LEWIS COUNTY TENNESSEE - TN Comptroller County, Tennessee ... We have audited the basic financial statements of Lewis County as of and for the year ended ... Benny Pace, Director of

ANNUAL FINANCIAL REPORT

LEWIS COUNTY, TENNESSEE FOR THE YEAR ENDED JUNE 30, 2017

DIVISION OF LOCAL GOVERNMENT AUDIT

ANNUAL FINANCIAL REPORT

LEWIS COUNTY, TENNESSEE

FOR THE YEAR ENDED JUNE 30, 2017

COMPTROLLER OF THE TREASURY JUSTIN P. WILSON

DIVISION OF LOCAL GOVERNMENT AUDIT JAMES R. ARNETTE

Director

JEFF BAILEY, CPA, CGFM, CFE Audit Manager MARK HARVILL, CFE CHRIS HUGHES KENT WHITE, CPA, CGFM, CFE BETHANY GRAVES Auditor 4 State Auditors

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

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Exhibit Page(s)

Summary of Audit Findings 7

INTRODUCTORY SECTION 8

Lewis County Officials 9-10

FINANCIAL SECTION 11

Independent Auditor's Report 12-15BASIC FINANCIAL STATEMENTS: 16

Government-wide Financial Statements:Statement of Net Position A 17-18Statement of Activities B 19-20

Fund Financial Statements:Governmental Funds:

Balance Sheet C-1 21-22Reconciliation of the Balance Sheet of Governmental Funds

to the Statement of Net Position C-2 23Statement of Revenues, Expenditures, and Changes in

Fund Balances C-3 24-25Reconciliation of the Statement of Revenues, Expenditures,

and Changes in Fund Balances of Governmental Fundsto the Statement of Activities C-4 26

Statements of Revenues, Expenditures, and Changes in FundBalances – Actual and Budget: General Fund C-5 27-28 Highway/Public Works Fund C-6 29

Statement of Fiduciary Assets and Liabilities D 30Index and Notes to the Financial Statements 31-85

REQUIRED SUPPLEMENTARY INFORMATION: 86Schedule of Changes in Net Pension Liability (Asset) and Related Ratios

Based on Participation in the Public Employee Pension Planof TCRS – Primary Government - Lewis County E-1 87

Schedule of Changes in Net Pension Liability (Asset) and Related Ratios Based on Participation in the Public Employee Pension Planof TCRS – Primary Government - Lewis County Officials E-2 88

Schedule of Changes in Net Pension Liability (Asset) and Related Ratios Based on Participation in the Public Employee Pension Planof TCRS – Primary Government - Lewis County Highway Department E-3 89

LEWIS COUNTY, TENNESSEETABLE OF CONTENTS

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Exhibit Page(s)

Schedule of Changes in Net Pension Liability (Asset) and Related Ratios Based on Participation in the Public Employee Pension Planof TCRS – Discretely Presented Lewis County School Department -Non-Certified Employees E-4 90

Schedule of Contributions Based on Participation in the Public EmployeePension Plan of TCRS – Primary Government - Lewis County E-5 91

Schedule of Contributions Based on Participation in the Public EmployeePension Plan of TCRS – Primary Government - Lewis County Officials E-6 92

Schedule of Contributions Based on Participation in the Public EmployeePension Plan of TCRS – Primary Government - Lewis County HighwayDepartment E-7 93

Schedule of Contributions Based on Participation in the Public EmployeePension Plan of TCRS – Discretely Presented Lewis County SchoolDepartment - Non-Certified Employees E-8 94

Schedule of Contributions Based on Participation in the TeacherRetirement Plan of TCRS – Discretely Presented LewisCounty School Department - Certified Employees E-9 95

Schedule of Contributions Based on Participation in the TeacherLegacy Pension Plan of TCRS – Discretely Presented LewisCounty School Department - Certified Employees E-10 96

Schedule of Proportionate Share of the Net Pension Liability (Asset)in the Teacher Pension Plan of TCRS – Discretely PresentedLewis County School Department E-11 97

Schedule of Proportionate Share of the Net Pension Liability (Asset)in the Teacher Legacy Pension Plan of TCRS – Discretely PresentedLewis County School Department E-12 98

Schedule of Funding Progress – Other Postemployment BenefitsPlans – Primary Government and Discretely Presented LewisCounty School Department E-13 99

Notes to the Required Supplementary Information 100-102COMBINING AND INDIVIDUAL FUND FINANCIAL

STATEMENTS AND SCHEDULES: 103Nonmajor Governmental Funds: 104-105

Combining Balance Sheet F-1 106-109Combining Statement of Revenues, Expenditures, and Changes

in Fund Balances F-2 110-113Schedules of Revenues, Expenditures, and Changes in Fund

Balances – Actual and Budget:Solid Waste/Sanitation Fund F-3 114Drug Control Fund F-4 115Sports and Recreation Fund F-5 116General Debt Service Fund F-6 117

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Exhibit Page(s)

Fiduciary Funds: 118Combining Statement of Fiduciary Assets and Liabilities G-1 119Combining Statement of Changes in Assets and Liabilities –

All Agency Funds G-2 120Component Unit:

Discretely Presented Lewis County School Department: 121Statement of Activities H-1 122Balance Sheet – Governmental Funds H-2 123Reconciliation of the Balance Sheet of Governmental Funds

to the Statement of Net Position H-3 124Statement of Revenues, Expenditures, and Changes in Fund

Balances – Governmental Funds H-4 125Reconciliation of the Statement of Revenues, Expenditures,

and Changes in Fund Balances of Governmental Fundsto the Statement of Activities H-5 126

Combining Balance Sheet – Nonmajor Governmental Funds H-6 127Combining Statement of Revenues, Expenditures, and Changes

in Fund Balances – Nonmajor Governmental Funds H-7 128Schedules of Revenues, Expenditures, and Changes in Fund

Balances – Actual (Budgetary Basis) and Budget:General Purpose School Fund H-8 129-130School Federal Projects Fund H-9 131Central Cafeteria Fund H-10 132

Miscellaneous Schedules: 133Schedule of Changes in Long-term Notes and Bond I-1 134Schedule of Long-term Debt Requirements by Year I-2 135Schedule of Transfers – Primary Government and Discretely

Presented Lewis County School Department I-3 136Schedule of Salaries and Official Bonds of Principal Officials –

Primary Government and Discretely Presented LewisCounty School Department I-4 137

Schedule of Detailed Revenues – All Governmental Fund Types I-5 138-149Schedule of Detailed Revenues – All Governmental Fund Types –

Discretely Presented Lewis County School Department I-6 150-153Schedule of Detailed Expenditures – All Governmental Fund Types I-7 154-169Schedule of Detailed Expenditures – All Governmental Fund Types –

Discretely Presented Lewis County School Department I-8 170-180Schedule of Detailed Receipts, Disbursements, and Changes in

Cash Balance – City Agency Fund I-9 181

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Exhibit Page(s)

SINGLE AUDIT SECTION 182

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

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

Schedule of Expenditures of Federal Awards and State Grants 188-189Summary Schedule of Prior-year Findings 190Schedule of Findings and Questioned Costs 191-197Management's Corrective Action Plan 198-202Best Practice 203

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Summary of Audit Findings Annual Financial Report Lewis County, Tennessee

For the Year Ended June 30, 2017

Scope

We have audited the basic financial statements of Lewis County as of and for the year ended June 30, 2017.

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

Findings

The following are summaries of the audit findings: OFFICE OF COUNTY MAYOR

♦ Material audit adjustments were required for proper financial statement presentation. ♦ Expenditures exceeded appropriations. ♦ General ledger cash accounts were not properly reconciled with county trustee reports. ♦ General ledger payroll liability accounts were not reconciled with payroll reports and

payments in the General Fund. OFFICE OF ROAD SUPERINTENDENT ♦ Expenditures exceeded appropriations in the Highway/Public Works Fund.

OFFICE OF COUNTY CLERK ♦ The office did not review its software audit logs.

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INTRODUCTORY SECTION

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Lewis County OfficialsJune 30, 2017

Officials

Bill Webb, County MayorJoyce Holt, Road SuperintendentBenny Pace, Director of SchoolsMike Webb, TrusteeTravis Hinson, Assessor of PropertySandra Clayton, County ClerkBarbara Hinson, Circuit and General Sessions Courts ClerkDonna Couch, Clerk and MasterCheryl Staggs, Register of DeedsDwayne Kilpatrick, Sheriff

Board of County Commissioners

Bill Webb, County Mayor, Chairman Kenny PrenticeJerry Ashmore Connie SharpMike King Landis TurnerRobert Brewer Bruce BowenBrian Peery Leon HunterLarry Hensley Jim GrinderTimmie Hinson Chris DyerWendell Kelley Billy DyerBilly Meek Jr. Ronnie BrewerPatrick Halfacre

Highway Commission

Bill Webb, County Mayor, ChairmanLandis TurnerAlice Tubbs

(Continued)

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Lewis County Officials (Cont.)

Board of Education

Jeff Gandy, Chairman Brenda HelentjarisMarti Lomax Derek CothamCassie Couch Glenda AtkinsonPhyllis Townsend Clark BatesNancy McDonald

Audit Committee

Ronnie Brewer, ChairmanBobby PageAnnette PeeryRonnie GravesBert Moore

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FINANCIAL SECTION

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STATE OF TENNESSEE COMPTROLLER OF THE TREASURY

DEPARTMENT OF AUDIT DIVISION OF LOCAL GOVERNMENT AUDIT

SUITE 1500 JAMES K. POLK STATE OFFICE BUILDING

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

Independent Auditor's Report

Lewis County Mayor and Board of County Commissioners Lewis 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 Lewis County, Tennessee, as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the county’s basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

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An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Lewis County, Tennessee, as of June 30, 2017, and the respective changes in financial position 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 schedule of changes in the county’s net pension liability (asset) and related ratios, schedules of county and school contributions, schedule of school’s proportionate share of the net pension liability (asset), and schedule of funding progress - other postemployment benefits plan on pages 87-102 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

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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 Lewis County’s basic financial statements. The introductory section, combining and individual nonmajor fund financial statements, budgetary comparison schedules of nonmajor governmental funds, combining and individual fund financial statements of the Lewis County School Department (a discretely presented component unit), and miscellaneous schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedule of expenditures of federal awards is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and is also not a required part of the basic financial statements.

The combining and individual nonmajor fund financial statements, budgetary comparison schedules of nonmajor governmental funds, combining and individual fund financial statements of the Lewis County School Department (a discretely presented component unit), miscellaneous schedules, and schedule of expenditures of federal awards 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, combining and individual fund financial statements of the Lewis County School Department (a discretely presented component unit), miscellaneous schedules, and schedule of expenditures of federal awards 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 24, 2017, on our consideration of Lewis 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

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and the results of that testing, and not to provide an opinion on the effectiveness of Lewis 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 Lewis County’s internal control over financial reporting and compliance. Very truly yours,

Justin P. Wilson Comptroller of the Treasury Nashville, Tennessee October 24, 2017 JPW/kp

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BASIC FINANCIAL STATEMENTS

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Exhibit A

Lewis County, TennesseeStatement of Net PositionJune 30, 2017

ASSETS

Cash $ 15,583 $ 431,169Equity in Pooled Cash and Investments 4,636,934 11,135,875Inventories 0 29,607Net Pension Asset - Agent Plan 44,713 70,551Net Pension Asset - Teacher Retirement Plan 0 8,392Accounts Receivable 256,743 15,489Allowance for Uncollectibles (51,941) 0Due from Other Governments 447,532 504,794Property Taxes Receivable 2,894,104 1,335,599Allowance for Uncollectible Property Taxes (93,965) (43,364)Capital Assets: Assets Not Depreciated: Land 1,077,779 867,531 Construction in Progress 73,276 174,600 Assets Net of Accumulated Depreciation: Buildings and Improvements 978,116 3,203,835 Infrastructure 4,729,759 0 Other Capital Assets 555,771 857,423Total Assets $ 15,564,404 $ 18,591,501

DEFERRED OUTFLOWS OF RESOURCES

Pension Changes in Experience $ 174,347 $ 103,149Pension Contribution after Measurement Date 189,658 847,624Pension Changes in Investment Earnings 187,248 1,527,163Pension Changes in Proportionate Share of NPL 0 76,253Total Deferred Outflows of Resources $ 551,253 $ 2,554,189

LIABILITIES

Accounts Payable $ 72,971 $ 0Accrued Payroll 0 691,466Contracts Payable 55,000 0Payroll Deductions Payable 84,461 420,818Noncurrent Liabilities: Due Within One Year 25,010 9,161 Due in More Than One Year 1,034,332 1,669,235Total Liabilities $ 1,271,774 $ 2,790,680

(Continued)

ComponentUnit

Primary LewisGovernment County

Governmental SchoolActivities Department

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Exhibit A

Lewis County, TennesseeStatement of Net Position (Cont.)

DEFERRED INFLOWS OF RESOURCES

Deferred Current Property Taxes $ 2,703,631 $ 1,247,697Pension Changes in Experience 157,662 1,582,321Pension Changes in Proportionate Share of NPL 0 11,118Total Deferred Inflows of Resources $ 2,861,293 $ 2,841,136

NET POSITION

Net Investment in Capital Assets $ 7,319,201 $ 5,103,389Restricted for: General Government 46,187 0 Finance 33,884 0 Administration of Justice 34,906 0 Public Safety 179,078 0 Highway/Public Works 2,641,261 0 Education 0 221,357 Pensions 44,713 78,943Unrestricted 1,683,360 10,110,185

Total Net Position $ 11,982,590 $ 15,513,874

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

ComponentUnit

LewisCountySchool

DepartmentActivitiesGovernmentalGovernment

Primary

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Exhibit B

Lewis County, TennesseeStatement of ActivitiesFor the Year Ended June 30, 2017

Operating Capital LewisCharges Grants Grants County

for and and SchoolFunctions/Programs Expenses Services Contributions Contributions Department

Primary Government: Governmental Activities: General Government $ 1,100,306 $ 206,907 $ 220,089 $ 0 $ (673,310) $ 0 Finance 500,273 278,804 2,000 0 (219,469) 0 Administration of Justice 500,867 207,055 0 0 (293,812) 0 Public Safety 2,255,739 268,920 25,748 0 (1,961,071) 0 Public Health and Welfare 1,418,344 496,358 725,522 0 (196,464) 0 Social, Cultural, and Recreational Services 414,115 42,637 57,536 0 (313,942) 0 Agriculture and Natural Resources 106,900 0 39,883 0 (67,017) 0 Highways/Public Works 1,507,128 0 1,558,190 363,217 414,279 0Total Governmental Activities $ 7,803,672 $ 1,500,681 $ 2,628,968 $ 363,217 $ (3,310,806) $ 0

Total Primary Government $ 7,803,672 $ 1,500,681 $ 2,628,968 $ 363,217 $ (3,310,806) $ 0

Component Unit: Lewis County School Department $ 15,021,783 $ 136,126 $ 2,559,685 $ 11,035 $ 0 $ (12,314,937)

Total Component Unit $ 15,021,783 $ 136,126 $ 2,559,685 $ 11,035 $ 0 $ (12,314,937)

(Continued)

Net (Expense) Revenue and Changes in Net Position

UnitComponent

Program RevenuesPrimary

GovernmentGovernmental

Activities

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Exhibit B

Lewis County, TennesseeStatement of Activities (Cont.)

Operating Capital LewisCharges Grants Grants County

for and and SchoolFunctions/Programs Expenses Services Contributions Contributions Department

General Revenues: Taxes: Property Taxes Levied for General Purposes $ 2,794,468 $ 1,064,195 Local Option Sales Taxes 314,223 1,481,463 Hotel/Motel Tax 30,368 0 Wheel Tax 221,095 0 Litigation Tax - General 29,337 0 Litigation Tax - Jail, Workhouse, or Courthouse 20,904 0 Business Tax 77,600 0 Wholesale Beer Tax 36,129 0 Other Local Taxes 6,576 32,803 Grants and Contributions Not Restricted to Specific Programs 773,047 11,218,094 Interest Income 57,913 31,358 Miscellaneous 115,163 65,462 Insurance Recovery 9,680 7,517Total General Revenues $ 4,486,503 $ 13,900,892

Change in Net Position $ 1,175,697 $ 1,585,955Net Position, July 1, 2016 10,806,893 13,927,919

Net Position, June 30, 2017 $ 11,982,590 $ 15,513,874


Program Revenues

Net (Expense) Revenue and Changes in Net Position

PrimaryGovernment

GovernmentalActivities

ComponentUnit

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Exhibit C-1

Lewis County, TennesseeBalance SheetGovernmental FundsJune 30, 2017

OtherHighway / Govern- Total

Public mental GovernmentalGeneral Works Funds Funds

ASSETS

Cash $ 12,949 $ 10 $ 2,624 $ 15,583Equity in Pooled Cash and Investments 1,930,703 2,464,044 242,187 4,636,934Accounts Receivable 94,488 130 162,125 256,743Allowance for Uncollectibles 0 0 (51,941) (51,941)Due from Other Governments 132,178 315,354 0 447,532Property Taxes Receivable 2,821,461 72,643 0 2,894,104Allowance for Uncollectible Property Taxes (91,606) (2,359) 0 (93,965)

Total Assets $ 4,900,173 $ 2,849,822 $ 354,995 $ 8,104,990

LIABILITIES

Accounts Payable $ 51,083 $ 0 $ 21,888 $ 72,971Payroll Deductions Payable 70,723 8,387 4,661 83,771Contracts Payable 0 55,000 0 55,000Other Current Liabilities 690 0 0 690Total Liabilities $ 122,496 $ 63,387 $ 26,549 $ 212,432


Deferred Current Property Taxes $ 2,635,769 $ 67,862 $ 0 $ 2,703,631Deferred Delinquent Property Taxes 76,594 1,971 0 78,565Other Deferred/Unavailable Revenue 52,137 189,239 46,668 288,044Total Deferred Inflows of Resources $ 2,764,500 $ 259,072 $ 46,668 $ 3,070,240

(Continued)

Major FundsNonmajor

Funds

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Exhibit C-1

Lewis County, TennesseeBalance SheetGovernmental Funds (Cont.)



FUND BALANCES

Restricted:Restricted for General Government $ 46,187 $ 0 $ 0 $ 46,187Restricted for Finance 33,884 0 0 33,884Restricted for Administration of Justice 34,906 0 0 34,906Restricted for Public Safety 160,874 0 18,204 179,078Restricted for Highways/Public Works 0 2,527,363 16,521 2,543,884Restricted for Capital Projects 0 0 1,838 1,838

Committed:Committed for Administration of Justice 0 0 400 400Committed for Public Safety 0 0 1,784 1,784Committed for Public Health and Welfare 0 0 146,763 146,763Committed for Social, Cultural, and Recreational Services 0 0 63,685 63,685Committed for Debt Service 0 0 17,014 17,014Committed for Capital Projects 0 0 15,569 15,569

Unassigned 1,737,326 0 0 1,737,326Total Fund Balances $ 2,013,177 $ 2,527,363 $ 281,778 $ 4,822,318

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 4,900,173 $ 2,849,822 $ 354,995 $ 8,104,990


Major FundsNonmajor

Funds

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Exhibit C-2

Lewis County, TennesseeReconciliation of the Balance Sheet of Governmental Funds to the Statement of Net PositionJune 30, 2017

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

Total fund balances - balance sheet - governmental funds (Exhibit C-1) $ 4,822,318

(1) Capital assets used in governmental activities are not financial resources and therefore are not reported inthe governmental funds. Add: land $ 1,077,779 Add: construction in progress 73,276 Add: buildings and improvements net of accumulated depreciation 978,116 Add: infrastructure net of accumulated depreciation 4,729,759 Add: other capital assets net of accumulated depreciation 555,771 7,414,701

(2) Long-term liabilities are not due and payable in the currentperiod and therefore are not reported in the governmental funds. Less: notes payable $ (95,500) Less: compensated absences payable (23,004) Less: other postemployment benefits liability (93,833) Less: net pension liability - county officials plan (325,910) Less: net pension liability - highway plan (521,095) (1,059,342)

(3) Amounts reported as deferred outflows of resources and deferredinflows of resources related to pensions will be amortized andrecognized as components of pension expense in future years: Add: deferred outflows of resources related to pensions $ 551,253 Less: deferred inflows of resources related to pensions (157,662) 393,591

(4) Net pension assets of the county agent plan are not current financialresources and therefore are not reported in the governmental funds. 44,713

(5) Other long-term assets are not available to pay forcurrent-period expenditures and therefore are deferredin the governmental funds. 366,609

Net position of governmental activities (Exhibit A) $ 11,982,590


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Exhibit C-3

Lewis County, TennesseeStatement of Revenues, Expenditures,

and Changes in Fund BalancesGovernmental FundsFor the Year Ended June 30, 2017



RevenuesLocal Taxes $ 3,767,621 $ 76,645 $ 27,185 $ 3,871,451Licenses and Permits 4,067 0 0 4,067Fines, Forfeitures, and Penalties 68,876 0 2,613 71,489Charges for Current Services 51,566 4 484,673 536,243Other Local Revenues 275,383 62,482 15,491 353,356Fees Received From County Officials 504,937 0 0 504,937State of Tennessee 761,814 1,903,314 27,611 2,692,739Federal Government 30,925 0 584,432 615,357Other Governments and Citizens Groups 31,054 8,558 251,532 291,144

Total Revenues $ 5,496,243 $ 2,051,003 $ 1,393,537 $ 8,940,783

ExpendituresCurrent:

General Government $ 839,439 $ 0 $ 0 $ 839,439Finance 406,761 0 0 406,761Administration of Justice 407,355 0 0 407,355Public Safety 1,968,104 0 4,838 1,972,942Public Health and Welfare 281,269 0 625,466 906,735Social, Cultural, and Recreational Services 106,712 0 123,030 229,742Agriculture and Natural Resources 106,900 0 0 106,900Other Operations 986,624 0 64,329 1,050,953Highways 0 1,950,605 13,362 1,963,967

Debt Service:Principal on Debt 0 0 380,000 380,000Interest on Debt 0 0 8,713 8,713Other Debt Service 0 0 550 550

(Continued)

Major FundsNonmajor

Funds

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Exhibit C-3


and Changes in Fund BalancesGovernmental Funds (Cont.)



Expenditures (Cont.)Capital Projects $ 0 $ 0 $ 584,524 $ 584,524

Total Expenditures $ 5,103,164 $ 1,950,605 $ 1,804,812 $ 8,858,581

Excess (Deficiency) of RevenuesOver Expenditures $ 393,079 $ 100,398 $ (411,275) $ 82,202

Other Financing Sources (Uses)Notes Issued $ 95,500 $ 0 $ 75,000 $ 170,500Insurance Recovery 9,680 0 0 9,680Transfers In 0 0 110,000 110,000Transfers Out (110,000) 0 0 (110,000)

Total Other Financing Sources (Uses) $ (4,820) $ 0 $ 185,000 $ 180,180

Net Change in Fund Balances $ 388,259 $ 100,398 $ (226,275) $ 262,382Fund Balance, July 1, 2016 1,624,918 2,426,965 508,053 4,559,936

Fund Balance, June 30, 2017 $ 2,013,177 $ 2,527,363 $ 281,778 $ 4,822,318


Major FundsNonmajor

Funds

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Exhibit C-4

Lewis 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, 2017

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

Net change in fund balances - total governmental funds (Exhibit C-3) $ 262,382

(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 $ 1,427,939 Less: current-year depreciation expense (755,168) 672,771

(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, 2017 $ 366,609 Less: deferred delinquent property taxes and other deferred June 30, 2016 (337,703) 28,906

(3) The issuance of long-term debt (e.g., bonds and notes) 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, hasany effect on net position. Add: principal payments on bonds $ 195,000 Add: principal payments on notes 185,000 Less: note proceeds (170,500) 209,500

(4) Some expenses reported in the statement of activities do not require

the use of current financial resources and therefore are not reportedas expenditures in the governmental funds. Change in accrued interest payable $ 1,749 Change in net pension liability - county officials plan (28,340) Change in net pension liability - highway plan (101,678) Change in net pensionasset - county plan 10,220 Change in deferred outflows related to pensions 127,033 Change in deferred inflows related to pensions (2,833) Change in compensated absences payable 4,988 Change in other postemployment benefits liability (9,001) 2,138

Change in net position of governmental activities (Exhibit B) $ 1,175,697


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Exhibit C-5

Lewis County, TennesseeStatement of Revenues, Expenditures, and Changes

in Fund Balance - Actual and BudgetGeneral FundFor the Year Ended June 30, 2017

Variancewith FinalBudget -Positive

Actual Original Final (Negative)

RevenuesLocal Taxes $ 3,767,621 $ 3,552,023 $ 3,569,723 $ 197,898Licenses and Permits 4,067 3,200 3,200 867Fines, Forfeitures, and Penalties 68,876 54,170 68,245 631Charges for Current Services 51,566 44,200 48,200 3,366Other Local Revenues 275,383 247,700 263,362 12,021Fees Received From County Officials 504,937 480,000 480,000 24,937State of Tennessee 761,814 750,611 761,137 677Federal Government 30,925 12,078 12,078 18,847Other Governments and Citizens Groups 31,054 32,000 32,000 (946)

Total Revenues $ 5,496,243 $ 5,175,982 $ 5,237,945 $ 258,298

ExpendituresGeneral Government

County Commission $ 46,361 $ 65,850 $ 65,850 $ 19,489Board of Equalization 663 1,200 1,200 537County Mayor/Executive 154,958 155,656 155,656 698County Attorney 6,000 8,500 8,500 2,500Election Commission 123,550 126,688 126,688 3,138Register of Deeds 101,469 102,735 102,735 1,266Geographical Information Systems 32,450 33,325 33,303 853County Buildings 334,747 321,082 369,436 34,689Other Facilities 39,241 31,260 39,242 1

FinanceProperty Assessor's Office 100,033 104,466 104,466 4,433Reappraisal Program 27,834 27,812 27,834 0County Trustee's Office 143,546 145,090 145,090 1,544County Clerk's Office 135,348 130,109 135,609 261

Administration of JusticeCircuit Court 82,910 92,656 92,656 9,746General Sessions Judge 96,572 96,277 97,070 498General Sessions Court Clerk 79,010 77,679 80,279 1,269Chancery Court 102,667 105,831 105,831 3,164Judicial Commissioners 46,196 46,212 46,297 101

Public SafetySheriff's Department 740,609 783,200 764,045 23,436Drug Enforcement 13,662 1,750 15,825 2,163Administration of the Sexual Offender Registry 350 200 300 (50)Jail 992,839 775,259 974,303 (18,536)Fire Prevention and Control 37,094 43,323 43,323 6,229Civil Defense 142,709 137,465 149,881 7,172County Coroner/Medical Examiner 11,468 9,730 11,468 0Other Public Safety 29,373 36,000 44,457 15,084

Public Health and WelfareLocal Health Center 61,383 55,411 70,482 9,099Rabies and Animal Control 2,784 3,600 3,600 816Ambulance/Emergency Medical Services 142,800 142,800 142,800 0Other Local Health Services 36,934 60,900 60,900 23,966Regional Mental Health Center 4,500 4,500 4,500 0

(Continued)

Budgeted Amounts

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Exhibit C-5


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



Expenditures (Cont.)Public Health and Welfare (Cont.)

