DEKALB COUNTY TENNESSEE - TN Comptrollercomptroller.tn.gov/repository/CA/2016/FY16Dekalb.pdfannual financial report. dekalb county, tennessee. f. or the . y. ear . e. nded . j. une

ANNUAL FINANCIAL REPORT

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

DIVISION OF LOCAL GOVERNMENT AUDIT

ANNUAL FINANCIAL REPORT

DEKALB COUNTY, TENNESSEE

FOR THE YEAR ENDED JUNE 30, 2016

COMPTROLLER OF THE TREASURY JUSTIN P. WILSON

DIVISION OF LOCAL GOVERNMENT AUDIT JAMES R. ARNETTE

Director

STEVE REEDER, CPA, CGFM, CFE Audit Manager TIM BRASHEARS, CGFM AUSTIN LANNOM MELODIE C. HODGES, CFE KELLEY J. McNEAL, CPA, CGFM Auditor 4 State Auditors

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

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Exhibit Page(s)

Summary of Audit Findings 6

INTRODUCTORY SECTION 7

DeKalb County Officials 8

FINANCIAL SECTION 9

Independent Auditor's Report 10-13BASIC FINANCIAL STATEMENTS: 14

Government-wide Financial Statements:Statement of Net Position A 15-16Statement of Activities B 17-18

Fund Financial Statements:Governmental Funds:

Balance Sheet C-1 19-20Reconciliation of the Balance Sheet of Governmental Funds

to the Statement of Net Position C-2 21Statement of Revenues, Expenditures, and Changes in

Fund Balances C-3 22-23Reconciliation of the Statement of Revenues, Expenditures,

and Changes in Fund Balances of Governmental Fundsto the Statement of Activities C-4 24

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

General Fund C-5 25-26Local Purpose Tax Fund C-6 27Highway/Public Works Fund C-7 28

Proprietary Funds:Statement of Net Position D-1 29-30Statement of Revenues, Expenses, and Changes in Net Position D-2 31Statement of Cash Flows D-3 32

Fiduciary Funds:Statement of Fiduciary Assets and Liabilities E 33

Index and Notes to the Financial Statements 34-82REQUIRED SUPPLEMENTARY INFORMATION: 83

Schedule of Changes in Net Pension Liability (Asset) and Related Ratios Based on Participation in the Public Employee Pension Planof TCRS – Primary Government F-1 84

Schedule of Contributions Based on Participation in the Public EmployeePension Plan of TCRS – Primary Government F-2 85

Schedule of Contributions Based on Participation in the TeacherRetirement Plan of TCRS – Discretely Presented DeKalbCounty School Department F-3 86

TABLE OF CONTENTSDEKALB COUNTY, TENNESSEE

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Exhibit Page(s)

Schedule of Contributions Based on Participation in the TeacherLegacy Pension Plan of TCRS – Discretely Presented DeKalbCounty School Department F-4 87

Schedule of Proportionate Share of the Net Pension Asset in theTeacher Pension Plan of TCRS – Discretely PresentedDeKalb County School Department F-5 88

Schedule of Proportionate Share of the Net Pension Asset in theTeacher Legacy Pension Plan of TCRS – Discretely PresentedDeKalb County School Department F-6 89

Schedule of Funding Progress – Other Postemployment BenefitsPlan – Discretely Presented DeKalb County School Department F-7 90

Notes to the Required Supplementary Information 91COMBINING AND INDIVIDUAL FUND FINANCIAL

STATEMENTS AND SCHEDULES: 92Nonmajor Governmental Funds: 93

Combining Balance Sheet G-1 94-95Combining Statement of Revenues, Expenditures, and Changes

in Fund Balances G-2 96Schedules of Revenues, Expenditures, and Changes in Fund

Balances – Actual and Budget:Courthouse and Jail Maintenance Fund G-3 97Drug Control Fund G-4 98General Capital Projects Fund G-5 99

Major Governmental Fund: 100Schedule of Revenues, Expenditures, and Changes in Fund

Balance – Actual and Budget:General Debt Service Fund H 101

Fiduciary Funds: 102Combining Statement of Fiduciary Assets and Liabilities I-1 103Combining Statement of Changes in Assets and Liabilities –

All Agency Funds I-2 104Component Unit:

Discretely Presented DeKalb County School Department: 105Statement of Activities J-1 106Balance Sheet – Governmental Funds J-2 107-108Reconciliation of the Balance Sheet of Governmental Funds

to the Statement of Net Position J-3 109Statement of Revenues, Expenditures, and Changes in Fund

Balances – Governmental Funds J-4 110-111Reconciliation of the Statement of Revenues, Expenditures,

and Changes in Fund Balances of Governmental Fundsto the Statement of Activities J-5 112

Combining Balance Sheet – Nonmajor Governmental Funds J-6 113Combining Statement of Revenues, Expenditures, and

Changes in Fund Balances – Nonmajor GovernmentalFunds J-7 114

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

General Purpose School Fund J-8 115-116School Federal Projects Fund J-9 117Central Cafeteria Fund J-10 118

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Exhibit Page(s)

Miscellaneous Schedules: 119Schedule of Changes in Long-term Notes, Other Loans, and Bonds K-1 120Schedule of Long-term Debt Requirements by Year K-2 121Schedule of Notes Receivable K-3 122Schedule of Transfers – Primary Government and Discretely

Presented DeKalb County School Department K-4 123Schedule of Salaries and Official Bonds of Principal Officials –

Primary Government and Discretely Presented DeKalbCounty School Department K-5 124

Schedule of Detailed Revenues – All Governmental Fund Types K-6 125-136Schedule of Detailed Revenues – All Governmental Fund Types –

Discretely Presented DeKalb County School Department K-7 137-139Schedule of Detailed Expenditures – All Governmental Fund Types K-8 140-154Schedule of Detailed Expenditures – All Governmental Fund Types –

Discretely Presented DeKalb County School Department K-9 155-165Schedule of Detailed Receipts, Disbursements, and Changes in

Cash Balance – City Agency Fund K-10 166

SINGLE AUDIT SECTION 167

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 168-169

Auditor's Report on Compliance for Each Major Federal Program; Reporton Internal Control Over Compliance; and Report on the Schedule ofExpenditures of Federal Awards Required by Uniform Guidance 170-172

Schedule of Expenditures of Federal Awards and State Grants 173-174Summary Schedule of Prior-year Findings 175Schedule of Findings and Questioned Costs 176-180Management's Corrective Action Plan 181-182Best Practice 183

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Summary of Audit Findings Annual Financial Report

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

Scope

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

Results

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

Findings

The following is a summary of the audit findings: OFFICE OF COUNTY MAYOR

♦ The Solid Waste Disposal Fund had a deficit in unrestricted net position at

June 30, 2016. OFFICES OF ROAD SUPERVISOR, TRUSTEE, REGISTER OF DEEDS, AND SHERIFF ♦ Duties were not segregated adequately. OFFICE OF ASSESSOR OF PROPERTY ♦ The assessor of property had not formally documented internal controls.

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INTRODUCTORY SECTION

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DeKalb County Officials June 30, 2016 Officials Tim Stribling, County Mayor Wallace Agee, Road Supervisor Patrick Cripps, Director of Schools Sean Driver, Trustee Scott Cantrell, Assessor of Property James Poss, County Clerk Katherine Pack, Circuit, General Sessions, and Juvenile Courts Clerk Debra Malone, Clerk and Master Jeffery McMillen, Register of Deeds Patrick Ray, Sheriff Board of County Commissioners Tim Stribling, County Mayor, Chairman Jerry Adcock Bradley Hendrix Betty Atnip Joe Johnson Jeff Barnes James Midgett Jack Barton Jonathan Norris Wayne Cantrell Anita Puckett Mason Carter Kevin Robinson Elmer Ellis Larry Summers Board of Education W.J. Evins, III, Chairman Jim Beshearse Jerry Johnson Kate Miller Danny Parkerson Doug Stephens Shaun Tubbs Purchasing Committee Audit Committee Larry Summers, Chairman Tom Janey, Chairman Tim Stribling, County Mayor Jack Barton Wallace Agee, Road Supervisor Bradley Hendrix Patrick Cripps, Director of Schools Jonathan Norris Jerry Adcock Jonathan Norris

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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. FRANKLIN STATE OFFICE BUILDING

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

Independent Auditor's Report

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

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An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of DeKalb County, Tennessee, as of June 30, 2016, and the respective changes in financial position and, where applicable, cash flows thereof and the respective budgetary comparison for the General, Local Purpose Tax, and Highway/Public Works funds for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Change in Accounting Principle

As described in Note V.B., DeKalb County has adopted the provisions of Governmental Accounting Standards Board (GASB) Statement No. 72, Fair Value Measurement and Application; GASB Statement No. 76, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments; GASB Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets that are not within the Scope of GASB Statement No. 68 and Amendments to Certain Provisions of GASB Statements No. 67 and No. 68, and GASB Statement No. 79, Certain External Investment Pools and Pool Participants. Our opinion is not modified with respect to these matters.

Other Matters

Required Supplementary Information

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.

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Accounting principles generally accepted in the United States of America require that the schedule of changes in the county’s net pension liability and related ratios, schedule of county contributions, schedule of school’s proportionate share of the net pension liability, and schedule of funding progress - other postemployment benefit plan on pages 84-91 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary and Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise DeKalb County’s basic financial statements. The introductory section, combining and individual nonmajor fund financial statements, budgetary comparison schedules of nonmajor governmental funds and the General Debt Service Fund, combining and individual fund financial statements of the DeKalb County School Department (a discretely presented component unit), and miscellaneous schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements, budgetary comparison schedules of nonmajor governmental funds and the General Debt Service Fund, combining and individual fund financial statements of the DeKalb School Department (a discretely presented component unit), and miscellaneous schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, based on our audit and the additional procedures described above, the combining and individual nonmajor fund financial statements, budgetary comparison schedules of nonmajor governmental funds and the General Debt Service Fund, combining and individual fund financial statements of the DeKalb County School Department (a discretely presented component unit), and miscellaneous schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory section has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it.

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Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 31, 2016, on our consideration of DeKalb County’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering DeKalb County’s internal control over financial reporting and compliance. Very truly yours,

Justin P. Wilson Comptroller of the Treasury Nashville, Tennessee October 31, 2016 JPW/kp

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BASIC FINANCIAL STATEMENTS

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Exhibit A

DeKalb County, TennesseeStatement of Net PositionJune 30, 2016

DeKalbCounty

Governmental Business-type SchoolActivities Activities Total Department

ASSETS

Cash $ 26,063 $ 0 $ 26,063 $ 0Equity in Pooled Cash and Investments 8,646,742 2,782,399 11,429,141 5,961,111Accounts Receivable 1,778,705 67,119 1,845,824 966Allowance for Uncollectibles (1,245,610) 0 (1,245,610) 0Due from Other Governments 1,430,945 96,054 1,526,999 178,845Due from Component Units 2,075,404 0 2,075,404 0Property Taxes Receivable 6,046,176 0 6,046,176 3,008,897Allowance for Uncollectible Property Taxes (129,533) 0 (129,533) (62,804)Net Pension Asset - Agent Plan 226,597 15,081 241,678 137,662Net Pension Asset - Teacher Retirement Plan 0 0 0 13,393Capital Assets:

Assets Not Depreciated:Land 841,838 1,341,050 2,182,888 736,256Construction in Progress 0 1,533,602 1,533,602 0

Assets Net of Accumulated Depreciation:Buildings and Improvements 3,552,132 0 3,552,132 11,451,951Infrastructure 2,955,684 0 2,955,684 0Other Capital Assets 1,581,445 405,501 1,986,946 1,458,816

Total Assets $ 27,786,588 $ 6,240,806 $ 34,027,394 $ 22,885,093

DEFERRED OUTFLOWS OF RESOURCES

Pension Changes in Experience $ 66,472 $ 4,424 $ 70,896 $ 134,491Pensions - Other Deferrals 0 0 0 7,896Pension Changes in Contributions after Measurement Date 200,593 13,640 214,233 1,125,632Total Deferred Outflows of Resources $ 267,065 $ 18,064 $ 285,129 $ 1,268,019

LIABILITIES

Accounts Payable $ 389,773 $ 0 $ 389,773 $ 3,304Accrued Interest Payable 63,991 0 63,991 0Payroll Deductions Payable 32,767 3,722 36,489 0Contracts Payable 0 0 0 201,738Due to Primary Government 0 0 0 1,995,000Due to State of Tennessee 4,027 832 4,859 17,451Noncurrent Liabilities:

Due Within One Year 1,255,933 109,038 1,364,971 0Due in More Than One Year 8,900,352 6,553,822 15,454,174 786,723

Total Liabilities $ 10,646,843 $ 6,667,414 $ 17,314,257 $ 3,004,216

(Continued)

Component Unit

Primary Government

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Exhibit A

DeKalb County, TennesseeStatement of Net Position (Cont.)

DeKalbCounty

Governmental Business-type SchoolActivities Activities Total Department

DEFERRED INFLOWS OF RESOURCES

Deferred Current Property Taxes $ 5,779,671 $ 0 $ 5,779,671 $ 2,881,569Pension Changes in Experience 0 0 0 1,829,574Pension Changes in Investment Earnings 80,965 5,389 86,354 805,191Pension Changes in Other Deferrals 0 0 0 16,627Total Deferred Inflows of Resources $ 5,860,636 $ 5,389 $ 5,866,025 $ 5,532,961

NET POSITION

Net Investment in Capital Assets $ 5,666,099 $ 3,280,153 $ 8,946,252 $ 13,647,023Restricted for:

General Government 74,311 0 74,311 0Finance 24,035 0 24,035 0Administration of Justice 62,363 0 62,363 0Public Safety 51,101 0 51,101 0Public Health and Welfare 83,223 15,081 98,304 0Highway/Public Works 1,252,882 0 1,252,882 0Debt Service 1,634,187 0 1,634,187 0Education 1,613,648 0 1,613,648 671,392Capital Projects 1,070,691 0 1,070,691 210,399Other Purposes 226,597 0 226,597 0

Unrestricted (212,963) (3,709,167) (3,922,130) 1,087,121

Total Net Position $ 11,546,174 $ (413,933) $ 11,132,241 $ 15,615,935

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

Component Unit

Primary Government

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Exhibit B

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

Operating Capital DeKalbCharges Grants Grants Total Business- County

for and and Governmental type SchoolFunctions/Programs Expenses Services Contributions Contributions Activities Activities Total Department

Primary Government: Governmental Activities: General Government $ 1,664,979 $ 191,868 $ 43,669 $ 0 $ (1,429,442) $ 0 $ (1,429,442) $ 0 Finance 772,688 572,258 0 0 (200,430) 0 (200,430) 0 Administration of Justice 609,596 405,798 127,065 0 (76,733) 0 (76,733) 0 Public Safety 3,479,926 120,970 127,650 146,200 (3,085,106) 0 (3,085,106) 0 Public Health and Welfare 1,503,889 608,482 100,261 198,351 (596,795) 0 (596,795) 0 Social, Cultural, and Recreational Services 233,975 58,168 31,244 1,706 (142,857) 0 (142,857) 0 Agriculture and Natural Resources 72,893 0 1,000 0 (71,893) 0 (71,893) 0 Highways/Public Works 2,017,825 0 1,633,200 676,610 291,985 0 291,985 0 Education 1,547,466 0 0 51,375 (1,496,091) 0 (1,496,091) 0 Interest on Long-term Debt 258,134 0 0 0 (258,134) 0 (258,134) 0

Total Governmental Activities $ 12,161,371 $ 1,957,544 $ 2,064,089 $ 1,074,242 $ (7,065,496) $ 0 $ (7,065,496) $ 0

Business-type Activities: Solid Waste Disposal $ 0 $ 0 $ 0 $ 0 $ 0 $ (838,358) $ (838,358) $ 0

Total Primary Government $ 12,161,371 $ 1,957,544 $ 2,064,089 $ 1,074,242 $ (7,065,496) $ (838,358) $ (7,903,854) $ 0

Component Unit: School Department $ 22,989,767 $ 116,572 $ 3,371,596 $ 0 $ 0 $ 0 $ 0 $ (19,501,599)

Total Component Unit $ 22,989,767 $ 116,572 $ 3,371,596 $ 0 $ 0 $ 0 $ 0 $ (19,501,599)

(Continued)

Component UnitNet (Expense) Revenue and Changes in Net Position

Primary Government

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Exhibit B

DeKalb County, TennesseeStatement of Activities (Cont.)

Operating Capital DeKalbCharges Grants Grants Total Business- County

for and and Governmental type SchoolFunctions/Programs Expenses Services Contributions Contributions Activities Activities Total Department

General Revenues: Taxes: Property Taxes Levied for General Purposes $ 5,360,324 $ 102,642 $ 5,462,966 $ 2,820,947 Property Taxes Levied for Debt Service 594,170 0 594,170 0 Local Option Sales Taxes 2,600,685 453,835 3,054,520 0 Litigation Tax - General 50,931 0 50,931 0 Litigation Tax - Jail/Courthouse 14,602 0 14,602 0 Wholesale Beer Tax 0 60,724 60,724 0 Mineral Severance Tax 12,560 0 12,560 0 Bank Excise Tax 0 106,081 106,081 0 Business Tax 154,677 0 154,677 0 Hotel/Motel Tax 0 79,358 79,358 0 Mixed Drink Tax 11,461 0 11,461 0

Alcoholic Beverage Tax 0 41,524 41,524 0State Revenue Sharing - T.V.A. 0 424,001 424,001 0

Other Local Taxes 1,156 18,488 19,644 13,332 Grants and Contributions Not Restricted to Specific Programs 33,766 0 33,766 17,440,813 Unrestricted Investment Earnings 0 0 0 1,747 Sale of Equipment 3,500 0 3,500 0 Miscellaneous 116,758 5,268 122,026 53,400Total General Revenues $ 8,954,590 $ 1,291,921 $ 10,246,511 $ 20,330,239

Change in Net Position $ 1,889,094 $ 453,563 $ 2,342,657 $ 828,640Net Position, July 1, 2015 9,657,080 (867,496) 8,789,584 14,787,295

Net Position, June 30, 2016 $ 11,546,174 $ (413,933) $ 11,132,241 $ 15,615,935


Primary Government

Net (Expense) Revenue and Changes in Net PositionComponent Unit

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Exhibit C-1

DeKalb County, TennesseeBalance SheetGovernmental FundsJune 30, 2016

OtherLocal Highway / General Govern- Total

Purpose Public Debt mental GovernmentalGeneral Tax Works Service Funds Funds

ASSETS

Cash $ 525 $ 0 $ 0 $ 0 $ 25,538 $ 26,063Equity in Pooled Cash and Investments 3,734,773 1,162,217 983,248 1,620,603 1,145,901 8,646,742Accounts Receivable 1,772,241 0 0 0 6,464 1,778,705Allowance for Uncollectibles (1,245,610) 0 0 0 0 (1,245,610)Due from Other Governments 312,458 451,431 667,056 0 0 1,430,945Due from Other Funds 7,967 0 0 0 0 7,967Due from Component Units 80,404 0 0 0 0 80,404Property Taxes Receivable 4,711,419 0 197,742 593,225 543,790 6,046,176Allowance for Uncollectible Property Taxes (100,788) 0 (4,259) (12,775) (11,711) (129,533)

Total Assets $ 9,273,389 $ 1,613,648 $ 1,843,787 $ 2,201,053 $ 1,709,982 $ 16,641,859

LIABILITIES

Accounts Payable $ 0 $ 0 $ 389,773 $ 0 $ 0 $ 389,773Payroll Deductions Payable 30,038 0 2,729 0 0 32,767Due to Other Funds 0 0 0 0 7,967 7,967Due to State of Tennessee 4,027 0 0 0 0 4,027Total Liabilities $ 34,065 $ 0 $ 392,502 $ 0 $ 7,967 $ 434,534


Deferred Current Property Taxes $ 4,504,223 $ 0 $ 188,955 $ 566,866 $ 519,627 $ 5,779,671Deferred Delinquent Property Taxes 83,492 0 4,528 10,659 9,770 108,449Other Deferred/Unavailable Revenue 445,651 230,923 141,874 0 0 818,448Total Deferred Inflows of Resources $ 5,033,366 $ 230,923 $ 335,357 $ 577,525 $ 529,397 $ 6,706,568

(Continued)

Major FundsNonmajor

Funds

19

Exhibit C-1

DeKalb County, TennesseeBalance SheetGovernmental Funds (Cont.)



FUND BALANCES

Restricted:Restricted for General Government $ 29,833 $ 0 $ 0 $ 0 $ 44,478 $ 74,311Restricted for Administration of Justice 62,363 0 0 0 0 62,363Restricted for Public Safety 7,917 0 0 0 43,184 51,101Restricted for Public Health and Welfare 83,223 0 0 0 0 83,223Restricted for Highways/Public Works 0 0 1,115,928 0 0 1,115,928Restricted for Education 0 1,382,725 0 0 0 1,382,725Restricted for Capital Outlay 0 0 0 0 1,060,921 1,060,921Restricted for Debt Service 0 0 0 1,623,528 0 1,623,528

Committed:Committed for Finance 0 0 0 0 24,035 24,035Committed for Social, Cultural, and Recreational Services 129,652 0 0 0 0 129,652

Unassigned 3,892,970 0 0 0 0 3,892,970Total Fund Balances $ 4,205,958 $ 1,382,725 $ 1,115,928 $ 1,623,528 $ 1,172,618 $ 9,500,757

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 9,273,389 $ 1,613,648 $ 1,843,787 $ 2,201,053 $ 1,709,982 $ 16,641,859


Major FundsNonmajor

Funds

20

Exhibit C-2

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

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

Total fund balances - balance sheet - governmental funds (Exhibit C-1) $ 9,500,757

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

Add: land $ 841,838Add: buildings and improvements net of accumulated depreciation 3,552,132Add: infrastructure net of accumulated depreciation 2,955,684Add: other capital assets net of accumulated depreciation 1,581,445 8,931,099

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

Less: bonds payable $ (7,270,000)Less: notes payable (2,615,000)Add: debt to be contributed by the School Department 1,995,000Less: compensated absences payable (61,243)Less: accrued interest on notes and bonds (63,991)Less: unamortized premium on debt (71,856)Less: other postemployment benefits liability (138,186) (8,225,276)

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

Add: deferred outflows of resources related to pensions $ 267,065Less: deferred inflows of resources related to pensions (80,965) 186,100

(4) Net pension assets of the agent plan are not current financial resourcesand therefore are not reported in the governmental funds. 226,597

(5) Other long-term assets are not available to pay forcurrent-period expenditures and therefore are deferredin the governmental funds. 926,897

Net position of governmental activities (Exhibit A) $ 11,546,174


21

Exhibit C-3

DeKalb County, TennesseeStatement of Revenues, Expenditures,

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



RevenuesLocal Taxes $ 4,818,454 $ 2,600,685 $ 209,097 $ 597,692 $ 598,325 $ 8,824,253Licenses and Permits 52,042 0 0 0 0 52,042Fines, Forfeitures, and Penalties 107,545 0 0 0 35,540 143,085Charges for Current Services 1,041,837 0 0 0 121,032 1,162,869Other Local Revenues 178,906 0 862 0 0 179,768Fees Received From County Officials 797,869 0 0 0 0 797,869State of Tennessee 674,069 0 2,237,579 0 0 2,911,648Federal Government 173,906 0 16,707 0 0 190,613Other Governments and Citizens Groups 87,250 0 0 240,547 0 327,797

Total Revenues $ 7,931,878 $ 2,600,685 $ 2,464,245 $ 838,239 $ 754,897 $ 14,589,944

ExpendituresCurrent:

General Government $ 1,272,428 $ 0 $ 0 $ 0 $ 39,501 $ 1,311,929Finance 548,966 0 0 0 116,735 665,701Administration of Justice 632,104 0 0 0 3,554 635,658Public Safety 3,179,846 0 0 0 27,274 3,207,120Public Health and Welfare 1,449,122 0 0 0 0 1,449,122Social, Cultural, and Recreational Services 196,822 0 0 0 0 196,822Agriculture and Natural Resources 76,692 0 0 0 0 76,692Other Operations 208,190 0 0 0 314 208,504Highways 0 0 1,969,017 0 0 1,969,017Support Services 0 0 0 0 7,466 7,466

Debt Service:Principal on Debt 0 0 0 1,244,172 0 1,244,172Interest on Debt 0 0 0 242,684 0 242,684

(Continued)

Major FundsNonmajor

Funds

22

Exhibit C-3


and Changes in Fund BalancesGovernmental Funds (Cont.)



