JOHNSON COUNTY TENNESSEE - Comptroller.TN.gov

ANNUAL FINANCIAL REPORT

JOHNSON COUNTY, TENNESSEE FOR THE YEAR ENDED JUNE 30, 2020

DIVISION OF LOCAL GOVERNMENT AUDIT

ANNUAL FINANCIAL REPORT

JOHNSON COUNTY, TENNESSEE

FOR THE YEAR ENDED JUNE 30, 2020

COMPTROLLER OF THE TREASURY JUSTIN P. WILSON

DIVISION OF LOCAL GOVERNMENT AUDIT JAMES R. ARNETTE

Director

MARK TREECE, CPA, CGFM Audit Manager

BRANDON HAMMES MARIE TIDWELL, CPA MORGAN HAMILTON-PIGG ROBERT ANDERSON, CPA, CGFM GREG BRUSH, CISA Senior Auditors State Auditors

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

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http://www.comptroller.tn.gov/

Exhibit Page(s)

Summary of Audit Findings 6

INTRODUCTORY SECTION 7

Johnson County Officials 8

FINANCIAL SECTION 9

Independent Auditor's Report 10-12BASIC FINANCIAL STATEMENTS: 13

Government-wide Financial Statements:Statement of Net Position A 14-15Statement of Activities B 16-17

Fund Financial Statements:Governmental Funds:

Balance Sheet C-1 18-19Reconciliation of the Balance Sheet of Governmental Funds

to the Statement of Net Position C-2 20Statement of Revenues, Expenditures, and Changes in

Fund Balances C-3 21-22Reconciliation of the Statement of Revenues, Expenditures,

and Changes in Fund Balances of Governmental Fundsto the Statement of Activities C-4 23

Statements of Revenues, Expenditures, and Changes in FundBalances - Actual (Budgetary Basis) and Budget: General Fund C-5 24-26

Highway/Public Works Fund C-6 27Fiduciary Funds:

Statement of Fiduciary Assets and Liabilities D 28Index and Notes to the Financial Statements 29-100

REQUIRED SUPPLEMENTARY INFORMATION: 101Schedule of Changes in Net Pension Liability (Asset) and Related Ratios

Based on Participation in the Public Employee Legacy Pension Planof TCRS – Primary Government E-1 102

Schedule of Changes in Net Pension Liability (Asset) and Related Ratios Based on Participation in the Public Employee Pension Planof TCRS – Primary Government E-2 103

Schedule of Contributions Based on Participation in the Public EmployeeLegacy Pension Plan of TCRS – Primary Government E-3 104

Schedule of Contributions Based on Participation in the Public EmployeePension Plan of TCRS – Primary Government E-4 105

Schedule of Contributions Based on Participation in the TeacherRetirement Plan of TCRS – Discretely Presented JohnsonCounty School Department E-5 106

Schedule of Contributions Based on Participation in the TeacherLegacy Pension Plan of TCRS – Discretely Presented JohnsonCounty School Department E-6 107

Schedule of Proportionate Share of the Net Pension Asset in theTeacher Retirement Plan of TCRS – Discretely PresentedJohnson County School Department E-7 108

JOHNSON COUNTY, TENNESSEETABLE OF CONTENTS

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Exhibit Page(s)

Schedule of Proportionate Share of the Net Pension Liability (Asset) in theTeacher Legacy Pension Plan of TCRS – Discretely PresentedJohnson County School Department E-8 109

Schedule of Changes in the Total OPEB Liability and Related RatiosLocal Government Plan - Primary Government E-9 110

Schedule of Changes in the Total OPEB Liability and Related RatiosLocal Education Plan - Discretely Presented Johnson County School Department E-10 111

Notes to the Required Supplementary Information 112COMBINING AND INDIVIDUAL FUND FINANCIAL

STATEMENTS AND SCHEDULES: 113Nonmajor Governmental Funds: 114-115

Combining Balance Sheet F-1 116-119Combining Statement of Revenues, Expenditures, and Changes

in Fund Balances F-2 120-123Schedules of Revenues, Expenditures, and Changes in Fund

Balances – Actual (Budgetary Basis) and Budget:Public Library Fund F-3 124Solid Waste/Sanitation Fund F-4 125Drug Control Fund F-5 126General Capital Projects Fund F-6 127

Major Governmental Fund: 128Schedule of Revenues, Expenditures, and Changes in Fund

Balance – Actual and Budget:General Debt Service Fund G 129

Fiduciary Funds: 130Combining Statement of Fiduciary Assets and Liabilities H-1 131Combining Statement of Changes in Assets and Liabilities –

All Agency Funds H-2 132Component Unit:

Discretely Presented Johnson County School Department: 133Statement of Activities I-1 134Balance Sheet – Governmental Funds I-2 135Reconciliation of the Balance Sheet of Governmental Funds

to the Statement of Net Position I-3 136Statement of Revenues, Expenditures, and Changes in Fund

Balances – Governmental Funds I-4 137Reconciliation of the Statement of Revenues, Expenditures,

and Changes in Fund Balances of Governmental Fundsto the Statement of Activities I-5 138

Combining Balance Sheet – Nonmajor Governmental Funds I-6 139-140Combining Statement of Revenues, Expenditures, and Changes

in Fund Balances – Nonmajor Governmental Funds I-7 141Schedules of Revenues, Expenditures, and Changes in Fund

Balances – Actual (Budgetary Basis) and Budget:General Purpose School Fund I-8 142-143School Federal Projects Fund I-9 144-145Central Cafeteria Fund I-10 146Other Education Special Revenue Fund I-11 147

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Exhibit Page(s)

Miscellaneous Schedules: 148Schedule of Changes in Bonds and Capital Leases J-1 149Schedule of Long-term Debt Requirements by Year J-2 150Schedule of Transfers – Primary Government and Discretely

Presented Johnson County School Department J-3 151Schedule of Salaries and Official Bonds of Principal Officials –

Primary Government and Discretely Presented JohnsonCounty School Department J-4 152

Schedule of Detailed Revenues – All Governmental Fund Types J-5 153-164Schedule of Detailed Revenues – All Governmental Fund Types –

Discretely Presented Johnson County School Department J-6 165-168Schedule of Detailed Expenditures – All Governmental Fund Types J-7 169-186Schedule of Detailed Expenditures – All Governmental Fund Types –

Discretely Presented Johnson County School Department J-8 187-201Schedule of Detailed Receipts, Disbursements, and Changes in

Cash Balance – City Agency Fund J-9 202

SINGLE AUDIT SECTION 203

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 204-205

Auditor's Report on Compliance for Each Major Federal Program; Reporton Internal Control Over Compliance; and Report on the Schedule ofExpenditures of Federal Awards Required by Uniform Guidance 206-208

Schedule of Expenditures of Federal Awards and State Grants 209-211Summary Schedule of Prior-year Findings 212Schedule of Findings and Questioned Costs 213-218Management's Corrective Action Plan 219-224Best Practice 225

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Summary of Audit FindingsAnnual Financial Report

Johnson County, Tennessee For the Year Ended June 30, 2020

Scope

We have audited the basic financial statements of Johnson County as of and for the year ended June 30, 2020.

Results

Our report on Johnson County’s financial statements is unmodified.

Our audit resulted in four findings and recommendations, which we have reviewed with Johnson 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:

OFFICES OF COUNTY MAYOR, DIRECTOR OF SCHOOLS, ROAD SUPERINTENDENT AND DIRECTOR OF ACCOUNTS AND BUDGETS

♦ The offices had deficiencies in purchasing procedures.

OFFICE OF CIRCUIT AND GENERAL SESSIONS COURTS CLERK

♦ A cash overdraft occurred during the year in General Sessions Court.

OFFICE OF CLERK AND MASTER

♦ Special commissioner fees exceeded the percentage authorized by state statute.

OFFICE OF ASSESSOR OF PROPERTY

♦ The assessor did not maintain an adequate program of visual inspections.

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INTRODUCTORY SECTION

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Johnson County Officials June 30, 2020

Officials

Mike Taylor, County Mayor Jeff Wagner, Road Superintendent Mischelle Simcox, Director of Schools Lisa Crowder, Trustee Matthew Lewis, Assessor of Property Tammie Fenner, County Clerk Melissa Hollaway, Circuit and General Sessions Courts Clerk Sherrie Fenner, Clerk and Master Freida May Gwinn, Register of Deeds Edward Tester, Sheriff Dustin Shearin, Purchasing Agent Russell Robinson, Director of Accounts and Budgets

Board of County Commissioners

Rick Snyder, Chairman Scott Mast Bill Adams Gina Meade Berna Arnold Megan McEwen Eugene Campbell David McQueen Jerry Gentry Joey Norris Robert Grindstaff Freddy Phipps Evelyn Hill Tommy Poore Jimmy Lowe

Board of Education

Howard Carlton, Chairman Mike Payne Kevin Long Jo Ann Reece Gary Matheson

Audit Committee

Sally Snyder, Chairman Gina Meade Eugene Campbell

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FINANCIAL SECTION

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Independent Auditor's Report

Johnson County Mayor and Board of County Commissioners Johnson 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 Johnson County, Tennessee, as of and for the year ended June 30, 2020, 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 significant accounting

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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 Johnson County, Tennessee, as of June 30, 2020, and the respective changes in financial position thereof and the respective budgetary comparison for the General and Highway/Public Works funds for the year then ended in accordance with accounting principles generally accepted in the United States of America.

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 schedules of changes in the county’s net pension liability and related ratios, schedules of county and school contributions, schedules of school’s proportionate share of the net pension liability, and schedules of county and school changes in the total other postemployment benefits liability and related ratios, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial 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 Johnson 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 Johnson County School Department (a discretely presented component unit), miscellaneous schedules and other information such as the introductory section 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

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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 Johnson 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 Johnson 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 has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated October 30, 2020, on our consideration of Johnson 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 Johnson 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 Johnson County’s internal control over financial reporting and compliance.

Very truly yours,

Justin P. Wilson Comptroller of the Treasury Nashville, Tennessee

October 30, 2020

JPW/tg

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BASIC FINANCIAL STATEMENTS

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Exhibit A

Johnson County, TennesseeStatement of Net PositionJune 30, 2020

ASSETS

Cash $ 38,367 $ 58,272Equity in Pooled Cash and Investments 11,208,821 5,361,790Accounts Receivable 37,325 16,857Due from Other Governments 877,696 769,307Property Taxes Receivable 3,948,895 2,853,823Allowance for Uncollectible Property Taxes (84,828) (61,304)Prepaid Items 0 318,439Restricted Assets: Amounts Accumulated for OPEB Benefits 0 1,087,317 Amounts Accumulated for Pension Benefits 31,713 107,607Net Pension Asset - Agent Plan 3,781 1,893Net Pension Asset - Agent Plan - Legacy 1,274,016 879,130Net Pension Asset - Teacher Retirement Plan 0 122,976Net Pension Asset - Teacher Legacy Pension Plan 0 2,079,548Capital Assets: Assets Not Depreciated: Land 835,378 962,939 Construction in Progress 0 137,460 Assets Net of Accumulated Depreciation: Buildings and Improvements 6,659,594 11,285,507 Infrastructure 5,485,764 82,023 Other Capital Assets 1,142,155 1,096,267Total Assets $ 31,458,677 $ 27,159,851

DEFERRED OUTFLOWS OF RESOURCES

Deferred Charge on Refunding $ 306,515 $ 0Pension Changes in Experience 28,009 123,599Pension Changes in Assumptions 75,382 336,520Pension Contributions after Measurement Date 218,182 892,077Pension Changes in Proportion 0 44,949OPEB Changes in Experience 1,552 1,819,511OPEB Changes in Assumptions 11,809 74,100OPEB Benefits Paid after Measurement Date 977 216,950Total Deferred Outflows of Resources $ 642,426 $ 3,507,706

LIABILITIES

Accounts Payable $ 258,380 $ 40,609Accrued Payroll 3,779 4,046Payroll Deductions Payable 78,167 445,117Accrued Interest Payable 13,246 0Due to State of Tennessee 5,556 0Other Current Liabilities 43,524 58,030

(Continued)

PrimaryGovernment

Governmental Activities

Component

JohnsonCountySchool

Department

Unit

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Exhibit A

Johnson County, TennesseeStatement of Net Position (Cont.)

LIABILITIES (Cont.)

Noncurrent Liabilities: Due Within One Year - Debt $ 950,173 $ 0 Due Within One Year - Other 309,376 47,159 Due in More Than One Year - Debt 7,073,838 0 Due in More Than One Year - Other 1,006,807 4,900,600Total Liabilities $ 9,742,846 $ 5,495,561

DEFERRED INFLOWS OF RESOURCES

Deferred Current Property Taxes $ 3,745,723 $ 2,706,993Pension Changes in Experience 206,280 1,434,039Net Pension Changes in Investment Earnings 177,494 721,829Pension Changes in Proportion 0 86,907OPEB Changes in Experience 159,272 2,717,206OPEB Changes in Assumptions 68,324 540,029OPEB Changes in Proportion 0 286,093Total Deferred Inflows of Resources $ 4,357,093 $ 8,493,096

NET POSITION

Net Investment in Capital Assets $ 9,479,553 $ 13,564,196Restricted for: General Government 177,672 0 Finance 65,971 0 Administration of Justice 79,094 0 Public Safety 155,590 0 Public Health and Welfare 26,770 0 Highways 121,464 0 Education 0 1,293,000 Pensions 1,309,510 3,191,154 Capital Outlay 1,436,153 0Unrestricted 5,149,387 (1,369,450)

Total Net Position $ 18,001,164 $ 16,678,900

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

Johnson

ComponentUnit

Governmental Activities

GovernmentPrimary

CountySchool

Department

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Exhibit B

Johnson County, TennesseeStatement of ActivitiesFor the Year Ended June 30, 2020

Changes in Net Position

Program RevenuesOperating Capital

Charges for Grants and Grants and GovernmentalFunctions/Programs Expenses Services Contributions Contributions

Primary Government: Governmental Activities: General Government $ 1,953,060 $ 797,569 $ 123,179 $ 393,785 $ (638,527) $ 0 Finance 946,851 457,239 0 0 (489,612) 0 Administration of Justice 699,223 341,719 63,912 0 (293,592) 0 Public Safety 3,544,514 760,205 60,586 0 (2,723,723) 0 Public Health and Welfare 983,169 564,524 370,910 0 (47,735) 0 Social, Cultural, and Recreational Services 298,960 7,588 82,759 8,246 (200,367) 0 Agriculture and Natural Resources 115,680 0 0 0 (115,680) 0 Highways 2,424,107 6,188 2,114,170 43,658 (260,091) 0 Education 750 0 0 0 (750) 0 Interest on Long-term Debt 217,253 0 80,435 0 (136,818) 0

Total Primary Government $ 11,183,567 $ 2,935,032 $ 2,895,951 $ 445,689 $ (4,906,895) $ 0

Component Unit: Johnson County School Department $ 21,082,864 $ 440,633 $ 3,889,120 $ 0 $ 0 $ (16,753,111)

Total Component Unit $ 21,082,864 $ 440,633 $ 3,889,120 $ 0 $ 0 $ (16,753,111)

(Continued)

Department

Net (Expense) Revenue and

Activities

PrimaryGovernment

ComponentUnit

JohnsonCountySchool

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Exhibit B

Johnson County, TennesseeStatement of Activities (Cont.)

Changes in Net Position

Program RevenuesOperating Capital

Charges for Grants and Grants and GovernmentalFunctions/Programs Expenses Services Contributions Contributions

General Revenues: Taxes: Property Taxes Levied for General Purposes $ 3,290,643 $ 2,754,979 Property Taxes Levied for Debt Service 513,050 0 Local Option Sales Taxes 343,731 909,323 Hotel/Motel Tax 24,539 0 Wheel Tax 647,355 0 Litigation Tax - General 7,746 0 Litigation Tax - Special Purpose 33,506 0 Litigation Tax - Jail, Workhouse, or Courthouse 14,265 0 Business Tax 78,679 0 Mixed Drink Tax 8 0 Mineral Severance Tax 469 0 Wholesale Beer Tax 134,796 0 Grants and Contributions Not Restricted to Specific Programs 916,602 14,566,681 Unrestricted Investment Income 114,684 2,361 Gain on Investments 928 61,232 Miscellaneous 74,358 176,026 Gain on Disposal of Capital Assets 47,777 0Total General Revenues $ 6,243,136 $ 18,470,602

Change in Net Position $ 1,336,241 $ 1,717,491Net Position, July 1, 2019 16,664,923 14,961,409

Net Position, June 30, 2020 $ 18,001,164 $ 16,678,900


SchoolActivities Department

ComponentUnit

Primary JohnsonGovernment County

Net (Expense) Revenue and

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Exhibit C-1

Johnson County, TennesseeBalance SheetGovernmental FundsJune 30, 2020

OtherHighway / General Govern- Total

Public Debt mental GovernmentalGeneral Works Service Funds Funds

ASSETS

Cash $ 30,001 $ 6,816 $ 0 $ 1,550 $ 38,367Equity in Pooled Cash and Investments 2,003,798 1,174,255 6,215,691 1,815,077 11,208,821Accounts Receivable 28,881 428 0 8,016 37,325Due from Other Governments 461,486 331,904 26,669 57,637 877,696Due from Other Funds 1,080 0 111,112 0 112,192Property Taxes Receivable 3,119,295 0 530,944 298,656 3,948,895Allowance for Uncollectible Property Taxes (67,006) 0 (11,406) (6,416) (84,828)Restricted Assets 31,713 0 0 0 31,713

Total Assets $ 5,609,248 $ 1,513,403 $ 6,873,010 $ 2,174,520 $ 16,170,181

LIABILITIES

Accounts Payable $ 230,377 $ 2,966 $ 0 $ 25,037 $ 258,380Accrued Payroll 3,779 0 0 0 3,779Payroll Deductions Payable 61,805 16,362 0 0 78,167Due to Other Funds 111,112 0 0 1,080 112,192Due to State of Tennessee 4,797 759 0 0 5,556Other Current Liabilities 30,001 6,817 0 6,706 43,524Total Liabilities $ 441,871 $ 26,904 $ 0 $ 32,823 $ 501,598


Deferred Current Property Taxes $ 2,958,807 $ 0 $ 503,626 $ 283,290 $ 3,745,723Deferred Delinquent Property Taxes 86,806 0 14,776 8,311 109,893Other Deferred/Unavailable Revenue 48,753 171,941 16,170 3,908 240,772Total Deferred Inflows of Resources $ 3,094,366 $ 171,941 $ 534,572 $ 295,509 $ 4,096,388

(Continued)

Major FundsNonmajor

Funds

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Exhibit C-1

Johnson County, TennesseeBalance SheetGovernmental Funds (Cont.)



FUND BALANCES

Restricted:Restricted for General Government $ 177,672 $ 0 $ 0 $ 0 $ 177,672Restricted for Finance 65,971 0 0 0 65,971Restricted for Administration of Justice 79,094 0 0 0 79,094Restricted for Public Safety 95,643 0 0 59,947 155,590Restricted for Public Health and Welfare 26,770 0 0 0 26,770Restricted for Capital Outlay 0 0 0 1,427,842 1,427,842Restricted for Hybrid Retirement Stabilization Funds 31,713 0 0 0 31,713

Committed:Committed for Public Health and Welfare 0 0 0 306,178 306,178Committed for Social, Cultural, and Recreational Services 0 0 0 44,730 44,730Committed for Highways/Public Works 0 1,314,558 0 0 1,314,558Committed for Capital Outlay 0 0 0 7,491 7,491Committed for Debt Service 0 0 6,338,438 0 6,338,438

Assigned:Assigned for General Government 356,131 0 0 0 356,131Assigned for Public Safety 387,772 0 0 0 387,772Assigned for Highways/Public Works 247 0 0 0 247

Unassigned 851,998 0 0 0 851,998Total Fund Balances $ 2,073,011 $ 1,314,558 $ 6,338,438 $ 1,846,188 $ 11,572,195

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 5,609,248 $ 1,513,403 $ 6,873,010 $ 2,174,520 $ 16,170,181


Major FundsNonmajor

Funds

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Exhibit C-2

Johnson County, TennesseeReconciliation of the Balance Sheet of Governmental Funds to the Statement of Net PositionJune 30, 2020

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) $ 11,572,195

(1) Capital assets used in governmental activities are not financial resources and therefore are not reported inthe governmental funds.

Add: land $ 835,378Add: buildings and improvements net of accumulated depreciation 6,659,594Add: infrastructure net of accumulated depreciation 5,485,764Add: other capital assets net of accumulated depreciation 1,142,155 14,122,891

(2) Long-term liabilities are not due and payable in the currentperiod and therefore are not reported in the governmental funds.

Less: bonds payable $ (7,690,000)Less: capital leases payable (159,632)Add: deferred amount on refunding 306,515Less: compensated absences payable (255,325)Less: landfill postclosure care costs (567,118)Less: other postemployment benefits liability (493,740)Less: accrued interest on bonds (13,246)Less: other deferred revenue - premium on debt (174,379) (9,046,925)

(3) Amounts reported as deferred outflows of resources and deferredinflows of resources related to pensions and OPEB will be amortized andrecognized as components of pension and OPEB expense in future years.

Add: deferred outflows of resources related to pensions $ 321,573Less: deferred inflows of resources related to pensions (383,774)Add: deferred outflows of resources related to OPEB 14,338Less: deferred inflows of resources related to OPEB (227,596) (275,459)

(4) Net pension assets of the agent plans are not current financial resources and therefore are not reported in the governmental funds.

Add: net pension asset - agent plan $ 3,781Add: net pension asset - agent plan - legacy 1,274,016 1,277,797

(5) Other long-term assets are not available to pay forcurrent-period expenditures and therefore are deferredin the governmental funds. 350,665

Net position of governmental activities (Exhibit A) $ 18,001,164


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Exhibit C-3

Johnson County, TennesseeStatement of Revenues, Expenditures,

and Changes in Fund BalancesGovernmental FundsFor the Year Ended June 30, 2020



RevenuesLocal Taxes $ 3,666,657 $ 243,227 $ 902,085 $ 374,436 $ 5,186,405Licenses and Permits 74,450 0 0 0 74,450Fines, Forfeitures, and Penalties 91,580 0 0 32,873 124,453Charges for Current Services 67,194 0 0 577,653 644,847Other Local Revenues 585,349 44,940 0 119,261 749,550Fees Received From County Officials 751,386 0 0 0 751,386State of Tennessee 1,789,636 2,173,031 1,682 61,452 4,025,801Federal Government 575,449 78,091 0 2,440 655,980Other Governments and Citizens Groups 238,824 443 264,154 83,759 587,180

Total Revenues $ 7,840,525 $ 2,539,732 $ 1,167,921 $ 1,251,874 $ 12,800,052

ExpendituresCurrent:

General Government $ 635,303 $ 0 $ 0 $ 122 $ 635,425Finance 867,087 0 0 0 867,087Administration of Justice 694,744 0 0 13,385 708,129Public Safety 3,395,528 0 0 55,812 3,451,340Public Health and Welfare 425,439 0 0 577,942 1,003,381Social, Cultural, and Recreational Services 151,708 0 0 93,652 245,360Agriculture and Natural Resources 115,820 0 0 0 115,820Other Operations 1,145,339 0 0 0 1,145,339Highways 59,964 3,205,045 0 0 3,265,009

Debt Service:Principal on Debt 0 104,551 855,000 0 959,551Interest on Debt 0 4,199 176,050 0 180,249Other Debt Service 0 0 18,151 0 18,151

(Continued)

Major FundsNonmajor

Funds

21

Exhibit C-3


and Changes in Fund BalancesGovernmental Funds (Cont.)



Expenditures (Cont.)Capital Projects $ 0 $ 0 $ 0 $ 259,400 $ 259,400

Total Expenditures $ 7,490,932 $ 3,313,795 $ 1,049,201 $ 1,000,313 $ 12,854,241

Excess (Deficiency) of RevenuesOver Expenditures $ 349,593 $ (774,063) $ 118,720 $ 251,561 $ (54,189)

Other Financing Sources (Uses)Capital Leases Issued $ 0 $ 149,200 $ 0 $ 0 $ 149,200Insurance Recovery 11,661 7,324 0 0 18,985Transfers In 0 58,610 0 0 58,610Transfers Out 0 0 0 (58,610) (58,610)

Total Other Financing Sources (Uses) $ 11,661 $ 215,134 $ 0 $ (58,610) $ 168,185

Net Change in Fund Balances $ 361,254 $ (558,929) $ 118,720 $ 192,951 $ 113,996Fund Balance, July 1, 2019 1,711,757 1,873,487 6,219,718 1,653,237 11,458,199

Fund Balance, June 30, 2020 $ 2,073,011 $ 1,314,558 $ 6,338,438 $ 1,846,188 $ 11,572,195


Major FundsNonmajor

Funds

22

Exhibit C-4

Johnson 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, 2020

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) $ 113,996

(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 $ 1,679,538Less: current-year depreciation expense (1,178,926) 500,612

(2) 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, 2020 $ 350,665Less: deferred delinquent property taxes and other deferred June 30, 2019 (630,909) (280,244)

(3) The issuance of long-term debt (e.g., bonds, notes, other loans, leases) provides current financial resources to governmental funds, while the repaymentof the principal of long-term debt consumes the current financialresources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effectof premiums, discounts, and similar items when debt is firstissued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the effect of these differencesin the treatment of long-term debt and related items.

Less: capital lease proceeds $ (149,200)Add: change in unamortized premium on debt issuances 28,795Add: principal payments on bonds 855,000Add: principal payments on capital leases 104,551Less: change in deferred amount on refunding (67,224) 771,922

(4) 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 accrued interest payable $ 1,425Change in compensated absences payable (30,762)Change in landfill postclosure care costs 69,557Change in net OPEB liability (69,400)Change in deferred outflows related to OPEB 9,141Change in deferred inflows related to OPEB 29,775Change in net pension asset/liability 386,685Change in deferred outflows related to pensions (285,230)Change in deferred inflows related to pensions 118,764 229,955

Change in net position of governmental activities (Exhibit B) $ 1,336,241


23

Exhibit C-5

Johnson County, TennesseeStatement of Revenues, Expenditures, and Changes

in Fund Balance - Actual (Budgetary Basis) and BudgetGeneral FundFor the Year Ended June 30, 2020

Actual VarianceRevenues/ with Final

Actual Less: Add: Expenditures Budget -(GAAP Encumbrances Encumbrances (Budgetary PositiveBasis) 7/1/2019 6/30/2020 Basis) Original Final (Negative)

RevenuesLocal Taxes $ 3,666,657 $ 0 $ 0 $ 3,666,657 $ 3,525,661 $ 3,525,661 $ 140,996Licenses and Permits 74,450 0 0 74,450 72,500 72,500 1,950Fines, Forfeitures, and Penalties 91,580 0 0 91,580 92,250 94,250 (2,670)Charges for Current Services 67,194 0 0 67,194 40,450 48,450 18,744Other Local Revenues 585,349 0 0 585,349 754,533 803,063 (217,714)Fees Received From County Officials 751,386 0 0 751,386 715,250 715,250 36,136State of Tennessee 1,789,636 0 0 1,789,636 2,031,289 2,048,484 (258,848)Federal Government 575,449 0 0 575,449 74,500 830,024 (254,575)Other Governments and Citizens Groups 238,824 0 0 238,824 76,485 274,499 (35,675)

Total Revenues $ 7,840,525 $ 0 $ 0 $ 7,840,525 $ 7,382,918 $ 8,412,181 $ (571,656)

ExpendituresGeneral Government

County Commission $ 74,238 $ (733) $ 938 $ 74,443 $ 79,098 $ 81,349 $ 6,906Board of Equalization 1,050 0 0 1,050 1,000 1,100 50Other Boards and Committees 1,628 0 0 1,628 2,393 2,393 765County Mayor/Executive 144,067 0 0 144,067 146,528 147,428 3,361County Attorney 22,710 0 0 22,710 17,850 23,180 470Election Commission 191,582 (4,523) 14,649 201,708 211,730 214,097 12,389Register of Deeds 123,976 (787) 0 123,189 131,614 136,532 13,343County Buildings 76,052 (8,310) 7,088 74,830 85,500 85,399 10,569

FinanceAccounting and Budgeting 205,581 (1,963) 0 203,618 202,819 206,419 2,801Purchasing 54,324 (37) 0 54,287 53,303 55,013 726Property Assessor's Office 131,881 (69) 572 132,384 137,075 137,075 4,691Reappraisal Program 76,717 0 0 76,717 91,195 91,195 14,478County Trustee's Office 153,462 (348) 1,837 154,951 152,173 158,852 3,901County Clerk's Office 245,122 (1,448) 138 243,812 238,711 247,261 3,449

Administration of JusticeCircuit Court 290,001 (1,470) 855 289,386 306,100 305,983 16,597

(Continued)

Budgeted Amounts

24

Exhibit C-5


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



Expenditures (Cont.)Administration of Justice (Cont.)

