PERRY COUNTY TENNESSEE - TN Comptroller · Perry County management. recommendationsDetailed findings, , and management’s responses are included in the Single Audit section of this

ANNUAL FINANCIAL REPORT

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

DIVISION OF LOCAL GOVERNMENT AUDIT

ANNUAL FINANCIAL REPORT

PERRY COUNTY, TENNESSEE

FOR THE YEAR ENDED JUNE 30, 2018

COMPTROLLER OF THE TREASURY JUSTIN P. WILSON

DIVISION OF LOCAL GOVERNMENT AUDIT JAMES R. ARNETTE

Director

JEFF BAILEY, CPA, CGFM, CFE Audit Manager DONYA WADE, CFE CHRIS HUGHES RHONDA DAVIS, CFE TWYLA PRATT Senior Auditor State Auditors

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

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Exhibit Page(s)

Summary of Audit Findings 6

INTRODUCTORY SECTION 7

Perry 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 19-22Reconciliation of the Balance Sheet of Governmental Funds

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

Fund Balances C-3 24-27Reconciliation of the Statement of Revenues, Expenditures,

and Changes in Fund Balances of Governmental Fundsto the Statement of Activities C-4 28

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

General Fund C-5 29-30Solid Waste/Sanitation Fund C-6 31Ambulance Service Fund C-7 32Highway/Public Works Fund C-8 33

Fiduciary Funds:Statement of Fiduciary Assets and Liabilities D 34

Index and Notes to the Financial Statements 35-97REQUIRED SUPPLEMENTARY INFORMATION: 98

Schedule of Changes in Net Pension Liability (Asset) and Related Ratios Based on Participation in the Public Employee Pension Planof TCRS – Primary Government E-1 99

Schedule of Contributions Based on Participation in the Public EmployeePension Plan of TCRS – Primary Government E-2 100

Schedule of Contributions Based on Participation in the TeacherRetirement Plan of TCRS – Discretely Presented PerryCounty School Department E-3 101

Schedule of Contributions Based on Participation in the TeacherLegacy Pension Plan of TCRS – Discretely Presented PerryCounty School Department E-4 102

PERRY COUNTY, TENNESSEETABLE OF CONTENTS

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Exhibit Page(s)

Schedule of Proportionate Share of the Net Pension Liability (Asset) in theTeacher Retirement Plan of TCRS – Discretely PresentedPerry County School Department E-5 103

Schedule of Proportionate Share of the Net Pension Liability (Asset) in theTeacher Legacy Pension Plan of TCRS – Discretely PresentedPerry County School Department E-6 104

Schedule of Changes in the Total OPEB Liability and Related Ratios – Local Government Plans – Primary Government E-7 105

Schedule of Changes in the Total OPEB Liability and Related Ratios – Local Education Plan – Discretely Presented Perry CountySchool Department E-8 106

Notes to the Required Supplementary Information 107COMBINING AND INDIVIDUAL FUND FINANCIAL

STATEMENTS AND SCHEDULES: 108Nonmajor Governmental Funds: 109-110

Combining Balance Sheet F-1 111Combining Statement of Revenues, Expenditures, and Changes

in Fund Balances F-2 112-113Schedules of Revenues, Expenditures, and Changes in Fund

Balances – Actual and Budget:Courthouse and Jail Maintenance Fund F-3 114Special Purpose Fund F-4 115Drug Control Fund F-5 116

Major Governmental Fund: 117Schedule of Revenues, Expenditures, and Changes in Fund

Balance – Actual and Budget:General Debt Service Fund G 118

Fiduciary Funds: 119Combining Statement of Fiduciary Assets and Liabilities H-1 120Combining Statement of Changes in Assets and Liabilities –

All Agency Funds H-2 121Component Unit:

Discretely Presented Perry County School Department: 122Statement of Activities I-1 123Balance Sheet – Governmental Funds I-2 124Reconciliation of the Balance Sheet of Governmental Funds

to the Statement of Net Position I-3 125Statement of Revenues, Expenditures, and Changes in Fund

Balances – Governmental Funds I-4 126Reconciliation of the Statement of Revenues, Expenditures,

and Changes in Fund Balances of Governmental Fundsto the Statement of Activities I-5 127

Combining Balance Sheet – Nonmajor Governmental Funds I-6 128Combining Statement of Revenues, Expenditures, and

Changes in Fund Balances – Nonmajor Governmental Funds I-7 129Schedules of Revenues, Expenditures, and Changes in Fund

Balances – Actual and Budget:General Purpose School Fund I-8 130-131School Federal Projects Fund I-9 132Central Cafeteria Fund I-10 133

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Exhibit Page(s)

Miscellaneous Schedules: 134Schedule of Changes in Long-term Bonds, Notes, and Capital Leases J-1 135Schedule of Long-term Debt Requirements by Year J-2 136Schedule of Notes Receivable J-3 137Schedule of Transfers J-4 138Schedule of Salaries and Official Bonds of Principal Officials –

Primary Government and Discretely Presented Perry CountySchool Department J-5 139

Schedule of Detailed Revenues – All Governmental Fund Types J-6 140-151Schedule of Detailed Revenues – All Governmental Fund Types –

Discretely Presented Perry County School Department J-7 152-154Schedule of Detailed Expenditures – All Governmental Fund Types J-8 155-173Schedule of Detailed Expenditures – All Governmental Fund Types –

Discretely Presented Perry County School Department J-9 174-182Schedule of Detailed Receipts, Disbursements, and Changes in

Cash Balance – City Agency Fund J-10 183

SINGLE AUDIT SECTION 184

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 185-186

Auditor's Report on Compliance for Each Major Federal Program; Reporton Internal Control Over Compliance; and Report on the Scheduleof Expenditures of Federal Awards Required by Uniform Guidance 187-189

Schedule of Expenditures of Federal Awards and State Grants 190-191Summary Schedule of Prior-year Findings 192Schedule of Findings and Questioned Costs 193-200Management's Corrective Action Plan 201-207Best Practice 208

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Summary of Audit Findings

Annual Financial Report Perry County, Tennessee

For the Year Ended June 30, 2018

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

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

Findings The following are summaries of the audit findings: OFFICE OF COUNTY MAYOR ♦ Material audit adjustments were required for proper financial statement presentation. ♦ The ambulance service had accounting deficiencies. ♦ Expenditures exceeded appropriations. ♦ An investigative report dated October 30, 2018, identified deficiencies at the Perry

County Rescue Squad and the Perry County Emergency Medical Services. OFFICE OF DIRECTOR OF SCHOOLS ♦ Competitive bids were not solicited for the purchase of HVAC units and custodial sup-

plies. OFFICE OF TRUSTEE ♦ The office did not implement adequate controls to protect its information resources. ♦ Multiple employees operated from the same cash drawer. ♦ Duties were not segregated adequately.

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INTRODUCTORY SECTION

7

Perry County OfficialsJune 30, 2018

Officials

Terry Richardson, County MayorRobert Dedrick, Superintendent of HighwaysEric Lomax, Director of SchoolsGeorge Duncan, TrusteeGarry Horner, Assessor of PropertyGlenda Leegan, County ClerkPeggy Smotherman, Circuit and General Sessions Courts ClerkCharlene Duplessis, Clerk and MasterPatricia Bell, Register of DeedsNick Weems, Sheriff

Board of County Commissioners

Terry Richardson, County Mayor, Chairman Rodger BarberDavid Trull Jonathan HickersonBen Carroll Chris O'GuinBlake Skelton J.B. TrullEddie Ledbetter Johnny WardMichael Bell Jeff GravesMary Ann Qualls

Board of Education

Martha Sharp, Chairwoman Janet CarrollDon Barnette Rodd SpaidPhillip Tatum Jackie Duncan

Audit Committee

Jonathan Hickerson, ChairmanMary Ann QuallsJessie Ruth Tiller

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FINANCIAL SECTION

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Independent Auditor's Report

Perry County Mayor and Board of County Commissioners Perry County, Tennessee To the County Mayor and Board of County Commissioners: Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Perry County, Tennessee, as of and for the year ended June 30, 2018, and the related notes to the financial statements, which collectively comprise the county’s basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the discretely presented Industrial Development Board of Perry County. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for the Industrial Development Board of Perry County, is based solely on the report of the other auditors. We were unable to determine the Industrial Development Board of Perry County’s respective percentage of the assets, net position, and revenues of the aggregate discretely presented component units because the Perry County Emergency Communications District, a component unit requiring discrete presentation, was not included in the county’s financial statements. 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, based on our audit and the report of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Perry County, Tennessee, as of June 30, 2018, and the respective changes in financial position and the respective budgetary comparison for the General, Solid Waste/Sanitation, Ambulance Service, 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., Perry County has adopted the provisions of Governmental Accounting Standards Board (GASB) Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. Our opinion is not modified with respect to this matter. Emphasis of Matter We draw attention to Note I.D.8. to the financial statements, which describes restatements reducing the beginning Governmental Activities net position by $46,305 and $449,605 for the primary government and discretely presented school department, respectively. These restatements were necessary because of the transitional requirements of GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. Our opinion is not modified with respect to 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

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an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information. Accounting principles generally accepted in the United States of America require that the schedule of changes in the county’s net pension liability (asset) and related ratios, schedules of county and school contributions, schedule of school’s proportionate share of the net pension liability (asset), and schedules of changes in the county and school’s total OPEB liability and related ratios – other postemployment benefit plans on pages 99-107 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 Perry County’s basic financial statements. The combining and individual nonmajor fund financial statements, budgetary comparison schedules of nonmajor governmental funds and the General Debt Service Fund, combining and individual fund financial statements of the Perry County School Department (a discretely presented component unit), miscellaneous schedules and the other information such as the introductory section and management’s corrective action plans are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedule of expenditures of federal awards is also presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and is not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements, budgetary comparison schedules of nonmajor governmental funds and the General Debt Service Fund , combining and individual fund financial statements of the Perry County School Department (a discretely presented component unit), schedule of expenditures of federal awards, and miscellaneous schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements, budgetary comparison schedules of nonmajor governmental funds and the General Debt Service Fund, combining and individual fund financial statements of the Perry County School Department

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(a discretely presented component unit), schedule of expenditures of federal awards, and miscellaneous schedules are fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory section and management’s corrective action plans have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 4, 2018, on our consideration of Perry 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 the effectiveness of Perry County’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Perry County’s internal control over financial reporting and compliance. Very truly yours,

Justin P. Wilson Comptroller of the Treasury Nashville, Tennessee December 4, 2018 JPW/yu

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BASIC FINANCIAL STATEMENTS

14

Exhibit A

Perry County, TennesseeStatement of Net PositionJune 30, 2018

Perry Industrial County Development School Board of

Department Perry County

ASSETS

Cash $ 0 $ 106,545 $ 51,859Equity in Pooled Cash and Investments 7,844,731 256,629 0Accounts Receivable 1,004,717 943 0Allowance for Uncollectibles (731,271) 0 0Due from Other Governments 787,652 434,528 0Due from Component Units 343,349 0 0Property Taxes Receivable 3,063,350 1,541,072 0Allowance for Uncollectible Property Taxes (78,287) (39,384) 0Net Pension Asset - Agent Plan 892,371 529,508 0Net Pension Asset - Teacher Retirement Plan 0 12,296 0Net Pension Asset - Teacher Legacy Pension Plan 0 45,010 0Note Receivable - Current 11,000 0 0Note Receivable - Long-term 9,992 0 0Capital Assets: Assets Not Depreciated: Land 298,266 138,512 127,737 Construction in Progress 141,630 0 0 Assets Net of Accumulated Depreciation: Buildings and Improvements 3,922,195 5,145,751 2,421,324 Infrastructure 3,818,739 0 0 Other Capital Assets 1,971,533 362,110 0Total Assets $ 23,299,967 $ 8,533,520 $ 2,600,920

DEFERRED OUTFLOWS OF RESOURCES

Pension Changes in Experience $ 0 $ 27,567 $ 0Pension Changes in Assumptions 186,951 493,232 0Pension Changes in Investment Earnings 0 6,833 0Pension Changes in Proportionate Share of NPL 0 110,184 0Pension Contributions After Measurement Date 327,188 660,119 0OPEB Changes in Benefits Paid After Measurement Date 581 43,067 0Total Deferred Outflows of Resources $ 514,720 $ 1,341,002 $ 0

LIABILITIES

Accounts Payable $ 191,793 $ 0 $ 0Accrued Interest Payable 1,299 0 0Payroll Deductions Payable 5,656 106,045 0Due to Primary Government 0 36,540 306,809Noncurrent Liabilities: Due Within One Year 170,703 11,164 588,834 Due in More Than One Year 497,674 918,398 0Total Liabilities $ 867,125 $ 1,072,147 $ 895,643

(Continued)

Component Units

GovernmentPrimary

GovernmentalActivities

15

Exhibit A

Perry County, TennesseeStatement of Net Position (Cont.)