Expenditures (Cont.)Debt Service (Cont.)

Other Debt Service $ 0 $ 0 $ 0 $ 13,405 $ 0 $ 13,405Capital Projects 0 1,565,947 0 0 173,333 1,739,280

Total Expenditures $ 7,564,170 $ 1,565,947 $ 1,969,017 $ 1,500,261 $ 368,177 $ 12,967,572

Excess (Deficiency) of RevenuesOver Expenditures $ 367,708 $ 1,034,738 $ 495,228 $ (662,022) $ 386,720 $ 1,622,372

Other Financing Sources (Uses)Transfers In $ 0 $ 0 $ 0 $ 834,834 $ 0 $ 834,834Transfers Out 0 (834,834) 0 0 0 (834,834)

Total Other Financing Sources (Uses) $ 0 $ (834,834) $ 0 $ 834,834 $ 0 $ 0

Net Change in Fund Balances $ 367,708 $ 199,904 $ 495,228 $ 172,812 $ 386,720 $ 1,622,372Fund Balance, July 1, 2015 3,838,250 1,182,821 620,700 1,450,716 785,898 7,878,385

Fund Balance, June 30, 2016 $ 4,205,958 $ 1,382,725 $ 1,115,928 $ 1,623,528 $ 1,172,618 $ 9,500,757


Major FundsNonmajor

Funds

23

Exhibit C-4

DeKalb County, TennesseeReconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the

Statement of ActivitiesFor the Year Ended June 30, 2016

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

Net change in fund balances - total governmental funds (Exhibit C-3) $ 1,622,372

(1) Governmental funds report capital outlays as expenditures. However, in thestatement of activities, the cost of these assets is allocated over their usefullives and reported as depreciation expense. The difference between capital outlaysand depreciation is itemized as follows:

Add: capital assets purchased in the current period $ 300,704Less: current-year depreciation expense (835,817) (535,113)

(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, 2016 $ 926,897Less: deferred delinquent property taxes and other deferred June 30, 2015 (1,284,858) (357,961)

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

Add: change in premium on debt issuances $ 7,654Less: principal on other loans contributed by the School Department (189,172)Add: principal payments on notes 265,000Add: principal payments on other loans 59,172Add: principal payments on bonds 920,000 1,062,654

(4) Some expenses reported in the statement of activities do not requirethe use of current financial resources and therefore are not reportedas expenditures in the governmental funds.

Change in accrued interest payable on bonds $ (1,571)Change in accrued interest payable on notes (13,879)Change in compensated absences payable (55,880)Change in other postemployment benefits liability (18,647)Change in deferred outflows of resources related to pensions 52,422Change in deferred inflows of resources related to pensions 263,843Change in net pension liability (129,146) 97,142

Change in net position of governmental activities (Exhibit B) $ 1,889,094


24

Exhibit C-5

DeKalb County, TennesseeStatement of Revenues, Expenditures, and Changes

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

Variancewith FinalBudget -Positive

Actual Original Final (Negative)

RevenuesLocal Taxes $ 4,818,454 $ 4,529,275 $ 4,529,275 $ 289,179Licenses and Permits 52,042 42,610 42,610 9,432Fines, Forfeitures, and Penalties 107,545 90,624 90,624 16,921Charges for Current Services 1,041,837 1,164,365 1,164,365 (122,528)Other Local Revenues 178,906 231,650 250,764 (71,858)Fees Received From County Officials 797,869 744,470 744,470 53,399State of Tennessee 674,069 609,114 642,901 31,168Federal Government 173,906 44,440 190,640 (16,734)Other Governments and Citizens Groups 87,250 80,000 80,000 7,250

Total Revenues $ 7,931,878 $ 7,536,548 $ 7,735,649 $ 196,229

ExpendituresGeneral Government

County Commission $ 87,954 $ 115,230 $ 113,233 $ 25,279Board of Equalization 1,884 4,000 4,000 2,116Beer Board 5,950 3,848 6,145 195County Mayor/Executive 164,760 176,591 176,591 11,831County Attorney 24,000 27,400 27,400 3,400Election Commission 141,646 171,416 171,416 29,770Register of Deeds 158,065 166,863 166,863 8,798Planning 14,276 14,978 14,978 702County Buildings 215,357 297,079 297,079 81,722Other Facilities 83,164 100,077 100,077 16,913Other General Administration 375,372 404,054 405,704 30,332

FinanceProperty Assessor's Office 194,821 201,333 203,153 8,332County Trustee's Office 161,863 168,858 168,858 6,995County Clerk's Office 192,282 195,484 195,484 3,202

Administration of JusticeCircuit Court 191,631 211,575 211,975 20,344General Sessions Court 124,188 125,493 125,493 1,305Drug Court 122,374 157,849 157,849 35,475Chancery Court 114,600 121,825 121,825 7,225Juvenile Court 40,982 53,493 53,493 12,511Judicial Commissioners 38,329 44,002 44,002 5,673

Public SafetySheriff's Department 1,425,074 1,490,618 1,502,314 77,240Special Patrols 40,982 46,986 48,006 7,024Traffic Control 18,648 18,640 18,670 22Correctional Incentive Program Improvements 1,176,071 1,111,180 1,190,059 13,988Fire Prevention and Control 338,880 225,679 375,542 36,662Civil Defense 5,765 6,120 6,120 355Other Emergency Management 122,045 126,095 126,095 4,050County Coroner/Medical Examiner 35,560 43,500 43,500 7,940Other Public Safety 16,821 29,895 29,895 13,074

Public Health and WelfareLocal Health Center 137,970 170,226 191,695 53,725Rabies and Animal Control 76,565 5,500 80,500 3,935

(Continued)

Budgeted Amounts

25

Exhibit C-5


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



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

Ambulance/Emergency Medical Services $ 1,227,407 $ 1,396,893 $ 1,397,143 $ 169,736Regional Mental Health Center 7,180 7,180 7,180 0General Welfare Assistance 0 2,750 2,750 2,750

Social, Cultural, and Recreational ServicesSenior Citizens Assistance 20,381 25,840 25,840 5,459Libraries 154,209 167,091 167,091 12,882Other Social, Cultural, and Recreational 22,232 0 135,933 113,701

Agriculture and Natural ResourcesAgricultural Extension Service 44,103 51,990 51,990 7,887Soil Conservation 32,589 33,166 33,166 577

Other OperationsIndustrial Development 20 4,500 4,500 4,480Other Economic and Community Development 23,005 27,000 27,000 3,995Veterans' Services 10,858 17,153 17,153 6,295Other Charges 116,098 114,219 120,219 4,121Contributions to Other Agencies 17,745 34,725 34,725 16,980Employee Benefits 6,598 8,100 8,100 1,502Miscellaneous 33,866 41,699 49,283 15,417

Total Expenditures $ 7,564,170 $ 7,968,193 $ 8,460,087 $ 895,917

Excess (Deficiency) of RevenuesOver Expenditures $ 367,708 $ (431,645) $ (724,438) $ 1,092,146

Net Change in Fund Balance $ 367,708 $ (431,645) $ (724,438) $ 1,092,146Fund Balance, July 1, 2015 3,838,250 2,863,847 2,863,847 974,403

Fund Balance, June 30, 2016 $ 4,205,958 $ 2,432,202 $ 2,139,409 $ 2,066,549


Budgeted Amounts

26

Exhibit C-6


in Fund Balance - Actual and BudgetLocal Purpose Tax FundFor the Year Ended June 30, 2016



RevenuesLocal Taxes $ 2,600,685 $ 2,300,000 $ 2,300,000 $ 300,685

Total Revenues $ 2,600,685 $ 2,300,000 $ 2,300,000 $ 300,685

ExpendituresCapital Projects

Other General Government Projects $ 1,565,947 $ 2,400,134 $ 1,566,300 $ 353Total Expenditures $ 1,565,947 $ 2,400,134 $ 1,566,300 $ 353

Excess (Deficiency) of RevenuesOver Expenditures $ 1,034,738 $ (100,134) $ 733,700 $ 301,038

Other Financing Sources (Uses)Transfers Out $ (834,834) $ 0 $ (834,834) $ 0

Total Other Financing Sources $ (834,834) $ 0 $ (834,834) $ 0

Net Change in Fund Balance $ 199,904 $ (100,134) $ (101,134) $ 301,038Fund Balance, July 1, 2015 1,182,821 1,040,622 1,040,622 142,199

Fund Balance, June 30, 2016 $ 1,382,725 $ 940,488 $ 939,488 $ 443,237


Budgeted Amounts

27

Exhibit C-7


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



RevenuesLocal Taxes $ 209,097 $ 203,049 $ 253,699 $ (44,602)Other Local Revenues 862 0 0 862State of Tennessee 2,237,579 2,245,453 2,245,453 (7,874)Federal Government 16,707 0 0 16,707

Total Revenues $ 2,464,245 $ 2,448,502 $ 2,499,152 $ (34,907)

ExpendituresHighways

Administration $ 145,212 $ 180,050 $ 181,094 $ 35,882Highway and Bridge Maintenance 477,988 782,774 790,207 312,219Operation and Maintenance of Equipment 194,312 320,500 330,875 136,563Quarry Operations 151,707 212,300 212,621 60,914Other Charges 108,860 108,500 111,151 2,291Employee Benefits 205,446 238,000 238,000 32,554Capital Outlay 685,492 820,000 822,225 136,733


Excess (Deficiency) of RevenuesOver Expenditures $ 495,228 $ (213,622) $ (187,021) $ 682,249

Net Change in Fund Balance $ 495,228 $ (213,622) $ (187,021) $ 682,249Fund Balance, July 1, 2015 620,700 475,967 475,967 144,733



Budgeted Amounts

28

Exhibit D-1DeKalb County, TennesseeStatement of Net PositionProprietary FundJune 30, 2016

SolidWaste

DisposalFund

ASSETS

Current Assets:Equity in Pooled Cash and Investments $ 2,782,399Accounts Receivable 67,119Due from Other Governments 96,054

Total Current Assets $ 2,945,572

Noncurrent Assets:Net Pension Asset $ 15,081Capital Assets:

Assets Not Depreciated:Land 1,341,050Construction in Progress 1,533,602

Assets Net of Accumulated Depreciation:Machinery and Equipment 405,501

Total Noncurrent Assets $ 3,295,234Total Assets $ 6,240,806

DEFERRED OUTFLOWS OF RESOURCES

Deferred Outflows of Resources:Pension Changes in Experience $ 4,424Pension Contributions After Measurement Date 13,640

Total Deferred Outflows of Resources $ 18,064

Total Assets and Deferred Outflows of Resources $ 6,258,870

(Continued)

Business-type Activities - Major Enterprise Fund

29

Exhibit D-1DeKalb County, TennesseeStatement of Net PositionProprietary Fund (Cont.)

SolidWaste

DisposalFund

LIABILITIES

Current Liabilities:Payroll Deductions Payable $ 3,722Due to State of Tennessee 832

Total Current Liabilities $ 4,554

Noncurrent Liabilities:Accrued Liability for Landfill Closure/Postclosure Care Costs $ 6,662,860

Total Noncurrent Liabilities $ 6,662,860Total Liabilities $ 6,667,414


Deferred Inflows of Resources:Pension Changes in Investment Earnings $ 5,389

Total Deferred Inflows of Resources $ 5,389

NET POSITION

Net Investment in Capital Assets $ 3,280,153Restricted for Public Health and Welfare 15,081Unrestricted (3,709,167)

Total Net Position $ (413,933)



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Exhibit D-2

DeKalb County, TennesseeStatement of Revenues, Expenses, and Changes

in Net PositionProprietary FundsFor the Year Ended June 30, 2016

SolidWaste

DisposalFund

Operating RevenuesCharges for Services $ 165,885Other Local Revenues 13,023

Total Operating Revenues $ 178,908

Operating ExpensesWaste Pickup $ 97,723 Convenience Centers 236,187 Landfill Operation and Maintenance 590,473 Depreciation 73,269 Other Waste Disposal 14,346

Total Operating Expenses $ 1,011,998Operating Income (Loss) $ (833,090)

Nonoperating Revenues (Expenses)Local Taxes $ 802,640State Taxes 484,013

Total Nonoperating Revenues (Expenses) $ 1,286,653

Change in Net Position $ 453,563Net Position, June 30, 2015 (867,496)

Net Position, June 30, 2016 $ (413,933)


Business-type Activities -

Major Enterprise

Fund

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Exhibit D-3

DeKalb County, TennesseeStatement of Cash FlowsProprietary FundsFor the Year Ended June 30, 2016

SolidWaste

DisposalFund

Cash Flows from Operating ActivitiesReceipts from Customers and Users $ 175,739Payments to Vendors (526,147)Payments to Employees (540,088)Other Payments (14,346)

Net Cash Provided By (Used In) Operating Activities $ (904,842)

Cash Flows from Capital and Related Financing ActivitiesAcquisition of Capital Assets $ (508,423)

Net Cash Provided By (Used In) Capital and Related Financing Activities $ (508,423)

Cash Flows from Noncapital Financing ActivitiesLocal Taxes $ 789,151State Revenues 484,013

Net Cash Provided By (Used In) Noncapital Financing Activities $ 1,273,164

Net Increase (Decrease) in Cash $ (140,101)Cash, July 1, 2015 2,922,500

Cash, June 30, 2016 $ 2,782,399

Reconciliation of Net Operating Income (Loss) to Net Cash Provided By (Used In) Operating Activities

Operating Income (Loss) $ (833,040)Adjustment to Reconcile Net Operating Income

to Net Cash Provided By (Used In) Operating Activities:Pension Contributions (12,644)Depreciation 73,269

Change in Assets and Liabilities:(Increase) Decrease in Accounts Receivable (3,169)Increase (Decrease) in Payroll Deduction Liabilities 4,554Increase (Decrease) in Landfill Closure/Postclosure Care Cost (133,762)

Net Cash Provided By (Used In) Operating Activities $ (904,792)


32

Exhibit E

DeKalb County, TennesseeStatement of Fiduciary Assets and LiabilitiesFiduciary FundsJune 30, 2016

ASSETS

Cash $ 1,564,490Due from Other Governments 185,286Notes Receivable - Long-term 116,200

Total Assets $ 1,865,976

LIABILITIES

Due to Other Taxing Units $ 185,286Due to Litigants, Heirs, and Others 1,680,690

Total Liabilities $ 1,865,976


Agency Funds

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Note Page(s)

I. Summary of Significant Accounting PoliciesA. Reporting Entity 35B. Government-wide and Fund Financial Statements 36C. Measurement Focus, Basis of Accounting, and Financial

Statement Presentation 37D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and

Net Position/Fund Balance1. Deposits and Investments 402. Receivables and Payables 403. Capital Assets 414. Deferred Outflows/Inflows of Resources 425. Compensated Absences 436. Long-term Obligations 437. Net Position and Fund Balance 44

E. Pension Plans 46II. 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 46

B. Explanation of Certain Differences Between the Governmental FundStatement of Revenues, Expenditures, and Changes in Fund Balancesand the Government-wide Statement of Activities 47

III. Stewardship, Compliance, and AccountabilityA. Budgetary Information 47B. Unrestricted Net Position Deficit 48

IV. Detailed Notes on All FundsA. Deposits and Investments 48B. Notes Receivable 49C. Capital Assets 49D. Construction Commitments 53E. Interfund Receivables, Payables, and Transfers 53F. Long-term Obligations 54G. On-Behalf Payments 59

V. Other InformationA. Risk Management 59B. Accounting Changes 60C. Subsequent Event 61D. Contingent Liabilities 61E. Change in Administration 61F. Landfill Closure/Postclosure Care Costs 61G. Joint Ventures 62H. Retirement Commitments 62I. Other Postemployment Benefits (OPEB) 79J. Purchasing Law 82

DEKALB COUNTY, TENNESSEEIndex of Notes to the Financial Statements

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DEKALB COUNTY, TENNESSEE NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended June 30, 2016

I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES DeKalb 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 DeKalb County:

A. Reporting Entity

DeKalb County is a public municipal corporation governed by an elected 14-member board. As required by GAAP, these financial statements present DeKalb County (the primary government) and its component units. The financial statements of the DeKalb County Emergency Communications District, a component unit requiring discrete presentation, were excluded from this report due to materiality calculations; therefore, the effect of their 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 DeKalb County School Department operates the public school system in the county, and the voters of DeKalb 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 DeKalb County Emergency Communications District provides a simplified means of securing emergency services through a uniform emergency number for the residents of DeKalb County, and the DeKalb 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 DeKalb County Emergency Communications District were not material to the component units’ opinion unit and therefore have been omitted from this report.

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The DeKalb County School Department does not issue separate financial statements from those of the county. Therefore, basic financial statements of the School Department are included in this report as listed in the table of contents. The Industrial Development Board did not have any financial activity during the year; therefore, there were no financial statements to report. Complete financial statements of the DeKalb County Emergency Communications District can be obtained from its administrative office at the following address:

Administrative Office: DeKalb County Emergency Communications District P.O. Box 346

Smithville, TN 37166 Related Organization – The Industrial Development Board of DeKalb County provides assistance in industrial recruitment in DeKalb County, and the DeKalb County Commission appoints its eight-member board. The authority acted as a decision-making board and did not have any financial activity during the year.

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. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The DeKalb 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

36

items not properly included among program revenues are reported instead as general revenues. DeKalb County issues all debt for the discretely presented DeKalb County School Department. There were no debt issues contributed by the county to the School Department during the year ended June 30, 2016. Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds. The fiduciary funds are excluded from the government-wide financial statements. Major individual governmental funds and the major enterprise fund are reported as separate columns in the fund financial statements.

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

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary funds and fiduciary funds financial statements, except for agency funds, which have no measurement focus. Revenues are recorded when earned, and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Fund financial statements of DeKalb County are organized into funds, each of which is considered to be a separate accounting entity. Each fund is accounted for by providing a separate set of self-balancing accounts that constitute its assets, deferred outflow of resources, liabilities, deferred inflow of resources, fund equity, revenues, and expenditures/expenses. Funds are organized into three major categories: governmental, proprietary, and fiduciary. An emphasis is placed on major funds within the governmental and proprietary categories. DeKalb County reports only one proprietary fund, an enterprise fund. Separate financial statements are provided for governmental funds, the proprietary fund, and fiduciary funds. Major individual governmental funds and the major enterprise fund 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 columns. 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

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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. DeKalb County considers grants and similar revenues to be available if they are collected within 60 days after year-end. Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred. Principal and interest on long-term debt are recognized as fund liabilities when due or when amounts have been accumulated in the General Debt Service Fund for payments to be made early in the following year. Property taxes for the period levied, in-lieu-of tax payments, sales taxes, interest, and miscellaneous taxes are all considered to be susceptible to accrual and have been recognized as revenues of the current period. Applicable business taxes, litigation taxes, state-shared excise taxes, fines, forfeitures, and penalties are not susceptible to accrual since they are not measurable (reasonably estimable). All other revenue items are considered to be measurable and available only when the county receives cash.

Proprietary fund and 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. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. DeKalb 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. Local Purpose Tax Fund – This special revenue fund accounts for local sales tax collections, which are disbursed to other county funds and component units. Local option sales tax is the foundational revenue of this fund. Highway/Public Works Fund – This special revenue fund accounts for transactions of the county’s Highway Department. Local and state gasoline/fuel taxes are the foundational revenues of this fund. General Debt Service Fund – This fund accounts for the resources accumulated and payments made for principal and interest on long-term general obligation debt of governmental funds.

DeKalb County reports the following major enterprise fund:

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Solid Waste Disposal Fund – This fund accounts for the county’s solid waste landfill operations.

Additionally, DeKalb County reports the following fund types:

Capital Projects Fund – The General Capital Projects Fund is used to account for resources that are restricted, committed, or assigned to expenditure for general capital outlays 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 DeKalb 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 DeKalb County School Department reports the following major governmental funds:

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. Education Capital Projects Fund – This fund is used to account for the receipt of debt issued by DeKalb County and contributed to the School Department for building repairs and renovations.

Additionally, the DeKalb 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 expenditure for specified purposes other than debt service or capital projects.

Amounts reported as program revenues include (1) charges to customers or applicants for goods, services, or privileges provided; (2) operating grants and contributions; and (3) capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from nonoperating items. The county has one proprietary fund, an enterprise fund used to account for the operations of the county’s landfill. Operating revenues and expenses generally result from providing services in connection with the fund’s principal ongoing operations. The principal operating revenues of the county’s proprietary funds are charges for services. Operating expenses for

39

the enterprise fund include waste collection, landfill operation, administrative expenses, and employee benefits.

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

1. Deposits and Investments

For the purposes of the Statement of Cash Flows, cash includes cash on deposit with the county trustee. 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 DeKalb 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 Solid Waste Disposal funds. DeKalb 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 at the end of the fiscal year is referred to as due to/from other funds.

All ambulance service and property taxes receivables are shown with an allowance for uncollectibles. Ambulance receivables allowances for uncollectibles are based on historical collection data. The allowance for

40

uncollectible property taxes is equal to 1.11 percent of total taxes levied. Property taxes receivable are recognized as of the date an enforceable legal claim to the taxable property arises. This date is January 1 and is referred to as the lien date. However, revenues from property taxes are recognized in the period for which the taxes are levied, which is the ensuing fiscal year. Since the receivable is recognized before the period of revenue recognition, the entire amount of the receivable, less an estimated allowance for uncollectible taxes, is reported as a deferred inflow of resources as of June 30.

Property taxes receivable are also reported as of June 30 for the taxes

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

Property taxes are levied as of the first Monday in October. Taxes

become delinquent and begin accumulating interest and penalty the following March 1. Suit must be filed in Chancery Court between the following February 1 to April 1 for any remaining unpaid taxes. Additional costs attach to delinquent taxes after a court suit has been filed.

Most payables are disaggregated on the face of the financial

statements.

3. 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 and business-type columns in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of $15,000 or more and an estimated useful life of more than one year (five years for the School Department). Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation.

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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 DeKalb County and the discretely presented DeKalb County School Department are depreciated using the straight-line method over the following estimated useful lives:

Years

Buildings and Improvements 20 - 40Other Capital Assets 5 - 15Infrastructure: Roads 8 - 20Bridges 30

Assets

4. Deferred Outflows/Inflows of Resources

In addition to assets, the Statement of Net Position will sometimes report a separate section for deferred outflows of resources. Deferred outflows of resources represent a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The government has items that qualify for reporting in this category. Accordingly, the items are reported in the government-wide Statement of Net Position and the governmental funds balance sheet. These items are for pension changes in experience and other deferrals, as well as 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 and delinquent property taxes, pension changes in experience, pension changes in investment earnings, and various receivables for revenues, which do not meet the availability criteria in governmental funds. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available.

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5. Compensated Absences

Primary Government

It is the county’s policy, except for the Highway Department, not to allow for the accumulation of unused vacation and sick days beyond year end. The Highway Department’s policy permits employees to accumulate earned but unused vacation/sick leave benefits up to 20 days. All vacation/sick leave pay is accrued when incurred in the government-wide financial statements for the county. A liability for vacation/sick leave pay is reported in governmental funds only if amounts have matured, for example, as a result of employee resignations and retirements. Vested or accumulated vacation leave is accrued when incurred in proprietary funds using the accrual basis of accounting. However, DeKalb County’s proprietary fund did not have accrued leave because the county’s policy does not allow for the accumulation of unused vacation and sick days beyond year end. Discretely Presented DeKalb County School Department It is the policy of the discretely presented DeKalb County School Department to permit employees to accumulate earned but unused vacation and sick pay benefits. Sick leave us unlimited and vacation leave has a twelve day maximum by year end. There is no liability for accumulated vacation or sick leave since the School Department does not have a policy to pay any amounts when employees separate from service with the government.

6. Long-term Obligations

In the government-wide financial statements and the proprietary fund type in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities or proprietary fund type 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

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current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Only the matured portion (the portion that has come due for payment) of long-term indebtedness, including bonds payable, is recognized as a liability and expenditure in the governmental fund financial statements. Liabilities and expenditures for other long-term obligations, including compensated absences, other postemployment benefits, and landfill closure/postclosure care costs, are recognized to the extent that the liabilities have matured (come due for payment) each period.

7. Net Position and Fund Balance

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

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

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

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

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

meet the definition of restricted or net investment in capital assets.