Sanitation Education/Information $ 32,868 $ 33,700 $ 33,700 $ 832Social, Cultural, and Recreational Services

Senior Citizens Assistance 6,000 6,000 6,000 0Libraries 100,712 100,003 100,638 (74)Parks and Fair Boards 0 110,000 0 0

Agriculture and Natural ResourcesAgricultural Extension Service 53,644 54,180 54,180 536Soil Conservation 53,256 53,256 53,256 0

Other OperationsOther Economic and Community Development 35,243 38,300 38,300 3,057Airport 64,794 81,070 98,320 33,526Veterans' Services 9,459 11,250 11,250 1,791Contributions to Other Agencies 76,000 76,000 76,000 0Employee Benefits 634,401 590,200 590,200 (44,201)Miscellaneous 166,727 157,850 167,357 630

Total Expenditures $ 5,103,164 $ 5,038,375 $ 5,252,827 $ 149,663

Excess (Deficiency) of RevenuesOver Expenditures $ 393,079 $ 137,607 $ (14,882) $ 407,961

Other Financing Sources (Uses)Notes Issued $ 95,500 $ 96,000 $ 191,500 $ (96,000)Insurance Recovery 9,680 0 6,613 3,067Transfers Out (110,000) 0 (110,000) 0

Total Other Financing Sources $ (4,820) $ 96,000 $ 88,113 $ (92,933)

Net Change in Fund Balance $ 388,259 $ 233,607 $ 73,231 $ 315,028Fund Balance, July 1, 2016 1,624,918 1,590,000 1,590,000 34,918

Fund Balance, June 30, 2017 $ 2,013,177 $ 1,823,607 $ 1,663,231 $ 349,946


Budgeted Amounts

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Exhibit C-6


in Fund Balance - Actual and BudgetHighway/Public Works FundFor the Year Ended June 30, 2017



RevenuesLocal Taxes $ 76,645 $ 75,825 $ 75,825 $ 820Charges for Current Services 4 10 10 (6)Other Local Revenues 62,482 4,500 4,500 57,982State of Tennessee 1,903,314 1,921,676 1,921,676 (18,362)Other Governments and Citizens Groups 8,558 7,000 7,000 1,558

Total Revenues $ 2,051,003 $ 2,009,011 $ 2,009,011 $ 41,992

ExpendituresHighways

Administration $ 143,083 $ 148,462 $ 148,462 $ 5,379Highway and Bridge Maintenance 662,812 725,529 725,529 62,717Operation and Maintenance of Equipment 179,458 276,820 207,908 28,450Other Charges 59,553 58,579 60,079 526Employee Benefits 217,886 250,220 234,220 16,334Capital Outlay 687,813 549,401 632,813 (55,000)

Total Expenditures $ 1,950,605 $ 2,009,011 $ 2,009,011 $ 58,406

Excess (Deficiency) of RevenuesOver Expenditures $ 100,398 $ 0 $ 0 $ 100,398

Net Change in Fund Balance $ 100,398 $ 0 $ 0 $ 100,398Fund Balance, July 1, 2016 2,426,965 2,316,754 2,316,754 110,211

Fund Balance, June 30, 2017 $ 2,527,363 $ 2,316,754 $ 2,316,754 $ 210,609


Budgeted Amounts

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Exhibit D

Lewis County, TennesseeStatement of Fiduciary Assets and LiabilitiesFiduciary FundsJune 30, 2017

ASSETS

Cash $ 384,185Due from Other Governments 206,325

Total Assets $ 590,510

LIABILITIES

Due to Other Taxing Units $ 206,325Due to Litigants, Heirs, and Others 384,185

Total Liabilities $ 590,510


AgencyFunds

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Note Page(s)

I. Summary of Significant Accounting PoliciesA. Reporting Entity 32B. Government-wide and Fund Financial Statements 33C. Measurement Focus, Basis of Accounting, and Financial

Statement Presentation 34D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and

Net Position/Fund Balance1. Deposits and Investments 362. Receivables and Payables 363. Inventories 374. Capital Assets 375. Deferred Outflows/Inflows of Resources 386. Compensated Absences 397. Long-term Obligations 398. Net Position and Fund Balance 40

E. Pension Plans 41II. Reconciliation of Government-wide and Fund Financial Statements

A. Explanation of Certain Differences Between the Governmental FundBalance Sheet and the Government-wide Statement of Net Position 42

B. Explanation of Certain Differences Between the Governmental FundStatement of Revenues, Expenditures, and Changes in Fund Balancesand the Government-wide Statement of Activities 42

III. Stewardship, Compliance, and AccountabilityA. Budgetary Information 42B. Expenditures Exceeded Appropriations 43

IV. Detailed Notes on All FundsA. Deposits and Investments 44B. Capital Assets 45C. Interfund Transfers 48D. Long-term Obligations 49E. On-Behalf Payments - Discretely Presented Lewis County

School Department 51V. Other Information

A. Risk Management 52B. Accounting Changes 53C. Contingent Liabilities 54D. Joint Ventures 54E. Jointly Governed Organization 56F. Retirement Commitments 56G. Other Postemployment Benefits (OPEB) 82H. Purchasing Laws 85

LEWIS COUNTY, TENNESSEEIndex of Notes to the Financial Statements

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LEWIS COUNTY, TENNESSEE NOTES TO THE FINANCIAL STATEMENTS


I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Lewis 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 Lewis County:

A. Reporting Entity

Lewis County is a public municipal corporation governed by an elected 18-member board. As required by GAAP, these financial statements present Lewis County (the primary government) and its component units. The financial statements of the Lewis County Emergency Communications District, a component unit requiring discrete presentation was excluded from this report due to materiality calculations; therefore, the effect of its omission will not affect our opinion thereon. The component units discussed below are included in the county’s reporting entity because of the significance of their operational or financial relationships with the county.

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

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

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the school department are included in this report as listed in the table of contents. Complete financial statements of the Lewis County Emergency Communications District can be obtained from its administrative office at the following address:

Administrative Office: Lewis County Emergency Communications District P.O. Box 611 Hohenwald, TN 38462

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 Lewis 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 Lewis 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. Lewis County issues all debt for the discretely presented Lewis County School Department. There were no debt issues contributed by the county to the School Department during the year ended June 30, 2017. Separate financial statements are provided for governmental funds and fiduciary funds. The fiduciary funds are excluded from the government-wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements.

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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 fund 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 Lewis 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. Lewis County has no proprietary funds to report. Separate financial statements are provided for governmental funds and fiduciary funds. Major individual governmental funds are reported as separate columns in the fund financial statements. All other governmental funds are aggregated into a single column on the fund financial statements. The fiduciary funds in total are reported in a single column. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they become both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the county considers revenues other than grants to be available if they are collected within 30 days after year-end. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met and the revenues are available. Lewis County considers grants and similar revenues to be available if they are collected within 60 days after year-end. Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred. Principal and interest on long-term debt are recognized as fund liabilities when due or when amounts have been accumulated in the General Debt Service Fund for payments to be made early in the following year. Property taxes for the period levied, in-lieu-of tax payments, sales taxes, interest, and miscellaneous taxes are all considered to be susceptible to accrual and have been recognized as revenues of the current period. Applicable business taxes, litigation taxes, state-shared excise taxes, fines, forfeitures, and penalties are not susceptible to accrual since they are not measurable

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(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. Lewis 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.

Additionally, Lewis County reports the following fund types: Debt Service Fund – The General Debt Service Fund accounts for the resources accumulated and payments made for principal and interest on long-term general obligation debt of governmental funds. Capital Projects Funds – These funds account for capital expenditures of the county. Agency Funds – These funds account for amounts collected in an agency capacity by the constitutional officers and local sales taxes received by the state to be forwarded to the various cities in Lewis County. Agency funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. They do, however, use the accrual basis of accounting to recognize receivables and payables.

The discretely presented Lewis 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 Lewis County School Department reports the following fund type:

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

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

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

1. Deposits and Investments

State statutes authorize the government to make direct investments in bonds, notes, or treasury bills of the U.S. government and obligations guaranteed by the U.S. government or any of its agencies; deposit accounts at state and federal chartered banks and savings and loan associations; repurchase agreements; the State Treasurer’s Investment Pool; bonds of any state or political subdivision rated A or higher by any nationally recognized rating service; nonconvertible debt securities of certain federal government sponsored enterprises; and the county’s own legally issued bonds or notes. The county trustee maintains a cash and internal investment pool that is used by all funds and the discretely presented Lewis 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 and the General Purpose School funds. Lewis County and the School Department have adopted a policy of reporting U.S. Treasury obligations, U.S. agency obligations, and repurchase agreements with maturities of one year or less when purchased on the balance sheet at amortized cost. Certificates of deposit are reported at cost. Investments in the State Treasurer’s Investment Pool are reported at amortized cost using a Stable Net Asset Value. State statutes require the state treasurer to administer the pool under the same terms and conditions, including collateral requirements, as prescribed for other funds invested by the state treasurer. All other investments are reported at fair value. No investments required to be reported at fair value were held at the balance sheet date.

2. Receivables and Payables

Activity between funds for unremitted current collections outstanding at the end of the fiscal year is referred to as due to/from other funds. All solid waste and property tax receivables are shown with an allowance for uncollectibles. Solid waste receivables allowance for uncollectibles is based on historical collection data. The allowance for uncollectible property taxes is equal to two percent of total taxes levied.

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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.

3. Inventories

Inventories of the School Department are recorded at cost, determined on the average cost method. Inventories of governmental funds are recorded as expenditures when consumed rather than when purchased. Inventories are offset in the nonspendable fund balance account in governmental funds.

4. Capital Assets

Governmental funds do not capitalize the cost of capital outlays; these funds report capital outlays as expenditures upon acquisition. Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, and similar items), are reported in the governmental column in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of $10,000 ($5,000 for land) or more and an estimated useful life of more than two years. Such assets are recorded at historical cost or estimated historical cost if purchased or

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constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Property, plant, equipment, and infrastructure of the primary government and the discretely presented School Department are depreciated using the straight-line method over the following estimated useful lives:

Assets Years

Buildings and Improvements 20 - 40Other Capital Assets 5 - 20Infrastructure: Roads 8 - 30 Bridges 20 - 40

5. Deferred Outflows/Inflows of Resources

In addition to assets, the Statement of Net Position will sometimes report a separate section for deferred outflows of resources. Deferred outflows of resources represent a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The government has items that qualify for reporting in this category. Accordingly, the items are reported in the government-wide Statement of Net Position and the governmental funds balance sheet. These items are for pension changes in experience and employer contributions made to the pension plan after the measurement date. In addition to liabilities, the Statement of Net Position will sometimes report a separate section for deferred inflows of resources. Deferred inflows of resources represent an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue, etc.) until that time. The government has items that qualify for reporting in this category. Accordingly, the items are reported in the government-wide Statement of Net Position and the governmental funds balance sheet. These items are from the following sources: current property taxes, pension changes in experience, and pension changes in investment earnings, which do not meet the availability criteria for governmental funds. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available.

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6. Compensated Absences

It is the county’s policy to permit employees to accumulate earned but unused sick leave and compensatory time benefits. There is no liability for unpaid accumulated sick leave since Lewis County does not have a policy to pay any amounts when employees separate from service with the government. The county’s policy does not allow for the accumulation of unused vacation days beyond the fiscal year. It is the School Department’s policy to permit employees to accumulate earned but unused vacation and sick leave benefits. There is no liability for unpaid accumulated sick leave since the school department does not have a policy to pay any amounts when employees separate from service with the 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.

7. Long-term Obligations In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities Statement of Net Position. Debt premiums and discounts are deferred and amortized over the life of the new debt using the straight-line method. Debt issuance costs are expensed in the period incurred. In refunding transactions, the difference between the reacquisition price and the net carrying amount of the old debt is reported as a deferred outflow of resources or a deferred inflow of resources and recognized as a component of interest expense in a systematic and rational manner over the remaining life of the refunded debt or the life of the new debt issued, whichever is shorter. In the fund financial statements, governmental funds recognize debt premiums and discounts, as well as debt issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources, while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Only the matured portion (the portion that has come due for payment) of long-term indebtedness, including bonds payable, is recognized as a liability and expenditure in the governmental fund financial statements. Liabilities and expenditures for other long-term obligations, including compensated absences and other postemployment benefits, are recognized to the extent that the liabilities have matured (come due for payment) each period.

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8. Net Position and Fund Balance In the government-wide financial statements, equity is classified as net position and displayed in three components: a. Net investment in capital assets – Consists of capital assets,

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

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

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

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

Nonspendable Fund Balance – includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact.

Restricted Fund Balance – includes amounts that have constraints placed on the use of the resources that are either (a) externally imposed by creditors, grantors, contributors or laws and regulations of other governments or (b) imposed by law through constitutional provisions or enabling legislation.

Committed Fund Balance – includes amounts that can only be used for specific purposes pursuant to constraints imposed by formal resolutions of the county commission, the county’s highest level of decision-making authority and the Board of Education, the School Department’s highest level of

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decision-making authority, and shall remain binding unless removed in the same manner.

Assigned Fund Balance – includes amounts that are constrained by the county’s intent to be used for specific purposes, but are neither restricted nor committed (excluding stabilization arrangements). The county commission has authorized the county’s Budget Committee to make assignments for the general government. The Board of Education makes assignments for the School Department.

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

E. Pension Plans

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

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

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II. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS

A. Explanation of certain differences between the governmental fund

balance sheet and the government-wide Statement of Net 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 Lewis County School Department Exhibit H-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 Lewis County School Department Exhibit H-5 includes explanations of the nature of individual elements of items required to reconcile the net change in fund balances – total governmental funds with the change in net position of governmental activities reported in the government-wide Statement of Activities.

III. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY

A. Budgetary Information

Annual budgets are adopted on a basis consistent with generally accepted accounting principles (GAAP) for all governmental funds except the Constitutional Officers - Fees Fund (special revenue fund), which is not budgeted, and the 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

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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, 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, 2017, the Lewis County School Department reported the following significant encumbrances: Fund Description Amount

School Department Major Fund: General Purpose School School Buses $ 173,898 General Purpose School Roofing Projects 67,250

B. Expenditures Exceeded Appropriations

Expenditures exceeded appropriations approved by the county commission in the major appropriation categories (the legal level of control) of the following funds:

AmountFund/Major Category Overspent

General: Administration of the Sexual Offender Registry $ 50 Jail 18,536 Libraries 74 Employee Benefits 44,201Solid Waste/Sanitation: Transfer Stations 82,814Highway/Public Works: Capital Outlay 55,000

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In addition, total expenditures of the Solid Waste fund exceeded total appropriations approved by the county commission by $75,561. Expenditures that exceed appropriations are a violation of state statutes. These expenditures in excess of appropriations were funded by greater than anticipated revenues in the General Fund and by available fund balance in the Solid Waste and Highway/Public Works funds.

IV. DETAILED NOTES ON ALL FUNDS

A. Deposits and Investments

Lewis County and the Lewis 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

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federal chartered banks and savings and loan associations; bonds of any state or political subdivision rated A or higher by any nationally recognized rating service; nonconvertible debt securities of certain federal government sponsored enterprises; and the county’s own legally issued bonds or notes. These investments may not have a maturity greater than two years. The county may make investments with longer maturities if various restrictions set out in state law are followed. Counties are also authorized to make investments in the State Treasurer’s Investment Pool and in repurchase agreements. Repurchase agreements must be approved by the state Comptroller’s Office and executed in accordance with procedures established by the State Funding Board. Securities purchased under a repurchase agreement must be obligations of the U.S. government or obligations guaranteed by the U.S. government or any of its agencies. When repurchase agreements are executed, the purchase of the securities must be priced at least two percent below the fair value of the securities on the day of purchase. The county had no pooled and nonpooled investments as of June 30, 2017.

B. Capital Assets Capital assets activity for the year ended June 30, 2017, was as follows:

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Primary Government Governmental Activities:

Balance Balance7-1-16 Increases Decreases 6-30-17

Capital Assets Not Depreciated:Land $ 1,066,779 $ 11,000 $ 0 $ 1,077,779Construction in Progress 0 73,276 0 73,276Total Capital Assets Not Depreciated $ 1,066,779 $ 84,276 $ 0 $ 1,151,055

Capital Assets Depreciated:Buildings and Improvements $ 3,007,098 $ 265,400 $ 0 $ 3,272,498Infrastructure 20,066,519 937,056 0 21,003,575Other Capital Assets 2,382,475 141,207 (47,775) 2,475,907Total Capital Assets Depreciated $ 25,456,092 $ 1,343,663 $ (47,775) $ 26,751,980

Less Accumulated Depreciation for:Buildings and Improvements $ 2,193,750 $ 100,632 $ 0 $ 2,294,382Infrastructure 15,717,541 556,275 0 16,273,816Other Capital Assets 1,869,650 98,261 (47,775) 1,920,136

Total Accumulated Depreciation $ 19,780,941 $ 755,168 $ (47,775) $ 20,488,334

Total Capital Assets Depreciated, Net $ 5,675,151 $ 588,495 $ 0 $ 6,263,646

Governmental Activities Capital Assets, Net $ 6,741,930 $ 672,771 $ 0 $ 7,414,701

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

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Governmental Activities:

General Government $ 9,217Public Safety 57,575Public Health and Welfare 25,438Social, Cultural, and Recreation 50,515Highway/Public Works 612,423

Total Depreciation Expense - Governmental Activities $ 755,168

Discretely Presented Lewis County School Department Governmental Activities:

Balance Balance7-1-16 Increases Decreases 6-30-17

Capital Assets Not Depreciated:Land $ 1,104,068 $ 0 $ (236,537) $ 867,531Construction in Progress 0 174,600 0 174,600Total Capital Assets Not Depreciated $ 1,104,068 $ 174,600 $ (236,537) $ 1,042,131

Capital Assets Depreciated:Buildings and Improvements $ 10,897,339 $ 227,911 $ 0 $ 11,125,250Other Capital Assets 2,983,978 179,709 (102,428) 3,061,259Total Capital Assets Depreciated $ 13,881,317 $ 407,620 $ (102,428) $ 14,186,509

Less Accumulated Depreciation for:Buildings and Improvements $ 7,707,674 $ 213,741 $ 0 $ 7,921,415Other Capital Assets 2,144,318 161,946 (102,428) 2,203,836

Total Accumulated Depreciation $ 9,851,992 $ 375,687 $ (102,428) $ 10,125,251

Total Capital Assets Depreciated, Net $ 4,029,325 $ 31,933 $ (236,537) $ 4,061,258

Governmental Activities Capital Assets, Net $ 5,133,393 $ 206,533 $ (236,537) $ 5,103,389

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

Support Services $ 347,424Operation of Non-instructional Services 28,263

Total Depreciation Expense - Governmental Activities $ 375,687

C. Interfund Transfers

Interfund transfers for the year ended June 30, 2017, consisted of the following amounts: Primary Government

Transfer Out

General Fund $ 110,000

Transfer InNonmajor

GovernmentalFund

Discretely Presented Lewis County School Department

Transfer Out

Nonmajor governmental fund $ 12,814

Transfer InGeneralPurposeSchoolFund

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 authorization. The county made a transfer of $110,000 from the General Fund to the Sports and Recreation Fund for operations.

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D. Long-term Obligations Primary Government

General Obligation Bonds and Notes Lewis County issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities for the primary government and the discretely presented School Department. In addition, general obligation bonds have been issued to refund other general obligation bonds. Capital outlay notes are also issued to fund capital facilities and other capital outlay purchases, such as equipment. General obligation bonds and capital outlay notes are direct obligations and pledge the full faith and credit of the government. The capital outlay note outstanding was issued for original terms of 10 years. The capital outlay note is interest free with equal annual payments until maturity. The note included in long-term debt as of June 30, 2017, will be retired from the General Debt Service Fund. The capital outlay note outstanding as of June 30, 2017, for governmental activities is as follows:

OriginalInterest Final Amount Balance

Type Rate Maturity of Issue 6-30-17

Capital Outlay Note 0% 9-15-26 $ 95,500 $ 95,500

The annual requirements to amortize the capital outlay note outstanding as of June 30, 2017, is presented in the following table: Year EndingJune 30 Total

2018 $ 9,550 $ 0 $ 9,5502019 9,550 0 9,5502020 9,550 0 9,5502021 9,550 0 9,5502022 9,550 0 9,5502023-2027 47,750 0 47,750

Total $ 95,500 $ 0 $ 95,500

Principal InterestNote

There is $17,014 available in the General Debt Service Fund to service long-term debt. Debt per capita totaled $8, based on the 2010 federal census.

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Changes in Long-term Obligations Long-term obligations activity for the year ended June 30, 2017, was as follows: Governmental Activities:

Net PensionLiability -

Hwy AgentBond Notes Plan

Balance, July 1, 2016 $ 195,000 $ 110,000 $ 419,427Additions 0 170,500 231,873Reductions (195,000) (185,000) (130,205)

Balance, June 30, 2017 $ 0 $ 95,500 $ 521,095

Balance Due Within One Year $ 0 $ 9,550 $ 0

Governmental Activities:

Net PensionOther Liability -

Compensated Postemplyment Officials Absences Benefits Agent Plan

Balance, July 1, 2016 $ 27,992 $ 84,832 $ 297,570Additions 32,697 9,987 246,954Reductions (37,685) (986) (218,614)

Balance, June 30, 2017 $ 23,004 $ 93,833 $ 325,910

Balance Due Within One Year $ 15,460 $ 0 $ 0

Analysis of Noncurrent Liabilities Presented on Exhibit A:

Total Noncurrent Liabilities, June 30, 2017 $ 1,059,342Less: Balance Due Within One Year (25,010)

Noncurrent Liabilities - Due in More Than One Year - Exhibit A $ 1,034,332

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

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Discretely Presented Lewis County School Department Changes in Long-term Obligations Long-term obligations activity for the discretely presented Lewis County School Department for the year ended June 30, 2017, was as follows: Governmental Activities:

Other Net PensionCompensated Postemployment Liability -

Absences Benefits Legacy Plan

Balance, July 1, 2016 $ 11,834 $ 456,258 $ 78,556Additions 7,868 95,932 2,398,304Reductions (10,541) (73,011) (1,286,804)

Balance, June 30, 2017 $ 9,161 $ 479,179 $ 1,190,056

Balance Due Within One Year $ 9,161 $ 0 $ 0

Analysis of Noncurrent Liabilities Presented on Exhibit A:

Total Noncurrent Liabilities, June 30, 2017 $ 1,678,396Less: Balance Due Within One Year (9,161)

Noncurrent Liabilities - Due in More Than One Year - Exhibit A $ 1,669,235

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

E. On-Behalf Payments – Discretely Presented Lewis County School Department The State of Tennessee pays health insurance premiums for retired teachers on-behalf of the Lewis County School Department. These payments are made by the state to the Local Education Group Insurance Plan and the Medicare Supplement Plan. Both of these plans are administered by the State of Tennessee and reported in the state’s Comprehensive Annual Financial Report. Payments by the state to the Local Education Group Insurance Plan and the Medicare Supplement Plan for the year ended June 30, 2017, were $32,516 and $11,900, respectively. The School Department has recognized these on-behalf payments as revenues and expenditures in the General Purpose School Fund.

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V. OTHER INFORMATION A. Risk Management

Primary Government Lewis 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 premiums. The LGPCF reinsures through commercial insurance companies for claims exceeding $100,000 for each insured event.

The county decided it was more economically feasible to join a public entity risk pool as opposed to purchasing commercial insurance for workers’ compensation coverage. Lewis County joined the Local Government Workers’ Compensation Fund (LGWCF), which is a public entity risk pool established by the Tennessee County Services Association, an association of member counties. Lewis County pays annual premiums to the LGWCF for its workers’ compensation coverage. The creation of the LGWCF provides for it to be self-sustaining through member premiums. Lewis 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 of the State of Tennessee, but the state does not retain any risk for losses by this fund. The state statute provides for the LGGIF to be self-sustaining through member premiums. Discretely Presented Lewis 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 an annual premium to the TN-RMT for its general liability, property, casualty, and workers’ compensation insurance coverage. The creation of the TN-RMT provides for it to be self-sustaining through member premiums.