General Sessions Court $ 139,186 $ 0 $ 67 $ 139,253 $ 144,582 $ 145,730 $ 6,477Chancery Court 150,053 (130) 200 150,123 143,701 150,566 443Juvenile Court 115,504 0 2,000 117,504 146,935 146,935 29,431Courtroom Security 0 0 0 0 7,500 7,500 7,500

Public SafetySheriff's Department 1,592,994 (21,116) 69,544 1,641,422 1,568,209 1,746,556 105,134Administration of the Sexual Offender Registry 1,596 0 0 1,596 2,646 2,646 1,050Jail 1,141,780 (19,348) 14,805 1,137,237 1,219,086 1,225,634 88,397Juvenile Services 243,011 0 0 243,011 77,663 266,227 23,216Commissary 53,122 (8,964) 4,186 48,344 50,000 70,000 21,656Fire Prevention and Control 159,000 0 0 159,000 159,000 159,000 0Civil Defense 88,146 (1,073) 5,728 92,801 88,292 93,792 991Other Emergency Management 85,000 0 0 85,000 85,000 85,000 0Inspection and Regulation 21,687 (125) 299 21,861 21,745 22,045 184County Coroner/Medical Examiner 7,993 0 0 7,993 7,837 8,451 458Other Public Safety 1,199 0 0 1,199 0 1,200 1

Public Health and WelfareLocal Health Center 380,941 (1,589) 500 379,852 487,000 487,363 107,511Rabies and Animal Control 670 0 0 670 4,000 4,000 3,330Alcohol and Drug Programs 6,030 0 0 6,030 0 14,104 8,074Appropriation to State 33,952 0 0 33,952 33,952 33,952 0Other Public Health and Welfare 3,846 0 0 3,846 0 30,616 26,770

Social, Cultural, and Recreational ServicesSenior Citizens Assistance 124,208 0 0 124,208 123,086 125,617 1,409Other Social, Cultural, and Recreational 27,500 0 0 27,500 27,500 27,500 0

Agriculture and Natural ResourcesAgricultural Extension Service 88,242 0 0 88,242 96,821 97,328 9,086Soil Conservation 27,578 0 0 27,578 27,821 27,831 253

(Continued)

Budgeted Amounts

25

Exhibit C-5


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



Expenditures (Cont.)Other Operations

Tourism $ 18,850 $ 0 $ 0 $ 18,850 $ 19,000 $ 36,750 $ 17,900Other Economic and Community Development 426,406 0 0 426,406 0 742,733 316,327Airport 34,752 (73) 1,270 35,949 22,653 42,204 6,255Veterans' Services 30,732 (125) 252 30,859 31,123 31,423 564Other Charges 340,080 0 20,700 360,780 668,519 670,073 309,293Contributions to Other Agencies 20,508 0 0 20,508 21,000 22,708 2,200Employee Benefits 32,797 0 0 32,797 30,900 34,215 1,418COVID-19 Grant #1 4,796 0 0 4,796 0 4,796 0COVID-19 Grant #2 11,717 0 0 11,717 0 11,717 0Miscellaneous 224,701 (2,114) 823 223,410 199,202 231,260 7,850

HighwaysLitter and Trash Collection 59,964 (6,091) 247 54,120 53,617 58,346 4,226

Total Expenditures $ 7,490,932 $ (80,436) $ 146,698 $ 7,557,194 $ 7,425,479 $ 8,759,094 $ 1,201,900

Excess (Deficiency) of RevenuesOver Expenditures $ 349,593 $ 80,436 $ (146,698) $ 283,331 $ (42,561) $ (346,913) $ 630,244

Other Financing Sources (Uses)Insurance Recovery $ 11,661 $ 0 $ 0 $ 11,661 $ 0 $ 11,363 $ 298Special Items (Revenues) 0 0 0 0 8,000 0 0Transfers Out 0 0 0 0 (3,000) (3,000) 3,000

Total Other Financing Sources $ 11,661 $ 0 $ 0 $ 11,661 $ 5,000 $ 8,363 $ 3,298

Net Change in Fund Balance $ 361,254 $ 80,436 $ (146,698) $ 294,992 $ (37,561) $ (338,550) $ 633,542Fund Balance, July 1, 2019 1,711,757 (80,436) 0 1,631,321 1,617,461 1,617,461 13,860

Fund Balance, June 30, 2020 $ 2,073,011 $ 0 $ (146,698) $ 1,926,313 $ 1,579,900 $ 1,278,911 $ 647,402


Budgeted Amounts

26

Exhibit C-6

Johnson County, TennesseeSchedule of Revenues, Expenditures, and Changes

in Fund Balance - Actual (Budgetary Basis) and BudgetHighway/Public Works FundFor the Year Ended June 30, 2020



RevenuesLocal Taxes $ 243,227 $ 0 $ 0 $ 243,227 $ 236,035 $ 237,035 $ 6,192Other Local Revenues 44,940 0 0 44,940 0 44,491 449State of Tennessee 2,173,031 0 0 2,173,031 2,064,177 2,064,177 108,854Federal Government 78,091 0 0 78,091 17,000 224,938 (146,847)Other Governments and Citizens Groups 443 0 0 443 58,610 443 0

Total Revenues $ 2,539,732 $ 0 $ 0 $ 2,539,732 $ 2,375,822 $ 2,571,084 $ (31,352)

ExpendituresHighways

Administration $ 290,214 $ 0 $ 0 $ 290,214 $ 290,090 $ 300,202 $ 9,988Highway and Bridge Maintenance 1,435,582 (31,511) 35,951 1,440,022 1,583,906 1,808,259 368,237Operation and Maintenance of Equipment 241,750 (13,008) 16,123 244,865 350,000 358,048 113,183Other Charges 77,158 (293) 265 77,130 87,112 88,432 11,302Employee Benefits 80,756 0 0 80,756 80,766 82,403 1,647Capital Outlay 1,079,585 (773,961) 0 305,624 231,974 432,957 127,333

Principal on DebtHighways and Streets 104,551 0 0 104,551 72,773 104,552 1

Interest on DebtHighways and Streets 4,199 0 0 4,199 4,201 4,201 2

Total Expenditures $ 3,313,795 $ (818,773) $ 52,339 $ 2,547,361 $ 2,700,822 $ 3,179,054 $ 631,693

Excess (Deficiency) of RevenuesOver Expenditures $ (774,063) $ 818,773 $ (52,339) $ (7,629) $ (325,000) $ (607,970) $ 600,341

Other Financing Sources (Uses)Capital Leases Issued $ 149,200 $ 0 $ 0 $ 149,200 $ 0 $ 149,200 $ 0Insurance Recovery 7,324 0 0 7,324 0 7,324 0Transfers In 58,610 0 0 58,610 0 58,610 0

Total Other Financing Sources $ 215,134 $ 0 $ 0 $ 215,134 $ 0 $ 215,134 $ 0

Net Change in Fund Balance $ (558,929) $ 818,773 $ (52,339) $ 207,505 $ (325,000) $ (392,836) $ 600,341Fund Balance, July 1, 2019 1,873,487 (818,773) 0 1,054,714 1,197,656 1,197,656 (142,942)

Fund Balance, June 30, 2020 $ 1,314,558 $ 0 $ (52,339) $ 1,262,219 $ 872,656 $ 804,820 $ 457,399


Budgeted Amounts

27

Exhibit D

Johnson County, TennesseeStatement of Fiduciary Assets and LiabilitiesFiduciary FundsJune 30, 2020

ASSETS

Cash $ 646,653Equity in Pooled Cash and Investments 8,094Accounts Receivable 22,798Due from Other Governments 103,040

Total Assets $ 780,585

LIABILITIES

Accounts Payable $ 156 Due to Other Taxing Units 123,478Due to Litigants, Heirs, and Others 656,951

Total Liabilities $ 780,585


Agency Funds

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Note Page(s)

I. Summary of Significant Accounting PoliciesA. Reporting Entity 30B. Government-wide and Fund Financial Statements 31C. Measurement Focus, Basis of Accounting, and Financial

Statement Presentation 32D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and

Net Position/Fund Balance1. Deposits and Investments 342. Receivables and Payables 353. Prepaid Items 364. Restricted Assets 375. Capital Assets 376. Deferred Outflows/Inflows of Resources 387. Compensated Absences 398. Long-term Debt and Long-term Obligations 399. Net Position and Fund Balances 40

E. Pension Plans 42F. Other Postemployment Benefit (OPEB) Plans 42

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 43B. Explanation of Certain Differences Between the Governmental Fund

Statement of Revenues, Expenditures, and Changes in Fund Balancesand the Government-wide Statement of Activities 43

III. Stewardship, Compliance, and AccountabilityBudgetary Information 44

IV. Detailed Notes on All FundsA. Deposits and Investments 45B. Capital Assets 54C. Interfund Receivables, Payables, and Transfers 56D. Capital Leases 57E. Long-term Debt 58F. Long-term Obligations 60G. On-Behalf Payments 61H. Internal Financing 62

V. Other InformationA. Risk Management 62B. Contingent Liabilities 63C. Landfill Closure/Postclosure Care Costs 64D. Joint Ventures 64E. Jointly Governed Organization 65F. Retirement Commitments 66G. Other Postemployment Benefits (OPEB) 91H. Office of Central Accounting and Budgeting 100I. Purchasing Laws 100

JOHNSON COUNTY, TENNESSEEIndex of Notes to the Financial Statements

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JOHNSON COUNTY, TENNESSEE NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended June 30, 2020

I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Johnson 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 Johnson County:

A. Reporting Entity

Johnson County is a public municipal corporation governed by an elected 15-member board. As required by GAAP, these financial statements present Johnson County (the primary government) and its component units. The financial statements of the Johnson County Emergency Communications District, a component unit requiring discrete presentation, were excluded from this report due to materiality calculations; therefore, the effect of this 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 relationships with the county.

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

The Johnson County School Department operates the public school system in the county, and the voters of Johnson 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 Johnson County Emergency Communications District provides a simplified means of securing emergency services through a uniform emergency number for the residents of Johnson County, and the Johnson 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 Johnson County Emergency Communications District were not material to the component units’ opinion unit and therefore have been omitted from this report.

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The Johnson 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 Johnson County Emergency Communications District can be obtained from its administrative office at the following address:

Administrative Office:

Johnson County Emergency Communications District 999 Honeysuckle Street Mountain City, TN 37683

Related Organization – The Johnson County Industrial Commission is a related organization of Johnson County. The county’s officials are responsible for appointing the members of the Johnson County Industrial Commission; however, the county’s accountability for the organization does not extend beyond making the appointments.

B. Government-wide and Fund Financial Statements The government-wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. However, when applicable, interfund services provided and used between functions are not eliminated in the process of consolidation in the Statement of Activities. Governmental activities are normally supported by taxes and intergovernmental revenues. Business-type activities, which rely to a significant extent on fees and charges, are required to be reported separately from governmental activities in government-wide financial statements. However, the primary government of Johnson 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 Johnson County School Department component unit only reports governmental activities in the government-wide financial statements. The Statement of Activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. Program revenues include (1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. Taxes and other items not properly included among program revenues are reported instead as general revenues.

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Johnson County issues all debt for the discretely presented Johnson County School Department. There were no debt issues contributed by the county to the school department during the year ended June 30, 2020. Separate financial statements are provided for governmental funds and fiduciary funds. Fiduciary funds are excluded from the government-wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements.

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

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the fiduciary funds financial statements, except for agency funds, which have no measurement focus. Revenues are recorded when earned, and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Fund financial statements of Johnson County are organized into funds, each of which is considered to be a separate accounting entity. Each fund is accounted for by providing a separate set of self-balancing accounts that constitute its assets, deferred outflow of resources, liabilities, deferred inflow of resources, fund equity, revenues, and expenditures. Funds are organized into three major categories: governmental, proprietary, and fiduciary. An emphasis is placed on major funds within the governmental category. Johnson County has no proprietary funds to report. Separate financial statements are provided for governmental funds and fiduciary funds. Major individual governmental funds are reported as separate columns in the fund financial statements. All other governmental funds are aggregated into a single column on the fund financial statements. Fiduciary funds in total are reported in a single column. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they become both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the county considers revenues other than grants to be available if they are collected within 30 days after year-end. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met and the revenues are available. Johnson County considers grants and similar revenues to be available if they are collected within 60 days after year-end. Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred. Principal and interest on long-term debt are

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

Johnson County reports the following major governmental funds:

General Fund – This is the county’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. Highway/Public Works Fund – This special revenue fund accounts for transactions of the county’s highway department. Local and state gasoline/fuel taxes are the foundational revenues of this fund. General Debt Service Fund – This fund accounts for the resources accumulated and payments made for principal and interest on long-term general obligation debt of governmental funds.

Additionally, Johnson County reports the following fund types:

Capital Projects Funds – These funds account for and report financial resources that are restricted, committed, or assigned to expenditures 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 Johnson County, and assets held in a custodial capacity for the Doe Mountain Recreation Authority. 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.

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The discretely presented Johnson 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 Johnson 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.

Amounts reported as program revenues include (1) charges to customers or applicants for goods, services, or privileges provided; (2) operating grants and contributions; and (3) capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes.

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

1. Deposits and Investments

State statutes authorize the government to make direct investments in bonds, notes, or treasury bills of the U.S. government and obligations guaranteed by the U.S. government or any of its agencies; deposit accounts at state and federal chartered banks and savings and loan associations; repurchase agreements; the State Treasurer’s Investment Pool; the State Treasurer’s Intermediate Term Investment Fund; 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 Johnson County School Department. Each fund’s portion of this pool is displayed on the balance sheets or statements of net position as Equity in Pooled Cash and Investments. Most income from these pooled investments is assigned to the General Fund. Johnson 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.

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Investments in the State Treasurer’s Investment Pool are reported at amortized cost using a stable net asset value. The primary oversight responsibility for the investments and operations of the State Treasurer’s Investment Pool rests with the Funding Board of the State of Tennessee (Funding Board). The Funding Board has established an investment policy that is administered by the state treasurer. These polices were designed to comply with generally accepted accounting principles. In addition, 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. Compliance with Funding Board polices is audited by the Tennessee Comptroller of the Treasury, Division of State Audit. The latest audit opinion issued by the Division of State Audit concluded that the State Treasurer’s Investment Pool complied with accounting principles generally accepted in the United State of America. Investments in the State Treasurer’s Intermediate Term Investment Fund are reported at amortized cost using a floating net asset value. The primary oversight responsibility for the investments and operations of the State Treasurer’s Intermediate Term Investment Fund rests with the Funding Board of the State of Tennessee (Funding Board). The Funding Board has established an investment policy that is administered by the state treasurer. These polices were designed to comply with generally accepted accounting principles. In addition, state statutes require the state treasurer to administer the pool under the same terms and conditions as prescribed for other funds invested by the state treasurer. Compliance with Funding Board polices is audited by the Tennessee Comptroller of the Treasury, Division of State Audit. The latest audit opinion issued by the Division of State Audit concluded that the State Treasurer’s Intermediate Term Investment Fund complied with accounting principles generally accepted in the United State of America. Johnson County had no investments in the State Treasurer’s Intermediate Term Investment Fund during the year. All other investments are reported at fair value. Other than Johnson County’s and Johnson County School Department’s investments in the Pension Stabilization Trust and the school department’s investment in the Tennessee School Board OPEB Trust discussed in Note IV.A., no investments required to be reported at fair value were held at the balance sheet date.

2. Receivables and Payables

Activity between funds for unremitted current collections outstanding at the end of the fiscal year is referred to as due to/from other funds. Long-term receivables between funds, as reported in Due from Other Funds in the General Debt Service Fund financial statements, are included in committed fund balance.

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All property taxes receivable are shown with an allowance for uncollectibles. The allowance for uncollectible property taxes is equal to 1.12 percent of total taxes levied. Property taxes receivable are recognized as of the date an enforceable legal claim to the taxable property arises. This date is January 1 and is referred to as the lien date. However, revenues from property taxes are recognized in the period for which the taxes are levied, which is the ensuing fiscal year. Since the receivable is recognized before the period of revenue recognition, the entire amount of the receivable, less an estimated allowance for uncollectible taxes, is reported as a deferred inflow of resources as of June 30.

Property taxes receivable are also reported as of June 30 for the taxes that are levied, collected, and reported as revenue during the current fiscal year. These property taxes receivable are presented on the balance sheet as a deferred inflow of resources to reflect amounts not available as of June 30. Property taxes collected within 30 days of year-end are considered available and accrued. The allowance for uncollectible taxes represents the estimated amount of the receivable that will be filed in court for collection. Delinquent taxes filed in court for collection are not included in taxes receivable since they are neither measurable nor available.

Property taxes are levied as of the first Monday in October. Taxes become delinquent and begin accumulating interest and penalty the following March 1. Suit must be filed in Chancery Court between the following February 1 to April 1 for any remaining unpaid taxes. Additional costs attach to delinquent taxes after a court suit has been filed. Most payables are disaggregated on the face of the financial statements. Other current liabilities of the General, Highway/Public Works, and the discretely presented school department’s General Purpose School funds consist of balances of employee federal tax deposits not drawn as of June 30, 2020. Other current liabilities of the Drug Control Fund (a nonmajor governmental fund) represent asset seizures that have not been awarded to the county as of June 30, 2020.

3. Prepaid Items Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both the government-wide and fund financial statements. The cost of prepaid items is recorded as an expenditure when consumed rather than when purchased. Prepaids are offset in the nonspendable fund balance account in governmental funds.

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4. Restricted Assets Restricted assets include amounts held in a pension stabilization trust by the Tennessee Consolidated Retirement System (TCRS) for the benefit of Johnson County’s Public Employee Pension Plan and the discretely presented Johnson County School Department’s Teacher Retirement Plan. The purpose of this trust is to accumulate funds to provide stabilization (smoothing) of retirement costs to the county and in times of fluctuation investment returns and market downturns. These funds are held and invested by TCRS pursuant to an irrevocable agreement and may only be used for the benefit of the Johnson County and Johnson County School Department to fund retirement benefits upon the approval of the TCRS Board of Directors. To date, Johnson County and the Johnson County School Department have not withdrawn any funds from the trust to pay pension cost. Trust documents provide that the funds are not subject to the claims of general creditors of Johnson County and the Johnson County School Department. Restricted assets also consist of amounts held in trust by the Tennessee School Board Association (TSBA) OPEB Trust for the benefit of the discretely presented Johnson County School Department. These funds are held and invested by the trust pursuant to an irrevocable agreement and may only be used to reimburse the Johnson County School Department for postemployment benefits paid from school department funds. To date, the Johnson County School Department has not requested any amounts to be reimbursed by the trust. Trust documents provide that the funds are not subject to the claims of general creditors of the school department. Since the payment of postemployment benefits has not been administered through this trust, the trust is not considered to be in compliance with paragraph 4 of Governmental Accounting Standards Board Statement No. 75. OPEB liabilities of the school department are therefore reported gross and have not been reduced by balances of the trust. The trust is reported as an asset and restricted fund balance of the school department’s General Purpose School Fund.

5. 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 in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of $5,000 or more and an estimated useful life of more than five years. Such assets are recorded at historical

37

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 7 - 39Machinery and Equipment 5 - 15Other Capital Assets 5 - 15Infrastructure: Roads 9 - 20 Bridges 75 School Infrastructure 15

6. 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 experience, assumptions, and proportion; employer contributions made to the pension and OPEB plans after the measurement date; OPEB changes in experience and assumptions; and the deferred charge on refunding. A deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter life of the refunded or refunding debt. 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

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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, investment earnings, and proportion; OPEB changes in experience, assumptions, and proportion; and various receivables for revenues, which do not meet the availability criteria for governmental funds.

7. Compensated Absences

It is the county’s policy to permit employees to accumulate a limited amount of earned but unused vacation and sick pay benefits, which will be paid to employees upon separation of service. All vacation and sick pay is accrued when incurred in the government-wide financial statements for the county. A liability for vacation and sick pay is reported in governmental funds only if amounts have matured, for example, as a result of employee resignations and retirements. It is the policy of the Johnson County School Department to permit noncertified employees to accumulate a limited amount of earned but unused vacation benefits, which will be paid upon separation from service. All vacation pay is accrued when incurred in the government-wide financial statements for the school department. A liability for vacation pay is reported in governmental funds only if amounts have matured, for example, as a result of employee resignations and retirements. Also, the general policy of the school department permits all professional personnel (teachers) to accumulate an unlimited amount of unused sick leave days. There is no liability for unpaid accumulated sick leave since the school department does not have a policy to pay any amounts when employees separate from service.

8. Long-term Debt and 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 are amortized over the life of the new debt using the straight-line method. Debt issuance costs are expensed in the period incurred. In refunding transactions, the difference between the reacquisition price and the net carrying amount of the old debt is reported as a deferred outflow of resources or a deferred inflow of resources and recognized as a component of interest expense in a systematic and rational manner over the remaining life of the refunded debt or the life of the new debt issued, whichever is shorter. 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

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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.

9. Net Position and Fund Balances

In the government-wide financial statements, equity is classified as net position and displayed in three components:

a. Net investment in capital assets – Consists of capital assets,

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

b. Restricted net position – Consists of net position with constraints placed on the use either by (1) external groups such as creditors, grantors, contributors, or laws or regulations of other governments or (2) law through constitutional provisions or enabling legislation.

c. Unrestricted net position – All other net position that does not meet

the definition of restricted or net investment in capital assets.

The government-wide Statement of Net Position reports $3,372,224 of restricted net position, of which $505,097 is restricted by enabling legislation. As of June 30, 2020, Johnson County had $3,295,860 in outstanding debt for capital purposes for the discretely presented Johnson County School Department. This debt is a liability of Johnson County, but the capital assets acquired are reported in the financial statements of the school department. Therefore, Johnson 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

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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 classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in these funds can be spent. These classifications may consist of the following:

Nonspendable Fund Balance – includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. Restricted Fund Balance – includes amounts that have constraints placed on the use of the resources that are either (a) externally imposed by creditors, grantors, contributors or laws and regulations of other governments or (b) imposed by law through constitutional provisions or enabling legislation. Committed Fund Balance – includes amounts that can only be used for specific purposes pursuant to constraints imposed by formal resolutions of the county commission, the county’s highest level of decision-making authority and the Board of Education, the school department’s highest level of decision-making authority, and shall remain binding unless removed in the same manner. Assigned Fund Balance – includes amounts that are constrained by the county’s intent to be used for specific purposes but are neither restricted nor committed (excluding stabilization arrangements). The county commission and the Board of Education are authorized bodies to make assignments. Assigned fund balance in the General Fund includes fund balance assigned for encumbrances ($146,698), and amounts assigned by the county commission for public safety ($293,209), various other purposes ($254,243), and fund balance appropriated for use in the 2020-2021 year budget totaling $50,000. Assigned fund balance in the discretely presented school department’s General Purpose School Fund includes fund balance assigned for encumbrances of ($200,389), and amounts assigned by the board for various purposes within Instruction ($500,000), Support ($100,000), and Capital Outlay ($705,000), and fund balance fund balance appropriated for use in the 2020-2021 year budget totaling $76,338.

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Unassigned Fund Balance – the residual classification of the General and General Purpose School funds. This classification represents fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the General and General Purpose School funds.

E. Pension Plans

Primary Government For purposes of measuring the net pension liability/asset, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of Johnson County’s participation in the Public Employee Retirement Plans (agent legacy and agent hybrid plans) of the Tennessee Consolidated Retirement System (TCRS), and additions to/deductions from Johnson County’s fiduciary net position have been determined on the same basis as they are reported by the TCRS for the Public Employee Retirement Plans. 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 Plans of TCRS. Investments are reported at fair value. Discretely Presented Johnson County School Department

For purposes of measuring the net pension liability/asset, 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

Primary Government 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 Johnson County. For this purpose, Johnson County recognizes benefit payments when due and payable in accordance with benefit terms. Johnson County’s OPEB plan is not administered through a trust.

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Discretely Presented Johnson County School Department

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 Johnson 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 Johnson 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

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

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III. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY

Budgetary Information

Annual budgets are adopted on a basis consistent with generally accepted accounting principles (GAAP) for all governmental funds except the Constitutional Officers - Fees Fund (special revenue fund), which is not budgeted, and the Community Development/Industrial Park and Other Capital Projects funds, which adopt project length budgets. All annual appropriations lapse at fiscal year-end.

The county is required by state statute to adopt annual budgets. Annual budgets are prepared on the basis in which current available funds must be sufficient to meet current expenditures. Expenditures and encumbrances may not legally exceed appropriations authorized by the county commission and any authorized revisions. Unencumbered appropriations lapse at the end of each fiscal year.

The budgetary level of control is at the major category level established by the County Uniform Chart of Accounts, as prescribed by the Comptroller of the Treasury of the State of Tennessee. Major categories are at the department level (examples of General Fund major categories: County Commission, Board of Equalization, Other Boards and Committees, County Mayor/Executive, County Attorney, etc.). Management may make revisions within major categories, but only the county commission may transfer appropriations between major categories. During the year, several supplementary appropriations were necessary. The county's budgetary basis of accounting is consistent with GAAP, except instances in which encumbrances are treated as budgeted expenditures. The difference between the budgetary basis and GAAP basis is presented on the face of each budgetary schedule.

At June 30, 2020, Johnson County and the Johnson County School Department reported the following significant encumbrances:

Fund Amount

Primary Government: Major Fund:

General $ 146,698 Highway/Public Works 52,339

Nonmajor Funds:Public Library 2,386 Solid Waste/Sanitation 1,646 Drug Control 250 General Capital Projects 295,939

School Department: Major Fund:

General Purpose School 200,389 Nonmajor Fund:

School Federal Projects 94,255

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IV. DETAILED NOTES ON ALL FUNDS

A. Deposits and Investments Johnson County and the Johnson County School Department participate in an internal cash and investment pool through the Office of Trustee. The county trustee is the treasurer of the county and in this capacity is responsible for receiving, disbursing, and investing most county funds. Each fund’s portion of this pool is displayed on the balance sheets or statements of net position as Equity in Pooled Cash and Investments. Cash reflected on the balance sheets or statements of net position represents nonpooled amounts held separately by individual funds. Deposits Legal Provisions. All deposits with financial institutions must be secured by one of two methods. One method involves financial institutions that participate in the bank collateral pool administered by the state treasurer. Participating banks determine the aggregate balance of their public fund accounts for the State of Tennessee and its political subdivisions. The amount of collateral required to secure these public deposits must equal at least 105 percent of the average daily balance of public deposits held. Collateral securities required to 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, the State Treasurer’s Intermediate Term

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Investment Fund, and in repurchase agreements. The primary oversight responsibility for the investments and operations of the State Treasurer’s Investment Pool rests with the Funding Board of the State of Tennessee (Funding Board). The Funding Board has established an investment policy that is administered by the state treasurer. Investments in the State Treasurer’s Investment Pool are reported both by the pool and the county at amortized cost using a stable net asset value. The primary oversight responsibility for the investments and operations of the Intermediate Term Investment Fund rests with the Funding Board of the State of Tennessee (Funding Board). The Funding Board has established an investment policy that is administered by the state treasurer. Investments in the Intermediate Term Investment Fund are reported both by the pool and the county at amortized cost using a floating net asset value. 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. Other than Johnson County’s investment in the Tennessee Consolidated Retirement System (TCRS) Stabilization Reserve Trust and the school department’s investment in the Tennessee School Board’s OPEB Trust discussed below, the county had no pooled and nonpooled investments as of June 30, 2020. TCRS Stabilization Trust

Legal Provisions. Johnson County and the Johnson County School Department are members of the Tennessee Consolidated Retirement System (TCRS) Stabilization Reserve Trust. Johnson County and the school department have placed funds into the irrevocable trust as authorized by 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 trust. Funds of trust members are held and invested in the name of the trust for the benefit of each member. Each member’s funds are restricted for the payment of retirement benefits of that member’s employees. Trust funds are not subject to the claims of general creditors of Johnson County and the school department. The trust is authorized to make investments as directed by the TCRS Board of Trustees. Johnson County and the Johnson County School Department may not impose any restrictions on investments placed by the trust on their behalf. Investment Balances. Assets of the TCRS, including the Stabilization Reserve Trust, are invested in the Tennessee Retiree Group Trust (TRGT). The TRGT is not registered with the Securities and Exchange Commission (SEC) as an investment company. The State of Tennessee has not obtained a credit

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quality rating for the TRGT from a nationally recognized credit ratings agency. The fair value of investment positions in the TRGT is determined daily based on the fair value of the pool’s underlying portfolio. Furthermore, TCRS had not obtained or provided any legally binding guarantees to support the value of participant shares during the fiscal year. There are no restrictions on the sale or redemption of shares. Investments are reported at fair value. Securities traded on a national exchange are valued at the last reported sales price. Investment income consists of realized and unrealized appreciation (depreciation) in the fair value of investments and interest and dividend income. Interest income is recognized when earned. Securities and securities transactions are recorded in the financial statements on a trade-date basis. The fair value of assets of the TRGT held at June 30, 2020, represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Assets held are categorized for fair value measurement within the fair value hierarchy established by GAAP. The hierarchy is based on the valuation inputs used to measure the fair value of the asset and give the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

• Level 1 - Unadjusted quoted prices for identical assets or liabilities in active markets that can be accessed at the measurement date. • Level 2 - Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; assets or liabilities that have a bid-ask spread price in an inactive dealer market, brokered market and principal-to-principal market; and Level 1 assets or liabilities that are adjusted. • Level 3 - Valuations derived from valuation techniques in which significant inputs are unobservable.

Investments where fair value is measured using the Net Asset Value (“NAV”) per share have no readily determinable fair value and have been determined to be calculated consistent with FASB principles for investment companies.

Where inputs used in the measurement of fair value fall into different levels of the hierarchy, fair value of the instrument in its entirety is categorized based on the lowest level input that is significant to the valuation. This assessment requires professional judgement and as such management of the TRGT developed a fair value committee that worked in conjunction with the plan’s custodian and investment professionals to make these valuations. All assets held were valued individually and aggregated into classes to be represented in the table below.

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Short-term securities generally include investments in money market-type securities reported at cost plus accrued interest. Equity and equity derivative securities classified in Level 1 are valued using last reported sales prices quoted in active markets that can be accessed at the measurement date. Equity and equity derivative securities classified in Level 2 are securities whose values are derived daily from associated traded securities. Equity securities classified in Level 3 are valued with last trade data having limited trading volume. U.S. Treasury Bills, Bonds, Notes and Futures classified in Level 1 are valued using last reported sales prices quoted in active markets that can be accessed at the measurement date. Debt and debt derivative securities classified in Level 2 are valued using a bid-ask spread price from multiple independent brokers, dealers, or market principals, which are known to be actively involved in the market. Level 3 debt securities are valued using proprietary information, a single pricing source, or other unobservable inputs related to similar assets or liabilities. Real estate investments classified in Level 3 are valued using the last valuations provided by external investment advisors or independent external appraisers. Generally, all direct real estate investments are appraised by a qualified independent appraiser(s) with the professional designation of Member of the Appraisal Institute (“MAI”), or its equivalent, every three (3) years beginning from the acquisition date of the property. The appraisals are performed using generally accepted valuation approaches applicable to the property type. Investments in private mutual funds, traditional private equity funds, strategic lending funds and real estate funds that report using GAAP, the fair value, as well as the unfunded commitments, were determined using the prior quarter’s NAV, as reported by the fund managers, plus the current cash flows. These assets were then categorized by investment strategy. In instances where the fund investment reported using non-GAAP standards, the investment was valued using the same method, but was classified in Level 3. At June 30, 2020, Johnson County and the Johnson County School Department had the following investments held by the trust on their behalf.

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Primary Government and Discretely Presented School Department – For Benefit of the Johnson County Hybrid Retirement Plan

WeightedAverageMaturity Fair

Investment (days) Maturities ValueInvestments at Fair Value: U.S. Equity N/A N/A $ 14,910 Developed Market International Equity N/A N/A 6,734 Emerging Market International Equity N/A N/A 1,924 U.S. Fixed Income N/A N/A 9,620 Real Estate N/A N/A 4,810 Short-term Securities N/A N/A 481 NAV - Private Equity and Strategic Lending N/A N/A 9,620

Total $ 48,099

QuotedPrices in

Active SignificantMarkets for Other Significant

Identical Observable UnobservableFair Value Assets Inputs Inputs

Investment by Fair Value Level 6-30-20 (Level 1) (Level 2) (Level 3) NAV

U.S. Equity $ 14,910 $ 14,910 $ 0 $ 0 $ 0Developed Market International Equity 6,734 6,734 0 0 0Emerging Market International Equity 1,924 1,924 0 0 0U.S. Fixed Income 9,620 0 9,620 0 0Real Estate 4,810 0 0 4,810 0Short-term Securities 481 0 481 0 0Private Equity and Strategic Lending 9,620 0 0 0 9,620

Total $ 48,099 $ 23,568 $ 10,101 $ 4,810 $ 9,620

Fair Value Measurements Using

The balance at June 30, 2020, ($48,099) has been allocated to the primary government ($31,713) and to the discretely presented school department ($16,386) in the financial statements.

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Discretely Presented School Department – For Benefit of the Teacher Retirement Plan


Investment (days) Maturities ValueInvestments at Fair Value: U.S. Equity N/A N/A $ 28,279 Developed Market International Equity N/A N/A 12,771 Emerging Market International Equity N/A N/A 3,649 U.S. Fixed Income N/A N/A 18,244 Real Estate N/A N/A 9,122 Short-term Securities N/A N/A 912 NAV - Private Equity and Strategic Lending N/A N/A 18,244

Total $ 91,221

QuotedPrices in



Investment by Fair Value Level 6-30-20 (Level 1) (Level 2) (Level 3) NAV

U.S. Equity $ 28,279 $ 28,279 $ 0 $ 0 $ 0Developed Market International Equity 12,771 12,771 0 0 0Emerging Market International Equity 3,649 3,649 0 0 0U.S. Fixed Income 18,244 0 18,244 0 0Real Estate 9,122 0 0 9,122 0Short-term Securities 912 0 912 0 0Private Equity and Strategic Lending 18,244 0 0 0 18,244

Total $ 91,221 $ 44,699 $ 19,156 $ 9,122 $ 18,244


Risks and Uncertainties. The trust’s investments include various types of investment funds, which in turn invest in any combination of stock, bonds and other investments exposed to various risks, such as interest rate, credit, and market risk. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported for trust investments.

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Interest Rate Risk. Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. Johnson County and the Johnson County School Department do not have the ability to limit trust investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. Credit Risk. Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Johnson County and the Johnson County School Department do not have the ability to limit the credit ratings of individual investments made by the trust. Concentration of Credit Risk. Concentration of credit risk is the risk of loss attributed to the magnitude of the county’s investment in a single issuer. Johnson County and the Johnson County School Department place no limit on the amount the county may invest in one issuer. Custodial Credit Risk. Custodial credit risk for investments is the risk that, in the event of a failure of the counterparty to a transaction, the county will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. Pursuant to the trust agreement, investments are held in the name of the trust for the benefit of Johnson County and the Johnson County School Department to pay retirement benefits of their respective employees. For further information concerning Johnson County and the Johnson County School Department’s investments with the TCRS Stabilization Reserve Trust, audited financial statements of the Tennessee Consolidated Retirement System may be obtained at: https://comptroller.tn.gov/content/dam/cot/sa/advanced-search/disclaimer/2020/ag19091.pdf Tennessee School Board OPEB Trust Legal Provisions. The Johnson County School Department is a member of the Tennessee School Board OPEB Trust. The school department has placed funds into the irrevocable trust as authorized by the Other Postemployment Benefit Trust Act of 2006, section 8-50-1201, et. seq., Tennessee Code Annotated. Funds of trust members are held and invested in the name of the trust for the benefit of each member. Each member’s funds are restricted for the payment of postemployment benefits of that member’s employees. Trust documents provide that the funds are not subject to the claims of general creditors of the school department. The trust is authorized to make investments in securities as authorized by each member’s investment committee. The Johnson County School Department has authorized investments in U.S. common stock, non U.S. common stock, U.S. preferred stock, non U.S. preferred stock, U.S. government and agency securities, non U.S. government and agency securities, corporate bonds with a minimum BAA rating or the equivalent, municipal debt,

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https://comptroller.tn.gov/content/dam/cot/sa/advanced-search/disclaimer/2020/ag19091.pdf

https://comptroller.tn.gov/content/dam/cot/sa/advanced-search/disclaimer/2020/ag19091.pdf

convertible securities, commercial paper, money market funds, mutual funds (open and closed-end), exchange traded funds, passive index funds, commodities exchange traded funds, 1940 Act Alternative Funds – Hedging Strategies, 1940 Act Managed Futures Funds, and certificates of deposit. All fixed income and preferred stock issues must be investment grade and dollar denominated. Mutual fund investment must have investment objectives, rules and regulations that are consistent with the trust’s investment policy. All assets selected for the trust must have a readily ascertainable market value and must be readily marketable. Prohibited investments include uncovered options – puts or calls, short selling, restricted stock, and other derivative securities not specifically approved above. Investment Balances. At June 30, 2020, the Johnson County School Department had the following investments held by the trust on its behalf.