On the government-wide Statement of Net Position (Exhibit A), the account Restricted for Other Purposes for the primary government consists of pension obligations. As of June 30, 2016, DeKalb County had $6,620,000 in outstanding debt for capital purposes for the discretely presented DeKalb County School Department. This debt is a liability of DeKalb County; however, the capital assets acquired are reported in the financial statements of the School Department. Therefore, DeKalb County has incurred a liability significantly decreasing its unrestricted net position with no corresponding increase in the county’s capital assets.

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

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

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

Committed Fund Balance – includes amounts that can only be used for specific purposes pursuant to constraints imposed by formal resolutions of the County Commission, the county’s highest level of decision-making authority and the Board of Education, the School Department’s highest level of decision-making authority, and shall remain binding unless removed in the same manner.

Assigned Fund Balance – includes amounts that are constrained by the county’s intent to be used for specific purposes, but are neither restricted nor committed (excluding stabilization arrangements). The County Commission has by resolution authorized the county’s Financial Management 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 has not been restricted, committed, or assigned to specific purposes within the General and General Purpose School funds.

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E. Pension Plans

Primary Government For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of DeKalb County’s participation in the Public Employee Retirement Plan of the Tennessee Consolidated Retirement System (TCRS), and additions to/deductions from DeKalb 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 DeKalb County School Department

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

II. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL

STATEMENTS

A. Explanation of certain differences between the governmental fund balance sheet and the government-wide Statement of Net Position Primary Government Exhibit C-2 includes explanations of the nature of individual elements of items required to reconcile the balance sheet of governmental funds with the government-wide Statement of Net Position. Discretely Presented DeKalb County School Department Exhibit J-3 includes explanations of the nature of individual elements of items required to reconcile the balance sheet of governmental funds with the government-wide Statement of Net Position.

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B. Explanation of certain differences between the governmental fund Statement of Revenues, Expenditures, and Changes in Fund Balances and the government-wide Statement of Activities

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

Discretely Presented DeKalb County School Department Exhibit J-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 discretely presented DeKalb County School Department’s Education Capital Projects Fund, which adopts a project length budget. All annual appropriations lapse at fiscal year-end. The county is required by state statute to adopt annual budgets. Annual budgets are prepared on the basis in which current available funds must be sufficient to meet current expenditures. Expenditures and encumbrances may not legally exceed appropriations authorized by the County Commission and any authorized revisions. Unencumbered appropriations lapse at the end of each fiscal year. The budgetary level of control is at the major category level established by the County Uniform Chart of Accounts, as prescribed by the Comptroller of the Treasury of the State of Tennessee. Major categories are at the department level (examples of General Fund major categories: County Commission, Board of Equalization, 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.

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B. Unrestricted Net Position Deficit

The Solid Waste Disposal Fund had a deficit in unrestricted net position of $3,709,167 at June 30, 2016. This deficit primarily resulted from the recognition of a liability of $6,662,860 in the financial statements for costs associated with closing the county’s landfills and monitoring the landfills for 30 years after closure. Generally accepted accounting principles and state statutes require that such costs be reflected in the financial statements.

IV. DETAILED NOTES ON ALL FUNDS

A. Deposits and Investments

DeKalb County and the DeKalb 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

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guaranteed by the U.S. government or any of its agencies; deposits at state and federal chartered banks and savings and loan associations; bonds of any state or political subdivision rated A or higher by any nationally recognized rating service; nonconvertible debt securities of certain federal government sponsored enterprises; and the county’s own legally issued bonds or notes. These investments may not have a maturity greater than two years. The county may make investments with longer maturities if various restrictions set out in state law are followed. Counties are also authorized to make investments in the State Treasurer’s Investment Pool and in repurchase agreements. Repurchase agreements must be approved by the state Comptroller’s Office and executed in accordance with procedures established by the State Funding Board. Securities purchased under a repurchase agreement must be obligations of the U.S. government or obligations guaranteed by the U.S. government or any of its agencies. When repurchase agreements are executed, the purchase of the securities must be priced at least two percent below the fair value of the securities on the day of purchase. The county had no pooled and nonpooled investments as of June 30, 2016.

B. Notes Receivable

In a prior year, the county sold its hospital to a private corporation. On May 10, 1971, the chancellor ordered that a portion of the proceeds of this sale be used to provide loans to “...deserving young men and women, who are preparing themselves for the practice of medicine or the practice of nursing…”. These proceeds were deposited in the Office of Clerk and Master and were earmarked for loans to students in medical-related fields. Notes receivable of $116,200 in the Constitutional Officers - Agency Fund represent the total of these student loans outstanding at June 30, 2016. These loans are repayable to the county over a ten-year period after the student leaves school with an interest rate two percent below the prime interest rate as published in the Wall Street Journal.

C. Capital Assets

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

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Primary Government

Governmental Activities:Balance Balance7-1-15 Increases 6-30-16

Capital Assets Not Depreciated:Land $ 841,838 $ 0 $ 841,838Total Capital Assets Not Depreciated $ 841,838 $ 0 $ 841,838

Capital Assets Depreciated:Buildings and Improvements $ 7,279,809 $ 0 $ 7,279,809Roads and Bridges 17,343,509 283,494 17,627,003Other Capital Assets 4,219,432 17,210 4,236,642Total Capital Assets Depreciated $ 28,842,750 $ 300,704 $ 29,143,454

Less Accumulated Depreciation For:Buildings and Improvements $ 3,427,859 $ 299,818 $ 3,727,677Infrastructure 14,389,137 282,182 14,671,319Other Capital Assets 2,401,380 253,817 2,655,197Total Accumulated Depreciation $ 20,218,376 $ 835,817 $ 21,054,193

Total Capital Assets Depreciated, Net $ 8,624,374 $ (535,113) $ 8,089,261

Governmental Activities Capital Assets, Net $ 9,466,212 $ (535,113) $ 8,931,099

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

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Governmental Activities:

General Government $ 206,870Public Safety 193,420Public Health and Welfare 72,647Social, Cultural, and Recreational Services 15,179Highways/Public Works 347,701

Total Depreciation Expense - Governmental Activities $ 835,817

Business-type Activities:

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

Capital Assets Not Depreciated:Land $ 1,341,050 $ 0 $ 1,341,050Construction in Progress 1,025,179 508,423 1,533,602Total Capital Assets Not Depreciated $ 2,366,229 $ 508,423 $ 2,874,652

Capital Assets Depreciated:Buildings and Improvements $ 2,713,638 $ 0 $ 2,713,638Other Capital Assets 1,187,359 0 1,187,359Total Capital Assets Depreciated $ 3,900,997 $ 0 $ 3,900,997

Less Accumulated Depreciation For:Buildings and Improvements $ 2,713,638 $ 0 $ 2,713,638Other Capital Assets 708,589 73,269 781,858Total Accumulated Depreciation $ 3,422,227 $ 73,269 $ 3,495,496

Total Capital Assets Depreciated, Net $ 478,770 $ (73,269) $ 405,501

Business-type Activities Capital Assets, Net $ 2,844,999 $ 435,154 $ 3,280,153

The business-type activities had no decreases in capital assets to report during the year ended June 30, 2016.

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Depreciation expense was charged to functions of the Solid Waste Disposal Fund as follows: Business-type Activities:

Public Health and Welfare $ 73,269

Total Depreciation Expense - Business-type Activities $ 73,269

Discretely Presented DeKalb County School Department

Governmental Activities:Balance Balance7-1-15 Increases 6-30-16

Capital Assets Not Depreciated:Land $ 736,256 $ 0 $ 736,256Total Capital Assets Not Depreciated $ 736,256 $ 0 $ 736,256

Capital Assets Depreciated:Buildings and Improvements $ 19,622,540 $ 0 $ 19,622,540Other Capital Assets 3,058,570 95,900 3,154,470Total Capital Assets Depreciated $ 22,681,110 $ 95,900 $ 22,777,010

Less Accumulated Depreciation For:Buildings and Improvements $ 7,768,932 $ 401,657 $ 8,170,589Other Capital Assets 1,515,019 180,635 1,695,654Total Accumulated Depreciation $ 9,283,951 $ 582,292 $ 9,866,243

Total Capital Assets Depreciated, Net $ 13,397,159 $ (486,392) $ 12,910,767

Governmental Activities Capital Assets, Net $ 14,133,415 $ (486,392) $ 13,647,023

There were no decreases in capital assets to report during the year ended June 30, 2016.

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

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Governmental Activities:

Instruction $ 291,124Support Services 291,168Total Depreciation Expense - Governmental Activities $ 582,292

D. Construction Commitments

At June 30, 2016, the discretely presented DeKalb County School Department had uncompleted construction contracts of approximately $201,738 for energy management projects. Funding for these future expenditures has been received.

E. Interfund Receivables, Payables, and Transfers

The composition of interfund balances as of June 30, 2016, was as follows:

Due to/from Other Funds:

Receivable Fund Payable Fund Amount

Primary Government:General Nonmajor governmental $ 7,967 This balance resulted from the time lag between the dates that interfund goods and services are provided or reimbursable expenditures occur and payments between funds are made. Due to/from Primary Government and Component Unit:

Receivable Payable Amount

Primary Government: Component Unit:Governmental Activities School Department $ 1,995,000

Component Unit:Primary Government: School Department

General Fund General Purpose School 80,404

The Due to Primary Government of $1,995,000 is the balance of bonds issued by the county for the School Department. The School Department has agreed to contribute the funds annually to retire these bonds and other loans. These long-term obligations are reflected in governmental activities on the Statement of Net Position.

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The amount reflected as Due from Component Unit in the General Fund ($80,404) was in transit from the General Purpose School Fund at June 30, 2016.

Interfund Transfers:

Interfund transfers for the year ended June 30, 2016, consisted of the

following amounts:

Primary GovernmentTransfer In

GeneralDebt

ServiceTransfer Out Fund

Local Purpose Tax Fund $ 834,834


GeneralPurposeSchool

Transfer Out Fund

Nonmajor governmental funds $ 2,255

Transfer In

Transfers are used to move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them.

F. Long-term Obligations

Primary Government General Obligation Bonds, Notes, and Other Loans DeKalb County issues general obligation bonds and other loans to provide funds for the acquisition and construction of major capital facilities for the primary government and the discretely presented School Department. In addition, general obligation bonds have been issued to refund other loans. Capital outlay notes are issued to fund capital facilities and other capital outlay purchases, such as equipment. General obligation bonds, capital outlay notes, and other loans are direct obligations and pledge the full faith and credit of the government. General obligation bonds and capital outlay notes outstanding were issued for original

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terms of up to 16 years for bonds and up to 12 years for notes. Repayment terms are generally structured with increasing amounts of principal maturing as interest requirements decrease over the term of the debt. All bonds and notes included in long-term debt as of June 30, 2016, will be retired from the General Debt Service Fund. General obligation bonds and capital outlay notes outstanding as of June 30, 2016, for governmental activities are as follows:

OriginalInterest Final Amount Balance

Type Rate Maturity of Issue 6-30-16

General Obligation Bonds - 2 to 3.5 % 10-1-28 $ 8,000,000 $ 5,920,000General Obligation Bonds -

Refunding .1 to 5.5 3-1-19 7,930,000 1,350,000Capital Outlay Notes 1 to 2 3-1-25 3,400,000 2,615,000 The annual requirements to amortize all general obligation bonds, notes, and other loans as of June 30, 2016, including interest payments, are presented in the following tables: Year EndingJune 30 Principal Interest Total

2017 $ 940,000 $ 166,454 $ 1,106,4542018 955,000 154,971 1,109,9712019 970,000 142,341 1,112,3412020 530,000 129,210 659,2102021 550,000 115,339 665,3392022-2026 2,620,000 320,421 2,940,4212027-2029 705,000 34,737 739,737

Total $ 7,270,000 $ 1,063,473 $ 8,333,473

Bonds

Year EndingJune 30 Principal Interest Total

2017 $ 270,000 $ 47,550 $ 317,5502018 275,000 43,463 318,4632019 275,000 38,650 313,6502020 285,000 33,050 318,0502021 290,000 27,300 317,3002022-2025 1,220,000 49,500 1,269,500

Total $ 2,615,000 $ 239,513 $ 2,854,513

Notes

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There is $1,623,528 available in the General Debt Service Fund to service long-term debt. Debt per capita, including bonds and notes totaled $528, based on the 2010 federal census. The School Department is currently contributing funds to service some of the debt issued on its behalf by the primary government as noted in the table below. This debt is reflected in the government-wide financial statements as Due to the Primary Government in the financial statements of the School Department and as Due from Component Units in the financial statements of the primary government.

OutstandingDescription of Indebtedness 6-30-16

Bonds Contributions from the General Purpose School Fund General Obligation School Bonds, Series 2013 1,995,000

Total $ 1,995,000

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

OtherBonds Notes Loans

Balance, July 1, 2015 $ 8,190,000 $ 2,880,000 $ 59,172Reductions (920,000) (265,000) (59,172)

Balance, June 30, 2016 $ 7,270,000 $ 2,615,000 $ 0

Balance Due Within One Year $ 940,000 $ 270,000 $ 0

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OtherCompensated Postemployment

Absences Benefits

Balance, July 1, 2015 $ 5,363 $ 119,539Additions 67,926 20,982Reductions (12,046) (2,335)

Balance, June 30, 2016 $ 61,243 $ 138,186

Balance Due Within One Year $ 45,933 $ 0

Analysis of Noncurrent Liabilities Presented on Exhibit A:

Total Noncurrent Liabilities, June 30, 2016 $ 10,084,429Less: Balance Due Within One Year (1,255,933)Add: Unamortized Premium on Debt 71,856Noncurrent Liabilities - Due in More Than One Year - Exhibit A $ 8,900,352 DeKalb County Solid Waste Disposal Fund (enterprise fund)

Changes in Long-term Obligations Long-term obligations activity for the Solid Waste Disposal Fund (enterprise fund) for the year ended June 30, 2016, was as follows: Business-type Activities:

Closure/PostclosureCare Costs

Balance, July 1, 2015 $ 6,796,622Additions 166,724Reductions (300,486)

Balance, June 30, 2016 $ 6,662,860

Balance Due Within One Year $ 109,038

The reductions include a change of $277,019 in the estimated liability for closure/postclosure care cost.

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Analysis of Noncurrent Liabilities Presented on Exhibit A:

Total Noncurrent Liabilities, June 30, 2016 $ 6,662,860Less: Balance Due Within One Year (109,038)

Noncurrent Liabilities - Due in More Than One Year - Exhibit A $ 6,553,822

Discretely Presented DeKalb County School Department Changes in Long-term Obligations Long-term obligations activity for the discretely presented DeKalb County School Department for the year ended June 30, 2016, was as follows: Governmental Activities:

NetPension

Other Liability -Postemployment Teacher

Benefits Legacy Plan*

Balance, July 1, 2015 $ 631,927 $ (46,396)Additions 189,905 1,395,835Reductions (152,373) (1,232,175)

Balance, June 30, 2016 $ 669,459 $ 117,264

Balance Due Within One Year $ 0 $ 0 * At July 1, 2015, the Teacher Legacy Plan had a net pension asset. Analysis of Noncurrent Liabilities Presented on Exhibit A:

Total Noncurrent Liabilities, June 30, 2016 $ 786,723Less: Balance Due Within One Year 0

Noncurrent Liabilities - Due in More Than One Year - Exhibit A $ 786,723

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

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G. On-Behalf Payments

Primary Government The State of Tennessee pays health insurance premiums for retired employees on-behalf of DeKalb County. These payments are made by the state to the Medicare Supplement Plan. This plan is administered by the State of Tennessee and reported in the state’s Comprehensive Annual Financial Report. Payments by the state to the Medicare Supplement Plan for the year ended June 30, 2016, were $1,650. The county has recognized these on-behalf payments as revenues and expenditures in the General Fund.


The State of Tennessee pays health insurance premiums for retired teachers on-behalf of the DeKalb County School Department. These payments are made by the state to the Local Education Group Insurance Plan and the Medicare Supplement Plan. Both of these plans are administered by the State of Tennessee and reported in the state’s Comprehensive Annual Financial Report. Payments by the state to the Local Education Group Insurance Plan and the Medicare Supplement Plan for the year ended June 30, 2016, were $82,589 and $25,312, respectively. The School Department has recognized these on-behalf payments as revenues and expenditures in the General Purpose School Fund.

V. OTHER INFORMATION A. Risk Management

Primary Government The county is exposed to various risks related to general liability, property, casualty, and workers’ compensation. The county participates in the Local Government Property and Casualty Fund (LGPCF) and the Local Government Workers’ Compensation Fund (LGWCF) as opposed to purchasing commercial insurance for these risks. The LGPCF and LGWCF are public entity risk pools established by the Tennessee County Services Association, an association of member counties. The county pays annual premiums to these pools for their insurance coverage. These pools are 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 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, all local

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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. State statutes provide for the LGGIF to be self-sustaining through member premiums. Discretely Presented DeKalb County School Department The discretely presented DeKalb County School Department participates in the Tennessee Risk Management Trust (TN-RMT), which is a public entity risk pool created under the auspices of the Tennessee Governmental Tort Liability Act to provide governmental insurance coverage. The School Department pays annual premiums to the TN-RMT for its general liability, property, casualty, and workers’ compensation insurance coverage. The creation of TN-RMT provides for it to be self-sustaining through member premiums. The School Department participates in the Local Education Group Insurance Fund (LEGIF), a public entity risk pool established to provide a program of health insurance coverage for employees of local education agencies. In accordance with Section 8-27-301, Tennessee Code Annotated (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. 72, Fair Value Measurement and Application; Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets that are not within the Scope of GASB Statement 68 and Amendments to Certain Provisions of GASB Statements No. 67 and No. 68; Statement No. 76, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments; Statement No. 79, Certain External Investment Pools and Pool Participants became effective for the year ended June 30, 2016. GASB Statement No. 72, establishes general principles for measuring fair value and standards of accounting and financial reporting for assets and liabilities measured at fair value. This standard supersedes previous statements as they relate to measuring fair value of certain assets and liabilities. GASB Statement No. 73, established accounting and reporting requirements for pensions that are not administered through a trust account and also addresses changes made to Statements No. 67 and No. 68. The changes to Statements No. 67 and No. 68 require new RSI disclosures concerning plan investments and address specific payables to defined benefit plans.

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GASB Statement No. 76, addresses changes made to the hierarchy of generally accepted accounting principles. This standard supersedes Statement No. 55 and reduces the hierarchy from four to two categories. GASB Statement No. 79, addresses issues related to certain external investment pools and pool participants because of changes in Security and Exchange rules relative to money market funds. This standard establishes criteria for an external investment pool to qualify for making the election to measure all of its investments at amortized cost rather than fair value for financial reporting purposes standards.

C. Subsequent Event

On August 31, 2016, Scott Cantrell left the Office of Assessor of Property and was succeeded by Shannon Cantrell.

D. Contingent Liabilities

The county is involved in several pending lawsuits. Based on correspondence from the attorneys for the county, management 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.

E. Change in Administration

On July 15, 2015, Dr. Danielle Collins left the Office of Director of Schools and was succeeded by Patrick Cripps.

F. Landfill Closure and Postclosure Care Costs

DeKalb County has four active permits on file with the state Department of Environment and Conservation for sanitary landfills. The county has provided financial assurances for estimated closure and postclosure liabilities as required by the State of Tennessee. These financial assurances are on file with the Department of Environment and Conservation. State and federal laws and regulations require the county to place a final cover on its sanitary landfill site when it stops accepting waste and to perform certain maintenance and monitoring functions at the site for 30 years after closure. Although closure and postclosure care costs will be paid only near or after the date that the landfill stops accepting waste, the county reports a portion of these closure and postclosure care costs as an operating expense in each period based on landfill capacity used as of each balance sheet date. DeKalb County closed the Midway landfill in 1994 and the Felts Tract in 2002. The $6,662,860 reported as postclosure care liability at June 30, 2016, represents $428,790 for the Midway landfill and $418,278 for the Felts Tract based on what it would cost to perform all postclosure care in 2016. Actual costs may be higher due to inflation, changes in technology, or

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changes in regulations. The amount reported as landfill closure postclosure care liability at June 30, 2016, also represents the cumulative amount reported to date based on the use of 100 percent of the estimated capacity of the extension landfill ($1,325,670) and 90 percent estimated capacity of the lateral expansion ($4,490,122). These amounts are based on what it would cost to perform all closure and postclosure care in 2016. Actual costs may be higher due to inflation, changes in technology, or changes in regulations.

G. Joint Venture

The Thirteenth Judicial District Drug Task Force (DTF) is a joint venture formed by an interlocal agreement between the district attorney general of the Thirteenth Judicial District, Clay, Cumberland, DeKalb, Overton, Pickett, Putnam, and White counties, and participating municipalities within the district. The purpose of the DTF is to provide multi-jurisdictional law enforcement to promote the investigation and prosecution of drug-related activities. Funds for the operations of the DTF come primarily from federal grants, drug fines, and the forfeiture of drug-related assets to the DTF. The DTF is overseen by the district attorney general and is governed by a board of directors including the district attorney general, sheriffs, and police chiefs of participating law enforcement agencies within each judicial district. DeKalb County did not make appropriations to the DTF for the year ended June 30, 2016.

DeKalb County does not have an equity interest in any of the above-noted joint venture. Complete financial statements for the DTF can be obtained from its administrative office at the following address:

Administrative Office:

Office of District Attorney General Thirteenth Judicial District Drug Task Force

1519A East Spring Street Cookeville, TN 38506

H. Retirement Commitments

1. Tennessee Consolidated Retirement System (TCRS)

Primary Government General Information About the Pension Plan Plan Description. Employees of DeKalb County and non-certified employees of the discretely presented DeKalb County School Department are provided a defined benefit pension plan through the Public Employee Retirement Plan, an agent multiple-employer pension plan administered by the TCRS. The primary government

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employees comprise 63.71 percent and the non-certified employees of the discretely presented School Department comprise 36.29 percent of the plan based on contribution data. The TCRS was created by state statute under Tennessee Code Annotated (TCA), Title 8, Chapters 34-37. The TCRS Board of Trustees is responsible for the proper operation and administration of the TCRS. The Tennessee Treasury Department, an agency in the legislative branch of state government, administers the plans of the TCRS. The TCRS issues a publicly available financial report that can be obtained at www.treasury.tn.gov/tcrs. Benefits Provided. TCA, Title 8, Chapters 34-37 establish the benefit terms and can be amended only by the Tennessee General Assembly. The chief legislative body may adopt the benefit terms permitted by statute. Members are eligible to retire with an unreduced benefit at age 60 with five years of service credit or after 30 years of service credit regardless of age. Benefits are determined by a formula using the member’s highest five consecutive year average compensation and the member’s years of service credit. Reduced benefits for early retirement are available to vested members at age 55. Members vest with five years of service credit. Service related disability benefits are provided regardless of length of service. Five years of service is required for non-service related disability eligibility. The service related and non-service related disability benefits are determined in the same manner as a service retirement benefit but are reduced ten percent and include projected service credits. A variety of death benefits is available under various eligibility criteria. Employees Covered by Benefit Terms. At the measurement date of June 30, 2015, the following employees were covered by the benefit terms: Inactive Employees or Beneficiaries Currently Receiving Benefits 139Inactive Employees Entitled to But Not Yet Receiving Benefits 302Active Employees 289

Total 730

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. DeKalb County makes employer contributions at the rate set by the Board of Trustees as determined by an actuarial valuation. For the year ended June 30, 2015, the Actuarial Determined Contribution (ADC) for DeKalb County was $371,908 based on a rate

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of 5.41 percent of covered payroll. By law, employer contributions are required to be paid. The TCRS may intercept DeKalb 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) DeKalb County’s net pension liability (asset) was measured as of June 30, 2015, and the total pension liability (asset) used to calculate net pension liability (asset) was determined by an actuarial valuation as of that date. Actuarial Assumptions. The total pension liability as of the June 30, 2015, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:

Inflation 3%Salary Increases Graded Salary Ranges from 8.97%

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

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

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

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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:

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

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Changes in the Net Pension Liability (Asset)

Total Plan NetPension Fiduciary PensionLiability Net Position Liability

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

Balance, July 1, 2014 $ 11,748,008 $ 12,547,695 $ (799,687)

Changes for the year: Service Cost $ 499,326 $ 0 $ 499,326 Interest 896,508 0 896,508 Differences Between Expected and Actual Experience 118,817 0 118,817 Contributions-Employer 0 371,908 (371,908) Contributions-Employees 0 349,028 (349,028) Net Investment Income 0 388,277 (388,277) Benefit Payments, Including Refunds of Employee Contributions (587,776) (587,776) 0 Administrative Expense 0 (14,909) 14,909Net Changes $ 926,875 $ 506,528 $ 420,347

Balance, June 30, 2015 $ 12,674,883 $ 13,054,223 $ (379,340)

Increase (Decrease)

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

Plan NetTotal Fiduciary Pension

Pension Net LiabilityLiability Position (Asset)

Primary Government 63.71% $ 8,075,168 $ 8,316,845 $ (241,678)

School Department 36.29% 4,599,715 4,737,378 (137,662)

Total $ 12,674,883 $ 13,054,223 $ (379,340)

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

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Current1% Discount 1%

Decrease Rate IncreaseDeKalb County 6.5% 7.5% 8.5%

Net Pension Liability $ 1,096,811 $ (379,340) $ (1,614,054)

Pension Expense (Income) and Deferred Outflows of Resources and Deferred Inflows of Resources to Pensions Pension Expense. For the year ended June 30, 2016, DeKalb County recognized pension expense of $56,743. Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2016, DeKalb County reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred DeferredOutflows Inflows

of of Resources Resources

Difference Between Expected and Actual Experience $ 111,279 $ 0Net Difference Between Projected and Actual Earnings on Pension Plan Investments 445,788 581,329Contributions Subsequent to the Measurement Date of June 30, 2015 (1) 367,927 N/A

Total $ 924,994 $ 581,329 (1) The amount shown above for “Contributions Subsequent to the

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

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

Deferred DeferredOutflows of Inflows ofResources Resources

Primary Government $ 569,140 $ 370,365

School Department 355,854 210,964

Total $ 924,994 $ 581,329

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

Year EndingJune 30 Amount

2017 $ (59,460)2018 (59,460)2019 (59,460)2020 134,3162021 19,803Thereafter 0

In the table shown above, positive amounts will increase pension expense while negative amounts will decrease pension expense. Payable to the Pension Plan At June 30, 2016, DeKalb County reported a payable of $388 for the outstanding amount of contributions to the pension plan required at the year ended June 30, 2016.