Perry Industrial County Development School Board of

Department Perry County

DEFERRED INFLOWS OF RESOURCES

Deferred Current Property Taxes $ 2,875,794 $ 1,446,718 $ 0OPEB Changes in Assumptions 4,795 36,121 0Pension Changes in Investment Earnings 6,127 4,297 0Pension Changes in Experience 353,648 1,140,046 0Total Deferred Inflows of Resources $ 3,240,364 $ 2,627,182 $ 0

NET POSITION

Net Investment in Capital Assets $ 10,152,363 $ 5,609,833 $ 1,653,418Restricted for: General Government 63,531 0 0 Administration of Justice 70,794 0 0 Public Safety 165,956 0 0 Social, Cultural, and Recreational 176,027 0 0 Highway/Public Works 5,785,342 0 0 Education 0 126,009 0 Pensions 892,371 586,814 0Unrestricted 2,400,814 (147,463) 51,859

Total Net Position $ 19,707,198 $ 6,175,193 $ 1,705,277

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

Activities

Component UnitsPrimary

GovernmentGovernmental

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Exhibit B

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

Operating Capital Perry Industrial Charges Grants Grants County Development

for and and School Board ofFunctions/Programs Expenses Services Contributions Contributions Department Perry County

Primary Government: Governmental Activities: General Government $ 1,053,704 $ 135,241 $ 251,684 $ 0 $ (666,779) $ 0 $ 0 Finance 432,097 238,135 0 0 (193,962) 0 0 Administration of Justice 433,704 159,321 12,791 0 (261,592) 0 0 Public Safety 2,467,653 622,357 40,880 0 (1,804,416) 0 0 Public Health and Welfare 1,820,067 1,277,250 41,496 0 (501,321) 0 0 Social, Cultural, and Recreational Services 281,010 2,176 39,760 0 (239,074) 0 0 Agriculture and Natural Resources 56,077 0 0 0 (56,077) 0 0 Highways/Public Works 1,778,259 8,264 1,981,744 168,964 380,713 0 0 Education 232,522 0 0 0 (232,522) 0 0 Interest on Long-term Debt 26,884 0 0 0 (26,884) 0 0

Total Primary Government $ 8,581,977 $ 2,442,744 $ 2,368,355 $ 168,964 $ (3,601,914) $ 0 $ 0

Component Units: Perry County School Department $ 11,052,210 $ 185,295 $ 1,760,758 $ 223,000 $ 0 $ (8,883,157) $ 0 Industrial Development Board of Perry County 125,696 90,555 0 0 0 0 (35,141)

Total Component Units $ 11,177,906 $ 275,850 $ 1,760,758 $ 223,000 $ 0 $ (8,883,157) $ (35,141)

(Continued)

Program Revenues Component UnitsNet (Expense) Revenue and Changes in Net Position

PrimaryGovernment

TotalGovernmental

Activities

17

Exhibit B

Perry County, TennesseeStatement of Activities (Cont.)

Operating Capital Industrial Charges Grants Grants Development

for and and Board ofFunctions/Programs Expenses Services Contributions Contributions Perry County

General Revenues: Taxes: Property Taxes Levied for General Purposes $ 2,889,704 $ 1,564,271 $ 0 Property Taxes Levied for Debt Service 217,389 0 0 Local Option Sales Tax 552,100 334,472 0 Mineral Severance Tax 79,231 0 0 Wholesale Beer Tax 40,367 0 0 Other Local Taxes 101,667 5,916 0 Grants and Contributions Not Restricted to Specific Programs 735,266 7,259,793 0 Unrestricted Investment Earnings 59,338 14,158 0 Miscellaneous 24,772 39,839 0Total General Revenues $ 4,699,834 $ 9,218,449 $ 0

Change in Net Position $ 1,097,920 $ 335,292 $ (35,141)Net Position, July 1, 2017 18,655,583 6,289,506 1,740,418Restatement - See Note I.D.8. (46,305) (449,605) 0

Net Position, June 30, 2018 $ 19,707,198 $ 6,175,193 $ 1,705,277


Program Revenues Component UnitsPrimaryNet (Expense) Revenue and Changes in Net Position

TotalGovernmental

Activities

PerryCountySchool

Department

Government

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Exhibit C-1

Perry County, TennesseeBalance SheetGovernmental FundsJune 30, 2018

Solid Highway / GeneralWaste / Ambulance Public Debt

General Sanitation Service Works Service

ASSETS

Equity in Pooled Cash and Investments $ 335,402 $ 181,110 $ 723,384 $ 5,303,177 $ 1,119,997Accounts Receivable 32,864 2,988 968,865 0 0Allowance for Uncollectibles 0 0 (731,271) 0 0Due from Other Governments 281,875 0 0 485,302 20,475Due from Component Units 0 0 0 0 306,809Property Taxes Receivable 2,612,304 451,046 0 0 0Allowance for Uncollectible Property Taxes (66,760) (11,527) 0 0 0Notes Receivable - Current 0 0 0 0 11,000Notes Receivable - Long-term 0 0 0 0 9,992

Total Assets $ 3,195,685 $ 623,617 $ 960,978 $ 5,788,479 $ 1,468,273

LIABILITIES

Accounts Payable $ 191,793 $ 0 $ 0 $ 0 $ 0Payroll Deductions Payable 2,103 0 416 2,402 0Due to State of Tennessee 0 0 0 735 0Total Liabilities $ 193,896 $ 0 $ 416 $ 3,137 $ 0


Deferred Current Property Taxes $ 2,452,364 $ 423,430 $ 0 $ 0 $ 0Deferred Delinquent Property Taxes 86,090 14,562 0 0 0Other Deferred/Unavailable Revenue 69,624 0 169,325 171,446 20,475Total Deferred Inflows of Resources $ 2,608,078 $ 437,992 $ 169,325 $ 171,446 $ 20,475

Major Funds

(Continued)

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Exhibit C-1

Perry County, TennesseeBalance SheetGovernmental Funds (Cont.)


General Sanitation Service Works ServiceFUND BALANCES

Restricted:Restricted for General Government $ 55,297 $ 0 $ 0 $ 0 $ 0Restricted for Administration of Justice 21,326 0 0 0 0Restricted for Public Safety 41,997 0 0 0 0Restricted for Social, Cultural, and Recreational Services 176,027 0 0 0 0Restricted for Highways/Public Works 0 0 0 5,613,896 0

Committed:Committed for General Government 6,660 0 0 0 0Committed for Public Health and Welfare 0 185,625 791,237 0 0Committed for Debt Service 0 0 0 0 1,447,798

Unassigned 92,404 0 0 0 0Total Fund Balances $ 393,711 $ 185,625 $ 791,237 $ 5,613,896 $ 1,447,798

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 3,195,685 $ 623,617 $ 960,978 $ 5,788,479 $ 1,468,273

(Continued)

Major Funds

20

Exhibit C-1


OtherGovern- Totalmental GovernmentalFunds Funds

ASSETS

Equity in Pooled Cash and Investments $ 181,661 $ 7,844,731Accounts Receivable 0 1,004,717Allowance for Uncollectibles 0 (731,271)Due from Other Governments 0 787,652Due from Component Units 0 306,809Property Taxes Receivable 0 3,063,350Allowance for Uncollectible Property Taxes 0 (78,287)Notes Receivable - Current 0 11,000Notes Receivable - Long-term 0 9,992

Total Assets $ 181,661 $ 12,218,693

LIABILITIES

Accounts Payable $ 0 $ 191,793Payroll Deductions Payable 0 4,921Due to State of Tennessee 0 735Total Liabilities $ 0 $ 197,449


Deferred Current Property Taxes $ 0 $ 2,875,794Deferred Delinquent Property Taxes 0 100,652Other Deferred/Unavailable Revenue 0 430,870Total Deferred Inflows of Resources $ 0 $ 3,407,316

Nonmajor Funds

(Continued)21

Exhibit C-1



FUND BALANCES

Restricted:Restricted for General Government $ 8,234 $ 63,531Restricted for Administration of Justice 49,468 70,794Restricted for Public Safety 123,959 165,956Restricted for Social, Cultural, and Recreational Services 0 176,027Restricted for Highways/Public Works 0 5,613,896

Committed:Committed for General Government 0 6,660Committed for Public Health and Welfare 0 976,862Committed for Debt Service 0 1,447,798

Unassigned 0 92,404Total Fund Balances $ 181,661 $ 8,613,928

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 181,661 $ 12,218,693


Nonmajor Funds

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Exhibit C-2

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

(Exhibit A) are different because:

Total fund balances - balance sheet - governmental funds (Exhibit C-1) $ 8,613,928

(1) Capital assets used in governmental activities are not financialresources and therefore are not reported in the governmental funds.

Add: land $ 298,266Add: construction in progress 141,630Add: buildings and improvements net of accumulated depreciation 3,922,195Add: infrastructure net of accumulated depreciation 3,818,739Add: other capital assets net of accumulated depreciation 1,971,533 10,152,363

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

Less: capital leases payable $ (36,540)Add: debt to be contributed by the School Department 36,540Less: accrued interest on capital leases (1,299)Less: compensated absences payable (154,005)Less: landfill postclosure care costs (368,380)Less: OPEB obligation (109,452) (633,136)

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

Add: deferred outflows of resources related to OPEB $ 581 Less: deferred inflows of resources related to OPEB (4,795) Add: deferred outflows of resources related to pensions 514,139 Less: deferred inflows of resources related to pensions (359,775) 150,150

(4) Net pension assets of the agent plan are not current financialresources and therefore are not reported in the governmental funds. 892,371

(5) Other long-term assets are not available to pay for current-periodexpenditures and therefore are deferred in the governmental funds. 531,522

Net position of governmental activities (Exhibit A) $ 19,707,198


Amounts reported for governmental activities in the statement of net position

23

Exhibit C-3

Perry County, TennesseeStatement of Revenues, Expenditures,

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



RevenuesLocal Taxes $ 2,868,770 $ 462,269 $ 0 $ 79,231 $ 511,044Licenses and Permits 2,544 0 0 0 0Fines, Forfeitures, and Penalties 52,919 0 0 0 0Charges for Current Services 39,949 64,910 1,027,759 0 0Other Local Revenues 249,072 7,103 0 24,715 38,197Fees Received From County Officials 378,539 0 0 0 0State of Tennessee 780,899 74,572 0 2,123,270 231,280Federal Government 221,159 0 0 0 0Other Governments and Citizens Groups 183,459 0 0 0 45,013

Total Revenues $ 4,777,310 $ 608,854 $ 1,027,759 $ 2,227,216 $ 825,534

ExpendituresCurrent:

General Government $ 922,505 $ 0 $ 0 $ 0 $ 0Finance 462,388 0 0 0 0Administration of Justice 443,413 0 0 0 0Public Safety 2,258,832 0 0 0 0Public Health and Welfare 53,275 585,865 950,969 0 0Social, Cultural, and Recreational Services 254,378 0 0 0 0Agriculture and Natural Resources 62,725 0 0 0 0Other Operations 248,913 187 0 0 0Highways 38,455 0 0 1,587,650 0

Debt Service:Principal on Debt 0 0 0 0 1,473,941Interest on Debt 0 0 0 0 33,753Other Debt Service 0 0 0 0 6,325

Major Funds

(Continued)

24

Exhibit C-3


and Changes in Fund BalancesGovernmental Funds (Cont.)