Investment (days) Maturities ValueInvestments at Fair Value:Cash, Bank Deposit Program, and Money Market Funds N/A N/A $ 51,832 Stocks N/A N/A 65,934 Exchange Traded and Closed End Funds N/A N/A 250,355 Mutual Funds N/A N/A 719,196

Total $ 1,087,317

QuotedPrices in



Investment by Fair Value Level 6-30-20 (Level 1) (Level 2) (Level 3)

Cash, Bank Deposit Program, and Money $ 51,832 $ 51,832 0 $ 0 Market FundsStocks 65,934 65,934 0 0Exchange Traded and Closed End Funds 250,355 250,355 0 0Mutual Funds 719,196 719,196 0 0

Total $ 1,087,317 $ 1,087,317 $ 0 $ 0


Fair value investments classified at Level 1 of the fair value hierarchy are valued using prices quoted in active markets for those securities. Fair value investments classified as Level 2 of the fair value hierarchy are valued using the active market rates for the underlying securities. Fair value investments classified as Level 3 of the fair value hierarchy are valued using non-observable inputs.

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Risks and Uncertainties The trust’s investments include various types of investment funds, which in turn invest in any combination of stock, bonds and other investments exposed to various risks, such as interest rate, credit, and market risk. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported for trust investments. Interest Rate Risk. Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. The Johnson County School Department’s investment policy does not limit trust investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. Credit Risk. Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Except as discussed under Legal Provisions above, the Johnson County School Department’s investment policy does not otherwise limit the credit ratings of individual investments made by the trust. Concentration of Credit Risk. Concentration of credit risk is the risk of loss attributed to the magnitude of the county’s investment in a single issuer. While Johnson County School Department’s investment policy establishes allocation targets for types of investments, the policy places no limit on the amount the county may invest in one issuer. Custodial Credit Risk. Custodial credit risk for investments is the risk that, in the event of a failure of the counterparty to a transaction, the county will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. Pursuant to the trust agreement, investments are held in the name of the trust for the benefit of the Johnson County School Department to pay postemployment benefits of the school department employees. For further information concerning the school departments investments with the TSBA, audited financial statements of the TSBA OPEB Trust may be obtained from the TSBA administrative office at 525 Brick Church Park Drive Nashville, TN 37207.

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B. Capital Assets

Capital assets activity for the year ended June 30, 2020, was as follows:

Primary Government Governmental Activities:

Balance Balance7-1-19 Increases Decreases 6-30-20

Capital Assets Not Depreciated:Land $ 833,378 $ 2,000 $ 0 $ 835,378Total Capital Assets Not Depreciated $ 833,378 $ 2,000 $ 0 $ 835,378

Capital Assets Depreciated:Buildings and Improvements $ 12,309,796 $ 127,821 $ 0 $ 12,437,617Infrastructure 7,229,047 1,161,004 0 8,390,051Other Capital Assets 4,137,239 388,713 (400,375) 4,125,577Total Capital Assets Depreciated $ 23,676,082 $ 1,677,538 $ (400,375) $ 24,953,245

Less Accumulated Depreciation For:Buildings and Improvements $ 5,480,922 $ 297,101 $ 0 $ 5,778,023Infrastructure 2,379,364 524,923 0 2,904,287Other Capital Assets 3,026,895 356,902 (400,375) 2,983,422Total Accumulated Depreciation $ 10,887,181 $ 1,178,926 $ (400,375) $ 11,665,732

Total Capital Assets Depreciated, Net $ 12,788,901 $ 498,612 $ 0 $ 13,287,513

Governmental Activities Capital Assets, Net $ 13,622,279 $ 500,612 $ 0 $ 14,122,891

Depreciation expense was charged to functions of the primary government as follows:

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Governmental Activities:

General Government $ 80,678Finance 2,760Administration of Justice 9,842Public Safety 220,404Public Health and Welfare 62,378Social, Cultural, and Recreational Services 37,976Other Operations 128,557Highways/Public Works 636,331Total Depreciation Expense - Governmental Activities $ 1,178,926

Discretely Presented Johnson County School Department Governmental Activities:

Balance Balance7-1-19 Increases Decreases 6-30-20

Capital Assets Not Depreciated:Land $ 962,939 $ 0 $ 0 $ 962,939Construction in Progress 10,648 126,812 0 137,460Total Capital Assets Not Depreciated $ 973,587 $ 126,812 $ 0 $ 1,100,399

Capital Assets Depreciated:Buildings and Improvements $ 25,086,786 $ 32,235 $ 0 $ 25,119,021Infrastructure 2,301,093 0 0 2,301,093Other Capital Assets 4,966,417 96,313 (114,356) 4,948,374Total Capital Assets Depreciated $ 32,354,296 $ 128,548 $ (114,356) $ 32,368,488

Less Accumulated Depreciated For:Buildings and Improvements $ 13,251,619 $ 581,895 $ 0 $ 13,833,514Infrastructure 2,186,491 32,579 0 2,219,070Other Capital Assets 3,737,925 228,538 (114,356) 3,852,107Total Accumulated Depreciation $ 19,176,035 $ 843,012 $ (114,356) $ 19,904,691

Total Capital Assets Depreciated, Net $ 13,178,261 $ (714,464) $ 0 $ 12,463,797

Governmental Activities Capital Assets, Net $ 14,151,848 $ (587,652) $ 0 $ 13,564,196

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Depreciation expense was charged to functions of the discretely presented Johnson County School Department, as follows: Governmental Activities:

Instruction $ 611,608Support Services 228,399Operation of Non-instructional Services 3,005Total Depreciation Expense - Governmental Activities $ 843,012

C. Interfund Receivables, Payables, and Transfers

The composition of interfund balances as of June 30, 2020, was as follows:

Due to/from Other Funds:

Receivable Fund Payable Fund Amount

Primary Government: General Nonmajor governmental $ 1,080 General Debt Service General 111,112

Discretely Presented School Department: General Purpose School Nonmajor governmental 5,910 Nonmajor governmental General Purpose School 4,471

The entire amount due to the General Debt Service Fund ($111,112) from the General Fund resulted from a long-term interfund loan. See Note IV.H. for further details of this loan. The remaining balances resulted from the time lag between the dates that interfund goods and services are provided or reimbursable expenditures occur and payments between funds are made. Interfund Transfers:

Interfund transfers for the year ended June 30, 2020, consisted of the following

amounts:

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Primary Government

Highway/PublicWorks

Transfer Out Fund

Nonmajor governmental funds $ 58,610

Total $ 58,610

Transfer In

Discretely Presented Johnson County School Department

GeneralPurposeSchool

Transfer Out Fund

Nonmajor governmental funds $ 44,843

Total $ 44,843

Transfer In

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

D. Capital Leases On October 5, 2016, Johnson County entered into a four-year lease-purchase agreement for the highway department for two dump trucks. The terms of the agreement require total lease payments of $203,338 plus interest of 3.95 percent. Title to the equipment transferred to the highway department immediately upon acceptance of each item of equipment. The Highway/ Public Works Fund is making the lease payments. On October 28, 2019, Johnson County entered into a four-year lease-purchase agreement for the highway department for an excavator. The terms of the agreement require total lease payments of $149,200 plus interest of 3.25 percent. Title to the equipment transferred to the highway department immediately upon acceptance of the equipment. The Highway/ Public Works Fund is making the lease payments.

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The assets acquired through capital leases are as follows:

GovernmentalAsset Activities

Machinery and Equipment $ 352,538 Less: Accumulated Depreciation (177,590)

Total Book Value $ 174,948

Future minimum lease payments and the net present value of these minimum lease payments as of June 30, 2020, were as follows: Year Ending GovernmentalJune 30 Funds

2021 $ 75,6562022 31,7792023 31,7792024 31,778Total Minimum Lease Payments $ 170,992Less: Amount Representing Interest (11,360)

Present Value of Minimum Lease Payments $ 159,632

E. Long-term Debt

Primary Government General Obligation Bonds, Notes, and Other Loans General Obligation Bonds – Johnson County issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities for the primary government and the discretely presented school department. In addition, general obligation bonds have been issued to refund other general obligation bonds. General obligation bonds are direct obligations and pledge the full faith, credit, and taxing authority of the government. General obligation bonds outstanding were issued for original terms of up to 12 years. Repayment terms are generally structured with increasing amounts of principal maturing as interest requirements decrease over the term of the debt. All bonds included in long-term debt as of June 30, 2020, will be retired from the General Debt Service Fund. Direct Borrowing and Direct Placements – Johnson County issues other loans to provide funds for the acquisition and construction of major capital facilities for the primary government and the discretely presented school department. Capital outlay notes are also issued to fund capital facilities and other capital

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outlay purchases, such as equipment. Capital outlay notes, and other loans are direct obligations and pledge the full faith, credit, and taxing authority of the government. Repayment terms are generally structured with increasing amounts of principal maturing as interest requirements decrease over the term of the debt. Johnson County had no notes and other loans included in long-term debt as of June 30, 2020.

General obligation bonds and capital leases outstanding as of June 30, 2020, for governmental activities are as follows:

OriginalInterest Final Amount Balance

Type Rate Maturity of Issue 6-30-20

General Obligation Bonds - Refunding 2 to 2.25 % 6-1-28 $ 11,185,000 $ 7,690,000Direct Borrowing and Direct Placement: Capital Leases 3.25 to 3.95 10-28-23 352,538 159,632

The annual requirements to amortize all general obligation bonds outstanding as of June 30, 2020, including interest payments, are presented in the following table:

Year EndingJune 30 Total

2021 880,000 158,950 1,038,9502022 895,000 141,350 1,036,3502023 910,000 123,450 1,033,4502024 930,000 103,575 1,033,5752025 960,000 83,263 1,043,2632026-2028 3,115,000 126,000 3,241,000

Total $ 7,690,000 $ 736,588 $ 8,426,588

BondsPrincipal Interest

During the year, the Johnson County School Department contributed $264,154 to the primary government’s General Debt Service Fund to be applied toward the retirement of general obligation debt that was issued by the county for school capital purposes.

There is $6,338,438 available in the General Debt Service Fund to service long-term debt. Bonded debt per capita totaled $422, based on the 2010 federal census. Total debt per capita, including bonds, capital leases, and unamortized premium on bonds totaled $440, based on the 2010 federal census.

Changes in Long-term Debt

Long-term debt activity for the year ended June 30, 2020, was as follows:

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Governmental Activities: CapitalLeases -Direct

Bonds Placement

Balance, July 1, 2019 $ 8,545,000 $ 114,983Additions 0 149,200Reductions (855,000) (104,551)

Balance, June 30, 2020 $ 7,690,000 $ 159,632

Balance Due Within One Year $ 880,000 $ 70,173

Analysis of Noncurrent Liabilities for Debt Presented on Exhibit A:

Total Noncurrent Liabilities - Debt, June 30, 2020 $ 7,849,632Less: Balance Due Within One Year - Debt (950,173)Add: Unamortized Premium on Debt 174,379

Noncurrent Liabilities - Due in More Than One Year - Debt - Exhibit A $ 7,073,838

F. Long-term Obligations

Primary Government Changes in Long-term Obligations Long-term obligations activity for the year ended June 30, 2020, was as follows: Governmental Activities: Landfill Other

Compensated Postclosure PostemploymentAbsences Care Costs

Balance, July 1, 2019 $ 224,563 $ 636,675 $ 424,340Additions 166,185 0 74,597Reductions (135,423) (69,557) (5,197)

Balance, June 30, 2020 $ 255,325 $ 567,118 $ 493,740

Balance Due Within One Year $ 229,792 $ 79,584 $ 0

Benefits

Analysis of Noncurrent Liabilities for Other Presented on Exhibit A:

Total Noncurrent Liabilities - Other, June 30, 2020 $ 1,316,183Less: Balance Due Within One Year - Other (309,376)

Noncurrent Liabilities - Due in More Than One Year - Other - Exhibit A $ 1,006,807

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Compensated absences and other postemployment benefits will be paid from the employing funds, primarily the General and Highway/Public Works funds. The landfill postclosure care costs will be paid from the Solid Waste/Sanitation Fund. Discretely Presented Johnson County School Department Changes in Long-term Obligations Long-term obligations activity for the discretely presented school department for the year ended June 30, 2020, was as follows:

Governmental Activities: Other

Balance, July 1, 2019 $ 47,256 $ 3,597,286Additions 56,762 2,392,074Reductions (56,859) (1,088,760)

Balance, June 30, 2020 $ 47,159 $ 4,900,600

Balance Due Within One Year $ 47,159 $ 0

Compensated PostemploymentBenefits Absences

Analysis of Noncurrent Liabilities for Other Presented on Exhibit A:

Total Noncurrent Liabilities - Other, June 30, 2020 $ 4,947,759Less: Balance Due Within One Year - Other (47,159)

Noncurrent Liabilities - Due in More Than One Year - Other - Exhibit A $ 4,900,600

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

G. On-Behalf Payments – Discretely Presented Johnson County School Department The State of Tennessee pays health insurance premiums for retired teachers on-behalf of the Johnson County School Department. These payments are made by the state to the Local Education Group Insurance Plan. The plan is administered by the State of Tennessee and reported in the state’s Comprehensive Annual Financial Report. Payments made by the state to the Local Education Group Insurance Plan for the year ended June 30, 2020, were $95,343. The school department has recognized these on-behalf payments as revenues and expenditures in the General Purpose School Fund.

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H. Internal Financing

In-lieu-of issuing debt with financial institutions, Johnson County often chooses to internally finance various projects with idle county funds. Internally reported notes receivable from idle funds due to the General Debt Service Fund from the General and Community Development/Industrial Park funds are reflected below:

Original Date LastAmount Interest of Maturity

Borrowing Fund/Purpose of Issue Rate Issue Date

Community Development/ Industrial Park: Building Rehabilitation $ 300,000 0% 11-30-10 9-16-19General: E-911 Operations Center 250,000 0 9-17-15 6-1-21

Paid and/or

MaturedOutstanding During Outstanding

Borrowing Fund/Purpose 7-1-19 Period 6-30-20

Community Development/ Industrial Park: Building Rehabilitation $ 33,333 $ 33,333 $ 0General: E-911 Operations Center 138,889 27,777 111,112

Total $ 172,222 $ 61,110 $ 111,112

The balance of this note at June 30, 2020, is reflected as Due to Other Funds in the General Fund and as Due from Other Funds in the General Debt Service Fund.

V. OTHER INFORMATION

A. Risk Management

Primary Government The county is exposed to various risks related to general liability, property, and casualty losses. The county decided it was more economically feasible to join a public entity risk pool instead of purchasing commercial insurance for general liability, property, and casualty coverage. The county joined the Local Government Property and Casualty Fund (LGPCF), which is a public entity risk pool established by the Tennessee County Services Association, an association of member counties. The county pays an annual premium to the LGPCF for its general liability, property, and casualty insurance coverage. The creation of the LGPCF provides for it to be self-sustaining through member

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premiums. The LGPCF reinsures through commercial insurance companies for claims exceeding $100,000 for each insured event. Johnson County decided it was more economically feasible to join a public entity risk pool as opposed to purchasing commercial insurance for workers’ compensation coverage. The county joined the Local Government Workers’ Compensation Fund (LGWCF). The county pays an annual premium to the LGWCF for its workers’ compensation coverage. The creation of the LGWCF provides for it to be self-sustaining through member premiums. Johnson County participates in the Local Government Group Insurance Fund (LGGIF), a public entity risk pool established to provide a program of health insurance coverage for employees of local governments and quasi-governmental entities that was established for the primary purpose of providing services for or on behalf of state and local governments. In accordance with Section 8-27-207, Tennessee Code Annotated (TCA), all local governments and quasi-governmental entities described above are eligible to participate. The LGGIF is included in the Comprehensive Annual Financial Report for the State of Tennessee, but the state does not retain any risk for losses by this fund. The state statute provides for the LGGIF to be self-sustaining through member premiums. Discretely Presented Johnson County School Department The school department participates in the Tennessee Risk Management Trust (TN-RMT), which is a public entity risk pool created under the auspices of the Tennessee Governmental Tort Liability Act to provide governmental insurance coverage. The school department pays annual premiums to the TN-RMT for its general liability, property, casualty, and workers’ compensation insurance coverage. The creation of TN-RMT provides for it to be self-sustaining through member premiums. The school department participates in the Local Education Group Insurance Fund (LEGIF), a public entity risk pool established to provide a program of health insurance coverage for employees of local education agencies. In accordance with Section 8-27-301, TCA, all local education agencies are eligible to participate. The LEGIF is included in the Comprehensive Annual Financial Report of the State of Tennessee, but the state does not retain any risk for losses by this fund. Section 8-27-303, TCA, provides for the LEGIF to be self-sustaining through member premiums.

B. Contingent Liabilities

The county is involved in several pending lawsuits. Based on letters from attorneys, management estimates that the potential claims not covered by insurance resulting from such litigation would not materially affect the financial statements.

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C. Landfill Closure/Postclosure Care Costs Johnson 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 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. Johnson County closed its sanitary landfill in 1997. The $567,118 reported as postclosure care liability at June 30, 2020, represents amounts based on what it would cost to perform all postclosure care in 2020. Actual costs may be higher due to inflation, changes in technology, or changes in regulations.

D. Joint Ventures Primary Government The Upper East Tennessee Juvenile Detention Center was formed through cooperative agreements between Johnson County and the counties of Carter, Greene, Hawkins, Sullivan, Unicoi, and Washington for the operation of a program to divert youth from commitment to Department of Correction facilities. This program is governed by a board of directors designated by the counties. The board of directors has contracted with Universal Health Services to undertake the management of this program. Operation costs to the counties are allocated according to percentages based on population. Johnson County’s participation cost is 3.7 percent. The county also pays a daily fee for each individual from the county using the facility. Johnson County does not retain an equity interest in this joint venture. Complete financial statements for the above-noted joint venture can be obtained from its administrative office at the following address:

Upper East Tennessee Regional Juvenile Detention Center 307 Wesley Street Johnson City, TN 37601

Discretely Presented Johnson County School Department The discretely presented school department participates in the Northeast Tennessee Cooperative (NETCO). The cooperative was established through a contractual agreement between the Boards of Education of Johnson County

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and various other counties and cities in the upper East Tennessee area. The cooperative was authorized through Chapter 49 of Tennessee Code Annotated, and was established to obtain lower prices for food supplies, materials, equipment, and services by combining the purchasing requirements of each member’s school food service systems. The cooperative has contracted with a coordinating district (Johnson City School System) and a service provider to provide this service. NETCO is governed by a representative committee, including one representative from each of the member districts and an executive council, consisting of the chair, vice chair, secretary, treasurer, and a member-at-large from the representative committee. Complete financial statements for NETCO can be obtained from its administrative office at the following address:

Northeast Tennessee Cooperative 100 East Maple Street P.O. Box 1517 Johnson City, TN 37605

E. Jointly Governed Organization

Primary Government The East Tennessee Regional Agribusiness Marketing Authority was established through Title 64 of 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, and to further the economy and growth of the region served by the authority by developing, marketing, and promoting facilities for warehousing, distribution, light manufacturing, and agribusiness purposes. 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 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 operations of the center. Johnson County is a participant in the joint governance of the Alliance for Business and Training (AB&T) which administers funds received under the Workforce Innovation and Opportunity Act for the Northeast Tennessee Local Workforce Development Area. An interlocal consortium agreement between Carter, Greene, Hancock, Hawkins, Johnson, Sullivan, Unicoi, and Washington counties established the Northeast Tennessee Workforce Development Board and the governing structure of AB&T. The county mayors represent each county in the consortium. The Sullivan County Mayor serves as the chief local elected county official of the consortium by the majority approval of the local elected county officials in the consortium agreement and

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approves appointments of board members of the workforce development board following a nomination process specified in the agreement. The board has no financial activity but provides oversight for workforce development programs of the Development Area. Those programs are funded by grants passed through the state Department of Labor to AB&T. Mayors of the participating counties, along with four members jointly appointed by the mayors serve as the governing board of AB&T. The consortium agreement calls for any liability for disallowed costs of the grant programs to be shared by member counties of the consortium based on each county’s percent of the population of the local workforce development area. However, that contingent liability is to be mitigated by $3 million of insurance coverage provided by AB&T to indemnify the counties pursuant to the consortium agreement. Complete financial information for the Alliance for Business and Training can be obtained from the following address.

Alliance for Business and Training 386 Hwy 91 P.O. Box 249 Elizabethton, TN 37643

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

Primary Government Johnson County Legacy Pension Plan General Information About the Pension Plan Plan Description – Johnson County Legacy Plan. Employees of Johnson County and non-certified employees of the discretely presented Johnson County School Department with membership in the TCRS prior to November 1, 2017, are provided a defined benefit pension plan through the Public Employee Legacy Retirement Plan, an agent multiple-employer pension plan administered by the TCRS. The Public Employee Legacy Retirement Plan is closed to new membership. The primary government employees comprised 59.17 percent and the non-certified employees of the discretely presented school department comprised 40.83 percent of the plan based on contribution data. Employees of Johnson County and non-certified employees of the discretely presented Johnson County School Department with membership in TCRS after November 1, 2017, are provided with pensions through a legally separate plan, referred to as the Public Employee Hybrid Retirement Plan, an agent multiple-employer pension plan administered by the TCRS. The TCRS was created by

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state statute under Tennessee Code Annotated (TCA), Title 8, Chapters 34-37. The TCRS Board of Trustees is responsible for the proper operation and administration of the TCRS. The Tennessee Treasury Department, an agency in the legislative branch of state government, administers the plans of the TCRS. The TCRS issues a publicly available financial report that can be obtained at www.treasury.tn.gov/Retirement/Boards-and-Governance/Reporting-and-Investment-Policies. Benefits Provided. TCA, Title 8, Chapters 34-37 establish the benefit terms and can be amended only by the Tennessee General Assembly. The chief legislative body may adopt the benefit terms permitted by statute. Members are eligible to retire with an unreduced benefit at age 60 with five years of service credit or after 30 years of service credit regardless of age. Benefits are determined by a formula using the member’s highest five consecutive year average compensation and the member’s years of service credit. Reduced benefits for early retirement are available to vested members at age 55. Members vest with five years of service credit. Service related disability benefits are provided regardless of length of service. Five years of service is required for non-service related disability eligibility. The service related and non-service related disability benefits are determined in the same manner as a service retirement benefit but are reduced ten percent and include projected service credits. A variety of death benefits is available under various eligibility criteria. Member and beneficiary annuitants are entitled to an automatic cost of living adjustment (COLA) after retirement. A COLA is granted each July for annuitants retired prior to the second of July of the previous year. The COLA is based on the change in the consumer price index (CPI) during the prior calendar year, capped at three percent, and applied to the current benefit. No COLA is granted if the change in the CPI is less than one-half percent. A one percent COLA is granted if the CPI change is between one-half percent and one percent. A member who leaves employment may withdraw their employee contributions plus any accumulated interest. Employees Covered by Benefit Terms. At the measurement date of June 30, 2019, the following employees were covered by the benefit terms: Inactive Employees or Beneficiaries Currently Receiving Benefits 247Inactive Employees Entitled to But Not Yet Receiving Benefits 405Active Employees 215

Total 867

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http://www.treasury.tn.gov/Retirement/Boards-and-Governance/Reporting-and-Investment-Policies


Johnson County withdrew from the TCRS Johnson County Legacy Plan effective October 31, 2017. Employees hired after the date of withdrawal are not eligible to participate in the Johnson County Legacy Plan. Employees active as of the withdrawal date will continue to accrue salary and services credit in TCRS. The employer remains responsible for the pension liability for employees and retirees that were active as of the withdrawal date. 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. Johnson County elected to make employer contributions at a rate higher than the rate set by the Board of Trustees as determined by an actuarial valuation. For the year ended June 30, 2020, the employer contribution for Johnson County was $326,899 based on a rate of 6 percent of covered payroll for general employees and 9.5 percent of covered payroll for public safety officers. The rate set by the Board of Trustees as determined by an actuarial valuation was 4.32 percent for general employees and 7.82 percent for public safety officers. By law, employer contributions are required to be paid. The TCRS may intercept Johnson 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) Johnson County’s net pension liability (asset) was measured as of June 30, 2019, and the total pension liability (asset) used to calculate net pension liability (asset) was determined by an actuarial valuation as of that date. Actuarial Assumptions. The total pension liability as of the June 30, 2019, 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 3.44% Based on Age, Including Inflation, Averaging 4%

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

Cost of Living Adjustment 2.25%

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Mortality rates were based on actual experience including an adjustment for some anticipated improvement. The actuarial assumptions used in the June 30, 2019, 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 asset 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 asset class are summarized in the following table:

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.

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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 Johnson 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. Changes in the Net Pension Liability (Asset)

Total Plan NetPension Fiduciary PensionLiability Net Position Liability

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

Balance, July 1, 2018 $ 22,870,328 $ 24,409,464 $ (1,539,136)

Changes for the Year: Service Cost $ 547,348 $ 0 $ 547,348 Interest 1,649,141 0 1,649,141 Differences Between Expected and Actual Experience (37,548) 0 (37,548) Contributions-Employer 0 708,709 (708,709) Contributions-Employees 0 280,463 (280,463) Net Investment Income 0 1,803,652 (1,803,652) Benefit Payments, Including Refunds of Employee Contributions (1,341,820) (1,341,820) 0 Administrative Expense 0 (19,873) 19,873Net Changes $ 817,121 $ 1,431,131 $ (614,010)

Balance, June 30, 2019 $ 23,687,449 $ 25,840,595 $ (2,153,146)

Increase (Decrease)

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

Plan NetTotal Fiduciary Pension

Pension Net LiabilityLiability Position (Asset)

Primary Government 59.17% $ 14,015,864 $ 15,289,880 $ (1,274,016)

School Department 40.83% 9,671,585 10,550,715 (879,130)

Total $ 23,687,449 $ 25,840,595 $ (2,153,146)

Sensitivity of the Net Pension Liability (Asset) to Changes in the Discount Rate. The following presents the net pension liability (asset) of Johnson 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 Increase6.25% 7.25% 8.25%

Net Pension Liability (Asset) $ 719,024 $ (2,153,146) $ (4,547,798)

Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources to Pensions Pension Expense. For the year ended June 30, 2020, Johnson County recognized pension expense of $27,884. Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2020, Johnson County reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

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Deferred DeferredOutflows Inflows

of of Resources Resources

Difference Between Expected and Actual Experience $ 28,801 $ 348,622Net Difference Between Projected and Actual Earnings on Pension Plan Investments 0 299,842Changes in Assumptions 127,399 0Contributions Subsequent to the Measurement Date of June 30, 2019 (1) 326,899 N/A

Total $ 483,099 $ 648,464

(1) The amount shown above for “Contributions Subsequent to the Measurement Date of June 30, 2019,” will be recognized as a reduction (increase) to net pension liability (asset) in the following measurement period.

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

Deferred DeferredOutflows of Inflows ofResources Resources

Primary Government $ 291,223 $ 383,697

School Department 191,876 264,767

Total $ 483,099 $ 648,464

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:

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Year EndingJune 30 Amount

2021 $ (32,994)2022 (383,348)2023 (66,426)2024 (9,494)2025 0Thereafter 0

In the table shown above, positive amounts will increase pension expense while negative amounts will decrease pension expense. Primary Government Johnson County Hybrid Pension Plan Plan Description – Johnson County Hybrid Plan. Employees of Johnson County and non-certified employees of the discretely presented Johnson County School Department hired on or after November 1, 2017, are provided a defined benefit pension plan (Johnson County Hybrid Plan) through the Public Employee Retirement Plan, an agent multiple-employer pension plan administered by the TCRS. The primary government employees comprise 66.63 percent and the non-certified employees of the discretely presented school department comprise 33.37 percent of the plan based on contribution data. The TCRS was created by state statute under Tennessee Code Annotated (TCA), Title 8, Chapters 34-37. The TCRS Board of Trustees is responsible for the proper operation and administration of the TCRS. The Tennessee Treasury Department, an agency in the legislative branch of state government, administers the plans of the TCRS. The TCRS issues a publicly available financial report that can be obtained at www.treasury.tn.gov/Retirement/Boards-and-Governance/Reporting-and-Investment-Policies. 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 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. Reduced benefits for early retirement are available at age 60 and vested or pursuant to the rule of 80 in which the member’s age and service credit total 80. Members vest with five years of service credit. Service related disability benefits are provided regardless of length of service. Five years of service is required for non-service related disability

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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. A member who leaves employment may withdraw their employee contributions plus any accumulated interest. Moreover, there are defined cost controls and unfunded liability controls that provide for the adjustment of benefit terms and conditions on an automatic basis. Employees Covered by Benefit Terms. At the measurement date of June 30, 2019, the following employees were covered by the benefit terms: Inactive Employees or Beneficiaries Currently Receiving Benefits 0Inactive Employees Entitled to But Not Yet Receiving Benefits 10Active Employees 55

Total 65

Contributions. Contributions for employees 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. Employees contribute five percent of salary. Johnson County makes 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, as established by the TCRS Board of Trustees, is reached. By law, employer contributions are required to be paid. The TCRS may intercept Johnson County’s state shared taxes if required employer contributions are not remitted. Employer contributions for the year ended June 30, 2020, to the Retirement Plan were $31,080, based on 1.8 percent of covered payroll for general employees and 2.64 percent of covered payroll for public safety officers. In addition, employer contributions of $31,722 were made to the Pension Stabilization Reserve Trust Fund to fund future pension costs. The employer rate, when combined with member contributions and the stabilization

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reserve trust funds, 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. Johnson County’s net pension liability (asset) was measured as of June 30, 2019, and the total pension liability used to calculate net pension liability (asset) was determined by an actuarial valuation as of that date. Actuarial Assumptions. The total pension liability as of the June 30, 2019, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:





Mortality rates were based on actual experience including an adjustment for some anticipated improvement. The actuarial assumptions used in the June 30, 2019, 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 asset 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 asset 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.

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 Johnson County will be made at the actuarially determined contribution rate pursuant to an actuarial valuation in accordance with the funding policy of the TCRS Board of Trustees and as required to be paid by state statute. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make projected future benefit payments of current active and inactive members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

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Changes in the Net Pension Liability (Asset)

Total Plan NetPension Fiduciary PensionLiability Net Position Liability

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

Balance, July 1, 2018 $ 11,437 $ 17,197 $ (5,760)

Changes for the Year: Service Cost $ 25,532 $ 0 $ 25,532 Interest 2,680 0 2,680 Differences Between Expected and Actual Experience 18,812 0 18,812 Contributions-Employer 0 11,945 (11,945) Contributions-Employees 0 35,191 (35,191) Net Investment Income 0 2,920 (2,920) Administrative Expense 0 (3,118) 3,118Net Changes $ 47,024 $ 46,938 $ 86

Balance, June 30, 2019 $ 58,461 $ 64,135 $ (5,674)

Increase (Decrease)

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

Plan NetTotal Fiduciary Pension

Pension Net LiabilityLiability Position (Asset)

Primary Government 66.63% $ 38,953 $ 42,733 $ (3,781)

School Department 33.37% 19,508 21,402 (1,893)

Total $ 58,461 $ 64,135 $ (5,674)

Sensitivity of the Net Pension Liability (Asset) to Changes in the Discount Rate. The following presents the net pension liability (asset) of Johnson 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 Increase6.25% 7.25% 8.25%

Net Pension Liability (Asset) $ 9,739 $ (5,674) $ (17,204)

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Pension Expense (Negative Pension Expense) and Deferred Outflows of Resources and Deferred Inflows of Resources to Pensions Pension Expense (Negative Pension Expense). For the year ended June 30, 2020, Johnson County recognized pension expense (negative pension expense) of ($4,384). Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2020, Johnson County reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:



Difference Between Expected and Actual Experience $ 16,460 $ 0Net Difference Between Projected and Actual Earnings on Pension Plan Investments 0 115Contributions Subsequent to the Measurement Date of June 30, 2019 (1) 31,080 N/A

Total $ 47,540 $ 115

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

Measurement Date of June 30, 2019,” will be recognized as a reduction (increase) to net pension liability (asset) in the following measurement period.