Discretely Presented DeKalb County School Department Non-certified Employees General Information About the Pension Plan Plan Description. As noted above under the primary government, employees of DeKalb County and non-certified employees of the discretely presented DeKalb County School Department are provided a defined benefit pension plan through the Public Employee

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Retirement Plan, an agent multiple-employer pension plan administered by the TCRS. The primary government employees comprise 63.71 percent and the non-certified employees of the discretely presented School Department comprise 36.29 percent of the plan based on contribution data.

Certified Employees Teacher Retirement Plan General Information About the Pension Plan Plan Description. Teachers of the DeKalb County School Department with membership in the TCRS before July 1, 2014, are provided with pensions through the Teacher Legacy Retirement 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 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

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retired prior to the second of July of the previous year. The COLA is based on the change in the consumer price index (CPI) during the prior calendar year, capped at three percent, and applied to the current benefit. No COLA is granted if the change in the CPI is less than one-half percent. A one percent COLA is granted if the CPI change is between one-half percent and one percent. Members who leave employment may withdraw their employee contributions, plus any accumulated interest. Under the Teacher Retirement Plan, benefit terms and conditions, including COLA, can be adjusted on a prospective basis. Moreover, there are defined cost controls and unfunded liability controls that provide for the adjustment of benefit terms and conditions on an automatic basis. Contributions. Contributions for teachers are established in the statutes governing the TCRS and may only be changed by the Tennessee General Assembly or by automatic cost controls set out in law. Teachers are required to contribute five percent of their salary to the plan. The Local Education Agencies (LEAs) make employer contributions at the rate set by the Board of Trustees as determined by an actuarial valuation. Per the statutory provisions governing TCRS, the employer contribution rate cannot be less than four percent, except in years when the maximum funded level, approved by the TCRS Board of Trustees, is reached. By law, employer contributions for the Teacher Retirement Plan are required to be paid. The TCRS may intercept the state shared taxes of the sponsoring governmental entity of the LEA if the required employer contributions are not remitted. Employer contributions for the year ended June 30, 2016, to the Teacher Retirement Plan were $42,243, which is four percent of covered payroll. The employer rate, when combined with member contributions, is expected to finance the costs of benefits earned by members during the year, the cost of administration, as well as an amortized portion of any unfunded liability. Pension Liabilities (Assets), Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions Pension Liabilities (Assets). At June 30, 2016, the DeKalb County School Department reported an asset of $13,393 for its proportionate share of the net pension asset. The net pension asset was measured as of June 30, 2015, and the total pension asset used to calculate the net pension asset was determined by an actuarial valuation as of that date. The DeKalb County School Department’s proportion of the net pension asset was based on the DeKalb County School Department’s share of contributions to the pension plan relative to the contributions of all participating LEAs. At the measurement date of June 30, 2015, the DeKalb County School Department’s proportion was .0332922 percent.

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Pension Expense. For the year ended June 30, 2016, DeKalb County School Department’s recognized pension expense of $17,552. Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2016, the DeKalb County School Department’s reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:



Difference Between Expected and Actual Experience $ 0 $ 4,359Net Difference Between Projected and Actual Earnings on Pension Plan Investments 1,083 0LEA's Contributions Subsequent to the Measurement Date of June 30, 2015 42,243 N/A

Total $ 43,326 $ 4,359

The DeKalb County School Department’s employer contributions of $42,243, reported as pension related deferred outflows of resources subsequent to the measurement date, will be recognized as an increase of net pension liability (asset) in the year ending June 30, 2017. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:


2017 $ (93)2018 (93)2019 (93)2020 (93)2021 (363)Thereafter (2,543)

In the table shown above, positive amounts will increase pension expense while negative amounts will decrease pension expense. Actuarial Assumptions. The total pension liability in the June 30, 2015, actuarial valuation was determined using the following

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actuarial assumptions, applied to all periods included in the measurement:




Cost of Living Adjustment 2.5% Mortality rates are customized based on the June 30, 2012, actuarial experience study and some included adjustment for expected future improvement in life expectancy. The actuarial assumptions used in the June 30, 2015, actuarial valuation were based on the results of an actuarial experience study performed for the period July 1, 2008, through June 30, 2012. The demographic assumptions were adjusted to more closely reflect actual and expected future experience. The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees in conjunction with the June 30, 2012, actuarial experience study by considering the following three techniques: (1) the 25-year historical return of the TCRS at June 30, 2012, (2) the historical market returns of asset classes from 1926 to 2012 using the TCRS investment policy asset allocation, and (3) capital market projections that were utilized as a building-block method in which best-estimate ranges of expected future real rate of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. Four sources of capital market projections were blended and utilized in the third technique. The blended capital market projection established the long-term expected rate of return by weighting the expected future real rate of return by the target asset allocation percentage and by adding inflation of three percent. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

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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 DeKalb 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 DeKalb 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 $ 2,375 $ (13,393) $ (24,958)

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 DeKalb 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

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eligibility criteria. Member and beneficiary annuitants are entitled to an automatic cost of living adjustment (COLA) after retirement. A COLA is granted each July for annuitants retired prior to the second of July of the previous year. The COLA is based on the change in the consumer price index (CPI) during the prior calendar year, capped at three percent, and applied to the current benefit. No COLA is granted if the change in the CPI is less than one-half percent. A one percent COLA is granted if the CPI change is between one-half and one percent. A member who leaves employment may withdraw their employee contributions, plus any accumulated interest. Under the Teacher Legacy Pension Plan, benefit terms and conditions, including COLAs can be adjusted on a prospective basis. Moreover, there are defined cost controls and unfunded liability controls that provide for the adjustment of benefit terms and conditions on an automatic basis. Contributions. Contributions for teachers are established in the statutes governing the TCRS and may only be changed by the Tennessee General Assembly. Teachers are required to contribute five percent of their salaries. The Local Education Agencies (LEAs) make employer contributions at the rate set by the Board of Trustees as determined by an actuarial valuation. By law, employer contributions for the Teacher Legacy Pension Plan are required to be paid. The TCRS may intercept the state shared taxes of the sponsoring governmental entity of the LEA if the required employer contributions are not remitted. Employer contributions by the DeKalb County School Department for the year ended June 30, 2016, to the Teacher Legacy Pension Plan were $929,695, which is 9.04 percent of covered payroll. The employer rate, when combined with member contributions, is expected to finance the costs of benefits earned by members during the year, the cost of administration, as well as an amortized portion of any unfunded liability. Pension Liabilities (Assets), Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions Pension Liability (Assets). At June 30, 2016, the DeKalb County School Department reported a liability of $117,263 for its proportionate share of the net pension liability (asset). The net pension liability (asset) was measured as of June 30, 2015, and the total pension liability used to calculate the net pension liability (asset) was determined by an actuarial valuation as of that date. The DeKalb County School Department’s proportion of the net pension liability (asset) was based on the DeKalb County School Department’s long-term share of contributions to the pension plan relative to the contributions of all participating LEAs. At the measurement date of June 30, 2015, the DeKalb County School Department’s proportion

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was .286263 percent. The proportion measured at June 30, 2014, was .285524 percent. Negative Pension Expense. For the year ended June 30, 2016, the DeKalb County School Department recognized negative pension expense of $100,746. Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2016, the DeKalb 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 $ 94,108 $ 1,825,215Net Difference Between Projected and Actual Earnings on Pension Plan Investments 2,117,402 2,874,488Changes in Proportion of Net Pension Liability (Asset) 7,896 16,627LEA's Contributions Subsequent to the Measurement Date of June 30, 2015 929,695 N/A

Total $ 3,149,101 $ 4,716,330

The DeKalb County School Department’s employer contributions of $929,695 reported as pension related deferred outflows of resources subsequent to the measurement date, will be recognized as an increase in net pension asset in the year ending June 30, 2017. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:


2017 $ (776,780)2018 (776,780)2019 (776,780)2020 181,3832021 (347,967)Thereafter 0

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




Cost of Living Adjustment 2.5%

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, 2014, 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 four factors described above. Discount Rate. The discount rate used to measure the total pension liability was 7.5 percent. The projection of cash flows used to determine the discount rate assumes that employee contributions will be made at the current rate and that contributions from all the LEAs will be made at the actuarially determined contribution rate pursuant to an actuarial valuation in accordance with the funding policy of the TCRS Board of Trustees and as required to be paid by state statute. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make projected future benefit payments of current active and inactive members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the Proportionate Share of Net Pension Liability (Asset) to Changes in the Discount Rate. The following presents the DeKalb 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 DeKalb 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 $ 7,994,593 $ 117,263 $ (6,404,237)

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 School Department offers its employees a deferred compensation plan established pursuant to IRC Section 403(b). All costs of administering and funding the program are the responsibility of plan participants. The 403(b) plan assets remain the property of the contributing employees and are not presented in the accompanying financial statements. IRC Section 403(b) establishes participation, contribution, and withdrawal provisions for the plan. Teachers hired after July 1, 2014, by the discretely presented DeKalb County School Department are required to participate in a hybrid pension plan administered by the Tennessee Consolidated Retirement System. This hybrid pension plan requires that these teachers contribute five percent of their salaries into a deferred compensation plan managed by the hybrid plan pursuant to IRC Section 401(k). As part of their employment package, the DeKalb County School Department has assumed all costs of funding this program on-behalf of the plan participants. The Section 401(k) plan assets remain the property of the participating teachers and are not presented in the accompanying financial statements. IRC Section 401(k), establishes participation, contribution, and withdrawal provisions for the plans. During the year, the DeKalb County School Department contributed $15,841 to the 401(k) portion of the hybrid pension plan on-behalf of the plan participants.

I. Other Postemployment Benefits (OPEB)

Plan Description DeKalb County and the DeKalb County School Department participate in the state-administered Local Government Group Insurance Plan and the Local Education Group Insurance Plan for healthcare benefits. For accounting purposes, the plans are agent multiple-employer defined benefit OPEB plans. Benefits are established and amended by an insurance committee created by Section 8-27-207, Tennessee Code Annotated (TCA), for local governments and Section 8-27-302, TCA, for local education employees. Prior to reaching the

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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://tn.gov/finance/article/fa-accfin-cafr. Funding Policy The premium requirements of plan members are established and may be amended by the insurance committee. The 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 employer in the plan develops a contribution policy in terms of subsidizing active employees or retired employees’ premiums since the committee is not prescriptive on that issue. The state does not provide a subsidy for local government participants, however, the state does provide a partial subsidy to Local Education Agency pre-65 teachers and a full subsidy based on years of service for post-65 teachers in the Medicare Supplement Plan. During the year ended June 30, 2016, the county and the discretely presented School Department contributed $2,335 and $152,373, respectively, for postemployment benefits. Annual OPEB Cost and Net OPEB Obligation

Local LocalGovernment Education

Group GroupPlan Plan

ARC 21,000$ $ 190,000Interest on the NOPEBO 4,483 23,697Adjustment to the ARC (4,501) (23,792)Annual OPEB cost 20,982$ $ 189,905Amount of contribution (2,335) (152,373)Increase/decrease in NOPEBO 18,647$ $ 37,532Net OPEB obligation, 7-1-15 119,539 631,927

Net OPEB obligation, 6-30-16 138,186$ $ 669,459

80

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

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

PercentageFiscal Annual of Annual Net OPEBYear OPEB OPEB Cost Obligation

Ended Plans Cost Contributed at Year End

6-30-14 Local Government Group $ 11,102 11 % $ 108,7146-30-15 " 12,112 11 119,5396-30-16 " 20,982 11 138,1866-30-14 Local Education Group 145,617 113 580,4666-30-15 " 196,840 74 631,9276-30-16 " 189,905 80 669,459

Funded Status and Funding Progress

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

Local LocalGovernment Education

Group GroupPlan Plan

Actuarial valuation date 7-1-15 7-1-15Actuarial accrued liability (AAL) $ 121,000 $ 1,890,000Actuarial value of plan assets $ 0 $ 0Unfunded actuarial accrued liability (UAAL) $ 121,000 $ 1,890,000Actuarial value of assets as a % of the AAL 0% 0%Covered payroll (active plan members) $ 4,205,559 $ 14,127,900UAAL as a % of covered payroll 3% 13% 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

81

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 Group Plan and the Local Education Group Plan, the projected unit credit actuarial cost method was used, and the actuarial assumptions included a 3.75 percent investment rate of return (net of administrative expenses) and an annual healthcare cost trend rate of 6.5 percent initially. The trend rate will decrease to six percent in fiscal year 2016 and then be reduced by decrements to an ultimate rate of 4.7 percent by fiscal year 2050. Both rates include a 2.5 percent inflation assumption. The unfunded actuarial accrued liability is being amortized as a level percentage of payroll on a closed basis over a 30-year period beginning with July 1, 2007. Payroll is assumed to grow at a rate of three percent.

J. Purchasing Law

Offices of County Mayor and Road Supervisor Purchasing procedures for the funds administered by the county mayor and road supervisor are governed by provisions of Chapter 63, Private Acts of 1979, as amended. Purchasing procedures for the Highway Department are also governed by Section 54-7-113, Tennessee Code Annotated (TCA), (Uniform Road Law). Chapter 63, Private Acts of 1979, as amended, provides for the establishment of a Purchasing Committee and designates the county mayor as purchasing agent for purchases approved by the committee. All purchases of materials, supplies, equipment, or services estimated to exceed $10,000 are required to be made by the Purchasing Committee on the basis of competitive bids solicited through newspaper advertisement. Other purchases may be made by the department heads. Requisitions and purchase orders are required for all purchases.

Office of Director of Schools Purchasing procedures for the discretely presented DeKalb County School Department are governed by provisions of Chapter 63, Private Acts of 1979, as amended, and by Section 49-2-203, TCA. Chapter 63, Private Acts of 1979, as amended, provides for the establishment of a Purchasing Committee and designates the county mayor as purchasing agent for purchases approved by the committee. All purchases of materials, supplies, equipment, or services estimated to exceed $10,000 are required to be made by the Purchasing Committee on the basis of competitive bids solicited through newspaper advertisement. Other purchases may be made by the department heads. Requisitions and purchase orders are required for all purchases.

82

REQUIRED SUPPLEMENTARY INFORMATION

83

Exhibit F-1

DeKalb County, TennesseeSchedule of Changes in Net Pension Liability (Asset) and Related Ratios Based on

2014 2015

$ 450,903 $ 499,326832,772 896,50818,397 118,817

(413,560) (587,776)$ 888,512 $ 926,875

10,859,496 $ 11,748,008

$ 11,748,008 $ 12,674,883

$ 420,976 $ 371,908357,846 349,028

1,764,331 388,277(413,560) (587,776)(10,531) (14,909)

$ 2,119,062 $ 506,52810,428,633 12,547,695

$ 12,547,695 $ 13,054,223

$ (799,687) $ (379,340)

106.81% 102.99%$ 6,724,834 $ 6,879,540

11.89% 5.51%

Participation in the Public Employee Pension Plan of TCRSPrimary GovernmentLast Fiscal Year Ending June 30

Total Pension Liability (Asset)Service CostInterestDifferences Between Actual and Expected ExperienceBenefit Payments, Including Refunds of Employee ContributionsNet Change in Total Pension Liability (Asset)Total Pension Liability (Asset), Beginning

Total Pension Liability (Asset), Ending (a)

Plan Fiduciary Net PositionContributions - EmployerContributions - EmployeeNet Investment IncomeBenefit Payments, Including Refunds of Employee Contributions Administrative ExpenseNet Change in Plan Fiduciary Net PositionPlan Fiduciary Net Position, Beginning

Plan Fiduciary Net Position, Ending (b)

Net Pension Liability (Asset), Ending (a - b)

Plan Fiduciary Net Position as a Percentage of Total Pension Liability Covered PayrollNet Pension Liability (Asset) as a Percentage of Covered Payroll

Note: ten-year information will be presented when available.

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

84

Exhibit F-2

DeKalb County, TennesseeSchedule of Contributions Based on Participation in the PublicEmployee Pension Plan of TCRSPrimary GovernmentLast Fiscal Year Ending June 30

2014 2015 2016

Actuarially Determined Contribution $ 420,976 $ 371,908 $ 367,927Less Contributions in Relation to the Actuarially Determined Contribution (420,976) (371,908) (367,927)

Contribution Deficiency (Excess) $ 0 $ 0 $ 0

Covered Payroll $ 6,724,834 $ 6,879,540 $ 6,774,054

Contributions as a Percentage of Covered Payroll 6.26% 5.41% 5.43%

Note: ten-year information will be presented when available.

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

85

Exhibit F-3

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

2015 2016

Contractually Required Contribution $ 17,293 $ 26,401Less Contributions in Relation to the Contractually Required Contribution (27,669) (42,242)

Contribution Deficiency (Excess) $ (10,376) $ (15,841)

Covered Payroll $ 691,718 $ 1,056,059

Contributions as a Percentage of Covered Payroll 4.00% 4.00%

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

86

Exhibit F-4

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

2014 2015 2016

Contractually Required Contribution $ 995,164 $ 968,749 $ 929,695Less Contributions in Relation to the Contractually Required Contribution (995,164) (968,749) (929,695)

Contribution Deficiency (Excess) $ 0 $ 0 $ 0

Covered Payroll $ 11,206,799 $ 10,716,254 $ 10,268,059

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


87

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

2016

School Department's Proportion of the Net Pension Asset 0.332922%

School Department's Proportionate Share of the Net Pension Liability (Asset) $ (13,393)

Covered Payroll $ 691,718

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

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

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


88

Exhibit F-6

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

2015 2016

School Department's Proportion of the Net Pension Asset 0.285524% 0.286263%

School Department's Proportionate Share of the Net Pension Liability (Asset) $ (46,396) $ 117,263

Covered Payroll $ 11,206,799 $ 10,716,254

School Department's Proportionate Share of the Net Pension Liability (Asset) as a Percentage of its Covered Payroll (.414002)% 1.094253%

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

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


89

Exhibit F-7

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

(Dollar amounts in thousands)

ActuarialAccrued Liability

Actuarial (AAL)Value of Projected Unfunded

Actuarial Plan Unit AAL Covered Valuation Assets Credit (UAAL) Payroll

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

Local Government Group 7-1-11 0 108 108 0 2,932 4 %" 7-1-13 0 64 64 0 4,229 2 " 7-1-15 0 121 121 0 4,206 3

Local Education Group 7-1-11 0 2,465 2,465 0 13,491 18 %" 7-1-13 0 1,421 1,421 0 14,225 10 " 7-1-15 0 1,890 1,890 0 14,128 13

UAAL as a Percentage

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

FundedRatio

of CoveredPayroll

90

DEKALB COUNTY, TENNESSEE NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION


TENNESSEE CONSOLIDATED RETIREMENT SYSTEM

Valuation Date: Actuarially determined contribution rates for 2016 were calculated based on the July 1, 2013, actuarial valuation. Methods and assumptions used to determine contribution rates:

Actuarial Cost Method Frozen Initial LiabilityAmortization Method Level Dollar, Closed (Not to Exceed 20 Years)Remaining Amortization Period Two YearsAsset 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

91

COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES

92

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.

____________________________ Courthouse and Jail Maintenance Fund – The Courthouse and Jail Maintenance Fund is used to account for a special tax levied by private act on litigation. Drug Control Fund – The Drug Control Fund is used to account for revenues received from drug-related fines, forfeitures, and seizures. Constitutional Officers - Fees Fund – The Constitutional Officers - Fees Fund is used to account for operating expenses paid directly from the fee and commission accounts of the trustee, clerks, register of deeds, and sheriff.

Capital Projects Fund ____________________________

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

____________________________

93

Exhibit G-1

DeKalb County, TennesseeCombining Balance SheetNonmajor Governmental FundsJune 30, 2016

Constitu - TotalCourthouse tional General Nonmajor

and Jail Drug Officers - Capital GovernmentalMaintenance Control Fees Total Projects Funds

ASSETS

Cash $ 0 $ 0 $ 25,538 $ 25,538 $ 0 $ 25,538Equity in Pooled Cash and Investments 44,478 43,184 0 87,662 1,058,239 1,145,901Accounts Receivable 0 0 6,464 6,464 0 6,464Property Taxes Receivable 0 0 0 0 543,790 543,790Allowance for Uncollectible Property Taxes 0 0 0 0 (11,711) (11,711)

Total Assets $ 44,478 $ 43,184 $ 32,002 $ 119,664 $ 1,590,318 $ 1,709,982

LIABILITIES

Due to Other Funds $ 0 $ 0 $ 7,967 $ 7,967 $ 0 $ 7,967Total Liabilities $ 0 $ 0 $ 7,967 $ 7,967 $ 0 $ 7,967


Deferred Current Property Taxes $ 0 $ 0 $ 0 $ 0 $ 519,627 $ 519,627Deferred Delinquent Property Taxes 0 0 0 0 9,770 9,770Total Deferred Inflows of Resources $ 0 $ 0 $ 0 $ 0 $ 529,397 $ 529,397

FUND BALANCES

Restricted:Restricted for General Government $ 44,478 $ 0 $ 0 $ 44,478 $ 0 $ 44,478Restricted for Public Safety 0 43,184 0 43,184 0 43,184

(Continued)

Special Revenue FundsCapital

Projects Fund

94

Exhibit G-1

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



FUND BALANCES (Cont.)