Expenditures (Cont.)Capital Projects $ 154,724 $ 0 $ 0 $ 0 $ 0Capital Projects - Donated 0 0 0 0 0

Total Expenditures $ 4,899,608 $ 586,052 $ 950,969 $ 1,587,650 $ 1,514,019

Excess (Deficiency) of RevenuesOver Expenditures $ (122,298) $ 22,802 $ 76,790 $ 639,566 $ (688,485)

Other Financing Sources (Uses)Notes Issued $ 0 $ 0 $ 0 $ 0 $ 0Insurance Recovery 4,625 0 0 0 0Transfers In 0 0 0 0 6,978Transfers Out 0 0 0 0 0

Total Other Financing Sources (Uses) $ 4,625 $ 0 $ 0 $ 0 $ 6,978

Net Change in Fund Balances $ (117,673) $ 22,802 $ 76,790 $ 639,566 $ (681,507)Fund Balance, July 1, 2017 511,384 162,823 714,447 4,974,330 2,129,305

Fund Balance, June 30, 2018 $ 393,711 $ 185,625 $ 791,237 $ 5,613,896 $ 1,447,798

(Continued)

Major Funds

25

Exhibit C-3




RevenuesLocal Taxes $ 26,547 $ 3,947,861Licenses and Permits 0 2,544Fines, Forfeitures, and Penalties 10,621 63,540Charges for Current Services 50 1,132,668Other Local Revenues 84,900 403,987Fees Received From County Officials 0 378,539State of Tennessee 17,805 3,227,826Federal Government 0 221,159Other Governments and Citizens Groups 0 228,472

Total Revenues $ 139,923 $ 9,606,596


General Government $ 7,459 $ 929,964Finance 0 462,388Administration of Justice 220 443,633Public Safety 244,852 2,503,684Public Health and Welfare 0 1,590,109Social, Cultural, and Recreational Services 0 254,378Agriculture and Natural Resources 0 62,725Other Operations 259 249,359Highways 0 1,626,105

Debt Service:Principal on Debt 0 1,473,941Interest on Debt 0 33,753Other Debt Service 500 6,825

Nonmajor Funds

(Continued)

26

Exhibit C-3




Expenditures (Cont.)Capital Projects $ 0 $ 154,724Capital Projects - Donated 232,522 232,522

Total Expenditures $ 485,812 $ 10,024,110

Excess (Deficiency) of RevenuesOver Expenditures $ (345,889) $ (417,514)

Other Financing Sources (Uses)Notes Issued $ 330,000 $ 330,000Insurance Recovery 0 4,625Transfers In 0 6,978Transfers Out (6,978) (6,978)

Total Other Financing Sources (Uses) $ 323,022 $ 334,625

Net Change in Fund Balances $ (22,867) $ (82,889)Fund Balance, July 1, 2017 204,528 8,696,817

Fund Balance, June 30, 2018 $ 181,661 $ 8,613,928


Nonmajor Funds

27

Exhibit C-4

Perry County, TennesseeReconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of ActivitiesFor the Year Ended June 30, 2018

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

Net change in fund balances - total governmental funds (Exhibit C-3) $ (82,889)

(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 capitaloutlays and depreciation is itemized as follows: Add: capital assets purchased in the current period $ 376,828 Less: current-year depreciation expense (726,480) (349,652)

(2) Revenues in the statement of activities that do not provide current financialresources are not reported as revenues in the funds. Less: deferred delinquent property taxes and other deferred June 30, 2017 $ (446,979) Add: deferred delinquent property taxes and other deferred June 30, 2018 531,522 84,543

(3) The issuance of long-term debt (e.g., bonds, notes, capital leases and other loans)provides current financial resources to governmental funds, while the repaymentof the principal of long-term debt consumes the current financial resources ofgovernmental funds. Neither transaction, however, has any effect on net position.This amount is the effect of these differences in the treatment of long-term debtand related items: Add: principal payments on bonds $ 909,000 Add: principal payments on notes 553,699 Add: principal payments on capital leases 11,242 Less: capital outlay notes proceeds (330,000) Less: contributions from the School Department for capital leases (11,242) 1,132,699

(4) Some expenses reported in the statement of activities do not require the use ofcurrent financial resources and therefore are not reported as expenditures inthe governmental funds. Change in accrued interest payable $ 6,869 Change in other postemployment benefits liability (net of restatement) (7,408) Change in deferred outflows of resources related to OPEB 581 Change in deferred inflows of resources related to OPEB (4,795) Change in landfill postclosure care costs 986 Change in compensated absences payable (1,474) Change in net pension liability/asset 631,524 Change in deferred outflows of resources related to pensions (83,685) Change in deferred inflows of resources related to pensions (229,379) 313,219

Change in net position of governmental activities (Exhibit B) $ 1,097,920


28

Exhibit C-5

Perry County, TennesseeStatement of Revenues, Expenditures, and Changes

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

Variancewith FinalBudget -Positive

Actual Original Final (Negative)

RevenuesLocal Taxes $ 2,868,770 $ 2,833,812 $ 2,875,812 $ (7,042)Licenses and Permits 2,544 5,250 5,250 (2,706)Fines, Forfeitures, and Penalties 52,919 66,580 66,580 (13,661)Charges for Current Services 39,949 24,925 40,425 (476)Other Local Revenues 249,072 224,250 267,950 (18,878)Fees Received From County Officials 378,539 398,500 398,500 (19,961)State of Tennessee 780,899 872,479 985,298 (204,399)Federal Government 221,159 13,000 235,618 (14,459)Other Governments and Citizens Groups 183,459 193,000 193,000 (9,541)

Total Revenues $ 4,777,310 $ 4,631,796 $ 5,068,433 $ (291,123)

ExpendituresGeneral Government

County Commission $ 64,153 $ 55,068 $ 72,793 $ 8,640County Mayor/Executive 247,971 238,895 255,895 7,924Election Commission 132,631 128,200 141,195 8,564Register of Deeds 119,215 121,319 122,269 3,054County Buildings 358,535 350,689 377,374 18,839Preservation of Records 0 4,100 600 600

FinanceAccounting and Budgeting 48 200 200 152Property Assessor's Office 125,497 133,632 132,982 7,485Reappraisal Program 43,883 52,084 52,234 8,351County Trustee's Office 125,800 132,093 132,593 6,793County Clerk's Office 167,160 162,838 173,452 6,292

Administration of JusticeCircuit Court 170,442 179,954 179,954 9,512General Sessions Court 117,455 120,274 120,328 2,873Chancery Court 122,460 123,861 124,111 1,651Juvenile Court 22,524 24,333 23,833 1,309Judicial Commissioners 10,356 11,157 12,974 2,618Other Administration of Justice 176 2,920 1,920 1,744

Public SafetySheriff's Department 1,065,847 950,369 1,082,812 16,965Jail 793,640 816,556 796,197 2,557Civil Defense 72,123 88,388 88,325 16,202Rescue Squad 9,749 10,000 10,000 251Other Emergency Management 205,065 184,745 209,990 4,925County Coroner/Medical Examiner 21,539 27,000 31,200 9,661Public Safety Grants Program 34,797 0 40,000 5,203Other Public Safety 56,072 57,821 59,096 3,024

Public Health and WelfareLocal Health Center 33,033 35,915 35,915 2,882Rabies and Animal Control 344 0 344 0Other Local Health Services 15,124 0 58,400 43,276General Welfare Assistance 4,774 12,362 8,604 3,830

Social, Cultural, and Recreational ServicesSenior Citizens Assistance 15,000 15,000 15,000 0

Budgeted Amounts

(Continued)29

Exhibit C-5


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



Expenditures (Cont.)Social, Cultural, and Recreational Services (Cont.)

Libraries $ 115,560 $ 117,598 $ 118,186 $ 2,626Parks and Fair Boards 78,363 23,950 23,950 (54,413)Other Social, Cultural, and Recreational 45,455 20,000 50,810 5,355

Agriculture and Natural ResourcesAgricultural Extension Service 43,225 42,608 42,608 (617)Forest Service 2,000 2,000 2,000 0Soil Conservation 17,500 17,500 17,500 0

Other OperationsTourism 62,447 26,500 78,105 15,658Industrial Development 0 2,000 2,000 2,000Airport 43,853 20,855 52,355 8,502Veterans' Services 29,738 37,518 38,518 8,780Other Charges 65,796 70,000 72,000 6,204Employee Benefits 7,014 18,400 18,400 11,386Miscellaneous 40,065 42,200 45,027 4,962

HighwaysLitter and Trash Collection 38,455 57,000 44,200 5,745

Capital ProjectsPublic Health and Welfare Projects 154,724 0 150,000 (4,724)

Total Expenditures $ 4,899,608 $ 4,537,902 $ 5,116,249 $ 216,641

Excess (Deficiency) of RevenuesOver Expenditures $ (122,298) $ 93,894 $ (47,816) $ (74,482)

Other Financing Sources (Uses)Insurance Recovery $ 4,625 $ 0 $ 0 $ 4,625

Total Other Financing Sources $ 4,625 $ 0 $ 0 $ 4,625

Net Change in Fund Balance $ (117,673) $ 93,894 $ (47,816) $ (69,857)Fund Balance, July 1, 2017 511,384 525,486 525,486 (14,102)

Fund Balance, June 30, 2018 $ 393,711 $ 619,380 $ 477,670 $ (83,959)


Budgeted Amounts

30

Exhibit C-6


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



RevenuesLocal Taxes $ 462,269 $ 460,242 $ 464,042 $ (1,773)Charges for Current Services 64,910 60,950 60,950 3,960Other Local Revenues 7,103 1,500 7,163 (60)State of Tennessee 74,572 78,000 81,300 (6,728)

Total Revenues $ 608,854 $ 600,692 $ 613,455 $ (4,601)

ExpendituresPublic Health and Welfare

Sanitation Education/Information $ 10,615 $ 14,000 $ 14,000 $ 3,385Convenience Centers 54,834 68,498 68,398 13,564Transfer Stations 434,398 494,466 474,566 40,168Landfill Operation and Maintenance 86,018 94,063 94,063 8,045

Other OperationsEmployee Benefits 187 0 350 163

Total Expenditures $ 586,052 $ 671,027 $ 651,377 $ 65,325

Excess (Deficiency) of RevenuesOver Expenditures $ 22,802 $ (70,335) $ (37,922) $ 60,724

Net Change in Fund Balance $ 22,802 $ (70,335) $ (37,922) $ 60,724Fund Balance, July 1, 2017 162,823 161,938 161,938 885

Fund Balance, June 30, 2018 $ 185,625 $ 91,603 $ 124,016 $ 61,609


Budgeted Amounts

31

Exhibit C-7


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



RevenuesCharges for Current Services $ 1,027,759 $ 950,000 $ 950,000 $ 77,759

Total Revenues $ 1,027,759 $ 950,000 $ 950,000 $ 77,759

ExpendituresPublic Health and Welfare

Ambulance/Emergency Medical Services $ 950,969 $ 1,164,675 $ 1,165,915 $ 214,946Total Expenditures $ 950,969 $ 1,164,675 $ 1,165,915 $ 214,946


Net Change in Fund Balance $ 76,790 $ (214,675) $ (215,915) $ 292,705Fund Balance, July 1, 2017 714,447 647,094 647,094 67,353