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

Deferred DeferredOutflows of Inflows ofResources Resources

Primary Government $ 30,350 $ 77

School Department 17,190 38

Total $ 47,540 $ 115

Amounts reported as deferred outflows of resources, with the exception of contributions subsequent to the measurement date, and deferred

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inflows of resources related to pensions will be recognized in pension expense as follows:


2021 $ 2,3192022 2,3192023 2,3192024 2,3362025 2,352Thereafter 4,704

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

Discretely Presented Johnson County School Department Non-certified Employees General Information About the Pension Plan Plan Description - Johnson County Legacy Plan. As noted above under the primary government, employees of Johnson County and non-certified employees of the discretely presented Johnson County School Department with membership in TCRS before November 1, 2017, are provided a defined benefit pension plan (Johnson County Legacy Plan) through the Public Employee Retirement Plan, an agent multiple-employer pension plan administered by the TCRS. The primary government employees comprise 59.17 percent and the non-certified employees of the discretely presented school department comprise 40.83 percent of the plan based on contribution data. Plan Description – Johnson County Hybrid Plan. As also noted above under primary government, employees of Johnson County and non-certified employees of the discretely presented Johnson County School Department hired on or after November 1, 2017, are provided a defined benefit pension plan (Johnson County Hybrid Plan) through the Public Employee Retirement Plan, an agent multiple-employer pension plan administered by the TCRS. The primary government employees comprise 66.63 percent and the non-certified employees of the discretely presented school department comprise 33.37 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 Johnson 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.tn.gov/Retirement/Boards-and-Governance/Reporting-and-Investment-Policies. 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

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Retirement Plan, benefit terms and conditions, including COLA, can be adjusted on a prospective basis. Moreover, there are defined cost controls and unfunded liability controls that provide for the adjustment of benefit terms and conditions on an automatic basis. 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, 2020, to the Teacher Retirement Plan were $48,291, which is 2.03 percent of covered payroll. In addition, employer contributions of $42,682 were made to the Pension Stabilization Reserve Trust Fund to fund future pension costs. The employer rate, when combined with member contributions and the stabilization reserve trust funds, 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, 2020, the school department reported a liability (asset) of ($122,976) for its proportionate share of the net pension liability (asset). The net pension liability (asset) was measured as of June 30, 2019, 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, 2019, the school department’s proportion was .217854 percent. The proportion as of June 30, 2018, was .226395 percent. Pension Expense. For the year ended June 30, 2020, the school department recognized pension expense of $38,096. Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2020, the school department reported deferred

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outflows of resources and deferred inflows of resources related to pensions from the following sources:



Difference Between Expected and Actual Experience $ 5,099 $ 21,468Net Difference Between Projected and Actual Earnings on Pension Plan Investments 0 5,199Changes in Assumptions 4,273 0Changes in Proportion of Net Pension Liability (Asset) 11,345 16,606LEA's Contributions Subsequent to the Measurement Date of June 30, 2019 48,291 N/A

Total $ 69,008 $ 43,273

The school department’s employer contributions of $48,291, 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, 2021. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:


2021 $ (3,105)2022 (3,900)2023 (2,442)2024 (1,698)2025 (1,486)Thereafter (9,927)

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, 2019, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:

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Mortality rates are based on actual experience including an adjustment for some anticipated improvement. The actuarial assumptions used in the June 30, 2019, 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 asset 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 asset class are summarized in the following table:

83




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. 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. 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:

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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 (Asset) $ 38,964 $ (122,976) $ (242,679)

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 Johnson 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.tn.gov/Retirement/Boards-and-Governance/Reporting-and-Investment-Policies. Benefits Provided. TCA, Title 8, Chapters 34-37 establish the benefit terms and can be amended only by the Tennessee General Assembly. Members of the Teacher Legacy Pension Plan are eligible to retire with an unreduced benefit at age 60 with five years of service credit or after 30 years of service credit regardless of age. Benefits are determined by a formula using the member’s highest five consecutive year average compensation and the member’s years of service credit. A reduced early retirement benefit is available to vested members at age 55. Members are vested with five years of service credit. Service related disability benefits are provided regardless of length of service. Five years of service is required for non-service related disability eligibility. The service related and non-service related disability benefits are determined in the same manner as a service retirement benefit but are reduced ten percent and include projected service credits. A variety of death benefits is available under various eligibility criteria. Member

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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 condition 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 Johnson County School Department for the year ended June 30, 2020, to the Teacher Legacy Pension Plan were $703,989, which is 10.63% 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, 2020, the school department reported a liability (asset) of ($2,079,548) for its proportionate share of the net pension liability (asset). The net pension liability (asset) was measured as of June 30, 2019, and the total pension liability 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 long-term share of contributions to the pension plan relative to the contributions of all participating LEAs. At the measurement date of June 30, 2019, the school department’s proportion was .202255 percent. The proportion measured at June 30, 2018, was .203936 percent.

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Pension Expense. For the year ended June 30, 2020, the school department recognized negative pension expense of $256,088. Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2020, 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 $ 101,248 $ 1,270,229Changes in Assumptions 280,230 0Net Difference Between Projected and Actual Earnings on Pension Plan Investments 0 594,167Changes in Proportion of Net Pension Liability (Asset) 33,604 70,301LEA's Contributions Subsequent to the Measurement Date of June 30, 2019 703,989 N/A

Total $ 1,119,071 $ 1,934,697

The school department’s employer contributions of $703,989 reported as pension related deferred outflows of resources subsequent to the measurement date, will be recognized as a decrease (increase) in net pension liability (asset) in the year ending June 30, 2021. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:


2021 $ (445,746)2022 (596,944)2023 (279,939)2024 (196,987)2025 0Thereafter 0

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, 2019, 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, 2019, 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 asset 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 asset class are summarized in the following table:

88




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. 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. 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:

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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 (Asset) $ 4,252,074 $ (2,079,548) $ (7,116,178)

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

Johnson County offers its employees an optional deferred compensation plan established pursuant to IRC Section 457. All costs of administering and funding this program are the responsibility of plan participants. The Section 457 plan assets remain the property of the contributing employees and are not presented in the accompanying financial statements. IRC Section 457 establish participation, contribution, and withdrawal provisions for the plans. Employees hired after November 1, 2017, by Johnson County and non-certified employees of the discretely presented Johnson County School Department are required to participate in a hybrid pension plan consisting of a defined benefit portion, which is detailed in the pensions footnote above and is managed by the Tennessee Consolidated Retirement System, and a defined contribution portion which is placed into the state’s 401(k) plan and is managed by the employee. The defined contribution portion of the plan requires that Johnson County and the discretely presented Johnson County School Department contribute five percent of each employee’s salary into their deferred compensation plan. In addition, employees are required to contribute two percent of their salaries into this deferred compensation plan, unless they opt out of the employee portion. During the year Johnson County and the Johnson County School Department contributed $47,423, and $32,641 and employees contributed $9,029 and $1,524 to this deferred compensation pension plan, respectively. Teachers hired after July 1, 2014, by the Johnson County School Department are required to participate in a hybrid pension plan consisting of a defined benefit portion, which is detailed in the pensions footnote above and is managed by the Tennessee Consolidated Retirement System, and a defined contribution portion which is placed into the state’s 401(k) plan and is managed by the employee. The defined contribution portion of the plan requires that the school department contribute five percent of each teacher’s salary into their deferred compensation plan. In addition, teachers are required to contribute two percent of their salaries into this deferred compensation plan, unless they opt out of the employee portion. During the year the

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Johnson County School Department contributed $118,592 and teachers contributed $48,612 to this deferred compensation pension plan.

G. Other Postemployment Benefits (OPEB)

Johnson County and the discretely presented Johnson County School Department provide OPEB benefits to their retirees through state administered public entity risk pools. For reporting purposes the plans are considered single employer defined benefit OPEB plans based on criteria in Statement No. 75 of the Governmental Accounting Standards Board (GASB). The plans are 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. As discussed in Note I.D.4, the Johnson County School Department has joined the Tennessee School Board OPEB Trust and at June 30, 2020, reports a balance of $1,087,317 in restricted assets managed by the trust. However, the trust does not meet the criteria of paragraph 4 of GASB Statement No. 75 since payment of OPEB benefits is not being administered by the trust. Therefore, OPEB liabilities of the school department have been reported gross and not reduced by balances of the trust. Retirees of Johnson County are provided healthcare under the Local Government Plan (LGP) until they reach Medicare eligibility. Likewise, the school department provides healthcare benefits to its employees under the Local Education Plan (LEP) until they reach Medicare eligibility. The county and the school department’s total OPEB liability for each plan was measured as of June 30, 2019, and was determined by an actuarial valuation as of that date. Actuarial Assumptions and other inputs. The total OPEB liability in the June 30, 2019, actuarial valuation of each plan was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified:

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Actuarial Cost Method Entry Age NormalInflation 2.20%Salary Increases Salary increases used in the July 1, 2018

TCRS actuarial valuation; 3.44% to 8.72%, including inflation

Discount Rate 3.51%Healthcare Cost Trend Based on the Getzen Model, with trend Rates starting at 6.03% for pre-65 retirees

in the 2019 calendar year, and gradually decreasing over a 10 year period to an ultimate trend rate of 4.5 percent.

Retirees Share of Benefit Related Cost Discussed under Benefits Provided

The discount rate reflects the interest rate derived from yields on 20-year, tax-exempt general obligation municipal bonds, prevailing on the measurement date, with an average rating of AA/Aa as shown on the Bond Buyer 20-Year Municipal GO AA index. Mortality rates were based on the results of a statewide experience study undertaken on behalf of the Tennessee Consolidated Retirement System (TCRS). These mortality rates were used in the July 1, 2018, actuarial valuation of the TCRS. Unless noted otherwise, the actuarial demographic assumptions used in the June 30, 2019, valuations were the same as those employed in the July 1, 2018, Pension Actuarial Valuation of the Tennessee Consolidated Retirement System (TCRS). These assumptions were developed by TCRS based on the results of an actuarial experience study for the period July 1, 2012 - June 30, 2016. The demographic assumptions were adjusted to more closely reflect actual and expected future experience. Mortality tables are used to measure the probabilities of participants dying before and after retirement. The mortality rates employed in this valuation are taken from the RP-2014 Healthy Participant Mortality Table for Annuitants for non-disabled post-retirement mortality, with mortality improvement projected to all future years using Scale MP-2016. Post-retirement tables are Blue Collar and adjusted with a 2.0 percent load for males and a -3.0 percent load for females. Mortality rates for impaired lives are the same as those used by TCRS and are taken from a gender distinct table published in the IRS Ruling 96-7 for disabled lives with a ten percent load. Changes in Assumptions. The discount rate changed from 3.62 percent as of the beginning of the measurement period to 3.51 percent as of the measurement date of June 30, 2019. This change in assumption increased the total OPEB liability. Other changes in assumptions include adjustments to initial per capita costs and health trend rates. The trend rate applicable to the 2020 plan year was revised from 6.75 percent to 6.03 percent.

92

Local Government OPEB Plan (Primary Government) Plan Description. Employees of Johnson County are provided with pre-65 retiree health insurance benefits through the Local Government Plan (LGP) administered by the Tennessee Department of Finance and Administration. All eligible pre-65 retired employees and disability participants of local governments, who choose coverage, participate in the LGP. Benefits Provided. Johnson County offers the LGP to provide health insurance coverage to eligible pre-65 retirees and disabled participants. With the exception of a small group of grandfathered individuals, retirees are required to discontinue coverage under the LGP upon obtaining Medicare eligibility. Insurance coverage is the only postemployment benefit provided to retirees. An insurance committee created in accordance with Tennessee Code Annotated (TCA) 8-27-701 establishes and amends the benefit terms of the LGP. All members have the option of choosing between the premier preferred provider organization (PPO), standard PPO, limited PPO or the wellness health savings consumer-driven health plan (CDHP) for healthcare benefits. Retired plan members of the LGP receive the same plan benefits as active employees, at a blended premium rate that considers the cost of all participants. This creates an implicit subsidy for retirees. Participating employers determine their own policy related to direct subsidies provided for the retiree premiums. Johnson County provides a direct subsidy for retirees with at least 25 years of service in TCRS and insurance coverage for a minimum of one year prior to retirement. The subsidy ranges from $358 to $548 per month based on coverage selected. Employees Covered by Benefit Terms At the measurement date of June 30, 2019, the following employees were covered by the benefit terms:

PrimaryGovernment

Inactive Employees or Beneficiaries Currently Receiving Benefits 0Inactive Employees Entitled to But Not Yet Receiving Benefits 0Active Employees 140Total 140

An insurance committee, created in accordance with TCA 8-27-701, establishes the required payments to the LGP by member employers and employees through the blended premiums established for active and retired employees. Claims liabilities of the plan are periodically computed using actuarial and statistical techniques to establish premium rates. For the fiscal year ended June 30, 2020, the county paid $977 to the LGP for OPEB benefits as they came due.

93

Changes in the Total OPEB Liability

PrimaryGovernment

Balance July 1, 2018 $ 424,340Changes for the Year: Service Cost $ 42,366 Interest 16,802 Difference between Expected and Actuarial Experience 1,792 Changes in Assumption and Other Inputs 13,637

Benefit Payments (5,197)Net Changes $ 69,400

Balance June 30, 2019 $ 493,740

OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2020, the county recognized OPEB expense of $31,462. At June 30, 2020, the county reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:



Difference Between Expected and Actual Experience $ 1,552 $ 159,272Changes of Assumptions/Inputs 11,809 68,324Net Difference Between Projected and Actual Investment Earnings 0 0Benefits Paid After the Measurement Date of June 30, 2019 977 0

Total $ 14,338 $ 227,596

Amounts reported as deferred inflows and deferred outflows of resources (excluding benefits paid after the measurement date) related to OPEB will be recognized in OPEB expense as follows:

94

Year Ending PrimaryJune 30 Government

2021 $ (27,706)2022 (27,706)2023 (27,706)2024 (27,706)2025 (27,706)Thereafter (75,705)

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 county 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: Discount Rate Current

1% Discount 1%Decrease Rate Increase

2.51% 3.51% 4.51%

Proportionate Share of the Collective Total OPEB Liability $ 550,232 $ 493,740 $ 441,922

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: Healthcare Cost Trend Rate

1% Curent 1%Decrease Rate Increase

5.03 to 3.5% 6.03 to 4.5% 7.03 to 5.5%

Proportionate Share of the Collective Total OPEB Liability $ 418,326 $ 493,740 $ 585,467

95

Closed Local Education (LEP) OPEB Plan (Discretely Presented School Department) Plan Description. Employees of the Johnson County School Department who were hired prior to July 1, 2015, are provided with pre-65 retiree health insurance benefits through the closed Local Education Plan (LEP) administered by the Tennessee Department of Finance and Administration. All eligible pre-65 retired teachers, support staff, and disability participants of local education agencies, who choose coverage, participate in the LEP. This plan is closed to the employees of all participating employers that were hired on or after July 1, 2015. Benefits Provided. The Johnson County School Department offers the LEP to provide health insurance coverage to eligible pre-65 retirees, support staff, and disabled participants. Retirees are required to discontinue coverage under the LEP upon obtaining Medicare eligibility. Insurance coverage is the only postemployment benefit provided to retirees. An insurance committee created in accordance with TCA 8-27-301 establishes and amends the benefit terms of the LEP. All members have the option of choosing between the premier preferred provider organization (PPO), standard PPO, limited PPO or the wellness health savings consumer-driven health plan (CDHP) for healthcare benefits. Retired plan members of the LEP receive the same plan benefits as active employees at a blended premium rate that considers the cost of all participants. This creates an implicit subsidy for retirees. Participating employers determine their own policy related to direct subsidies provided for retiree premiums. Johnson County School Department provides a direct subsidy for retirees with a minimum of 20 years of service in amounts ranging from $251 to $602 per month based on years of service and coverage selected. The state, as a governmental non-employer contributing entity, provides a direct subsidy for eligible retirees premiums based on years of service. Therefore, retirees with 30 or more years of service will receive 45 percent; 20 but less than 30 years, 35 percent; and less than 20 years, 25 percent of the scheduled premium. No subsidy is provided for enrollees of the health savings CDHP. Employees Covered by Benefit Terms At the measurement date of June 30, 2019, the following employees were covered by the benefit terms:

96

School Department

Inactive Employees or Beneficiaries Currently Receiving Benefits 24Inactive Employees Entitled to But Not Yet Receiving Benefits 0Active Employees 245

Total 269

A state insurance committee, created in accordance with TCA 8-27-301, establishes the required payments to the LEP by member employers and employees through the blended premiums established for active and retired employees. Claims liabilities of the plan are periodically computed using actuarial and statistical techniques to establish premium rates. Administrative costs are allocated to plan participants. Employers contribute towards employee costs based on their own developed policies. During the current reporting period, the school department paid $216,950 to the LEP for OPEB benefits as they came due. Changes in the Collective Total OPEB Liability

Johnson County State ofSchool Department TN Total OPEB

75.3316% 24.6684% Liability

Balance July 1, 2018 $ 3,597,286 $ 1,138,664 $ 4,735,950Changes for the Year: Service Cost $ 200,932 $ 65,798 $ 266,730 Interest 131,906 43,195 175,101 Changes in Benefit Terms (447,641) (146,586) (594,227) Difference between Expected and Actuarial Experience 2,059,236 674,326 2,733,562 Changes in Proportion (29,618) 29,618 0 Changes in Assumption and Other Inputs (359,727) (117,798) (477,525)

Benefit Payments (251,774) (82,447) (334,221)Net Changes $ 1,303,314 $ 466,106 $ 1,769,420

Balance June 30, 2019 $ 4,900,600 $ 1,604,770 $ 6,505,370

Share of Collective Liability

97

The Johnson County School Department has a special funding situation related to benefits paid by the State of Tennessee for its eligible retired employees participating in the LEP. The Johnson County School Department's proportionate share of the collective total OPEB liability was based on a projection of the employers long-term share of benefit payments to the OPEB plan relative to the projected share of benefit payments of all participating employers and nonemployer contributing entities, actuarially determined. The school department recognized negative revenues of $57,568 for subsidies provided by nonemployer contributing entities for benefits paid by the LEP for school department retirees. During the year, the Johnson County School Department’s proportionate share of the collective OPEB liability was 75.3316 percent and the State of Tennessee’s share was 24.6684 percent. OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2020, the school department recognized negative OPEB expense of $381,461, which includes expenses funded by subsidies provided by the state. At June 30, 2020, the school department reported deferred outflows of resources and deferred inflows of resources related to its proportionate share of OPEB from the following sources:



Difference Between Expected and Actual Experience $ 1,819,511 $ 2,717,206Changes of Assumptions/Inputs 74,100 540,029Changes in Proportion 0 286,093Benefits Paid After the Measurement Date of June 30, 2019 216,950 0

Total $ 2,110,561 $ 3,543,328

Amounts reported as deferred inflows and deferred outflows of resources (excluding benefits paid after the measurement date) related to OPEB will be recognized in OPEB expense as follows:

98

Year Ending PrimaryJune 30 Government

2021 $ (209,089)2022 (209,089)2023 (209,089)2024 (209,089)2025 (209,089)Thereafter (604,272)

In the table shown above, positive amounts will increase OPEB expense while negative amounts will decrease OPEB expense. Sensitivity of Proportionate Share of the Collective Total OPEB Liability to Changes in the Discount Rate. The following presents the school department’s proportionate share of the collective total OPEB liability related to the LEP, as well as what the proportionate share of the collective total OPEB liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current discount rate. Discount Rate Current

1% Discount 1%Decrease Rate Increase

2.51% 3.51% 4.51%

Proportionate Share of the Collective Total OPEB Liability $ 5,262,008 $ 4,900,600 $ 4,555,785

Sensitivity of Proportionate Share of the Collective Total OPEB Liability to Changes in the Healthcare Cost Trend Rate. The following presents the school department’s proportionate share of the collective total OPEB liability related to the LEP, as well as what the proportionate share of the collective total OPEB liability would be if it were calculated using a healthcare cost trend rate that is one percentage point lower or one percentage point higher than the current healthcare cost trend rate. Healthcare Cost Trend Rate

1% Curent 1%Decrease Rate Increase

5.03 to 3.5% 6.03 to 4.5% 7.03 to 5.5%

Proportionate Share of the Collective Total OPEB Liability $ 4,393,039 $ 4,900,600 $ 5,490,611

99

H. Office of Central Accounting and Budgeting Johnson County operates under provisions of the Fiscal Control Acts of 1957. These acts provide for a central system of accounting and budgeting covering funds administered by the county mayor, road superintendent, and director of schools. These funds were maintained in the Office of Central Accounting under the supervision of the director of accounts and budgets.

I. Purchasing Laws Office of County Mayor and Road Superintendent Purchasing procedures for the Offices of County Mayor and Road Superintendent are conducted under provisions of Section 5-14-101, et seq., Tennessee Code Annotated (TCA). Purchasing procedures for the Office of Road Superintendent are also governed by provisions of the Uniform Road Law, Section 54-7-113, TCA. These statutes provide for purchases exceeding $25,000 to be made on a competitive bid basis. Office of Director of Schools Purchasing procedures for the discretely presented Johnson County School Department are governed by purchasing laws applicable to schools as set forth in Section 49-2-203, TCA, which provides for the county Board of Education, through its executive committee (director of schools and chairman of the Board of Education), to make all purchases. This statute also requires that competitive bids be solicited through newspaper advertisement on all purchases estimated to exceed $10,000.

100

REQUIRED SUPPLEMENTARY INFORMATION

101

Exhibit E-1

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

2014 2015 2016 2017 2018 2019

Total Pension LiabilityService Cost $ 489,369 $ 477,723 $ 482,243 $ 534,657 $ 576,133 $ 547,348Interest 1,364,428 1,453,651 1,579,294 1,566,240 1,630,549 1,649,141Differences Between Actual and Expected Experience 322,898 839,364 (1,166,327) 115,201 (640,921) (37,548)Changes in Assumptions 0 0 0 509,596 0 0Benefit Payments, Including Refunds of Employee Contributions (893,289) (1,057,518) (1,142,502) (1,100,847) (1,219,252) (1,341,820)Net Change in Total Pension Liability $ 1,283,406 $ 1,713,220 $ (247,292) $ 1,624,847 $ 346,509 $ 817,121Total Pension Liability, Beginning 18,149,638 19,433,044 21,146,264 20,898,972 22,523,819 22,870,328

Total Pension Liability, Ending (a) $ 19,433,044 $ 21,146,264 $ 20,898,972 $ 22,523,819 $ 22,870,328 $ 23,687,449

Plan Fiduciary Net PositionContributions - Employer $ 668,604 $ 720,240 $ 716,263 $ 755,316 $ 753,596 $ 708,709Contributions - Employee 286,133 283,354 281,384 299,016 295,947 280,463Net Investment Income 2,783,446 601,837 531,242 2,316,614 1,878,249 1,803,652Benefit Payments, Including Refunds of Employee Contributions (893,289) (1,057,518) (1,142,502) (1,100,847) (1,219,252) (1,341,820)Administrative Expense (10,300) (13,258) (19,298) (21,573) (23,674) (19,873)Net Change in Plan Fiduciary Net Position $ 2,834,594 $ 534,655 $ 367,089 $ 2,248,526 $ 1,684,866 $ 1,431,131Plan Fiduciary Net Position, Beginning 16,739,734 19,574,328 20,108,983 20,476,072 22,724,598 24,409,464

Plan Fiduciary Net Position, Ending (b) $ 19,574,328 $ 20,108,983 $ 20,476,072 $ 22,724,598 $ 24,409,464 $ 25,840,595

Net Pension Liability (Asset), Ending (a - b) $ (141,284) $ 1,037,281 $ 422,900 $ (200,779) $ (1,539,136) $ (2,153,146)

Plan Fiduciary Net Position as a Percentage of Total Pension Liability 100.73% 95.09% 97.98% 100.89% 106.73% 109.09%Covered Payroll $ 5,690,056 $ 5,631,427 $ 5,615,758 $ 5,928,370 $ 5,913,434 $ 5,554,013Net Pension Liability (Asset) as a Percentage of Covered Payroll (2.48%) 18.42% 7.53% (3.39%) (26.03%) (38.77%)

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

Note: The agent plan is a single plan reported under one account with the Tennessee Consolidated Retirement System.This plan covers employees of the primary government and non-certified employees of the discretely presented schooldepartment.

102

Exhibit E-2

Johnson 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

2018 2019

Total Pension LiabilityService Cost $ 0 $ 25,532Interest 0 2,680Changes in Benefit Terms 11,437 0Differences Between Actual and Expected Experience 0 18,812Net Change in Total Pension Liability $ 11,437 $ 47,024Total Pension Liability, Beginning 0 11,437

Total Pension Liability, Ending (a) $ 11,437 $ 58,461

Plan Fiduciary Net PositionContributions - Employer $ 7,770 $ 11,945Contributions - Employee 9,713 35,191Net Investment Income 686 2,920Administrative Expense (972) (3,118)Net Change in Plan Fiduciary Net Position $ 17,197 $ 46,938Plan Fiduciary Net Position, Beginning 0 17,197

Plan Fiduciary Net Position, Ending (b) $ 17,197 $ 64,135

Net Pension Liability (Asset), Ending (a - b) $ (5,760) $ (5,674)

Plan Fiduciary Net Position as a Percentage of Total Pension Liability 150.36% 109.71%Covered Payroll $ 194,259 $ 703,819Net Pension Liability (Asset) as a Percentage of Covered Payroll (2.97%) (0.81)%


Note: The agent plan is a single plan reported under one account with theTennessee Consolidated Retirement System. This plan covers employees ofthe primary government and non-certified employees of the discretelypresented school department.

103

Exhibit E-3

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

2014 2015 2016 2017 2018 2019 2020

Actuarially Determined Contribution $ 668,604 $ 720,240 $ 716,263 $ 755,316 $ 753,596 $ 708,709 $ 326,899Less Contributions in Relation to the Actuarially Determined Contribution (668,604) (720,240) (716,263) (755,316) (753,596) (708,709) (326,899)Contribution Deficiency (Excess) $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0

Covered Payroll $ 5,690,056 $ 5,631,427 $ 5,615,758 $ 5,928,370 $ 5,913,434 $ 5,554,013 $ 5,150,886

Contributions as a Percentage of Covered Payroll 11.75% 12.79% 12.75% 12.74% 12.74% 12.76% 6.35%


Note: The agent plan is a single plan reported under one account with the Tennessee ConsolidatedRetirement System. This plan covers employees of the primary government and non-certified employees ofthe discretely presented school department.

104

Exhibit E-4Johnson County, TennesseeSchedule of Contributions Based on Participation in the Public Employee Pension Plan of TCRSPrimary GovernmentFor the Fiscal Year Ended June 30

2018 2019 2020

Contractually Required Contribution $ 7,770 $ 11,945 $ 31,080Less Contributions in Relation to the Contractually Required Contribution (7,770) (11,945) (31,080)

Contribution Deficiency (Excess) $ 0 $ 0 $ 0

Covered Payroll $ 194,259 $ 703,819 $ 1,608,900

Contributions as a Percentage of Covered Payroll 4.00% 1.70% 1.93%


Note: The agent plan is a single plan reported under one account with theTennessee Consolidated Retirement System. This plan covers employees of theprimary government and non-certified employees of the discretely presentedschool department.

105

Exhibit E-5

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

2015 2016 2017 2018 2019 2020

Contractually Required Contribution $ 22,164 $ 39,844 $ 39,787 $ 79,137 $ 44,724 $ 48,291Less Contributions in Relation to the Contractually Required Contribution (22,164) (39,844) (39,787) (79,137) (44,724) (48,291)Contribution Deficiency (Excess) $ 0 $ 0 $ 0 $ 0 $ 0 $ 0

Covered Payroll $ 554,107 $ 996,096 $ 1,226,191 $ 1,978,415 $ 2,305,334 $ 2,378,836

Contributions as a Percentage of Covered Payroll 4.00% 4.00% 3.24% 4.00% 1.94% 2.03%


106

Exhibit E-6

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

2014 2015 2016 2017 2018 2019 2020

Contractually Required Contribution $ 785,473 $ 737,832 $ 708,083 $ 732,079 $ 648,420 $ 709,388 $ 703,989Less Contributions in Relation to the Contractually Required Contribution (785,473) (737,832) (708,083) (732,079) (648,420) (709,388) (703,989)Contribution Deficiency (Excess) $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0

Covered Payroll $ 8,845,421 $ 8,161,862 $ 7,832,775 $ 7,866,697 $ 7,141,171 $ 6,781,904 $ 6,622,679

Contributions as a Percentage of Covered Payroll 8.88% 9.04% 9.04% 9.31% 9.08% 10.46% 10.63%


107

Exhibit E-7

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

2015 2016 2017 2018 2019

School Department's Proportion of the Net Pension Liability (Asset) 0.266690% 0.226384% 0.151550% 0.226395% 0.217854%

School Department's Proportionate Share of the Net Pension Liability (Asset) $ (10,729) $ (23,567) $ (39,983) $ (102,676) $ (122,976)

Covered Payroll $ 554,107 $ 996,096 $ 1,226,191 $ 1,978,415 $ 2,305,334

School Department's Proportionate Share of the Net Pension Liability (Asset) as a Percentage of its Covered Payroll (1.94)% (2.37)% (3.26)% (5.19)% (5.33)%

Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 127.46% 121.88% 126.81% 126.97% 123.07%


108

Exhibit E-8

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

2014 2015 2016 2017 2018 2019

School Department's Proportion of the Net Pension Liability (Asset) 0.225362% 0.218027% 0.216987% 0.229090% 0.203936% 0.202255%

School Department's Proportionate Share of the Net Pension Liability (Asset) $ (36,620) $ 89,311 $ 1,356,046 $ (74,955) $ (717,635) $ (2,079,548)

Covered Payroll $ 8,845,421 $ 8,161,862 $ 7,832,775 $ 7,866,698 $ 7,141,171 $ 6,781,904

School Department's Proportionate Share of the Net Pension Liability (Asset) as a Percentage of its Covered Payroll (0.41)% 1.09% 17.31% (0.95%) (10.05%) (30.66%)

Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 100.08% 99.81% 97.14% 100.14% 101.49% 104.28%


109

Exhibit E-9

Johnson County, TennesseeSchedule of Changes in the Total OPEB Liability and Related Ratios - Local Government PlanPrimary GovernmentFor the Fiscal Year Ended June 30

2017 2018 2019Total OPEB LiabilityService Cost $ 52,320 $ 48,506 $ 42,366 Interest 19,205 23,624 16,802 Changes in Benefit Terms 0 (2,020) 0Differences Between Actual and Expected Experience 0 (200,111) 1,792Changes in Assumptions or Other Inputs (40,981) (50,278) 13,637Benefit Payments (20,762) (20,935) (5,197) Net Change in Total OPEB Liability $ 9,782 $ (201,214) $ 69,400 Total OPEB Liability, Beginning 615,772 625,554 424,340

Total OPEB Liability, Ending $ 625,554 $ 424,340 $ 493,740

Covered Employee Payroll $ 3,440,354 $ 3,608,268 $ 3,906,559 Net OPEB Liability as a Percentage of Covered Employee Payroll 18.18% 11.76% 12.64%

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

Note 2: Changes in assumptions. (a) The following are the discount rates used in each period:

2016 2.92%2017 3.56%2018 3.62%2019 3.51%

(b) The assumed initial trend rate applicable to plan years was revised as follows: For the 2019 plan - from 5.4% to 6.75% For the 2020 plan - from 6.75% to 6.03%

Note 3: No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75.

110

Exhibit E-10

Johnson County, TennesseeSchedule of Changes in the Total OPEB Liability and Related Ratios - Local Education PlanDiscretely Presented Johnson County School DepartmentFor the Fiscal Year Ended June 30

2017 2018 2019Total OPEB LiabilityService Cost $ 490,643 $ 454,123 $ 266,730 Interest 272,318 328,191 175,101 Changes in Benefit Terms 0 (212,137) (594,227)Differences Between Actual and Expected Experience 0 (4,520,156) 2,733,562Changes in Assumptions or Other Inputs (437,645) 123,267 (477,525)Benefit Payments (387,672) (404,142) (334,221) Net Change in Total OPEB Liability $ (62,356) $ (4,230,854) $ 1,769,420 Total OPEB Liability, Beginning 9,029,160 8,966,804 4,735,950

Total OPEB Liability, Ending $ 8,966,804 $ 4,735,950 $ 6,505,370

Nonemployer Contributing Entity Proportionate Share of the Total OPEB Liability $ 1,881,980 $ 1,138,664 $ 1,604,770 Employer Proportionate Share of the Total OPEB Liability 7,084,824 3,597,286 4,900,600

Covered Employee Payroll $ 10,886,869 $ 10,885,918 $ 10,969,848 Net OPEB Liability as a Percentage of Covered Employee Payroll 65.08% 33.05% 44.67%

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

Note 2: Changes in assumptions. (a) The following are the discount rates used in each period:

2016 2.92%2017 3.56%2018 3.62%2019 3.51%

(b) The assumed initial trend rate applicable to plan years was revised as follows: 2019 plan year - from 5.4% to 6.75% 2020 plan year - from 6.75% to 6.03%

Note 3: No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75.