Restricted (Cont.):Restricted for Capital Outlay $ 0 $ 0 $ 0 $ 0 $ 1,060,921 $ 1,060,921

Committed:Committed for Finance 0 0 24,035 24,035 0 24,035

Total Fund Balances $ 44,478 $ 43,184 $ 24,035 $ 111,697 $ 1,060,921 $ 1,172,618

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 44,478 $ 43,184 $ 32,002 $ 119,664 $ 1,590,318 $ 1,709,982


Projects Fund

95

Exhibit G-2

DeKalb County, TennesseeCombining Statement of Revenues, Expenditures,

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



RevenuesLocal Taxes $ 54,260 $ 0 $ 0 $ 54,260 $ 544,065 $ 598,325Fines, Forfeitures, and Penalties 0 35,540 0 35,540 0 35,540Charges for Current Services 0 0 121,032 121,032 0 121,032

Total Revenues $ 54,260 $ 35,540 $ 121,032 $ 210,832 $ 544,065 $ 754,897


General Government $ 39,501 $ 0 $ 0 $ 39,501 $ 0 $ 39,501Finance 0 0 116,735 116,735 0 116,735Administration of Justice 0 0 3,554 3,554 0 3,554Public Safety 0 27,274 0 27,274 0 27,274Other Operations 0 314 0 314 0 314Support Services 0 7,466 0 7,466 0 7,466

Capital Projects 0 0 0 0 173,333 173,333Total Expenditures $ 39,501 $ 35,054 $ 120,289 $ 194,844 $ 173,333 $ 368,177

Excess (Deficiency) of RevenuesOver Expenditures $ 14,759 $ 486 $ 743 $ 15,988 $ 370,732 $ 386,720

Net Change in Fund Balances $ 14,759 $ 486 $ 743 $ 15,988 $ 370,732 $ 386,720Fund Balance, July 1, 2015 29,719 42,698 23,292 95,709 690,189 785,898

Fund Balance, June 30, 2016 $ 44,478 $ 43,184 $ 24,035 $ 111,697 $ 1,060,921 $ 1,172,618


Projects Fund

96

Exhibit G-3

DeKalb County, TennesseeSchedule of Revenues, Expenditures, and Changes

in Fund Balance - Actual and BudgetCourthouse and Jail Maintenance FundFor the Year Ended June 30, 2016



RevenuesLocal Taxes $ 54,260 $ 56,420 $ 56,420 $ (2,160)

Total Revenues $ 54,260 $ 56,420 $ 56,420 $ (2,160)

ExpendituresGeneral Government

County Buildings $ 39,501 $ 40,121 $ 40,121 $ 620Total Expenditures $ 39,501 $ 40,121 $ 40,121 $ 620

Excess (Deficiency) of RevenuesOver Expenditures $ 14,759 $ 16,299 $ 16,299 $ (1,540)

Net Change in Fund Balance $ 14,759 $ 16,299 $ 16,299 $ (1,540)Fund Balance, July 1, 2015 29,719 35,195 35,195 (5,476)

Fund Balance, June 30, 2016 $ 44,478 $ 51,494 $ 51,494 $ (7,016)

Budgeted Amounts

97

Exhibit G-4


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



RevenuesFines, Forfeitures, and Penalties $ 35,540 $ 23,745 $ 40,198 $ (4,658)Other Local Revenues 0 105 105 (105)

Total Revenues $ 35,540 $ 23,850 $ 40,303 $ (4,763)

ExpendituresPublic Safety

Sheriff's Department $ 25,274 $ 10,000 $ 26,353 $ 1,079Drug Enforcement 2,000 15,000 15,000 13,000

Other OperationsOther Charges 314 274 374 60

Support ServicesOther Student Support 7,466 10,000 10,000 2,534

Total Expenditures $ 35,054 $ 35,274 $ 51,727 $ 16,673

Excess (Deficiency) of RevenuesOver Expenditures $ 486 $ (11,424) $ (11,424) $ 11,910

Net Change in Fund Balance $ 486 $ (11,424) $ (11,424) $ 11,910Fund Balance, July 1, 2015 42,698 20,257 20,257 22,441

Fund Balance, June 30, 2016 $ 43,184 $ 8,833 $ 8,833 $ 34,351

Budgeted Amounts

98

Exhibit G-5


in Fund Balance - Actual and BudgetGeneral Capital Projects FundFor the Year Ended June 30, 2016



RevenuesLocal Taxes $ 544,065 $ 512,186 $ 512,186 $ 31,879

Total Revenues $ 544,065 $ 512,186 $ 512,186 $ 31,879

ExpendituresCapital Projects

General Administration Projects $ 58,179 $ 77,738 $ 77,738 $ 19,559Public Safety Projects 115,154 236,170 236,170 121,016Public Health and Welfare Projects 0 70,000 70,000 70,000

Total Expenditures $ 173,333 $ 383,908 $ 383,908 $ 210,575

Excess (Deficiency) of RevenuesOver Expenditures $ 370,732 $ 128,278 $ 128,278 $ 242,454

Net Change in Fund Balance $ 370,732 $ 128,278 $ 128,278 $ 242,454Fund Balance, July 1, 2015 690,189 661,242 661,242 28,947


Budgeted Amounts

99

Major Governmental Fund

General Debt Service Fund ____________________________

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

____________________________

100

Exhibit H


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



RevenuesLocal Taxes $ 597,692 $ 558,748 $ 558,748 $ 38,944Other Governments and Citizens Groups 240,547 240,547 299,719 (59,172)

Total Revenues $ 838,239 $ 799,295 $ 858,467 $ (20,228)

ExpendituresPrincipal on Debt

General Government $ 305,000 $ 305,000 $ 305,000 $ 0Education 939,172 939,172 998,344 59,172

Interest on DebtGeneral Government 106,475 106,475 106,475 0Education 136,209 136,209 136,209 0

Other Debt ServiceGeneral Government 13,405 13,593 14,293 888Education 0 1,500 800 800


Excess (Deficiency) of RevenuesOver Expenditures $ (662,022) $ (702,654) $ (702,654) $ 40,632

Other Financing Sources (Uses)Transfers In $ 834,834 $ 834,834 $ 834,834 $ 0

Total Other Financing Sources $ 834,834 $ 834,834 $ 834,834 $ 0

Net Change in Fund Balance $ 172,812 $ 132,180 $ 132,180 $ 40,632Fund Balance, July 1, 2015 1,450,716 1,393,887 1,393,887 56,829

Fund Balance, June 30, 2016 $ 1,623,528 $ 1,526,067 $ 1,526,067 $ 97,461

Budgeted Amounts

101

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.

102

Exhibit I-1

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

Constitu -Cities - tionalSales Officers -Tax Agency Total

ASSETS

Cash $ 0 $ 1,564,490 $ 1,564,490Due from Other Governments 185,286 0 185,286Notes Receivable - Long-term 0 116,200 116,200

Total Assets $ 185,286 $ 1,680,690 $ 1,865,976

LIABILITIES

Due to Other Taxing Units $ 185,286 $ 0 $ 185,286Due to Litigants, Heirs, and Others 0 1,680,690 1,680,690

Total Liabilities $ 185,286 $ 1,680,690 $ 1,865,976

Agency Funds

103

Exhibit I-2

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

Beginning EndingBalance Additions Deductions Balance

Cities - Sales Tax FundAssets

Equity in Pooled Cash and Investments $ 0 $ 1,077,407 $ 1,077,407 $ 0Due from Other Governments 179,636 185,286 179,636 185,286

Total Assets $ 179,636 $ 1,262,693 $ 1,257,043 $ 185,286

LiabilitiesDue to Other Taxing Units $ 179,636 $ 1,262,693 $ 1,257,043 $ 185,286

Total Liabilities $ 179,636 $ 1,262,693 $ 1,257,043 $ 185,286

Constitutional Officers - Agency FundAssets

Cash $ 1,574,112 $ 3,832,163 $ 3,841,785 $ 1,564,490 Notes Receivable - Long-term 98,000 20,000 1,800 116,200

Total Assets $ 1,672,112 $ 3,852,163 $ 3,843,585 $ 1,680,690

LiabilitiesDue to Litigants, Heirs, and Others $ 1,672,112 $ 3,852,163 $ 3,843,585 $ 1,680,690


Totals - All Agency Funds Assets Cash $ 1,574,112 $ 3,832,163 $ 3,841,785 $ 1,564,490 Equity in Pooled Cash and Investments 0 1,077,407 1,077,407 0 Due from Other Governments 179,636 185,286 179,636 185,286 Notes Receivable - Long-term 98,000 20,000 1,800 116,200

Total Assets $ 1,851,748 $ 5,114,856 $ 5,100,628 $ 1,865,976

Liabilities Due to Other Taxing Units $ 179,636 $ 1,262,693 $ 1,257,043 $ 185,286 Due to Litigants, Heirs, and Others 1,672,112 3,852,163 3,843,585 1,680,690


104

DeKalb County School Department ____________________________

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

____________________________ General Purpose School Fund – The General Purpose School Fund is used to account for general operations of the School Department. School Federal Projects Fund – The School Federal Projects Fund is used to account for restricted federal revenues, which must be expended on specific education programs. Central Cafeteria Fund – The Central Cafeteria Fund is used to account for the cafeteria operations in each of the schools. Education Capital Projects Fund – The Education Capital Projects Fund is used to account for building construction and renovations of the School Department.

105

Exhibit J-1

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

Net (Expense)Revenue andChanges in

Operating Net PositionCharges Grants Total

for and GovernmentalFunctions/Programs Expenses Services Contributions Activities

Governmental Activities:Instruction $ 12,934,954 $ 0 $ 1,642,428 $ (11,292,526)Support Services 7,647,561 24,946 90,871 (7,531,744)Operation of Non-instructional Services 2,355,877 91,626 1,638,297 (625,954)Interest on Long-term Debt 51,375 0 0 (51,375)

Total Governmental Activities $ 22,989,767 $ 116,572 $ 3,371,596 $ (19,501,599)

General Revenues:Taxes:

Property Taxes Levied for General Purposes $ 2,820,947Other Local Taxes 13,332

Grants and Contributions Not Restricted to Specific Programs 17,440,813Unrestricted Investment Earnings 1,747Miscellaneous 53,400

Total General Revenues $ 20,330,239

Change in Net Position $ 828,640Net Position, July 1, 2015 14,787,295

Net Position, June 30, 2016 $ 15,615,935

Program Revenues

106

Exhibit J-2

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

OtherGeneral Education Govern- TotalPurpose Capital mental GovernmentalSchool Projects Funds Funds

ASSETS

Equity in Pooled Cash and Investments $ 4,916,326 $ 412,137 $ 632,648 $ 5,961,111Accounts Receivable 966 0 0 966Due from Other Governments 166,857 0 11,988 178,845Property Taxes Receivable 3,008,897 0 0 3,008,897Allowance for Uncollectible Property Taxes (62,804) 0 0 (62,804)

Total Assets $ 8,030,242 $ 412,137 $ 644,636 $ 9,087,015

LIABILITIES

Accounts Payable $ 1,167 $ 0 $ 2,137 $ 3,304Contracts Payable 0 201,738 0 201,738Due to State of Tennessee 17,451 0 0 17,451Total Liabilities $ 18,618 $ 201,738 $ 2,137 $ 222,493


Deferred Current Property Taxes $ 2,881,569 $ 0 $ 0 $ 2,881,569Deferred Delinquent Property Taxes 50,628 0 0 50,628Total Deferred Inflows of Resources $ 2,932,197 $ 0 $ 0 $ 2,932,197

FUND BALANCES

Restricted:Restricted for Education $ 108,893 $ 0 $ 562,499 $ 671,392Restricted for Capital Outlay 0 210,399 0 210,399

(Continued)

Nonmajor Funds

Major Funds

107

Exhibit J-2

DeKalb County, TennesseeBalance Sheet - Governmental FundsDiscretely Presented DeKalb County School Department (Cont.)


FUND BALANCES (Cont.)

Committed:Committed for Education $ 0 $ 0 $ 80,000 $ 80,000

Assigned:Assigned for Education 16,845 0 0 16,845

Unassigned 4,953,689 0 0 4,953,689Total Fund Balances $ 5,079,427 $ 210,399 $ 642,499 $ 5,932,325

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 8,030,242 $ 412,137 $ 644,636 $ 9,087,015

Nonmajor Funds

Major Funds

108

Exhibit J-3

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

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

Total fund balances - balance sheet - governmental funds (Exhibit J-2) $ 5,932,325

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

Add: land $ 736,256Add: buildings and improvements net of accumulated depreciation 11,451,951Add: other capital assets net of accumulated depreciation 1,458,816 13,647,023

(2) Long-term liabilities are not due and payable in the current period andtherefore are not reported in the governmental funds.

Less: contributions due on the primary government debt for bonds $ (1,995,000)Less: other postemployment benefits liability (669,459)Less: net pension liability - cost-sharing plan (117,264) (2,781,723)

(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 $ 1,268,019Less: deferred inflows of resources related to pensions (2,651,392) (1,383,373)

(4) Net pension assets of the cost-sharing plan are not current financialresources and therefore are not reported in the governmental funds.

Add: net pension assets - agent plan $ 137,662Add: net pension assets - teacher retirement plan 13,393 151,055

(5) Other long-term assets are not available to pay forcurrent-period expenditures and therefore are deferredin the governmental funds. 50,628

Net position of governmental activities (Exhibit A) $ 15,615,935

109

Exhibit J-4


and Changes in Fund Balances - Governmental Funds

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


RevenuesLocal Taxes $ 2,848,646 $ 0 $ 0 $ 2,848,646Licenses and Permits 2,001 0 0 2,001Charges for Current Services 24,946 0 91,626 116,572Other Local Revenues 63,799 0 9,564 73,363State of Tennessee 15,220,043 0 14,437 15,234,480Federal Government 173,435 167,824 3,676,453 4,017,712Other Governments and Citizens Groups 1,540,000 0 0 1,540,000

Total Revenues $ 19,872,870 $ 167,824 $ 3,792,080 $ 23,832,774


Instruction $ 12,171,915 $ 0 $ 1,489,641 $ 13,661,556Support Services 6,526,235 0 506,739 7,032,974Operation of Non-Instructional Services 520,667 0 1,835,210 2,355,877Capital Outlay 262,426 0 0 262,426

Debt Service:Principal on Debt 189,172 0 0 189,172Interest on Debt 51,375 0 0 51,375

Capital Projects 0 292,330 0 292,330Total Expenditures $ 19,721,790 $ 292,330 $ 3,831,590 $ 23,845,710

Excess (Deficiency) of RevenuesOver Expenditures $ 151,080 $ (124,506) $ (39,510) $ (12,936)

(Continued)

Nonmajor Funds

Major Funds

110

Exhibit J-4


and Changes in Fund Balances - Governmental Funds

Discretely Presented DeKalb County School Department (Cont.)


Other Financing Sources (Uses)Transfers In $ 2,255 $ 0 $ 0 $ 2,255Transfers Out 0 0 (2,255) (2,255)

Total Other Financing Sources (Uses) $ 2,255 $ 0 $ (2,255) $ 0

Net Change in Fund Balances $ 153,335 $ (124,506) $ (41,765) $ (12,936)Fund Balance, July 1, 2015 4,926,092 334,905 684,264 5,945,261

Fund Balance, June 30, 2016 $ 5,079,427 $ 210,399 $ 642,499 $ 5,932,325

Nonmajor Funds

Major Funds

111

Exhibit J-5

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

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

Net change in fund balances - total governmental funds (Exhibit J-4) $ (12,936)

(1) Governmental funds report capital outlays as expenditures. However,in the statement of activities, the cost of these assets is allocatedover their useful lives and reported as depreciation expense. Thedifference between capital outlays and depreciation is itemized asfollows:

Add: capital assets purchased in the current period $ 95,900Less: current-year depreciation expense (582,291) (486,391)

(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, 2016 $ 50,628Less: deferred delinquent property taxes and other deferred June 30, 2015 (64,995) (14,367)

(3) The contribution of long-term debt (e.g., bonds, notes, other loans) by the primary government provides current financial resources to governmental funds, while the contributions by the School Department of the principal of long-term debt consume the current financial resources of governmental funds.

Add: principal contributed on bonds to the primary government $ 130,000Add: principal contributed on other loans to the primary government 59,172 189,172

(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 other postemployment benefits liability $ (37,532)Change in net pension asset - agent plan (280,654)Change in net pension asset - teacher plan 13,393Change in net pension asset - teacher legacy plan (163,660)Change in deferred outflows related to pensions 24,835Change in deferred inflows related to pensions 1,596,780 1,153,162

Change in net position of governmental activities (Exhibit B) $ 828,640

112

Exhibit J-6

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

TotalSchool Nonmajor

Federal Central GovernmentalProjects Cafeteria Funds

ASSETS

Equity in Pooled Cash and Investments $ 80,000 $ 552,648 $ 632,648Due from Other Governments 2,137 9,851 11,988

Total Assets $ 82,137 $ 562,499 $ 644,636

LIABILITIES

Accounts Payable $ 2,137 $ 0 $ 2,137Total Liabilities $ 2,137 $ 0 $ 2,137

FUND BALANCES

Restricted:Restricted for Education $ 0 $ 562,499 $ 562,499

Committed:Committed for Education 80,000 0 80,000

Total Fund Balances $ 80,000 $ 562,499 $ 642,499

Total Liabilities and Fund Balances $ 82,137 $ 562,499 $ 644,636

Special Revenue Funds

113

Exhibit J-7

DeKalb County, TennesseeCombining Statement of Revenues, Expenditures,

and Changes in Fund Balances - Nonmajor Governmental Funds

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

TotalSchool Nonmajor

Federal Central GovernmentalProjects Cafeteria Funds

RevenuesCharges for Current Services $ 0 $ 91,626 $ 91,626Other Local Revenues 0 9,564 9,564State of Tennessee 0 14,437 14,437Federal Government 2,226,880 1,449,573 3,676,453

Total Revenues $ 2,226,880 $ 1,565,200 $ 3,792,080


Instruction $ 1,489,641 $ 0 $ 1,489,641Support Services 506,739 0 506,739Operation of Non-Instructional Services 228,245 1,606,965 1,835,210

Total Expenditures $ 2,224,625 $ 1,606,965 $ 3,831,590

Excess (Deficiency) of RevenuesOver Expenditures $ 2,255 $ (41,765) $ (39,510)

Other Financing Sources (Uses)Transfers Out $ (2,255) $ 0 $ (2,255)

Total Other Financing Sources (Uses) $ (2,255) $ 0 $ (2,255)

Net Change in Fund Balances $ 0 $ (41,765) $ (41,765)Fund Balance, July 1, 2015 80,000 604,264 684,264

Fund Balance, June 30, 2016 $ 80,000 $ 562,499 $ 642,499


114

Exhibit J-8


in Fund Balance - Actual and BudgetDiscretely Presented DeKalb County School DepartmentGeneral Purpose School FundFor the Year Ended June 30, 2016



RevenuesLocal Taxes $ 2,848,646 $ 2,655,254 $ 2,655,254 $ 193,392Licenses and Permits 2,001 1,000 1,000 1,001Charges for Current Services 24,946 42,000 42,000 (17,054)Other Local Revenues 63,799 59,500 85,500 (21,701)State of Tennessee 15,220,043 14,840,903 15,148,804 71,239Federal Government 173,435 280,000 280,000 (106,565)Other Governments and Citizens Groups 1,540,000 1,540,000 1,540,000 0

Total Revenues $ 19,872,870 $ 19,418,657 $ 19,752,558 $ 120,312

ExpendituresInstruction

Regular Instruction Program $ 9,474,944 $ 10,036,305 $ 9,990,765 $ 515,821Alternative Instruction Program 98,770 100,538 100,538 1,768Special Education Program 1,952,824 1,924,266 1,953,766 942Vocational Education Program 645,377 649,730 649,730 4,353

Support ServicesAttendance 130,555 129,779 132,881 2,326Health Services 359,880 394,420 389,768 29,888Other Student Support 509,201 499,960 529,960 20,759Regular Instruction Program 711,995 776,655 789,555 77,560Special Education Program 374,044 460,300 460,550 86,506Other Programs 107,901 0 107,901 0Board of Education 329,928 343,633 359,233 29,305Director of Schools 132,307 176,165 161,005 28,698Office of the Principal 1,164,101 1,281,895 1,281,895 117,794Fiscal Services 160,900 165,690 165,690 4,790Operation of Plant 1,155,201 1,321,145 1,321,145 165,944Maintenance of Plant 280,051 312,680 312,680 32,629Transportation 1,110,171 1,408,813 1,428,453 318,282

Operation of Non-Instructional ServicesCommunity Services 151,722 0 180,360 28,638Early Childhood Education 368,945 486,167 486,167 117,222

Capital OutlayRegular Capital Outlay 262,426 300,000 300,000 37,574

Principal on DebtEducation 189,172 189,172 189,172 0

Interest on DebtEducation 51,375 51,375 51,375 0

Total Expenditures $ 19,721,790 $ 21,008,688 $ 21,342,589 $ 1,620,799

Excess (Deficiency) of RevenuesOver Expenditures $ 151,080 $ (1,590,031) $ (1,590,031) $ 1,741,111

Other Financing Sources (Uses)Insurance Recovery $ 0 $ 10,000 $ 10,000 $ (10,000)Transfers In 2,255 6,000 6,000 (3,745)

Total Other Financing Sources $ 2,255 $ 16,000 $ 16,000 $ (13,745)

(Continued)

Budgeted Amounts

115

Exhibit J-8


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



Net Change in Fund Balance $ 153,335 $ (1,574,031) $ (1,574,031) $ 1,727,366Fund Balance, July 1, 2015 4,926,092 3,409,561 3,409,561 1,516,531

Fund Balance, June 30, 2016 $ 5,079,427 $ 1,835,530 $ 1,835,530 $ 3,243,897

Budgeted Amounts

116

Exhibit J-9


in Fund Balance - Actual and BudgetDiscretely Presented DeKalb County School DepartmentSchool Federal Projects FundFor the Year Ended June 30, 2016



RevenuesFederal Government $ 2,226,880 $ 2,237,189 $ 2,610,889 $ (384,009)

Total Revenues $ 2,226,880 $ 2,237,189 $ 2,610,889 $ (384,009)

ExpendituresInstruction

Regular Instruction Program $ 869,977 $ 909,144 $ 1,044,503 $ 174,526Special Education Program 575,472 597,051 646,128 70,656Vocational Education Program 44,192 42,348 44,192 0

Support ServicesOther Student Support 23,139 19,107 26,204 3,065Regular Instruction Program 220,711 211,528 320,270 99,559Special Education Program 261,925 230,911 295,953 34,028Vocational Education Program 664 1,600 664 0Transportation 300 0 2,475 2,175

Operation of Non-Instructional ServicesCommunity Services 228,245 223,245 228,245 0


Excess (Deficiency) of RevenuesOver Expenditures $ 2,255 $ 2,255 $ 2,255 $ 0

Other Financing Sources (Uses)Transfers Out $ (2,255) $ (2,255) $ (2,255) $ 0

Total Other Financing Sources $ (2,255) $ (2,255) $ (2,255) $ 0

Net Change in Fund Balance $ 0 $ 0 $ 0 $ 0Fund Balance, July 1, 2015 80,000 0 0 80,000

Fund Balance, June 30, 2016 $ 80,000 $ 0 $ 0 $ 80,000

Budgeted Amounts

117

Exhibit J-10


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



RevenuesCharges for Current Services $ 91,626 $ 225,000 $ 225,000 $ (133,374)Other Local Revenues 9,564 23,028 23,028 (13,464)State of Tennessee 14,437 0 0 14,437Federal Government 1,449,573 1,525,000 1,525,000 (75,427)

Total Revenues $ 1,565,200 $ 1,773,028 $ 1,773,028 $ (207,828)

ExpendituresOperation of Non-Instructional Services

Food Service $ 1,606,965 $ 1,953,028 $ 1,953,028 $ 346,063Total Expenditures $ 1,606,965 $ 1,953,028 $ 1,953,028 $ 346,063

Excess (Deficiency) of RevenuesOver Expenditures $ (41,765) $ (180,000) $ (180,000) $ 138,235

Net Change in Fund Balance $ (41,765) $ (180,000) $ (180,000) $ 138,235Fund Balance, July 1, 2015 604,264 488,114 488,114 116,150

Fund Balance, June 30, 2016 $ 562,499 $ 308,114 $ 308,114 $ 254,385

Budgeted Amounts

118

MISCELLANEOUS SCHEDULES

119

Exhibit K-1

DeKalb County, TennesseeSchedule of Changes in Long-term Notes, Other Loans, and BondsFor the Year Ended June 30, 2016

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

Description of Indebtedness of Issue Rate Issue Date 7-1-15 Period 6-30-16

NOTES PAYABLEPayable through General Debt Service Fund

School Capital Outlay Notes, Series 2012 $ 3,400,000 1 to 2 % 9-21-12 3-1-25 $ 2,880,000 $ 265,000 $ 2,615,000

Total Notes Payable $ 2,880,000 $ 265,000 $ 2,615,000

OTHER LOANS PAYABLEContributions Due by the School Department from the

General Purpose School Fund to the General DebtService Fund

Energy Efficiency Loan 414,198 0 2-11-09 3-15-16 $ 59,172 $ 59,172 $ 0

Total Other Loans Payable $ 59,172 $ 59,172 $ 0

BONDS PAYABLEPayable through General Debt Service Fund

Refunding Bonds, Series 2003 7,930,000 .1 to 5.5 4-24-03 3-1-19 $ 1,790,000 $ 440,000 $ 1,350,000General Obligation Bonds, Series 2010 5,000,000 2 to 3.5 6-10-10 6-1-25 3,570,000 305,000 3,265,000General Obligation School Bonds, Series 2013 750,000 2 to 3.25 10-28-13 10-1-28 705,000 45,000 660,000

Total Payable through General Debt Service Fund $ 6,065,000 $ 790,000 $ 5,275,000

Contributions Due by the School Department from theGeneral Purpose School Fund to the General DebtService Fund

General Obligation School Bonds, Series 2013 2,250,000 2 to 3.25 10-28-13 10-1-28 $ 2,125,000 $ 130,000 $ 1,995,000

Total Bonds Payable $ 8,190,000 $ 920,000 $ 7,270,000

120

Exhibit K-2DeKalb County, TennesseeSchedule of Long-term Debt Requirements by Year

YearEndingJune 30 Principal Interest Total

2017 $ 270,000 $ 47,550 $ 317,5502018 275,000 43,463 318,4632019 275,000 38,650 313,6502020 285,000 33,050 318,0502021 290,000 27,300 317,3002022 295,000 21,450 316,4502023 300,000 15,500 315,5002024 310,000 9,400 319,4002025 315,000 3,150 318,150

Total $ 2,615,000 $ 239,513 $ 2,854,513

YearEndingJune 30 Principal Interest Total

2017 $ 940,000 $ 166,454 $ 1,106,4542018 955,000 154,971 1,109,9712019 970,000 142,341 1,112,3412020 530,000 129,210 659,2102021 550,000 115,339 665,3392022 570,000 100,045 670,0452023 585,000 83,313 668,3132024 610,000 65,356 675,3562025 635,000 46,222 681,2222026 220,000 25,485 245,4852027 225,000 18,975 243,9752028 235,000 11,780 246,7802029 245,000 3,982 248,982

Total $ 7,270,000 $ 1,063,473 $ 8,333,473

Notes

Bonds

121

Exhibit K-3

DeKalb County, TennesseeSchedule of Notes ReceivableFor the Year Ended June 30, 2016

Original Date Date Loaned RetiredAmount of of Interest Balance During During Balance

Description of Loan Issue Maturity Rate 6-30-15 Period Period 6-30-16

Constitutional Officers - Agency Fund

Snow $ 18,000 7-13-04 (1) (2) $ 16,400 $ 0 $ 0 $ 16,400Johnson 12,500 12-19-07 (1) (2) 12,500 0 0 12,500Snipes 10,000 1-3-08 (1) (2) 9,100 0 1,800 7,300Scott 60,000 5-4-12 (1) (2) 60,000 20,000 0 80,000

Total $ 98,000 $ 20,000 $ 1,800 $ 116,200

(1) Ten years after borrower graduates school.(2) Two percent below prime interest rate as published in the Wall Street Journal.