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The discretely presented Lewis County 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. Accounting Changes Provisions of Governmental Accounting Standards Board (GASB) Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans; Statement No. 77, Tax Abatement Disclosures; Statement No. 78, Pensions Provided through Certain Multiple-Employer Defined Benefit Pension Plans; Statement No. 80, Blending Requirements for Certain Component Units; and Statement No. 82, Pension Issues an amendment of GASB Statements No. 67, No. 68, and No. 73, became effective for the year ended June 30, 2017. GASB Statement No. 74, establishes accounting and reporting requirements for postemployment benefits other than pensions (other postemployment benefits or OPEB), which are included in the general purpose external financial reports of state and local governmental OPEB plans. This statement replaces GASB Statements No. 43 and No. 57. It also includes requirements for defined contribution OPEB plans that replace the requirements in statements No. 25, No. 43, and No. 50. The scope of this statement includes OPEB plans, both defined benefit and defined contribution, administered through trusts meeting the necessary criteria as well as reporting assets accumulated through OPEB plans that are not administered through trusts that meet the specified criteria. GASB Statement No. 77, established reporting requirements for tax abatements. This standard requires the disclosure of information about the nature and magnitude of tax abatement agreements entered into by state and local governments that reduce the government’s tax revenues. GASB Statement No. 78, amends Statement No. 68 to exclude certain pensions provided to employees of state or local governments through a cost-sharing multiple-employer pension plans that are not state or local plans and meet specific other criteria. This statement establishes recognition, measurement, and reporting requirements criteria for these plans. GASB Statement No. 80, amends the blending requirements of paragraph 53 of Statement No. 14. This standard adds additional blending criterion, which requires blending of a component unit incorporated as a not-for-profit corporation in which the primary government is the sole corporate member.

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GASB Statement No. 82 amends Statements No. 67, No. 68, and No. 73. This standard establishes covered payroll as the payroll on which contributions to a pension plan are based in the Required Supplementary Information. In addition, this standard clarifies that employer paid member contributions should be considered plan member contributions for purposes of applying Statement No. 67, and employee contributions for the purposes of applying Statement No. 68. This standard further states that an employer’s expense and expenditures for employer paid member contributions should be recognized in the period for which the contribution is assessed and classified in the same manner that the employer classifies similar compensation other than pensions (for example, as salaries and wages or as fringe benefits).

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

D. Joint Ventures Primary Government The Joint Economic and Community Development Board of Lewis County is a joint venture between Lewis County and the City of Hohenwald. The board comprises the mayor of the City of Hohenwald, the mayor of Lewis County, the president of the Lewis County Chamber of Commerce, a private citizen who owns greenbelt property, and a local industry representative. The purpose of the board is to develop, recommend, and direct a strategic plan of policies and action that improves the economic well-being of the community and those activities and services that support economic growth and improve the quality of life of the community’s members. The city and county provide the majority of funding for the board based on the percentage of their population compared to the total census of the county. Lewis County did not appropriate any funds to the Joint Economic and Community Development Board of Lewis County during the 2016-17 year. The Twenty-first Judicial District Drug Task Force (DTF) is a joint venture formed by an interlocal agreement between the district attorney general of the Twenty-first Judicial District, Williamson, Lewis, Hickman, and Perry counties, and various cities within these counties. The purpose of the DTF is to provide multi-jurisdictional law enforcement to promote the investigation and prosecution of drug-related activities. Funds for the operations of the DTF come primarily from federal grants, drug fines, and the forfeiture of drug-related assets to the DTF. The DTF is overseen by the district attorney general and is governed by a board of directors, including the district attorney general, sheriffs, and police chiefs of participating law enforcement agencies within

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each judicial district. Lewis County did not appropriate any funds to the DTF for the year ended June 30, 2017.

Lewis County does not have an equity interest in any of the above-noted joint ventures. Complete financial statements for the Joint Economic and Community Development Board of Lewis County and the Twenty-first Judicial District Drug Task Force can be obtained from their administrative offices at the following addresses:

Administrative Offices: Joint Economic and Community Development Board of Lewis County 196 North Court Street Hohenwald, TN 38462

Office of District Attorney General Twenty-first Judicial District Drug Task Force P.O. Box 937 Franklin, TN 37065

Discretely Presented Lewis County School Department

The discretely presented School Department participates in the Volunteer State Cooperative (VOLCO), which represents a cost-sharing arrangement. The cooperative was established through a contractual agreement between the Boards of Education of Lewis County, Bedford County, Coffee County, Dickson County, Fayetteville City, Hickman County, Houston County, Humphreys County, Lincoln County, Manchester City, Marshall County, and Stewart County. The cooperative was authorized through Chapter 49 of Tennessee Code Annotated 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 (Dickson County School Department) and a service provider to provide these services. The cooperative is governed by a Representative Committee, comprising 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 the Volunteer State Cooperative can be obtained from its administrative office at the following address:

Administrative Office:

Volunteer State Cooperative 220 McLemore Street Dickson, TN 37055

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E. Jointly Governed Organization Lewis County, in conjunction with Hickman, Perry, and Wayne counties, and the cities of Hohenwald, Centerville, Waynesboro, and Linden, has created the South Central Tennessee Railroad Authority (SCTRA). The SCTRA’s board comprises 16 members, consisting of the county mayors/executives, city mayors, and appointed members from the respective county commissions and city councils. Lewis County does not have any ongoing financial interest or responsibility for the entity, and the county did not appropriate any funds to the SCTRA during the audit period. Funding sources for the SCTRA are lease payments, switching fees, interest, and grants.

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

Primary Government General Information About the Pension Plan Plan Description. Employees of Lewis County are provided a defined benefit pension plan through one of three Public Employee Retirement Plans. These plans are the Lewis County Plan, the Lewis County Officials Plan, and the Lewis County Highway Department Plan. These plans are agent multiple-employer pension plans 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 the TCRS. The Tennessee Treasury Department, an agency in the legislative branch of state government, administers the plans of the TCRS. The TCRS issues a publicly available financial report that can be obtained at www.treasury.tn.gov/tcrs.

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

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service retirement benefit but are reduced ten percent and include projected service credits. A variety of death benefits is available under various eligibility criteria. The Lewis County Plan does not provide its member and beneficiary annuitants an automatic cost of living adjustment (COLA) after retirement. The Lewis County Officials Plan and the Lewis County Highway Department Plan member and beneficiary annuitants are entitled to a 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, 2016, the following employees were covered by the benefit terms: Lewis County: Inactive Employees or Beneficiaries Currently Receiving Benefits 5Inactive Employees Entitled to But Not Yet Receiving Benefits 41Active Employees 50

Total 96

Lewis County Officials: Inactive Employees or Beneficiaries Currently Receiving Benefits 12Inactive Employees Entitled to But Not Yet Receiving Benefits 6Active Employees 10

Total 28

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Lewis County Highway Department: Inactive Employees or Beneficiaries Currently Receiving Benefits 27Inactive Employees Entitled to But Not Yet Receiving Benefits 7Active Employees 15

Total 49

Contributions. Contributions for employees are established in the statutes governing the TCRS and may only be changed by the Tennessee General Assembly. Employees contribute five percent of their salary. Lewis County makes employer contributions at the rate set by the Board of Trustees as determined by an actuarial valuation. For the year ended June 30, 2017, the Actuarial Determined Contributions (ADC) for Lewis County, Lewis County Officials, and the Lewis County Highway Department, were $63,522 based on a rate of 4.14 percent of covered payroll, $60,572 based on a rate of 8.69 percent of covered payroll, and $65,564 based on a rate of 14.30 percent of covered payroll, respectively. By law, employer contributions are required to be paid. The TCRS may intercept Lewis County’s state shared taxes if required employer contributions are not remitted. The employer’s ADC and member contributions are expected to finance the costs of benefits earned by members during the year, the cost of administration, as well as an amortized portion of any unfunded liability. Net Pension Liability (Asset) Lewis County’s net pension liability (asset) was measured as of June 30, 2016, 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, 2016, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:

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Inflation 3%Salary Increases Graded Salary Ranges from 8.97%

to 3.71% Based on Age, IncludingInflation, Averaging 4.25%

Investment Rate of Return 7.5%, Net of Pension PlanInvestment Expenses, IncludingInflation

Cost of Living Adjustment 2.5%

Mortality rates were based on actual experience from the June 30, 2012, actuarial experience study, adjusted for some of the expected future improvement in life expectancy. The actuarial assumptions used in the June 30, 2016, actuarial valuation were based on the results of an actuarial experience study performed for the period July 1, 2008, through June 30, 2012. The demographic assumptions were adjusted to more closely reflect actual and expected future experience. The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees in conjunction with the June 30, 2012, actuarial experience study by considering the following three techniques: (1) the 25-year historical return of the TCRS at June 30, 2012, (2) the historical market returns of asset classes from 1926 to 2012 using the TCRS investment policy asset allocation, and (3) capital market projections that were utilized as a building-block method in which best-estimate ranges of expected future real rate of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. Four sources of capital market projections were blended and utilized in the third technique. The blended capital market projection established the long-term expected rate of return by weighting the expected future real rate of return by the target asset allocation percentage and by adding inflation of three percent. The target allocation and best estimate of arithmetic real rates of return for each major asset class are summarized in the following table:

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PercentageLong-termExpected PercentageReal Rate Target

Asset Class of Return Allocations

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

Total 100 %

The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees as 7.5 percent based on a blending of the three factors described above. Discount Rate. The discount rate used to measure the total pension liability was 7.5 percent. The projection of cash flows used to determine the discount rate assumes that employee contributions will be made at the current rate and that contributions from Lewis 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) Lewis County:

Total Plan NetPension Fiduciary PensionLiability Net Position Liability

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

Balance, July 1, 2015 $ 1,189,308 $ 1,223,801 $ (34,493)

Changes for the year: Service Cost $ 125,145 $ 0 $ 125,145 Interest 97,900 0 97,900 Differences Between Expected and Actual Experience (67,292) 0 (67,292) Contributions-Employer 0 61,547 (61,547) Contributions-Employees 0 74,333 (74,333) Net Investment Income 0 33,985 (33,985) Benefit Payments, Including Refunds of Employee Contributions (18,250) (18,250) 0 Administrative Expense 0 (3,892) 3,892 Other Changes 0 0 0Net Changes $ 137,503 $ 147,723 $ (10,220)

Balance, June 30, 2016 $ 1,326,811 $ 1,371,524 $ (44,713)

Increase (Decrease)

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Lewis County Officials:


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

Balance, July 1, 2015 $ 2,520,353 $ 2,222,783 $ 297,570

Changes for the year: Service Cost $ 58,056 $ 0 $ 58,056 Interest 188,141 0 188,141 Differences Between Expected and Actual Experience (66,561) 0 (66,561) Contributions-Employer 0 59,489 (59,489) Contributions-Employees 0 34,228 (34,228) Net Investment Income 0 58,336 (58,336) Benefit Payments, Including Refunds of Employee Contributions (139,724) (139,724) 0 Administrative Expense 0 (757) 757 Other Changes 0 0 0Net Changes $ 39,912 $ 11,572 $ 28,340

Balance, June 30, 2016 $ 2,560,265 $ 2,234,355 $ 325,910

Increase (Decrease)

Lewis County Highway Department:


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

Balance, July 1, 2015 $ 2,452,528 $ 2,033,101 $ 419,427

Changes for the year: Service Cost $ 34,361 $ 0 $ 34,361 Interest 181,465 0 181,465 Differences Between Expected and Actual Experience 14,844 0 14,844 Contributions-Employer 0 50,813 (50,813) Contributions-Employees 0 26,246 (26,246) Net Investment Income 0 53,146 (53,146) Benefit Payments, Including Refunds of Employee Contributions (134,721) (134,721) 0 Administrative Expense 0 (1,203) 1,203 Other Changes 0 0 0Net Changes $ 95,949 $ (5,719) $ 101,668

Balance, June 30, 2016 $ 2,548,477 $ 2,027,382 $ 521,095

Increase (Decrease)

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

Current1% Discount 1%

Decrease Rate IncreaseLewis County 6.5% 7.5% 8.5%

Net Pension Liability $ 166,462 $ (44,713) $ (215,112)


Decrease Rate IncreaseLewis County Officials 6.5% 7.5% 8.5%

Net Pension Liability $ 597,925 $ 325,910 $ 91,733


Lewis County Decrease Rate IncreaseHighway Department 6.5% 7.5% 8.5%

Net Pension Liability $ 816,593 $ 521,095 $ 273,749

Pension Expense (Income) and Deferred Outflows of Resources and Deferred Inflows of Resources to Pensions Pension Expense. For the year ended June 30, 2017, Lewis County recognized pension expense of $53,579, Lewis County Officials recognized pension expense of $54,491, and the Lewis County Highway Department recognized pension expense of $76,931. Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2017, Lewis County reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

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Lewis County:

Deferred DeferredOutflows Inflows

of of Resources Resources

Difference Between Expected and Actual Experience $ 30,511 $ 99,468Net Difference Between Projected and Actual Earnings on Pension Plan Investments 46,617 0Contributions Subsequent to the Measurement Date of June 30, 2016 (1) 63,522 N/A

Total $ 140,650 $ 99,468





Total $ 211,054 $ 58,194




Difference Between Expected and Actual Experience $ 67,898 $ 0Net Difference Between Projected and Actual Earnings on Pension Plan Investments 66,087 0Contributions Subsequent to the Measurement Date of June 30, 2016 (1) 65,564 N/A

Total $ 199,549 $ 0

(1) The amount shown above for “Contributions Subsequent to the Measurement Date of June 30, 2016,” will be recognized as a reduction

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(increase) to net pension liability (asset) in the following measurement period. 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: Lewis County:

Year EndingJune 30 Amount

2018 $ (2,975)2019 (2,975)2020 13,8052021 3,6302022 (8,783)Thereafter (25,043)



2018 $ 6,7202019 14,9942020 49,2542021 21,3242022 0Thereafter 0



2018 $ 67,6662019 9,6632020 37,2302021 19,4262022 0Thereafter 0

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

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

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

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Employees Covered by Benefit Terms. At the measurement date of June 30, 2016, the following employees were covered by the benefit terms: Inactive Employees or Beneficiaries Currently Receiving Benefits 60Inactive Employees Entitled to But Not Yet Receiving Benefits 66Active Employees 91

Total 217

Contributions. Contributions for employees are established in the statutes governing the TCRS and may only be changed by the Tennessee General Assembly. Employees contribute five percent of their salary. The Lewis County School Department makes employer contributions at the rate set by the Board of Trustees as determined by an actuarial valuation. For the year ended June 30, 2017, the Actuarial Determined Contribution (ADC) for the Lewis County School Department was $203,536 based on a rate of 11.07 percent of covered payroll. By law, employer contributions are required to be paid. The TCRS may intercept Lewis 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) The Lewis County School Department’s net pension liability (asset) was measured as of June 30, 2016, 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, 2016, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:

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Mortality rates were based on actual experience from the June 30, 2012, actuarial experience study, adjusted for some of the expected future improvement in life expectancy. The actuarial assumptions used in the June 30, 2016, actuarial valuation were based on the results of an actuarial experience study performed for the period July 1, 2008, through June 30, 2012. The demographic assumptions were adjusted to more closely reflect actual and expected future experience. The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees in conjunction with the June 30, 2012, actuarial experience study by considering the following three techniques: (1) the 25-year historical return of the TCRS at June 30, 2012, (2) the historical market returns of asset classes from 1926 to 2012 using the TCRS investment policy asset allocation, and (3) capital market projections that were utilized as a building-block method in which best-estimate ranges of expected future real rate of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. Four sources of capital market projections were blended and utilized in the third technique. The blended capital market projection established the long-term expected rate of return by weighting the expected future real rate of return by the target asset allocation percentage and by adding inflation of three percent. The target allocation and best estimate of arithmetic real rates of return for each major asset class are summarized in the following table:

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Total 100 %

The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees as 7.5 percent based on a blending of the three factors described above. Discount Rate. The discount rate used to measure the total pension liability was 7.5 percent. The projection of cash flows used to determine the discount rate assumes that employee contributions will be made at the current rate and that contributions from the Lewis County School Department 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)


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

Balance, July 1, 2015 $ 5,560,415 $ 5,698,452 $ (138,037)

Changes for the year: Service Cost $ 154,765 $ 0 $ 154,765 Interest 418,980 0 418,980 Differences Between Expected and Actual Experience (82,734) 0 (82,734) Contributions-Employer 0 191,949 (191,949) Contributions-Employees 0 86,697 (86,697) Net Investment Income 0 151,567 (151,567) Benefit Payments, Including Refunds of Employee Contributions (257,548) (257,548) 0 Administrative Expense 0 (6,688) 6,688 Other Changes 0 0 0Net Changes $ 233,463 $ 165,977 $ 67,486

Balance, June 30, 2016 $ 5,793,878 $ 5,864,429 $ (70,551)

Increase (Decrease)

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


Decrease Rate Increase6.5% 7.5% 8.5%


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Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources to Pensions Pension Expense. For the year ended June 30, 2017, the Lewis County School Department recognized pension expense of $48,394. Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2017, Lewis County reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:




Total $ 452,865 $ 140,589

(1) The amount shown above for “Contributions Subsequent to the Measurement Date of June 30, 2016,” will be recognized as a reduction (increase) to net pension liability (asset) in the following measurement period.

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:


2018 $ (17,418)2019 (17,418)2020 104,8482021 38,7242022 0Thereafter 0

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

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

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adjusted on a prospective basis. Moreover, there are defined cost controls and unfunded liability controls that provide for the adjustment of benefit terms and conditions on an automatic basis. Contributions. Contributions for teachers are established in the statutes governing the TCRS and may only be changed by the Tennessee General Assembly or by automatic cost controls set out in law. Teachers are required to contribute five percent of their salary to the plan. The Local Education Agencies (LEAs) make employer contributions at the rate set by the Board of Trustees as determined by an actuarial valuation. Per the statutory provisions governing TCRS, the employer contribution rate cannot be less than four percent, except in years when the maximum funded level, approved by the TCRS Board of Trustees, is reached. By law, employer contributions for the Teacher Retirement Plan are required to be paid. The TCRS may intercept the state shared taxes of the sponsoring governmental entity of the LEA if the required employer contributions are not remitted. Employer contributions for the year ended June 30, 2017, to the Teacher Retirement Plan were $21,767, which is four percent of covered payroll. The employer rate, when combined with member contributions, is expected to finance the costs of benefits earned by members during the year, the cost of administration, as well as an amortized portion of any unfunded liability. Pension Liabilities (Assets), Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions Pension Liabilities (Assets). At June 30, 2017, the Lewis County School Department reported an asset of $8,392 for its proportionate share of the net pension asset. The net pension asset was measured as of June 30, 2016, and the total pension liability used to calculate the net pension asset was determined by an actuarial valuation as of that date. The Lewis County School Department’s proportion of the net pension asset was based on the Lewis County School Department’s share of contributions to the pension plan relative to the contributions of all participating LEAs. At the measurement date of June 30, 2016, the Lewis County School Department’s proportion was 0.080616 percent. The revised proportion measured at June 30, 2015, was 0.047700 percent. Pension Expense. For the year ended June 30, 2017, the Lewis County School Department recognized pension expense of $6,949. Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2017, the Lewis County School Department reported deferred outflows of resources related to pensions from the following sources:

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Difference Between Expected and Actual Experience $ 813 $ 968Net Difference Between Projected and Actual Earnings on Pension Plan Investments 1,374 0Changes in Proportion of Net Pension Liability (Asset) 0 923LEA's Contributions Subsequent to the Measurement Date of June 30, 2016 21,767 N/A

Total $ 23,954 $ 1,891

The Lewis County School Department’s employer contributions of $21,767, reported as pension related deferred outflows of resources subsequent to the measurement date, will be recognized as an increase of net pension liability (asset) in the year ending June 30, 2018. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:


2018 $ 2632019 2632020 2632021 1972022 (97)Thereafter (592)

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, 2016, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:

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Mortality rates are customized based on the June 30, 2012, actuarial experience study and some included adjustment for expected future improvement in life expectancy. The actuarial assumptions used in the June 30, 2016, actuarial valuation were based on the results of an actuarial experience study performed for the period July 1, 2008, through June 30, 2012. The demographic assumptions were adjusted to more closely reflect actual and expected future experience. The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees in conjunction with the June 30, 2012, actuarial experience study by considering the following three techniques: (1) the 25-year historical return of the TCRS at June 30, 2012, (2) the historical market returns of asset classes from 1926 to 2012 using the TCRS investment policy asset allocation, and (3) capital market projections that were utilized as a building-block method in which best-estimate ranges of expected future real rate of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. Four sources of capital market projections were blended and utilized in the third technique. The blended capital market projection established the long-term expected rate of return by weighting the expected future real rate of return by the target asset allocation percentage and by adding inflation of three percent. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

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Total 100 %

The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees as 7.5 percent based on a blending of the three factors described above. Discount Rate. The discount rate used to measure the total pension liability was 7.5 percent. The projection of cash flows used to determine the discount rate assumes that employee contributions will be made at the current rate and that contributions from 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 Lewis County School Department’s proportionate share of the net pension liability (asset) calculated using the discount rate of 7.5 percent, as well as what the Lewis County School Department’s proportionate share of the net pension liability (asset) would be if it was calculated using a discount rate that is one percentage point lower (6.5%) or one percentage point higher (8.5%) than the current rate:

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School Department's Current Proportionate Share of 1% Discount 1% the Net Pension Decrease Rate Increase Liability (Asset) 6.5% 7.5% 8.5%


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

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adjustment (COLA) after retirement. A COLA is granted each July for annuitants retired prior to the second of July of the previous year. The COLA is based on the change in the consumer price index (CPI) during the prior calendar year, capped at three percent, and applied to the current benefit. No COLA is granted if the change in the CPI is less than one-half percent. A one percent COLA is granted if the CPI change is between one-half and one percent. A member who leaves employment may withdraw their employee contributions, plus any accumulated interest. Under the Teacher Legacy Pension Plan, benefit terms and conditions, including COLAs can be adjusted on a prospective basis. Moreover, there are defined cost controls and unfunded liability controls that provide for the adjustment of benefit terms and conditions on an automatic basis. Contributions. Contributions for teachers are established in the statutes governing the TCRS and may only be changed by the Tennessee General Assembly. Teachers are required to contribute five percent of their salaries. The Local Education Agencies (LEAs) make employer contributions at the rate set by the Board of Trustees as determined by an actuarial valuation. By law, employer contributions for the Teacher Legacy Pension Plan are required to be paid. The TCRS may intercept the state shared taxes of the sponsoring governmental entity of the LEA if the required employer contributions are not remitted. Employer contributions by the Lewis County School Department for the year ended June 30, 2017, to the Teacher Legacy Pension Plan were $622,321 which is 9.04 percent of covered payroll. The employer rate, when combined with member contributions, is expected to finance the costs of benefits earned by members during the year, the cost of administration, as well as an amortized portion of any unfunded liability. Pension Liabilities (Assets), Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions Pension Liability (Assets). At June 30, 2017, the Lewis County School Department reported a liability of $1,190,056 for its proportionate share of the net pension liability (asset). The net pension liability (asset) was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability (asset) was determined by an actuarial valuation as of that date. The Lewis County School Department’s proportion of the net pension liability (asset) was based on the Lewis County School Department’s long-term share of contributions to the pension plan relative to the contributions of all participating LEAs. At the measurement date of June 30, 2016, the Lewis County School Department’s proportion was 0.190426 percent. The proportion measured at June 30, 2015, was 0.191770 percent.

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Pension Expense. For the year ended June 30, 2017, the Lewis County School Department recognized pension expense of $157,245. Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2017, the Lewis County 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 $ 50,082 $ 1,440,764Net Difference Between Projected and Actual Earnings on Pension Plan Investments 1,328,714 0Changes in Proportion of Net Pension Liability (Asset) 76,146 10,195LEA's Contributions Subsequent to the Measurement Date of June 30, 2016 622,321 N/A

Total $ 2,077,263 $ 1,450,959

The Lewis County School Department’s employer contributions of $622,321 reported as pension related deferred outflows of resources subsequent to the measurement date, will be recognized as an increase in net pension asset in the year ending June 30, 2018. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:


2018 $ (205,682)2019 (205,682)2020 431,7022021 79,5702022 (95,926)Thereafter 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, 2016, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:





Mortality rates are customized based on the June 30, 2012, actuarial experience study and some included adjustments for expected future improvement in life expectancy. The actuarial assumptions used in the June 30, 2016, actuarial valuation were based on the results of an actuarial experience study performed for the period July 1, 2008, through June 30, 2012. The demographic assumptions were adjusted to more closely reflect actual and expected future experience. The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees in conjunction with the June 30, 2012, actuarial experience study by considering the following three techniques: (1) the 25-year historical return of the TCRS at June 30, 2012, (2) the historical market returns of asset classes from 1926 to 2012 using the TCRS investment policy asset allocation, and (3) capital market projections that were utilized as a building-block method in which best-estimate ranges of expected future real rate of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. Four sources of capital market projections were blended and utilized in the third technique. The blended capital market projection established the long-term expected rate of return by weighting the expected future real rate of return by the target asset allocation percentage and by adding inflation of three percent. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

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Total 100 %

The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees as 7.5 percent based on a blending of the three factors described above. Discount Rate. The discount rate used to measure the total pension liability was 7.5 percent. The projection of cash flows used to determine the discount rate assumes that employee contributions will be made at the current rate and that contributions from 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 Lewis County School Department’s proportionate share of the net pension liability (asset) calculated using the discount rate of 7.5 percent, as well as what the Lewis County School Department’s proportionate share of the net pension liability (asset) would be if it was calculated using a discount rate that is one percentage point lower (6.5%) or one percentage point higher (8.5%) than the current rate:

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School Department's Current Proportionate Share of 1% Discount 1% the Net Pension Decrease Rate Increase Liability (Asset) 6.5% 7.5% 8.5%

Net Pension Liability $ 6,534,804 $ 1,190,056 $ (3,237,292)

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 The Lewis County Highway Department offers its employees a deferred compensation plan established pursuant to IRC Section 457 and the Lewis County School Department offers its employees a deferred compensation plan established pursuant to IRC Section 403(b). All costs of administering and funding these programs are the responsibility of plan participants. The Section 403(b) and Section 457 plan assets remain the property of the contributing employees and are not presented in the accompanying financial statements. IRC Sections 403(b) and 457 establish participation, contribution, and withdrawal provisions for the plans.