111

JOHNSON COUNTY, TENNESSEE NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION


TENNESSEE CONSOLIDATED RETIREMENT SYSTEM

Valuation Date: Actuarially determined contribution rates for fiscal year 2020 were calculated based on the June 30, 2018, 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 2.5%Salary Increases Graded Salary Ranges from 8.72% to

3.44% Based on Age, Including Inflation, averaging 4%

Investment Rate of Return 7.25%, Net of Investment Expense, Including Inflation

Retirement Age Pattern of Retirement Determined by Experience Study

Mortality Customized Table Based on Actual Experience Including an Adjustment for Some Anticipated Improvement


Changes of assumptions. In 2017, the following assumptions were changed: decreased inflation rate from 3 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 percent; and modified mortality assumptions.

112

COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES

113

Nonmajor Governmental Funds

Special Revenue Funds ______________________________

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

______________________________

Public Library Fund – The Public Library Fund is used to account for revenues committed or restricted for library operations. Solid Waste/Sanitation Fund – The Solid Waste/Sanitation Fund is used to account for transactions involving solid waste collection. 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.

114

Capital Projects Funds ______________________________

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

______________________________ General Capital Projects Fund – The General Capital Projects Fund is used to account for general capital expenditures of the county. Community Development/Industrial Park Fund – The Community Development/Industrial Park Fund is used to account for community development and industrial expansion in the county. Other Capital Projects Fund – The Other Capital Projects Fund is used to account for the Trails Grant program.

115

Exhibit F-1

Johnson County, TennesseeCombining Balance SheetNonmajor Governmental FundsJune 30, 2020

Constitu -Solid tional General

Public Waste / Drug Officers - CapitalLibrary Sanitation Control Fees Total Projects

ASSETS

Cash $ 300 $ 250 $ 0 $ 1,000 $ 1,550 $ 0Equity in Pooled Cash and Investments 40,707 328,922 66,653 0 436,282 979,664Accounts Receivable 0 1,936 0 80 2,016 0Due from Other Governments 7,660 0 0 0 7,660 156Property Taxes Receivable 0 0 0 0 0 298,656Allowance for Uncollectible Property Taxes 0 0 0 0 0 (6,416)

Total Assets $ 48,667 $ 331,108 $ 66,653 $ 1,080 $ 447,508 $ 1,272,060

LIABILITIES

Accounts Payable $ 107 $ 24,930 $ 0 $ 0 $ 25,037 $ 0Due to Other Funds 0 0 0 1,080 1,080 0Other Current Liabilities 0 0 6,706 0 6,706 0Total Liabilities $ 107 $ 24,930 $ 6,706 $ 1,080 $ 32,823 $ 0


Deferred Current Property Taxes $ 0 $ 0 $ 0 $ 0 $ 0 $ 283,290Deferred Delinquent Property Taxes 0 0 0 0 0 8,311Other Deferred/Unavailable Revenue 3,830 0 0 0 3,830 78Total Deferred Inflows of Resources $ 3,830 $ 0 $ 0 $ 0 $ 3,830 $ 291,679

(Continued)

Special Revenue Funds

Capital Projects Funds

116

Exhibit F-1

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



FUND BALANCES

Restricted:Restricted for Public Safety $ 0 $ 0 $ 59,947 $ 0 $ 59,947 $ 0Restricted for Capital Outlay 0 0 0 0 0 972,890

Committed:Committed for Public Health and Welfare 0 306,178 0 0 306,178 0Committed for Social, Cultural, and Recreational Services 44,730 0 0 0 44,730 0Committed for Capital Outlay 0 0 0 0 0 7,491

Total Fund Balances $ 44,730 $ 306,178 $ 59,947 $ 0 $ 410,855 $ 980,381

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 48,667 $ 331,108 $ 66,653 $ 1,080 $ 447,508 $ 1,272,060

(Continued)



117

Exhibit F-1


Community TotalDevelopment/ Other Nonmajor

Industrial Capital GovernmentalPark Projects Total Funds

ASSETS

Cash $ 0 $ 0 $ 0 $ 1,550Equity in Pooled Cash and Investments 396,005 3,126 1,378,795 1,815,077Accounts Receivable 6,000 0 6,000 8,016Due from Other Governments 49,821 0 49,977 57,637Property Taxes Receivable 0 0 298,656 298,656Allowance for Uncollectible Property Taxes 0 0 (6,416) (6,416)

Total Assets $ 451,826 $ 3,126 $ 1,727,012 $ 2,174,520

LIABILITIES

Accounts Payable $ 0 $ 0 $ 0 $ 25,037Due to Other Funds 0 0 0 1,080Other Current Liabilities 0 0 0 6,706Total Liabilities $ 0 $ 0 $ 0 $ 32,823


Deferred Current Property Taxes $ 0 $ 0 $ 283,290 $ 283,290Deferred Delinquent Property Taxes 0 0 8,311 8,311Other Deferred/Unavailable Revenue 0 0 78 3,908Total Deferred Inflows of Resources $ 0 $ 0 $ 291,679 $ 295,509

(Continued)

Capital Projects Funds (Cont.)

118

Exhibit F-1




FUND BALANCES

Restricted:Restricted for Public Safety $ 0 $ 0 $ 0 $ 59,947Restricted for Capital Outlay 451,826 3,126 1,427,842 1,427,842

Committed:Committed for Public Health and Welfare 0 0 0 306,178Committed for Social, Cultural, and Recreational Services 0 0 0 44,730Committed for Capital Outlay 0 0 7,491 7,491

Total Fund Balances $ 451,826 $ 3,126 $ 1,435,333 $ 1,846,188

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 451,826 $ 3,126 $ 1,727,012 $ 2,174,520


119

Exhibit F-2

Johnson County, TennesseeCombining Statement of Revenues, Expenditures,

and Changes in Fund BalancesNonmajor Governmental FundsFor the Year Ended June 30, 2020



RevenuesLocal Taxes $ 45,960 $ 11 $ 0 $ 0 $ 45,971 $ 328,465Fines, Forfeitures, and Penalties 0 0 32,873 0 32,873 0Charges for Current Services 7,588 556,558 0 13,507 577,653 0Other Local Revenues 0 9,796 405 0 10,201 16,530State of Tennessee 0 10,685 0 0 10,685 946Federal Government 0 0 0 0 0 2,246Other Governments and Citizens Groups 77,759 0 0 0 77,759 0

Total Revenues $ 131,307 $ 577,050 $ 33,278 $ 13,507 $ 755,142 $ 348,187


General Government $ 0 $ 0 $ 0 $ 122 $ 122 $ 0Administration of Justice 0 0 0 13,385 13,385 0Public Safety 0 0 55,812 0 55,812 0Public Health and Welfare 0 577,942 0 0 577,942 0Social, Cultural, and Recreational Services 93,652 0 0 0 93,652 0

Capital Projects 0 0 0 0 0 180,118Total Expenditures $ 93,652 $ 577,942 $ 55,812 $ 13,507 $ 740,913 $ 180,118

Excess (Deficiency) of RevenuesOver Expenditures $ 37,655 $ (892) $ (22,534) $ 0 $ 14,229 $ 168,069

(Continued)



120

Exhibit F-2


and Changes in Fund BalancesNonmajor Governmental Funds (Cont.)



Other Financing Sources (Uses)Transfers Out $ 0 $ 0 $ 0 $ 0 $ 0 $ (58,610)

Total Other Financing Sources (Uses) $ 0 $ 0 $ 0 $ 0 $ 0 $ (58,610)

Net Change in Fund Balances $ 37,655 $ (892) $ (22,534) $ 0 $ 14,229 $ 109,459Fund Balance, July 1, 2019 7,075 307,070 82,481 0 396,626 870,922

Fund Balance, June 30, 2020 $ 44,730 $ 306,178 $ 59,947 $ 0 $ 410,855 $ 980,381

(Continued)



121

Exhibit F-2





RevenuesLocal Taxes $ 0 $ 0 $ 328,465 $ 374,436Fines, Forfeitures, and Penalties 0 0 0 32,873Charges for Current Services 0 0 0 577,653Other Local Revenues 92,530 0 109,060 119,261State of Tennessee 49,821 0 50,767 61,452Federal Government 194 0 2,440 2,440Other Governments and Citizens Groups 6,000 0 6,000 83,759

Total Revenues $ 148,545 $ 0 $ 496,732 $ 1,251,874


General Government $ 0 $ 0 $ 0 $ 122Administration of Justice 0 0 0 13,385Public Safety 0 0 0 55,812Public Health and Welfare 0 0 0 577,942Social, Cultural, and Recreational Services 0 0 0 93,652

Capital Projects 76,837 2,445 259,400 259,400Total Expenditures $ 76,837 $ 2,445 $ 259,400 $ 1,000,313

Excess (Deficiency) of RevenuesOver Expenditures $ 71,708 $ (2,445) $ 237,332 $ 251,561

(Continued)


122

Exhibit F-2





Other Financing Sources (Uses)Transfers Out $ 0 $ 0 $ (58,610) $ (58,610)

Total Other Financing Sources (Uses) $ 0 $ 0 $ (58,610) $ (58,610)

Net Change in Fund Balances $ 71,708 $ (2,445) $ 178,722 $ 192,951Fund Balance, July 1, 2019 380,118 5,571 1,256,611 1,653,237

Fund Balance, June 30, 2020 $ 451,826 $ 3,126 $ 1,435,333 $ 1,846,188


123

Exhibit F-3


in Fund Balance - Actual (Budgetary Basis) and BudgetPublic Library FundFor the Year Ended June 30, 2020


Actual Add: Expenditures Budget -(GAAP Encumbrances (Budgetary PositiveBasis) 6/30/2020 Basis) Original Final (Negative)

RevenuesLocal Taxes $ 45,960 $ 0 $ 45,960 $ 45,960 $ 45,960 $ 0Charges for Current Services 7,588 0 7,588 9,000 9,410 (1,822)State of Tennessee 0 0 0 0 602 (602)Other Governments and Citizens Groups 77,759 0 77,759 21,000 77,107 652

Total Revenues $ 131,307 $ 0 $ 131,307 $ 75,960 $ 133,079 $ (1,772)

ExpendituresSocial, Cultural, and Recreational Services

Libraries $ 93,652 $ 2,386 $ 96,038 $ 75,960 $ 99,286 $ 3,248Total Expenditures $ 93,652 $ 2,386 $ 96,038 $ 75,960 $ 99,286 $ 3,248

Excess (Deficiency) of RevenuesOver Expenditures $ 37,655 $ (2,386) $ 35,269 $ 0 $ 33,793 $ 1,476

Net Change in Fund Balance $ 37,655 $ (2,386) $ 35,269 $ 0 $ 33,793 $ 1,476Fund Balance, July 1, 2019 7,075 0 7,075 7,076 7,076 (1)

Fund Balance, June 30, 2020 $ 44,730 $ (2,386) $ 42,344 $ 7,076 $ 40,869 $ 1,475

Budgeted Amounts

124

Exhibit F-4


in Fund Balance - Actual (Budgetary Basis) and BudgetSolid Waste/Sanitation FundFor the Year Ended June 30, 2020



RevenuesLocal Taxes $ 11 $ 0 $ 0 $ 11 $ 0 $ 0 $ 11Charges for Current Services 556,558 0 0 556,558 550,000 550,000 6,558Other Local Revenues 9,796 0 0 9,796 5,500 7,330 2,466State of Tennessee 10,685 0 0 10,685 12,500 12,500 (1,815)

Total Revenues $ 577,050 $ 0 $ 0 $ 577,050 $ 568,000 $ 569,830 $ 7,220

ExpendituresPublic Health and Welfare

Sanitation Management $ 577,942 $ (10,506) $ 1,646 $ 569,082 $ 568,000 $ 596,275 $ 27,193Total Expenditures $ 577,942 $ (10,506) $ 1,646 $ 569,082 $ 568,000 $ 596,275 $ 27,193

Excess (Deficiency) of RevenuesOver Expenditures $ (892) $ 10,506 $ (1,646) $ 7,968 $ 0 $ (26,445) $ 34,413

Net Change in Fund Balance $ (892) $ 10,506 $ (1,646) $ 7,968 $ 0 $ (26,445) $ 34,413Fund Balance, July 1, 2019 307,070 (10,506) 0 296,564 296,564 296,564 0

Fund Balance, June 30, 2020 $ 306,178 $ 0 $ (1,646) $ 304,532 $ 296,564 $ 270,119 $ 34,413

Budgeted Amounts

125

Exhibit F-5


in Fund Balance - Actual (Budgetary Basis) and BudgetDrug Control FundFor the Year Ended June 30, 2020



RevenuesFines, Forfeitures, and Penalties $ 32,873 $ 0 $ 0 $ 32,873 $ 4,500 $ 21,560 $ 11,313Other Local Revenues 405 0 0 405 0 320 85

Total Revenues $ 33,278 $ 0 $ 0 $ 33,278 $ 4,500 $ 21,880 $ 11,398

ExpendituresPublic Safety

Drug Enforcement $ 55,812 $ (175) $ 250 $ 55,887 $ 30,600 $ 81,999 $ 26,112Total Expenditures $ 55,812 $ (175) $ 250 $ 55,887 $ 30,600 $ 81,999 $ 26,112

Excess (Deficiency) of RevenuesOver Expenditures $ (22,534) $ 175 $ (250) $ (22,609) $ (26,100) $ (60,119) $ 37,510

Net Change in Fund Balance $ (22,534) $ 175 $ (250) $ (22,609) $ (26,100) $ (60,119) $ 37,510Fund Balance, July 1, 2019 82,481 (175) 0 82,306 82,306 82,306 0

Fund Balance, June 30, 2020 $ 59,947 $ 0 $ (250) $ 59,697 $ 56,206 $ 22,187 $ 37,510

Budgeted Amounts

126

Exhibit F-6


in Fund Balance - Actual (Budgetary Basis) and BudgetGeneral Capital Projects FundFor the Year Ended June 30, 2020



RevenuesLocal Taxes $ 328,465 $ 0 $ 0 $ 328,465 $ 313,445 $ 313,445 $ 15,020Other Local Revenues 16,530 0 0 16,530 0 16,530 0State of Tennessee 946 0 0 946 1,100 1,100 (154)Federal Government 2,246 0 0 2,246 0 1,635 611

Total Revenues $ 348,187 $ 0 $ 0 $ 348,187 $ 314,545 $ 332,710 $ 15,477

ExpendituresCapital Projects

General Administration Projects $ 5,844 $ 0 $ 33,531 $ 39,375 $ 40,200 $ 40,731 $ 1,356Public Health and Welfare Projects 6,536 0 0 6,536 0 6,535 (1)Social, Cultural, and Recreation Projects 20,150 (18,950) 0 1,200 75,175 75,175 73,975Other General Government Projects 111,332 0 0 111,332 75,000 114,846 3,514Highway and Street Capital Projects 36,256 0 0 36,256 34,000 55,530 19,274

Capital Projects - DonatedCapital Projects Donated to School Department 0 0 262,408 262,408 165,000 270,000 7,592

Total Expenditures $ 180,118 $ (18,950) $ 295,939 $ 457,107 $ 389,375 $ 562,817 $ 105,710

Excess (Deficiency) of RevenuesOver Expenditures $ 168,069 $ 18,950 $ (295,939) $ (108,920) $ (74,830) $ (230,107) $ 121,187

Other Financing Sources (Uses)Transfers Out $ (58,610) $ 0 $ 0 $ (58,610) $ (58,610) $ (58,610) $ 0

Total Other Financing Sources $ (58,610) $ 0 $ 0 $ (58,610) $ (58,610) $ (58,610) $ 0

Net Change in Fund Balance $ 109,459 $ 18,950 $ (295,939) $ (167,530) $ (133,440) $ (288,717) $ 121,187Fund Balance, July 1, 2019 870,922 (18,950) 0 851,972 851,688 851,688 284

Fund Balance, June 30, 2020 $ 980,381 $ 0 $ (295,939) $ 684,442 $ 718,248 $ 562,971 $ 121,471

Budgeted Amounts

127

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.

____________________________________

128

Exhibit G


in Fund Balance - Actual and BudgetGeneral Debt Service FundFor the Year Ended June 30, 2020

Variancewith FinalBudget -Positive

Actual Original Final (Negative)

RevenuesLocal Taxes $ 902,085 $ 804,059 $ 804,059 $ 98,026State of Tennessee 1,682 2,500 2,500 (818)Other Governments and Citizens Groups 264,154 264,154 264,154 0

Total Revenues $ 1,167,921 $ 1,070,713 $ 1,070,713 $ 97,208

ExpendituresPrincipal on Debt

General Government $ 262,000 $ 262,000 $ 262,000 $ 0Education 593,000 593,000 593,000 0

Interest on DebtGeneral Government 95,615 95,615 95,615 0Education 80,435 80,435 80,435 0

Other Debt ServiceGeneral Government 17,401 32,000 30,000 12,599Education 750 1,500 3,500 2,750

Total Expenditures $ 1,049,201 $ 1,064,550 $ 1,064,550 $ 15,349

Excess (Deficiency) of RevenuesOver Expenditures $ 118,720 $ 6,163 $ 6,163 $ 112,557

Net Change in Fund Balance $ 118,720 $ 6,163 $ 6,163 $ 112,557Fund Balance, July 1, 2019 6,219,718 6,219,181 6,219,181 537

Fund Balance, June 30, 2020 $ 6,338,438 $ 6,225,344 $ 6,225,344 $ 113,094

Budgeted Amounts

129

Fiduciary Funds _______________________________

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

_______________________________ Cities - Sales Tax Fund – The Cities - Sales Tax Fund is used to account for the second half of the sales tax revenues collected inside incorporated cities of the county. These revenues are received by the county from the State of Tennessee and forwarded to the various cities on a monthly basis. Constitutional Officers - Agency Fund – The Constitutional Officers - Agency Fund is used to account for amounts collected in an agency capacity by the county clerk, circuit and general sessions courts clerk, clerk and master, register 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 amounts received and disbursed in an agency capacity for the Doe Mountain Recreation Authority.

130

Exhibit H-1

Johnson County, TennesseeCombining Statement of Fiduciary Assets and LiabilitiesFiduciary FundsJune 30, 2020

Constitu -Cities - tionalSales Officers - OtherTax Agency Agency Total

ASSETS

Cash $ 0 $ 646,653 $ 0 $ 646,653Equity in Pooled Cash and Investments 0 0 8,094 8,094Accounts Receivable 0 10,298 12,500 22,798Due from Other Governments 103,040 0 0 103,040

Total Assets $ 103,040 $ 656,951 $ 20,594 $ 780,585

LIABILITIES

Accounts Payable $ 0 $ 0 $ 156 $ 156Due to Other Taxing Units 103,040 0 20,438 123,478Due to Litigants, Heirs, and Others 0 656,951 0 656,951

Total Liabilities $ 103,040 $ 656,951 $ 20,594 $ 780,585

Agency Funds

131

Exhibit H-2

Johnson County, TennesseeCombining Statement of Changes in Assets and Liabilities - All Agency FundsFor the Year Ended June 30, 2020

Beginning Ending Balance Additions Deductions Balance

Cities - Sales Tax Fund Assets Equity in Pooled Cash and Investments $ 0 $ 556,133 $ 556,133 $ 0 Due from Other Governments 90,946 103,040 90,946 103,040

0 Total Assets $ 90,946 $ 659,173 $ 647,079 $ 103,040

Liabilities Due to Other Taxing Units $ 90,946 $ 659,173 $ 647,079 $ 103,040


Constitutional Officers - Agency Fund Assets Cash $ 774,254 $ 5,210,805 $ 5,338,406 $ 646,653 Accounts Receivable 8,065 10,298 8,065 10,298

Total Assets $ 782,319 $ 5,221,103 $ 5,346,471 $ 656,951

Liabilities Due to Litigants, Heirs, and Others $ 782,319 $ 5,221,103 $ 5,346,471 $ 656,951

Total Liabilities $ 782,319 $ 5,221,103 $ 5,346,471 $ 656,951

Other Agency Fund Assets Equity in Pooled Cash and Investments $ 34,215 $ 174,097 $ 200,218 $ 8,094 Due from other Governments 0 12,500 0 12,500

Total Assets $ 34,215 $ 186,597 $ 200,218 $ 20,594

Liabilities Accounts Payable $ 12,425 $ 156 $ 12,425 $ 156 Due to Other Taxing Units 21,790 186,441 187,793 20,438


Totals - All Agency Funds Assets Cash $ 774,254 $ 5,210,805 $ 5,338,406 $ 646,653 Equity in Pooled Cash and Investments 34,215 730,230 756,351 8,094 Accounts Receivable 8,065 22,798 8,065 22,798 Due from Other Governments 90,946 103,040 90,946 103,040

Total Assets $ 907,480 $ 6,066,873 $ 6,193,768 $ 780,585

Liabilities Accounts Payable $ 12,425 $ 156 $ 12,425 $ 156 Due to Other Taxing Units 112,736 845,614 834,872 123,478 Due to Litigants, Heirs, and Others 782,319 5,221,103 5,346,471 656,951

Total Liabilities $ 907,480 $ 6,066,873 $ 6,193,768 $ 780,585

132

Johnson County School Department _________________________

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

_________________________

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. Other Education Special Revenue Fund – The Other Education Special Revenue Fund is used to account for a head start program, which is funded by charges for services.

133

Exhibit I-1

Johnson County, TennesseeStatement of ActivitiesDiscretely Presented Johnson County School DepartmentFor the Year Ended June 30, 2020

Net (Expense)Revenue and

Program Revenues Changes inOperating Capital Net Position

Charges Grants Grants Totalfor and and Governmental

Functions/Programs Expenses Services Contributions Contributions Activities

Governmental Activities: Instruction $ 12,065,044 $ 208,600 $ 2,493,540 $ 0 $ (9,362,904) Support Services 7,240,157 60,492 143,629 0 (7,036,036) Operation of Non-instructional Services 1,777,663 171,541 1,251,951 0 (354,171)

Total Governmental Activities $ 21,082,864 $ 440,633 $ 3,889,120 $ 0 $ (16,753,111)

General Revenues: Taxes: Property Taxes Levied for General Purposes $ 2,754,979 Local Option Sales Taxes 909,323 Grants and Contributions Not Restricted for Specific Programs 14,566,681 Unrestricted Investment Income 2,361 Gain on Investments 61,232 Miscellaneous 176,026Total General Revenues $ 18,470,602

Change in Net Position $ 1,717,491Net Position, July 1, 2019 14,961,409

Net Position, June 30, 2020 $ 16,678,900

134

Exhibit I-2

Johnson County, TennesseeBalance Sheet - Governmental FundsDiscretely Presented Johnson County School DepartmentJune 30, 2020

OtherGeneral Govern- TotalPurpose mental GovernmentalSchool Funds Funds

ASSETS

Cash $ 58,030 $ 242 $ 58,272Equity in Pooled Cash and Investments 4,270,328 1,091,462 5,361,790Accounts Receivable 16,857 0 16,857Due from Other Governments 391,494 377,813 769,307Due from Other Funds 5,910 4,471 10,381Property Taxes Receivable 2,853,823 0 2,853,823Allowance for Uncollectible Property Taxes (61,304) 0 (61,304)Prepaid Items 298,380 20,059 318,439Restricted Assets 1,194,924 0 1,194,924

Total Assets $ 9,028,442 $ 1,494,047 $ 10,522,489

LIABILITIES

Accounts Payable $ 27,038 $ 13,571 $ 40,609Accrued Payroll 41 4,005 4,046Payroll Deductions Payable 362,482 82,635 445,117Due to Other Funds 4,471 5,910 10,381Other Current Liabilities 58,030 0 58,030Total Liabilities $ 452,062 $ 106,121 $ 558,183


Deferred Current Property Taxes $ 2,706,993 $ 0 $ 2,706,993Deferred Delinquent Property Taxes 79,418 0 79,418Other Deferred/Unavailable Revenue 80,921 61,446 142,367Total Deferred Inflows of Resources $ 2,867,332 $ 61,446 $ 2,928,778

FUND BALANCES

Nonspendable:Prepaid Items $ 298,380 $ 20,059 $ 318,439

Restricted:Restricted for Education 266,520 1,006,421 1,272,941Restricted for OPEB 1,087,317 0 1,087,317Restricted for Hybrid Retirement Stabilization Funds 107,607 0 107,607

Committed:Committed for Education 0 300,000 300,000

Assigned:Assigned for Education 1,581,727 0 1,581,727

Unassigned 2,367,497 0 2,367,497Total Fund Balances $ 5,709,048 $ 1,326,480 $ 7,035,528

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 9,028,442 $ 1,494,047 $ 10,522,489

Major FundNonmajor

Funds

135

Exhibit I-3

Johnson County, TennesseeReconciliation of the Balance Sheet of Governmental Funds to the Statement of Net PositionDiscretely Presented Johnson County School DepartmentJune 30, 2020

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) $ 7,035,528

(1) Capital assets used in governmental activities are not financial resources and therefore are not reported inthe governmental funds.

Add: land $ 962,939Add: construction in progress 137,460Add: buildings and improvements net of accumulated depreciation 11,285,507Add: infrastructure net of accumulated depreciation 82,023Add: other capital assets net of accumulated depreciation 1,096,267 13,564,196

(2) Long-term liabilities are not due and payablein the current period and therefore are not reportedin the governmental funds.

Less: compensated absences payable $ (47,159)Less: other postemployment benefits liability (4,900,600) (4,947,759)

(3) Amounts reported as deferred outflows of resources and deferredinflows of resources related to pensions and OPEB will be amortized andrecognized as components of pension and OPEB expense in future years. Add: deferred outflows of resources related to pensions $ 1,397,145 Less: deferred inflows of resources related to pensions (2,242,775) Add: deferred outflows of resources related to OPEB 2,110,561 Less: deferred inflows of resources related to OPEB (3,543,328) (2,278,397)

(4) Net pension assets are not current financial resourcesand therefore are not reported in the governmental funds.

Add: net pension asset - agent plan $ 1,893 Add: net pension asset - agent plan - legacy 879,130 Add: net pension asset - teacher retirement plan 122,976 Add: net pension asset - teacher legacy pension plan 2,079,548 3,083,547

(5) Other long-term assets are not available to pay forcurrent-period expenditures and therefore are deferredin the governmental funds. 221,785

Net position of governmental activities (Exhibit A) $ 16,678,900

136

Exhibit I-4


and Changes in Fund Balances - Governmental Funds

Discretely Presented Johnson County School DepartmentFor the Year Ended June 30, 2020

OtherGeneral Govern- TotalPurpose mental GovernmentalSchool Funds Funds

RevenuesLocal Taxes $ 3,733,987 $ 0 $ 3,733,987Licenses and Permits 3,649 0 3,649Charges for Current Services 130,294 674,403 804,697Other Local Revenues 442,511 3,104 445,615State of Tennessee 14,358,508 0 14,358,508Federal Government 114,287 3,447,304 3,561,591

Total Revenues $ 18,783,236 $ 4,124,811 $ 22,908,047


Instruction $ 9,883,642 $ 1,726,353 $ 11,609,995Support Services 7,214,235 744,651 7,958,886Operation of Non-Instructional Services 335,129 1,470,468 1,805,597Capital Outlay 126,811 0 126,811

Debt Service:Other Debt Service 264,154 0 264,154

Total Expenditures $ 17,823,971 $ 3,941,472 $ 21,765,443

Excess (Deficiency) of RevenuesOver Expenditures $ 959,265 $ 183,339 $ 1,142,604

Other Financing Sources (Uses)Insurance Recovery $ 3,662 $ 937 $ 4,599Transfers In 44,843 0 44,843Transfers Out 0 (44,843) (44,843)

Total Other Financing Sources (Uses) $ 48,505 $ (43,906) $ 4,599

Net Change in Fund Balances $ 1,007,770 $ 139,433 $ 1,147,203Fund Balance, July 1, 2019 4,701,278 1,187,047 5,888,325

Fund Balance, June 30, 2020 $ 5,709,048 $ 1,326,480 $ 7,035,528

Major FundNonmajor

Funds

137

Exhibit I-5

Johnson County, TennesseeReconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of ActivitiesDiscretely Presented Johnson County School DepartmentFor the Year Ended June 30, 2020

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

Net changes in fund balances - total governmental funds (Exhibit I-4) $ 1,147,203

(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 $ 255,360Less: current-year depreciation expense (843,012) (587,652)

(2) 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, 2020 $ 221,785Less: deferred delinquent property taxes and other deferred June 30, 2019 (176,566) 45,219

(3) 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 compensated absences payable $ 97 Change in other postemployment benefits liability (1,303,314) Change in deferred outflows related to OPEB 1,787,510 Change in deferred inflows related to OPEB 56,647 Change in net pension asset/liability 1,609,452 Change in deferred outflows related to pensions (420,963) Change in deferred inflows related to pensions (616,708) 1,112,721

Change in net position of governmental activities (Exhibit B) $ 1,717,491

138

Exhibit I-6

Johnson County, TennesseeCombining Balance Sheet - Nonmajor Governmental FundsDiscretely Presented Johnson County School DepartmentJune 30, 2020

Other TotalSchool Education Nonmajor

Federal Central Special GovernmentalProjects Cafeteria Revenue Funds

ASSETS

Cash $ 0 $ 242 $ 0 $ 242Equity in Pooled Cash and Investments 95,168 979,906 16,388 1,091,462Due from Other Governments 343,048 33,505 1,260 377,813Due from Other Funds 4,471 0 0 4,471Prepaid Items 7,559 12,500 0 20,059

Total Assets $ 450,246 $ 1,026,153 $ 17,648 $ 1,494,047

LIABILITIES

Accounts Payable $ 0 $ 13,571 $ 0 $ 13,571Accrued Payroll 4,005 0 0 4,005Payroll Deductions Payable 38,517 26,470 17,648 82,635Due to Other Funds 5,910 0 0 5,910Total Liabilities $ 48,432 $ 40,041 $ 17,648 $ 106,121


Other Deferred/Unavailable Revenue $ 61,446 $ 0 $ 0 $ 61,446Total Deferred Inflows of Resources $ 61,446 $ 0 $ 0 $ 61,446

FUND BALANCES

Nonspendable:Prepaid Items $ 7,559 $ 12,500 $ 0 $ 20,059

(Continued)


139

Exhibit I-6

Johnson County, TennesseeCombining Balance Sheet - Nonmajor Governmental FundsDiscretely Presented Johnson County School Department (Cont.)



FUND BALANCES (Cont.)

Restricted:Restricted for Education $ 32,809 $ 973,612 $ 0 $ 1,006,421

Committed:Committed for Education 300,000 0 0 300,000

Total Fund Balances $ 340,368 $ 986,112 $ 0 $ 1,326,480

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 450,246 $ 1,026,153 $ 17,648 $ 1,494,047


140

Exhibit I-7


and Changes in Fund Balances - Nonmajor Governmental Funds

Discretely Presented Johnson County School DepartmentFor the Year Ended June 30, 2020



RevenuesCharges for Current Services $ 0 $ 101,739 $ 572,664 $ 674,403Other Local Revenues 0 3,104 0 3,104Federal Government 2,216,491 1,230,813 0 3,447,304

Total Revenues $ 2,216,491 $ 1,335,656 $ 572,664 $ 4,124,811


Instruction $ 1,324,183 $ 0 $ 402,170 $ 1,726,353Support Services 566,167 0 178,484 744,651Operation of Non-Instructional Services 277,508 1,192,960 0 1,470,468

Total Expenditures $ 2,167,858 $ 1,192,960 $ 580,654 $ 3,941,472

Excess (Deficiency) of RevenuesOver Expenditures $ 48,633 $ 142,696 $ (7,990) $ 183,339

Other Financing Sources (Uses)Insurance Recovery $ 0 $ 0 $ 937 $ 937Transfers Out (44,843) 0 0 (44,843)

Total Other Financing Sources (Uses) $ (44,843) $ 0 $ 937 $ (43,906)

Net Change in Fund Balances $ 3,790 $ 142,696 $ (7,053) $ 139,433Fund Balance, July 1, 2019 336,578 843,416 7,053 1,187,047

Fund Balance, June 30, 2020 $ 340,368 $ 986,112 $ 0 $ 1,326,480


141

Exhibit I-8


in Fund Balance - Actual (Budgetary Basis) and BudgetDiscretely Presented Johnson County School DepartmentGeneral Purpose School FundFor the Year Ended June 30, 2020



RevenuesLocal Taxes $ 3,733,987 $ 0 $ 0 $ 3,733,987 $ 3,522,916 $ 3,522,916 $ 211,071Licenses and Permits 3,649 0 0 3,649 1,250 1,250 2,399Charges for Current Services 130,294 0 0 130,294 85,500 140,353 (10,059)Other Local Revenues 442,511 0 0 442,511 26,000 374,216 68,295State of Tennessee 14,358,508 0 0 14,358,508 13,902,247 14,407,980 (49,472)Federal Government 114,287 0 0 114,287 60,000 67,033 47,254

Total Revenues $ 18,783,236 $ 0 $ 0 $ 18,783,236 $ 17,597,913 $ 18,513,748 $ 269,488

ExpendituresInstruction

Regular Instruction Program $ 7,424,537 $ (59,666) $ 3,754 $ 7,368,625 $ 7,392,502 $ 7,718,006 $ 349,381Alternative Instruction Program 177,131 0 1,824 178,955 121,053 184,775 5,820Special Education Program 1,342,960 (250) 1,150 1,343,860 1,200,666 1,382,297 38,437Career and Technical Education Program 931,981 (2,230) 360 930,111 884,386 1,189,404 259,293COVID-19 Expenditures 7,033 0 0 7,033 0 7,033 0

Support ServicesAttendance 87,237 0 0 87,237 87,560 91,308 4,071Health Services 273,080 (1,298) 2,131 273,913 307,484 317,838 43,925Other Student Support 659,646 (300) 4,874 664,220 417,318 710,146 45,926Regular Instruction Program 704,120 (217) 1,202 705,105 761,719 736,717 31,612Special Education Program 172,859 0 350 173,209 390,503 216,681 43,472Career and Technical Education Program 92,960 0 0 92,960 88,830 94,290 1,330Technology 176,599 (7,400) 11,489 180,688 87,127 182,534 1,846Other Programs 95,343 0 0 95,343 0 95,343 0Board of Education 494,429 0 0 494,429 523,410 525,927 31,498Director of Schools 273,857 (13,554) 528 260,831 232,148 274,520 13,689Office of the Principal 1,410,775 (5,451) 0 1,405,324 1,369,558 1,422,431 17,107Fiscal Services 93,718 0 0 93,718 93,814 94,631 913Human Services/Personnel 62,637 0 0 62,637 62,544 63,712 1,075

(Continued)

Budgeted Amounts

142

Exhibit I-8


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



Expenditures (Cont.)Support Services (Cont.)

