurance 3,600Medical Insurance 98,873Unemployment Compensation 3,025Employer Medicare 14,846Instructional Supplies and Materials 30,688Other Charges 434

Total Regular Instruction Program $ 1,381,900

Special Education ProgramTeachers $ 69,225Educational Assistants 776,598Speech Pathologist 2,500Certified Substitute Teachers 26,290Social Security 51,298Pensions 49,243Life Insurance 480Medical Insurance 13,476Unemployment Compensation 4,259Employer Medicare 11,998Contracts with Private Agencies 8,156Instructional Supplies and Materials 20,521Other Supplies and Materials 1,204

Total Special Education Program 1,035,248

(Continued)

171

Exhibit J-8



School Federal Projects Fund (Cont.)Instruction (Cont.)

Career and Technical Education ProgramOther Salaries and Wages $ 1,500Social Security 46Pensions 68Employer Medicare 22Other Contracted Services 5,256Instructional Supplies and Materials 147Vocational Instruction Equipment 50,975

Total Career and Technical Education Program $ 58,014

Support ServicesOther Student Support

Social Workers $ 17,170Social Security 832Pensions 1,559Life Insurance 160Medical Insurance 5,160Unemployment Compensation 67Employer Medicare 195Travel 16,594Other Supplies and Materials 345In Service/Staff Development 4,049Other Charges 9,241

Total Other Student Support 55,372

Regular Instruction ProgramSupervisor/Director $ 74,828Secretary(ies) 12,248Other Salaries and Wages 121,172Social Security 11,462Pensions 17,753Life Insurance 840Medical Insurance 24,084Unemployment Compensation 307Employer Medicare 2,858Other Supplies and Materials 1,408In Service/Staff Development 21,573Other Equipment 299

Total Regular Instruction Program 288,832

Special Education ProgramPsychological Personnel $ 56,391Social Security 3,095Pensions 5,075Life Insurance 240Medical Insurance 7,740Unemployment Compensation 67

(Continued)

172

Exhibit J-8



School Federal Projects Fund (Cont.)Support Services (Cont.)

Special Education Program (Cont.)Employer Medicare $ 724Communication 2,175Travel 3,204Other Contracted Services 24,830Other Supplies and Materials 8,155In Service/Staff Development 4,942

Total Special Education Program $ 116,638

Career and Technical Education ProgramTravel $ 1,200In Service/Staff Development 1,408Other Equipment 3,440

Total Career and Technical Education Program 6,048

TransportationBus Drivers $ 760Social Security 47Pensions 42Employer Medicare 11Diesel Fuel 452

Total Transportation 1,312

Operation of Non-Instructional ServicesCommunity Services

Other Salaries and Wages $ 76,425Social Security 4,711Pensions 6,785Life Insurance 240Medical Insurance 5,736Unemployment Compensation 87Employer Medicare 1,102Travel 11,638Other Contracted Services 6,837Food Supplies 1,937Other Supplies and Materials 30,311Other Charges 56,200

Total Community Services 202,009

Total School Federal Projects Fund $ 3,145,373

Central Cafeteria FundOperation of Non-Instructional Services

Food ServiceSupervisor/Director $ 70,147Accountants/Bookkeepers 16,230Clerical Personnel 32,524

(Continued)

173

Exhibit J-8



Central Cafeteria Fund (Cont.)Operation of Non-Instructional Services (Cont.)

Food Service (Cont.)Cafeteria Personnel $ 828,799Social Security 55,724Pensions 52,767Life Insurance 220Medical Insurance 7,298Unemployment Compensation 4,684Employer Medicare 13,054Communication 10,734Maintenance and Repair Services - Equipment 18,129Travel 4,473Other Contracted Services 23,980Food Preparation Supplies 94,975Food Supplies 1,013,358Office Supplies 3,468Uniforms 4,621USDA - Commodities 232,198Other Supplies and Materials 7,991In Service/Staff Development 467Other Charges 8,560Food Service Equipment 18,195

Total Food Service $ 2,522,596

Total Central Cafeteria Fund $ 2,522,596

Total Governmental Funds - Claiborne County School Department $ 42,938,155

174

Exhibit J-9

Claiborne County, TennesseeSchedule of Detailed Receipts, Disbursements,

and Changes in Cash Balance - City Agency FundFor the Year Ended June 30, 2018

Cities -Sales Tax

Fund

Cash ReceiptsLocal Option Sales Tax $ 1,899,502

Total Cash Receipts $ 1,899,502

Cash DisbursementsRemittance of Revenues Collected $ 1,880,507Trustee's Commission 18,995