A. Other Postemployment Benefits (OPEB) Plan Description The Lewis County Highway Department and the School Department participate in the state-administered Local Government Group Insurance Plan and the Teacher Group Insurance Plan for healthcare benefits. For accounting purposes, the plans are agent multiple-employer defined benefit OPEB plans. Benefits are established and amended by an insurance committee created by Section 8-27-302, Tennessee Code Annotated (TCA), for local education employees, and Section 8-27-207, TCA, for local governments. Prior to reaching the age of 65, all members have the option of choosing between the standard or partnership preferred provider organization (PPO) plan for healthcare benefits. Subsequent to age 65, members who are also in the state’s retirement system may participate in a state-administered Medicare Supplement Plan that does not include pharmacy. The plans are reported in the State of Tennessee Comprehensive Annual Financial Report (CAFR). The CAFR is available on the state’s website at http://tennessee.gov/finance/article/fa-accfin-cafr.

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

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Funding Policy The premium requirements of plan members are established and may be amended by the insurance committee. The plan is self-insured and financed on a pay-as-you-go basis with the risk shared equally among the participants. Claims liabilities of the plan are periodically computed using actuarial and statistical techniques to establish premium rates. The employers in each plan develop their own contribution policy in terms of subsidizing active employees or retired employees’ premiums since the committee is not prescriptive on that issue. The state does not provide a subsidy for local government participants; however, the state does provide a partial subsidy to Local Education Agency pre-65 teachers and a full subsidy based on years of service for post-65 members in the Medicare Supplement Plan. The Highway Department and the School Department recognized expenditures of $986 and $73,011, respectively, for postemployment health care during the year ended June 30, 2017. Annual OPEB Cost and Net OPEB Obligation

Local LocalEducation Government

Group GroupPlan Plan *

ARC $ 96,000 $ 10,000Interest on the NOPEBO 17,110 3,181Adjustment to the ARC (17,178) (3,194)Annual OPEB cost $ 95,932 $ 9,987Amount of contribution (73,011) (986)Increase/decrease in NOPEBO $ 22,921 $ 9,001Net OPEB obligation, 7-1-16 456,258 84,832

Net OPEB obligation, 6-30-17 $ 479,179 $ 93,833

* Local Government Group Plan covers only the Highway Department.

PercentageFiscal Annual of Annual Net OPEBYear OPEB OPEB Cost Obligation

Ended Plans Cost Contributed at Year End

6-30-15 Local Education Group $ 73,407 68 418,6966-30-16 " 92,937 60 456,2586-30-17 " 95,932 76 479,1796-30-15 Local Government Group 8,072 19 75,5946-30-16 " 9,989 8 84,8326-30-17 " 9,987 10 93,833

Funded Status and Funding Progress

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

Actuarial valuation date 7-1-15 7-1-15Actuarial accrued liability (AAL) $ 938,000 $ 130,000Actuarial value of plan assets $ 0 $ 0Unfunded actuarial accrued liability (UAAL) $ 938,000 $ 130,000Actuarial value of assets as a % of the AAL 0% 0%Covered payroll (active plan members) $ 8,525,000 $ 545,000UAAL as a % of covered payroll 11% 24%

LocalEducation

GroupPlan

LocalGovernment

GroupPlan

Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future, and actuarially determined amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. The Schedule of Funding Progress, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits.

Actuarial Methods and Assumptions

Calculations are based on the types of benefits provided under the terms of the substantive plan at the time of each valuation and on the pattern of sharing of costs between the employer and plan members to that point. Actuarial calculations reflect a long-term perspective. Consistent with that perspective, actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets. In the July 1, 2015, actuarial valuation for the Local Government Plan and the Local Education Plan, the projected unit credit actuarial cost method was used. The actuarial assumptions included a 3.75 percent investment rate of return (net of administrative expenses) and an annual health care cost trend rate of six percent in fiscal year 2017, and then be reduced by decrements to an ultimate rate of 4.645 percent by fiscal year 2050. Both rates include a 2.5 percent inflation assumption. The unfunded actuarial accrued liability is being amortized as a level percentage of payroll on a closed basis over a 35-year period beginning with July 1, 2007. Payroll is assumed to grow at a rate of three percent.

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H. Purchasing Laws

Office of County Mayor

Purchasing procedures for the Office of County Mayor are governed by the County Purchasing Law of 1983, Sections 5-14-201 through 5-14-207, Tennessee Code Annotated (TCA), which provide for all purchases exceeding $10,000 to be made after public advertisement and solicitation of competitive bids.

Office of Road Superintendent

Purchasing procedures for the Highway Department are governed by Chapter 395, Private Acts of 1937, as amended, and provisions of the Uniform Road Law, Section 54-7-113, TCA, which provide for purchases exceeding $10,000 to be made after public advertisement, solicitation of competitive bids, and approval by the county Highway Advisory Commission. Office of Director of Schools Purchasing procedures for the discretely presented Lewis 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 exceeding $10,000.

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REQUIRED SUPPLEMENTARY INFORMATION

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Exhibit E-1

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

2014 2015 2016

Total Pension Liability (Asset)Service Cost $ 108,675 $ 115,210 $ 125,145Interest 75,473 82,252 97,900Changes in Benefit Terms 0 0 0Differences Between Actual and Expected Experience (56,648) 39,229 (67,292)Changes in Assumptions 0 0 0Benefit Payments, Including Refunds of Employee Contributions (29,556) (57,733) (18,250)Net Change in Total Pension Liability (Asset) $ 97,944 $ 178,958 $ 137,503Total Pension Liability (Asset), Beginning 912,406 1,010,350 1,189,308

Total Pension Liability (Asset), Ending (a) $ 1,010,350 $ 1,189,308 $ 1,326,811

Plan Fiduciary Net PositionContributions - Employer $ 72,054 $ 61,251 $ 61,547Contributions - Employee 75,846 73,975 74,333Net Investment Income 151,684 35,450 33,985Benefit Payments, Including Refunds of Employee Contributions (29,556) (57,733) (18,250)Administrative Expense (1,993) (2,791) (3,892)Net Change in Plan Fiduciary Net Position $ 268,035 $ 110,152 $ 147,723Plan Fiduciary Net Position, Beginning 845,614 1,113,649 1,223,801

Plan Fiduciary Net Position, Ending (b) $ 1,113,649 $ 1,223,801 $ 1,371,524

Net Pension Liability (Asset), Ending (a - b) $ (103,299) $ (34,493) $ (44,713)

Plan Fiduciary Net Position as a Percentage of Total Pension Liability 110.22% 102.90% 103.37%Covered Payroll $ 1,516,923 $ 1,479,508 $ 1,486,651Net Pension Liability (Asset) as a Percentage of Covered Payroll 6.81% 2.33% (3.01)%

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

87

Exhibit E-2

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

2014 2015 2016

Total Pension Liability (Asset)Service Cost $ 49,142 $ 43,838 $ 58,056Interest 167,342 171,815 188,141Changes in Benefit Terms 0 0 0Differences Between Actual and Expected Experience (33,095) 126,564 (66,561)Changes in Assumptions 0 0 0Benefit Payments, Including Refunds of Employee Contributions (99,073) (137,796) (139,724)Net Change in Total Pension Liability (Asset) $ 84,316 $ 204,421 $ 39,912Total Pension Liability (Asset), Beginning 2,231,616 2,315,932 2,520,353


Plan Fiduciary Net PositionContributions - Employer $ 56,871 $ 59,026 $ 59,489Contributions - Employee 32,647 33,962 34,228Net Investment Income 313,259 67,092 58,336Benefit Payments, Including Refunds of Employee Contributions (99,073) (137,796) (139,724)Administrative Expense (486) (508) (757)Net Change in Plan Fiduciary Net Position $ 303,218 $ 21,776 $ 11,572Plan Fiduciary Net Position, Beginning 1,897,789 2,201,007 2,222,783


Net Pension Liability (Asset), Ending (a - b) $ 114,925 $ 297,570 $ 325,910

Plan Fiduciary Net Position as a Percentage of Total Pension Liability 95.04% 88.19% 87.27%Covered Payroll $ 652,939 $ 679,244 $ 684,565Net Pension Liability (Asset) as a Percentage of Covered Payroll 17.60% 43.81% 47.61%


88

Exhibit E-3

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

2014 2015 2016

Total Pension Liability (Asset)Service Cost $ 45,725 $ 35,589 $ 34,361Interest 166,650 164,278 181,465Changes in Benefit Terms 0 0 0Differences Between Actual and Expected Experience (93,729) 174,008 14,844Changes in Assumptions 0 0 0Benefit Payments, Including Refunds of Employee Contributions (128,013) (152,273) (134,721)Net Change in Total Pension Liability (Asset) $ (9,367) $ 221,602 $ 95,949Total Pension Liability (Asset), Beginning 2,240,293 2,230,926 2,452,528


Plan Fiduciary Net PositionContributions - Employer $ 40,997 $ 44,277 $ 50,813Contributions - Employee 26,113 22,870 26,246Net Investment Income 296,891 62,030 53,146Benefit Payments, Including Refunds of Employee Contributions (128,013) (152,273) (134,721)Administrative Expense (742) (761) (1,203)Net Change in Plan Fiduciary Net Position $ 235,246 $ (23,857) $ (5,719)Plan Fiduciary Net Position, Beginning 1,821,712 2,056,958 2,033,101


Net Pension Liability (Asset), Ending (a - b) $ 173,968 $ 419,427 $ 521,095

Plan Fiduciary Net Position as a Percentage of Total Pension Liability 92.20% 82.90% 79.55%Covered Payroll $ 522,259 $ 457,407 $ 524,924Net Pension Liability (Asset) as a Percentage of Covered Payroll 33.31% 91.70% 99.27%


89

Exhibit E-4

Lewis County, TennesseeSchedule of Changes in Net Pension Liability (Asset) and Related Ratios Based on Participation in the Public Employee Pension Plan of TCRSDiscretely Presented Lewis County School Department - Non-Certified EmployeesFor the Fiscal Year Ended June 30

2014 2015 2016

Total Pension Liability (Asset)Service Cost $ 150,031 $ 160,695 $ 154,765Interest 379,629 389,972 418,980Changes in Benefit Terms 0 0 0Differences Between Actual and Expected Experience (186,002) 87,090 (82,734)Changes in Assumptions 0 0 0Benefit Payments, Including Refunds of Employee Contributions (200,296) (232,539) (257,548)Net Change in Total Pension Liability (Asset) $ 143,362 $ 405,218 $ 233,463Total Pension Liability (Asset), Beginning 5,011,835 5,155,197 5,560,415


Plan Fiduciary Net PositionContributions - Employer $ 184,607 $ 184,651 $ 191,949Contributions - Employee 85,768 84,317 86,697Net Investment Income 776,785 169,899 151,567Benefit Payments, Including Refunds of Employee Contributions (200,296) (232,539) (257,548)Administrative Expense (3,236) (4,162) (6,688)Net Change in Plan Fiduciary Net Position $ 843,628 $ 202,166 $ 165,977Plan Fiduciary Net Position, Beginning 4,652,658 5,496,286 5,698,452


Net Pension Liability (Asset), Ending (a - b) $ (341,089) $ (138,037) $ (70,551)

Plan Fiduciary Net Position as a Percentage of Total Pension Liability 106.62% 102.48% 101.22%Covered Payroll $ 1,692,114 $ 1,668,034 $ 1,733,952Net Pension Liability (Asset) as a Percentage of Covered Payroll 20.16% 8.28% (4.07)%


90

Exhibit E-5Lewis County, TennesseeSchedule of Contributions Based on Participation in the Public Employee Pension Plan of TCRSPrimary Government - Lewis CountyFor the Fiscal Year Ended June 30

2014 2015 2016 2017

Actuarially Determined Contribution $ 72,054 $ 61,251 $ 61,547 $ 63,522Less Contributions in Relation to the Actuarially Determined Contribution (72,054) (61,251) (61,547) (63,522)Contribution Deficiency (Excess) $ 0 $ 0 $ 0 $ 0

Covered Payroll $ 1,516,923 $ 1,479,508 $ 1,486,651 $ 1,534,337

Contributions as a Percentage of Covered Payroll 4.75% 4.14% 4.14% 4.14%


91

Exhibit E-6Lewis County, TennesseeSchedule of Contributions Based on Participation in the Public Employee Pension Plan of TCRSPrimary Government - Lewis County OfficialsFor the Fiscal Year Ended June 30

2014 2015 2016 2017


Covered Payroll $ 652,939 $ 679,244 $ 684,565 $ 697,029



92

Exhibit E-7Lewis County, TennesseeSchedule of Contributions Based on Participation in the Public Employee Pension Plan of TCRSPrimary Government - Lewis County Highway DepartmentFor the Fiscal Year Ended June 30

2014 2015 2016 2017


Covered Payroll $ 522,259 $ 457,407 $ 524,924 $ 469,801



93

Exhibit E-8Lewis County, TennesseeSchedule of Contributions Based on Participation in the Public Employee Pension Plan of TCRSDiscretely Presented Lewis County School Department - Non-Certified EmployeesFor the Fiscal Year Ended June 30

2014 2015 2016 2017


Covered Payroll $ 1,692,114 $ 1,668,034 $ 1,733,952 $ 1,849,334



94

Exhibit E-9

Lewis County, TennesseeSchedule of Contributions Based on Participation in the Teacher Retirement Plan of TCRSDiscretely Presented Lewis County School Department - Certified EmployeesFor the Fiscal Year Ended June 30

2015 2016 2017

Contractually Required Contribution $ 4,048 $ 14,189 $ 21,767Less Contributions in Relation to the Contractually Required Contribution (4,048) (14,189) (21,767)Contribution Deficiency (Excess) $ 0 $ 0 $ 0

Covered Payroll $ 101,195 $ 354,715 $ 544,168

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


95

Exhibit E-10Lewis County, TennesseeSchedule of Contributions Based on Participation in the Teacher Legacy Pension Plan of TCRSDiscretely Presented Lewis County School Department - Certified EmployeesFor the Fiscal Year Ended June 30

2014 2015 2016 2017

Contractually Required Contribution $ 653,387 $ 648,974 $ 621,409 $ 622,321Less Contributions in Relation to the Contractually Required Contribution (653,387) (648,974) (621,409) (622,321)Contribution Deficiency (Excess) $ 0 $ 0 $ 0 $ 0

Covered Payroll $ 7,357,958 $ 7,178,942 $ 6,873,995 $ 6,884,074



96

Exhibit E-11

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

2016 2017

School Department's Proportion of the Net Pension Liability (Asset) 0.048705% 8.061600%

School Department's Proportionate Share of the Net Pension Liability (Asset) $ (1,959) $ (8,392)

Covered Payroll $ 101,195 $ 354,715

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

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

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

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

97

Exhibit E-12

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

2014 2015 2016

School Department's Proportion of the Net Pension Liability (Asset) 0.187464% 0.191770% 19.042600%

School Department's Proportionate Share of the Net Pension Liability (Asset) $ (30,462) $ 78,556 $ 1,190,056

Covered Payroll $ 7,357,958 $ 7,178,942 $ 6,873,995

School Department's Proportionate Share of the Net Pension Liability (Asset) as a Percentage of its Covered Payroll (.41)% 1.09% 17.31%

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

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


98

Exhibit E-13Lewis County, TennesseeSchedule of Funding Progress – Other Postemployment Benefits PlansPrimary Government and Discretely Presented Lewis County School DepartmentJune 30, 2017

(Dollar amounts in thousands)

ActuarialAccrued Liability

(AAL)Actuarial Projected Unfunded

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

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

PRIMARY GOVERNMENT

Local Government Group 7-1-11 $ 0 $ 72 $ 72 0 % $ 564 13 % " 7-1-13 0 76 76 0 549 14 " 7-1-15 0 130 130 0 545 24

DISCRETELY PRESENTED LEWIS COUNTY SCHOOL DEPARTMENT

Local Education Group 7-1-11 0 1,266 1,266 0 7,974 16 " 7-1-13 0 719 719 0 7,811 9 " 7-1-15 0 938 938 0 8,525 11

FundedRatio(a/b)

UAAL as a Percentage

((b-a)/c)

of CoveredPayroll

99

LEWIS COUNTY, TENNESSEE NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION


TENNESSEE CONSOLIDATED RETIREMENT SYSTEM Valuation Date: Actuarially determined contribution rates for 2017 were calculated based on the July 1, 2015, actuarial valuation.

Methods and assumptions used to determine contribution rates:

Lewis County:

Actuarial Cost Method Frozen Initial LiabilityAmortization Method Level Dollar, Closed (Not to Exceed 20 Years)Remaining Amortization Period Varies by YearAsset Valuation 10-Year Smoothed Within a 20%

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

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

Including InflationRetirement Age Pattern of Retirement Determined by

Experience StudyMortality Customized Table Based on Actual

Experience Including an Adjustment for Some Anticipated Improvement


(Continued)

100








Cost of Living Adjustments 2.5%









(Continued)

101

Discretely Presented Lewis County School Department - Non-Certified Employees:








102

COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES

103

Nonmajor Governmental Funds

Special Revenue Funds ____________________________

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

____________________________

Solid Waste/Sanitation Fund – The Solid Waste/Sanitation Fund is used to account for transactions relating to Lewis County’s waste disposal program. Drug Control Fund – The Drug Control Fund is used to account for revenues received from drug-related fines, forfeitures, and seizures. Sports and Recreation Fund – The Sports and Recreation Fund is used to account for transactions relating to the Lewis County Memorial Park. 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.

Debt Service 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 expenditures for principal and interest.

____________________________

104

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 revenues provided for community development and industrial park projects. Highway Capital Projects Fund – The Highway Capital Projects Fund is used to account for capital expenditures of the Highway Department.

105

Exhibit F-1

Lewis County, TennesseeCombining Balance SheetNonmajor Governmental FundsJune 30, 2017

Constitu -Solid tional General

Waste / Drug Sports and Officers - DebtSanitation Control Recreation Fees Total Service

ASSETS

Cash $ 400 $ 0 $ 40 $ 2,184 $ 2,624 $ 0Equity in Pooled Cash and Investments 174,175 18,204 14,435 0 206,814 17,014Accounts Receivable 111,825 0 50,300 0 162,125 0Allowance for Uncollectibles (51,941) 0 0 0 (51,941) 0

Total Assets $ 234,459 $ 18,204 $ 64,775 $ 2,184 $ 319,622 $ 17,014

LIABILITIES

Accounts Payable $ 21,589 $ 0 $ 299 $ 0 $ 21,888 $ 0Payroll Deductions Payable 3,870 0 791 0 4,661 0Total Liabilities $ 25,459 $ 0 $ 1,090 $ 0 $ 26,549 $ 0


Other Deferred/Unavailable Revenue $ 46,668 $ 0 $ 0 $ 0 $ 46,668 $ 0Total Deferred Inflows of Resources $ 46,668 $ 0 $ 0 $ 0 $ 46,668 $ 0

FUND BALANCES

Restricted:Restricted for Public Safety $ 0 $ 18,204 $ 0 $ 0 $ 18,204 $ 0Restricted for Highways/Public Works 0 0 0 0 0 0Restricted for Capital Projects 0 0 0 0 0 0

(Continued)

Special Revenue FundsDebt Service

Fund

106

Exhibit F-1

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



FUND BALANCES (Cont.)

Committed:Committed for Administration of Justice $ 0 $ 0 $ 0 $ 400 $ 400 $ 0Committed for Public Safety 0 0 0 1,784 1,784 0Committed for Public Health and Welfare 146,763 0 0 0 146,763 0Committed for Social, Cultural, and Recreational Services 0 0 63,685 0 63,685 0Committed for Debt Service 0 0 0 0 0 17,014Committed for Capital Projects 15,569 0 0 0 15,569 0

Total Fund Balances $ 162,332 $ 18,204 $ 63,685 $ 2,184 $ 246,405 $ 17,014

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 234,459 $ 18,204 $ 64,775 $ 2,184 $ 319,622 $ 17,014

(Continued)


Fund

107

Exhibit F-1


TotalGeneral Highway NonmajorCapital Capital GovernmentalProjects Projects Total Funds

ASSETS

Cash $ 0 $ 0 $ 0 $ 2,624Equity in Pooled Cash and Investments 1,838 16,521 18,359 242,187Accounts Receivable 0 0 0 162,125Allowance for Uncollectibles 0 0 0 (51,941)

Total Assets $ 1,838 $ 16,521 $ 18,359 $ 354,995

LIABILITIES

Accounts Payable $ 0 $ 0 $ 0 $ 21,888Payroll Deductions Payable 0 0 0 4,661Total Liabilities $ 0 $ 0 $ 0 $ 26,549


Other Deferred/Unavailable Revenue $ 0 $ 0 $ 0 $ 46,668Total Deferred Inflows of Resources $ 0 $ 0 $ 0 $ 46,668

FUND BALANCES

Restricted:Restricted for Public Safety $ 0 $ 0 $ 0 $ 18,204Restricted for Highways/Public Works 0 16,521 16,521 16,521Restricted for Capital Projects 1,838 0 1,838 1,838

(Continued)


108

Exhibit F-1


TotalGeneral Highway NonmajorCapital Capital GovernmentalProjects Projects Total Funds

FUND BALANCES (Cont.)

Committed:Committed for Administration of Justice $ 0 $ 0 $ 0 $ 400Committed for Public Safety 0 0 0 1,784Committed for Public Health and Welfare 0 0 0 146,763Committed for Social, Cultural, and Recreational Services 0 0 0 63,685Committed for Debt Service 0 0 0 17,014Committed for Capital Projects 0 0 0 15,569

Total Fund Balances $ 1,838 $ 16,521 $ 18,359 $ 281,778

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 1,838 $ 16,521 $ 18,359 $ 354,995


109

Exhibit F-2

Lewis County, TennesseeCombining Statement of Revenues, Expenditures,

and Changes in Fund BalancesNonmajor Governmental FundsFor the Year Ended June 30, 2017



RevenuesLocal Taxes $ 7,875 $ 0 $ 0 $ 0 $ 7,875 $ 84Fines, Forfeitures, and Penalties 0 2,613 0 0 2,613 0Charges for Current Services 472,455 0 11,376 842 484,673 0Other Local Revenues 15,228 0 171 0 15,399 0State of Tennessee 27,611 0 0 0 27,611 0Federal Government 0 0 0 0 0 0Other Governments and Citizens Groups 0 5,000 45,000 0 50,000 201,532

Total Revenues $ 523,169 $ 7,613 $ 56,547 $ 842 $ 588,171 $ 201,616


Public Safety $ 0 $ 4,838 $ 0 $ 0 $ 4,838 $ 0Public Health and Welfare 625,466 0 0 0 625,466 0Social, Cultural, and Recreational Services 0 0 123,030 0 123,030 0Other Operations 51,647 0 12,679 0 64,326 3Highways 0 0 0 0 0 0

Debt Service:Principal on Debt 0 0 0 0 0 380,000Interest on Debt 0 0 0 0 0 8,713Other Debt Service 0 0 0 0 0 550

Capital Projects 0 0 0 0 0 0Total Expenditures $ 677,113 $ 4,838 $ 135,709 $ 0 $ 817,660 $ 389,266

(Continued)


Fund

110

Exhibit F-2


and Changes in Fund BalancesNonmajor Governmental Funds (Cont.)