Operation of Plant $ 1,532,449 $ (38,425) $ 43,529 $ 1,537,553 $ 1,607,461 $ 1,610,404 $ 72,851Maintenance of Plant 328,585 (5,298) 59,626 382,913 427,681 399,624 16,711Transportation 733,947 (29,134) 50,961 755,774 918,417 802,629 46,855Central and Other 21,994 0 0 21,994 22,587 22,808 814

Operation of Non-Instructional ServicesFood Service 101,675 0 0 101,675 100,515 102,915 1,240Community Services 46,669 (286) 0 46,383 79,663 46,677 294Early Childhood Education 186,785 (7,158) 18,611 198,238 201,624 202,070 3,832

Capital OutlayRegular Capital Outlay 126,811 (100,177) 0 26,634 25,000 30,000 3,366

Other Debt ServiceEducation 264,154 0 0 264,154 264,154 264,154 0

Total Expenditures $ 17,823,971 $ (270,844) $ 200,389 $ 17,753,516 $ 17,667,724 $ 18,788,874 $ 1,035,358

Excess (Deficiency) of RevenuesOver Expenditures $ 959,265 $ 270,844 $ (200,389) $ 1,029,720 $ (69,811) $ (275,126) $ 1,304,846

Other Financing Sources (Uses)Insurance Recovery $ 3,662 $ 0 $ 0 $ 3,662 $ 0 $ 3,632 $ 30Transfers In 44,843 0 0 44,843 69,811 69,811 (24,968)

Total Other Financing Sources $ 48,505 $ 0 $ 0 $ 48,505 $ 69,811 $ 73,443 $ (24,938)

Net Change in Fund Balance $ 1,007,770 $ 270,844 $ (200,389) $ 1,078,225 $ 0 $ (201,683) $ 1,279,908Fund Balance, July 1, 2019 4,701,278 (270,844) 0 4,430,434 3,182,489 3,182,489 1,247,945

Fund Balance, June 30, 2020 $ 5,709,048 $ 0 $ (200,389) $ 5,508,659 $ 3,182,489 $ 2,980,806 $ 2,527,853

Budgeted Amounts

143

I-9


in Fund Balance - Actual (Budgetary Basis) and BudgetDiscretely Presented Johnson County School DepartmentSchool Federal Projects FundFor the Year Ended June 30, 2020



RevenuesOther Local Revenues $ 0 $ 0 $ 0 $ 0 $ 665 $ 4,471 $ (4,471)Federal Government 2,216,491 0 0 2,216,491 2,627,159 2,590,036 (373,545)

Total Revenues $ 2,216,491 $ 0 $ 0 $ 2,216,491 $ 2,627,824 $ 2,594,507 $ (378,016)


Regular Instruction Program $ 910,186 $ (3,500) $ 30,986 $ 937,672 $ 1,052,818 $ 1,024,191 $ 86,519Special Education Program 373,837 0 33,607 407,444 455,274 436,048 28,604Career and Technical Education Program 34,250 0 19,713 53,963 47,423 54,869 906COVID-19 Expenditures 5,910 0 0 5,910 0 5,910 0

Support ServicesHealth Services 29,874 0 0 29,874 29,874 29,874 0Other Student Support 13,738 0 975 14,713 36,169 23,938 9,225Regular Instruction Program 322,808 (31,840) 123 291,091 299,586 341,924 50,833Special Education Program 85,004 0 0 85,004 85,538 101,210 16,206Technology 14,058 (138) 8,699 22,619 13,204 22,619 0Transportation 100,685 0 0 100,685 116,238 134,364 33,679

Operation of Non-Instructional ServicesCommunity Services 277,508 (1,100) 152 276,560 448,727 369,469 92,909

Total Expenditures $ 2,167,858 $ (36,578) $ 94,255 $ 2,225,535 $ 2,584,851 $ 2,544,416 $ 318,881

Excess (Deficiency) of RevenuesOver Expenditures $ 48,633 $ 36,578 $ (94,255) $ (9,044) $ 42,973 $ 50,091 $ (59,135)

Other Financing Sources (Uses)Transfers Out $ (44,843) $ 0 $ 0 $ (44,843) $ (42,973) $ (50,091) $ 5,248

Total Other Financing Sources $ (44,843) $ 0 $ 0 $ (44,843) $ (42,973) $ (50,091) $ 5,248

(Continued)

Budgeted Amounts

144

I-9


in Fund Balance - Actual (Budgetary Basis) and BudgetDiscretely Presented Johnson County School DepartmentSchool Federal Projects Fund (Cont.)



Net Change in Fund Balance $ 3,790 $ 36,578 $ (94,255) $ (53,887) $ 0 $ 0 $ (53,887)Fund Balance, July 1, 2019 336,578 (36,578) 0 300,000 300,000 300,000 0

Fund Balance, June 30, 2020 $ 340,368 $ 0 $ (94,255) $ 246,113 $ 300,000 $ 300,000 $ (53,887)

Budgeted Amounts

145

Exhibit I-10


in Fund Balance - Actual and BudgetCentral Cafeteria FundFor the Year Ended June 30, 2020



RevenuesCharges for Current Services $ 101,739 $ 195,000 $ 195,000 $ (93,261)Other Local Revenues 3,104 3,000 3,000 104Federal Government 1,230,813 1,382,000 1,382,000 (151,187)

Total Revenues $ 1,335,656 $ 1,580,000 $ 1,580,000 $ (244,344)

ExpendituresOperation of Non-Instructional Services

Food Service $ 1,192,960 $ 1,580,000 $ 1,580,000 $ 387,040Total Expenditures $ 1,192,960 $ 1,580,000 $ 1,580,000 $ 387,040

Excess (Deficiency) of RevenuesOver Expenditures $ 142,696 $ 0 $ 0 $ 142,696

Net Change in Fund Balance $ 142,696 $ 0 $ 0 $ 142,696Fund Balance, July 1, 2019 843,416 830,916 830,916 12,500

Fund Balance, June 30, 2020 $ 986,112 $ 830,916 $ 830,916 $ 155,196

Budgeted Amounts

146

Exhibit I-11


in Fund Balance - Actual and BudgetOther Education Special Revenue FundFor the Year Ended June 30, 2020



RevenuesCharges for Current Services $ 572,664 $ 285,961 $ 593,997 $ (21,333)

Total Revenues $ 572,664 $ 285,961 $ 593,997 $ (21,333)


Regular Instruction Program $ 402,170 $ 194,047 $ 405,687 $ 3,517Support Services

Attendance 67,658 35,694 70,448 2,790Health Services 26,266 13,211 26,351 85Regular Instruction Program 84,560 43,009 91,511 6,951

Total Expenditures $ 580,654 $ 285,961 $ 593,997 $ 13,343

Excess (Deficiency) of RevenuesOver Expenditures $ (7,990) $ 0 $ 0 $ (7,990)

Other Financing Sources (Uses)Insurance Recovery $ 937 $ 0 $ 0 $ 937

Total Other Financing Sources $ 937 $ 0 $ 0 $ 937

Net Change in Fund Balance $ (7,053) $ 0 $ 0 $ (7,053)Fund Balance, July 1, 2019 7,053 7,053 7,053 0

Fund Balance, June 30, 2020 $ 0 $ 7,053 $ 7,053 $ (7,053)

Budgeted Amounts

147

MISCELLANEOUS SCHEDULES

148

Exhibit J-1

Johnson County, TennesseeSchedule of Changes in Bonds and Capital LeasesFor the Year Ended June 30, 2020

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

Description of Indebtedness of Issue Rate Issue Date 7-1-19 Period Period 6-30-20

BONDS PAYABLE

Payable through General Debt Service Fund General Refunding Bonds, Series 2015 $ 6,470,000 2 to 2.25 % 3-18-15 6-1-25 $ 3,995,000 $ 0 $ 625,000 $ 3,370,000 General Refunding Bonds, Series 2016 4,715,000 2 9-21-16 6-1-28 4,550,000 0 230,000 4,320,000Total Payable through General Debt Service Fund $ 8,545,000 $ 0 $ 855,000 $ 7,690,000

Total Bonds Payable $ 8,545,000 $ 0 $ 855,000 $ 7,690,000

CAPITAL LEASES PAYABLE

Payable through Highway/Public Works Fund Highway Equipment 156,432 2.89 4-11-16 4-11-20 $ 32,166 $ 0 $ 32,166 $ 0 Highway Dump Trucks 203,338 3.95 10-5-16 10-20-20 82,817 0 40,606 42,211 Highway Equipment 149,200 3.25 10-28-19 10-28-23 0 149,200 31,779 117,421

Total Payable through Highway/Public Works Fund $ 114,983 $ 149,200 $ 104,551 $ 159,632

Total Capital Leases Payable $ 114,983 $ 149,200 $ 104,551 $ 159,632

149

Exhibit J-2

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

Year EndingJune 30 Principal Interest Total

2021 $ 880,000 $ 158,950 $ 1,038,9502022 895,000 141,350 1,036,3502023 910,000 123,450 1,033,4502024 930,000 103,575 1,033,5752025 960,000 83,263 1,043,2632026 1,000,000 62,300 1,062,3002027 1,045,000 42,300 1,087,3002028 1,070,000 21,400 1,091,400

Total $ 7,690,000 $ 736,588 $ 8,426,588

YearEndingJune 30 Principal Interest Total

2021 $ 70,173 $ 5,483 $ 75,6562022 28,871 2,908 31,7792023 29,810 1,969 31,7792024 30,778 1,000 31,778

Total $ 159,632 $ 11,360 $ 170,992

Bonds

Capital Leases

150

Exhibit J-3

Johnson County, TennesseeSchedule of TransfersPrimary Government and Discretely Presented Johnson County School DepartmentFor the Year Ended June 30, 2020

From Fund To Fund Purpose Amount

PRIMARY GOVERNMENT

General Capital Projects Highway/Public Works Debt retirement $ 58,610

Total Transfers Primary Government $ 58,610

DISCRETELY PRESENTED JOHNSON COUNTY SCHOOL DEPARTMENT

School Federal Projects General Purpose School Indirect costs $ 44,843

Total Transfers Discretely Presented JohnsonCounty School Department $ 44,843

151

Exhibit J-4

Johnson County, TennesseeSchedule of Salaries and Official Bonds of Principal OfficialsPrimary Government and Discretely Presented Johnson County School DepartmentFor the Year Ended June 30, 2020

Salary Paid

DuringOfficial Authorization for Salary Period Bond Surety

County Mayor Section 8-24-102, TCA $ 86,235 (1) $ 400,000 Local Government Property and Casualty FundRoad Superintendent Section 8-24-102, TCA 81,368 400,000 Local Government Property and Casualty FundDirector of Schools State Board of Education

and County Board of Education 99,255 (2) 400,000 Tennessee Risk Management TrustTrustee Section 8-24-102, TCA 73,971 699,996 Western Surety CompanyAssessor of Property Section 8-24-102, TCA 73,971 400,000 Local Government Property and Casualty FundDirector of Accounts and Budgets County Commission 70,434 (3) 400,000 Local Government Property and Casualty FundCounty Clerk Section 8-24-102, TCA 73,971 400,000 Local Government Property and Casualty FundCircuit and General Sessions Courts Clerk Section 8-24-102, TCA 73,971 400,000 Local Government Property and Casualty FundClerk and Master Section 8-24-102, TCA 73,971 (4) 400,000 Local Government Property and Casualty Fund

and Chancery Court JudgeRegister of Deeds Section 8-24-102, TCA 73,971 400,000 Local Government Property and Casualty FundSheriff Section 8-24-102, TCA 82,968 (5) 400,000 Local Government Property and Casualty FundPurchasing Agent County Commission 38,143 (6) 400,000 Local Government Property and Casualty Fund

Employee Blanket Bonds:Public Employees Dishonesty - County Departments 400,000 Local Government Property and Casualty FundPublic Employees Dishonesty - School Department 400,000 Tennessee Risk Management Trust

(1) Includes $800 local training supplement.(2) Includes contractual payments for travel allowance of $5,000 and CEO Supplement of $1,000; does not include bonus of $500, Career Ladder Supplement of $1,000, and stipends paid from School Federal Projects Fund as grant program director of $8,210.(3) Includes payment for accrued vacation leave of $3,619 and County Certified Financial Officer stipend of $1,158. (4) Does not include special commissioner fees of $13,385 paid through the court.(5) Includes a $800 law enforcement training supplement and $800 local training supplement.(6) Includes payment of accrued vacation leave of $1,472, accrued compensatory time of $1,104, and bereavement leave $83.

152

Exhibit J-5

Johnson County, TennesseeSchedule of Detailed Revenues -

All Governmental Fund TypesFor the Year Ended June 30, 2020

Constitu -Solid tional Highway /

Public Waste / Drug Officers - PublicGeneral Library Sanitation Control Fees Works

Local TaxesCounty Property Taxes

Current Property Tax $ 2,859,438 $ 0 $ 0 $ 0 $ 0 $ 0Trustee's Collections - Prior Year 103,634 0 0 0 0 0Trustee's Collections - Bankruptcy 531 0 7 0 0 0Circuit Clerk/Clerk and Master Collections - Prior Years 39,441 0 0 0 0 0Interest and Penalty 20,541 0 4 0 0 0Payments in-Lieu-of Taxes - T.V.A. 1,114 0 0 0 0 0Payments in-Lieu-of Taxes - Other 29,572 0 0 0 0 0

County Local Option TaxesLocal Option Sales Tax 161,683 45,960 0 0 0 0Hotel/Motel Tax 24,539 0 0 0 0 0Wheel Tax 129,471 0 0 0 0 242,758Litigation Tax - General 7,746 0 0 0 0 0Litigation Tax - Special Purpose 33,506 0 0 0 0 0Litigation Tax - Jail, Workhouse, or Courthouse 14,265 0 0 0 0 0Business Tax 78,679 0 0 0 0 0Mixed Drink Tax 8 0 0 0 0 0Mineral Severance Tax 0 0 0 0 0 469

Statutory Local TaxesBank Excise Tax 27,693 0 0 0 0 0Wholesale Beer Tax 134,796 0 0 0 0 0

Total Local Taxes $ 3,666,657 $ 45,960 $ 11 $ 0 $ 0 $ 243,227

Licenses and PermitsLicenses

Cable TV Franchise $ 72,446 $ 0 $ 0 $ 0 $ 0 $ 0

(Continued)


153

Exhibit J-5


All Governmental Fund Types (Cont.)



Licenses and Permits (Cont.)Permits

Beer Permits $ 2,004 $ 0 $ 0 $ 0 $ 0 $ 0Total Licenses and Permits $ 74,450 $ 0 $ 0 $ 0 $ 0 $ 0

Fines, Forfeitures, and PenaltiesCircuit Court

Fines $ 4,184 $ 0 $ 0 $ 0 $ 0 $ 0Drug Control Fines 0 0 0 2,973 0 0Jail Fees 1,591 0 0 0 0 0DUI Treatment Fines 1,120 0 0 0 0 0Data Entry Fee - Circuit Court 741 0 0 0 0 0Courtroom Security Fee 2,677 0 0 0 0 0

Criminal CourtOfficers Costs 6,328 0 0 0 0 0Drug Control Fines 995 0 0 715 0 0Drug Court Fees 1,051 0 0 0 0 0Data Entry Fee - Criminal Court 95 0 0 0 0 0

General Sessions CourtFines 8,872 0 0 0 0 0Officers Costs 16,197 0 0 0 0 0Game and Fish Fines 131 0 0 0 0 0Drug Control Fines 5,938 0 0 5,938 0 0Drug Court Fees 2,750 0 0 0 0 0Jail Fees 18,011 0 0 0 0 0DUI Treatment Fines 3,014 0 0 0 0 0Data Entry Fee - General Sessions Court 5,201 0 0 0 0 0Courtroom Security Fee 6,792 0 0 0 0 0

(Continued)


154

Exhibit J-5





Fines, Forfeitures, and Penalties (Cont.)Chancery Court

Officers Costs $ 143 $ 0 $ 0 $ 0 $ 0 $ 0Data Entry Fee - Chancery Court 1,823 0 0 0 0 0Courtroom Security Fee 46 0 0 0 0 0

Other Fines, Forfeitures, and PenaltiesProceeds from Confiscated Property 2,860 0 0 22,947 0 0Other Fines, Forfeitures, and Penalties 1,020 0 0 300 0 0

Total Fines, Forfeitures, and Penalties $ 91,580 $ 0 $ 0 $ 32,873 $ 0 $ 0

Charges for Current ServicesGeneral Service Charges

Self-Insurance Premiums/Contributions $ 2,137 $ 0 $ 0 $ 0 $ 0 $ 0Tipping Fees 0 0 556,558 0 0 0Other General Service Charges 4,990 0 0 0 0 0

FeesAirport Fees 1,922 0 0 0 0 0Copy Fees 1,819 0 0 0 0 0Library Fees 0 7,588 0 0 0 0Telephone Commissions 34,698 0 0 0 0 0Vending Machine Collections 107 0 0 0 0 0Constitutional Officers' Fees and Commissions 0 0 0 0 122 0Special Commissioner Fees/Special Master Fees 0 0 0 0 13,385 0Data Processing Fee - Register 6,100 0 0 0 0 0Probation Fees 226 0 0 0 0 0Data Processing Fee - Sheriff 1,570 0 0 0 0 0Sexual Offender Registration Fee - Sheriff 1,800 0 0 0 0 0

(Continued)


155

Exhibit J-5





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

Data Processing Fee - County Clerk $ 10,900 $ 0 $ 0 $ 0 $ 0 $ 0Vehicle Insurance Coverage and Reinstatement Fees 925 0 0 0 0 0

Total Charges for Current Services $ 67,194 $ 7,588 $ 556,558 $ 0 $ 13,507 $ 0

Other Local RevenuesRecurring Items

Investment Income $ 115,612 $ 0 $ 0 $ 0 $ 0 $ 0Lease/Rentals 85,847 0 0 0 0 0Sale of Materials and Supplies 615 0 7,966 0 0 5,745Commissary Sales 100,592 0 0 0 0 0Sale of Gasoline 217,308 0 0 0 0 0Retirees' Insurance Payments 14,006 0 0 0 0 0Miscellaneous Refunds 42,941 0 0 405 0 476

Nonrecurring ItemsSale of Equipment 7,228 0 1,830 0 0 38,719Contributions and Gifts 1,200 0 0 0 0 0

Total Other Local Revenues $ 585,349 $ 0 $ 9,796 $ 405 $ 0 $ 44,940

Fees Received From County OfficialsFees In-Lieu-of Salary

County Clerk $ 216,122 $ 0 $ 0 $ 0 $ 0 $ 0Circuit Court Clerk 53,097 0 0 0 0 0General Sessions Court Clerk 115,342 0 0 0 0 0Clerk and Master 57,353 0 0 0 0 0Register 80,262 0 0 0 0 0

(Continued)


156

Exhibit J-5





Fees Received From County Officials (Cont.)Fees In-Lieu-of Salary (Cont.)

Sheriff $ 40 $ 0 $ 0 $ 0 $ 0 $ 0Trustee 229,170 0 0 0 0 0

Total Fees Received From County Officials $ 751,386 $ 0 $ 0 $ 0 $ 0 $ 0

State of TennesseeGeneral Government Grants

Juvenile Services Program $ 63,912 $ 0 $ 0 $ 0 $ 0 $ 0Airport Maintenance Program 32,886 0 0 0 0 0Aging Programs 49,867 0 0 0 0 0

Public Safety GrantsLaw Enforcement Training Programs 12,000 0 0 0 0 0

Public Works GrantsState Aid Program 0 0 0 0 0 127,011Litter Program 44,114 0 0 0 0 0

Other State RevenuesIncome Tax 18,662 0 0 0 0 0Beer Tax 18,175 0 0 0 0 0Vehicle Certificate of Title Fees 19,116 0 0 0 0 0Alcoholic Beverage Tax 49,714 0 0 0 0 0State Revenue Sharing - T.V.A. 543,332 0 0 0 0 0State Revenue Sharing - Telecommunications 10,952 0 0 0 0 0Contracted Prisoner Boarding 595,101 0 0 0 0 0Gasoline and Motor Fuel Tax 0 0 0 0 0 2,032,856Petroleum Special Tax 0 0 0 0 0 13,164Registrar's Salary Supplement 15,164 0 0 0 0 0

(Continued)


157

Exhibit J-5





State of Tennessee (Cont.)Other State Revenues (Cont.)

Other State Revenues $ 316,641 $ 0 $ 10,685 $ 0 $ 0 $ 0Total State of Tennessee $ 1,789,636 $ 0 $ 10,685 $ 0 $ 0 $ 2,173,031

Federal GovernmentFederal Through State

Community Development $ 426,406 $ 0 $ 0 $ 0 $ 0 $ 0Homeland Security Grants 27,000 0 0 0 0 0COVID-19 Grant #1 4,796 0 0 0 0 0Other Federal through State 28,672 0 0 0 0 0

Direct Federal RevenueOther Direct Federal Revenue 88,575 0 0 0 0 78,091

Total Federal Government $ 575,449 $ 0 $ 0 $ 0 $ 0 $ 78,091

Other Governments and Citizens GroupsOther Governments

Contributions $ 5,000 $ 77,004 $ 0 $ 0 $ 0 $ 0Contracted Services 233,749 0 0 0 0 443

Citizens GroupsDonations 75 153 0 0 0 0

OtherOther 0 602 0 0 0 0

Total Other Governments and Citizens Groups $ 238,824 $ 77,759 $ 0 $ 0 $ 0 $ 443

Total $ 7,840,525 $ 131,307 $ 577,050 $ 33,278 $ 13,507 $ 2,539,732

(Continued)


158

Exhibit J-5



CommunityGeneral General Development/

Debt Capital IndustrialService Projects Park Total


Current Property Tax $ 487,878 $ 274,446 $ 0 $ 3,621,762Trustee's Collections - Prior Year 19,140 10,137 0 132,911Trustee's Collections - Bankruptcy 132 59 0 729Circuit Clerk/Clerk and Master Collections - Prior Years 7,326 3,862 0 50,629Interest and Penalty 3,757 2,004 0 26,306Payments in-Lieu-of Taxes - T.V.A. 190 107 0 1,411Payments in-Lieu-of Taxes - Other 5,034 2,831 0 37,437

County Local Option TaxesLocal Option Sales Tax 131,156 0 0 338,799Hotel/Motel Tax 0 0 0 24,539Wheel Tax 242,758 32,368 0 647,355Litigation Tax - General 0 0 0 7,746Litigation Tax - Special Purpose 0 0 0 33,506Litigation Tax - Jail, Workhouse, or Courthouse 0 0 0 14,265Business Tax 0 0 0 78,679Mixed Drink Tax 0 0 0 8Mineral Severance Tax 0 0 0 469

Statutory Local TaxesBank Excise Tax 4,714 2,651 0 35,058Wholesale Beer Tax 0 0 0 134,796

Total Local Taxes $ 902,085 $ 328,465 $ 0 $ 5,186,405


Cable TV Franchise $ 0 $ 0 $ 0 $ 72,446

(Continued)

Debt Service Fund Capital Projects Funds

159

Exhibit J-5





Licenses and Permits (Cont.)Permits

Beer Permits $ 0 $ 0 $ 0 $ 2,004Total Licenses and Permits $ 0 $ 0 $ 0 $ 74,450

Fines, Forfeitures, and PenaltiesCircuit Court

Fines $ 0 $ 0 $ 0 $ 4,184Drug Control Fines 0 0 0 2,973Jail Fees 0 0 0 1,591DUI Treatment Fines 0 0 0 1,120Data Entry Fee - Circuit Court 0 0 0 741Courtroom Security Fee 0 0 0 2,677

Criminal CourtOfficers Costs 0 0 0 6,328Drug Control Fines 0 0 0 1,710Drug Court Fees 0 0 0 1,051Data Entry Fee - Criminal Court 0 0 0 95

General Sessions CourtFines 0 0 0 8,872Officers Costs 0 0 0 16,197Game and Fish Fines 0 0 0 131Drug Control Fines 0 0 0 11,876Drug Court Fees 0 0 0 2,750Jail Fees 0 0 0 18,011DUI Treatment Fines 0 0 0 3,014Data Entry Fee - General Sessions Court 0 0 0 5,201Courtroom Security Fee 0 0 0 6,792

(Continued)


160

Exhibit J-5





Fines, Forfeitures, and Penalties (Cont.)Chancery Court

Officers Costs $ 0 $ 0 $ 0 $ 143Data Entry Fee - Chancery Court 0 0 0 1,823Courtroom Security Fee 0 0 0 46

Other Fines, Forfeitures, and PenaltiesProceeds from Confiscated Property 0 0 0 25,807Other Fines, Forfeitures, and Penalties 0 0 0 1,320

Total Fines, Forfeitures, and Penalties $ 0 $ 0 $ 0 $ 124,453

Charges for Current ServicesGeneral Service Charges

Self-Insurance Premiums/Contributions $ 0 $ 0 $ 0 $ 2,137Tipping Fees 0 0 0 556,558Other General Service Charges 0 0 0 4,990

FeesAirport Fees 0 0 0 1,922Copy Fees 0 0 0 1,819Library Fees 0 0 0 7,588Telephone Commissions 0 0 0 34,698Vending Machine Collections 0 0 0 107Constitutional Officers' Fees and Commissions 0 0 0 122Special Commissioner Fees/Special Master Fees 0 0 0 13,385Data Processing Fee - Register 0 0 0 6,100Probation Fees 0 0 0 226Data Processing Fee - Sheriff 0 0 0 1,570Sexual Offender Registration Fee - Sheriff 0 0 0 1,800

(Continued)


161

Exhibit J-5





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

Data Processing Fee - County Clerk $ 0 $ 0 $ 0 $ 10,900Vehicle Insurance Coverage and Reinstatement Fees 0 0 0 925

Total Charges for Current Services $ 0 $ 0 $ 0 $ 644,847


Investment Income $ 0 $ 0 $ 0 $ 115,612Lease/Rentals 0 0 92,530 178,377Sale of Materials and Supplies 0 0 0 14,326Commissary Sales 0 0 0 100,592Sale of Gasoline 0 0 0 217,308Retirees' Insurance Payments 0 0 0 14,006Miscellaneous Refunds 0 16,530 0 60,352

Nonrecurring ItemsSale of Equipment 0 0 0 47,777Contributions and Gifts 0 0 0 1,200

Total Other Local Revenues $ 0 $ 16,530 $ 92,530 $ 749,550

Fees Received From County OfficialsFees In-Lieu-of Salary

County Clerk $ 0 $ 0 $ 0 $ 216,122Circuit Court Clerk 0 0 0 53,097General Sessions Court Clerk 0 0 0 115,342Clerk and Master 0 0 0 57,353Register 0 0 0 80,262

(Continued)


162

Exhibit J-5





Fees Received From County Officials (Cont.)Fees In-Lieu-of Salary (Cont.)

Sheriff $ 0 $ 0 $ 0 $ 40Trustee 0 0 0 229,170

Total Fees Received From County Officials $ 0 $ 0 $ 0 $ 751,386


Juvenile Services Program $ 0 $ 0 $ 0 $ 63,912Airport Maintenance Program 0 0 0 32,886Aging Programs 0 0 0 49,867

Public Safety GrantsLaw Enforcement Training Programs 0 0 0 12,000

Public Works GrantsState Aid Program 0 0 0 127,011Litter Program 0 0 0 44,114

Other State RevenuesIncome Tax 0 0 0 18,662Beer Tax 0 0 0 18,175Vehicle Certificate of Title Fees 0 0 0 19,116Alcoholic Beverage Tax 0 0 0 49,714State Revenue Sharing - T.V.A. 0 0 0 543,332State Revenue Sharing - Telecommunications 1,682 946 0 13,580Contracted Prisoner Boarding 0 0 0 595,101Gasoline and Motor Fuel Tax 0 0 0 2,032,856Petroleum Special Tax 0 0 0 13,164Registrar's Salary Supplement 0 0 0 15,164

(Continued)


163

Exhibit J-5





State of Tennessee (Cont.)Other State Revenues (Cont.)

Other State Revenues $ 0 $ 0 $ 49,821 $ 377,147Total State of Tennessee $ 1,682 $ 946 $ 49,821 $ 4,025,801


Community Development $ 0 $ 2,246 $ 194 $ 428,846Homeland Security Grants 0 0 0 27,000COVID-19 Grant #1 0 0 0 4,796Other Federal through State 0 0 0 28,672

Direct Federal RevenueOther Direct Federal Revenue 0 0 0 166,666

Total Federal Government $ 0 $ 2,246 $ 194 $ 655,980

Other Governments and Citizens GroupsOther Governments

Contributions $ 264,154 $ 0 $ 6,000 $ 352,158Contracted Services 0 0 0 234,192

Citizens GroupsDonations 0 0 0 228

OtherOther 0 0 0 602

Total Other Governments and Citizens Groups $ 264,154 $ 0 $ 6,000 $ 587,180

Total $ 1,167,921 $ 348,187 $ 148,545 $ 12,800,052


164

Exhibit J-6


All Governmental Fund TypesDiscretely Presented Johnson County School DepartmentFor the Year Ended June 30, 2020

OtherGeneral School EducationPurpose Federal Central SpecialSchool Projects Cafeteria Revenue Total


Current Property Tax $ 2,622,479 $ 0 $ 0 $ 0 $ 2,622,479Trustee's Collections - Prior Year 97,981 0 0 0 97,981Trustee's Collections - Bankruptcy 571 0 0 0 571Circuit Clerk/Clerk and Master Collections - Prior Years 37,328 0 0 0 37,328Interest and Penalty 19,343 0 0 0 19,343Payments in-Lieu-of Taxes - T.V.A. 1,020 0 0 0 1,020Payments in-Lieu-of Taxes - Other 27,055 0 0 0 27,055

County Local Option TaxesLocal Option Sales Tax 902,874 0 0 0 902,874

Statutory Local TaxesBank Excise Tax 25,336 0 0 0 25,336

Total Local Taxes $ 3,733,987 $ 0 $ 0 $ 0 $ 3,733,987


Marriage Licenses $ 1,045 $ 0 $ 0 $ 0 $ 1,045Permits

Other Permits 2,604 0 0 0 2,604Total Licenses and Permits $ 3,649 $ 0 $ 0 $ 0 $ 3,649

Charges for Current ServicesFees

Copy Fees $ 1,002 $ 0 $ 0 $ 0 $ 1,002

(Continued)


165

Exhibit J-6


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


Charges for Current Services (Cont.)Education Charges

Lunch Payments - Adults $ 0 $ 0 $ 32,861 $ 0 $ 32,861A la Carte Sales 0 0 68,878 0 68,878Contract for Instructional Services with Other LEA's 0 0 0 572,664 572,664Receipts from Individual Schools 59,490 0 0 0 59,490Community Service Fees - Children 69,802 0 0 0 69,802

Total Charges for Current Services $ 130,294 $ 0 $ 101,739 $ 572,664 $ 804,697


Investment Income $ 61,232 $ 0 $ 2,361 $ 0 $ 63,593Retirees' Insurance Payments 22,485 0 0 0 22,485Miscellaneous Refunds 85,394 0 743 0 86,137

Nonrecurring ItemsSale of Property 208,600 0 0 0 208,600Contributions and Gifts 64,800 0 0 0 64,800

Total Other Local Revenues $ 442,511 $ 0 $ 3,104 $ 0 $ 445,615


On-behalf Contributions for OPEB $ 95,343 $ 0 $ 0 $ 0 $ 95,343State Education Funds

Basic Education Program 13,367,395 0 0 0 13,367,395Early Childhood Education 192,194 0 0 0 192,194School Food Service 12,311 0 0 0 12,311

(Continued)


166

Exhibit J-6




State of Tennessee (Cont.)State Education Funds (Cont.)