Total Cash Disbursements $ 1,899,502

Excess of Cash Receipts Over (Under) Cash Disbursements $ 0Cash Balance, July 1, 2017 0

Cash Balance, June 30, 2018 $ 0

175

SINGLE AUDIT SECTION

176

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

Independent Auditor’s Report



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 Claiborne County, Tennessee, as of and for the year ended June 30, 2018, and the related notes to the financial statements, which collectively comprise Claiborne County's basic financial statements, and have issued our report thereon dated January 4, 2019.

Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered Claiborne 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 Claiborne County's internal control. Accordingly, we do not express an opinion on the effectiveness of Claiborne 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.

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. Given these limitations, during

177

our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. We did identify a certain deficiency in internal control, described in the accompanying Schedule of Findings and Questioned Costs, that we consider to be a significant deficiency: 2018-004.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Claiborne 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 instances of noncompliance or other matters that are required to be reported under Government Auditing Standards and are described in the accompanying Schedule of Findings and Questioned Costs as items: 2018-001, 2018-002, and 2018-003.

Claiborne County's Responses to the Findings

Claiborne County's responses to the findings identified in our audit are described in the accompanying Schedule of Findings and Questioned Costs. Claiborne 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 results 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 Claiborne County’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Very truly yours,


January 4, 2019

JPW/tg

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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

Independent Auditor’s Report



Report on Compliance for Each Major Federal Program

We have audited Claiborne County's compliance with the types of compliance requirementsdescribed in the OMB Compliance Supplement that could have a direct and material effect on each of Claiborne County's major federal programs for the year ended June 30, 2018. Claiborne 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 federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs.

Auditor's Responsibility

Our responsibility is to express an opinion on compliance for each of Claiborne 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 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 Claiborne County's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.

179

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 Claiborne County's compliance.

Opinion on Each Major Federal Program

In our opinion, Claiborne 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, 2018.

Report on Internal Control Over Compliance

Management of Claiborne 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 Claiborne 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 Claiborne 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.

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.

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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 Claiborne County, Tennessee, as of and for the year ended June 30, 2018, and the related notes to the financial statements, which collectively comprise Claiborne County’s basic financial statements. We issued our report thereon dated January 4, 2019, 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,


January 4, 2019

JPW/tg

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Claiborne County, Tennessee, and the Claiborne County School DepartmentSchedule of Expenditures of Federal Awards and State Grants (1) (2)For the Year-Ended June 30, 2018

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: (4) School Breakfast Program 10.553 N/A $ 578,288 National School Lunch Program 10.555 N/A 1,601,233 (5) Fresh Fruit and Vegetable Program 10.582 N/A 26,494 Passed-through State Department of Agriculture: Child Nutrition Cluster: (4) National School Lunch Program (Commodities - Noncash Assistance) 10.555 N/A 232,198 (5) Passed-through State Department of Health: Special Supplemental Nutrition Program for Women, Infants, and Children 10.557 GG-1855546 26,848Total U.S. Department of Agriculture $ 2,465,061

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 49928 $ 506,000Total U.S. Department of Housing and Urban Development $ 506,000

U.S. Department of Justice: Direct Program: Equitable Sharing Program 16.922 N/A $ 6,101Total U.S. Department of Justice $ 6,101

Appalachian Regional Commission: Passed-through State Department of Economic and Community Development: Appalachian Area Development 23.002 46608 $ 55,030Total Appalachian Regional Commission $ 55,030

U.S. Department of Education: Passed-through State Department of Education: Title 1 Grants to Local Educational Agencies 84.010 N/A $ 1,417,885 Special Education Cluster: (4) Special Education - Grants to States 84.027 N/A 1,138,633 Special Education - Preschool Grants 84.173 N/A 45,300 Career and Technical Education - Basic Grants to States 84.048 N/A 84,306 Gaining Early Awareness and Readiness for Undergraduate Programs 84.334 N/A 202,009 Rural Education 84.358 N/A 77,678 Improving Teacher Quality State Grants 84.367 N/A 194,445Total U.S. Department of Education $ 3,160,256