Budgeted Amounts

32

Exhibit C-8


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



RevenuesLocal Taxes $ 79,231 $ 65,000 $ 65,000 $ 14,231Other Local Revenues 24,715 11,500 11,500 13,215State of Tennessee 2,123,270 1,812,648 1,812,648 310,622Other Governments and Citizens Groups 0 10,000 10,000 (10,000)

Total Revenues $ 2,227,216 $ 1,899,148 $ 1,899,148 $ 328,068

ExpendituresHighways

Administration $ 127,289 $ 146,250 $ 146,250 $ 18,961Highway and Bridge Maintenance 726,226 984,000 984,000 257,774Operation and Maintenance of Equipment 138,110 295,500 295,500 157,390Other Charges 89,769 129,400 129,400 39,631Employee Benefits 205,969 254,500 254,500 48,531Capital Outlay 300,287 1,000,000 1,000,000 699,713

Total Expenditures $ 1,587,650 $ 2,809,650 $ 2,809,650 $ 1,222,000

Excess (Deficiency) of RevenuesOver Expenditures $ 639,566 $ (910,502) $ (910,502) $ 1,550,068

Net Change in Fund Balance $ 639,566 $ (910,502) $ (910,502) $ 1,550,068Fund Balance, July 1, 2017 4,974,330 4,206,853 4,206,853 767,477

Fund Balance, June 30, 2018 $ 5,613,896 $ 3,296,351 $ 3,296,351 $ 2,317,545


Budgeted Amounts

33

Exhibit D

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

ASSETS

Cash $ 462,181Accounts Receivable 24Due from Other Governments 75,929

Total Assets $ 538,134

LIABILITIES

Due to Other Taxing Units $ 75,929Due to Litigants, Heirs, and Others 462,205

Total Liabilities $ 538,134


AgencyFunds

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Note Page(s)

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

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

Net Position/Fund Balance1. Deposits and Investments 412. Receivables and Payables 423. Capital Assets 434. Deferred Outflows/Inflows of Resources 435. Compensated Absences 446. Long-term Obligations 457. Net Position and Fund Balance 458. Restatements 47

E. Pension Plans 47F. Other Postemployment Benefit (OPEB) Plans 48

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

Balance Sheet and the Government-wide Statement of Net Position 48B. Explanation of Certain Differences Between the Governmental Fund

Statement of Revenues, Expenditures, and Changes in Fund Balancesand the Government-wide Statement of Activities 48

III. Stewardship, Compliance, and AccountabilityA. Budgetary Information 49B. Expenditures Exceeded Appropriations 50

IV. Detailed Notes on All FundsA. Deposits and Investments 50B. Notes Receivable 51C. Capital Assets 51D. Interfund Receivables, Payables, and Transfers 54E. Capital Leases 55F. Long-term Obligations 56G. Pledges of Receivables and Future Revenues 58H. On-Behalf Payments 58I. Short-term Debt 59

(Continued)

PERRY COUNTY, TENNESSEEIndex of Notes to the Financial Statements

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Note Page(s)

V. Other InformationA. Risk Management 59B. Accounting Changes 60C. Contingent Liabilities 61D. Landfill Postclosure Care Costs 61E. Joint Ventures 62F. Jointly Governed Organization 62G. Retirement Commitments 63H. Other Postemployment Benefits (OPEB) 81I. Purchasing Laws 90J. Subsequent Events 91

VI. Other Notes - Discretely Presented Industrial DevelopmentBoard of Perry County 91

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

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PERRY COUNTY, TENNESSEE NOTES TO THE FINANCIAL STATEMENTS


I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Perry County’s financial statements are presented in accordance with generallyaccepted accounting principles (GAAP). The Governmental Accounting StandardsBoard (GASB) is responsible for establishing GAAP for state and local governments.

The following are the more significant accounting policies of Perry County:

A. Reporting Entity

Perry County is a public municipal corporation governed by an elected12-member board. As required by GAAP, these financial statements presentPerry County (the primary government) and its component units. Thefinancial statements of the Perry County Emergency CommunicationsDistrict, a component unit requiring discrete presentation, were excludedfrom this report due to materiality calculations; therefore, the effect of itsomission did not affect the independent auditor’s opinion thereon. Thecomponent units discussed below are included in the county's reporting entitybecause of the significance of their operational or financial relationships withthe 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 Perry County School Department operates the public school system in the county, and the voters of Perry 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 Perry County Emergency Communications District provides a simplified means of securing emergency services through a uniform emergency number for the residents of Perry County, and the Perry 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 Perry 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 Industrial Development Board of Perry County consists of members appointed by the Perry County Commission, and it has been delegated the authority to develop, maintain, and operate industrial sites for the benefit of the community. The Perry County School Department does not issue separate financial statements from those of the county. Therefore, basic financial statements of the School Department are included in this report as listed in the table of contents. Complete financial statements of the Perry County Emergency Communications District and the Industrial Development Board of Perry County can be obtained from their administrative offices at the following addresses:

Administrative Offices:

Perry County Emergency Communications District 300 Venture Drive P.O. Box 724 Linden, TN 37096 Industrial Development Board of Perry County P.O. Box 209 Linden, TN 37096

B. Government-wide and Fund Financial Statements

The government-wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. However, when applicable, interfund services provided and used between functions are not eliminated in the process of consolidation in the Statement of Activities. Governmental activities are normally supported by taxes and intergovernmental revenues. Business-type activities, which rely to a significant extent on fees and charges, are required to be reported separately from governmental activities in government-wide financial statements. However, the primary government of Perry County does not have any business-type activities to report. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The Perry 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

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operational or capital requirements of a particular function. Taxes and other items not properly included among program revenues are reported instead as general revenues. Perry County issues all debt for the discretely presented Perry County School Department. Net debt issues totaling $232,522 were contributed by the county to the School Department during the year ended June 30, 2018. Separate financial statements are provided for governmental funds and fiduciary funds. The fiduciary funds are excluded from the government-wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements.

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

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revenues are available. Perry 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. Fiduciary funds financial statements are reported using the economic resources measurement focus, except for agency funds, which have no measurement focus, and the accrual basis of accounting. Revenues are recognized when earned, and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Perry County reports the following major governmental funds:

General Fund – This is the county’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. Solid Waste/Sanitation Fund – This special revenue fund accounts for transactions of the county’s transfer station and convenience centers. Local taxes and general service charges are the foundational revenues of this fund. Ambulance Service Fund – This special revenue fund accounts for transactions of the county’s ambulance service. General service charges are the foundational revenues 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.

Additionally, Perry County reports the following fund types:

Agency Funds – These funds account for amounts collected in an agency capacity by the constitutional officers and local sales taxes

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received by the state to be forwarded to the various cities in Perry 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. Education Capital Projects Fund – This fund accounts for debt issued by Perry County that is subsequently contributed to the discretely presented Perry County School Department for capital purchases.

The discretely presented Perry County School Department reports the following major governmental fund:

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

Additionally, the Perry 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 specific purposes other than debt service or capital projects.

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

D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balance 1. Deposits and Investments

State statutes authorize the government to make direct investments in bonds, notes, or treasury bills of the U.S. government and obligations guaranteed by the U.S. government or any of its agencies; deposit accounts at state and federal chartered banks and savings and loan associations; repurchase agreements; the State Treasurer’s Investment Pool; 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 Perry County

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School Department. Each fund’s portion of this pool is displayed on the balance sheets or statements of net position as Equity in Pooled Cash and Investments. Most income from these pooled investments is assigned to the General Fund. Perry County and the School Department have adopted a policy of reporting U.S. Treasury obligations, U.S. agency obligations, and repurchase agreements with maturities of one year or less when purchased on the balance sheet at amortized cost. Certificates of deposit are reported at cost. Investments in the State Treasurer’s Investment Pool are reported at amortized cost using a stable net asset value. State statutes require the state treasurer to administer the pool under the same terms and conditions, including collateral requirements, as prescribed for other funds invested by the state treasurer. All other investments are reported at fair value. No investments required to be reported at fair value were held at the balance sheet date.

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

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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.

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 column in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of $10,000 or more (except for infrastructure at $25,000) and an estimated useful life of three years or more. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Property, plant, equipment, and infrastructure of the primary government and the discretely presented School Department are depreciated using the straight-line method over the following estimated useful lives:

Assets Years

Buildings and Improvements 7 - 40Other Capital Assets 5 - 20Infrastructure: Roads 20 Bridges 20 - 40

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

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pension changes in experience, pension changes in assumptions, pension changes in investment earnings, pension changes in the proportionate share of pension contributions, pension changes in employer contributions made to the pension plan after the measurement date, and OPEB changes in benefits paid 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) 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, OPEB changes in assumptions, pension changes in investment earnings, pension changes in experience, 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.

5. Compensated Absences

It is the county’s policy to permit employees (excluding the Highway Department, which closes one week in July and one week in December) to accumulate earned but unused vacation benefits, which will be paid to employees upon separation from service. A liability for vacation leave is reported in governmental funds only if amounts have matured, for example, as a result of employee resignations and retirements. The granting of sick leave for employees of Perry County has no guaranteed payment attached and therefore is not required to be accrued or recorded. The discretely presented Perry County School Department does permit Central Office employees to accumulate a limited amount of earned but unused vacation benefits, which will be paid to employees upon separation from service. A liability for vacation pay is reported in governmental funds only if amounts have matured, for example, as a result of employee resignations and retirements. The School Department permits professional personnel (teachers) to accumulate an unlimited amount of unused sick leave days. However, the granting of sick leave has no guaranteed payment attached and, therefore, is not required to be accrued or recorded.

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6. Long-term Obligations In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities Statement of Net Position. Debt premiums and discounts are deferred and are amortized over the life of the new debt using the straight-line method. Debt issuance costs are expensed in the period incurred. In refunding transactions, the difference between the reacquisition price and the net carrying amount of the old debt is reported as a deferred outflow of resources or a deferred inflow of resources and recognized as a component of interest expense in a systematic and rational manner over the remaining life of the refunded debt or the life of the new debt issued, whichever is shorter. In the fund financial statements, governmental funds recognize debt premiums and discounts, as well as debt issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as 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, landfill postclosure care costs, and other postemployment benefits, 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, 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.

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c. Unrestricted net position – All other net position that does not meet the definition of restricted or net investment in capital assets.

As of June 30, 2018, Perry County had $36,540 in outstanding debt for capital purposes for the discretely presented Perry County School Department. This debt is a liability of Perry County, but the capital assets acquired are reported in the financial statements of the School Department. Therefore, Perry County has incurred a liability decreasing its unrestricted net position with no corresponding increase in the county’s capital assets. It is the county’s policy that restricted amounts would be reduced first followed by unrestricted amounts when expenditures are incurred for purposes for which both restricted and unrestricted fund balance is available. Also, it is the county’s policy that committed amounts would be reduced first, followed by assigned amounts, and then unassigned amounts when expenditures are incurred for purposes for which amounts in any of these unrestricted fund balance classifications could be used. In the fund financial statements, governmental funds report fund balance in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in these funds can be spent. These classifications may consist of the following:

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

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

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

Assigned Fund Balance – includes amounts that are constrained by the county’s intent to be used for specific purposes but are neither restricted nor committed (excluding stabilization arrangements). The County Commission has by

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resolution authorized the county’s Budget Committee to make assignments for the general government. The Board of Education by resolution makes assignments for the School Department. Unassigned Fund Balance – the residual classification of the General and General Purpose School funds. This classification represents fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the General and General Purpose School funds.

8. Restatements

In prior years, the government was required to recognize a liability for its other postemployment benefits plans under Governmental Accounting Standards Board (GASB) Statement No. 45. As of July 1, 2017, Perry County has adopted the provisions of GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. Restatements reducing the beginning net position of the Governmental Activities of the primary government and the discretely presented Perry County School Department totaling $46,305 and $449,605, respectively, have been recognized to account for the transitional requirements.