Other State Education Funds $ 640,988 $ 0 $ 0 $ 0 $ 640,988Career Ladder Program 39,030 0 0 0 39,030

Other State RevenuesState Revenue Sharing - Telecommunications 9,040 0 0 0 9,040Other State Revenues 2,207 0 0 0 2,207

Total State of Tennessee $ 14,358,508 $ 0 $ 0 $ 0 $ 14,358,508


USDA School Lunch Program $ 0 $ 0 $ 584,457 $ 0 $ 584,457USDA - Commodities 0 0 91,884 0 91,884Breakfast 0 0 215,786 0 215,786USDA - Other 0 0 338,686 0 338,686Vocational Education - Basic Grants to States 0 49,514 0 0 49,514Other Vocational 0 10,449 0 0 10,449Title I Grants to Local Education Agencies 53,570 1,028,489 0 0 1,082,059Special Education - Grants to States 0 540,468 0 0 540,468Special Education Preschool Grants 0 15,341 0 0 15,341Safe and Drug-free Schools - State Grants 0 102,061 0 0 102,061Rural Education 0 66,014 0 0 66,014Eisenhower Professional Development State Grants 0 119,965 0 0 119,965COVID-19 Grant #1 0 5,910 0 0 5,910COVID-19 Grant #2 413 0 0 0 413COVID-19 Grant #3 6,620 0 0 0 6,620Other Federal through State 0 278,280 0 0 278,280

(Continued)


167

Exhibit J-6




Federal Government (Cont.)Direct Federal Revenue

Other Direct Federal Revenue $ 53,684 $ 0 $ 0 $ 0 $ 53,684Total Federal Government $ 114,287 $ 2,216,491 $ 1,230,813 $ 0 $ 3,561,591

Total $ 18,783,236 $ 2,216,491 $ 1,335,656 $ 572,664 $ 22,908,047


168

Exhibit J-7

Johnson County, TennesseeSchedule of Detailed Expenditures -

All Governmental Fund TypesFor the Year Ended June 30, 2020

General FundGeneral Government

County CommissionBoard and Committee Members Fees $ 36,000Social Security 1,866Pensions 713Medical Insurance 3,144Employer Medicare 471Advertising 1,164Audit Services 6,933Dues and Memberships 7,546Printing, Stationery, and Forms 1,295Travel 1,557In Service/Staff Development 13,549

Total County Commission $ 74,238

Board of EqualizationBoard and Committee Members Fees $ 1,050

Total Board of Equalization 1,050

Other Boards and CommitteesBoard and Committee Members Fees $ 1,520Social Security 15Pensions 17Medical Insurance 71Unemployment Compensation 1Employer Medicare 4

Total Other Boards and Committees 1,628

County Mayor/ExecutiveCounty Official/Administrative Officer $ 86,235Secretary(ies) 24,028Social Security 6,539Pensions 7,221Medical Insurance 13,057Unemployment Compensation 42Employer Medicare 1,529Data Processing Services 2,651Operating Lease Payments 490Printing, Stationery, and Forms 535Office Supplies 513Other Charges 1,000Office Equipment 227

Total County Mayor/Executive 144,067

County AttorneyCounty Official/Administrative Officer $ 3,000Social Security 186Employer Medicare 44Legal Services 16,480Other Contracted Services 3,000

Total County Attorney 22,710

(Continued)

169

Exhibit J-7



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

Election CommissionCounty Official/Administrative Officer $ 66,574Deputy(ies) 23,832Clerical Personnel 2,664Other Salaries and Wages 2,528Election Commission 6,650Election Workers 14,976Social Security 4,917Pensions 5,508Medical Insurance 15,318Unemployment Compensation 62Employer Medicare 1,166Data Processing Services 21,238Dues and Memberships 400Operating Lease Payments 516Legal Notices, Recording, and Court Costs 2,574Maintenance and Repair Services - Buildings 1,250Printing, Stationery, and Forms 3,002Rentals 360Travel 1,187Office Supplies 7,268Liability Insurance 2,576In Service/Staff Development 3,828Data Processing Equipment 1,741Office Equipment 1,447

Total Election Commission $ 191,582

Register of DeedsCounty Official/Administrative Officer $ 73,971Deputy(ies) 14,917Social Security 5,226Pensions 5,453Medical Insurance 8,949Unemployment Compensation 33Employer Medicare 1,222Data Processing Services 4,480Dues and Memberships 560Operating Lease Payments 964Printing, Stationery, and Forms 6,473Office Supplies 1,186Office Equipment 542

Total Register of Deeds 123,976

County BuildingsMaintenance and Repair Services - Buildings $ 21,537Custodial Supplies 8,422Electricity 38,107Natural Gas 2,983

(Continued)

170

Exhibit J-7



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

County Buildings (Cont.)Water and Sewer $ 4,821Other Charges 182

Total County Buildings $ 76,052

FinanceAccounting and Budgeting

Supervisor/Director $ 70,434Data Processing Personnel 67,145Social Security 7,617Pensions 8,010Medical Insurance 22,086Unemployment Compensation 126Employer Medicare 1,781Data Processing Services 14,446Operating Lease Payments 1,607Printing, Stationery, and Forms 4,691Office Supplies 1,926Data Processing Equipment 2,214Office Equipment 3,498

Total Accounting and Budgeting 205,581

PurchasingCounty Official/Administrative Officer $ 38,143Social Security 2,223Pensions 2,289Medical Insurance 6,584Unemployment Compensation 42Employer Medicare 520Advertising 234Dues and Memberships 439Office Supplies 3,850

Total Purchasing 54,324

Property Assessor's OfficeCounty Official/Administrative Officer $ 73,971Deputy(ies) 25,294Social Security 5,648Pensions 5,956Medical Insurance 14,453Unemployment Compensation 42Employer Medicare 1,321Advertising 102Data Processing Services 3,174Operating Lease Payments 885Postal Charges 110Printing, Stationery, and Forms 528Office Supplies 397

Total Property Assessor's Office 131,881

(Continued)

171

Exhibit J-7



General Fund (Cont.)Finance (Cont.)

Reappraisal ProgramClerical Personnel $ 23,806Other Salaries and Wages 22,787Social Security 2,523Pensions 2,796Medical Insurance 12,260Unemployment Compensation 84Employer Medicare 590Contracts with Government Agencies 7,961Other Contracted Services 3,910

Total Reappraisal Program $ 76,717

County Trustee's OfficeCounty Official/Administrative Officer $ 73,971Deputy(ies) 27,065Other Salaries and Wages 5,445Social Security 5,526Pensions 6,649Medical Insurance 16,873Unemployment Compensation 75Employer Medicare 1,292Data Processing Services 9,627Dues and Memberships 560Operating Lease Payments 741Printing, Stationery, and Forms 1,381Other Contracted Services 2,398Office Supplies 1,795Office Equipment 64

Total County Trustee's Office 153,462

County Clerk's OfficeCounty Official/Administrative Officer $ 73,971Deputy(ies) 30,222Other Salaries and Wages 59,952Social Security 9,164Pensions 9,211Medical Insurance 26,690Unemployment Compensation 173Employer Medicare 2,143Data Processing Services 17,866Dues and Memberships 560Operating Lease Payments 764Maintenance and Repair Services - Buildings 1,148Printing, Stationery, and Forms 3,725Office Supplies 451Data Processing Equipment 8,550Office Equipment 532

Total County Clerk's Office 245,122

(Continued)

172

Exhibit J-7



General Fund (Cont.)Administration of Justice

Circuit CourtCounty Official/Administrative Officer $ 73,971Other Salaries and Wages 114,527Jury and Witness Expense 9,708Social Security 10,947Pensions 10,067Medical Insurance 33,731Unemployment Compensation 284Employer Medicare 2,560Advertising 1,723Data Processing Services 17,015Dues and Memberships 560Operating Lease Payments 1,296Printing, Stationery, and Forms 2,573Office Supplies 5,329Other Supplies and Materials 4,005Data Processing Equipment 1,576Office Equipment 129

Total Circuit Court $ 290,001

General Sessions CourtJudge(s) $ 96,445Social Security 5,877Pensions 5,787Medical Insurance 6,024Employer Medicare 1,375Contracts with Private Agencies 1,050Data Processing Services 4,628Dues and Memberships 400Operating Lease Payments 516Printing, Stationery, and Forms 15,395Office Supplies 563Data Processing Equipment 1,126

Total General Sessions Court 139,186

Chancery CourtCounty Official/Administrative Officer $ 73,971Deputy(ies) 26,050Social Security 5,684Pensions 6,001Medical Insurance 13,860Unemployment Compensation 42Employer Medicare 1,329Data Processing Services 15,150Dues and Memberships 560Operating Lease Payments 993Printing, Stationery, and Forms 1,245Office Supplies 2,110

(Continued)

173

Exhibit J-7



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

Chancery Court (Cont.)Data Processing Equipment $ 861Office Equipment 2,197

Total Chancery Court $ 150,053

Juvenile CourtYouth Service Officer(s) $ 26,348Social Workers 28,566Secretary(ies) 7,652Social Security 3,476Pensions 3,145Medical Insurance 10,485Unemployment Compensation 111Employer Medicare 813Communication 349Operating Lease Payments 751Other Contracted Services 25,432Office Supplies 520Workers' Compensation Insurance 2,165In Service/Staff Development 3,851Other Charges 18Data Processing Equipment 1,822

Total Juvenile Court 115,504

Public SafetySheriff's Department

County Official/Administrative Officer $ 82,968Deputy(ies) 445,305Investigator(s) 122,103Guards 31,104Secretary(ies) 69,605Clerical Personnel 106,550Overtime Pay 73,037Other Salaries and Wages 30,249Board and Committee Members Fees 19,677Social Security 56,106Pensions 69,295Medical Insurance 112,871Unemployment Compensation 1,272Employer Medicare 13,451Communication 25,942Data Processing Services 545Dues and Memberships 1,500Operating Lease Payments 1,251Maintenance and Repair Services - Vehicles 138,314Postal Charges 1,478Printing, Stationery, and Forms 2,382Travel 183

(Continued)

174

Exhibit J-7



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

Sheriff's Department (Cont.)Remittance of Revenue Collected $ 1,650Other Contracted Services 23,405Law Enforcement Supplies 3,432Office Supplies 3,039Uniforms 14,908Other Supplies and Materials 2,256In Service/Staff Development 17,786Other Charges 1,676Data Processing Equipment 15,423Law Enforcement Equipment 102,880Office Equipment 1,351

Total Sheriff's Department $ 1,592,994

Administration of the Sexual Offender RegistryCriminal Investigation of Applicants - TBI $ 500Data Processing Equipment 1,096

Total Administration of the Sexual Offender Registry 1,596

JailGuards $ 353,440Maintenance Personnel 34,939Part-time Personnel 11,104Overtime Pay 75,689Social Security 27,943Pensions 20,289Medical Insurance 77,587Unemployment Compensation 1,288Employer Medicare 6,535Operating Lease Payments 1,031Maintenance and Repair Services - Buildings 56,819Medical and Dental Services 191,391Printing, Stationery, and Forms 411Custodial Supplies 19,531Electricity 55,390Food Supplies 138,341Natural Gas 15,669Office Supplies 1,240Uniforms 6,426Water and Sewer 29,499Other Supplies and Materials 15,321Food Service Equipment 150Office Equipment 342Other Equipment 1,405

Total Jail 1,141,780

Juvenile ServicesSchool Resource Officer $ 181,792

(Continued)

175

Exhibit J-7




Juvenile Services (Cont.)Social Security $ 10,633Pensions 10,125Medical Insurance 19,016Unemployment Compensation 446Employer Medicare 2,487In Service/Staff Development 18,512

Total Juvenile Services $ 243,011

CommissaryFood Supplies $ 28,772Other Supplies and Materials 24,350

Total Commissary 53,122

Fire Prevention and ControlContracts with Other Public Agencies $ 1,000Contributions 148,400Liability Insurance 9,600

Total Fire Prevention and Control 159,000

Civil DefenseSupervisor/Director $ 45,908Secretary(ies) 13,891Social Security 3,539Pensions 3,588Medical Insurance 6,584Unemployment Compensation 63Employer Medicare 828Communication 551Dues and Memberships 110Operating Lease Payments 1,251Maintenance Agreements 6,500Maintenance and Repair Services - Vehicles 2,502Instructional Supplies and Materials 164Uniforms 171Other Supplies and Materials 1,828In Service/Staff Development 470Other Equipment 198

Total Civil Defense 88,146

Other Emergency ManagementContracts with Other Public Agencies $ 85,000

Total Other Emergency Management 85,000

Inspection and RegulationSecretary(ies) $ 13,581Social Security 773Pensions 815

(Continued)

176

Exhibit J-7




Inspection and Regulation (Cont.)Medical Insurance $ 3,531Unemployment Compensation 21Employer Medicare 181Operating Lease Payments 258Medical and Dental Services 2,402Office Supplies 125

Total Inspection and Regulation $ 21,687

County Coroner/Medical ExaminerMedical Personnel $ 4,300Social Security 267Employer Medicare 62Ambulance Services 2,251Drugs and Medical Supplies 1,113

Total County Coroner/Medical Examiner 7,993

Other Public SafetyOther Equipment $ 1,199

Total Other Public Safety 1,199

Public Health and WelfareLocal Health Center

Custodial Personnel $ 19,558Other Salaries and Wages 232,469Social Security 13,806Pensions 14,704Medical Insurance 30,948Unemployment Compensation 229Employer Medicare 3,229Other Fringe Benefits 11,618Communication 277Contracts with Other Public Agencies 18,491Dues and Memberships 200Maintenance and Repair Services - Buildings 10,967Travel 2,954Custodial Supplies 1,901Electricity 14,460Office Supplies 1,395Water and Sewer 881Other Supplies and Materials 487Workers' Compensation Insurance 2,367

Total Local Health Center 380,941

Rabies and Animal ControlContracts with Other Public Agencies $ 670

Total Rabies and Animal Control 670

(Continued)

177

Exhibit J-7



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

Alcohol and Drug ProgramsOther Contracted Services $ 2,211Instructional Supplies and Materials 2,174In Service/Staff Development 1,645

Total Alcohol and Drug Programs $ 6,030

Appropriation to StateContracts with Other Public Agencies $ 33,952

Total Appropriation to State 33,952

Other Public Health and WelfareOther Supplies and Materials $ 3,846

Total Other Public Health and Welfare 3,846

Social, Cultural, and Recreational ServicesSenior Citizens Assistance

Supervisor/Director $ 32,341Bus Drivers 28,421Part-time Personnel 3,600Other Salaries and Wages 19,717Social Security 4,782Pensions 4,632Life Insurance 21Medical Insurance 13,064Unemployment Compensation 183Employer Medicare 1,164Other Fringe Benefits 90Communication 2,540Data Processing Services 1,400Travel 341Utilities 8,013Other Supplies and Materials 1,838Workers' Compensation Insurance 946Other Charges 1,115

Total Senior Citizens Assistance 124,208

Other Social, Cultural, and RecreationalContracts with Other Public Agencies $ 25,000Contributions 2,500

Total Other Social, Cultural, and Recreational 27,500

Agriculture and Natural ResourcesAgricultural Extension Service

Communication $ 2,700Contracts with Other Public Agencies 78,707Dues and Memberships 225Operating Lease Payments 803Postal Charges 1,550

(Continued)

178

Exhibit J-7



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

Agricultural Extension Service (Cont.)Travel $ 2,500Office Equipment 1,757

Total Agricultural Extension Service $ 88,242

Soil ConservationSecretary(ies) $ 18,653Social Security 956Pensions 1,119Medical Insurance 6,584Unemployment Compensation 42Employer Medicare 224

Total Soil Conservation 27,578

Other OperationsTourism

Contributions $ 15,000Dues and Memberships 850Refunds 3,000

Total Tourism 18,850

Other Economic and Community DevelopmentConsultants $ 20,918Remittance of Revenue Collected 405,488

Total Other Economic and Community Development 426,406

AirportCommunication $ 1,743Maintenance and Repair Services - Buildings 13,088Electricity 1,171Liability Insurance 1,250Airport Improvement 17,500

Total Airport 34,752

Veterans' ServicesSecretary(ies) $ 13,581Other Salaries and Wages 10,135Social Security 1,402Pensions 815Medical Insurance 3,531Unemployment Compensation 64Employer Medicare 328Data Processing Services 449Operating Lease Payments 258Office Supplies 169

Total Veterans' Services 30,732

(Continued)

179

Exhibit J-7



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

Other ChargesMaintenance and Repair Services - Equipment $ 1,341Diesel Fuel 136,648Electricity 380Gasoline 49,172Trustee's Commission 81,069Workers' Compensation Insurance 71,470

Total Other Charges $ 340,080

Contributions to Other AgenciesContributions $ 15,000Remittance of Revenue Collected 5,508

Total Contributions to Other Agencies 20,508

Employee BenefitsHandling Charges and Administrative Costs $ 2,603Life Insurance 2,048Medical Insurance 17,425Other Fringe Benefits 10,721

Total Employee Benefits 32,797

COVID-19 Grant #1Other Supplies and Materials $ 4,796

Total COVID-19 Grant #1 4,796

COVID-19 Grant #2Other Supplies and Materials $ 11,717

Total COVID-19 Grant #2 11,717

MiscellaneousBank Charges $ 545Communication 38,790Legal Notices, Recording, and Court Costs 5,375Maintenance and Repair Services - Buildings 7,254Maintenance and Repair Services - Vehicles 1,252Postal Charges 28,614Duplicating Supplies 5,932Electricity 990Liability Insurance 127,195Premiums on Corporate Surety Bonds 3,750Other Charges 3,004Land 2,000

Total Miscellaneous 224,701

HighwaysLitter and Trash Collection

Part-time Personnel $ 1,688Other Salaries and Wages 22,715

(Continued)

180

Exhibit J-7



General Fund (Cont.)Highways (Cont.)

Litter and Trash Collection (Cont.)Social Security $ 1,305Pensions 1,363Medical Insurance 6,024Unemployment Compensation 52Employer Medicare 305Communication 1,631Maintenance and Repair Services - Vehicles 4,600Other Contracted Services 10,284Other Supplies and Materials 2,642Workers' Compensation Insurance 5,334Other Charges 2,021

Total Litter and Trash Collection $ 59,964

Total General Fund $ 7,490,932

Public Library FundSocial, Cultural, and Recreational Services

LibrariesBonus Payments $ 1,000Other Salaries and Wages 38,981Social Security 2,351Pensions 1,296Life Insurance 21Medical Insurance 6,024Unemployment Compensation 139Employer Medicare 550Other Fringe Benefits 180Communication 3,325Data Processing Services 4,172Dues and Memberships 305Operating Lease Payments 815Maintenance and Repair Services - Buildings 8,888Postal Charges 207Travel 42Electricity 5,305Library Books/Media 3,488Office Supplies 921Periodicals 521Water and Sewer 657Software 1,323Other Supplies and Materials 1,838Trustee's Commission 1,303Workers' Compensation Insurance 233Office Equipment 777Regular Instruction Equipment 8,990

Total Libraries $ 93,652

Total Public Library Fund 93,652

(Continued)

181

Exhibit J-7



Solid Waste/Sanitation FundPublic Health and Welfare

Sanitation ManagementSupervisor/Director $ 11,882Equipment Operators 69,646Overtime Pay 4,149Social Security 5,219Pensions 5,115Life Insurance 53Medical Insurance 6,024Unemployment Compensation 150Employer Medicare 1,221Other Fringe Benefits 90Communication 1,892Freight Expenses 182,712Operating Lease Payments 516Maintenance and Repair Services - Buildings 13,086Maintenance and Repair Services - Equipment 18,152Medical and Dental Services 1,243Printing, Stationery, and Forms 107Disposal Fees 198,912Other Contracted Services 20,865Custodial Supplies 906Diesel Fuel 3,464Electricity 2,745Gasoline 1,808Office Supplies 445Uniforms 3,074Water and Sewer 792Other Supplies and Materials 1,487Liability Insurance 9,115Trustee's Commission 5,603Workers' Compensation Insurance 6,993In Service/Staff Development 450Other Charges 26

Total Sanitation Management $ 577,942

Total Solid Waste/Sanitation Fund $ 577,942

Drug Control FundPublic Safety

Drug EnforcementDeputy(ies) $ 17,000Veterinary Services 662Remittance of Revenue Collected 750Software 174Trustee's Commission 91In Service/Staff Development 646Law Enforcement Equipment 36,489

Total Drug Enforcement $ 55,812

Total Drug Control Fund 55,812

(Continued)

182

Exhibit J-7



Constitutional Officers - Fees FundGeneral Government

Other General AdministrationOther Charges $ 122

Total Other General Administration $ 122

Administration of JusticeChancery Court

Special Commissioner Fees/Special Master Fees $ 13,385Total Chancery Court 13,385

Total Constitutional Officers - Fees Fund $ 13,507

Highway/Public Works FundHighways

AdministrationCounty Official/Administrative Officer $ 81,368Supervisor/Director 71,514Clerical Personnel 36,421Overtime Pay 2,335Other Salaries and Wages 22,654Social Security 12,361Pensions 12,882Medical Insurance 38,569Unemployment Compensation 840Employer Medicare 2,891Retirement - Hybrid Stabilization 1,115Data Processing Services 782Dues and Memberships 2,766Operating Lease Payments 815Office Supplies 1,359Office Equipment 1,542

Total Administration $ 290,214

Highway and Bridge MaintenanceLaborers $ 575,180Overtime Pay 14,956Social Security 34,526Pensions 33,881Medical Insurance 91,964Unemployment Compensation 5,064Employer Medicare 8,075Retirement - Hybrid Stabilization 1,890Asphalt - Liquid 319,068Crushed Stone 267,441Pipe 73,522Road Signs 4,698Wood Products 5,317

Total Highway and Bridge Maintenance 1,435,582

(Continued)

183

Exhibit J-7



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

Operation and Maintenance of EquipmentLaundry Service $ 2,961Diesel Fuel 54,875Equipment and Machinery Parts 126,721Garage Supplies 26,894Gasoline 14,382Lubricants 6,137Tires and Tubes 9,780

Total Operation and Maintenance of Equipment $ 241,750

Other ChargesCommunication $ 5,484Medical and Dental Services 1,849Electricity 7,101Water and Sewer 369Liability Insurance 37,832Trustee's Commission 21,246Other Charges 3,277

Total Other Charges 77,158

Employee BenefitsLife Insurance $ 550Other Fringe Benefits 2,903Workers' Compensation Insurance 77,303

Total Employee Benefits 80,756

Capital OutlayBuilding Construction $ 1,457Highway Construction 766,348Highway Equipment 311,780

Total Capital Outlay 1,079,585

Principal on DebtHighways and Streets

Principal on Capital Leases $ 104,551Total Highways and Streets 104,551

Interest on DebtHighways and Streets

Interest on Capital Leases $ 4,199Total Highways and Streets 4,199

Total Highway/Public Works Fund $ 3,313,795

General Debt Service FundPrincipal on Debt

General GovernmentPrincipal on Bonds $ 262,000

Total General Government $ 262,000

(Continued)

184

Exhibit J-7



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

EducationPrincipal on Bonds $ 593,000

Total Education $ 593,000

Interest on DebtGeneral Government

Interest on Bonds $ 95,615Total General Government 95,615

EducationInterest on Bonds $ 80,435

Total Education 80,435

Other Debt ServiceGeneral Government

Trustee's Commission $ 14,401Other Debt Issuance Charges 3,000

Total General Government 17,401

EducationOther Debt Issuance Charges $ 750

Total Education 750

Total General Debt Service Fund $ 1,049,201

General Capital Projects FundCapital Projects

General Administration ProjectsTrustee's Commission $ 5,844

Total General Administration Projects $ 5,844

Public Health and Welfare ProjectsCommunication Equipment $ 6,536

Total Public Health and Welfare Projects 6,536

Social, Cultural, and Recreation ProjectsArchitects $ 1,200Building Improvements 18,950

Total Social, Cultural, and Recreation Projects 20,150

Other General Government ProjectsAdvertising $ 137Architects 4,867Other Supplies and Materials 156Building Improvements 106,172

Total Other General Government Projects 111,332

(Continued)

185

Exhibit J-7



General Capital Projects Fund (Cont.)Capital Projects (Cont.)

Highway and Street Capital ProjectsBridge Construction $ 36,256

Total Highway and Street Capital Projects $ 36,256

Total General Capital Projects Fund $ 180,118

Community Development/Industrial Park FundCapital Projects

General Administration ProjectsElectricity $ 4,687Water and Sewer 1,798Other Charges 49,625

Total General Administration Projects $ 56,110

Social, Cultural, and Recreation ProjectsBuilding Construction $ 15,844Other Capital Outlay 4,883

Total Social, Cultural, and Recreation Projects 20,727

Total Community Development/Industrial Park Fund 76,837

Other Capital Projects FundCapital Projects

Social, Cultural, and Recreation ProjectsOther Charges $ 2,445

Total Social, Cultural, and Recreation Projects $ 2,445

Total Other Capital Projects Fund 2,445

Total Governmental Funds - Primary Government $ 12,854,241

186

Exhibit J-8


All Governmental Fund TypesDiscretely Presented Johnson County School DepartmentFor the Year Ended June 30, 2020

General Purpose School FundInstruction

Regular Instruction ProgramTeachers $ 4,883,657Career Ladder Program 24,500Educational Assistants 63,109Bonus Payments 59,600Other Salaries and Wages 9,176Non-certified Substitute Teachers 65,056Social Security 295,721Pensions 467,957Medical Insurance 881,418Unemployment Compensation 6,399Employer Medicare 70,133Retirement - Hybrid Stabilization 7,345Evaluation and Testing 10,469Operating Lease Payments 4,454Maintenance and Repair Services - Equipment 2,154Tuition 46,750Other Contracted Services 61,653Instructional Supplies and Materials 107,617Textbooks - Bound 266,383Software 51,700Other Supplies and Materials 7,395Other Charges 19,517Regular Instruction Equipment 12,374

Total Regular Instruction Program $ 7,424,537

Alternative Instruction ProgramTeachers $ 94,250Educational Assistants 30,028Bonus Payments 2,500Non-certified Substitute Teachers 288Social Security 7,771Pensions 11,248Medical Insurance 27,599Unemployment Compensation 277Employer Medicare 1,817Instructional Supplies and Materials 400Other Supplies and Materials 953

Total Alternative Instruction Program 177,131

Special Education ProgramTeachers $ 551,057Career Ladder Program 3,000Educational Assistants 60,517Speech Pathologist 112,265Bonus Payments 15,715Other Salaries and Wages 116,926

(Continued)

187

Exhibit J-8



General Purpose School Fund (Cont.)Instruction (Cont.)

Special Education Program (Cont.)Non-certified Substitute Teachers $ 54,228Social Security 54,549Pensions 72,006Medical Insurance 118,740Unemployment Compensation 2,147Employer Medicare 12,772Contracts with Private Agencies 137,273Other Contracted Services 12,700Instructional Supplies and Materials 18,915Special Education Equipment 150

Total Special Education Program $ 1,342,960

Career and Technical Education ProgramTeachers $ 507,952Career Ladder Program 1,000Clerical Personnel 16,061Bonus Payments 8,000Other Salaries and Wages 80,515Non-certified Substitute Teachers 11,633Social Security 34,668Pensions 53,023Medical Insurance 117,450Unemployment Compensation 1,124Employer Medicare 8,489Operating Lease Payments 3,541Maintenance and Repair Services - Equipment 1,891Other Contracted Services 5,440Instructional Supplies and Materials 17,953T&I Construction Materials 18,006Other Supplies and Materials 3,196Other Charges 5,659Vocational Instruction Equipment 36,380

Total Career and Technical Education Program 931,981

COVID-19 ExpendituresUnemployment Compensation $ 413Other Supplies and Materials 6,620

Total COVID-19 Expenditures 7,033

Support ServicesAttendance

Supervisor/Director $ 64,147Bonus Payments 500Social Security 3,973Pensions 6,872Medical Insurance 7,224

(Continued)

188

Exhibit J-8



General Purpose School Fund (Cont.)Support Services (Cont.)

Attendance (Cont.)Unemployment Compensation $ 59Employer Medicare 929Communication 284Other Supplies and Materials 37In Service/Staff Development 2,175Other Charges 1,037

Total Attendance $ 87,237

Health ServicesMedical Personnel $ 134,461Bonus Payments 3,375Other Salaries and Wages 40,729Social Security 10,936Pensions 10,897Medical Insurance 41,899Unemployment Compensation 421Employer Medicare 2,558Travel 1,289Other Contracted Services 1,347Drugs and Medical Supplies 779Other Supplies and Materials 15,573In Service/Staff Development 4,506Other Charges 4,310

Total Health Services 273,080

Other Student SupportGuidance Personnel $ 280,202Bonus Payments 3,000Other Salaries and Wages 4,100Social Security 17,080Pensions 27,394Medical Insurance 44,000Unemployment Compensation 289Employer Medicare 3,995Contracts with Government Agencies 178,893Evaluation and Testing 1,377Travel 848Other Contracted Services 37,856Other Supplies and Materials 22,165In Service/Staff Development 250Other Charges 14,554Other Equipment 23,643

Total Other Student Support 659,646

Regular Instruction ProgramSupervisor/Director $ 219,109

(Continued)

189

Exhibit J-8




Regular Instruction Program (Cont.)Career Ladder Program $ 3,000Librarians 168,470Bonus Payments 3,375Other Salaries and Wages 15,864Non-certified Substitute Teachers 42Social Security 24,444Pensions 41,963Medical Insurance 54,650Unemployment Compensation 426Employer Medicare 5,717Maintenance and Repair Services - Equipment 2,400Travel 2,512Other Contracted Services 101,803Library Books/Media 24,000Periodicals 6,002Other Supplies and Materials 4,492In Service/Staff Development 17,500Other Charges 5,524Other Equipment 2,827

Total Regular Instruction Program $ 704,120

Special Education ProgramSupervisor/Director $ 55,928Psychological Personnel 52,520Secretary(ies) 14,625Bonus Payments 1,155Social Security 6,946Pensions 11,432Medical Insurance 12,697Unemployment Compensation 129Employer Medicare 1,624Travel 4,450Other Contracted Services 4,475Other Supplies and Materials 3,743In Service/Staff Development 2,057Other Equipment 1,078

Total Special Education Program 172,859

Career and Technical Education ProgramSupervisor/Director $ 69,296Bonus Payments 500Social Security 4,262Pensions 7,419Medical Insurance 7,224Unemployment Compensation 59Employer Medicare 997

(Continued)

190

Exhibit J-8




Career and Technical Education Program (Cont.)Other Fringe Benefits $ 1In Service/Staff Development 3,202

Total Career and Technical Education Program $ 92,960

TechnologySupervisor/Director $ 48,000Computer Programmer(s) 15,819Educational Assistants 8,095Bonus Payments 750Social Security 4,315Pensions 3,874Medical Insurance 14,788Unemployment Compensation 144Employer Medicare 1,009Travel 1,247Other Contracted Services 1,649Other Supplies and Materials 2,077In Service/Staff Development 385Other Charges 440Data Processing Equipment 6,162Other Equipment 67,845

Total Technology 176,599

Other ProgramsOn-behalf Payments to OPEB $ 95,343

Total Other Programs 95,343

Board of EducationSecretary to Board $ 1,240Board and Committee Members Fees 12,000Social Security 661Pensions 218Life Insurance 7,460Medical Insurance 254Unemployment Compensation 2Employer Medicare 189Other Fringe Benefits 13,045Audit Services 8,750Dues and Memberships 8,624Legal Services 18,406Other Contracted Services 3,725Liability Insurance 191,989Trustee's Commission 93,562Workers' Compensation Insurance 113,003In Service/Staff Development 12,754Other Charges 8,547

Total Board of Education 494,429

(Continued)

191

Exhibit J-8




Director of SchoolsCounty Official/Administrative Officer $ 99,255Career Ladder Program 1,000Clerical Personnel 21,204Bonus Payments 1,000Social Security 7,461Pensions 12,012Medical Insurance 14,448Unemployment Compensation 117Employer Medicare 1,745Communication 45,199Operating Lease Payments 3,282Postal Charges 1,827Other Contracted Services 16,073Office Supplies 1,340In Service/Staff Development 8,683Other Charges 38,489Administration Equipment 722

Total Director of Schools $ 273,857

Office of the PrincipalPrincipals $ 485,603Career Ladder Program 4,000Assistant Principals 273,437Secretary(ies) 198,173Bonus Payments 11,700Social Security 57,956Pensions 89,893Medical Insurance 158,016Unemployment Compensation 1,332Employer Medicare 13,563Communication 77,192Dues and Memberships 120Operating Lease Payments 6,473Postal Charges 285Travel 463Other Contracted Services 2,771Office Supplies 2,878In Service/Staff Development 12,854Other Charges 653Administration Equipment 13,413

Total Office of the Principal 1,410,775

Fiscal ServicesSupervisor/Director $ 37,159Accountants/Bookkeepers 31,519Bonus Payments 875

(Continued)

192

Exhibit J-8




Fiscal Services (Cont.)Social Security $ 4,178Pensions 4,104Medical Insurance 12,388Unemployment Compensation 97Employer Medicare 977Office Supplies 18In Service/Staff Development 2,403

Total Fiscal Services $ 93,718

Human Services/PersonnelSupervisor/Director $ 12,000Clerical Personnel 32,317Bonus Payments 625Social Security 2,449Pensions 2,696Medical Insurance 9,880Unemployment Compensation 73Employer Medicare 573Travel 15Office Supplies 132In Service/Staff Development 1,420Other Charges 158Administration Equipment 299

Total Human Services/Personnel 62,637

Operation of PlantGuards $ 53,872Custodial Personnel 359,047Bonus Payments 11,250Other Salaries and Wages 4,565Social Security 24,727Pensions 22,877Medical Insurance 152,434Unemployment Compensation 1,593Employer Medicare 5,973Other Contracted Services 131,134Custodial Supplies 68,653Electricity 478,943Natural Gas 109,811Water and Sewer 40,948Other Supplies and Materials 399In Service/Staff Development 370Other Charges 1,746Plant Operation Equipment 64,107

Total Operation of Plant 1,532,449

(Continued)

193

Exhibit J-8




Maintenance of PlantMaintenance Personnel $ 150,271Bonus Payments 2,150Social Security 9,106Pensions 8,423Medical Insurance 32,172Unemployment Compensation 266Employer Medicare 2,130Maintenance and Repair Services - Buildings 325Maintenance and Repair Services - Equipment 5,212Other Contracted Services 5,356General Construction Materials 5,296Other Supplies and Materials 95,228In Service/Staff Development 380Other Charges 645Maintenance Equipment 11,625

Total Maintenance of Plant $ 328,585

TransportationMechanic(s) $ 76,785Bus Drivers 275,019Bonus Payments 9,850Social Security 21,290Pensions 20,174Medical Insurance 132,791Unemployment Compensation 1,420Employer Medicare 5,034Communication 2,931Operating Lease Payments 240Medical and Dental Services 3,118Travel 109Other Contracted Services 5,824Diesel Fuel 73,450Drugs and Medical Supplies 2,443Equipment and Machinery Parts 1,447Garage Supplies 5,709Gasoline 10,635Lubricants 3,452Tires and Tubes 16,358Vehicle Parts 42,416Other Supplies and Materials 3,268In Service/Staff Development 1,671Other Charges 12,716Transportation Equipment 5,797

Total Transportation 733,947

(Continued)

194

Exhibit J-8




Central and OtherClerical Personnel $ 11,491Bonus Payments 220Social Security 700Pensions 703Medical Insurance 3,179Unemployment Compensation 21Employer Medicare 164Travel 507Data Processing Supplies 363In Service/Staff Development 4,636Other Charges 10

Total Central and Other $ 21,994

Operation of Non-Instructional ServicesFood Service

Supervisor/Director $ 49,287Accountants/Bookkeepers 21,674Bonus Payments 1,000Other Salaries and Wages 600Social Security 4,142Pensions 6,653Medical Insurance 15,298Unemployment Compensation 117Employer Medicare 969Other Supplies and Materials 1,782In Service/Staff Development 153

Total Food Service 101,675

Community ServicesOther Salaries and Wages $ 34,912Social Security 2,125Pensions 1,534Medical Insurance 3,982Unemployment Compensation 227Employer Medicare 497Food Supplies 2,914Other Charges 478

Total Community Services 46,669

Early Childhood EducationSupervisor/Director $ 9,045Teachers 83,726Educational Assistants 26,472Bonus Payments 2,100Non-certified Substitute Teachers 549Social Security 7,352

(Continued)

195

Exhibit J-8



General Purpose School Fund (Cont.)Operation of Non-Instructional Services (Cont.)