Excess (Deficiency) of RevenuesOver Expenditures $ (153,944) $ 2,775 $ (79,162) $ 842 $ (229,489) $ (187,650)

Other Financing Sources (Uses)Notes Issued $ 75,000 $ 0 $ 0 $ 0 $ 75,000 $ 0Transfers In 0 0 110,000 0 110,000 0

Total Other Financing Sources (Uses) $ 75,000 $ 0 $ 110,000 $ 0 $ 185,000 $ 0

Net Change in Fund Balances $ (78,944) $ 2,775 $ 30,838 $ 842 $ (44,489) $ (187,650)Fund Balance, July 1, 2016 241,276 15,429 32,847 1,342 290,894 204,664

Fund Balance, June 30, 2017 $ 162,332 $ 18,204 $ 63,685 $ 2,184 $ 246,405 $ 17,014

(Continued)


Fund

111

Exhibit F-2



Community TotalGeneral Development/ Highway NonmajorCapital Industrial Capital GovernmentalProjects Park Projects Total Funds

RevenuesLocal Taxes $ 0 $ 0 $ 19,226 $ 19,226 $ 27,185Fines, Forfeitures, and Penalties 0 0 0 0 2,613Charges for Current Services 0 0 0 0 484,673Other Local Revenues 0 92 0 92 15,491State of Tennessee 0 0 0 0 27,611Federal Government 0 584,432 0 584,432 584,432Other Governments and Citizens Groups 0 0 0 0 251,532

Total Revenues $ 0 $ 584,524 $ 19,226 $ 603,750 $ 1,393,537


Public Safety $ 0 $ 0 $ 0 $ 0 $ 4,838Public Health and Welfare 0 0 0 0 625,466Social, Cultural, and Recreational Services 0 0 0 0 123,030Other Operations 0 0 0 0 64,329Highways 0 0 13,362 13,362 13,362

Debt Service:Principal on Debt 0 0 0 0 380,000Interest on Debt 0 0 0 0 8,713Other Debt Service 0 0 0 0 550

Capital Projects 0 584,524 0 584,524 584,524Total Expenditures $ 0 $ 584,524 $ 13,362 $ 597,886 $ 1,804,812

(Continued)


112

Exhibit F-2



Community TotalGeneral Development/ Highway NonmajorCapital Industrial Capital GovernmentalProjects Park Projects Total Funds

Excess (Deficiency) of RevenuesOver Expenditures $ 0 $ 0 $ 5,864 $ 5,864 $ (411,275)

Other Financing Sources (Uses)Notes Issued $ 0 $ 0 $ 0 $ 0 $ 75,000Transfers In 0 0 0 0 110,000

Total Other Financing Sources (Uses) $ 0 $ 0 $ 0 $ 0 $ 185,000

Net Change in Fund Balances $ 0 $ 0 $ 5,864 $ 5,864 $ (226,275)Fund Balance, July 1, 2016 1,838 0 10,657 12,495 508,053

Fund Balance, June 30, 2017 $ 1,838 $ 0 $ 16,521 $ 18,359 $ 281,778


113

Exhibit F-3

Lewis County, TennesseeSchedule of Revenues, Expenditures, and Changes

in Fund Balance - Actual and BudgetSolid Waste/Sanitation FundFor the Year Ended June 30, 2017



RevenuesLocal Taxes $ 7,875 $ 0 $ 0 $ 7,875Charges for Current Services 472,455 516,300 516,300 (43,845)Other Local Revenues 15,228 12,800 12,800 2,428State of Tennessee 27,611 0 0 27,611

Total Revenues $ 523,169 $ 529,100 $ 529,100 $ (5,931)

ExpendituresPublic Health and Welfare

Transfer Stations $ 625,466 $ 461,134 $ 542,652 $ (82,814)Other Operations

Employee Benefits 42,771 49,900 49,900 7,129Miscellaneous 8,876 9,000 9,000 124

Total Expenditures $ 677,113 $ 520,034 $ 601,552 $ (75,561)

Excess (Deficiency) of RevenuesOver Expenditures $ (153,944) $ 9,066 $ (72,452) $ (81,492)

Other Financing Sources (Uses)Notes Issued $ 75,000 $ 0 $ 75,000 $ 0

Total Other Financing Sources $ 75,000 $ 0 $ 75,000 $ 0

Net Change in Fund Balance $ (78,944) $ 9,066 $ 2,548 $ (81,492)Fund Balance, July 1, 2016 241,276 237,856 237,856 3,420

Fund Balance, June 30, 2017 $ 162,332 $ 246,922 $ 240,404 $ (78,072)

Budgeted Amounts

114

Exhibit F-4


in Fund Balance - Actual and BudgetDrug Control FundFor the Year Ended June 30, 2017



RevenuesFines, Forfeitures, and Penalties $ 2,613 $ 2,550 $ 2,550 $ 63Other Governments and Citizens Groups 5,000 1,500 1,500 3,500

Total Revenues $ 7,613 $ 4,050 $ 4,050 $ 3,563

ExpendituresPublic Safety

Drug Enforcement $ 4,838 $ 4,050 $ 4,838 $ 0Total Expenditures $ 4,838 $ 4,050 $ 4,838 $ 0

Excess (Deficiency) of RevenuesOver Expenditures $ 2,775 $ 0 $ (788) $ 3,563

Net Change in Fund Balance $ 2,775 $ 0 $ (788) $ 3,563Fund Balance, July 1, 2016 15,429 15,423 15,423 6

Fund Balance, June 30, 2017 $ 18,204 $ 15,423 $ 14,635 $ 3,569

Budgeted Amounts

115

Exhibit F-5


in Fund Balance - Actual and BudgetSports and Recreation FundFor the Year Ended June 30, 2017



RevenuesLocal Taxes $ 0 $ 170 $ 170 $ (170)Charges for Current Services 11,376 8,000 8,000 3,376Other Local Revenues 171 0 0 171Other Governments and Citizens Groups 45,000 155,000 45,000 0

Total Revenues $ 56,547 $ 163,170 $ 53,170 $ 3,377

ExpendituresSocial, Cultural, and Recreational Services

Parks and Fair Boards $ 123,030 $ 137,315 $ 137,316 $ 14,286Other Operations

Employee Benefits 9,567 15,700 15,700 6,133Miscellaneous 3,112 4,785 4,785 1,673

Total Expenditures $ 135,709 $ 157,800 $ 157,801 $ 22,092

Excess (Deficiency) of RevenuesOver Expenditures $ (79,162) $ 5,370 $ (104,631) $ 25,469

Other Financing Sources (Uses)Transfers In $ 110,000 $ 0 $ 110,000 $ 0

Total Other Financing Sources $ 110,000 $ 0 $ 110,000 $ 0

Net Change in Fund Balance $ 30,838 $ 5,370 $ 5,369 $ 25,469Fund Balance, July 1, 2016 32,847 48,137 48,137 (15,290)

Fund Balance, June 30, 2017 $ 63,685 $ 53,507 $ 53,506 $ 10,179

Budgeted Amounts

116

Exhibit F-6


in Fund Balance - Actual and BudgetGeneral Debt Service FundFor the Year Ended June 30, 2017



RevenuesLocal Taxes $ 84 $ 0 $ 0 $ 84Other Governments and Citizens Groups 201,532 0 201,532 0

Total Revenues $ 201,616 $ 0 $ 201,532 $ 84

ExpendituresOther Operations

Miscellaneous $ 3 $ 0 $ 66 $ 63Principal on Debt

General Government 185,000 0 185,000 0Education 195,000 190,000 195,000 0

Interest on DebtGeneral Government 2,181 0 6,541 4,360Education 6,532 12,898 19,430 12,898

Other Debt ServiceEducation 550 550 550 0

Total Expenditures $ 389,266 $ 203,448 $ 406,587 $ 17,321

Excess (Deficiency) of RevenuesOver Expenditures $ (187,650) $ (203,448) $ (205,055) $ 17,405

Other Financing Sources (Uses)Transfers In $ 0 $ 204,095 $ 204,095 $ (204,095)

Total Other Financing Sources $ 0 $ 204,095 $ 204,095 $ (204,095)

Net Change in Fund Balance $ (187,650) $ 647 $ (960) $ (186,690)Fund Balance, July 1, 2016 204,664 56,000 56,000 148,664

Fund Balance, June 30, 2017 $ 17,014 $ 56,647 $ 55,040 $ (38,026)

Budgeted Amounts

117

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.

118

Exhibit G-1Lewis County, TennesseeCombining Statement of Fiduciary Assets and LiabilitiesFiduciary FundsJune 30, 2017

Agency FundsConstitu-

Cities - tionalSales Officers -Tax Agency Total

ASSETS

Cash $ 0 $ 384,185 $ 384,185Due from Other Governments 206,325 0 206,325

Total Assets $ 206,325 $ 384,185 $ 590,510

LIABILITIES

Due to Other Taxing Units $ 206,325 $ 0 $ 206,325Due to Litigants, Heirs, and Others 0 384,185 384,185

Total Liabilities $ 206,325 $ 384,185 $ 590,510

119

Exhibit G-2

Lewis County, TennesseeCombining Statement of Changes in Assets and Liabilities - All Agency FundsFor the Year Ended June 30, 2017

Beginning EndingBalance Additions Deductions Balance

Cities - Sales Tax Fund Assets Equity in Pooled Cash and Investments $ 0 $ 1,163,001 $ 1,163,001 $ 0 Due from Other Governments 200,170 206,325 200,170 206,325

Total Assets $ 0 $ 1,369,326 $ 1,363,171 $ 206,325

Liabilities Due to Other Taxing Units $ 200,170 $ 1,369,326 $ 1,363,171 $ 206,325

Total Liabilities $ 200,170 $ 1,369,326 $ 1,363,171 $ 206,325

Constitutional Officers - Agency Fund Assets Cash $ 414,942 $ 2,259,895 $ 2,290,652 $ 384,185

Total Assets $ 414,942 $ 2,259,895 $ 2,290,652 $ 384,185

Liabilities Due to Litigants, Heirs, and Others $ 414,942 $ 2,259,895 $ 2,290,652 $ 384,185


Totals - All Agency Funds Assets Cash $ 414,942 $ 2,259,895 $ 2,290,652 $ 384,185 Equity in Pooled Cash and Investments 0 1,163,001 1,163,001 0 Due from Other Governments 200,170 206,325 200,170 206,325

Total Assets $ 615,112 $ 3,629,221 $ 3,653,823 $ 590,510

Liabilities Due to Other Taxing Units $ 200,170 $ 1,369,326 $ 1,363,171 $ 206,325 Due to Litigants, Heirs, and Others 414,942 2,259,895 2,290,652 384,185


120

Lewis County School Department ____________________________

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

121

Exhibit H-1

Lewis County, TennesseeStatement of ActivitiesDiscretely Presented Lewis County School DepartmentFor the Year Ended June 30, 2017

Net (Expense)Revenue andChanges in

Operating Capital Net PositionCharges Grants Grants Total

for and and GovernmentalFunctions/Programs Expenses Services Contributions Contributions Activities

Governmental Activities: Instruction $ 7,986,954 $ 0 $ 660,520 $ 0 $ (7,326,434) Support Services 5,196,467 46,608 177,000 0 (4,972,859) Operation of Non-instructional Services 1,838,362 89,518 1,722,165 11,035 (15,644)

Total Governmental Activities $ 15,021,783 $ 136,126 $ 2,559,685 $ 11,035 $ (12,314,937)

General Revenues: Taxes: Property Taxes Levied for General Purposes $ 1,064,195 Local Option Sales Taxes 1,481,463 Other Local Taxes 32,803 Grants and Contributions Not Restricted to Specific Programs 11,218,094 Interest Income 31,358 Miscellaneous 65,462 Insurance Recovery 7,517Total General Revenues $ 13,900,892

Change in Net Position $ 1,585,955Net Position, July 1, 2016 13,927,919

Net Position, June 30, 2017 $ 15,513,874

Program Revenues

122

Exhibit H-2

Lewis County, TennesseeBalance Sheet - Governmental FundsDiscretely Presented Lewis County School DepartmentJune 30, 2017

OtherGeneral Govern- TotalPurpose mental GovernmentalSchool Funds Funds

ASSETS

Cash $ 422,313 $ 8,856 $ 431,169Equity in Pooled Cash and Investments 10,893,737 242,138 11,135,875Inventories 0 29,607 29,607Accounts Receivable 15,489 0 15,489Due from Other Governments 462,985 41,809 504,794Property Taxes Receivable 1,335,599 0 1,335,599Allowance for Uncollectible Property Taxes (43,364) 0 (43,364)

Total Assets $ 13,086,759 $ 322,410 $ 13,409,169

LIABILITIES

Accrued Payroll $ 619,444 $ 72,022 $ 691,466Payroll Deductions Payable 420,818 0 420,818Total Liabilities $ 1,040,262 $ 72,022 $ 1,112,284


Deferred Current Property Taxes $ 1,247,697 $ 0 $ 1,247,697Deferred Delinquent Property Taxes 36,258 0 36,258Other Deferred/Unavailable Revenue 131,960 0 131,960Total Deferred Inflows of Resources $ 1,415,915 $ 0 $ 1,415,915

FUND BALANCES

Nonspendable:Inventory $ 0 $ 29,607 $ 29,607

Restricted:Restricted for Education 0 191,750 191,750

Committed:Committed for Education 296,834 29,031 325,865

Assigned:Assigned for Capital Outlay 7,997,438 0 7,997,438

Unassigned 2,336,310 0 2,336,310Total Fund Balances $ 10,630,582 $ 250,388 $ 10,880,970

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 13,086,759 $ 322,410 $ 13,409,169

Nonmajor Funds

Major Fund

123

Exhibit H-3

Lewis County, TennesseeReconciliation of the Balance Sheet of Governmental Funds to the Statement of Net PositionDiscretely Presented Lewis County School DepartmentJune 30, 2017

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

Total fund balances - balance sheet - governmental funds (Exhibit H-2) $ 10,880,970

(1) Capital assets used in governmental activities are not financial resources and therefore are not reported inthe governmental funds. Add: land $ 867,531 Add: construction in progress 174,600 Add: buildings and improvements net of accumulated depreciation 3,203,835 Add: other capital assets net of accumulated depreciation 857,423 5,103,389

(2) Long-term liabilities are not due and payable in the current period and therefore are not reportedin the governmental funds. Less: other postemployment benefits liability $ (479,179) Less: compensated absences payable (9,161) (488,340)

(3) Amounts reported as deferred outflows of resources and deferredinflows of resources related to pensions will be amortized andrecognized as components of pension expense in future years: Add: deferred outflows of resourses related to pensions $ 2,554,189 Less: deferred inflows of resources related to pensions (1,593,439) 960,750

(4) Net pension assets of the agent and teacher retirement plans are not current financial resources and therefore are not reported in the governmental funds. Add: agent plan $ 70,551 Add: teacher retirement plan 8,392 78,943

(5) Net pension liabilities of the teacher legacy pension plan are not currentfinancial resources and therefore are not reported in the governmental funds. (1,190,056)

(6) Other long-term assets are not available to pay forcurrent-period expenditures and therefore are deferredin the governmental funds. 168,218

Net position of governmental activities (Exhibit A) $ 15,513,874

124

Exhibit H-4


and Changes in Fund Balances - Governmental Funds

Discretely Presented Lewis County School DepartmentFor the Year Ended June 30, 2017

OtherGeneral Govern- TotalPurpose mental GovernmentalSchool Funds Funds

RevenuesLocal Taxes $ 2,694,751 $ 0 $ 2,694,751Licenses and Permits 530 0 530Charges for Current Services 46,506 89,689 136,195Other Local Revenues 303,505 3,730 307,235State of Tennessee 11,080,898 10,945 11,091,843Federal Government 0 2,482,402 2,482,402Other Governments and Citizens Groups 86,000 0 86,000

Total Revenues $ 14,212,190 $ 2,586,766 $ 16,798,956


Instruction $ 7,488,747 $ 830,746 $ 8,319,493Support Services 4,508,067 438,159 4,946,226Operation of Non-Instructional Services 597,774 1,261,397 1,859,171Capital Outlay 488,157 0 488,157

Debt Service:Other Debt Service 201,532 0 201,532

Total Expenditures $ 13,284,277 $ 2,530,302 $ 15,814,579

Excess (Deficiency) of RevenuesOver Expenditures $ 927,913 $ 56,464 $ 984,377

Other Financing Sources (Uses)Insurance Recovery $ 7,517 $ 0 $ 7,517Transfers In 12,814 0 12,814Transfers Out 0 (12,814) (12,814)

Total Other Financing Sources (Uses) $ 20,331 $ (12,814) $ 7,517

Net Change in Fund Balances $ 948,244 $ 43,650 $ 991,894Fund Balance, July 1, 2016 9,682,338 206,738 9,889,076

Fund Balance, June 30, 2017 $ 10,630,582 $ 250,388 $ 10,880,970

Nonmajor Funds

Major Fund

125

Exhibit H-5

Lewis County, TennesseeReconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of ActivitiesDiscretely Presented Lewis County School DepartmentFor the Year Ended June 30, 2017

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

Net change in fund balances - total governmental funds (Exhibit H-4) $ 991,894

(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 $ 582,220 Less: current-year depreciation expense (375,687) 206,533

(2) The net effect of various miscellaneous transactions involving capital assets (sales, trade-ins, and donations) is to increase net assets. Less: book value of disposed capital assets (236,537)

(3) Revenues in the statement of activities that do not provide currentfinancial resources are not reported as revenues in the funds. Add: deferred delinquent property taxes and other deferred June 30, 2017 $ 168,218 Less: deferred delinquent property taxes and other deferred June 30, 2016 (159,219) 8,999

(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 compensated absences payable $ 2,673 Change in other postemployment benefits liability (22,921) Change in net pension asset - agent pension plan (67,486) Change in net pension asset - teacher retirement pension plan 6,433 Change in net pension liability - teacher legacy pension plan (1,111,500) Change in deferred outflows related to pensions 1,498,945 Change in deferred inflows related to pensions 308,922 615,066

Change in net position of governmental activities (Exhibit B) $ 1,585,955

126

Exhibit H-6

Lewis County, TennesseeCombining Balance Sheet - Nonmajor Governmental FundsDiscretely Presented Lewis County School DepartmentJune 30, 2017

TotalSchool NonmajorFederal Central GovernmentalProjects Cafeteria Funds

ASSETS

Cash $ 0 $ 8,856 $ 8,856Equity in Pooled Cash and Investments 106,906 135,232 242,138Inventories 0 29,607 29,607Due from Other Governments 18,164 23,645 41,809

Total Assets $ 125,070 $ 197,340 $ 322,410

LIABILITIES

Accrued Payroll $ 58,659 $ 13,363 $ 72,022Total Liabilities $ 58,659 $ 13,363 $ 72,022

FUND BALANCES

Nonspendable:Inventory $ 0 $ 29,607 $ 29,607

Restricted:Restricted for Education 37,380 154,370 191,750

Committed:Committed for Education 29,031 0 29,031

Total Fund Balances $ 66,411 $ 183,977 $ 250,388

Total Liabilities and Fund Balances $ 125,070 $ 197,340 $ 322,410

Special Revenue Funds

127

Exhibit H-7


and Changes in Fund Balances - Nonmajor Governmental Funds

Discretely Presented Lewis County School DepartmentFor the Year Ended June 30, 2017

TotalSchool Nonmajor

Federal Central GovernmentalProjects Cafeteria Funds

RevenuesCharges for Current Services $ 0 $ 89,689 $ 89,689Other Local Revenues 0 3,730 3,730State of Tennessee 0 10,945 10,945Federal Government 1,301,134 1,181,268 2,482,402

Total Revenues $ 1,301,134 $ 1,285,632 $ 2,586,766


Instruction $ 830,746 $ 0 $ 830,746Support Services 438,159 0 438,159Operation of Non-Instructional Services 0 1,261,397 1,261,397

Total Expenditures $ 1,268,905 $ 1,261,397 $ 2,530,302

Excess (Deficiency) of RevenuesOver Expenditures $ 32,229 $ 24,235 $ 56,464

Other Financing Sources (Uses)Transfers Out $ (12,814) $ 0 $ (12,814)

Total Other Financing Sources (Uses) $ (12,814) $ 0 $ (12,814)

Net Change in Fund Balances $ 19,415 $ 24,235 $ 43,650Fund Balance, July 1, 2016 46,996 159,742 206,738

Fund Balance, June 30, 2017 $ 66,411 $ 183,977 $ 250,388


128

Exhibit H-8


in Fund Balance - Actual (Budgetary Basis) and BudgetDiscretely Presented Lewis County School DepartmentGeneral Purpose School FundFor the Year Ended June 30, 2017

Actual VarianceRevenues/ with Final

Actual Less: Add: Expenditures Budget -(GAAP Encumbrances Encumbrances (Budgetary PositiveBasis) 7/1/2016 6/30/2017 Basis) Original Final (Negative)

RevenuesLocal Taxes $ 2,694,751 $ 0 $ 0 $ 2,694,751 $ 2,305,600 $ 2,484,600 $ 210,151Licenses and Permits 530 0 0 530 500 500 30Charges for Current Services 46,506 0 0 46,506 28,800 45,046 1,460Other Local Revenues 303,505 0 0 303,505 27,900 82,935 220,570State of Tennessee 11,080,898 0 0 11,080,898 10,694,507 11,075,109 5,789Other Governments and Citizens Groups 86,000 0 0 86,000 0 76,000 10,000

Total Revenues $ 14,212,190 $ 0 $ 0 $ 14,212,190 $ 13,057,307 $ 13,764,190 $ 448,000

ExpendituresInstruction

Regular Instruction Program $ 6,171,608 $ (2,010) $ 28 $ 6,169,626 $ 6,315,485 $ 6,374,887 $ 205,261Alternative Instruction Program 81,815 0 0 81,815 83,560 83,560 1,745Special Education Program 948,521 0 0 948,521 956,030 956,280 7,759Career and Technical Education Program 268,729 0 0 268,729 278,755 278,755 10,026Student Body Education Program 18,074 (8,295) 0 9,779 9,255 10,030 251

Support ServicesAttendance 3,731 0 0 3,731 6,000 6,000 2,269Health Services 162,337 (118) 2,207 164,426 77,990 167,990 3,564Other Student Support 426,044 (12,580) 0 413,464 393,688 433,939 20,475Regular Instruction Program 627,619 (10,500) 0 617,119 580,812 627,157 10,038Special Education Program 195,473 0 0 195,473 192,402 215,948 20,475Technology 24,180 0 20,000 44,180 55,000 55,000 10,820Other Programs 44,416 0 0 44,416 0 44,416 0Board of Education 228,181 (132) 30 228,079 233,725 233,725 5,646Director of Schools 209,449 0 0 209,449 225,660 226,594 17,145Office of the Principal 656,680 0 0 656,680 729,860 729,860 73,180Fiscal Services 105,612 0 0 105,612 110,605 110,605 4,993Operation of Plant 906,823 (455) 0 906,368 1,035,750 1,017,750 111,382Maintenance of Plant 182,333 (4,159) 7,800 185,974 186,270 211,565 25,591

(Continued)

Budgeted Amounts

129

Exhibit H-8


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



Expenditures (Cont.)Support Services (Cont.)

Transportation $ 706,459 $ (175,280) $ 175,121 $ 706,300 $ 608,947 $ 792,577 $ 86,277Central and Other 28,730 0 0 28,730 29,700 29,700 970

Operation of Non-Instructional ServicesCommunity Services 192,958 (12,739) 716 180,935 0 181,010 75Early Childhood Education 404,816 (6,220) 7,164 405,760 410,735 410,735 4,975

Capital OutlayRegular Capital Outlay 488,157 (231,711) 72,479 328,925 355,456 397,456 68,531

Principal on DebtEducation 0 0 0 0 195,000 0 0

Interest on DebtEducation 0 0 0 0 7,085 0 0

Other Debt ServiceEducation 201,532 0 0 201,532 0 202,085 553

Total Expenditures $ 13,284,277 $ (464,199) $ 285,545 $ 13,105,623 $ 13,077,770 $ 13,797,624 $ 692,001

Excess (Deficiency) of RevenuesOver Expenditures $ 927,913 $ 464,199 $ (285,545) $ 1,106,567 $ (20,463) $ (33,434) $ 1,140,001

Other Financing Sources (Uses)Insurance Recovery $ 7,517 $ 0 $ 0 $ 7,517 $ 0 $ 7,517 $ 0Transfers In 12,814 0 0 12,814 10,000 10,000 2,814Transfers Out 0 0 0 0 0 (1,846) 1,846

Total Other Financing Sources $ 20,331 $ 0 $ 0 $ 20,331 $ 10,000 $ 15,671 $ 4,660

Net Change in Fund Balance $ 948,244 $ 464,199 $ (285,545) $ 1,126,898 $ (10,463) $ (17,763) $ 1,144,661Fund Balance, July 1, 2016 9,682,338 (464,199) 0 9,218,139 9,065,358 9,065,358 152,781

Fund Balance, June 30, 2017 $ 10,630,582 $ 0 $ (285,545) $ 10,345,037 $ 9,054,895 $ 9,047,595 $ 1,297,442

Budgeted Amounts

130

Exhibit H-9


in Fund Balance - Actual (Budgetary Basis) and BudgetDiscretely Presented Lewis County School DepartmentSchool Federal Projects FundFor the Year Ended June 30, 2017



RevenuesFederal Government $ 1,301,134 $ 0 $ 0 $ 1,301,134 $ 1,191,731 $ 1,553,887 $ (252,753)

Total Revenues $ 1,301,134 $ 0 $ 0 $ 1,301,134 $ 1,191,731 $ 1,553,887 $ (252,753)

ExpendituresInstruction

Regular Instruction Program $ 606,934 $ 0 $ 1,124 $ 608,058 $ 634,642 $ 674,935 $ 66,877Special Education Program 194,286 0 0 194,286 213,400 251,717 57,431Career and Technical Education Program 29,526 (1,600) 2,960 30,886 27,696 30,886 0

Support ServicesOther Student Support 12,946 0 0 12,946 20,387 18,172 5,226Regular Instruction Program 221,022 0 33,296 254,318 66,898 324,156 69,838Special Education Program 182,625 (126) 0 182,499 191,073 214,666 32,167Career and Technical Education Program 947 0 0 947 1,845 947 0Transportation 20,619 0 0 20,619 23,138 23,486 2,867

Total Expenditures $ 1,268,905 $ (1,726) $ 37,380 $ 1,304,559 $ 1,179,079 $ 1,538,965 $ 234,406

Excess (Deficiency) of RevenuesOver Expenditures $ 32,229 $ 1,726 $ (37,380) $ (3,425) $ 12,652 $ 14,922 $ (18,347)

Other Financing Sources (Uses)Transfers Out $ (12,814) $ 0 $ 0 $ (12,814) $ (12,651) $ (14,922) $ 2,108

Total Other Financing Sources $ (12,814) $ 0 $ 0 $ (12,814) $ (12,651) $ (14,922) $ 2,108

Net Change in Fund Balance $ 19,415 $ 1,726 $ (37,380) $ (16,239) $ 1 $ 0 $ (16,239)Fund Balance, July 1, 2016 46,996 (1,726) 0 45,270 46,996 46,996 (1,726)

Fund Balance, June 30, 2017 $ 66,411 $ 0 $ (37,380) $ 29,031 $ 46,997 $ 46,996 $ (17,965)

Budgeted Amounts

131

Exhibit H-10


in Fund Balance - Actual (Budgetary Basis) and BudgetDiscretely Presented Lewis County School DepartmentCentral Cafeteria FundFor the Year Ended June 30, 2017


Actual Add: Expenditures Budget -(GAAP Encumbrances (Budgetary PositiveBasis) 6/30/2017 Basis) Original Final (Negative)

RevenuesCharges for Current Services $ 89,689 $ 0 $ 89,689 $ 101,700 $ 101,700 $ (12,011)Other Local Revenues 3,730 0 3,730 1,250 1,250 2,480State of Tennessee 10,945 0 10,945 11,000 11,000 (55)Federal Government 1,181,268 0 1,181,268 1,065,000 1,185,385 (4,117)

Total Revenues $ 1,285,632 $ 0 $ 1,285,632 $ 1,178,950 $ 1,299,335 $ (13,703)

ExpendituresOperation of Non-instructional Services

Food Service $ 1,261,397 $ 20,888 $ 1,282,285 $ 1,241,000 $ 1,361,385 $ 79,100Total Expenditures $ 1,261,397 $ 20,888 $ 1,282,285 $ 1,241,000 $ 1,361,385 $ 79,100

Excess (Deficiency) of RevenuesOver Expenditures $ 24,235 $ (20,888) $ 3,347 $ (62,050) $ (62,050) $ 65,397