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

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the TCRS. For this purpose, benefits (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms of the Teacher Retirement Plan and the Teacher Legacy Pension Plan. Investments are reported at fair value.

F. Other Postemployment Benefit (OPEB) Plans

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

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

II. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS A. Explanation of certain differences between the governmental fund

balance sheet and the government-wide Statement of Net Position Primary Government Exhibit C-2 includes explanations of the nature of individual elements of items required to reconcile the balance sheet of governmental funds with the government-wide Statement of Net Position. Discretely Presented Perry County School Department Exhibit I-3 includes explanations of the nature of individual elements of items required to reconcile the balance sheet of governmental funds with the government-wide Statement of Net Position.

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

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

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 Education Capital Projects Fund, which adopts project length budgets. All annual appropriations lapse at fiscal year end. The county is required by state statute to adopt annual budgets. Annual budgets are prepared on the basis in which current available funds must be sufficient to meet current expenditures. Expenditures and encumbrances may not legally exceed appropriations authorized by the county commission and any authorized revisions. Unencumbered appropriations lapse at the end of each fiscal year. The budgetary level of control is at the major category level established by the County Uniform Chart of Accounts, as prescribed by the Comptroller of the Treasury of the State of Tennessee. Major categories are at the department level (examples of General Fund major categories: County Commission, County Mayor/Executive, Election Commission, Register of Deeds, etc.). Management may make revisions within major categories, but only the county commission may transfer appropriations between major categories. During the year, several supplementary appropriations were necessary.

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

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B. Expenditures Exceeded Appropriations

Expenditures exceeded appropriations approved by the County Commission in the following major appropriation categories (the legal level of control) of the General Fund as reflected in the following table:

Amount

Major Appropriation Category Overspent

Parks and Fair Boards $ 54,413Agricultural Extension Service 617Public Health & Welfare Projects 4,724

IV. DETAILED NOTES ON ALL FUNDS

A. Deposits and Investments Perry County and the Perry 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.

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Investments Legal Provisions. Counties are authorized to make direct investments in bonds, notes, or treasury bills of the U.S. government and obligations guaranteed by the U.S. government or any of its agencies; deposits at state and federal chartered banks and savings and loan associations; bonds of any state or political subdivision rated A or higher by any nationally recognized rating service; nonconvertible debt securities of certain federal government sponsored enterprises; and the county’s own legally issued bonds or notes. These investments may not have a maturity greater than two years. The county may make investments with longer maturities if various restrictions set out in state law are followed. Counties are also authorized to make investments in the State Treasurer’s Investment Pool and in repurchase agreements. Repurchase agreements must be approved by the state Comptroller’s Office and executed in accordance with procedures established by the State Funding Board. Securities purchased under a repurchase agreement must be obligations of the U.S. government or obligations guaranteed by the U.S. government or any of its agencies. When repurchase agreements are executed, the purchase of the securities must be priced at least two percent below the fair value of the securities on the day of purchase. The county had no pooled and nonpooled investments at June 30, 2018.

B. Notes Receivable

A note receivable of $20,992 in the General Debt Service Fund resulted from the county loaning funds for the construction of a new Senior Citizens Center. The amount of the note that is not expected to be collected within one year is $9,992 and is offset by committed fund balance.

C. Capital Assets

Capital assets activity for the year ended June 30, 2018, was as follows:

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Primary Government Governmental Activities:

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

Capital Assets Not Depreciated: Land $ 290,266 $ 8,000 $ 298,266 Construction in Progress 0 141,630 141,630Total Capital Assets Not Depreciated $ 290,266 $ 149,630 $ 439,896

Capital Assets Depreciated: Buildings and Improvements $ 6,296,631 $ 160,998 $ 6,457,629 Infrastructure 5,936,696 0 5,936,696 Other Capital Assets 5,642,623 66,200 5,708,823Total Capital Assets Depreciated $ 17,875,950 $ 227,198 $ 18,103,148

Less Accumulated Depreciation For: Buildings and Improvements $ 2,390,744 $ 144,690 $ 2,535,434 Infrastructure 1,868,957 249,000 2,117,957 Other Capital Assets 3,404,500 332,790 3,737,290Total Accumulated Depreciation $ 7,664,201 $ 726,480 $ 8,390,681

Total Capital Assets Depreciated, Net $ 10,211,749 $ (499,282) $ 9,712,467

Governmental Activities Capital Assets, Net $ 10,502,015 $ (349,652) $ 10,152,363

There were no decreases in capital assets to report during the year ended June 30, 2018. Depreciation expense was charged to functions of the primary government as follows:

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Governmental Activities:

General Government $ 53,601 Public Safety 163,421 Public Health and Welfare 119,354 Other Operations 8,494 Highways/Public Works 381,610

Total Depreciation Expense - Governmental Activities $ 726,480

Discretely Presented Perry County School Department Governmental Activities:

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

Capital Assets Not Depreciated: Land $ 138,512 $ 0 $ 0 $ 138,512Total Capital Assets Not Depreciated $ 138,512 $ 0 $ 0 $ 138,512

Capital Assets Depreciated: Buildings and Improvements $ 11,150,760 $ 223,000 $ 0 $ 11,373,760 Other Capital Assets 1,839,949 78,982 (80,424) 1,838,507Total Capital Assets Depreciated $ 12,990,709 $ 301,982 $ (80,424) $ 13,212,267

Less Accumulated Depreciation For: Buildings and Improvements $ 5,950,906 $ 277,103 $ 0 $ 6,228,009 Other Capital Assets 1,427,450 85,138 (36,191) 1,476,397Total Accumulated Depreciation $ 7,378,356 $ 362,241 $ (36,191) $ 7,704,406

Total Capital Assets Depreciated, Net $ 5,612,353 $ (60,259) $ (44,233) $ 5,507,861

Governmental Activities Capital Assets, Net $ 5,750,865 $ (60,259) $ (44,233) $ 5,646,373

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

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Instruction $ 110,585 Support Services 200,275 Operation of Non-instructional Services 51,381

Total Depreciation Expense - Governmental Activities $ 362,241

D. Interfund Receivables, Payables, and Transfers

The composition of interfund balances as of June 30, 2018, was as follows: Due to/from Primary Government and Component Units:

Receivable Fund Payable Fund Amount

Primary Government: Component Units: Governmental Activities School Department $ 36,540

Industrial Development Board of Perry County:

General Debt Service Operating Fund 306,809

Total $ 343,349

The Due to Primary Government from the School Department is the balance of a capital lease issued by the county for the School Department. The School Department has agreed to contribute the funds necessary to retire the debt. This debt is reflected in the government-wide financial statements. The Due to Primary Government from the Industrial Development Board of Perry County is the balance of a repayment agreement wherein Perry County purchased two industrial buildings on behalf of the Industrial Development Board, and the board agreed to reimburse the county.

Interfund Transfers:

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

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Primary Government

General DebtTransfer Out Service Fund

Nonmajor governmental fund $ 6,978

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.

E. Capital Leases

On September 5, 2014, Perry County entered into a seven-year lease-purchase agreement for the School Department for a school bus. The terms of the agreement require total lease payments of $82,150 plus interest of 3.99 percent. Title to the school bus transferred to the School Department immediately upon the acceptance. The lease payments are made from the General Debt Service Fund. The asset acquired through the capital lease is as follows:

GovernmentalAsset Activities

Other Capital Assets $ 82,150 Less: Accumulated Depreciation (31,491)

Total Book Value $ 50,659

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

2019 $ 13,1842020 13,1842021 13,181Total Minimum Lease Payments $ 39,549Less: Amount Representing Interest (3,009)

Present Value of Minimum Lease Payments $ 36,540

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F. Long-term Obligations Primary Government General Obligation Bonds and Notes Perry County issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities for the primary government and the discretely presented School Department. In addition, general obligation bonds have been issued to refund other general obligation bonds. Capital outlay notes are also issued to fund capital facilities and other capital outlay purchases, such as equipment. General obligation bonds and capital outlay notes are direct obligations and pledge the full faith and credit of the government. 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 were retired as of June 30, 2018. Capital leases outstanding as of June 30, 2018, for governmental activities are as follows:

OriginalInterest Final Amount Balance

Type Rate Maturity of Issue 6-30-18

Capital Leases 3.99 % 9-5-20 $ 82,150 $ 36,540

There is $1,447,798 available in the General Debt Service Fund to service long-term debt. Total debt per capita, including capital leases, totaled $5, 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 Primary Government in the financial statements of the School Department and as Due from Component Units in the financial statements of the primary government.

OutstandingDescription of Indebtedness 6-30-18

Capital Leases Contributions from the General Purpose School Fund School Bus $ 36,540

Total $ 36,540

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

Capital Bonds Notes Leases

Balance, July 1, 2017 $ 909,000 $ 223,699 $ 47,782Additions 0 330,000 0Reductions (909,000) (553,699) (11,242)

Balance, June 30, 2018 $ 0 $ 0 $ 36,540

Balance Due Within One Year $ 0 $ 0 $ 11,698

Landfill Other Compensated Postclosure Postemployment

Absences Care Costs Benefits*

Balance, July 1, 2017 $ 152,531 $ 369,366 $ 102,044Additions 98,344 6,514 12,757Reductions (96,870) (7,500) (5,349)

Balance, June 30, 2018 $ 154,005 $ 368,380 $ 109,452

Balance Due Within One Year $ 154,005 $ 5,000 $ 0

*OPEB balance at June 1, 2017, was restated. See Note I.D.8.

Analysis of Noncurrent Liabilities Presented on Exhibit A:

Total Noncurrent Liabilities, June 30, 2018 $ 668,377Less: Balance Due Within One Year (170,703)

Noncurrent Liabilities - Due in More Than One Year - Exhibit A $ 497,674

Compensated absences and other postemployment benefits will be paid from the employing funds, primarily the General Fund. Landfill postclosure care costs will be paid from the Solid Waste/Sanitation Fund. Discretely Presented Perry County School Department Changes in Long-term Obligations Long-term obligations activity for the discretely presented Perry County School Department for the year ended June 30, 2018, was as follows:

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CompensatedAbsences

Balance, July 1, 2017 $ 41,947 $ 888,343 $ 824,296Additions 18,773 78,791 613,370Reductions (16,062) (82,230) (1,482,676)

Balance, June 30, 2018 $ 44,658 $ 884,904 $ (45,010)

Balance Due Within One Year $ 11,164 $ 0 $ 0

*OPEB balance at July 1, 2017, was restated. See Note I.D.8.** At June 30, 2018, the Teacher Legacy Pension Plan had a net pension asset.

PostemploymentBenefits*

Net Pension

Teacher LegacyPension Plan**

Other Liability -

Analysis of Noncurrent Liabilities Presented on Exhibit A:

Total Noncurrent Liabilities, June 30, 2018 $ 929,562Less: Balance Due Within One Year (11,164)

Noncurrent Liabilities - Due in More Than One Year - Exhibit A $ 918,398

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

G. Pledges of Receivables and Future Revenues Local Option Sales Tax Revenues Pledged In 1996, Perry County voters approved an additional one-half cent increase in the local sales tax rate that was allocated 100 percent for the repayment of school indebtedness related to the 1996-1999 school building program. As of March 13, 2018, all debt related to the 1996-1999 school building program was retired.

H. On-Behalf Payments – Discretely Presented Perry County School Department The State of Tennessee pays health insurance premiums for retired teachers on-behalf of the Perry County School Department. These payments are made by the state to the Local Education Group Insurance Plan. The plan is administered by the State of Tennessee and reported in the state’s Comprehensive Annual Financial Report. Payments by the state to the Local Education Group Insurance Plan for the year ended June 30, 2018, were

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$21,440. The School Department has recognized these on-behalf payments as revenues and expenditures in the General Purpose School Fund.