U.S. Department of Health and Human Services: Passed-through State Department of Health: Family Planning Services 93.217 GG-1855546 $ 2,429 HIV Prevention Activities Health Department Based 93.940 GG-1855546 242 Maternal and Child Health Services Block Grant to the States 93.994 GG-1855546 6,701 Preventive Health Services - Sexually Transmitted Diseased Control Grants 93.977 GG-1855546 240 Medicaid Cluster: Medical Assistance Program 93.778 GG-1855546 17,318 Passed-through State Department of Human Services: CCDF Cluster: Child Care and Development Block Grant 93.575 N/A 17,161Total U.S. Department of Health and Human Services $ 44,091

(Continued)

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Claiborne County, Tennessee, and the Claiborne County School DepartmentSchedule of Expenditures of Federal Awards and State Grants (1) (2) (Cont.)

Federal Pass-throughFederal/Pass-Through Agency/State CFDA Entity IdentifyingGrantor Program Title Number Number Expenditures

U.S. Department of Homeland Security: Passed-through State Department of Military: Disaster Grants - Public Assistance (Presidentially Declared Disasters) 97.036 34101-16415 $ 6,670 Emergency Management Performance Grants 97.042 34101-00919 27,000 Homeland Security Grant Program 97.067 34101-23716 13,363Total U.S. Department of Homeland Security $ 47,033

Total Expenditures of Federal Grants $ 6,283,572

ContractState Grants Number Three Star Program - State Department of Economic and Community Development N/A (3) $ 25,000 Lottery for Education: Preschool - State Department of Education N/A (3) 631,553 Lottery for Education: After School Programs - State Department of Education N/A (3) 429,097 Internet Connectivity Grant - State Department of Education N/A (3) 11,138 Child Care Assistance - State Department of Human Services N/A (3) 47,787 Family Resource Centers - State Department of Education N/A (3) 29,607 Safe Schools Act - State Department of Education N/A (3) 28,437 Coordinated School Health Program N/A (3) 94,997 Health Department Grants - State Department of Health Services N/A (3) 51,002 Read to Be Ready Coaching Network Grant - State Department of Education N/A (3) 9,714 Vocational Equipment State Grant - State Department of Education N/A (3) 80,000

Total State Grants $ 1,438,332

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) Claiborne county elected not to use the 10% de minimis cost rate permitted in the Uniform Guidance.(3) Information not available.(4) Child Nutrition Cluster total $2,411,719; Special Education Cluster total $1,183,933.(5) Total for CFDA No. 10.555 is $1,833,431.

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Claiborne County, TennesseeSummary Schedule of Prior-year FindingsFor the Year Ended June 30, 2018

Fiscal Page Finding CFDAYear Number Number Number

2017 183 2017-001 Payments were made to the Director N/A Correctedof Schools and Retiring Teachers WithoutSufficient Documentation of Approval bythe Board of Education

2017 184 2017-002 Accrued Leave Balances Exceeded the N/A Not Corrected - SeeMaximum Balance Provided by the Explanation on CorrectiveCounty's Personnel Policy Action Plan

2017 185 2017-003 Duties were not Segregated Adequately N/A Not Corrected by the Countyin the Offices of County Clerk, Register Clerk, Register of Deeds, andof Deeds, and Sheriff Sheriff

See Explanation on CorrectiveAction Plan

There were no prior-year federal award findings to repot.

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 not. Presentedbelow are financial statement findings along with their current status from the Annual Financial Report for Claiborne County,Tennessee, for the year ended June 30, 2018.

Prior-year Financial Statement Findings

Prior-year Federal Award Findings

184

Financial Statements:

1. Our report on the financial statements of Claiborne 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 inaccordance 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, National School Lunch Program

* CFDA Number 84.010 Title I Grants to Local EducationAgencies

8. Dollar threshold used to distinguish between Type A and Type B Programs. $750,000

9. Auditee qualified as low-risk auditee? YES

CLAIBORNE COUNTY, TENNESSEE

SCHEDULE OF FINDINGS AND QUESTIONED COSTS


PART I, SUMMARY OF AUDITOR'S RESULTS

185

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 for all findings are paraphrased and presented following each finding and recommendation. Management’s corrective action plans, whether related to the financial statements or federal awards, are 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 SHERIFF – CURRENT SHERIFF BOB BROOKS AND OFFICE OF FINANCE DIRECTOR