122

Exhibit K-4

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

From Fund To Fund Purpose Amount

PRIMARY GOVERNMENT

Local Purpose Tax General Debt Service School debt $ 834,834

DISCRETELY PRESENTED DEKALBCOUNTY SCHOOL DEPARTMENT

School Federal Projects General Purpose School Indirect costs $ 2,255

123

Exhibit K-5

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

SalaryPaid

DuringOfficial Authorization for Salary Period Bond Surety

County Mayor Section 8-24-102, TCA and $ 73,738 (1) $ 100,000 RLI Insurance Company Chairman of Roads, Chapter 156, Private Acts of 1943, as amended

Road Supervisor Section 8-24-102, TCA and 71,728 (2) 100,000 " DeKalb County Commission

Director of Schools:Dr. Danielle Collins (7-1-15 through 7-15-15) State Board of Education 1,000 (6)

and DeKalb County Board of Education

Patrick Cripps (7-16-15 through 6-30-16) State Board of Education 82,458 (3) 100,000 Cincinnati Insurance Company and DeKalb County Board of Education

Trustee Section 8-24-102, TCA 63,843 899,041 RLI Insurance CompanyAssessor of Property Section 8-24-102, TCA 63,843 50,000 "County Clerk Section 8-24-102, TCA 63,843 100,000 "Circuit and General Sessions Courts Clerk Section 8-24-102, TCA 63,843 75,000 "Clerk and Master Section 8-24-102, TCA

and Chancery Court Judge 63,843 (4) 100,000 "Register of Deeds Section 8-24-102, TCA 63,843 100,000 "Sheriff Section 8-24-102, TCA 70,828 (5) 100,000 "

Employee Blanket Bond Coverage:Public Employee Dishonesty - County Departments 150,000 Local Government Insurance PoolPublic Employee Dishonesty - School Department 150,000 Tennessee Risk Management Trust

(1) Does not include a $600 payment for serving as chairman of roads paid from the Highway/Public Works Fund. (2) Includes additional compensation of $1,500 for maintaining E-911 road signs.(3) Includes a career ladder supplement of $1,000.(4) Does not include special commissioner fees of $3,365.(5) Includes a law enforcement training supplement of $600.(6) The interim director of schools was covered by the $150,000 employee blanket bond.

124

Exhibit K-6

DeKalb County, TennesseeSchedule of Detailed Revenues -

All Governmental Fund TypesFor the Year Ended June 30, 2016

Constitu -Courthouse Local tional Highway /

and Jail Purpose Drug Officers - PublicGeneral Maintenance Tax Control Fees Works

Local TaxesCounty Property Taxes

Current Property Tax $ 4,309,293 $ 0 $ 0 $ 0 $ 0 $ 183,372Trustee's Collections - Prior Year 123,222 0 0 0 0 3,675Circuit Clerk/Clerk and Master Collections - Prior Years 176,698 0 0 0 0 6,531Interest and Penalty 24,503 0 0 0 0 941Pickup Taxes 2,406 0 0 0 0 91

County Local Option TaxesLocal Option Sales Tax 0 0 2,600,685 0 0 0Litigation Tax - General 392 50,539 0 0 0 0Litigation Tax - Special Purpose 10,881 3,721 0 0 0 0Business Tax 158,543 0 0 0 0 0Mixed Drink Tax 11,461 0 0 0 0 0Mineral Severance Tax 0 0 0 0 0 14,386

Statutory Local TaxesInterstate Telecommunications Tax 1,055 0 0 0 0 0Other Statutory Local Taxes 0 0 0 0 0 101

Total Local Taxes $ 4,818,454 $ 54,260 $ 2,600,685 $ 0 $ 0 $ 209,097

Licenses and PermitsLicenses

Cable TV Franchise $ 48,250 $ 0 $ 0 $ 0 $ 0 $ 0Permits

Beer Permits 3,792 0 0 0 0 0Total Licenses and Permits $ 52,042 $ 0 $ 0 $ 0 $ 0 $ 0

(Continued)


125

Exhibit K-6


All Governmental Fund Types (Cont.)



Fines, Forfeitures, and PenaltiesCircuit Court

Fines $ 11,626 $ 0 $ 0 $ 0 $ 0 $ 0Officers Costs 5,715 0 0 0 0 0Drug Control Fines 0 0 0 7,962 0 0Drug Court Fees 2,048 0 0 0 0 0Jail Fees 1,609 0 0 0 0 0DUI Treatment Fines 1,568 0 0 0 0 0Data Entry Fee - Circuit Court 1,144 0 0 0 0 0

General Sessions CourtFines 19,356 0 0 0 0 0Officers Costs 18,501 0 0 0 0 0Game and Fish Fines 2,167 0 0 0 0 0Drug Control Fines 415 0 0 20,902 0 0Drug Court Fees 4,831 0 0 287 0 0Jail Fees 5,468 0 0 0 0 0DUI Treatment Fines 4,092 0 0 0 0 0Data Entry Fee - General Sessions Court 7,266 0 0 0 0 0Courtroom Security Fee 74 0 0 0 0 0

Juvenile CourtFines 3,201 0 0 0 0 0Officers Costs 2,458 0 0 0 0 0Data Entry Fee - Juvenile Court 474 0 0 0 0 0Courtroom Security Fee 10 0 0 0 0 0

Chancery CourtData Entry Fee - Chancery Court 2,260 0 0 0 0 0Courtroom Security Fee 51 0 0 0 0 0

(Continued)


126

Exhibit K-6





Fines, Forfeitures, and Penalties (Cont.)Other Courts - In-county

Fines $ 11,268 $ 0 $ 0 $ 0 $ 0 $ 0Judicial District Drug Program

Drug Task Force Forfeitures and Seizures 0 0 0 6,389 0 0Other Fines, Forfeitures, and Penalties

Other Fines, Forfeitures, and Penalties 1,943 0 0 0 0 0Total Fines, Forfeitures, and Penalties $ 107,545 $ 0 $ 0 $ 35,540 $ 0 $ 0

Charges for Current ServicesGeneral Service Charges

Patient Charges $ 960,126 $ 0 $ 0 $ 0 $ 0 $ 0Other General Service Charges 3,251 0 0 0 0 0

FeesRecreation Fees 44,523 0 0 0 0 0Library Fees 12,913 0 0 0 0 0Telephone Commissions 3,026 0 0 0 0 0Vending Machine Collections 732 0 0 0 0 0Constitutional Officers' Fees and Commissions 0 0 0 0 121,032 0Data Processing Fee - Register 6,776 0 0 0 0 0Data Processing Fee - Sheriff 46 0 0 0 0 0Sexual Offender Registration Fee - Sheriff 3,650 0 0 0 0 0Data Processing Fee - County Clerk 6,674 0 0 0 0 0

Education ChargesTBI Criminal Background Fee 120 0 0 0 0 0

Total Charges for Current Services $ 1,041,837 $ 0 $ 0 $ 0 $ 121,032 $ 0

(Continued)


127

Exhibit K-6





Other Local RevenuesRecurring Items

Investment Income $ 108,747 $ 0 $ 0 $ 0 $ 0 $ 0Lease/Rentals 47,644 0 0 0 0 0Commissary Sales 3,619 0 0 0 0 0Cobra Insurance Payments 0 0 0 0 0 505Miscellaneous Refunds 0 0 0 0 0 357

Nonrecurring ItemsSale of Equipment 3,500 0 0 0 0 0Contributions and Gifts 13,199 0 0 0 0 0Performance Bond Forfeitures 2,197 0 0 0 0 0

Total Other Local Revenues $ 178,906 $ 0 $ 0 $ 0 $ 0 $ 862

Fees Received From County OfficialsExcess Fees

Trustee $ 286,707 $ 0 $ 0 $ 0 $ 0 $ 0Fees In-Lieu-of Salary

County Clerk 154,634 0 0 0 0 0Circuit Court Clerk 62,812 0 0 0 0 0General Sessions Court Clerk 119,600 0 0 0 0 0Clerk and Master 66,779 0 0 0 0 0Juvenile Court Clerk 7,525 0 0 0 0 0Register 84,857 0 0 0 0 0Sheriff 14,955 0 0 0 0 0

Total Fees Received From County Officials $ 797,869 $ 0 $ 0 $ 0 $ 0 $ 0

(Continued)


128

Exhibit K-6





State of TennesseeGeneral Government Grants

Juvenile Services Program $ 18,000 $ 0 $ 0 $ 0 $ 0 $ 0Aging Programs 13,769 0 0 0 0 0On-behalf Contributions for OPEB 1,650 0 0 0 0 0

Public Safety GrantsLaw Enforcement Training Programs 14,400 0 0 0 0 0Drug Control Grants 109,065 0 0 0 0 0

Health and Welfare GrantsOther Health and Welfare Grants 81,957 0 0 0 0 0

Public Works GrantsState Aid Program 0 0 0 0 0 676,610Litter Program 41,912 0 0 0 0 0

Other State RevenuesFlood Control 198,351 0 0 0 0 0Income Tax 27,584 0 0 0 0 0Vehicle Certificate of Title Fees 1,797 0 0 0 0 0Contracted Prisoner Boarding 98,626 0 0 0 0 0Gasoline and Motor Fuel Tax 0 0 0 0 0 1,547,459Petroleum Special Tax 0 0 0 0 0 13,510Registrar's Salary Supplement 15,164 0 0 0 0 0Other State Grants 12,149 0 0 0 0 0Other State Revenues 39,645 0 0 0 0 0

Total State of Tennessee $ 674,069 $ 0 $ 0 $ 0 $ 0 $ 2,237,579

(Continued)


129

Exhibit K-6





Federal GovernmentFederal Through State

Disaster Relief $ 0 $ 0 $ 0 $ 0 $ 0 $ 16,707Other Federal through State 1,706 0 0 0 0 0

Direct Federal RevenuePolice Service (Lake Area) 19,400 0 0 0 0 0Other Direct Federal Revenue 152,800 0 0 0 0 0

Total Federal Government $ 173,906 $ 0 $ 0 $ 0 $ 0 $ 16,707

Other Governments and Citizens GroupsOther Governments

Contributions $ 87,250 $ 0 $ 0 $ 0 $ 0 $ 0Total Other Governments and Citizens Groups $ 87,250 $ 0 $ 0 $ 0 $ 0 $ 0

Total $ 7,931,878 $ 54,260 $ 2,600,685 $ 35,540 $ 121,032 $ 2,464,245

(Continued)


130

Exhibit K-6



General GeneralDebt Capital

Service Projects Total


Current Property Tax $ 550,128 $ 504,285 $ 5,547,078Trustee's Collections - Prior Year 17,630 14,910 159,437Circuit Clerk/Clerk and Master Collections - Prior Years 26,151 21,626 231,006Interest and Penalty 3,439 2,952 31,835Pickup Taxes 344 292 3,133

County Local Option TaxesLocal Option Sales Tax 0 0 2,600,685Litigation Tax - General 0 0 50,931Litigation Tax - Special Purpose 0 0 14,602Business Tax 0 0 158,543Mixed Drink Tax 0 0 11,461Mineral Severance Tax 0 0 14,386

Statutory Local TaxesInterstate Telecommunications Tax 0 0 1,055Other Statutory Local Taxes 0 0 101

Total Local Taxes $ 597,692 $ 544,065 $ 8,824,253


Cable TV Franchise $ 0 $ 0 $ 48,250Permits

Beer Permits 0 0 3,792Total Licenses and Permits $ 0 $ 0 $ 52,042

(Continued)

Debt Service Fund

Capital Projects Fund

131

Exhibit K-6





Fines, Forfeitures, and PenaltiesCircuit Court

Fines $ 0 $ 0 $ 11,626Officers Costs 0 0 5,715Drug Control Fines 0 0 7,962Drug Court Fees 0 0 2,048Jail Fees 0 0 1,609DUI Treatment Fines 0 0 1,568Data Entry Fee - Circuit Court 0 0 1,144

General Sessions CourtFines 0 0 19,356Officers Costs 0 0 18,501Game and Fish Fines 0 0 2,167Drug Control Fines 0 0 21,317Drug Court Fees 0 0 5,118Jail Fees 0 0 5,468DUI Treatment Fines 0 0 4,092Data Entry Fee - General Sessions Court 0 0 7,266Courtroom Security Fee 0 0 74

Juvenile CourtFines 0 0 3,201Officers Costs 0 0 2,458Data Entry Fee - Juvenile Court 0 0 474Courtroom Security Fee 0 0 10

Chancery CourtData Entry Fee - Chancery Court 0 0 2,260Courtroom Security Fee 0 0 51

(Continued)

Debt Service Fund


132

Exhibit K-6





Fines, Forfeitures, and Penalties (Cont.)Other Courts - In-county

Fines $ 0 $ 0 $ 11,268Judicial District Drug Program

Drug Task Force Forfeitures and Seizures 0 0 6,389Other Fines, Forfeitures, and Penalties

Other Fines, Forfeitures, and Penalties 0 0 1,943Total Fines, Forfeitures, and Penalties $ 0 $ 0 $ 143,085

Charges for Current ServicesGeneral Service Charges

Patient Charges $ 0 $ 0 $ 960,126Other General Service Charges 0 0 3,251

FeesRecreation Fees 0 0 44,523Library Fees 0 0 12,913Telephone Commissions 0 0 3,026Vending Machine Collections 0 0 732Constitutional Officers' Fees and Commissions 0 0 121,032Data Processing Fee - Register 0 0 6,776Data Processing Fee - Sheriff 0 0 46Sexual Offender Registration Fee - Sheriff 0 0 3,650Data Processing Fee - County Clerk 0 0 6,674

Education ChargesTBI Criminal Background Fee 0 0 120

Total Charges for Current Services $ 0 $ 0 $ 1,162,869

(Continued)

Debt Service Fund


133

Exhibit K-6






Investment Income $ 0 $ 0 $ 108,747Lease/Rentals 0 0 47,644Commissary Sales 0 0 3,619Cobra Insurance Payments 0 0 505Miscellaneous Refunds 0 0 357

Nonrecurring ItemsSale of Equipment 0 0 3,500Contributions and Gifts 0 0 13,199Performance Bond Forfeitures 0 0 2,197

Total Other Local Revenues $ 0 $ 0 $ 179,768

Fees Received From County OfficialsExcess Fees

Trustee $ 0 $ 0 $ 286,707Fees In-Lieu-of Salary

County Clerk 0 0 154,634Circuit Court Clerk 0 0 62,812General Sessions Court Clerk 0 0 119,600Clerk and Master 0 0 66,779Juvenile Court Clerk 0 0 7,525Register 0 0 84,857Sheriff 0 0 14,955

Total Fees Received From County Officials $ 0 $ 0 $ 797,869

(Continued)

Debt Service Fund


134

Exhibit K-6






Juvenile Services Program $ 0 $ 0 $ 18,000Aging Programs 0 0 13,769On-behalf Contributions for OPEB 0 0 1,650

Public Safety GrantsLaw Enforcement Training Programs 0 0 14,400Drug Control Grants 0 0 109,065

Health and Welfare GrantsOther Health and Welfare Grants 0 0 81,957

Public Works GrantsState Aid Program 0 0 676,610Litter Program 0 0 41,912

Other State RevenuesFlood Control 0 0 198,351Income Tax 0 0 27,584Vehicle Certificate of Title Fees 0 0 1,797Contracted Prisoner Boarding 0 0 98,626Gasoline and Motor Fuel Tax 0 0 1,547,459Petroleum Special Tax 0 0 13,510Registrar's Salary Supplement 0 0 15,164Other State Grants 0 0 12,149Other State Revenues 0 0 39,645

Total State of Tennessee $ 0 $ 0 $ 2,911,648

(Continued)

Debt Service Fund


135

Exhibit K-6






Disaster Relief $ 0 $ 0 $ 16,707Other Federal through State 0 0 1,706

Direct Federal RevenuePolice Service (Lake Area) 0 0 19,400Other Direct Federal Revenue 0 0 152,800

Total Federal Government $ 0 $ 0 $ 190,613


Contributions $ 240,547 $ 0 $ 327,797Total Other Governments and Citizens Groups $ 240,547 $ 0 $ 327,797

Total $ 838,239 $ 544,065 $ 14,589,944

Debt Service Fund


136

Exhibit K-7


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

General School EducationPurpose Federal Central CapitalSchool Projects Cafeteria Projects Total


Current Property Tax $ 2,623,091 $ 0 $ 0 $ 0 $ 2,623,091Trustee's Collections - Prior Year 71,185 0 0 0 71,185Circuit Clerk/Clerk and Master Collections - Prior Years 123,843 0 0 0 123,843Interest and Penalty 15,607 0 0 0 15,607Pickup Taxes 1,588 0 0 0 1,588

County Local Option TaxesMixed Drink Tax 11,684 0 0 0 11,684

Statutory Local TaxesInterstate Telecommunications Tax 1,648 0 0 0 1,648

Total Local Taxes $ 2,848,646 $ 0 $ 0 $ 0 $ 2,848,646


Marriage Licenses $ 2,001 $ 0 $ 0 $ 0 $ 2,001Total Licenses and Permits $ 2,001 $ 0 $ 0 $ 0 $ 2,001

Charges for Current ServicesEducation Charges

Lunch Payments - Adults $ 0 $ 0 $ 42,408 $ 0 $ 42,408Income from Breakfast 0 0 521 0 521A la Carte Sales 0 0 48,697 0 48,697Receipts from Individual Schools 24,244 0 0 0 24,244Other Charges for Services 702 0 0 0 702

Total Charges for Current Services $ 24,946 $ 0 $ 91,626 $ 0 $ 116,572

(Continued)


Projects Fund

137

Exhibit K-7


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



Investment Income $ 0 $ 0 $ 1,747 $ 0 $ 1,747Sale of Recycled Materials 36 0 0 0 36E-Rate Funding 24,048 0 0 0 24,048Miscellaneous Refunds 21,749 0 7,567 0 29,316

Nonrecurring ItemsSale of Property 998 0 0 0 998Damages Recovered from Individuals 413 0 0 0 413Contributions and Gifts 16,555 0 250 0 16,805

Total Other Local Revenues $ 63,799 $ 0 $ 9,564 $ 0 $ 73,363


On-behalf Contributions for OPEB $ 107,901 $ 0 $ 0 $ 0 $ 107,901State Education Funds

Basic Education Program 14,315,000 0 0 0 14,315,000Early Childhood Education 373,170 0 0 0 373,170School Food Service 0 0 14,437 0 14,437Other State Education Funds 375,140 0 0 0 375,140Career Ladder Program 47,053 0 0 0 47,053

Other State RevenuesOther State Grants 1,779 0 0 0 1,779

Total State of Tennessee $ 15,220,043 $ 0 $ 14,437 $ 0 $ 15,234,480

(Continued)


Projects Fund

138

Exhibit K-7





USDA School Lunch Program $ 0 $ 0 $ 1,007,933 $ 0 $ 1,007,933USDA - Commodities 0 0 94,820 0 94,820Breakfast 0 0 319,926 0 319,926USDA - Other 0 0 26,894 0 26,894Vocational Education - Basic Grants to States 0 53,152 0 0 53,152Title I Grants to Local Education Agencies 0 911,090 0 0 911,090Special Education - Grants to States 0 811,096 0 0 811,096Special Education Preschool Grants 0 26,601 0 0 26,601English Language Acquisition Grants 0 13,638 0 0 13,638Safe and Drug-free Schools - State Grants 0 230,500 0 0 230,500Rural Education 0 53,371 0 0 53,371Eisenhower Professional Development State Grants 0 127,432 0 0 127,432Other Federal through State 0 0 0 167,824 167,824

Direct Federal RevenuePublic Law 874 - Maintenance and Operation 173,435 0 0 0 173,435

Total Federal Government $ 173,435 $ 2,226,880 $ 1,449,573 $ 167,824 $ 4,017,712


Contributions $ 1,540,000 $ 0 $ 0 $ 0 $ 1,540,000Total Other Governments and Citizens Groups $ 1,540,000 $ 0 $ 0 $ 0 $ 1,540,000

Total $ 19,872,870 $ 2,226,880 $ 1,565,200 $ 167,824 $ 23,832,774


Projects Fund

139

Exhibit K-8

DeKalb County, TennesseeSchedule of Detailed Expenditures -

All Governmental Fund TypesFor the Year Ended June 30, 2016

General FundGeneral Government

County CommissionBoard and Committee Members Fees $ 40,033Social Security 2,469Pensions 1,161Unemployment Compensation 228Employer Medicare 577Audit Services 5,617Fiscal Agent Charges 15,000Legal Notices, Recording, and Court Costs 5,968Tax Relief Program 16,883Other Charges 18

Total County Commission $ 87,954

Board of EqualizationBoard and Committee Members Fees $ 1,884

Total Board of Equalization 1,884

Beer BoardBoard and Committee Members Fees $ 5,725Social Security 34Pensions 30Unemployment Compensation 2Employer Medicare 8Other Contracted Services 151

Total Beer Board 5,950

County Mayor/ExecutiveCounty Official/Administrative Officer $ 73,738Assistant(s) 52,864Part-time Personnel 100Other Salaries and Wages 525Social Security 7,370Pensions 6,883Employee and Dependent Insurance 5,812Unemployment Compensation 245Employer Medicare 1,724Data Processing Services 8,709Office Supplies 6,077Other Charges 713

Total County Mayor/Executive 164,760

County AttorneyCounty Official/Administrative Officer $ 24,000

Total County Attorney 24,000

Election CommissionCounty Official/Administrative Officer $ 57,459Other Salaries and Wages 24,180

(Continued)

140

Exhibit K-8



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

Election Commission (Cont.)Election Commission $ 3,100Election Workers 14,838In-service Training 425Social Security 4,518Pensions 4,417Employee and Dependent Insurance 6,240Unemployment Compensation 174Employer Medicare 1,057Advertising 1,459Communication 1,409Printing, Stationery, and Forms 786Travel 488Other Contracted Services 10,038Office Supplies 2,562Other Charges 8,496

Total Election Commission $ 141,646

Register of DeedsCounty Official/Administrative Officer $ 63,843Assistant(s) 52,864Social Security 6,986Pensions 6,314Employee and Dependent Insurance 3,120Unemployment Compensation 180Employer Medicare 1,634Maintenance and Repair Services - Records 9,100Other Contracted Services 1,911Office Supplies 998Other Supplies and Materials 1,553Data Processing Equipment 6,562Other Equipment 3,000

Total Register of Deeds 158,065

PlanningBoard and Committee Members Fees $ 3,400Social Security 81Pensions 22Unemployment Compensation 5Employer Medicare 19Other Contracted Services 10,749

Total Planning 14,276

County BuildingsCustodial Personnel $ 43,658Social Security 2,492Pensions 2,366Employee and Dependent Insurance 6,110

(Continued)

141

Exhibit K-8



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

County Buildings (Cont.)Unemployment Compensation $ 160Employer Medicare 583Maintenance and Repair Services - Buildings 64,091Utilities 95,897

Total County Buildings $ 215,357

Other FacilitiesPart-time Personnel $ 43,742Other Salaries and Wages 8,572Social Security 2,712Unemployment Compensation 377Employer Medicare 634Maintenance and Repair Services - Buildings 1,578Maintenance and Repair Services - Equipment 5,428Office Supplies 307Other Supplies and Materials 2,958Other Charges 6,957Other Equipment 9,899

Total Other Facilities 83,164

Other General AdministrationOther Salaries and Wages $ 4,200Social Security 235Pensions 227Employee and Dependent Insurance 428Unemployment Compensation 12Employer Medicare 55On-behalf Payments to OPEB 1,650Communication 46,334Dues and Memberships 8,601Operating Lease Payments 14,282Postal Charges 23,501Office Supplies 3,000Periodicals 172Liability Insurance 129,826Premiums on Corporate Surety Bonds 3,291Workers' Compensation Insurance 137,449Other Charges 2,109

Total Other General Administration 375,372

FinanceProperty Assessor's Office

County Official/Administrative Officer $ 63,843Assistant(s) 24,180Secretary(ies) 26,432Other Salaries and Wages 26,432Social Security 7,750

(Continued)

142

Exhibit K-8



General Fund (Cont.)Finance (Cont.)