I. Short-term Debt Perry County issued tax anticipation notes from the General Debt Service Fund in advance of property tax collections and deposited the proceeds in the General ($900,000) and Solid Waste/Sanitation ($21,879) funds. These notes were necessary because funds were not available to meet operating expenditures due before current tax collections. Short-term debt activity for the year ended June 30, 2018, was as follows:

Balance Balance7-1-17 Issued Paid 6-30-18

Tax Anticipation Notes $ 0 $ 921,879 $ (921,879) $ 0

V. OTHER INFORMATION

A. Risk Management Primary Government The county is exposed to various risks related to general liability, property, and casualty losses. The county participates in the Local Government Property and Casualty Fund (LGPCF), which is a public entity risk pool established by the Tennessee County Services Association, an association of member counties. The county pays an annual premium to the LGPCF for its general liability, property, and casualty insurance coverage. The creation of the LGPCF provides for it to be self-sustaining through member premiums. The LGPCF reinsures through commercial insurance companies for claims exceeding $100,000 for each insured event. Perry County participates in the Local Government Workers’ Compensation Fund (LGWCF), a public entity risk pool established under the provisions of Section 29-20-401, Tennessee Code Annotated (TCA), by the Tennessee County Services Association to provide a program of workers’ compensation coverage to employees of local governments. The county pays an annual premium to the LGWCF for its workers’ compensation insurance coverage. The LGWCF is to be self-sustaining through member premiums. Perry 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, TCA, all local governments and quasi-governmental entities described above are eligible to participate. The LGGIF

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is included in the Comprehensive Annual Financial Report of the State of Tennessee, but the state does not retain any risk for losses by this fund. The state statute provides for the LGGIF to be self-sustaining through member premiums. Discretely Presented Perry County School Department The discretely presented Perry 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 an annual premium to the TN-RMT for its general liability, property, casualty, and workers’ compensation insurance coverage. The creation of the TN-RMT provides for it to be self-sustaining through member premiums. The discretely presented Perry County School Department participates in the Local Education Group Insurance Fund (LEGIF), a public entity risk pool established to provide a program of health insurance coverage for employees of local education agencies. In accordance with Section 8-27-301, 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. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions; Statement No. 81, Irrevocable Split-Interest Agreements; Statement No. 85, Omnibus 2017; and Statement No. 86, Certain Debt Extinguishment Issues became effective for the year ended June 30, 2018. GASB Statement No. 75, establishes accounting and reporting requirements for postemployment benefits other than pensions (other postemployment benefits or OPEB), which are included in the general purpose financial reports of state and local governmental OPEB plans. This statement replaces GASB Statements No. 45 and No. 57. The scope of this statement establishes standards for recognizing and measuring liabilities, deferred outflows of resources, deferred inflows of resources, and expense/expenditures. For defined benefit OPEB, this statement identifies the methods and assumptions that are required to be used to project benefit payments, discount projected benefit payments to their actuarial present value, and attribute that present value to periods of employee service. Note disclosure and required supplementary information requirements about defined benefit OPEB also are addressed.

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GASB Statement No. 81, establishes accounting and financial reporting guidance for irrevocable split-interest agreements in which a government is a beneficiary. GASB Statement No. 85, addresses practice issues that have been identified during implementation and application of certain GASB Statements. This statement addresses a variety of topics including issues related to blending component units, goodwill, fair value measurement and application, and postemployment benefits (pensions and other postemployment benefits [OPEB]). GASB Statement No. 86, establishes guidance for transactions in which cash and other monetary assets acquired with only existing resources—resources other than the proceeds of refunding debt—are placed in an irrevocable trust for the sole purpose of extinguishing debt. This statement also provides guidance for accounting and financial reporting for prepaid insurance on debt that is extinguished and notes to financial statements for debt that is defeased in substance.

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

D. Landfill Postclosure Care Costs Perry County has active permits on file with the state Department of Environment and Conservation for a sanitary landfill and a demolition landfill. The county has provided financial assurances for estimated postclosure liabilities as required by the State of Tennessee. These financial assurances are on file with the Department of Environment and Conservation. State and federal laws and regulations require the county to place a final cover on its sanitary landfill site when it stops accepting waste and to perform certain maintenance and monitoring functions at the site for 30 years after closure. Although closure and postclosure care costs will be paid only near or after the date that the landfill stops accepting waste, the county reports a portion of these closure and postclosure care costs as an operating expense in each period based on landfill capacity used as of each balance sheet date. Perry County closed its sanitary landfill in 1998. The $368,380 reported as postclosure care liability at June 30, 2018, represents amounts based on what it would cost to perform all postclosure care in 2018. Actual costs may be higher due to inflation, changes in technology, or changes in regulations.

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E. Joint Ventures The Perry County Joint Economic Development Board is a joint venture between Perry County, the City of Lobelville, and the Town of Linden. The board comprises the county mayor, city/town mayors, and other members. The purpose of the board is to foster communication relative to economic and community development between and among governmental entities, industry, and private citizens. Perry County did not appropriate any funds to the Perry County Joint Economic Development Board during the year ended June 30, 2018. The Twenty-first Judicial District Drug Task Force (DTF) is a joint venture formed by an interlocal agreement between the district attorney general of the Twenty-first Judicial District, Williamson, Lewis, Hickman, and Perry counties, and various cities within these counties. The purpose of the DTF is to provide multi-jurisdictional law enforcement to promote the investigation and prosecution of drug-related activities. Funds for the operations of the DTF come primarily from federal grants, drug fines, and the forfeiture of drug-related assets to the DTF. The DTF is overseen by the district attorney general and is governed by a board of directors including the district attorney general, sheriffs, and police chiefs of participating law enforcement agencies within each judicial district. Perry County did not contribute to the DTF for the year ended June 30, 2018. Perry County does not have an equity interest in any of the above-noted joint ventures. Complete financial statements for the Perry County Joint Economic Development Board and the DTF can be obtained from their respective administrative offices at the following addresses:

Administrative Offices:

Perry County Joint Economic Development Board Perry County Mayor P.O. Box 16 Linden, TN 37096 Office of District Attorney General Twenty-first Judicial District Drug Task Force P.O. Box 937 Franklin, TN 37065

F. Jointly Governed Organization

The South Central Tennessee Railroad Authority (SCTRA) was created by Perry County in conjunction with Hickman, Lewis, and Wayne counties and the cities of Centerville, Linden, Hohenwald, and Waynesboro. The SCTRA board includes 16 members who are the elected county mayor and city mayor from each of the counties and cities and a member appointed by the County Commission or city council from each of the respective counties or cities.

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Perry County did not appropriate any funds for this operation during the year, and the county does not have any ongoing financial interest or responsibility for the entity. Funding sources for the SCTRA are lease payments, switching fees, interest income, and grants.

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

Primary Government General Information About the Pension Plan Plan Description. Employees of Perry County and non-certified employees of the discretely presented Perry County School Department are provided a defined benefit pension plan through the Public Employee Retirement Plan, an agent multiple-employer pension plan administered by the TCRS. The primary government employees comprise 62.76 percent and the non-certified employees of the discretely presented School Department comprise 37.24 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. 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

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year. The COLA is based on the change in the consumer price index (CPI) during the prior calendar year, capped at three percent, and applied to the current benefit. No COLA is granted if the change in the CPI is less than one-half percent. A one percent COLA is granted if the CPI change is between one-half percent and one percent. A member who leaves employment may withdraw their employee contributions plus any accumulated interest. Employees Covered by Benefit Terms. At the measurement date of June 30, 2017, the following employees were covered by the benefit terms: Inactive Employees or Beneficiaries Currently Receiving Benefits 104Inactive Employees Entitled to But Not Yet Receiving Benefits 158Active Employees 177

Total 439

Contributions. Contributions for employees are established in the statutes governing the TCRS and may only be changed by the Tennessee General Assembly. Employees contribute five percent of salary. Perry County makes employer contributions at the rate set by the Board of Trustees as determined by an actuarial valuation. For the year ended June 30, 2018, the employer contribution for Perry County was $515,825 based on a rate of 9.74 percent of covered payroll. By law, employer contributions are required to be paid. The TCRS may intercept Perry 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) Perry County’s net pension liability (asset) was measured as of June 30, 2017, and the total pension liability (asset) used to calculate net pension liability (asset) was determined by an actuarial valuation as of that date. Actuarial Assumptions. The total pension liability as of the June 30, 2017, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:

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Inflation 2.5%Salary Increases Graded Salary Ranges from 8.72%

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

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

Cost of Living Adjustment 2.25%

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

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PercentageLong-termExpected PercentageReal Rate Target

Asset Class of Return Allocations

U.S. Equity 5.69 % 31 %Developed Market International Equity 5.29 14Emerging Market International Equity 6.36 4Private Equity and Strategic Lending 5.79 20U.S. Fixed Income 2.01 20Real Estate 4.32 10Short-term Securities 0.00 1

Total 100 %

The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees as 7.25 percent based on a blending of the factors described above. Changes of Assumptions. In 2017, the following assumptions were changed: decreased inflation rate from 3.0 percent to 2.5 percent; decreased the investment rate of return from 7.5 percent to 7.25 percent; decreased the cost-of-living adjustment from 2.5 to 2.25 percent; decreased salary growth graded ranges from an average of 4.25 percent to an average of 4.0 percent; and modified the mortality assumptions. Discount Rate. The discount rate used to measure the total pension liability was 7.25 percent. The projection of cash flows used to determine the discount rate assumes that employee contributions will be made at the current rate and that contributions from Perry County will be made at the actuarially determined contribution rate pursuant to an actuarial valuation in accordance with the funding policy of the TCRS Board of Trustees and as required to be paid by state statute. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make projected future benefit payments of current active and inactive members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

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Changes in the Net Pension Liability (Asset)

Total Plan Net PensionPension Fiduciary LiabilityLiability Net Position (Asset)

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

Balance, July 1, 2016 $ 14,121,752 $ 14,539,307 $ (417,555)

Changes for the Year: Service Cost $ 433,397 $ 0 $ 433,397 Interest 1,066,221 0 1,066,221 Differences Between Expected and Actual Experience (525,032) 0 (525,032) Changes in Assumptions 372,353 0 372,353 Contributions-Employer 0 472,252 (472,252) Contributions-Employees 0 242,431 (242,431) Net Investment Income 0 1,651,885 (1,651,885) Benefit Payments, Including Refunds of Employee Contributions (677,739) (677,739) 0 Administrative Expense 0 (15,305) 15,305 Other Changes 0 0 0Net Changes $ 669,200 $ 1,673,524 $ (1,004,324)

Balance, June 30, 2017 $ 14,790,952 $ 16,212,831 $ (1,421,879)

Increase (Decrease)

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

Plan NetTotal Fiduciary Pension

Pension Net LiabilityLiability Position (Asset)

Primary Government 62.76% $ 9,282,801 $ 10,175,173 $ (892,371)

School Department 37.24% 5,508,151 6,037,658 (529,508)

Total $ 14,790,952 $ 16,212,831 $ (1,421,879)

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

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Current

1% Discount 1%Decrease Rate Increase

Perry County 6.25% 7.25% 8.25%

Net Pension Liability $ 392,899 $ (1,421,879) $ (2,936,798)

Pension Expense (Negative Pension Expense) and Deferred Outflows of Resources and Deferred Inflows of Resources to Pensions Pension Expense or Negative Pension Expense. For the year ended June 30, 2018, Perry County recognized pension expense of $18,808. Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2018, Perry County reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred DeferredOutflows Inflows

of of Resources Resources

Difference Between Expected and Actual Experience $ 0 $ 563,493Net Difference Between Projected and Actual Earnings on Pension Plan Investments 0 9,762Changes in Assumptions 297,882 0Contributions Subsequent to the Measurement Date of June 30, 2017 (1) 515,825 N/A

Total $ 813,707 $ 573,255

(1) The amount shown above for “Contributions Subsequent to the Measurement Date of June 30, 2017,” will be recognized as a reduction (increase) to net pension liability (asset) in the following measurement period.