Early Childhood Education (Cont.)Pensions $ 9,955Medical Insurance 30,511Unemployment Compensation 245Employer Medicare 1,726Travel 54Instructional Supplies and Materials 8,850In Service/Staff Development 1,287Other Charges 4,913

Total Early Childhood Education $ 186,785

Capital OutlayRegular Capital Outlay

Building Construction $ 126,807Data Processing Equipment 4

Total Regular Capital Outlay 126,811

Other Debt ServiceEducation

Debt Service Contribution to Primary Government $ 264,154Total Education 264,154

Total General Purpose School Fund $ 17,823,971

School Federal Projects FundInstruction

Regular Instruction ProgramTeachers $ 428,169Educational Assistants 158,625Bonus Payments 10,750Other Salaries and Wages 36,355Non-certified Substitute Teachers 2,802Social Security 40,936Pensions 40,133Medical Insurance 112,814Unemployment Compensation 1,478Employer Medicare 8,917Instructional Supplies and Materials 33,122Software 12,006Other Charges 17,959Regular Instruction Equipment 6,120


Special Education ProgramTeachers $ 130,738Educational Assistants 71,729Bonus Payments 6,125

(Continued)

196

Exhibit J-8



School Federal Projects Fund (Cont.)Instruction (Cont.)

Special Education Program (Cont.)Other Salaries and Wages $ 18,902Non-certified Substitute Teachers 2,851Social Security 13,704Pensions 17,365Medical Insurance 57,328Unemployment Compensation 622Employer Medicare 3,215Instructional Supplies and Materials 24,563Other Charges 1,100Special Education Equipment 25,595

Total Special Education Program $ 373,837

Career and Technical Education ProgramOther Supplies and Materials $ 10,449Vocational Instruction Equipment 23,801

Total Career and Technical Education Program 34,250

COVID-19 ExpendituresOther Contracted Services $ 5,910

Total COVID-19 Expenditures 5,910

Support ServicesHealth Services

Bonus Payments $ 500Other Salaries and Wages 19,274Social Security 1,232Pensions 1,192Medical Insurance 7,224Unemployment Compensation 72Employer Medicare 288Other Fringe Benefits 92


Other Student SupportOther Supplies and Materials $ 7,737In Service/Staff Development 6,001

Total Other Student Support 13,738

Regular Instruction ProgramSupervisor/Director $ 39,505Instructional Computer Personnel 15,819Secretary(ies) 7,801Clerical Personnel 4,000Bonus Payments 1,000Other Salaries and Wages 50,393In-service Training 47,563

(Continued)

197

Exhibit J-8



School Federal Projects Fund (Cont.)Support Services (Cont.)

Regular Instruction Program (Cont.)Non-certified Substitute Teachers $ 749Social Security 10,201Pensions 13,770Medical Insurance 16,041Unemployment Compensation 262Employer Medicare 2,395Travel 448Other Supplies and Materials 39,706In Service/Staff Development 63,250Other Equipment 9,905


Special Education ProgramOther Salaries and Wages $ 57,913In-service Training 840Non-certified Substitute Teachers 288Social Security 3,653Pensions 3,093Unemployment Compensation 304Employer Medicare 854Other Fringe Benefits 2Other Supplies and Materials 4,151In Service/Staff Development 13,906

Total Special Education Program 85,004

TechnologyOther Equipment $ 14,058

Total Technology 14,058

TransportationBus Drivers $ 29,901Bonus Payments 2,000Other Salaries and Wages 24,559Social Security 3,095Pensions 3,217Medical Insurance 36,875Unemployment Compensation 314Employer Medicare 724

Total Transportation 100,685

Operation of Non-Instructional ServicesCommunity Services

Supervisor/Director $ 14,000Teachers 193,287Clerical Personnel 8,336Educational Assistants 9,726

(Continued)

198

Exhibit J-8



School Federal Projects Fund (Cont.)Operation of Non-Instructional Services (Cont.)

Community Services (Cont.)Social Security $ 13,959Pensions 20,052Medical Insurance 2,139Unemployment Compensation 109Employer Medicare 3,264Food Supplies 594Instructional Supplies and Materials 7,917In Service/Staff Development 3,741Other Charges 384

Total Community Services $ 277,508

Total School Federal Projects Fund $ 2,167,858

Central Cafeteria FundOperation of Non-Instructional Services

Food ServiceCafeteria Personnel $ 334,357Bonus Payments 13,500Social Security 9,716Pensions 20,213Medical Insurance 161,276Unemployment Compensation 1,594Employer Medicare 4,798Communication 1,077Maintenance and Repair Services - Equipment 15,655Transportation - Other than Students 3,614Travel 2,042Other Contracted Services 90,276Food Preparation Supplies 32,567Food Supplies 378,599Office Supplies 1,778Uniforms 3,113USDA - Commodities 91,884Other Supplies and Materials 1,643Liability Insurance 4,368Workers' Compensation Insurance 8,132In Service/Staff Development 906Other Charges 1,596Food Service Equipment 10,256

Total Food Service $ 1,192,960

Total Central Cafeteria Fund 1,192,960

(Continued)

199

Exhibit J-8



Other Education Special Revenue FundInstruction

Regular Instruction ProgramTeachers $ 171,200Educational Assistants 49,977Bonus Payments 4,000Non-certified Substitute Teachers 4,020Social Security 12,288Pensions 21,491Medical Insurance 54,929Unemployment Compensation 442Employer Medicare 2,897Other Fringe Benefits 1,098Instructional Supplies and Materials 14,914Other Charges 64,914


Support ServicesAttendance

Social Workers $ 42,503Bonus Payments 1,000Social Security 2,377Pensions 2,376Medical Insurance 14,448Unemployment Compensation 150Employer Medicare 612Other Fringe Benefits 187Operating Lease Payments 1,629Travel 188Other Supplies and Materials 2,188

Total Attendance 67,658

Health ServicesMedical Personnel $ 15,641Bonus Payments 125Social Security 897Pensions 946Medical Insurance 903Unemployment Compensation 22Employer Medicare 210Other Fringe Benefits 535Drugs and Medical Supplies 6,987


Regular Instruction ProgramSupervisor/Director $ 54,649Bonus Payments 500Social Security 3,261Pensions 5,862

(Continued)

200

Exhibit J-8



Other Education Special Revenue Fund (Cont.)Support Services (Cont.)

Regular Instruction Program (Cont.)Medical Insurance $ 7,224Unemployment Compensation 50Employer Medicare 763Other Fringe Benefits 242Other Supplies and Materials 2,216In Service/Staff Development 9,643Other Charges 150


Total Other Education Special Revenue Fund $ 580,654

Total Governmental Funds - Johnson County School Department $ 21,765,443

201

Exhibit J-9

Johnson County, TennesseeSchedule of Detailed Receipts, Disbursements, and Changes in Cash Balance - City Agency FundFor the Year Ended June 30, 2020

Cities -Sales Tax

Fund

Cash ReceiptsLocal Option Sales Tax $ 556,133

Total Cash Receipts $ 556,133

Cash DisbursementsRemittance of Revenues Collected $ 550,572Trustee's Commissions 5,561

Total Cash Disbursements $ 556,133

Excess of Cash Receipts Over (Under)Cash Disbursements $ 0

Cash Balance, July 1, 2019 0

Cash Balance, June 30, 2020 $ 0

202

SINGLE AUDIT SECTION

203

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 Johnson County, Tennessee, as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise Johnson County's basic financial statements, as listed in the table of contents, and have issued our report thereon dated October 30, 2020.

Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered Johnson County's internal control over financial reporting (internal control) as a basis for designing 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 Johnson County's internal control. Accordingly, we do not express an opinion on the effectiveness of Johnson County's internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

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Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. We did identify certain deficiencies in internal control, described in the accompanying Schedule of Findings and Questioned Costs, that we consider to be significant deficiencies: 2020-001(A-E) and 2020-002.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Johnson 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 financial statements. 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: 2020-001(F), 2020-003, and 2020-004.

Johnson County's Responses to the Findings

Johnson County's responses to the findings identified in our audit are described in the accompanying Schedule of Findings and Questioned Costs. Johnson 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 Johnson County’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Very truly yours,


October 30, 2020

JPW/tg

205

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 Johnson 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 Johnson County's major federal programs for the year ended June 30, 2020. Johnson 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 Johnson 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

206

examining, on a test basis, evidence about Johnson County's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of Johnson County's compliance.

Opinion on Each Major Federal Program

In our opinion, Johnson 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, 2020.

Report on Internal Control Over Compliance

Management of Johnson 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 Johnson 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 Johnson 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

207

requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance

We have audited the financial statements of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Johnson County, Tennessee, as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise Johnson County’s basic financial statements. We issued our report thereon dated October 30, 2020, 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,


October 30, 2020

JPW/tg

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Johnson County, Tennessee, and the Johnson County School DepartmentSchedule of Expenditures of Federal Awards and State Grants (1) (2) (3)For the Year-Ended June 30, 2020

Federal Pass-throughFederal/Pass-Through Agency/State CFDA Entity IdentifyingGrantor Program Title Number Number Expenditures

U.S. Department of Agriculture: Direct Programs: Forest Service Schools and Roads Cluster: (5) Schools and Roads - Grants to States 10.665 N/A $ 86,240 Community Facilities Loans and Grants Cluster: (5) Community Facilities Loans and Grants 10.766 N/A 2,246 Emergency Watershed Protection Program 10.923 N/A 45,147 Passed-through State Department of Education: Child Nutrition Cluster: (5) School Breakfast Program 10.553 N/A 232,436 (7) COVID 19 - School Breakfast Program 10.553 N/A 106,384 (7) National School Lunch Program 10.555 N/A 612,810 (7) COVID 19 - National School Lunch Program 10.555 N/A 169,245 (7) Summer Food Service Program for Children 10.559 N/A 18,054 Passed-through State Department of Agriculture: Child Nutrition Cluster: (5) National School Lunch Program (Commodities - Noncash Assistance) 10.555 N/A 91,884 (7) Passed-through State Department of Health: Special Supplemental Nutrition Program for Women, Infants, and Children 10.557 GG-20-63978-00 25,130 (6)Total U.S. Department of Agriculture $ 1,389,576

U.S. Department of Housing and Urban Development: Passed-through State Housing Development Agency: Home Investment Partnership Program 14.239 HM-1516-11 $ 180,673Total U.S. Department of Housing and Urban Development $ 180,673

U.S. Department of the Interior: Direct Program: Payments in-Lieu-of Taxes 15.226 N/A $ 66,514Total U.S. Department of the Interior $ 66,514

U.S. Department of Labor: Passed-through State Department of Labor and Workforce Development: COVID 19 - Unemployment Insurance 17.225 N/A $ 413Total U.S. Department of Labor $ 413

U.S. Department of Transportation: Passed-through State Department of Transportation: Alcohol Open Container Requirements 20.607 (4) $ 2,185Total U.S. Department of Transportation $ 2,185

Appalachian Regional Commission: Passed-through State Department of Economic and Community Development: Appalachian Regional Development 23.001 (4) $ 245,733 Appalachian Area Development 23.002 (4) 194Total Appalachian Regional Commission $ 245,927

U.S. Institute of Museums and Library Services: Passed-through Department of State, Tennessee State Library and Archives: Grants to States 45.310 (4) $ 602Total U.S. Institute of Museums and Library Services $ 602

U.S. Department of Education: Passed-through State Department of Education: Title 1 Grants to Local Educational Agencies 84.010 N/A $ 1,100,989 Special Education Cluster: (5) Special Education - Grants to States 84.027 N/A 557,652 Special Education - Preschool Grants 84.173 N/A 13,620 Career and Technical Education - Basic Grants to States 84.048 N/A 40,250

(Continued)

209

Johnson County, Tennessee, and the Johnson County School DepartmentSchedule of Expenditures of Federal Awards and State Grants (1) (2) (3) (Cont.)

Federal Pass-throughFederal/Pass-Through Agency/State CFDA Entity IdentifyingGrantor Program Title Number Number Expenditures

U.S. Department of Education (Cont.): Passed-through State Department of Education (Cont.): Twenty-First Century Community Learning Centers 84.287 (4) $ 101,703 Rural Education 84.358 N/A 36,062 Improving Teacher Quality State Grants 84.367 N/A 120,627 Student Support and Academic Enrichment Program 84.424 N/A 30,172 COVID 19 - Education Stabilization Fund 84.425D N/A 5,910 Passed-through State Higher Education Commission: Gaining Early Awareness and Readiness for Undergraduate Programs 84.334 (4) 77,584Total U.S. Department of Education $ 2,084,569

U.S. Department of Health and Human Services: Passed-through State Department of Health: Injury Prevention and Control Research and State and Community Based Programs 93.136 GG-20-63978-00 $ 2,748 (6) Family Planning Services 93.217 GG-20-63978-00 5,982 (6) National State Based Tobacco Control Programs 93.305 GG-20-63978-00 2,443 (6) Medicaid Cluster: (5) Medical Assistance Program 93.778 GG-20-63978-00 18,805 (6) HIV Prevention Activities - Health Department Based 93.940 GG-20-63978-00 26,173 (6) Maternal and Child Health Services Block Grant to the States 93.994 GG-20-63978-00 12,134 (6) Passed-through State Department of Education: CCDF Cluster: (5) Child Care and Development Block Grant 93.575 (4) 219 Passed-through Upper East Tennessee Human Development Agency: Head Start Cluster: (5) Head Start 93.600 (4) 579,717Total U.S. Department of Health and Human Services $ 648,221

U.S. Department of Homeland Security: Passed-through State Department of Military: COVID 19 - Disaster Relief Fund - PPE 97.036 (4) $ 3,597 Emergency Management Performance Grants 97.042 52021-22217 27,000Total U.S. Department of Homeland Security $ 30,597

Total Expenditures of Federal Awards $ 4,649,277

ContractState Grants Number

Juvenile Justice - State Commission on Children and Youth N/A (4) $ 13,500 Safe Baby - State Commission on Children and Youth N/A (4) 50,412 Airport Maintenance - State Department of Transportation N/A AERM-46-0424-19 32,886 Aging Program - First Tennessee Development District N/A (4) 49,867 Rural Local Health Services - State Department of Health N/A (8) 213,558 (6) Health Access Program - State Department of Health N/A (4) 3,385 Litter Program - State Department of Transportation N/A (4) 44,114 Help America Vote Act - Secretary of State N/A (4) 1,677 Three Star Program - State Department of Environment and Conservation N/A (4) 49,821 Emergency Watershed Protection Program - State Department of Environment and Conservation N/A (4) 15,049 Safe Resource Officer - State Department of Education N/A (4) 161,393 Family Resource Center Grant - State Department of Education N/A (4) 29,612 Safe Schools Act Grant - State Department of Education N/A (4) 76,879 Supporting Postsecondary Access in Rural Counties - State Department of Education N/A (4) 36,000 Lottery for Education After School Program - State Department of Education N/A (4) 181,701

(Continued)

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Johnson County, Tennessee, and the Johnson County School DepartmentSchedule of Expenditures of Federal Awards and State Grants (1) (2) (3) (Cont.)

ContractState Grants (Cont.) Number

Early Childhood Education Pilot Project - State Department of Education N/A (4) $ 192,194 Coordinated School Health Program - State Department of Education N/A (4) 92,039 Work Based Learning - State Department of Economic and Community Development N/A 12263 10,234 COVID 19 - PPE - State Department of Military N/A (4) 1,199

Total State Grants $ 1,255,520

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) Johnson County elected not to use the 10% de minimis cost rate permitted in the Uniform Guidance.(3) No amounts ($0) were passed through to subrecipients.(4) Information not available.(5) Forest Service Schools and Roads Cluster total $86,240; Community Facilities Loans and Grant Cluster total $2,246;

Child Nutrition Cluster total $1,230,813; Special Education Cluster total $571,272; Head Start Cluster total $579,717;Medicaid Cluster total $18,805; CCDF Cluster total $219.

(6) Programs with pass-through identifying number GG-20-63978-00 are part of a multi-service contract.(7) CFDA Totals: CFDA No 10.553, $338,820; CFDA No. 10.555, $873,939.

Additional Note for State Grants:(8) GG-19-59591-00 $721; GG-20-63978-00 $212,837.

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Johnson County, TennesseeSummary Schedule of Prior-year FindingsFor the Year Ended June 30, 2020

Fiscal Page Finding CFDAYear Number Number Number

OFFICE OF DIRECTOR OF SCHOOLS

2019 217 2019-001 The school department had deficiencies N/Ain purchasing procedures.

OFFICES OF DIRECTOR OF SCHOOLS AND DIRECTOR OF ACCOUNTS AND BUDGETS

2019 218 2019-002 The offices had deficiencies in budget N/Aoperations.

There were no prior-year federal award findings to report.

Government Auditing Standards require auditors to report the status of uncorrected findings fromprior audits. In addition, OMB's Uniform Guidance requires auditees to report the status of all prior-year findings whether corrected or not. Presented below are financial statement findings along withtheir current status from the Annual Financial Report for Johnson County, Tennessee, for the yearended June 30, 2020.

Title of Finding Current Status

Prior-year Financial Statement Findings

Prior-year Federal Awards Findings

Corrected

Part C. Corrected.

Parts A. and B. Not Corrected - See Explanation

on Corrective Action Plan.

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Financial Statements:

1. Our report on the financial statements of Johnson 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: 84.010 Title I Grants to Local Educational Agencies

* CFDA Numbers: 93.600 Head Start

8. Dollar threshold used to distinguish between Type A and Type B Programs. $750,000

9. Auditee qualified as low-risk auditee? YES

JOHNSON COUNTY, TENNESSEE

SCHEDULE OF FINDINGS AND QUESTIONED COSTS


PART I, SUMMARY OF AUDITOR'S RESULTS

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PART II, FINDINGS RELATING TO THE FINANCIAL STATEMENTS Findings and recommendations, as a result of our audit and a review by the state Division of Property Assessments, 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. OFFICES OF COUNTY MAYOR, DIRECTOR OF SCHOOLS, ROAD SUPERINTENDENT, AND DIRECTOR OF ACCOUNTS AND BUDGETS FINDING 2020-001 THE OFFICES HAD DEFICIENCIES IN PURCHASING

PROCEDURES (A. through E. – Internal Control – Significant Deficiency Under Government Auditing Standards; F. – Noncompliance Under Government Auditing Standards)

As part of our audit procedures for determining whether the purchasing process was operating as designed, we selected a sample of 36 disbursements totaling $204,538 from a population of approximately 7,544 vendor checks totaling $23,655,977. Due to previous years questions related to some purchasing activities, we selected an additional 11 disbursements totaling $25,203. Our examination revealed the following deficiencies in purchasing procedures, which are the result of a lack of management oversight and the failure to follow established policies and procedures over purchasing.

A. Purchase requisitions were not utilized, and purchase orders were not issued in a total

of six applicable instances. Additionally, instances were noted where purchase orders were not approved by either the director of accounts and budgets or the director of schools. Purchase requisitions and purchase orders are necessary to control who has purchasing authority and to document purchasing commitments. Purchase order approval by the director of accounts or the director of schools prior to their issuance is evidence of supervisory review. The failure to utilize purchase requisitions, issue purchase orders, and properly approve purchase orders increases the risks of unauthorized purchases.

B. In four of 35 applicable instances, the total invoice amounts paid exceeded the amounts on approved purchases orders in amounts ranging from $131 to $1,599. Reasonable estimated dollar amounts on purchase orders at the time of issuance are necessary to quantify purchasing commitments and avoid exceeding approved appropriations.

C. We noted three instances where invoices were paid without canceling or marking the invoices as paid. Also, we noted 13 instances where invoices were paid without documentation that goods had been received and/or services rendered. These practices

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increase the risks of duplication of payment and/or paying for something that was never received.

D. We noted that sales tax was paid in two instances even though the county has tax

exempt status. Additionally, we noted late fees or interest charges were assessed and paid on two store card billing statements. The payment of sales tax, late fees, and interest increases the costs of goods and services and results in the unnecessary expenditure of county funds.

E. In one of 47 applicable instances, the purchase was coded to an account that did not

reflect the true nature of the expenditure. Additionally, while performing procedures for capital assets, we noted that amounts for assets capitalized in the current year were coded from non-capital expenditure accounts, such as Other Supplies and Materials and Other Charges. Sound budgetary principles require expenditures to be coded to accounts that reflect the true nature of the expenditures. Misclassifying expenditures diminishes the usefulness of the accounting records as a management tool and may result in inappropriately classifying items as capital assets.

F. In two of three applicable purchases, competitive bids were solicited; however, the bid

specifications for the purchase of a vehicle and the purchase of a replacement chassis were brand specific. Using bid specifications that apply only to a specific brand violates the intent of the county’s purchasing laws.

RECOMMENDATION To strengthen internal controls over purchasing procedures and to document purchasing commitments, purchase requisitions should be utilized and purchase orders should be issued and approved by appropriate personnel for all applicable purchases before purchases are made. Purchase orders should indicate total dollar amounts of items to be purchased with any necessary revisions adequately documented. All invoices should be cancelled when paid, and documentation that goods have been received and/or services have been rendered should be maintained before invoices are paid. Sales tax should not be paid, and invoices should be processed in a timely manner to avoid late fees and interest. Expenditures should be coded to accounts that most appropriately reflect the true nature of the transactions. Bid specifications should developed that are not brand specific. MANAGEMENT’S RESPONSE – DIRECTOR OF ACCOUNTS AND BUDGETS I concur with this finding. Johnson County operates under the County Fiscal Procedure Law and Purchasing Law of 1957. Under these statutes, the Office of Director of Accounts and Budgets is responsible for all fiscal transactions. Under the Purchasing Law of 1957, the school system has invoked exemption from centralized purchasing. This exemption creates indirect oversight of purchasing procedures from the Office of Director of Accounts and Budgets.

____________________________

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OFFICE OF CIRCUIT AND GENERAL SESSIONS COURTS CLERK FINDING 2020-002 A CASH OVERDRAFT OCCURRED DURING THE YEAR

IN GENERAL SESSIONS COURT (Internal Control – Significant Deficiency Under Government Auditing Standards)

General Sessions Court had a cash overdraft of $5,777 on January 13, 2020. This cash overdraft resulted from General Sessions collections for the period December 6, 2019, through January 10, 2020, being erroneously deposited into the Circuit Court bank account and Circuit Court collections being deposited into the General Sessions bank account. This deficiency is the result of a lack of management oversight and the failure of the clerk to ensure collections are deposited into the appropriate accounts. Sound business practices dictate that bank statements should be reconciled with the general ledger timely, and any differences identified and corrected promptly. This cash overdraft was liquidated on January 13, 2020, with a transfer of funds to the correct accounts. RECOMMENDATION The clerk should develop controls to ensure that collections are deposited into the correct accounts and that errors are identified and corrected promptly. MANAGEMENT’S RESPONSE – CIRCUIT AND GENERAL SESSIONS COURTS CLERK I concur with this finding.

___________________________ OFFICE OF CLERK AND MASTER FINDING 2020-003 SPECIAL COMMISSIONER FEES EXCEEDED THE

PERCENTAGE AUTHORIZED BY STATE STATUTE (Noncompliance Under Government Auditing Standards) During the year, the clerk and master received fees exceeding the percentage authorized by state statute for serving as special commissioner on one of several court cases involving the sale of property. Section 8-21-401(i)(7), Tennessee Code Annotated (TCA), provides that a clerk may receive for selling real or personal property under decree of court, and receiving, collecting, and paying out the proceeds, a commission not to exceed three percent of the amount of the sales. Property sales during the year totaled $433,355, which calculates to a maximum of $13,001 of allowable special commissions. However, the clerk and master received special commissioner fees of $13,385, which resulted in an overpayment of $384. The amount received by the clerk and master was approved by a court order signed by the chancellor.

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RECOMMENDATION Special commissioner fees should be limited to three percent of sales as provided by state statute. MANAGEMENT’S RESPONSE – CLERK AND MASTER I do not agree with this finding. Management agrees that the fee for special commissioner duties is limited to 3%. However, extra work beyond special commissioner duties are classified as extraordinary expenses or expenses reimbursed for time and effort outside the scope of selling real or personal property. There was wording to reflect this in the first Order confirming the sale. An additional Order was prepared and filed with a more detailed explanation. AUDITOR’S REBUTTAL As noted in your corrective action plan, you should review and ensure the special commissioner fees do not exceed the amount authorized in Section 8-21-401(i)(7), TCA, prior to the order being presented to the court. If additional costs are incurred during the sale, and those costs are to be reimbursed, those costs need to be reflected separately from the special commissioner fees on the order.

____________________________ OFFICE OF ASSESSOR OF PROPERTY FINDING 2020-004 THE ASSESSOR DID NOT MAINTAIN AN ADEQUATE

PROGRAM OF VISUAL INSPECTIONS (Noncompliance Under Government Auditing Standards)

The assessor did not adequately perform visual inspections required to maintain accurate property records. In many cases, data found on the property records did not accurately represent the structures on the property. During a monitoring review by the state Division of Property Assessments for the second quarter, 98 of the 381 parcels reviewed had errors affecting the property valuation. Section 67-5-1601, Tennessee Code Annotated, requires the assessor to complete an on-site review of each parcel of real property over a four-year review period. This deficiency can be attributed to the failure of management to maintain an adequate system of internal controls to ensure accurate reporting of on-site reviews.

RECOMMENDATION The assessor should ensure that visual inspections are properly performed to accurately reflect the property values. MANAGEMENT’S RESPONSE – ASSESSOR OF PROPERTY I concur with this finding.

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PART III, FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS

There were no findings and questioned costs related to federal awards for the year ended June 30, 2020.

218

FindingNumber

OFFICE OF DIRECTOR OF ACCOUNTS AND BUDGETS

2020-001 The Offices had Deficiencies in Purchasing Procedures

OFFICE OF CIRCUIT AND GENERAL SESSIONS COURTS CLERK

2020-002

OFFICE OF CLERK AND MASTER

2020-003

OFFICE OF ASSESSOR OF PROPERTY

2020-004

Johnson County, TennesseeManagement's Corrective Action Plan


Title of FindingCorrective Action

Plan Page Number

Special Commissioner Fees Exceeded the Percentage Authorized by State Statute 223

The Assessor did not Maintain an Adequate Program of Visual Inspections 224

We reviewed the financial statement and federal award findings and recommendations withmanagement to provide an opportunity for their response as required by the auditee requirementswithin Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, CostPrinciples, and Audit Requirements for Federal Awards (Uniform Guidance). Management’s correctiveaction plans for all financial statement findings and federal award findings are presented in thissection and have been indexed below. The corrective action plans were prepared by management andhave been presented as they were submitted.

220

A Cash Overdraft Occurred During the Year in General Sessions Court 222

219

220

221

222

223

Corrective Action Plan:

County - Jghnson

The Assessor did not maintain adequate visuaI inspections

1) Name and Title of person preparing the corrective action plan:

�#11:r:w T L�w,Y

2) Name and title of person responsible for implementing the corrective action plan:

_bk•Hht'y...:J T 1.e.J..e!'�------------------3) Specifi c actions to be taken to correct the finding:

4) Anticipated completion date of the corrective action: _ .•.•. J1�,+ .... ____ y_�_,_/_�_z._�_zo ____ _

5) If this is a repeat finding, an explanation of why action has not been taken in previous years:

(Jo

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BEST PRACTICE

Accounting literature describes a best practice as a recommended policy, procedure, or technique that aids management in improving financial performance. Historically, a best practice has consistently shown superior results over conventional methods.

The Division of Local Government Audit strongly believes that the item noted below is a best practice that should be adopted by the governing body as a means of significantly improving accountability and the quality of services provided to the citizens of Johnson County.

JOHNSON COUNTY SHOULD ADOPT A CENTRAL SYSTEM OF PURCHASING FOR ALL DEPARTMENTS

Johnson County operates under provisions of the Fiscal Control Acts of 1957. These acts provide for a central system of accounting and budgeting covering funds administered by the county mayor, road superintendent, and director of schools. These funds were maintained in the Office of Central Accounting under the supervision of the director of accounts and budgets.

The Fiscal Control Acts of 1957 also include provisions for centralized purchasing for funds maintained by the county mayor and road superintendent. However, purchasing procedures for the school department are governed by purchasing laws applicable to schools as set forth in Section 49-2-203, Tennessee Code Annotated, which provides for the county Board of Education, through its executive committee (director of schools and chairman of the Board of Education), to make all purchases. Sound business practices dictate that establishing a central system would significantly improve internal controls over the purchasing process. The absence of a central system of purchasing has been a management decision by the county commission, resulting in decentralization and some duplication of effort. We recommend the adoption of the County Financial Management System of 1981 or a private act, which would provide for a central system of purchasing for all county departments.

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Documents

JOHNSON COUNTY TENNESSEE - Comptroller.TN.gov