Net Change in Fund Balance $ 24,235 $ (20,888) $ 3,347 $ (62,050) $ (62,050) $ 65,397Fund Balance, July 1, 2016 159,742 0 159,742 159,742 159,742 0

Fund Balance, June 30, 2017 $ 183,977 $ (20,888) $ 163,089 $ 97,692 $ 97,692 $ 65,397

Budgeted Amounts

132

MISCELLANEOUS SCHEDULES

133

Exhibit I-1

Lewis County, TennesseeSchedule of Changes in Long-term Notes and BondFor the Year Ended June 30, 2017

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

Description of Indebtedness of Issue Issue Date 7-1-16 Period Period 6-30-17

NOTES PAYABLE

Payable through General Debt Service Fund Sheriff's Department Vehicles $ 110,000 2.4 % 4-7-16 1-19-17 $ 110,000 $ 0 $ 110,000 $ 0 Capital Outlay Note, Series 2016 95,500 0.0 9-15-16 9-15-26 0 95,500 0 95,500 Capital Outlay Note, Series 2017 75,000 2.15 12-29-16 1-19-17 0 75,000 75,000 0

Total Notes Payable $ 110,000 $ 170,500 $ 185,000 $ 95,500

BOND PAYABLE

Payable through General Debt Service Fund School Refunding 1,970,000 3.35 5-1-03 4-27-17 $ 195,000 $ 0 $ 195,000 $ 0

Total Bond Payable $ 195,000 $ 0 $ 195,000 $ 0

InterestRate

134

Exhibit I-2Lewis County, TennesseeSchedule of Long-term Debt Requirements by Year

YearEndingJune 30 Principal Interest Total

2018 $ 9,550 $ 0 $ 9,5502019 9,550 0 9,5502020 9,550 0 9,5502021 9,550 0 9,5502022 9,550 0 9,5502023 9,550 0 9,5502024 9,550 0 9,5502025 9,550 0 9,5502026 9,550 0 9,5502027 9,550 0 9,550

Total $ 95,500 $ 0 $ 95,500

Note

135

Exhibit I-3Lewis County, TennesseeSchedule of TransfersPrimary Government and Discretely Presented Lewis County School DepartmentFor the Year Ended June 30, 2017

From Fund To Fund Purpose Amount

PRIMARY GOVERNMENT

General Sports and Recreation Operations $ 110,000

Total Transfers Primary Government $ 110,000

DISCRETELY PRESENTED LEWIS COUNTY SCHOOL DEPARTMENT

School Federal Projects General Purpose School Indirect costs $ 12,814

Total Transfers Discretely Presented Lewis County School Department $ 12,814

136

Exhibit I-4

Lewis County, TennesseeSchedule of Salaries and Official Bonds of Principal OfficialsPrimary Government and Discretely Presented Lewis County School DepartmentFor the Year Ended June 30, 2017

Salary PaidDuring

Official Authorization for Salary Period Bond Surety

County Mayor Section 8-24-102, TCA $ 79,741 $ 100,000 RLI Insurance CompanyRoad Superintendent Section 8-24-102, TCA 71,743 100,000 "Director of Schools State Board of Education

and County Board of Education 111,711 (1) 50,000 "Trustee Section 8-24-102, TCA 65,221 531,726 "Assessor of Property Section 8-24-102, TCA 65,221 50,000 "County Clerk Section 8-24-102, TCA 65,221 50,000 "Circuit and General Sessions Courts Clerk Section 8-24-102, TCA 65,221 50,000 "Clerk and Master Section 8-24-102, TCA 65,221 75,000 "Register of Deeds Section 8-24-102, TCA 65,221 50,000 "Sheriff Section 8-24-102, TCA 71,743 (2) 100,000 "

Employee Blanket Bonds Public Employee Dishonesty - County Departments 150,000 Local Government Property and

Casualty Fund Public Employee Dishonesty - School Department 400,000 Tennessee Risk Management Trust

(1) Includes a chief executive officer training supplement of $800. Does not include 100 percent of the premiums for family health ($17,919) and dental ($1,756) insurance.(2) Does not include $3,600 for service as workhouse superintendent and a law enforcement training supplement of $600.

137

Exhibit I-5

Lewis County, TennesseeSchedule of Detailed Revenues -

All Governmental Fund TypesFor the Year Ended June 30, 2017

Constitu -Solid tional

Waste / Drug Sports and Officers -General Sanitation Control Recreation Fees

Local TaxesCounty Property Taxes

Current Property Tax $ 2,556,305 $ 0 $ 0 $ 0 $ 0Trustee's Collections - Prior Year 80,496 0 0 0 0Trustee's Collections - Bankruptcy 309 0 0 0 0Circuit Clerk/Clerk and Master Collections - Prior Years 52,569 0 0 0 0Interest and Penalty 17,088 7,875 0 0 0Payments in-Lieu-of Taxes - T.V.A. 7,205 0 0 0 0Payments in-Lieu-of Taxes - Local Utilities 286,208 0 0 0 0Payments in-Lieu-of Taxes - Other 11,249 0 0 0 0

County Local Option TaxesLocal Option Sales Tax 308,988 0 0 0 0Hotel/Motel Tax 30,368 0 0 0 0Wheel Tax 221,095 0 0 0 0Litigation Tax - General 29,337 0 0 0 0Litigation Tax - Special Purpose 2,900 0 0 0 0Litigation Tax - Jail, Workhouse, or Courthouse 20,904 0 0 0 0Litigation Tax - Victim-Offender Mediation Center 1,266 0 0 0 0Business Tax 75,209 0 0 0 0Mixed Drink Tax 1,349 0 0 0 0

Statutory Local TaxesBank Excise Tax 27,586 0 0 0 0Wholesale Beer Tax 36,129 0 0 0 0Interstate Telecommunications Tax 1,061 0 0 0 0

Total Local Taxes $ 3,767,621 $ 7,875 $ 0 $ 0 $ 0

(Continued)


138

Exhibit I-5


All Governmental Fund Types (Cont.)



Licenses and PermitsLicenses

Cable TV Franchise $ 2,832 $ 0 $ 0 $ 0 $ 0Permits

Beer Permits 1,235 0 0 0 0Total Licenses and Permits $ 4,067 $ 0 $ 0 $ 0 $ 0

Fines, Forfeitures, and PenaltiesCircuit Court

Fines $ 4,092 $ 0 $ 0 $ 0 $ 0Officers Costs 5,992 0 0 0 0Data Entry Fee - Circuit Court 630 0 0 0 0

Criminal CourtDrug Court Fees 1,213 0 0 0 0

General Sessions CourtFines 7,037 0 0 0 0Officers Costs 15,908 0 0 0 0Game and Fish Fines 160 0 0 0 0Drug Control Fines 0 0 2,613 0 0Drug Court Fees 818 0 0 0 0Jail Fees 9,434 0 0 0 0DUI Treatment Fines 570 0 0 0 0Data Entry Fee - General Sessions Court 3,006 0 0 0 0Courtroom Security Fee 80 0 0 0 0

Juvenile CourtFines 86 0 0 0 0

(Continued)


139

Exhibit I-5





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

Officers Costs $ 3,841 $ 0 $ 0 $ 0 $ 0Data Entry Fee - Chancery Court 1,919 0 0 0 0Courtroom Security Fee 15 0 0 0 0

Other Fines, Forfeitures, and PenaltiesProceeds from Confiscated Property 14,075 0 0 0 0

Total Fines, Forfeitures, and Penalties $ 68,876 $ 0 $ 2,613 $ 0 $ 0

Charges for Current ServicesGeneral Service Charges

Self-Insurance Premiums/Contributions $ 675 $ 0 $ 0 $ 0 $ 0Commercial and Industrial Waste Collection Charge 0 71,024 0 0 0Residential Waste Collection Charge 0 385,810 0 0 0Surcharge - General 0 555 0 0 0Solid Waste Disposal Fee 0 1,434 0 0 0Surcharge - Waste Tire Disposal 0 13,632 0 0 0Work Release Charges for Board 10,676 0 0 0 0

FeesAirport Fees 5,439 0 0 0 0Recreation Fees 0 0 0 11,376 0Copy Fees 146 0 0 0 0Library Fees 5,214 0 0 0 0Archives and Records Management Fee 6,295 0 0 0 0Greenbelt Late Application Fee 176 0 0 0 0Telephone Commissions 14,998 0 0 0 0Constitutional Officers' Fees and Commissions 0 0 0 0 842

(Continued)


140

Exhibit I-5





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

Data Processing Fee - Register $ 4,260 $ 0 $ 0 $ 0 $ 0Data Processing Fee - Sheriff 1,650 0 0 0 0Sexual Offender Registration Fee - Sheriff 1,050 0 0 0 0Data Processing Fee - County Clerk 987 0 0 0 0

Total Charges for Current Services $ 51,566 $ 472,455 $ 0 $ 11,376 $ 842

Other Local RevenuesRecurring Items

Investment Income $ 57,913 $ 0 $ 0 $ 0 $ 0Lease/Rentals 131,536 1,800 0 0 0Commissary Sales 5,132 0 0 0 0Sale of Gasoline 26,047 0 0 0 0Sale of Recycled Materials 131 13,428 0 0 0Retirees' Insurance Payments 0 0 0 0 0Miscellaneous Refunds 11,102 0 0 171 0

Nonrecurring ItemsSale of Equipment 18,255 0 0 0 0Damages Recovered from Individuals 25,267 0 0 0 0

Total Other Local Revenues $ 275,383 $ 15,228 $ 0 $ 171 $ 0

Fees Received From County OfficialsFees In-Lieu-of Salary

County Clerk $ 104,077 $ 0 $ 0 $ 0 $ 0Circuit Court Clerk 38,962 0 0 0 0General Sessions Court Clerk 49,844 0 0 0 0

(Continued)


141

Exhibit I-5





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

Clerk and Master $ 60,835 $ 0 $ 0 $ 0 $ 0Register 56,924 0 0 0 0Sheriff 27,176 0 0 0 0Trustee 167,119 0 0 0 0

Total Fees Received From County Officials $ 504,937 $ 0 $ 0 $ 0 $ 0

State of TennesseeGeneral Government Grants

Solid Waste Grants $ 0 $ 14,464 $ 0 $ 0 $ 0Public Safety Grants

Law Enforcement Training Programs 8,400 0 0 0 0Health and Welfare Grants

Health Department Programs 42,672 0 0 0 0Public Works Grants

State Aid Program 0 0 0 0 0Litter Program 27,999 0 0 0 0

Other State RevenuesIncome Tax 4,545 0 0 0 0Beer Tax 18,415 0 0 0 0Vehicle Certificate of Title Fees 11,860 0 0 0 0Alcoholic Beverage Tax 34,344 0 0 0 0State Revenue Sharing - T.V.A. 329,711 0 0 0 0Contracted Prisoner Boarding 235,246 0 0 0 0Gasoline and Motor Fuel Tax 0 0 0 0 0Petroleum Special Tax 0 0 0 0 0

(Continued)


142

Exhibit I-5





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

Registrar's Salary Supplement $ 15,164 $ 0 $ 0 $ 0 $ 0Other State Grants 22,010 0 0 0 0Other State Revenues 11,448 13,147 0 0 0

Total State of Tennessee $ 761,814 $ 27,611 $ 0 $ 0 $ 0

Federal GovernmentFederal Through State

Community Development $ 0 $ 0 $ 0 $ 0 $ 0Homeland Security Grants 6,873 0 0 0 0Other Federal through State 9,748 0 0 0 0

Direct Federal RevenueOther Direct Federal Revenue 14,304 0 0 0 0

Total Federal Government $ 30,925 $ 0 $ 0 $ 0 $ 0

Other Governments and Citizens GroupsOther Governments

Paving and Maintenance $ 0 $ 0 $ 0 $ 0 $ 0Contributions 31,054 0 5,000 45,000 0

Total Other Governments and Citizens Groups $ 31,054 $ 0 $ 5,000 $ 45,000 $ 0

Total $ 5,496,243 $ 523,169 $ 7,613 $ 56,547 $ 842

(Continued)


143

Exhibit I-5



CommunityHighway / General Development/ Highway

Public Debt Industrial CapitalWorks Service Park Projects Total


Current Property Tax $ 63,047 $ 0 $ 0 $ 15,769 $ 2,635,121Trustee's Collections - Prior Year 2,112 0 0 437 83,045Trustee's Collections - Bankruptcy 8 0 0 2 319Circuit Clerk/Clerk and Master Collections - Prior Years 1,254 0 0 446 54,269Interest and Penalty 436 0 0 129 25,528Payments in-Lieu-of Taxes - T.V.A. 178 0 0 64 7,447Payments in-Lieu-of Taxes - Local Utilities 7,056 0 0 1,773 295,037Payments in-Lieu-of Taxes - Other 0 0 0 0 11,249

County Local Option TaxesLocal Option Sales Tax 0 0 0 0 308,988Hotel/Motel Tax 0 0 0 0 30,368Wheel Tax 0 0 0 0 221,095Litigation Tax - General 0 0 0 0 29,337Litigation Tax - Special Purpose 0 0 0 0 2,900Litigation Tax - Jail, Workhouse, or Courthouse 0 0 0 0 20,904Litigation Tax - Victim-Offender Mediation Center 0 0 0 0 1,266Business Tax 1,874 84 0 433 77,600Mixed Drink Tax 0 0 0 0 1,349

Statutory Local TaxesBank Excise Tax 680 0 0 173 28,439Wholesale Beer Tax 0 0 0 0 36,129Interstate Telecommunications Tax 0 0 0 0 1,061

Total Local Taxes $ 76,645 $ 84 $ 0 $ 19,226 $ 3,871,451

(Continued)

Special Revenue

FundDebt Service

Fund Capital Projects Funds

144

Exhibit I-5






Cable TV Franchise $ 0 $ 0 $ 0 $ 0 $ 2,832Permits

Beer Permits 0 0 0 0 1,235Total Licenses and Permits $ 0 $ 0 $ 0 $ 0 $ 4,067

Fines, Forfeitures, and PenaltiesCircuit Court

Fines $ 0 $ 0 $ 0 $ 0 $ 4,092Officers Costs 0 0 0 0 5,992Data Entry Fee - Circuit Court 0 0 0 0 630

Criminal CourtDrug Court Fees 0 0 0 0 1,213

General Sessions CourtFines 0 0 0 0 7,037Officers Costs 0 0 0 0 15,908Game and Fish Fines 0 0 0 0 160Drug Control Fines 0 0 0 0 2,613Drug Court Fees 0 0 0 0 818Jail Fees 0 0 0 0 9,434DUI Treatment Fines 0 0 0 0 570Data Entry Fee - General Sessions Court 0 0 0 0 3,006Courtroom Security Fee 0 0 0 0 80

Juvenile CourtFines 0 0 0 0 86

(Continued)

Special Revenue

FundDebt Service


145

Exhibit I-5





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

Officers Costs $ 0 $ 0 $ 0 $ 0 $ 3,841Data Entry Fee - Chancery Court 0 0 0 0 1,919Courtroom Security Fee 0 0 0 0 15

Other Fines, Forfeitures, and PenaltiesProceeds from Confiscated Property 0 0 0 0 14,075

Total Fines, Forfeitures, and Penalties $ 0 $ 0 $ 0 $ 0 $ 71,489

Charges for Current ServicesGeneral Service Charges

Self-Insurance Premiums/Contributions $ 0 $ 0 $ 0 $ 0 $ 675Commercial and Industrial Waste Collection Charge 0 0 0 0 71,024Residential Waste Collection Charge 0 0 0 0 385,810Surcharge - General 0 0 0 0 555Solid Waste Disposal Fee 0 0 0 0 1,434Surcharge - Waste Tire Disposal 0 0 0 0 13,632Work Release Charges for Board 0 0 0 0 10,676

FeesAirport Fees 0 0 0 0 5,439Recreation Fees 0 0 0 0 11,376Copy Fees 0 0 0 0 146Library Fees 0 0 0 0 5,214Archives and Records Management Fee 0 0 0 0 6,295Greenbelt Late Application Fee 4 0 0 0 180Telephone Commissions 0 0 0 0 14,998Constitutional Officers' Fees and Commissions 0 0 0 0 842

(Continued)

Special Revenue

FundDebt Service


146

Exhibit I-5





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

Data Processing Fee - Register $ 0 $ 0 $ 0 $ 0 $ 4,260Data Processing Fee - Sheriff 0 0 0 0 1,650Sexual Offender Registration Fee - Sheriff 0 0 0 0 1,050Data Processing Fee - County Clerk 0 0 0 0 987

Total Charges for Current Services $ 4 $ 0 $ 0 $ 0 $ 536,243


Investment Income $ 0 $ 0 $ 0 $ 0 $ 57,913Lease/Rentals 0 0 0 0 133,336Commissary Sales 0 0 0 0 5,132Sale of Gasoline 0 0 0 0 26,047Sale of Recycled Materials 0 0 0 0 13,559Retirees' Insurance Payments 2,881 0 0 0 2,881Miscellaneous Refunds 1,105 0 92 0 12,470

Nonrecurring ItemsSale of Equipment 58,496 0 0 0 76,751Damages Recovered from Individuals 0 0 0 0 25,267

Total Other Local Revenues $ 62,482 $ 0 $ 92 $ 0 $ 353,356

Fees Received From County OfficialsFees In-Lieu-of Salary

County Clerk $ 0 $ 0 $ 0 $ 0 $ 104,077Circuit Court Clerk 0 0 0 0 38,962General Sessions Court Clerk 0 0 0 0 49,844

(Continued)

Special Revenue

FundDebt Service


147

Exhibit I-5





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

Clerk and Master $ 0 $ 0 $ 0 $ 0 $ 60,835Register 0 0 0 0 56,924Sheriff 0 0 0 0 27,176Trustee 0 0 0 0 167,119

Total Fees Received From County Officials $ 0 $ 0 $ 0 $ 0 $ 504,937


Solid Waste Grants $ 0 $ 0 $ 0 $ 0 $ 14,464Public Safety Grants

Law Enforcement Training Programs 0 0 0 0 8,400Health and Welfare Grants

Health Department Programs 0 0 0 0 42,672Public Works Grants

State Aid Program 363,217 0 0 0 363,217Litter Program 0 0 0 0 27,999

Other State RevenuesIncome Tax 0 0 0 0 4,545Beer Tax 0 0 0 0 18,415Vehicle Certificate of Title Fees 0 0 0 0 11,860Alcoholic Beverage Tax 0 0 0 0 34,344State Revenue Sharing - T.V.A. 32,000 0 0 0 361,711Contracted Prisoner Boarding 0 0 0 0 235,246Gasoline and Motor Fuel Tax 1,499,322 0 0 0 1,499,322Petroleum Special Tax 8,775 0 0 0 8,775

(Continued)

Special Revenue

FundDebt Service


148

Exhibit I-5





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

Registrar's Salary Supplement $ 0 $ 0 $ 0 $ 0 $ 15,164Other State Grants 0 0 0 0 22,010Other State Revenues 0 0 0 0 24,595

Total State of Tennessee $ 1,903,314 $ 0 $ 0 $ 0 $ 2,692,739


Community Development $ 0 $ 0 $ 584,432 $ 0 $ 584,432Homeland Security Grants 0 0 0 0 6,873Other Federal through State 0 0 0 0 9,748

Direct Federal RevenueOther Direct Federal Revenue 0 0 0 0 14,304

Total Federal Government $ 0 $ 0 $ 584,432 $ 0 $ 615,357


Paving and Maintenance $ 8,558 $ 0 $ 0 $ 0 $ 8,558Contributions 0 201,532 0 0 282,586

Total Other Governments and Citizens Groups $ 8,558 $ 201,532 $ 0 $ 0 $ 291,144

Total $ 2,051,003 $ 201,616 $ 584,524 $ 19,226 $ 8,940,783

Special Revenue

FundDebt Service


149

Exhibit I-6


All Governmental Fund TypesDiscretely Presented Lewis County School DepartmentFor the Year Ended June 30, 2017

General SchoolPurpose Federal CentralSchool Projects Cafeteria Total


Current Property Tax $ 1,001,705 $ 0 $ 0 $ 1,001,705Trustee's Collections - Prior Year 31,283 0 0 31,283Trustee's Collections - Bankruptcy 120 0 0 120Circuit Clerk/Clerk and Master Collections - Prior Years 19,883 0 0 19,883Interest and Penalty 6,680 0 0 6,680Payments in-Lieu-of Taxes - T.V.A. 2,827 0 0 2,827Payments in-Lieu-of Taxes - Local Utilities 111,696 0 0 111,696

County Local Option TaxesLocal Option Sales Tax 1,476,988 0 0 1,476,988Business Tax 31,989 0 0 31,989

Statutory Local TaxesBank Excise Tax 10,766 0 0 10,766Interstate Telecommunications Tax 814 0 0 814

Total Local Taxes $ 2,694,751 $ 0 $ 0 $ 2,694,751


Marriage Licenses $ 530 $ 0 $ 0 $ 530Total Licenses and Permits $ 530 $ 0 $ 0 $ 530

Charges for Current ServicesFees

Greenbelt Late Application Fee $ 69 $ 0 $ 0 $ 69

(Continued)


150

Exhibit I-6


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


Charges for Current Services (Cont.)Education Charges

Lunch Payments - Adults $ 0 $ 0 $ 21,468 $ 21,468Income from Breakfast 0 0 416 416A la Carte Sales 0 0 64,985 64,985School Based Health Services - FFS 16,246 0 0 16,246Receipts from Individual Schools 28,848 0 0 28,848Community Service Fees - Children 52 0 0 52TBI Criminal Background Fee 1,291 0 223 1,514Other Charges for Services 0 0 2,597 2,597

Total Charges for Current Services $ 46,506 $ 0 $ 89,689 $ 136,195


Investment Income $ 30,586 $ 0 $ 772 $ 31,358Lease/Rentals 6,412 0 0 6,412Sale of Materials and Supplies 5,680 0 0 5,680E-Rate Funding 38,505 0 0 38,505Commodity Rebates 0 0 2,138 2,138Miscellaneous Refunds 15,158 0 0 15,158

Nonrecurring ItemsSale of Property 203,334 0 0 203,334Damages Recovered from Individuals 1,080 0 0 1,080Contributions and Gifts 2,750 0 0 2,750

Other Local RevenuesOther Local Revenues 0 0 820 820

Total Other Local Revenues $ 303,505 $ 0 $ 3,730 $ 307,235

(Continued)


151

Exhibit I-6





On-behalf Contributions for OPEB $ 44,416 $ 0 $ 0 $ 44,416State Education Funds

Basic Education Program 10,265,871 0 0 10,265,871Early Childhood Education 410,735 0 0 410,735School Food Service 0 0 10,945 10,945Driver Education 6,872 0 0 6,872Other State Education Funds 307,252 0 0 307,252Career Ladder Program 45,752 0 0 45,752

Total State of Tennessee $ 11,080,898 $ 0 $ 10,945 $ 11,091,843


USDA School Lunch Program $ 0 $ 0 $ 698,372 $ 698,372USDA - Commodities 0 0 114,350 114,350Breakfast 0 0 357,511 357,511USDA Food Service Equipment Grant 0 0 11,035 11,035Vocational Education - Basic Grants to States 0 41,781 0 41,781Title I Grants to Local Education Agencies 0 693,238 0 693,238Special Education - Grants to States 0 377,294 0 377,294Special Education Preschool Grants 0 16,190 0 16,190Rural Education 0 54,009 0 54,009Eisenhower Professional Development State Grants 0 118,622 0 118,622

Total Federal Government $ 0 $ 1,301,134 $ 1,181,268 $ 2,482,402

(Continued)


152

Exhibit I-6





Contributions $ 86,000 $ 0 $ 0 $ 86,000Total Other Governments and Citizens Groups $ 86,000 $ 0 $ 0 $ 86,000

Total $ 14,212,190 $ 1,301,134 $ 1,285,632 $ 16,798,956


153

Exhibit I-7

Lewis County, TennesseeSchedule of Detailed Expenditures -

All Governmental Fund TypesFor the Year Ended June 30, 2017

General FundGeneral Government

County CommissionSecretary to Board $ 5,112Board and Committee Members Fees 31,050Audit Services 3,948Dues and Memberships 2,091Legal Notices, Recording, and Court Costs 756Printing, Stationery, and Forms 201Travel 2,671Office Supplies 532

Total County Commission $ 46,361

Board of EqualizationBoard and Committee Members Fees $ 663

Total Board of Equalization 663

County Mayor/ExecutiveCounty Official/Administrative Officer $ 79,741Accountants/Bookkeepers 28,147Purchasing Personnel 28,001Data Processing Services 10,207Dues and Memberships 1,050Legal Notices, Recording, and Court Costs 682Printing, Stationery, and Forms 790Travel 4,619Office Supplies 1,524Premiums on Corporate Surety Bonds 197

Total County Mayor/Executive 154,958

County AttorneyContracts with Private Agencies $ 6,000

Total County Attorney 6,000

Election CommissionCounty Official/Administrative Officer $ 58,699Part-time Personnel 20,504Election Commission 7,140Election Workers 12,821In-service Training 150Data Processing Services 7,800Dues and Memberships 175Legal Notices, Recording, and Court Costs 2,036Maintenance and Repair Services - Office Equipment 396Postal Charges 68Printing, Stationery, and Forms 2,232Rentals 1,000Travel 3,707Other Contracted Services 3,617Food Supplies 371

(Continued)

154

Exhibit I-7



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

Election Commission (Cont.)Office Supplies $ 1,835Other Supplies and Materials 999

Total Election Commission $ 123,550

Register of DeedsCounty Official/Administrative Officer $ 65,221Secretary(ies) 26,194Data Processing Services 4,372Dues and Memberships 587Printing, Stationery, and Forms 1,430Office Supplies 3,567Premiums on Corporate Surety Bonds 98

Total Register of Deeds 101,469

Geographical Information SystemsData Processing Personnel $ 30,895Salary Supplements 1,000Dues and Memberships 350Office Supplies 205

Total Geographical Information Systems 32,450

County BuildingsSupervisor/Director $ 38,849Custodial Personnel 23,667Maintenance Personnel 25,888Communication 26,415Operating Lease Payments 2,629Maintenance Agreements 1,104Maintenance and Repair Services - Buildings 14,724Maintenance and Repair Services - Equipment 1,137Pest Control 391Postal Charges 11,490Travel 599Other Contracted Services 10,129Asphalt 64Custodial Supplies 3,276Food Supplies 2,424Gasoline 2,046Ice 1,836Office Supplies 466Propane Gas 18Tires and Tubes 10Utilities 33,511Building Improvements 103,604Land 30,412Maintenance Equipment 23Office Equipment 35

Total County Buildings 334,747

(Continued)

155

Exhibit I-7



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

Other FacilitiesCommunication $ 985Maintenance and Repair Services - Buildings 28,239Pest Control 605Other Contracted Services 440Custodial Supplies 600Utilities 8,372

Total Other Facilities $ 39,241

FinanceProperty Assessor's Office

County Official/Administrative Officer $ 65,221Assistant(s) 24,270Audit Services 2,400Data Processing Services 2,851Dues and Memberships 1,050Legal Notices, Recording, and Court Costs 87Maintenance Agreements 700Maintenance and Repair Services - Equipment 804Gasoline 283Office Supplies 1,126Premiums on Corporate Surety Bonds 192Motor Vehicles 214Office Equipment 835

Total Property Assessor's Office 100,033

Reappraisal ProgramAssistant(s) $ 25,282Data Processing Services 2,552

Total Reappraisal Program 27,834

County Trustee's OfficeCounty Official/Administrative Officer $ 65,221Data Processing Personnel 26,321Secretary(ies) 24,366Data Processing Services 6,890Dues and Memberships 472Legal Notices, Recording, and Court Costs 160Maintenance and Repair Services - Office Equipment 52Printing, Stationery, and Forms 722Travel 175Other Contracted Services 4,067Office Supplies 848Premiums on Corporate Surety Bonds 1,636Office Equipment 12,616

Total County Trustee's Office 143,546

(Continued)

156

Exhibit I-7



General Fund (Cont.)Finance (Cont.)