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

Deferred DeferredOutflows of Inflows ofResources Resources

Primary Government $ 514,139 $ 359,775

School Department 299,568 213,480

Total $ 813,707 $ 573,255

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

Year EndingJune 30 Amount

2019 $ (162,425)2020 65,1522021 (35,431)2022 (142,660)2023 0Thereafter 0

In the table shown above, positive amounts will increase pension expense while negative amounts will decrease pension expense. Discretely Presented Perry County School Department Non-certified Employees General Information About the Pension Plan Plan Description. As noted above under the primary government, employees of Perry County and non-certified employees of the discretely presented Perry County School Department are provided a defined benefit pension plan through the Public Employee Retirement Plan, an agent multiple-employer pension plan administered by the TCRS. The primary government employees comprise 62.76 percent and the non-certified employees of the discretely presented School Department comprise 37.24 percent of the plan based on contribution data.

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

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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, 2018, to the Teacher Retirement Plan were $17,494, which is four percent of covered payroll. The employer rate, when combined with member contributions, is expected to finance the costs of benefits earned by members during the year, the cost of administration, as well as an amortized portion of any unfunded liability. Pension Liabilities (Assets), Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions Pension Liabilities (Assets). At June 30, 2018, the School Department reported a liability (asset) of ($12,296) for its proportionate share of the net pension liability (asset). The net pension liability (asset) was measured as of June 30, 2017, and the total pension liability (asset) used to calculate the net pension liability (asset) was determined by an actuarial valuation as of that date. The School Department’s proportion of the net pension liability (asset) was based on the School Department’s share of contributions to the pension plan relative to the contributions of all participating LEAs. At the measurement date of June 30, 2017, the School Department’s proportion was .046604 percent. The proportion as of June 30, 2016, was .057285 percent. Pension Expense. For the year ended June 30, 2018, the School Department recognized pension expense of $5,688. Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2018, the School Department reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

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Difference Between Expected and Actual Experience $ 431 $ 925Net Difference Between Projected and Actual Earnings on Pension Plan Investments 0 662Changes in Assumptions 1,080 0Changes in Proportion of Net Pension Liability (Asset) 1,464 0LEA's Contributions Subsequent to the Measurement Date of June 30, 2017 (1) 17,494 N/A

Total $ 20,469 $ 1,587

The School Department’s employer contributions of $17,494, reported as pension related deferred outflows of resources subsequent to the measurement date, will be recognized as an increase of net pension asset in the year ending June 30, 2019. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:


2019 $ 522020 522021 152022 (156)2023 156Thereafter 1,270

In the table above, positive amounts will increase pension expense, while negative amounts will decrease pension expense. Actuarial Assumptions. The total pension liability in the June 30, 2017, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:

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

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Total 100 %

The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees as 7.25 percent based on a blending of the factors described above. Changes of Assumptions. In 2017, the following assumptions were changed: decreased inflation rate from 3.0 percent to 2.5 percent; decreased the investment rate of return from 7.5 percent to 7.25 percent; decreased the cost-of-living adjustment from 2.5 percent to 2.25 percent; decreased salary growth graded ranges from an average of 4.25 percent to an average of 4.0 percent; and modified the mortality assumptions. Discount Rate. The discount rate used to measure the total pension liability was 7.25 percent. The projection of cash flows used to determine the discount rate assumes that employee contributions will be made at the current rate and that contributions from all the LEAs will be made at the actuarially determined contribution rate pursuant to an actuarial valuation in accordance with the funding policy of the TCRS Board of Trustees and as required to be paid by state statute. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make projected future benefit payments of current active and inactive members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the Proportionate Share of Net Pension Liability (Asset) to Changes in the Discount Rate. The following presents the School

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Department’s proportionate share of the net pension liability (asset) calculated using the discount rate of 7.25 percent, as well as what the School Department’s proportionate share of the net pension liability (asset) would be if it were calculated using a discount rate that is one percentage point lower (6.25%) or one percentage point higher (8.25%) than the current rate: School Department's Current Proportionate Share of 1% Discount 1% the Net Pension Decrease Rate Increase Liability (Asset) 6.25% 7.25% 8.25%

Net Pension Liability $ 2,453 $ (12,296) $ (23,114)

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 Perry County School Department with membership in the TCRS before July 1, 2014, are provided with pensions through the Teacher Legacy Pension Plan, a cost-sharing multiple-employer pension plan administered by the TCRS. The Teacher Legacy Pension Plan closed to new membership on June 30, 2014, but will continue providing benefits to existing members and retirees. Beginning July 1, 2014, the Teacher Retirement Plan became effective for teachers employed by LEAs after June 30, 2014. The Teacher Retirement Plan is a separate cost-sharing, multiple-employer defined benefit plan. The TCRS was created by state statute under Tennessee Code Annotated (TCA), Title 8, Chapters 34-37. The TCRS Board of Trustees is responsible for the proper operation and administration of all employer pension plans in the TCRS. The Tennessee Treasury Department, an agency in the legislative branch of state government, administers the plans of the TCRS. The TCRS issues a publicly available financial report that can be obtained at www.treasury.tn.gov/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

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related disability benefits are provided regardless of length of service. Five years of service is required for non-service related disability eligibility. The service related and non-service related disability benefits are determined in the same manner as a service retirement benefit but are reduced ten percent and include projected service credits. A variety of death benefits is available under various eligibility criteria. Member and beneficiary annuitants are entitled to an automatic cost of living adjustment (COLA) after retirement. A COLA is granted each July for annuitants retired prior to the second of July of the previous year. The COLA is based on the change in the consumer price index (CPI) during the prior calendar year, capped at three percent, and applied to the current benefit. No COLA is granted if the change in the CPI is less than one-half percent. A one percent COLA is granted if the CPI change is between one-half and one percent. A member who leaves employment may withdraw their employee contributions, plus any accumulated interest. Under the Teacher Legacy Pension Plan, benefit terms and conditions, including COLAs can be adjusted on a prospective basis. Moreover, there are defined cost controls and unfunded liability controls that provide for the adjustment of benefit terms and conditions on an automatic basis. Contributions. Contributions for teachers are established in the statutes governing the TCRS and may only be changed by the Tennessee General Assembly. Teachers are required to contribute five percent of their salaries. The Local Education Agencies (LEAs) make employer contributions at the rate set by the Board of Trustees as determined by an actuarial valuation. By law, employer contributions for the Teacher Legacy Pension Plan are required to be paid. The TCRS may intercept the state shared taxes of the sponsoring governmental entity of the LEA if the required employer contributions are not remitted. Employer contributions by the Perry County School Department for the year ended June 30, 2018, to the Teacher Legacy Pension Plan were $453,988 which is 9.08 percent of covered payroll. The employer rate, when combined with member contributions, is expected to finance the costs of benefits earned by members during the year, the cost of administration, as well as an amortized portion of any unfunded liability. Pension Liabilities (Assets), Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions Pension Liability (Assets). At June 30, 2018, the School Department reported a liability (asset) of ($45,010) for its proportionate share of the net pension liability (asset). The net pension liability (asset) was measured as of June 30, 2017, and the total pension liability used to calculate the net pension liability (asset) was determined by an actuarial valuation as of that date. The School Department’s proportion of the net pension liability (asset) was based on the School

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Department’s long-term share of contributions to the pension plan relative to the contributions of all participating LEAs. At the measurement date of June 30, 2017, the School Department’s proportion was .137573 percent. The proportion measured at June 30, 2016, was .131899 percent. Pension Expense. For the year ended June 30, 2018, the School Department recognized pension expense of $35,832. Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2018, the School Department reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:



Difference Between Expected and Actual Experience $ 27,136 $ 929,276Changes in Assumptions 381,221 0Net Difference Between Projected and Actual Earnings on Pension Plan Investments 6,833 0Changes in Proportion of Net Pension Liability (Asset) 108,720 0LEA's Contributions Subsequent to the Measurement Date of June 30, 2017 453,988 N/A

Total $ 977,898 $ 929,276

The School Department’s employer contributions of $453,988 reported as pension related deferred outflows of resources subsequent to the measurement date, will be recognized as a decrease in net pension liability in the year ending June 30, 2019. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

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2019 $ (286,769)2020 173,7072021 (80,689)2022 (211,615)2023 0Thereafter 0

In the table above, positive amounts will increase pension expense, while negative amounts will decrease pension expense. Actuarial Assumptions. The total pension liability in the June 30, 2017, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:





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

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




Total 100 %

The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees as 7.25 percent based on a blending of the factors described above. Changes of Assumptions. In 2017, the following assumptions were changed: decreased inflation rate from 3.0 percent to 2.5 percent; decreased the investment rate of return from 7.5 percent to 7.25 percent; decreased the cost-of-living adjustment from 2.5 percent to 2.25 percent; decreased salary growth graded ranges from an average of 4.25 percent to an average of 4.0 percent; and modified the mortality assumptions. Discount Rate. The discount rate used to measure the total pension liability was 7.25 percent. The projection of cash flows used to determine the discount rate assumes that employee contributions will be made at the current rate and that contributions from all the LEAs will be made at the actuarially determined contribution rate pursuant to an actuarial valuation in accordance with the funding policy of the TCRS Board of Trustees and as required to be paid by state statute. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make projected future benefit payments of current active and inactive members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

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Sensitivity of the Proportionate Share of Net Pension Liability (Asset) to Changes in the Discount Rate. The following presents the School Department’s proportionate share of the net pension liability (asset) calculated using the discount rate of 7.25 percent, as well as what the School Department’s proportionate share of the net pension liability (asset) would be if it were calculated using a discount rate that is one percentage point lower (6.25%) or one percentage point higher (8.25%) than the current rate: School Department's Current Proportionate Share of 1% Discount 1% the Net Pension Decrease Rate Increase Liability (Asset) 6.25% 7.25% 8.25%

Net Pension Liability $ 4,038,815 $ (45,010) $ (3,420,564)

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 Perry County offers its employees a deferred compensation plan, established pursuant to IRC Section 401(k), and the Perry County School Department offers its employees a deferred compensation plan established pursuant to IRC Section 403(b). All costs of administering and funding these programs are the responsibility of plan participants. The Section 401(k) and Section 403(b) plan assets remain the property of the contributing employees and are not presented in the accompanying financial statements. IRC Sections 401(k) and 403(b) establish participation, contribution, and withdrawal provisions for the plans. Teachers hired after July 1, 2014, by the School Department are required to participate in a hybrid pension plan consisting of a defined benefit portion, which is detailed in the pensions footnote above and is managed by the Tennessee Consolidated Retirement System, and a defined contribution portion which is placed into the state’s 401(k) plan and is managed by the employee. The defined contribution portion of the plan requires that the School Department contribute five percent of each teacher’s salary into their deferred compensation plan. In addition, teachers are required to contribute two percent of their salaries into this deferred compensation plan, unless they opt out of the employee portion. During the year the School Department contributed $22,994 and teachers contributed $4,559 to this deferred compensation pension plan.

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H. Other Postemployment Benefits (OPEB) Perry County and the discretely presented Perry County School Department provide OPEB benefits to its retirees through state administered public entity risk pools. For reporting purposes the plans are considered single employer defined benefit OPEB plans based on criteria in Statement No. 75 of the Governmental Accounting Standards Board (GASB). The plans are funded on a pay-as-you-go basis, and there are no assets accumulating in a trust that meets the criteria of paragraph 4 of GASB Statement No. 75. OPEB Provided through State Administered Public Entity Risk Pools Primary Government Retirees of Perry County and the Perry County Highway Department (Hwy) are provided healthcare under separate Local Government Plans (LGPs) until they reach Medicare eligibility. The primary government’s LGPs are combined for presentation purposes. Likewise, the School Department provides healthcare benefits to its employees under the Local Education Plan (LEP) until they reach Medicare eligibility. The certified retirees of Perry County School Department may then join the Tennessee Plan – Medicare (TNM), which provides supplemental medical insurance for retirees with Medicare. However, the School Department does not provide any subsidy (direct or indirect) to this plan and therefore does not recognize any OPEB liability associated with the TNM.