Property Assessor's Office (Cont.)Pensions $ 7,622Employee and Dependent Insurance 11,180Unemployment Compensation 354Employer Medicare 1,813Maintenance and Repair Services - Vehicles 720Other Contracted Services 21,955Gasoline 1,477Office Supplies 1,063

Total Property Assessor's Office $ 194,821

County Trustee's OfficeCounty Official/Administrative Officer $ 63,843Assistant(s) 52,864Social Security 6,955Pensions 6,314Employee and Dependent Insurance 6,240Unemployment Compensation 180Employer Medicare 1,627Data Processing Services 22,255Legal Notices, Recording, and Court Costs 150Office Supplies 1,435

Total County Trustee's Office 161,863

County Clerk's OfficeCounty Official/Administrative Officer $ 63,843Deputy(ies) 76,713Social Security 8,273Pensions 7,604Employee and Dependent Insurance 8,840Unemployment Compensation 442Employer Medicare 1,935Contracts with Private Agencies 17,062Office Supplies 4,824Other Charges 2,746

Total County Clerk's Office 192,282

Administration of JusticeCircuit Court

County Official/Administrative Officer $ 63,843Deputy(ies) 76,294Part-time Personnel 820Jury and Witness Expense 5,238Social Security 8,308Pensions 7,581Employee and Dependent Insurance 6,240Unemployment Compensation 350Employer Medicare 1,943

(Continued)

143

Exhibit K-8



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

Circuit Court (Cont.)Data Processing Services $ 13,600Other Contracted Services 1,130Office Supplies 3,892Other Charges 2,392

Total Circuit Court $ 191,631

General Sessions CourtCounty Official/Administrative Officer $ 90,884Secretary(ies) 9,217Social Security 5,760Pensions 4,917Employee and Dependent Insurance 3,120Unemployment Compensation 93Employer Medicare 1,347Data Processing Services 3,259Travel 1,655Office Supplies 1,427Other Charges 2,509

Total General Sessions Court 124,188

Drug CourtOther Salaries and Wages $ 66,483Social Security 3,827Pensions 3,192Employee and Dependent Insurance 3,120Unemployment Compensation 248Employer Medicare 895Communication 3,384Travel 10,109Other Contracted Services 14,149Drugs and Medical Supplies 9,829Office Supplies 2,437Other Charges 4,701

Total Drug Court 122,374

Chancery CourtCounty Official/Administrative Officer $ 63,843Secretary(ies) 24,180Social Security 4,981Pensions 4,762Employee and Dependent Insurance 3,120Unemployment Compensation 174Employer Medicare 1,165Data Processing Services 8,240Travel 195Office Supplies 973Other Charges 1,030Office Equipment 1,937

Total Chancery Court 114,600

(Continued)

144

Exhibit K-8



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

Juvenile CourtYouth Service Officer(s) $ 31,000Social Security 1,642Pensions 1,677Employee and Dependent Insurance 3,120Unemployment Compensation 90Employer Medicare 384Contracts with Other Public Agencies 2,600Other Charges 469

Total Juvenile Court $ 40,982

Judicial CommissionersCounty Official/Administrative Officer $ 34,486Social Security 2,138Unemployment Compensation 330Employer Medicare 500Dues and Memberships 225Office Supplies 650

Total Judicial Commissioners 38,329

Public SafetySheriff's Department

County Official/Administrative Officer $ 70,828Deputy(ies) 828,871Overtime Pay 52,019In-service Training 18,782Social Security 56,103Pensions 50,484Employee and Dependent Insurance 36,941Unemployment Compensation 2,343Employer Medicare 13,121Communication 21,103Contracts with Private Agencies 2,670Contributions 1,500Maintenance and Repair Services - Vehicles 61,135Travel 8,660Gasoline 59,689Law Enforcement Supplies 7,009Office Supplies 12,235Tires and Tubes 6,798Uniforms 14,676Utilities 51,456Other Supplies and Materials 20,055Other Charges 1,477Data Processing Equipment 2,119Motor Vehicles 25,000

Total Sheriff's Department 1,425,074

(Continued)

145

Exhibit K-8



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

Special PatrolsGuards $ 24,919Other Salaries and Wages 4,200Social Security 1,463Pensions 1,367Employee and Dependent Insurance 1,820Unemployment Compensation 102Employer Medicare 342Gasoline 1,670Instructional Supplies and Materials 4,999Other Charges 100

Total Special Patrols $ 40,982

Traffic ControlPart-time Personnel $ 3,300Other Salaries and Wages 14,125Social Security 876Unemployment Compensation 142Employer Medicare 205

Total Traffic Control 18,648

Correctional Incentive Program ImprovementsCafeteria Personnel $ 19,231Other Salaries and Wages 568,794Social Security 36,027Pensions 32,983Employee and Dependent Insurance 35,209Unemployment Compensation 2,546Employer Medicare 8,426Contracts with Private Agencies 100,322Medical and Dental Services 179,785Food Supplies 126,720Other Supplies and Materials 23,231Other Charges 42,797

Total Correctional Incentive Program Improvements 1,176,071

Fire Prevention and ControlIn-service Training $ 10,702Communication 5,520Forest Resource Services 1,500Maintenance and Repair Services - Buildings 4,898Maintenance and Repair Services - Equipment 8,814Equipment and Machinery Parts 14,813Gasoline 6,112Utilities 16,940Other Supplies and Materials 4,621Liability Insurance 2,915In Service/Staff Development 50,000

(Continued)

146

Exhibit K-8



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

Fire Prevention and Control (Cont.)Other Charges $ 4,177Communication Equipment 7,050Other Equipment 200,818

Total Fire Prevention and Control $ 338,880

Civil DefenseCommunication $ 965Maintenance and Repair Services - Vehicles 2,347Other Charges 2,453

Total Civil Defense 5,765

Other Emergency ManagementContributions $ 117,595Liability Insurance 4,126Other Charges 324

Total Other Emergency Management 122,045

County Coroner/Medical ExaminerEvaluation and Testing $ 21,100Medical and Dental Services 6,600Other Contracted Services 7,860

Total County Coroner/Medical Examiner 35,560

Other Public SafetyContributions $ 16,821

Total Other Public Safety 16,821

Public Health and WelfareLocal Health Center

Social Workers $ 37,292Medical Personnel 29,139Custodial Personnel 5,884Social Security 4,365Pensions 1,576Employee and Dependent Insurance 296Unemployment Compensation 312Employer Medicare 1,021Advertising 54Communication 3,093Contracts with Government Agencies 10,478Maintenance and Repair Services - Equipment 1,331Travel 915Custodial Supplies 513Drugs and Medical Supplies 288Instructional Supplies and Materials 13,652Office Supplies 491Utilities 11,616

(Continued)

147

Exhibit K-8



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

Local Health Center (Cont.)Other Supplies and Materials $ 7,170Other Charges 8,484

Total Local Health Center $ 137,970

Rabies and Animal ControlContracts with Other Public Agencies $ 1,500Contributions 75,000Veterinary Services 65

Total Rabies and Animal Control 76,565

Ambulance/Emergency Medical ServicesCounty Official/Administrative Officer $ 49,937Medical Personnel 311,064Secretary(ies) 26,432Part-time Personnel 130,837Overtime Pay 197,933In-service Training 4,384Social Security 42,587Pensions 30,256Employee and Dependent Insurance 34,190Unemployment Compensation 2,254Employer Medicare 9,960Communication 7,337Operating Lease Payments 3,127Licenses 2,050Maintenance and Repair Services - Buildings 4,098Maintenance and Repair Services - Equipment 5,746Maintenance and Repair Services - Vehicles 31,181Printing, Stationery, and Forms 436Disposal Fees 679Other Contracted Services 55,438Custodial Supplies 2,374Diesel Fuel 24,985Drugs and Medical Supplies 40,973Instructional Supplies and Materials 1,810Office Supplies 3,479Uniforms 4,365Utilities 6,414Other Supplies and Materials 3,395Liability Insurance 87,187Workers' Compensation Insurance 91,692Other Charges 4,344Other Equipment 6,463

Total Ambulance/Emergency Medical Services 1,227,407

Regional Mental Health CenterContributions $ 7,180

Total Regional Mental Health Center 7,180

(Continued)

148

Exhibit K-8



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

Senior Citizens AssistanceClerical Personnel $ 14,670Social Security 817Pensions 794Employee and Dependent Insurance 2,600Unemployment Compensation 128Employer Medicare 191Other Supplies and Materials 1,181

Total Senior Citizens Assistance $ 20,381

LibrariesLibrarians $ 26,432Clerical Personnel 40,798Part-time Personnel 32,434Social Security 6,071Pensions 3,637Employee and Dependent Insurance 3,120Unemployment Compensation 599Employer Medicare 1,420Communication 4,609Library Books/Media 10,195Periodicals 1,489Utilities 9,328Other Supplies and Materials 12,587Other Equipment 1,490

Total Libraries 154,209

Other Social, Cultural, and RecreationalOther Charges $ 22,232

Total Other Social, Cultural, and Recreational 22,232

Agriculture and Natural ResourcesAgricultural Extension Service

Assistant(s) $ 19,395Supervisor/Director 7,598Clerical Personnel 9,083Other Fringe Benefits 6,510Other Supplies and Materials 1,517

Total Agricultural Extension Service 44,103

Soil ConservationSecretary(ies) $ 26,431Social Security 1,230Pensions 1,430Employee and Dependent Insurance 3,120Unemployment Compensation 90Employer Medicare 288

Total Soil Conservation 32,589

(Continued)

149

Exhibit K-8



General Fund (Cont.)Other Operations

Industrial DevelopmentOther Charges $ 20

Total Industrial Development $ 20

Other Economic and Community DevelopmentContributions $ 17,500Other Charges 5,505

Total Other Economic and Community Development 23,005

Veterans' ServicesSupervisor/Director $ 10,000Social Security 620Unemployment Compensation 93Employer Medicare 145

Total Veterans' Services 10,858

Other ChargesContributions $ 7,200Trustee's Commission 108,898

Total Other Charges 116,098

Contributions to Other AgenciesContributions $ 17,745

Total Contributions to Other Agencies 17,745

Employee BenefitsEmployee and Dependent Insurance $ 6,598

Total Employee Benefits 6,598

MiscellaneousLaborers $ 926Other Salaries and Wages 200Pauper Burials 2,500Road Signs 8,586Refunds 16,453Other Charges 5,201

Total Miscellaneous 33,866

Total General Fund $ 7,564,170

Courthouse and Jail Maintenance FundGeneral Government

County BuildingsMaintenance and Repair Services - Buildings $ 9,910Other Contracted Services 1,718Custodial Supplies 27,320Trustee's Commission 553

Total County Buildings $ 39,501

Total Courthouse and Jail Maintenance Fund 39,501

(Continued)

150

Exhibit K-8



Local Purpose Tax FundCapital Projects

Other General Government ProjectsContributions $ 1,540,000Trustee's Commission 25,947

Total Other General Government Projects $ 1,565,947

Total Local Purpose Tax Fund $ 1,565,947

Drug Control FundPublic Safety

Sheriff's DepartmentOther Charges $ 9,724Law Enforcement Equipment 15,550

Total Sheriff's Department $ 25,274

Drug EnforcementConfidential Drug Enforcement Payments $ 2,000

Total Drug Enforcement 2,000

Other OperationsOther Charges

Trustee's Commission $ 314Total Other Charges 314

Support ServicesOther Student Support

Other Supplies and Materials $ 7,466Total Other Student Support 7,466

Total Drug Control Fund 35,054

Constitutional Officers - Fees FundFinance

County Trustee's OfficeConstitutional Officers' Operating Expenses $ 116,735

Total County Trustee's Office $ 116,735

Administration of JusticeCircuit Court Clerk

Constitutional Officers' Operating Expenses $ 142Total Circuit Court Clerk 142

General Sessions Court ClerkConstitutional Officers' Operating Expenses $ 47

Total General Sessions Court Clerk 47

Chancery CourtSpecial Commissioner Fees $ 3,365

Total Chancery Court 3,365

Total Constitutional Officers - Fees Fund 120,289

(Continued)

151

Exhibit K-8



Highway/Public Works FundHighways

AdministrationCounty Official/Administrative Officer $ 71,728Accountants/Bookkeepers 26,222Secretary(ies) 24,756Board and Committee Members Fees 600Communication 5,660Data Processing Services 5,294Dues and Memberships 2,593Postal Charges 392Rentals 1,211Electricity 3,860Natural Gas 1,523Office Supplies 1,043Water and Sewer 239Data Processing Equipment 91

Total Administration $ 145,212

Highway and Bridge MaintenanceForemen $ 33,407Equipment Operators 55,078Truck Drivers 72,902Laborers 79,307Rentals 2,324Other Contracted Services 560Asphalt - Liquid 166,343Concrete 1,572Crushed Stone 40,520Pipe - Metal 20,999Road Signs 109Uniforms 556Wood Products 1,852Other Supplies and Materials 2,459

Total Highway and Bridge Maintenance 477,988

Operation and Maintenance of EquipmentMechanic(s) $ 57,487Maintenance and Repair Services - Equipment 3,381Diesel Fuel 43,357Equipment and Machinery Parts 39,502Garage Supplies 11,690Gasoline 14,824Lubricants 3,251Small Tools 285Tires and Tubes 20,535

Total Operation and Maintenance of Equipment 194,312

Quarry OperationsForemen $ 27,621

(Continued)

152

Exhibit K-8



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

Quarry Operations (Cont.)Equipment Operators $ 48,200Explosive and Drilling Services 35,151Maintenance and Repair Services - Equipment 1,062Electricity 20,275Equipment and Machinery Parts 19,398

Total Quarry Operations $ 151,707

Other ChargesLiability Insurance $ 40,570Trustee's Commission 19,544Workers' Compensation Insurance 48,306Other Charges 440

Total Other Charges 108,860

Employee BenefitsSocial Security $ 39,570Pensions 26,104Employee and Dependent Insurance 136,272Unemployment Compensation 3,500

Total Employee Benefits 205,446

Capital OutlayMotor Vehicles $ 12,225State Aid Projects 673,267

Total Capital Outlay 685,492

Total Highway/Public Works Fund $ 1,969,017

General Debt Service FundPrincipal on Debt

General GovernmentPrincipal on Bonds $ 305,000

Total General Government $ 305,000

EducationPrincipal on Bonds $ 615,000Principal on Notes 265,000Principal on Other Loans 59,172

Total Education 939,172

Interest on DebtGeneral Government

Interest on Bonds $ 106,475Total General Government 106,475

EducationInterest on Bonds $ 84,978Interest on Notes 51,231

Total Education 136,209

(Continued)

153

Exhibit K-8



General Debt Service Fund (Cont.)Other Debt Service

General GovernmentTrustee's Commission $ 11,655Other Debt Service 1,750

Total General Government $ 13,405

Total General Debt Service Fund $ 1,500,261

General Capital Projects FundCapital Projects

General Administration ProjectsTrustee's Commission $ 10,630Building Construction 23,148Other Equipment 10,751Other Construction 13,650

Total General Administration Projects $ 58,179

Public Safety ProjectsOther Charges $ 32,654Motor Vehicles 82,500

Total Public Safety Projects 115,154

Total General Capital Projects Fund 173,333

Total Governmental Funds - Primary Government $ 12,967,572

154

Exhibit K-9


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

General Purpose School FundInstruction

Regular Instruction ProgramTeachers $ 6,610,710Career Ladder Program 27,900Educational Assistants 109,880Other Salaries and Wages 45,708Certified Substitute Teachers 38,862In-service Training 500Non-certified Substitute Teachers 77,600Social Security 391,697Pensions 605,845Medical Insurance 892,171Dental Insurance 67,221Unemployment Compensation 10,789Employer Medicare 92,078Other Contracted Services 18,000Instructional Supplies and Materials 113,316Textbooks 241,447Fee Waivers 7,345Other Charges 11,197Regular Instruction Equipment 112,678

Total Regular Instruction Program $ 9,474,944

Alternative Instruction ProgramTeachers $ 59,115Career Ladder Program 3,000Educational Assistants 14,220Social Security 4,333Pensions 6,384Medical Insurance 9,961Dental Insurance 484Unemployment Compensation 110Employer Medicare 1,013Instructional Supplies and Materials 150

Total Alternative Instruction Program 98,770

Special Education ProgramTeachers $ 1,179,845Career Ladder Program 3,100Homebound Teachers 47,643Educational Assistants 182,822Speech Pathologist 16,178Other Salaries and Wages 600Certified Substitute Teachers 1,723Non-certified Substitute Teachers 19,894Social Security 81,495Pensions 121,827Medical Insurance 151,093

(Continued)

155

Exhibit K-9



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

Special Education Program (Cont.)Dental Insurance $ 12,474Unemployment Compensation 2,761Employer Medicare 19,563Contracts with Other School Systems 55,000Other Contracted Services 8,943Instructional Supplies and Materials 312Other Supplies and Materials 1,501Special Education Equipment 46,050

Total Special Education Program $ 1,952,824

Vocational Education ProgramTeachers $ 446,687Career Ladder Program 1,000Other Salaries and Wages 37,234Certified Substitute Teachers 819Non-certified Substitute Teachers 5,481Social Security 28,392Pensions 42,436Medical Insurance 59,139Dental Insurance 4,844Unemployment Compensation 701Employer Medicare 6,644Instructional Supplies and Materials 12,000

Total Vocational Education Program 645,377

Support ServicesAttendance

Supervisor/Director $ 56,502Career Ladder Program 1,000Clerical Personnel 29,169Social Security 5,187Pensions 6,776Medical Insurance 7,426Dental Insurance 481Unemployment Compensation 103Employer Medicare 1,213Travel 1,102Other Contracted Services 21,494Other Supplies and Materials 102

Total Attendance 130,555

Health ServicesSupervisor/Director $ 38,182Medical Personnel 200,193Clerical Personnel 11,362Social Security 14,050

(Continued)

156

Exhibit K-9



General Purpose School Fund (Cont.)Support Services (Cont.)

Health Services (Cont.)Pensions $ 19,720Medical Insurance 37,694Dental Insurance 2,461Unemployment Compensation 456Employer Medicare 3,286Travel 798Other Contracted Services 42Drugs and Medical Supplies 1,361Other Supplies and Materials 28,813In Service/Staff Development 1,462

Total Health Services $ 359,880

Other Student SupportCareer Ladder Program $ 1,000Guidance Personnel 284,477Other Salaries and Wages 25,000Social Security 17,634Pensions 28,067Medical Insurance 42,316Dental Insurance 2,907Unemployment Compensation 354Employer Medicare 4,124Contracts with Government Agencies 80,404Evaluation and Testing 22,918

Total Other Student Support 509,201

Regular Instruction ProgramSupervisor/Director $ 129,225Career Ladder Program 4,000Career Ladder Extended Contracts 1,000Librarians 222,173Instructional Computer Personnel 105,758Educational Assistants 29,916Social Security 28,140Pensions 37,576Medical Insurance 55,236Dental Insurance 3,383Unemployment Compensation 794Employer Medicare 6,581Maintenance and Repair Services - Equipment 59,726Travel 777Food Supplies 11,787Library Books/Media 15,270Other Supplies and Materials 653

Total Regular Instruction Program 711,995

(Continued)

157

Exhibit K-9




Special Education ProgramSupervisor/Director $ 67,200Career Ladder Program 1,000Psychological Personnel 52,974Social Security 6,967Pensions 10,919Medical Insurance 16,025Dental Insurance 965Unemployment Compensation 121Employer Medicare 1,629Travel 1,490Other Contracted Services 213,495In Service/Staff Development 1,259

Total Special Education Program $ 374,044

Other ProgramsOn-behalf Payments to OPEB $ 107,901

Total Other Programs 107,901

Board of EducationBoard and Committee Members Fees $ 6,495Social Security 403Employer Medicare 94Audit Services 12,340Dues and Memberships 10,182Legal Services 4,300Travel 1,090Other Contracted Services 2,012Liability Insurance 37,500Trustee's Commission 84,819Workers' Compensation Insurance 153,469Refund to Applicant for Criminal Investigation 2,622Other Charges 14,602

Total Board of Education 329,928

Director of SchoolsCounty Official/Administrative Officer $ 81,458Career Ladder Program 1,000Social Security 4,863Pensions 7,454Medical Insurance 7,758Dental Insurance 404Unemployment Compensation 41Employer Medicare 1,137Communication 22,330Dues and Memberships 160Postal Charges 3,538

(Continued)

158

Exhibit K-9




Director of Schools (Cont.)Travel $ 1,608Other Charges 556

Total Director of Schools $ 132,307

Office of the PrincipalPrincipals $ 275,059Career Ladder Program 1,300Assistant Principals 339,155Secretary(ies) 289,214Social Security 51,980Pensions 70,518Medical Insurance 92,457Dental Insurance 4,465Unemployment Compensation 1,341Employer Medicare 12,363Communication 13,700Dues and Memberships 3,450Travel 1,600Other Contracted Services 7,249Administration Equipment 250

Total Office of the Principal 1,164,101

Fiscal ServicesAccountants/Bookkeepers $ 62,532Secretary(ies) 35,780Social Security 5,220Pensions 5,319Medical Insurance 19,379Unemployment Compensation 181Employer Medicare 1,221Data Processing Services 516Travel 1,349Other Contracted Services 26,483Data Processing Supplies 246Office Supplies 2,162Other Charges 512

Total Fiscal Services 160,900

Operation of PlantCustodial Personnel $ 315,008Other Salaries and Wages 3,510Social Security 18,559Pensions 15,538Medical Insurance 43,853Unemployment Compensation 1,342Employer Medicare 4,340

(Continued)

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Exhibit K-9




Operation of Plant (Cont.)Permits $ 2,275Other Contracted Services 3,585Custodial Supplies 44,874Electricity 458,606Natural Gas 76,784Uniforms 4,059Water and Sewer 34,968Other Supplies and Materials 27,053Boiler Insurance 7,300Building and Contents Insurance 93,030Plant Operation Equipment 517

Total Operation of Plant $ 1,155,201

Maintenance of PlantSupervisor/Director $ 34,597Maintenance Personnel 86,053Other Salaries and Wages 4,552Social Security 7,286Pensions 6,649Medical Insurance 18,570Unemployment Compensation 262Employer Medicare 1,704Pest Control 3,300Travel 1,137Other Contracted Services 11,046Other Supplies and Materials 101,328Maintenance Equipment 3,567

Total Maintenance of Plant 280,051

TransportationSupervisor/Director $ 36,960Mechanic(s) 56,355Bus Drivers 427,241Other Salaries and Wages 85,588Social Security 35,283Pensions 32,292Medical Insurance 43,236Unemployment Compensation 2,224Employer Medicare 8,253Contracts with Other School Systems 3,000Contracts with Parents 1,530Maintenance and Repair Services - Vehicles 195Travel 408Other Contracted Services 24,762Diesel Fuel 83,156Equipment and Machinery Parts 400

(Continued)

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Exhibit K-9




Transportation (Cont.)Food Supplies $ 144Garage Supplies 375Gasoline 9,982Lubricants 3,762Tires and Tubes 19,991Uniforms 7,070Vehicle Parts 52,368Other Supplies and Materials 11,904Vehicle and Equipment Insurance 62,000Other Charges 1,992Transportation Equipment 99,700

Total Transportation $ 1,110,171

Operation of Non-Instructional ServicesCommunity Services

Teachers $ 126,904Social Security 7,768Pensions 11,168Unemployment Compensation 74Employer Medicare 1,817Food Supplies 10Instructional Supplies and Materials 3,981

Total Community Services 151,722

Early Childhood EducationTeachers $ 157,187Clerical Personnel 2,629Educational Assistants 98,055Certified Substitute Teachers 1,842Non-certified Substitute Teachers 4,118Social Security 15,214Pensions 19,750Medical Insurance 30,835Dental Insurance 1,938Unemployment Compensation 662Employer Medicare 3,574Communication 1,642Travel 1,478Other Contracted Services 5,706Food Supplies 2,824Instructional Supplies and Materials 15,772Other Supplies and Materials 5,522In Service/Staff Development 197

Total Early Childhood Education 368,945

(Continued)

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Exhibit K-9



General Purpose School Fund (Cont.)Capital Outlay

Regular Capital OutlayBuilding Improvements $ 36,744Other Capital Outlay 225,682

Total Regular Capital Outlay $ 262,426

Principal on DebtEducation

Debt Service Contribution to Primary Government $ 189,172Total Education 189,172

Interest on DebtEducation

Debt Service Contribution to Primary Government $ 51,375Total Education 51,375

Total General Purpose School Fund $ 19,721,790

School Federal Projects FundInstruction

Regular Instruction ProgramTeachers $ 490,108Educational Assistants 57,090Other Salaries and Wages 38,141Certified Substitute Teachers 630Non-certified Substitute Teachers 2,291Social Security 32,864Pensions 50,540Medical Insurance 95,178Dental Insurance 5,292Unemployment Compensation 949Employer Medicare 7,695Instructional Supplies and Materials 79,749Regular Instruction Equipment 9,450

Total Regular Instruction Program $ 869,977

Special Education ProgramTeachers $ 80,460Educational Assistants 287,552Other Salaries and Wages 9,844Certified Substitute Teachers 1,040Non-certified Substitute Teachers 8,183Social Security 21,203Pensions 22,662Medical Insurance 56,594Dental Insurance 969Unemployment Compensation 1,460Employer Medicare 5,141

(Continued)

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Exhibit K-9



School Federal Projects Fund (Cont.)Instruction (Cont.)