FINDING 2018-001 THE SHERIFF ENTERED INTO AN AGREEMENT TO PROVIDE HEALTHCARE TO JAIL INMATES WITHOUT APPROVAL FROM THE FINANCE DIRECTOR (Noncompliance Under Government Auditing Standards)

During our audit, we were notified that on October 23, 2018, Sheriff Bob Brooks entered into an agreement with a company to provide healthcare services to jail inmates. The agreement was signed by the sheriff and a representative from the healthcare provider. Claiborne County operates under the provisions of the County Financial Management System of 1981, Sections 5-21-101 through 5-21-130, Tennessee Code Annotated (TCA). This act provides for a central system of accounting, budgeting, and purchasing for all county departments. The act also provides for the creation of a Finance Department operated under the direction of the finance director. The County Financial Management System of 1981 provides for the finance director or a deputy appointed by him to serve as the county purchasing agent, and the finance director serves as the purchasing agent for Claiborne County. The internal control policy for the Claiborne County Finance Department allows department heads to sign contracts. However, this policy contradicts the County Financial Management System of 1981, Section 5-21-118(b)(1), TCA, which states it is the responsibility of the finance director to enter into contracts, purchases, or obligations of the county for contractual services. This agreement was executed improperly as a result of management’s lack of knowledge of state statutes. Since the finance director did not enter into the contract for healthcare services, management increases the risk of financial details being overlooked, which could potentially cost the county more than necessary or could result in the county executing agreements that they are financially unable to fulfill.

RECOMMENDATION

All contracts for the county should be approved and signed by the finance director in compliance with state statutes. The internal control policy for the Finance Department should be amended to reflect purchasing procedures that comply with the County Financial Management System of 1981.

186

MANAGEMENT’S RESPONSE – ACTING FINANCE DIRECTOR ANGELIA TUCKER AND CURRENT SHERIFF BOB BROOKS (PARAPHRASED)

We concur with this finding; however, we felt that at the time we had followed the correct procedure. The proposed contract had been given to the previous Finance Director, Sam Owens, and the County Attorney for review. Once both were satisfied with the terms, the sheriff signed in good faith, per the existing Internal Control Policy as the department head.

Upon realization that the Internal Control Policy did not adhere to the 81 Financial Management Act requirements, we took immediate steps to amend our policy and will continue to follow those guidelines and have the Finance Director sign all future contacts.

MANAGEMENT’S RESPONSE – FORMER FINANCE DIRECTOR SAM OWENS (PARAPHRASED)

The contract was reviewed by the finance director with a recommendation that prior to approval by the Finance Director, the plan should be presented to the Claiborne County Commission to approve and move enough appropriations to the line item to fund the contract for the remaining budget year. The recommendation was relayed to the sheriff and the county mayor.

________________________________________

OFFICE OF SHERIFF – FORMER SHERIFF DAVID RAY AND CURRENT SHERIFF BOB BROOKS

FINDING 2018-002 ACCRUED LEAVE BALANCES EXCEEDED THE MAXIMUM BALANCE PROVIDED BY THE COUNTY’S PERSONNEL POLICY (Noncompliance Under Government Auditing Standards)

We noted several employees in the Office of Sheriff had accrued compensatory and vacation leave balances exceeding the maximum balance provided by the county’s personnel policy. The county’s personnel policy for compensatory leave provides, “The maximum hours that an employee may accrue is 100 hours at the discretion of the county official or department head. Any employee reaching this maximum shall not work any additional overtime until the employee’s compensatory time falls below the maximum.” The county’s personnel policy for vacation leave provides, “Vacation time may be accumulated and carried forward to the next year in an amount not to exceed five days. Any days exceeding the five-day limit will be lost if not used prior to the end of the current employment year.” These deficiencies can be attributed to the failure of management to adequately monitor employees’ leave balances, management’s failure to correct the deficiencies reported in prior-year audit reports, and the failure to implement their corrective action plan. Allowing employees to accrue excess leave balances may result in excess employee compensation.

RECOMMENDATION

The sheriff should monitor employees’ leave balances to ensure compliance with the county’s personnel policy.

187

MANAGEMENT’S RESPONSE – CURRENT SHERIFF BOB BROOKS (PARAPHRASED)

We concur with this finding. We will be implementing a plan to assist in lowering the accrued comp time by utilizing school resource officers and other office employees with less accrued time. This plan will reduce the balance of those with more than the maximum balances allowed.