County Clerk's OfficeCounty Official/Administrative Officer $ 65,221Data Processing Personnel 28,000Secretary(ies) 26,193Board and Committee Members Fees 120Data Processing Services 12,733Dues and Memberships 572Legal Notices, Recording, and Court Costs 100Maintenance and Repair Services - Office Equipment 30Office Supplies 548Periodicals 1,733Premiums on Corporate Surety Bonds 98

Total County Clerk's Office $ 135,348

Administration of JusticeCircuit Court

County Official/Administrative Officer $ 65,221Other Salaries and Wages 3,927Jury and Witness Expense 1,900Data Processing Services 7,055Dues and Memberships 532Legal Notices, Recording, and Court Costs 360Printing, Stationery, and Forms 1,121Other Contracted Services 2,016Office Supplies 680Premiums on Corporate Surety Bonds 98

Total Circuit Court 82,910

General Sessions JudgeJudge(s) $ 91,882Secretary(ies) 2,000Dues and Memberships 75Printing, Stationery, and Forms 39Travel 2,493Office Supplies 83

Total General Sessions Judge 96,572

General Sessions Court ClerkData Processing Personnel $ 26,872Secretary(ies) 25,500Part-time Personnel 16,767Data Processing Services 2,949Operating Lease Payments 2,779Printing, Stationery, and Forms 1,200Office Supplies 2,943

Total General Sessions Court Clerk 79,010

(Continued)

157

Exhibit I-7



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

Chancery CourtCounty Official/Administrative Officer $ 65,221Secretary(ies) 25,453Data Processing Services 5,015Dues and Memberships 632Operating Lease Payments 2,191Legal Notices, Recording, and Court Costs 250Maintenance and Repair Services - Office Equipment 220Printing, Stationery, and Forms 900Other Contracted Services 150Data Processing Supplies 1,000Office Supplies 972Periodicals 468Premiums on Corporate Surety Bonds 195

Total Chancery Court $ 102,667

Judicial CommissionersSupervisor/Director $ 23,335Youth Service Officer(s) 9,315Part-time Personnel 11,552Dues and Memberships 75Travel 905Office Supplies 1,014

Total Judicial Commissioners 46,196

Public SafetySheriff's Department

County Official/Administrative Officer $ 71,743Supervisor/Director 43,410Deputy(ies) 270,690Investigator(s) 35,942Lieutenant(s) 81,910Sergeant(s) 76,918Salary Supplements 8,400Guards 29,104Secretary(ies) 21,827Other Salaries and Wages 734In-service Training 410Advertising 363Communication 3,500Contracts with Government Agencies 656Contracts with Private Agencies 521Dues and Memberships 1,500Operating Lease Payments 1,472Licenses 112Maintenance and Repair Services - Equipment 2,377Maintenance and Repair Services - Vehicles 18,139Printing, Stationery, and Forms 758

(Continued)

158

Exhibit I-7



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

Sheriff's Department (Cont.)Travel $ 970Other Contracted Services 1,151Fuel Oil 873Gasoline 44,240Ice 300Office Supplies 1,262Tires and Tubes 8,091Uniforms 4,500Vehicle Parts 959Premiums on Corporate Surety Bonds 1,156Other Charges 2,500Law Enforcement Equipment 3,834Motor Vehicles 287

Total Sheriff's Department $ 740,609

Drug EnforcementOther Charges $ 722Law Enforcement Equipment 12,940

Total Drug Enforcement 13,662

Administration of the Sexual Offender RegistryMaintenance and Repair Services - Office Equipment $ 350

Total Administration of the Sexual Offender Registry 350

JailCounty Official/Administrative Officer $ 5,400Supervisor/Director 37,576Data Processing Personnel 25,085Guards 252,218Secretary(ies) 27,976Cafeteria Personnel 15,787Maintenance Personnel 27,558Part-time Personnel 6,397Other Salaries and Wages 5,275In-service Training 550Contracts with Government Agencies 58,135Contracts with Private Agencies 6,964Contracts with Public Carriers 1,781Dues and Memberships 45Evaluation and Testing 1,430Maintenance and Repair Services - Buildings 75,417Maintenance and Repair Services - Equipment 2,802Maintenance and Repair Services - Vehicles 1,860Medical and Dental Services 200,091Pest Control 1,326Printing, Stationery, and Forms 1,409Travel 1,453

(Continued)

159

Exhibit I-7



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

Jail (Cont.)Other Contracted Services $ 74,701Custodial Supplies 6,958Drugs and Medical Supplies 1,753Food Supplies 83,739Gasoline 4,904Ice 500Office Supplies 1,009Prisoners Clothing 2,477Tires and Tubes 599Uniforms 2,316Utilities 49,063Premiums on Corporate Surety Bonds 200Other Charges 935Heating and Air Conditioning Equipment 615Law Enforcement Equipment 1,752Maintenance Equipment 4,783

Total Jail $ 992,839

Fire Prevention and ControlOther Salaries and Wages $ 11,000Contracts with Private Agencies 19,000Utilities 3,837Building and Contents Insurance 3,257

Total Fire Prevention and Control 37,094

Civil DefenseSupervisor/Director $ 19,531Dispatchers/Radio Operators 93,705Dues and Memberships 55Maintenance Agreements 1,727Maintenance and Repair Services - Equipment 818Matching Share 10,484Other Contracted Services 6,290Gasoline 1,622Office Supplies 521Tires and Tubes 317Motor Vehicles 7,639

Total Civil Defense 142,709

County Coroner/Medical ExaminerCounty Official/Administrative Officer $ 2,112Medical and Dental Services 9,281Premiums on Corporate Surety Bonds 75

Total County Coroner/Medical Examiner 11,468

Other Public SafetySchool Resource Officer $ 29,373

Total Other Public Safety 29,373

(Continued)

160

Exhibit I-7



General Fund (Cont.)Public Health and Welfare

Local Health CenterCustodial Personnel $ 3,167Communication 4,150Contributions 15,908Maintenance and Repair Services - Buildings 536Other Contracted Services 639Custodial Supplies 117Office Supplies 1,231Periodicals 200Utilities 11,716Other Charges 23,719

Total Local Health Center $ 61,383

Rabies and Animal ControlContributions $ 600Other Contracted Services 600Animal Food and Supplies 476Utilities 1,108

Total Rabies and Animal Control 2,784

Ambulance/Emergency Medical ServicesContracts with Private Agencies $ 142,800

Total Ambulance/Emergency Medical Services 142,800

Other Local Health ServicesTeachers $ 32,465Social Security 1,549Travel 2,920

Total Other Local Health Services 36,934

Regional Mental Health CenterContributions $ 4,500

Total Regional Mental Health Center 4,500

Sanitation Education/InformationOther Salaries and Wages $ 24,618Instructional Supplies and Materials 4,117Other Charges 4,133

Total Sanitation Education/Information 32,868

Social, Cultural, and Recreational ServicesSenior Citizens Assistance

Contributions $ 6,000Total Senior Citizens Assistance 6,000

LibrariesAssistant(s) $ 22,591Supervisor/Director 32,500

(Continued)

161

Exhibit I-7



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

Libraries (Cont.)Part-time Personnel $ 17,264Communication 501Dues and Memberships 312Maintenance and Repair Services - Buildings 355Pest Control 336Travel 163Other Contracted Services 2,409Ice 326Library Books/Media 10,007Office Supplies 1,672Periodicals 1,404Utilities 6,809Other Charges 2,127Office Equipment 1,936

Total Libraries $ 100,712

Agriculture and Natural ResourcesAgricultural Extension Service

Salary Supplements $ 47,114Board and Committee Members Fees 1,200Communication 953Dues and Memberships 420Travel 3,000Office Supplies 957

Total Agricultural Extension Service 53,644

Soil ConservationOther Salaries and Wages $ 35,256Contributions 18,000

Total Soil Conservation 53,256

Other OperationsOther Economic and Community Development

Contracts with Private Agencies $ 18,000Contributions 10,000Dues and Memberships 3,865Other Charges 3,378

Total Other Economic and Community Development 35,243

AirportAdvertising $ 32Communication 3,597Maintenance and Repair Services - Buildings 846Maintenance and Repair Services - Equipment 2,351Travel 3,499Permits 200Other Contracted Services 130

(Continued)

162

Exhibit I-7



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

Airport (Cont.)Custodial Supplies $ 352Gasoline 26,948Office Supplies 5Utilities 7,459Excess Risk Insurance 2,125Land 17,250

Total Airport $ 64,794

Veterans' ServicesCounty Official/Administrative Officer $ 7,000Dues and Memberships 35Travel 812Library Books/Media 399Office Supplies 207Office Equipment 1,006

Total Veterans' Services 9,459

Contributions to Other AgenciesContributions $ 76,000

Total Contributions to Other Agencies 76,000

Employee BenefitsOther Salaries and Wages $ 6,572Social Security 175,308Pensions 116,182Employee and Dependent Insurance 268,704Life Insurance 3,922Unemployment Compensation 9,373Workers' Compensation Insurance 54,340

Total Employee Benefits 634,401

MiscellaneousContributions $ 18,600Liability Insurance 69,500Premiums on Corporate Surety Bonds 100Trustee's Commission 73,881Other Charges 4,646

Total Miscellaneous 166,727

Total General Fund $ 5,103,164

Solid Waste/Sanitation FundPublic Health and Welfare

Transfer StationsSupervisor/Director $ 33,000Equipment Operators 22,838Clerical Personnel 33,057

(Continued)

163

Exhibit I-7



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

Transfer Stations (Cont.)Attendants $ 43,305Part-time Personnel 16,853Other Salaries and Wages 2,801Audit Services 430Communication 457Contracts with Other Public Agencies 22,585Contracts with Private Agencies 216,907Data Processing Services 1,500Engineering Services 18,466Legal Notices, Recording, and Court Costs 88Maintenance and Repair Services - Buildings 1,502Maintenance and Repair Services - Equipment 9,088Postal Charges 6,035Printing, Stationery, and Forms 2,459Permits 4,500Crushed Stone 1,664Custodial Supplies 314Diesel Fuel 5,292Food Supplies 744Gasoline 4,085Ice 263Office Supplies 1,127Propane Gas 509Tires and Tubes 1,335Uniforms 3,194Utilities 5,399Refunds 2,478Other Charges 735Building Construction 140,091Maintenance Equipment 12Motor Vehicles 11,518Office Equipment 1,152Solid Waste Equipment 9,683

Total Transfer Stations $ 625,466

Other OperationsEmployee Benefits

Social Security $ 11,498Pensions 6,043Employee and Dependent Insurance 19,458Life Insurance 296Unemployment Compensation 476Workers' Compensation Insurance 5,000


MiscellaneousLiability Insurance $ 4,000Trustee's Commission 4,876

Total Miscellaneous 8,876

Total Solid Waste/Sanitation Fund $ 677,113

(Continued)

164

Exhibit I-7



Drug Control FundPublic Safety

Drug EnforcementOther Charges $ 310Law Enforcement Equipment 4,528

Total Drug Enforcement $ 4,838

Total Drug Control Fund $ 4,838

Sports and Recreation FundSocial, Cultural, and Recreational Services

Parks and Fair BoardsSupervisor/Director $ 23,288Custodial Personnel 10,138Temporary Personnel 14,487Part-time Personnel 11,076Communication 1,509Data Processing Services 400Maintenance and Repair Services - Buildings 2,218Maintenance and Repair Services - Equipment 1,685Permits 680Other Contracted Services 4,200Custodial Supplies 1,056Diesel Fuel 404Fertilizer, Lime, and Seed 339Food Supplies 515Gasoline 103Instructional Supplies and Materials 847Office Supplies 634Sand 325Uniforms 1,466Utilities 31,509Fencing 6,400Chemicals 586Refunds 75Other Charges 679Building Improvements 5,442Maintenance Equipment 2,127Office Equipment 842

Total Parks and Fair Boards $ 123,030

Other OperationsEmployee Benefits

Social Security $ 4,486Pensions 1,384Employee and Dependent Insurance 902Life Insurance 71Unemployment Compensation 224Workers' Compensation Insurance 2,500


(Continued)

165

Exhibit I-7



Sports and Recreation Fund (Cont.)Other Operations (Cont.)

MiscellaneousLiability Insurance $ 3,000Trustee's Commission 112

Total Miscellaneous $ 3,112

Total Sports and Recreation Fund $ 135,709

Highway/Public Works FundHighways

AdministrationCounty Official/Administrative Officer $ 71,743Salary Supplements 955Secretary(ies) 27,814Board and Committee Members Fees 400Advertising 258Communication 4,894Contributions 5,000Dues and Memberships 3,137Legal Services 24Licenses 126Maintenance and Repair Services - Buildings 481Maintenance and Repair Services - Office Equipment 5,350Postal Charges 239Printing, Stationery, and Forms 166Rentals 818Travel 1,008Permits 350Other Contracted Services 3,639Custodial Supplies 2,749Electricity 5,117Food Supplies 611Natural Gas 173Office Supplies 607Water and Sewer 2,087Other Supplies and Materials 1,992Office Equipment 3,345

Total Administration $ 143,083

Highway and Bridge MaintenanceForemen $ 60,780Equipment Operators 50,702Equipment Operators - Light 113,905Truck Drivers 57,748Laborers 66,743Freight Expenses 145Other Contracted Services 16,268Asphalt - Cold Mix 8,627Asphalt - Liquid 135,628

(Continued)

166

Exhibit I-7



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

Highway and Bridge Maintenance (Cont.)Concrete $ 14,896Crushed Stone 110,165General Construction Materials 7,117Riprap 5,533Pipe - Concrete 420Pipe - Metal 10,933Road Signs 1,525Gravel and Chert 674Other Supplies and Materials 1,003

Total Highway and Bridge Maintenance $ 662,812

Operation and Maintenance of EquipmentForemen $ 32,728Mechanic(s) 36,129Freight Expenses 582Rentals 692Other Contracted Services 12,599Diesel Fuel 30,017Equipment and Machinery Parts 31,253Garage Supplies 8,081Gasoline 8,815Lubricants 3,383Small Tools 2,186Tires and Tubes 3,377Uniforms 1,029Other Supplies and Materials 8,587

Total Operation and Maintenance of Equipment 179,458

Other ChargesLiability Insurance $ 17,609Trustee's Commission 16,944Workers' Compensation Insurance 25,000

Total Other Charges 59,553

Employee BenefitsSocial Security $ 33,243Pensions 68,006Employee and Dependent Insurance 5,316Life Insurance 2,640Medical Insurance 99,603Unemployment Compensation 1,705Employer Medicare 7,293Other Fringe Benefits 80


Capital OutlayEngineering Services $ 5,116

(Continued)

167

Exhibit I-7



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

Capital Outlay (Cont.)Highway Construction $ 354,084State Aid Projects 55,000Transportation Equipment 16,600Other Equipment 133,615Other Construction 123,398

Total Capital Outlay $ 687,813

Total Highway/Public Works Fund $ 1,950,605

General Debt Service FundOther Operations

MiscellaneousTrustee's Commission $ 3

Total Miscellaneous $ 3

Principal on DebtGeneral Government

Principal on Notes $ 185,000Total General Government 185,000

EducationPrincipal on Bonds $ 195,000

Total Education 195,000

Interest on DebtGeneral Government

Interest on Notes $ 2,181Total General Government 2,181

EducationInterest on Bonds $ 6,532

Total Education 6,532

Other Debt ServiceEducation

Other Debt Issuance Charges $ 550Total Education 550

Total General Debt Service Fund 389,266

Community Development/Industrial Park FundCapital Projects

Public Utility ProjectsContracts with Government Agencies $ 21,900Engineering Services 162,975Legal Notices, Recording, and Court Costs 92Other Construction 399,557

Total Public Utility Projects $ 584,524

Total Community Development/Industrial Park Fund 584,524

(Continued)

168

Exhibit I-7



Highway Capital Projects FundHighways

Other ChargesTrustee's Commission $ 373

Total Other Charges $ 373

Capital OutlayEngineering Services $ 12,989

Total Capital Outlay 12,989

Total Highway Capital Projects Fund $ 13,362

Total Governmental Funds - Primary Government $ 8,858,581

169

Exhibit I-8


All Governmental Fund TypesDiscretely Presented Lewis County School DepartmentFor the Year Ended June 30, 2017

General Purpose School FundInstruction

Regular Instruction ProgramTeachers $ 4,431,189Career Ladder Program 25,494Homebound Teachers 1,037Educational Assistants 79,283Bonus Payments 166,459Certified Substitute Teachers 9,903Non-certified Substitute Teachers 63,643Social Security 269,947Pensions 424,511Medical Insurance 361,475Dental Insurance 1,794Unemployment Compensation 7,149Employer Medicare 63,565Other Contracted Services 7,304Instructional Supplies and Materials 39,170Textbooks - Bound 65,841Fee Waivers 700Regular Instruction Equipment 153,144

Total Regular Instruction Program $ 6,171,608

Alternative Instruction ProgramTeachers $ 51,172Other Salaries and Wages 12,701Non-certified Substitute Teachers 625Social Security 3,547Pensions 6,032Medical Insurance 6,464Employer Medicare 830Other Contracted Services 444

Total Alternative Instruction Program 81,815

Special Education ProgramTeachers $ 669,426Career Ladder Program 2,000Homebound Teachers 5,776Educational Assistants 11,613Speech Pathologist 51,959Other Salaries and Wages 22Non-certified Substitute Teachers 12,225Social Security 41,412Pensions 67,325Medical Insurance 73,896Employer Medicare 9,685Instructional Supplies and Materials 3,182

Total Special Education Program 948,521

(Continued)

170

Exhibit I-8



General Purpose School Fund (Cont.)Instruction (Cont.)

Career and Technical Education ProgramTeachers $ 210,759Career Ladder Program 1,000Certified Substitute Teachers 25Non-certified Substitute Teachers 4,075Social Security 12,609Pensions 19,455Medical Insurance 11,183Employer Medicare 2,825Contracts with Other School Systems 5,000Instructional Supplies and Materials 1,291Other Charges 507

Total Career and Technical Education Program $ 268,729

Student Body Education ProgramOther Salaries and Wages $ 6,207Social Security 385Pensions 277Employer Medicare 90Other Contracted Services 2,045Other Supplies and Materials 9,070

Total Student Body Education Program 18,074

Support ServicesAttendance

Travel $ 2,851In Service/Staff Development 880

Total Attendance 3,731

Health ServicesSupervisor/Director $ 51,506Medical Personnel 39,208Clerical Personnel 15,768Other Salaries and Wages 14,467Non-certified Substitute Teachers 1,315Social Security 7,081Pensions 12,343Medical Insurance 6,029Dental Insurance 300Employer Medicare 1,656Communication 447Other Contracted Services 6,380Drugs and Medical Supplies 911Other Supplies and Materials 2,602In Service/Staff Development 748Other Charges 1,417Health Equipment 159

Total Health Services 162,337

(Continued)

171

Exhibit I-8



General Purpose School Fund (Cont.)Support Services (Cont.)

Other Student SupportGuidance Personnel $ 244,854Clerical Personnel 12,806Other Salaries and Wages 31,989Social Security 16,698Pensions 25,676Medical Insurance 18,002Dental Insurance 351Employer Medicare 3,905Contracts with Government Agencies 39,654Evaluation and Testing 3,792Postal Charges 108Other Contracted Services 20,925Other Supplies and Materials 3,708In Service/Staff Development 2,153Other Charges 843Other Equipment 580

Total Other Student Support $ 426,044

Regular Instruction ProgramSupervisor/Director $ 151,334Career Ladder Program 4,000Librarians 197,875Instructional Computer Personnel 55,168Secretary(ies) 17,480Other Salaries and Wages 2,000Non-certified Substitute Teachers 1,900Social Security 24,030Pensions 39,921Medical Insurance 38,356Dental Insurance 402Employer Medicare 5,620Communication 107Travel 461Other Contracted Services 4,125Library Books/Media 24,713In Service/Staff Development 1,786Other Equipment 58,341

Total Regular Instruction Program 627,619

Special Education ProgramSupervisor/Director $ 60,905Career Ladder Program 1,000Psychological Personnel 76,312Social Security 8,110Pensions 12,461Medical Insurance 6,080

(Continued)

172

Exhibit I-8




Special Education Program (Cont.)Dental Insurance $ 531Employer Medicare 1,897Other Contracted Services 28,177

Total Special Education Program $ 195,473

TechnologyInternet Connectivity $ 859Software 23,321

Total Technology 24,180

Other ProgramsOn-behalf Payments to OPEB $ 44,416

Total Other Programs 44,416

Board of EducationSecretary to Board $ 2,000Board and Committee Members Fees 12,800Social Security 918Pensions 221Employer Medicare 215Audit Services 6,800Dues and Memberships 8,410Legal Services 1,836Postal Charges 150Travel 8,097Liability Insurance 20,986Premiums on Corporate Surety Bonds 929Trustee's Commission 59,297Workers' Compensation Insurance 83,850In Service/Staff Development 9,138Criminal Investigation of Applicants - TBI 2,205Refund to Applicant for Criminal Investigation 621Other Charges 9,708

Total Board of Education 228,181

Director of SchoolsCounty Official/Administrative Officer $ 111,711Secretary(ies) 35,421Social Security 9,123Pensions 13,405Medical Insurance 17,919Dental Insurance 1,756Employer Medicare 2,134Other Fringe Benefits 207Communication 5,226Dues and Memberships 1,882

(Continued)

173

Exhibit I-8




Director of Schools (Cont.)Postal Charges $ 1,615Travel 486Other Contracted Services 2,160Office Supplies 3,759In Service/Staff Development 1,188Other Charges 1,387Administration Equipment 70

Total Director of Schools $ 209,449

Office of the PrincipalPrincipals $ 229,182Career Ladder Program 3,000Accountants/Bookkeepers 104,295Assistant Principals 110,885Secretary(ies) 68,002Other Salaries and Wages 6,211Social Security 29,485Pensions 50,431Medical Insurance 41,365Dental Insurance 330Employer Medicare 6,896Communication 2,616Travel 217Other Contracted Services 1,520In Service/Staff Development 2,245

Total Office of the Principal 656,680

Fiscal ServicesAccountants/Bookkeepers $ 65,427Social Security 3,330Pensions 7,243Medical Insurance 9,411Employer Medicare 779Dues and Memberships 50Travel 101Other Contracted Services 12,673Data Processing Supplies 2,644Office Supplies 828In Service/Staff Development 1,975Administration Equipment 1,151

Total Fiscal Services 105,612

Operation of PlantSupervisor/Director $ 46,937Custodial Personnel 209,214Other Salaries and Wages 36,331

(Continued)

174

Exhibit I-8




Operation of Plant (Cont.)Social Security $ 16,546Pensions 10,168Medical Insurance 14,514Employer Medicare 3,934Other Contracted Services 10,973Custodial Supplies 38,010Electricity 331,881Natural Gas 43,172Water and Sewer 69,442Boiler Insurance 2,973Building and Contents Insurance 54,168Plant Operation Equipment 18,560

Total Operation of Plant $ 906,823

Maintenance of PlantMaintenance Personnel $ 83,196Other Salaries and Wages 22,829Social Security 5,465Pensions 6,326Medical Insurance 7,295Employer Medicare 1,283Communication 1,844Laundry Service 1,661Other Contracted Services 8,054Other Supplies and Materials 38,721Maintenance Equipment 5,659

Total Maintenance of Plant 182,333

TransportationSupervisor/Director $ 27,274Mechanic(s) 66,808Bus Drivers 240,564Other Salaries and Wages 7,212Social Security 20,522Pensions 31,725Medical Insurance 6,411Dental Insurance 402Employer Medicare 4,844Communication 4,462Contracts with Parents 1,329Laundry Service 1,909Medical and Dental Services 2,270Other Contracted Services 4,049Diesel Fuel 44,211Garage Supplies 2,623Gasoline 3,257

(Continued)

175

Exhibit I-8




Transportation (Cont.)Lubricants $ 3,272Tires and Tubes 9,783Vehicle Parts 23,600Vehicle and Equipment Insurance 13,856In Service/Staff Development 956Other Charges 6,176Maintenance Equipment 4,450Transportation Equipment 174,494

Total Transportation $ 706,459

Central and OtherData Processing Personnel $ 21,809Social Security 1,110Pensions 2,414Medical Insurance 3,137Employer Medicare 260

Total Central and Other 28,730

Operation of Non-Instructional ServicesCommunity Services

Supervisor/Director $ 33,221Teachers 29,516Educational Assistants 63,210Social Security 7,256Pensions 9,494Medical Insurance 6,629Employer Medicare 1,697Other Contracted Services 3,540Food Supplies 2,222Instructional Supplies and Materials 17,083In Service/Staff Development 1,387Other Charges 11,064Other Equipment 6,639

Total Community Services 192,958

Early Childhood EducationSupervisor/Director $ 62,248Teachers 180,204Career Ladder Program 2,000Educational Assistants 63,852Non-certified Substitute Teachers 4,825Social Security 18,251Pensions 28,652Medical Insurance 16,179Dental Insurance 663Employer Medicare 4,268

(Continued)

176

Exhibit I-8



General Purpose School Fund (Cont.)Operation of Non-Instructional Services (Cont.)