Special Education Program (Cont.)Instructional Supplies and Materials $ 52,734Other Supplies and Materials 7,384Special Education Equipment 20,246


Vocational Education ProgramInstructional Supplies and Materials $ 7,193Vocational Instruction Equipment 36,999

Total Vocational Education Program 44,192

Support ServicesOther Student Support

Travel $ 4,696In Service/Staff Development 3,600Other Charges 14,843

Total Other Student Support 23,139

Regular Instruction ProgramSupervisor/Director $ 70,712Other Salaries and Wages 5,065Certified Substitute Teachers 1,612In-service Training 975Non-certified Substitute Teachers 6,902Social Security 4,863Pensions 6,850Medical Insurance 8,223Dental Insurance 519Unemployment Compensation 94Employer Medicare 1,158Maintenance and Repair Services - Equipment 7,772Travel 415Other Supplies and Materials 8,470In Service/Staff Development 97,081

Total Regular Instruction Program 220,711

Special Education ProgramPsychological Personnel $ 43,002Secretary(ies) 35,280Other Salaries and Wages 19,919Social Security 5,777Pensions 7,579Medical Insurance 12,127Unemployment Compensation 181Employer Medicare 1,351Travel 39Other Contracted Services 90,000

(Continued)

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Exhibit K-9



School Federal Projects Fund (Cont.)Support Services (Cont.)

Special Education Program (Cont.)Other Supplies and Materials $ 11,897In Service/Staff Development 34,174Other Charges 599


Vocational Education ProgramTravel $ 664

Total Vocational Education Program 664

TransportationContracts with Parents $ 300

Total Transportation 300

Operation of Non-Instructional ServicesCommunity Services

Supervisor/Director $ 24,000Teachers 132,644Other Salaries and Wages 26,100Non-certified Substitute Teachers 522Social Security 9,874Pensions 12,764Unemployment Compensation 295Employer Medicare 2,657Travel 1,063Food Supplies 1,304Instructional Supplies and Materials 12,900In Service/Staff Development 4,122

Total Community Services 228,245

Total School Federal Projects Fund $ 2,224,625

Central Cafeteria FundOperation of Non-Instructional Services

Food ServiceSupervisor/Director $ 46,248Accountants/Bookkeepers 35,530Cafeteria Personnel 452,838Social Security 29,269Pensions 25,918Medical Insurance 89,146Unemployment Compensation 2,109Employer Medicare 6,989Communication 2,432Maintenance and Repair Services - Buildings 1,672Maintenance and Repair Services - Equipment 14,228Travel 1,533

(Continued)

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Exhibit K-9



Central Cafeteria Fund (Cont.)Operation of Non-Instructional Services (Cont.)

Food Service (Cont.)Other Contracted Services $ 4,920Food Supplies 693,984USDA - Commodities 94,820Other Supplies and Materials 64,525In Service/Staff Development 6,414Other Charges 6,486Food Service Equipment 27,904

Total Food Service $ 1,606,965

Total Central Cafeteria Fund $ 1,606,965

Education Capital Projects FundCapital Projects

Education Capital ProjectsArchitects $ 28,672Building Construction 61,920Other Capital Outlay 201,738

Total Education Capital Projects $ 292,330

Total Education Capital Projects Fund 292,330

Total Governmental Funds - DeKalb County School Department $ 23,845,710

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Exhibit K-10DeKalb County, TennesseeSchedule of Detailed Receipts, Disbursements,

and Changes in Cash Balance - City Agency FundFor the Year Ended June 30, 2016

Cities - Sales Tax

Fund

Cash ReceiptsLocal Option Sales Tax $ 1,077,407

Cash DisbursementsRemittance of Revenues Collected $ 1,066,635Trustee's Commission 10,772

Total Cash Disbursements $ 1,077,407

Excess of Cash Receipts Over (Under) Cash Disbursements $ 0

Cash Balance, July 1, 2015 0

Cash Balance, June 30, 2016 $ 0

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SINGLE AUDIT SECTION

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SUITE 1500 JAMES K. POLK STATE OFFICE BUILDING


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

Independent Auditor's Report

DeKalb County Mayor and Board of County Commissioners DeKalb 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 business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of DeKalb County, Tennessee, as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise DeKalb County's basic financial statements, and have issued our report thereon dated October 31, 2016. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered DeKalb 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 DeKalb County's internal control. Accordingly, we do not express an opinion on the effectiveness of DeKalb County's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

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Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. We did identify certain deficiencies in internal control, described in the accompanying Schedule of Findings and Questioned Costs that we consider to be significant deficiencies: 2016-001 and 2016-002. Compliance and Other Matters As part of obtaining reasonable assurance about whether DeKalb 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 an instance of noncompliance or other matter that is required to be reported under Government Auditing Standards and is described in the accompanying Schedule of Findings and Questioned Costs as item: 2016-003. DeKalb County's Responses to Findings DeKalb County's responses to the findings identified in our audit are described in the accompanying Schedule of Findings and Questioned Costs. DeKalb 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 DeKalb County’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Very truly yours,

Justin P. Wilson Comptroller of the Treasury Nashville, Tennessee October 31, 2016 JPW/kp

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SUITE 1500 JAMES K. POLK STATE OFFICE BUILDING


Independent Auditor’s Report on Compliance for Each Major Federal Program;

Report on Internal Control Over Compliance; and Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance

DeKalb County Mayor and Board of County Commissioners DeKalb County, Tennessee To the County Mayor and Board of County Commissioners: Report on Compliance for Each Major Federal Program We have audited DeKalb 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 DeKalb County's major federal programs for the year ended June 30, 2016. DeKalb 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 DeKalb County's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether

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noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about DeKalb 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 DeKalb County's compliance. Opinion on Each Major Federal Program In our opinion, DeKalb County complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2016. Report on Internal Control Over Compliance Management of DeKalb 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 DeKalb 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 DeKalb 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 business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of DeKalb County, Tennessee, as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise DeKalb County’s basic financial statements. We issued our report thereon dated October 31, 2016, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Schedule of Expenditures of Federal Awards is fairly stated in all material respects in relation to the basic financial statements as a whole. Very truly yours, Justin P. Wilson Comptroller of the Treasury Nashville, Tennessee October 31, 2016 JPW/kp

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DeKalb County, TennesseeSchedule of Expenditures of Federal Awards and State Grants (1) (2)For the Year Ended June 30, 2016

Federal Passed-throughFederal/Pass-through Agency/State CFDA Entity IdentifyingGrantor Program Title Number Number Expenditures

U.S. Department of Agriculture:Passed-through State Department of Education:

Child Nutrition Cluster:School Breakfast Program 10.553 N/A $ 319,926National School Lunch Program 10.555 N/A 1,030,471 (4)

Passed-through State Department of Agriculture:National School Lunch Program (Commodities - Noncash Assistance) 10.555 N/A 94,820 (4)

Passed-through State Department of Human Services:Child Nutrition Cluster:

Summer Food Service Program for Children 10.559 N/A 9,851Total U.S. Department of Agriculture $ 1,455,068

Institute of Museum and Library Services:Passed-through Tennessee Secretary of State:

Grants to States 45.310 (3) $ 1,706

U.S. Department of Education:Direct Program:

Impact Aid 84.041 N/A $ 173,435Passed-through State Department of Education:

Title I Grants to Local Educational Agencies 84.010 N/A 911,091Special Education Cluster:

Special Education - Grants to States 84.027 N/A 778,948Special Education - Preschool Grants 84.173 N/A 58,748

Career and Technical Education - Basic Grants to States 84.048 N/A 53,152Twenty-first Century Community Learning Centers 84.287 (3) 230,500Rural Education 84.358 (3) 53,371English Language Acquisition State Grants 84.365 (3) 13,413Improving Teacher Quality State Grants 84.367 (3) 127,432

Total U.S. Department of Education $ 2,400,090

U.S. Department of Homeland Security:Direct Program:

Assistance to Firefighters Grant 97.044 (3) $ 146,200Passed-through Tennessee Department of Military:

Disaster Grants - Public Assistance (Presidentially Declared Disasters) 97.036 (3) 16,707Hazard Mitigation Grant 97.039 (3) 167,824

Total U.S. Department of Homeland Security 330,731

Total Expenditures of Federal Awards $ 4,187,595

(Continued)

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DeKalb County, TennesseeSchedule of Expenditures of Federal Awards and State Grants (1) (Cont.)

FederalFederal/Pass-through Agency/State CFDAGrantor Program Title Number Contract Number Expenditures

State GrantsArts Build Communities (ABC) Grant Program - State Arts Commission N/A (3) $ 1,779Farmers Market Promotion Retail Grant - State Department of Agriculture N/A (3) 1,000Free Access to Computer Training - Tennessee Secretary of State N/A (3) 1,250Rural Local Health Services - State Department of Health N/A (3) 81,957ThreeStar Grant Program- State Department of Economic and Community Development N/A (3) 9,899Litter Program - State Department of Transportation N/A (3) 41,912Adult Drug Court - State Department of Mental Health and Substance

Abuse Services N/A (3) 63,236Juvenile Drug Court - State Department of Mental Health and Substance

Abuse Services N/A (3) 45,829Youth Services Program - State Commission on Children and Youth N/A (3) 18,000Early Childhood Education (Pre-K) - State Department of Education N/A (3) 517,019Lottery Education After School Programs - State Department of Education N/A (3) 229,709Coordinated School Health - State Department of Education N/A (3) 105,773ConnectTenn (Internet Connectivity) - State Department of Education N/A (3) 7,626Family Resource Center - State Department of Education N/A (3) 13,084Safe Schools Act - State Department of Education N/A (3) 16,080Aging Program - Upper Cumberland Development District N/A (3) 13,769

Total State Grants $ 1,167,922

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) DeKalb County elected not to use the 10% de minimus cost rate permitted in the Uniform Guidance.(3) Information not available.(4) Total for CFDA No. 10.555 is $1,125,291.

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DeKalb County, Tennessee Summary Schedule of Prior-year Findings For the Year Ended June 30, 2016

Government Auditing Standards require auditors to report the status of uncorrected findings from prior audits. In addition, OMB’s Uniform Guidance requires auditees to report the status of all prior-year findings whether corrected or uncorrected. Presented below are financial statement findings along with their current status from the Annual Financial Report for DeKalb County, Tennessee, for the year ended June 30, 2016.

Prior-year Financial Statement Findings

Fiscal Page Finding CFDAYear Number Number Number

OFFICE OF COUNTY MAYOR

2015 186 2015-001

OFFICE OF CIRCUIT, GENERAL SESSIONS, AND JUVENILE COURTS CLERK

2015 186 2015-002 N/A Corrected

OFFICES OF CIRCUIT, GENERAL SESSIONS, AND JUVENILE COURTS CLERK AND REGISTER OF DEEDS

2015 187 2015-003 N/A Corrected

OFFICES OF ROAD SUPERVISOR, TRUSTEE, REGISTER OF DEEDS, AND SHERIFF

2015 187 2015-004 N/A Not Corrected - See Explanation on Corrective Action Plan

Duties were not segregated adequately in the Offices of Road Supervisor, Trustee, Register of Deeds, and Sheriff

Title of Finding Current Status

N/A Not Corrected - See Explanation on Corrective Action Plan

The Solid Waste Disposal Fund had a deficit in unrestricted net position

Execution docket trial balances for Circuit and General Sessions Courts did not reconcile with general ledger accounts

Multiple employees operated from the same cash drawer in the Offices of Circuit, General Sessions and Juvenile Courts Clerk and the Register of Deeds

Prior-year Federal Award Findings There were no prior-year federal award findings to report.

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Financial Statements:

1. Our report on the financial statements of DeKalb County is unmodified.

2. Internal Control Over Financial Reporting:

* Material weakness identified? NO

* Significant deficiency identified? YES

3. Noncompliance material to the financial statements noted? NO

Federal Awards:

4. Internal Control Over Major Federal Programs:

* Material weakness identified? NO

* Significant deficiency identified? NONE REPORTED

5. Type of report auditor issued on compliance for major programs: UNMODIFIED

6. Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? NO

7. Identification of Major Federal Programs:

* CFDA Number: 10.553, 10.555, and 10.559 Nutrition Cluster: School Breakfast Program, National School Lunch Program, and Summer Food ServiceProgram for Children

* CFDA Number: 84.027 and 84.173 Special Education Cluster: SpecialEducation - Grants to States and Special Education - Preschool Grants

8. Dollar threshold used to distinguish between Type A and Type B Programs: $750,000

9. Auditee qualified as low-risk auditee? NO

DEKALB COUNTY, TENNESSEE

SCHEDULE OF FINDINGS AND QUESTIONED COSTS


PART I, SUMMARY OF AUDITOR'S RESULTS

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PART II, FINDINGS RELATING TO THE FINANCIAL STATEMENTS Findings and recommendations, as a result of our audit of the financial statements of DeKalb County, Tennessee, 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 for which they were received. The county mayor, road supervisor, trustee, register of deeds, and sheriff provided corrective action plans, which are paraphrased in the Management’s Corrective Action Plan section of this report. The assessor of property did not provide a response and/or corrective action plan for inclusion in 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 2016-001 THE SOLID WASTE DISPOSAL FUND HAD A DEFICIT

IN UNRESTRICTED NET POSITION AT JUNE 30, 2016 (Internal Control – Significant Deficiency Under Government Auditing Standards)

The Solid Waste Disposal Fund had a deficit of $3,280,153 in unrestricted net position at June 30, 2016. This deficit resulted from the recognition of a liability totaling $6,662,860 in the financial statements for costs associated with closing the county’s landfill and monitoring the landfill for 30 years after its closure. Generally accepted accounting principles require that such costs be reflected in the financial statements. This deficiency exists due to the failure of management to correct the finding noted in the prior-year audit report. RECOMMENDATION County officials should develop and implement a plan that would fund the deficit in unrestricted net position. MANAGEMENT’S RESPONSE – COUNTY MAYOR We concur. The Solid Waste Disposal Fund is a proprietary fund that has a liability for the closure cost for the life of the landfill. The county would have to put $3,700,000 in the budget to liquidate this negative asset. The cost benefit is not there, thus there is no benefit in clearing this finding. If more funds are needed than budgeted for closure of the landfill, then money will probably be borrowed and paid back over a period of time.

____________________________

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OFFICES OF ROAD SUPERVISOR, TRUSTEE, REGISTER OF DEEDS, AND SHERIFF FINDING 2016-002 DUTIES WERE NOT SEGREGATED ADEQUATELY

(Internal Control – Significant Deficiency Under Government Auditing Standards)

Duties were not segregated adequately among officials and employees in the Offices of Road Supervisor, Trustee, Register of Deeds, and Sheriff. Officials and employees responsible for maintaining the accounting records in these offices were also involved in receipting, depositing, and/or disbursing funds. Sound business practices dictate that management is responsible for designing internal controls to give reasonable assurance of the reliability of financial reporting and of the effectiveness and efficiency of operations. This lack of segregation of duties is the result of management’s decisions based on the availability of financial resources and is a significant deficiency in internal controls that increases the risk of unauthorized transactions. Also, this deficiency is the result of management’s failure to correct the finding noted in the prior-year audit report. RECOMMENDATION Officials should segregate duties to the extent possible using available resources. MANAGEMENT’S RESPONSE – ROAD SUPERVISOR We concur with the finding. The Highway Department is under new management and our goal is to comply with the segregation of duties. We have revised and enforced new office policies as per audit findings on all duties as of October 2016. MANAGEMENT’S RESPONSE – TRUSTEE We concur with the finding and have implemented corrective actions including organizational charts and internal control procedures. MANAGEMENT’S RESPONSE – REGISTER OF DEEDS We concur with the finding and have segregated duties for the 2016-17 fiscal year. MANAGEMENT’S RESPONSE – SHERIFF We concur with the finding and have implemented a policy to segregate duties for the 2016-17 fiscal year.

____________________________

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OFFICE OF ASSESSOR OF PROPERTY FINDING 2016-002 THE ASSESSOR OF PROPERTY HAD NOT FORMALLY

DOCUMENTED INTERNAL CONTROLS (Noncompliance Under Government Auditing Standards)

Section 9-18-102(a), Tennessee Code Annotated (TCA), requires each county government to establish and maintain internal controls to provide reasonable assurance for compliance with applicable laws, the safeguarding of assets, and proper accountability for the preparation of accurate and reliable financial records and reports. These provisions became effective for the fiscal year ended June 30, 2016. The assessor of property had not formally documented internal controls for office operations to verify compliance with the above-noted statute. Formal documentation could be in the form of printed or digital policies and procedures for the maintenance of controls, including the segregation of employee duties. Failure to implement and maintain internal controls could put public assets at risk of loss, misuse, or abuse. RECOMMENDATION The assessor of property should formally document and maintain internal controls for office operations as required by Section 9-18-102(a), TCA.

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PART III, FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS There were no findings and questioned costs related to federal awards for the year ended June 30, 2016.

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DeKalb County, Tennessee Management’s Corrective Action Plan

For the Year Ended June 30, 2016 We reviewed the financial statement and federal award findings and recommendations with management to provide an opportunity for their response as required by the auditee requirements within Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Management’s corrective action plans for all financial statement findings and federal award findings are presented below:

Corrective Action - Financial Statement Findings OFFICE OF COUNTY MAYOR FINDING 2016-001 THE SOLID WASTE DISPOSAL FUND HAD A DEFICIT

IN UNRESTRICTED NET POSITION AT JUNE 30, 2016 Response and Corrective Action Plan Prepared by: Tim Stribling, County

Mayor, DeKalb County, Tennessee

Person Responsible for Implementing the Corrective Action: Same Anticipated Completion Date of Corrective Action: Unknown Repeat Finding: Yes Reason Why Corrective Action was Not Taken – PY Management decision – due

to the county’s belief that funding the liability on a basis other than pay-as-you-go would cause an undue burden on the taxpayers

Planned Corrective Action: The county will continue to fund this liability on a pay-as-you-go basis while providing revenues on an annual basis for monitoring postclosure costs. If more funds are needed than budgeted, the county anticipates using bonds or notes to close the landfill.

________________________________________ OFFICES OF ROAD SUPERVISOR, TRUSTEE, REGISTER OF DEEDS AND SHERIFF FINDING 2016-002 DUTIES WERE NOT SEGREGATED ADEQUATELY Response and Corrective Action Plan Prepared by: Wallace Agee, Road

Supervisor, Sean Driver, Trustee, Jeffery McMillen, Register of Deeds, and

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Patrick Ray, Sheriff DeKalb County, Tennessee

Person Responsible for Implementing the Corrective Action: Same Anticipated Completion Date of Corrective Action: Road Supervisor –

October 17, 2016 Trustee – July 1, 2016 Sheriff – July 1, 2016 Register of Deeds – July 1, 2016

Repeat Finding: Yes Reason Why Corrective Action was Not Taken – PY Management decision

Planned Corrective Action:

Road Supervisor: We have revised and enforced new office policies as per audit findings on all duties as of October 2016.

Trustee: We have prepared an organizational chart to segregate duties as a part of detailed internal controls and each employee has been made aware of the new controls and a chart is posted in our safe room as a reminder. We have been utilizing these new procedures since July 1, 2016.

Register of Deeds: A written plan for segregation of duties has been prepared and is being followed.

Sheriff: We have developed an internal control plan to better maintain accounting records for receipting, depositing, and/or disbursing funds in order to provide reasonable assurance of the reliability of financial reporting.

________________________________________

OFFICE OF ASSESSOR OF PROPERTY

FINDING 2016-003 THE ASSESSOR OF PROPERTY HAD NOT FORMALLY DOCUMENTED INTERNAL CONTROLS

Response and Corrective Action Plan Prepared by: N/A Person Responsible for Implementing the Corrective Action: Same Anticipated Completion Date of Corrective Action: N/A Repeat Finding: No Reason Why Corrective Action was Not Taken – PY N/A

Planned Corrective Action:

Management did not submit a corrective action plan.

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BEST PRACTICE

Accounting literature describes a best practice as a recommended policy, procedure, or technique that aids management in improving financial performance. Historically, a best practice has consistently shown superior results over conventional methods.

The Division of Local Government Audit strongly believes that the item noted below is a best practice that should be adopted by the governing body as a means of significantly improving accountability and the quality of services provided to the citizens of DeKalb County.

DEKALB COUNTY SHOULD ADOPT A CENTRAL SYSTEM OF ACCOUNTING, BUDGETING, AND PURCHASING

DeKalb 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. The Division of Local Government Audit strongly believes that the adoption of a central system of accounting, budgeting, and purchasing is a best practice that would significantly improve accountability and the quality of services provided to the citizens of DeKalb County. Therefore, 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

DEKALB COUNTY TENNESSEE - TN Comptrollercomptroller.tn.gov/repository/CA/2016/FY16Dekalb.pdfannual financial report. dekalb county, tennessee. f. or the . y. ear . e. nded . j. une