MANAGEMENT’S RESPONSE – FORMER SHERIFF DAVID RAY AND FORMER CHIEF DEPUTY WAYNE LEE (PARAPHRASED)

I can neither agree nor disagree with this finding because I do not know what the county’s personnel policy provides. The Sheriff’s Office has a personnel policy separate and apart from the county.

AUDITOR’S REBUTTAL

The Sheriff’s Department does have a separate employee personnel policy; however, this policy does not address compensatory leave.

________________________________________

OFFICE OF SHERIFF – FORMER SHERIFF DAVID RAY

FINDING 2018-003 THE FORMER SHERIFF AND TWO EMPLOYEES OF THE SHERIFF’S DEPARTMENT WERE INDICTED BY THE CLAIBORNE COUNTY GRAND JURY (Noncompliance Under Government Auditing Standards)

On August 22,2018, Claiborne County Sheriff David Ray was indicted by the Claiborne County Grand Jury and charged with seven counts of official misconduct, one count of use of inmates for personal gain, one count of forgery, and six counts of attempted sales tax evasion. Sheriff Ray left office on August 31, 2018, and was succeeded by newly elected Sheriff Bob Brooks. Also, on August 22, 2018, Sheriff’s Department employee Larry Martin was indicted on three counts of unlawful possession of a handgun (after having been convicted of a felony), and Sheriff’s Department employee Larry Roberts was indicted on two counts of official misconduct.

________________________________________

OFFICES OF COUNTY CLERK, REGISTER OF DEEDS, AND SHERIFF

FINDING 2018-004 DUTIES WERE NOT SEGREGATED ADEQUATELY (Internal Control – Significant Deficiency Under Government Auditing Standards)

Duties were not segregated adequately among the officials and employees in the Offices of County Clerk, Register of Deeds, and Sheriff. Officials and employees responsible for maintaining accounting records were also involved in receipting, depositing, and/or disbursing funds. Sound business practices dictate that internal controls be designed to provide reasonable assurance of the reliability of financial reporting and of the effectiveness

188

and efficiency of operations. This lack of segregation of duties is the result of management’s decisions based on the availability of financial resources and is a significant deficiency in internal controls that increases the risk of unauthorized transactions, management’s failure to correct the finding noted in the prior-year audit report, and management’s failure to implement their corrective action plan.

RECOMMENDATION

Management should segregate duties to the extent possible using available resources.

MANAGEMENT’S RESPONSE – CURRENT COUNTY CLERK KAREN HURST

I concur with the finding. I will implement internal controls to segregate duties to the extent possible using available resources. I will continue to try to implement the segregation of duties checklist on the Division of Local Government Audit's website as a guide for how to adequately segregate duties in small county offices.

MANAGEMENT’S RESPONSE – REGISTER OF DEEDS

The Internal Control Checklist that was implemented in 2018 was utilized to the best of our ability since we only have one full time employee, one part time employee, and me. We will continue to segregate the duties required by the auditors.

MANAGEMENT’S RESPONSE – CURRENT SHERIFF BOB BROOKS

We concur with this finding. There has been a written procedure put in place to segregate the accounts receivable and accounts payable departments.

MANAGEMENT’S RESPONSE – FORMER SHERIFF DAVID RAY AND FORMER CHIEF DEPUTY WAYNE LEE

As I have stated in previous audits, the Sheriff’s Office does not have sufficient administrative employees to accomplish adequate segregation of duties. To do so would require the hiring of at least two new employees, thus creating a financial burden on the county. I agree with the auditor’s recommendation.

189

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, 2018.

190

FindingNumber

OFFICE OF SHERIFF AND OFFICE OF FINANCE DIRECTOR - CURRENT SHERIFF BOB BROOKS AND ACTING FINANCE DIRECTOR ANGELIA TUCKER

2018-001

OFFICE OF SHERIFF - CURRENT SHERIFF BOB BROOKS

2018-002

2018-004

OFFICE OF COUNTY CLERK - CURRENT COUNTY CLERK KAREN HURST

2018-004 Duties were not Segregated Adequately

OFFICE OF REGISTER OF DEEDS

2018-004 Duties were not Segregated Adequately

Claiborne County, TennesseeManagement's Corrective Action Plan


Title of FindingCorrective Action

Plan Page Number

195

196

Duties were not Segregated Adequately

Accrued Leave Balances Exceeded the Maximum Balance Provided by the County's Personnel Policy

We reviewed the financial statement and federal award findings and recommendations with managementto 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 AuditRequirements for Federal Awards (Uniform Guidance). Management’s corrective action plans for allfinancial statement findings and federal award findings are presented in this section and have beenindexed below. The corrective action plans were prepared by management and have been presented asthey were submitted.