Early Childhood Education (Cont.)Communication $ 2,025Other Contracted Services 404Instructional Supplies and Materials 11,108In Service/Staff Development 2,588Regular Instruction Equipment 7,549

Total Early Childhood Education $ 404,816

Capital OutlayRegular Capital Outlay

Other Contracted Services $ 3,250Building Improvements 479,607Site Development 5,300

Total Regular Capital Outlay 488,157

Other Debt ServiceEducation

Debt Service Contribution to Primary Government $ 201,532Total Education 201,532

Total General Purpose School Fund $ 13,284,277

School Federal Projects FundInstruction

Regular Instruction ProgramTeachers $ 115,990Educational Assistants 199,469Non-certified Substitute Teachers 7,277Social Security 19,238Pensions 31,977Medical Insurance 17,870Dental Insurance 285Employer Medicare 4,499Other Fringe Benefits 1,279Instructional Supplies and Materials 43,691Regular Instruction Equipment 165,359

Total Regular Instruction Program $ 606,934

Special Education ProgramTeachers $ 4,000Educational Assistants 138,300Speech Pathologist 18,690Social Security 9,841Pensions 14,323Medical Insurance 3,695Employer Medicare 2,302Other Fringe Benefits 633

(Continued)

177

Exhibit I-8



School Federal Projects Fund (Cont.)Instruction (Cont.)

Special Education Program (Cont.)Instructional Supplies and Materials $ 765Other Supplies and Materials 1,387Special Education Equipment 350


Career and Technical Education ProgramMaintenance and Repair Services - Equipment $ 302Instructional Supplies and Materials 5,939Other Supplies and Materials 1,125Vocational Instruction Equipment 22,160

Total Career and Technical Education Program 29,526

Support ServicesOther Student Support

Other Salaries and Wages $ 1,200Social Security 74Pensions 108Employer Medicare 17Travel 6,618In Service/Staff Development 1,723Other Charges 3,206

Total Other Student Support 12,946

Regular Instruction ProgramSecretary(ies) $ 4,500Other Salaries and Wages 106,101Non-certified Substitute Teachers 3,325Social Security 5,889Pensions 9,511Medical Insurance 11,751Employer Medicare 1,470In Service/Staff Development 67,683Other Charges 10,792

Total Regular Instruction Program 221,022

Special Education ProgramSupervisor/Director $ 6,365Psychological Personnel 38,545Assessment Personnel 22,838Secretary(ies) 35,190Social Security 6,059Pensions 10,484Medical Insurance 4,848Dental Insurance 84Employer Medicare 1,417Other Fringe Benefits 540

(Continued)

178

Exhibit I-8



School Federal Projects Fund (Cont.)Support Services (Cont.)

Special Education Program (Cont.)Communication $ 2,601Other Contracted Services 32,786Other Supplies and Materials 8,233In Service/Staff Development 3,686Other Charges 8,949


Career and Technical Education ProgramTravel $ 697In Service/Staff Development 250

Total Career and Technical Education Program 947

TransportationBus Drivers $ 11,689Other Salaries and Wages 6,718Social Security 416Pensions 744Employer Medicare 267Other Fringe Benefits 785

Total Transportation 20,619

Total School Federal Projects Fund $ 1,268,905

Central Cafeteria FundOperation of Non-Instructional Services

Food ServiceSupervisor/Director $ 57,245Clerical Personnel 15,750Cafeteria Personnel 394,821Other Salaries and Wages 388In-service Training 913Social Security 27,958Pensions 39,144Medical Insurance 16,830Dental Insurance 542Unemployment Compensation 3,495Employer Medicare 6,550Other Fringe Benefits 240Communication 2,567Maintenance and Repair Services - Equipment 10,512Transportation - Other than Students 160Travel 215Other Contracted Services 22,365Food Preparation Supplies 35,261Food Supplies 476,044Office Supplies 3,726

(Continued)

179

Exhibit I-8



Central Cafeteria Fund (Cont.)Operation of Non-Instructional Services (Cont.)

Food Service (Cont.)Utilities $ 16,000USDA - Commodities 114,350Other Supplies and Materials 906In Service/Staff Development 635Criminal Investigation of Applicants - TBI 185Refund to Applicant for Criminal Investigation 114Food Service Equipment 14,481

Total Food Service $ 1,261,397

Total Central Cafeteria Fund $ 1,261,397

Total Governmental Funds - Lewis County School Department $ 15,814,579

180

Exhibit I-9

Lewis County, TennesseeSchedule of Detailed Receipts, Disbursements, and Changes in Cash Balance - City Agency FundFor the Year Ended June 30, 2017

Cities -Sales Tax

Fund

Cash Receipts Local Option Sales Tax $ 1,163,001Total Cash Receipts $ 1,163,001

Cash Disbursements Remittance of Revenues Collected $ 1,151,371 Trustee's Commission 11,630Total Cash Disbursements $ 1,163,001

Excess of Cash Receipts Over (Under) Cash Disbursements $ 0Cash Balance, July 1, 2016 0

Cash Balance, June 30, 2017 $ 0

181

SINGLE AUDIT SECTION

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Independent Auditor’s Report on Internal Control Over Financial Reporting and

on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards

Lewis County Mayor and Board of County Commissioners Lewis County, Tennessee To the County Mayor and Board of County Commissioners: We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Lewis County, Tennessee, as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise Lewis County’s basic financial statements, and have issued our report thereon dated October 24, 2017. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered Lewis County’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Lewis County’s internal control. Accordingly, we do not express an opinion on the effectiveness of Lewis County’s internal control. Our consideration of internal control was for the limited purpose described in the preceding paragraph 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. However, as described in the accompanying Schedule of Findings and Questioned Costs, we identified certain deficiencies in internal control that we consider to be material weaknesses and significant deficiencies. 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. We consider this

183

deficiency described in the accompanying Schedule of Findings and Questioned Costs to be a material weakness: 2017-001. 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. We consider these deficiencies described in the accompanying Schedule of Findings and Questioned Costs to be significant deficiencies: 2017-004 and 2017-006. Compliance and Other Matters As part of obtaining reasonable assurance about whether Lewis County’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed instances of noncompliance or other matters that are required to be reported under Government Auditing Standards and are described in the accompanying Schedule of Findings and Questioned Costs as items: 2017-002, 2017-003, and 2017-005. Lewis County’s Responses to Findings Lewis County’s responses to the findings identified in our audit are described in the accompanying Schedule of Findings and Questioned Costs. Lewis County’s responses were not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on them.

Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the result of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Lewis County’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Very truly yours,


184





Independent Auditor’s Report on Compliance for Each Major Program and on

Internal Control Over Compliance and on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance

Lewis County Mayor and Board of County Commissioners Lewis County, Tennessee To the County Mayor and Board of County Commissioners: Report on Compliance for Each Major Federal Program We have audited Lewis County’s compliance with the types of compliance requirements

described in the OMB Compliance Supplement that could have a direct and material effect on each of Lewis County’s major federal programs for the year ended June 30, 2017. Lewis County’s major federal programs are identified in the summary of auditor's results section of the accompanying Schedule of Findings and Questioned Costs. Management's Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Auditor's Responsibility Our responsibility is to express an opinion on compliance for each of Lewis 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

185

noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Lewis 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 Lewis County’s compliance. Opinion on Each Major Federal Program In our opinion, Lewis 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, 2017. Report on Internal Control Over Compliance Management of Lewis 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 Lewis 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 Lewis County’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

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The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Lewis County, Tennessee, as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise Lewis County’s basic financial statements. We issued our report thereon dated October 24, 2017, 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,


187

Lewis County, Tennessee, and the Lewis County School DepartmentSchedule of Expenditures of Federal Awards and State Grants (1) (2)For the Year Ended June 30, 2017

Federal Pass-throughFederal/Pass-through Agency/State CFDA Entity IdentifyingGrantor Program Title Number Number Expenditures

U.S. Department of Agriculture: Direct Program: Soil and Water Conservation 10.902 N/A $ 8,829 Passed-through State Department of Agriculture: Child Nutrition Cluster: (4) National School Lunch Program (Commodities - Noncash Assistance) 10.555 N/A 114,350 (7) Passed-through State Department of Education: Child Nutrition Cluster: (4) School Breakfast Program 10.553 N/A 357,511 National School Lunch Program 10.555 N/A 698,372 (7) Child Nutrition Discretionary Grants Limited Availability 10.579 N/A 29,206Total U.S. Department of Agriculture $ 1,208,268

U.S. Department of Housing and Urban Development: Passed-through State Department of Economic and Community Development: Community Development Block Grants/State's Program and Non-Entitlement Grants in Hawaii 14.228 (3) $ 306,552Total U.S. Department of Housing and Urban Development $ 306,552

U.S. Department of Justice: Direct Program: Bulletproof Vest Partnership Program 16.607 N/A $ 5,475Total U.S. Department of Justice $ 5,475

Appalachian Regional Commission: Passed-through State Department of Economic and Community Development: Appalachian Regional Development Program 23.001 (3) $ 277,880Total Appalachian Regional Commission $ 277,880

U.S. Institute of Museum and Library Services: Passed-through Secretary of State: Grants to States 45.310 (3) $ 526Total U.S. Institute of Museum and Library Services $ 526

U.S. Department of Education: Passed-through State Department of Education: Title I Grants to Local Educational Agencies 84.010 N/A $ 678,078 Special Education Cluster: (4) Special Education - Grants to States 84.027 N/A 385,779 Special Education - Preschool Grants 84.173 N/A 16,190 Career and Technical Education - Basic Grants to States 84.048 N/A 40,421 Rural Education 84.358 N/A 54,009 Improving Teacher Quality State Grants 84.367 N/A 107,242Total U.S. Department of Education $ 1,281,719

(Continued)

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Lewis County, Tennessee, and the Lewis County School DepartmentSchedule of Expenditures of Federal Awards and State Grants (1) (2) (Cont.)

Federal Pass-throughFederal/Pass-through Agency/State CFDA Entity IdentifyingGrantor Program Title Number Number Expenditures

U.S. Department of Health and Human Services: Passed-through State Department of Health: Grants to States for Operation of State Offices of Rural Health 93.913 (5) $ 9,222Total U.S. Department of Health and Human Services $ 9,222

U.S. Department of Homeland Security: Passed-through State Department of Military: Homeland Security Grant Program 97.067 (3) $ 6,873Total U.S. Department of Homeland Security $ 6,873

Total Expenditures of Federal Awards $ 3,096,515

ContractNumber

State Grants Lottery for Education Afterschool Program - State Department of Education N/A (3) $ 177,000 Three Star Grant - State Department of Economic and Community Development N/A (3) 10,000 Litter Program - State Department of Transportation N/A (3) 27,999 Health Educator Grant - State Department of Health N/A (6) 42,672 Access to Health and Healthy Active Built Environments - State Department of Health N/A (3) 10,000 Archives Development Grant - TN Department of State N/A (3) 2,010 Coordinated School Health - State Department of Education N/A (3) 90,000 Recycling Equipment Grant - State Department of Environment and Conservation N/A (3) 14,464 Family Resource Grant - State Department of Education N/A (3) 29,612 Safe Schools Act Grant - State Department of Education N/A (3) 10,640 Early Childhood Education - State Department of Education N/A 32701-02621 410,735

Total State Grants $ 825,132

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) Lewis County elected not to use the 10% de minimus cost rate permitted in the Uniform Guidance.(3) Information not available.(4) Child Nutrition Cluster total $1,170,233; Special Education Cluster total $401,969.(5) GG1645631; $1,436; GG1750485; $7,786.(6) GG1645631; $6,643; GG1750485; $36,029.(7) Total for CFDA No. 10.555 is $812,722.

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Lewis County, TennesseeSummary Schedule of Prior-year FindingsFor the Year Ended June 30, 2017

Fiscal Page Finding CFDAYear Number Number Number

2016 191 2016-001 N/A

2016 192 2016-002 N/A

2016 192 2016-003 N/A

2016 193 2016-004 N/A

There were no prior-year federal award findings to report.

Title of Finding Current Status

Prior-year Financial Statement Findings

Government Auditing Standards require auditors to report the status of uncorrected findings from prior audits. Inaddition, OMB's Uniform Guidance requires auditees to report the status of all prior-year findings whether corrected ornot. Presented below are financial statement findings along with their current status from the Annual Financial Reportfor Lewis County, Tennessee, for the year ended June 30, 2017.

Prior-year Federal Awards Findings

Corrected

Mobile Homes Schedules were not Mailed to the Land Owner Where the Mobile Home was Located

The Assessor did not Prorate Improvements or New Construction

Expenditures exceeded Appropriations

Parks and Recreation Department and the Offices of County Mayor, County Clerk, Circuit and General Sessions Courts Clerk, Clerk and Master, and Register of Deeds did not have Adequately Segregated Duties

Corrected

Corrected

Not Corrected - See Explanation on Corrective Action Plan

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Financial Statements:

1. Our report on the financial statements of Lewis County is unmodified.

2. Internal Control Over Financial Reporting:

* Material weakness identified? YES

* Significant deficiency identified? YES

3. Noncompliance material to the financial statements noted? YES

Federal Awards:

4. Internal Control Over Major Federal Programs:

* Material weakness identified? NO

* Significant deficiency identified? NONE REPORTED

5. Type of report auditor issued on compliance for major programs. UNMODIFIED

6. Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? NO

7. Identification of Major Federal Programs:

* CFDA Numbers: 10.553 and 10.555 Nutrition Cluster: School Breakfast Program and National School Lunch Program

* CFDA Number: 84.010 Title I Grants to Educational Agencies

8. Dollar threshold used to distinguish between Type A and Type B Programs. $750,000

9. Auditee qualified as low-risk auditee? YES

LEWIS COUNTY, TENNESSEE

SCHEDULE OF FINDINGS AND QUESTIONED COSTS


PART I, SUMMARY OF AUDITOR'S RESULTS

191

PART II, FINDINGS RELATING TO THE FINANCIAL STATEMENTS Findings and recommendations, as a result of our audit, are presented below. We reviewed these findings and recommendations with management to provide an opportunity for their response. Written responses for all findings are paraphrased and presented following each finding and recommendation. Management’s corrective action plans, whether related to the financial statements or federal awards, are presented separately in the Management’s Corrective Action Plan in the Single Audit Section of this report. Findings relating specifically to the audit of federal awards, if any, are separately presented under Part III, Findings and Questioned Costs for Federal Awards.

OFFICE OF COUNTY MAYOR FINDING 2017-001 MATERIAL AUDIT ADJUSTMENTS WERE REQUIRED

FOR PROPER FINANCIAL STATEMENT PRESENTATION (Internal Control – Material Weakness Under Government Auditing Standards)

At June 30, 2017, certain general ledger account balances in the General, Solid Waste/Sanitation, Sports and Recreation, and Community Development/Industrial Park funds were not materially correct, and audit adjustments were required for the financial statements to be materially correct at year end. Material audit adjustments were required to increase receivables ($193,942), decrease cash with trustee ($240,065), and decrease a payroll liability account ($239,972) in the General Fund. Material audit adjustments were required to increase expenditures ($120,091) and decrease cash with trustee ($136,581) in the Solid Waste/Sanitation Fund. These above-noted adjustments were largely the result of the failure to reconcile funds as described in Finding 2017-003 below. Material audit adjustments were required to increase both revenues and receivables ($50,000) in the Sports and Recreation Fund due to management’s failure to recognize contributions from the city and additional funding from the county. Material audit adjustments were required to decrease both receivables and contracts payable ($164,590) in the Community Development/Industrial Park Fund due to management’s failure to reduce prior-year balances by related current-year cash receipts and disbursements. Generally accepted accounting principles require Lewis County to have adequate internal controls over the maintenance of its accounting records. Material audit adjustments were required because the county’s financial reporting system did not prevent, detect, or correct potential misstatements in the accounting records. It is a strong indicator of a material weakness in internal controls if the county has ineffective controls over the maintenance of its accounting records, which are used to prepare the financial statements, including the related notes to the financial statements. These deficiencies are the result of a lack of management oversight. We presented audit adjustments to management that they approved and posted to properly present the financial statements in this report. RECOMMENDATION Lewis County should have appropriate processes in place to ensure its general ledgers are materially correct.

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MANAGEMENT’S RESPONSE – COUNTY MAYOR We concur. This finding resulted from simply failing to see these deficiencies as we closed our year. We met the last day of June 2017 to amend the budget for any deficiencies and failed to identify them.

_____________________________ FINDING 2017-002 EXPENDITURES EXCEEDED APPROPRIATIONS

(Noncompliance Under Government Auditing Standards)

We noted the following deficiencies in the budget operations of the office:

A. Expenditures exceeded appropriations approved by the county commission in four of 43 major appropriation categories (the legal level of control) in the General Fund and one of three major appropriation categories in the Solid Waste/Sanitation Fund as reflected in the following table:

AmountFund/Major Appropriation Category Overspent

General: Administration of the Sexual Offender Registry $ 50 Jail 18,536 Libraries 74 Employee Benefits 44,201

Solid Waste/Sanitation: Capital Outlay 82,814

B. Total expenditures and other uses of the Solid Waste/Sanitation Fund exceeded total appropriations approved by the county commission by $75,561.

Section 5-9-401, Tennessee Code Annotated, states that “All funds from whatever source derived, including, but not limited to, taxes, county aid funds, federal funds, and fines, that are to be used in the operation and respective programs for the various departments, commissions, institutions, boards, offices, and agencies of county governments shall be appropriated to such use by the county legislative bodies.” These deficiencies exist due to management’s failure to hold spending to the limits authorized by the county commission, which resulted in unauthorized expenditures. Also, these deficiencies are the result of a lack of management oversight, a failure to correct the finding noted in the prior-year audit report, and the failure to implement their corrective action plan. RECOMMENDATION Expenditures should be held within appropriations approved by the county commission.

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MANAGEMENT’S RESPONSE – COUNTY MAYOR We concur. This finding resulted from a failure to closely monitor the appropriations relative to the expenditures. There was also an oversight involving employee benefits not being properly set up in our accounting software.

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FINDING 2017-003 GENERAL LEDGER CASH ACCOUNTS WERE NOT

PROPERLY RECONCILED WITH COUNTY TRUSTEE REPORTS

(Material Noncompliance Under Government Auditing Standards)

The office did not properly reconcile the general ledger cash accounts with cash on deposit with the trustee in the various funds administered by the Office of County Mayor. Proper reconciliations were performed until the resignation of the former bookkeeper in August 2016. The county hired a new bookkeeper, but no attempt was made to reconcile the cash accounts or to post the monthly revenues until auditors brought these deficiencies to management’s attention during interim audit procedures in May 2017. Subsequently, the office posted all revenues and attempted to reconcile the general ledger cash accounts with the trustee’s reports; however, the cash accounts of the General and Solid Waste/Sanitation funds did not reconcile with the trustee’s reports by $240,065 and $136,581, respectively, at June 30, 2017. This resulted in numerous material audit adjustments, as reported above in Finding 2017-001. Section 9-2-138, Tennessee Code Annotated, requires officials to reconcile their respective fund accounts with the trustee’s reports monthly. Failure to reconcile the general ledger cash accounts with the county trustee’s reports increases the risks that errors may occur and not be detected. This deficiency is the result of a lack of management oversight. RECOMMENDATION The office should record all revenues in a timely manner, reconcile the various funds’ general ledger cash accounts with county trustee reports monthly as required by state statute, and correct any errors discovered in a timely manner.

MANAGEMENT’S RESPONSE – COUNTY MAYOR We concur. This finding resulted from a new bookkeeper who was hired without knowledge of reconciling with the trustee. The bookkeeper has since been trained and has found a more detailed and easier method of reconciling.

_____________________________

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FINDING 2017-004 GENERAL LEDGER PAYROLL LIABILITY ACCOUNTS WERE NOT RECONCILED WITH PAYROLL REPORTS AND PAYMENTS IN THE GENERAL FUND (Internal Control – Significant Deficiency Under Government Auditing Standards)

General ledger payroll liability accounts were not reconciled with payroll reports and payments in the General Fund. Sound business practices dictate that these reconciliations be performed monthly. The failure to regularly reconcile payroll liability accounts allowed errors to remain undiscovered and uncorrected. Auditors discovered that the county continued to pay various insurance premiums for seven former employees, which resulted in an overpayment of $19,840. Lewis County was able to recover $4,885 in refunds from the insurance providers; however, the remaining overpayment of $14,955 was lost due to the lapse of time prior to filing the claims for refund. This deficiency is the result of a lack of management oversight. RECOMMENDATION General ledger payroll liability accounts should be reconciled monthly with payroll reports and payments, and errors should be corrected promptly. MANAGEMENT’S RESPONSE – COUNTY MAYOR We concur. This finding was a result of inconsistent monitoring of insurance reports when employees no longer work for the county, along with lack of communication between department heads and human resources. This resulted in a number of employees who no longer are employed by the county to remain on the county’s insurance.

_____________________________ OFFICE OF ROAD SUPERINTENDENT

FINDING 2017-005 EXPENDITURES EXCEEDED APPROPRIATIONS IN

THE HIGHWAY/PUBLIC WORKS FUND (Noncompliance Under Government Auditing Standards)

Expenditures exceeded appropriations approved by the county commission in one of six major appropriation categories (the legal level of control) in the Highway/Public Works Fund as reflected in the following table:

AmountMajor Appropriation Category Overspent

Capital Outlay $ 55,000

Section 5-9-401, Tennessee Code Annotated, states that “All funds from whatever source derived, including, but not limited to, taxes, county aid funds, federal funds, and fines, that are to be used in the operation and respective programs for the various departments, commissions, institutions, boards, offices, and agencies of county governments shall be

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appropriated to such use by the county legislative bodies.” This deficiency exists due to management’s failure to hold spending to the limits authorized by the county commission, which resulted in unauthorized expenditures. RECOMMENDATION Expenditures should be held within appropriations approved by the county commission.

MANAGEMENT’S RESPONSE – ROAD SUPERINTENDENT We concur. We will take the necessary steps to correct this deficiency in the future.

_____________________________ OFFICE OF COUNTY CLERK FINDING 2017-006 THE OFFICE DID NOT REVIEW ITS SOFTWARE

AUDIT LOGS (Internal Control – Significant Deficiency Under Government Auditing Standards)

The software application used by the office generated four logs that displayed changes made by users. These logs provided the only audit trail of these changes and should be reviewed for inappropriate activity. Although the official was aware of the importance of these logs, they were not reviewed. When the importance of these logs was brought to management’s attention again in February 2017, the review process was resumed. Procedures for reviewing these logs are currently in place. RECOMMENDATION Management should review the audit logs on a routine basis. Any unusual transactions should be investigated.

MANAGEMENT’S RESPONSE – COUNTY CLERK I concur with this finding and will continue to review the logs as required.

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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, 2017.

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FindingNumber

OFFICE OF COUNTY MAYOR

2017-001 199

2017-002 199

2017-003 200

2017-004 200

OFFICE OF ROAD SUPERINTENDENT

2017-005 201

OFFICE OF COUNTY CLERK

2017-006 202

General Ledger Cash Accounts were not Properly Reconciled with County Trustee Reports

Expenditures Exceeded Appropriations in the Highway/Public Works Fund

The Office did not Review its Software Audit Logs

Expenditures Exceeded Appropriations

General Ledger Payroll Liability Accounts were not Reconciled with Payroll Reports and Payments in the General Fund

Material Audit Adjustments were Required for Proper Financial Statement Presentation

Corrective ActionPlan Page Number

We reviewed the financial statement and federal award findings and recommendations with management toprovide an opportunity for their response as required by the auditee requirements within Title 2 U.S. Code ofFederal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements forFederal Awards (Uniform Guidance). Management’s corrective action plans for all financial statement findingsand federal award findings are presented in this section and have been indexed below. The corrective action planswere prepared by management and have been presented as they were submitted.

Lewis County, TennesseeManagement's Corrective Action Plan


Title of Finding

198

199

200

201

202

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 Lewis County.

LEWIS COUNTY SHOULD ADOPT A CENTRAL SYSTEM OF ACCOUNTING, BUDGETING, AND PURCHASING

Lewis County does not have a central system of accounting, budgeting, and purchasing. Sound business practices dictate that establishing a central system would significantly improve internal controls over the accounting, budgeting, and purchasing processes. The absence of a central system of accounting, budgeting, and purchasing has been a management decision by the county commission resulting in decentralization and some duplication of effort. We recommend the adoption of the County Financial Management System of 1981 or a private act, which would provide for a central system of accounting, budgeting, and purchasing covering all county departments.

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Documents

LEWIS COUNTY TENNESSEE - TN Comptroller County, Tennessee ... We have audited the basic financial statements of Lewis County as of and for the year ended ... Benny Pace, Director of