The Sheriff Entered into an Agreement to provideHealthcare to Jail Inmates without Approval from theFinance Director 192

193

193-194

191

Cfai6orne County Pinance (J)epartment <Finance (J)irector

}Inge(ia %cR!r C£mai[ ange(ia. [email protected]

Corrective Action Plan

FINDING: THE SHERIFF ENTERED INTO AN AGREEMENT TO

PROVIDE HEALTHCARE TO JAIL INMATES WITHOUT

AP PROV AL FROM THE FINANCE DIRECTOR

Response and Corrective Action Plan Prepared by:

Angelia Tucker, Deputy Finance Director

Robert Brooks, Claiborne County Sheriff

Person Responsible for Implementing the Corrective Action:

Angelia Tucker, Deputy Finance Director Robert Brooks, Claiborne County Sheriff

Anticipated Completion Date of Corrective Action:

01/28/2019

Repeat Finding:

No

Planned Corrective Action:

Internal Control Policy will be revised to assure all policies adhere to the 81 Financial

Management Act and will be presented to the Finance Committee for approval to take

effect immediately. All contracts will be handled by the Finance Director.

Signature:

Signature:

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l

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192

FINDING:

Boh Brooks. Sheriff -H5 Straight Creek Rel

Tazewell. T): 37::,79( 423)626✓ 331. 5 nr (-+23)626✓ 2501

Fa..�: 423✓ 626✓ .... 7 1

Correetive Action Plan

ACCRUED LEA VE BALANCES EXCEEDED THE MAXIMUM BALANCE PROVIDED BY THE COUNTY'S PERSONNEL POLICY

FINDING:


Bob Brooks, Sheriff

Person Responsible for Implementing the Corrective Action: Bob Brooks, Sheriff

Anticipated Completion Date of Corrective Action: 9/1/2019

Repeat Finding:

Yes

Reason Corrective Action was Not Taken in the Prior Year: Previous administration no longer in place.

Planned Corrective Action:

There will be a plan put in place to assist in lowering the accrued comp time by

utilizing school resource officers and other office employees with less accrued time

which will allow those with more than the maximum allowed to be reduced.

DUTIES WERE NOT SEGREGATED ADEQUATELY


Bob Brooks, Sheriff

Person Responsible for Implementing the Corrective Action: Bob Brooks, Sheriff

193

Reason Corrective Action was Not Taken in the Prior Year: Previous administration no longer in place.

Planned Corrective Action: There will be a written procedure put in place to segregate any accounting process.

Signature: Z e? 4 J "9L-

194

Claiborne County Clerk


PO Box 173 Tazewell, TN 37879

Phone: 423-626-3283 Fax: 423-626-6234

FINDING: DUTIES WERE NOT SEGREGATED ADEQUATELY

Response and Corrective Action Plan Prepared by: Karen Hurst, County Clerk

Person Responsible for Implementing the Corrective Action: Karen Hurst, County Clerk

Anticipated Completion Date of Corrective Action: 6/30/19

Repeat Finding: Yes

Reason Corrective Action was Not Taken in the Prior Year: Office is working to correct issues as soon as possible.

Planned Corrective Action: Steps are being taken to correct this situation immediately to bring findings into compliance with Local Government Guidelines. Office is working to implement Internal Control checklist that properly segregates duties.

195

Kimberly Reece Register of Deeds P.O. Box 117 Tazewell, TN 37879


FINDING: DUTIES WERE NOT SEGREGATED ADEQUATELY

Response and Corrective Action Plan Prepared By: Kimberly Reece, Register of Deeds

Person Responsible for Implementing the Corrective Action: Kimberly Reece, Register of Deeds

Anticipated Completion Date of Corrective Action: December 14, 2018

Repeat Findings: Yes

Reason Corrective Action was Not Taken in the Prior Year: Spread sheet was prepared in 2017, corrections added, per auditors request.

Planned Corrective Action: I will utilize the checklist on the Division of Local Governments Audit's website, Employees have been given specific duties from the checklist.

Kimberly Reece, Register of Deeds of Claiborne County Tennessee

196

Documents

CLAIBORNE COUNTY TENNESSEE