The county and the School Department’s total OPEB liability for each plan was measured as of June 30, 2017, and was determined by an actuarial valuation as of that date.

Actuarial Assumptions and Other Inputs. The total OPEB liability in the June 30, 2017, actuarial valuation of each plan was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified:

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Actuarial Cost Method Entry Age NormalInflation 2.25%Salary Increases Salary increases used in the July 1, 2017,

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

Discount Rate 3.56%Healthcare Cost Trend Rates LGP and LEP -

Based on the Getzen Model, with trend starting at 7.5% for the 2018 calendar year, and gradually decreasing over a 33-year period to an ultimate trend rate of 3.53% with .18% added to approximate the effect of the excise tax

Retirees Share of Benefit Related Cost Discussed under each plan

The discount rate was 3.56 percent, based on the daily rate of Fidelity’s 20-Year Municipal GO AA index closest to but not later than the measurement date. Mortality rates were based on the results of a statewide experience study undertaken on behalf of the Tennessee Consolidated Retirement System (TCRS). These mortality rates were used in the July 1, 2017, actuarial valuation of the TCRS.

Unless noted otherwise, the actuarial demographic assumptions used in the June 30, 2017, valuations were the same as those employed in the July 1, 2017, Pension Actuarial Valuation of the TCRS. These assumptions were developed by TCRS based on the results of an actuarial experience study for the period July 1, 2012 - June 30, 2016. The demographic assumptions were adjusted to more closely reflect actual and expected future experience. Mortality tables are used to measure the probabilities of participants dying before and after retirement. The mortality rates employed in this valuation are taken from the RP-2014 Healthy Participant Mortality Table for Annuitants for non-disabled post-retirement mortality, with mortality improvement projected to all future years using Scale MP-2016. Post-retirement tables are Blue Collar and adjusted with a 2 percent load for males and a -3 percent load for females. Mortality rates for impaired lives are the same as those used by TCRS and are taken from a gender distinct table published in the IRS Ruling 96-7 for disabled lives with a 10 percent load.

Changes in Assumptions. The discount rate changed from 2.92 percent as of the beginning of the measurement period to 3.56 percent as of the measurement date of June 30, 2017.

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Closed Local Government OPEB Plan (Primary Government)

Plan Description. Employees of Perry County who were hired prior to July 1, 2015, are provided with pre-65 retiree health insurance benefits through the closed Local Government Plan (LGP) administered by the Tennessee Department of Finance and Administration. All eligible pre-65 retired employees and disability participants of local governments, who choose coverage, participate in the LGP. This plan is closed to the employees of all participating employers that were hired on or after July 1, 2015.

Benefits Provided. Perry County offers the LGP to provide health insurance coverage to eligible pre-65 retirees and disabled participants of local governments. With the exception of a small group of grandfathered individuals, retirees are required to discontinue coverage under the LGP upon obtaining Medicare eligibility. Insurance coverage is the only postemployment benefit provided to retirees. An insurance committee created in accordance with TCA 8-27-701 establishes and amends the benefit terms of the LGP. All members have the option of choosing between the premier preferred provider organization (PPO), standard PPO, limited PPO or the wellness health savings consumer-driven health plan (CDHP) for healthcare benefits. Retired plan members of the LGP receive the same plan benefits as active employees, at a blended premium rate that considers the cost of all participants. This creates an implicit subsidy for retirees. Participating employers determine their own policy related to direct subsidies provided for the retiree premiums. Perry County does not provide a direct subsidy and is only subject to the implicit subsidy.

Employees Covered by Benefit Terms

At the measurement date of June 30, 2017, the following employees were covered by the benefit terms:

Perry HwyCounty Dept Total

Inactive Employees or Beneficiaries Currently Receiving Benefits 0 0 0Inactive Employees Entitled to But Not Yet Receiving Benefits 0 0 0Active Employees 54 17 71

Total 54 17 71

An insurance committee, created in accordance with TCA 8-27-701, establishes the required payments to the LGP by member employers and employees through the blended premiums established for active and retired employees. Claims liabilities of the plan are periodically computed using

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actuarial and statistical techniques to establish premium rates. For the fiscal year ended June 30, 2018, the county paid $581 (County - $247, Highway Dept - $334) to the LGP for OPEB benefits as they came due.

Changes in the Total OPEB Liability

Perry Hwy Total OPEBCounty Dept Liability

Balance July 1, 2016 $ 58,295 $ 43,749 $ 102,044Changes for the Year: Service Cost $ 5,346 $ 4,154 $ 9,500 Interest 1,858 1,399 3,257 Changes in Benefit Terms 0 0 Difference between 0 Expected and Actuarial Experience 0 0 Changes in Assumption and Other Inputs (3,748) (1,601) (5,349) Benefit Payments 0 0 0

Net Changes $ 3,456 $ 3,952 $ 7,408

Balance June 30, 2017 $ 61,751 $ 47,701 $ 109,452

OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2018, the county recognized OPEB expense of $12,203 (County - $6,822, Highway Dept - $5,381). At June 30, 2018, the county reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:



Difference Between Expected and Actual Experience (County $0, Hwy $0) $ 0 $ 0Changes of Assumptions/Inputs (DI - County $3,366, Hwy $1,429) 0 4,795Net Difference Between Projected andBenefits paid after the measurement date (DO - County $247, Hwy $334) 581 0

Total $ 581 $ 4,795

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

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Year Ending Perry Hwy TotalJune 30 County Dept Amount

2019 $ (382) $ (172) $ (554)2020 (382) (172) (554)2021 (382) (172) (554)2022 (382) (172) (554)2023 (382) (172) (554)Thereafter (1,456) (569) (2,025)

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

Current1% Discount 1%

Decrease Rate Increase2.56% 3.56% 4.56%

Perry County $ 67,619 $ 61,751 $ 56,354Hwy Dept 50,185 47,701 45,147

Total OPEB Liability $ 117,804 $ 109,452 $ 101,501

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

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Current1% Trend 1%

Decrease Rates Increase6 to 3.77% 7 to 4.77% 8 to 5.77%

Perry County $ 52,958 $ 61,751 $ 72,381Hwy Dept 43,092 47,701 52,905

Total OPEB Liability $ 96,050 $ 109,452 $ 125,286

Closed Local Education (LEP) OPEB Plan (Discretely Presented School Department) Plan Description. Employees of the Perry County School Department who were hired prior to July 1, 2015, are provided with pre-65 retiree health insurance benefits through the closed Local Education Plan (LEP) administered by the Tennessee Department of Finance and Administration. All eligible pre-65 retired teachers, support staff, and disability participants of local education agencies, who choose coverage, participate in the LEP. This plan is closed to the employees of all participating employers that were hired on or after July 1, 2015. Benefits Provide. The Perry County School Department offers the LEP to provide health insurance coverage to eligible pre-65 retirees, support staff, and disabled participants of local education agencies. Retirees are required to discontinue coverage under the LEP upon obtaining Medicare eligibility. Insurance coverage is the only postemployment benefit provided to retirees. An insurance committee created in accordance with TCA 8-27-301 establishes and amends the benefit terms of the LEP. All members have the option of choosing between the premier preferred provider organization (PPO), standard PPO, limited PPO, or the wellness health savings consumer-driven health plan (CDHP) for healthcare benefits. Retired plan members of the LEP receive the same plan benefits as active employees at a blended premium rate that considers the cost of all participants. This creates an implicit subsidy for retirees. Participating employers determine their own policy related to direct subsidies provided for retiree premiums. The Perry County School Department does not provide a direct subsidy and is only subject to the implicit subsidy. The state, as a governmental non-employer contributing entity, provides a direct subsidy for eligible retirees’ premiums based on years of service. Therefore, retirees with 30 or more years of service will receive 45%; 20 but less than 30 years, 35%; and less than 20 years, 20% of the scheduled premium. No subsidy is provided for enrollees of the health savings CDHP.

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Employees Covered by Benefit Terms At the measurement date of June 30, 2017, the following employees were covered by the benefit terms:

SchoolDepartment

Inactive Employees or Beneficiaries Currently Receiving Benefits 8Inactive Employees Entitled to But Not Yet Receiving Benefits 0Active Employees 178

Total 186

A state insurance committee, created in accordance with TCA 8-27-301, establishes the required payments to the LEP by member employers and employees through the blended premiums established for active and retired employees. Claims liabilities of the plan are periodically computed using actuarial and statistical techniques to establish premium rates. Administrative costs are allocated to plan participants. Employers contribute towards employee costs based on their own developed policies. During the current reporting period, the School Department paid $43,067 to the LEP for OPEB benefits as they came due.

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Changes in the Collective Total OPEB Liability

Perry County State ofSchool Department TN Total OPEB

65.6128% 34.3872% Liability

Balance July 1, 2016 $ 888,343 $ 465,574 $ 1,353,917Changes for the Year: Service Cost $ 51,947 $ 27,225 $ 79,172 Interest 26,844 14,069 40,913 Changes in Benefit Terms 0 0 0 Difference between Expected and Actuarial Experience 0 0 0 Changes in Assumption and Other Inputs (40,273) (21,107) (61,380) Benefit Payments (41,957) (21,990) (63,947)

Net Changes $ (3,439) $ (1,803) $ (5,242)

Balance June 30, 2017 $ 884,904 $ 463,771 $ 1,348,675

Share of Collective Liability

The Perry County School Department has a special funding situation related to benefits paid by the State of Tennessee for its eligible retired employees participating in the LEP. The Perry County School Department's proportionate share of the collective total OPEB liability was based on a projection of the employer’s long-term share of benefit payments to the OPEB plan relative to the projected share of benefit payments of all participating employers and nonemployer contributing entities, actuarially determined. The School Department recognized $39,118 in revenue for subsidies provided by nonemployer contributing entities for benefits paid by the LEP for School Department retirees.

During the year, the Perry County School Department’s proportionate share of the collective OPEB liability was 65.6128% and the State of Tennessee’s share was 34.3872%. OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2018, the School Department recognized OPEB expense of $113,757, including the state’s share of the expense. At June 30, 2018, the School Department reported deferred outflows of resources and deferred inflows of resources related to its proportionate share of OPEB from the following sources:

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Difference Between Expected and Actual Experience $ 0 $ 0Changes of Assumptions/Inputs 0 36,121Changes in Proportion and Differences Between Amounts Paid as Benefits Came Due and Proportionate Share Amounts Paid by the Employee and Nonemployer Contributors As Benefits Came Due 0 0Benefits Paid After the Measurement Date 43,067 0

Total $ 43,067 $ 36,121

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

Year Ending SchoolJune 30 Department

2019 $ (4,152)2020 (4,152)2021 (4,152)2022 (4,152)2023 (4,152)Thereafter (15,361)

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

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Discount Rate Current1% Discount 1%

Decrease Rate Increase2.56% 3.56% 4.56%

Proportionate Share of the Collective Total OPEB Liability $ 948,446 $ 884,904 $ 823,834

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

Healthcare Cost Trend Rate

1% Current 1%Decrease Rates Increase

6.5 to 2.71% 7.5 to 3.71% 8.5 to 4.71%

Proportionate Share of the Collective Total OPEB Liability $ 783,391 $ 884,904 $ 1,005,340

I. Purchasing Laws

Office of County Mayor Purchasing procedures for the County Mayor’s Office are governed by the County Purchasing Law of 1983, Sections 5-14-201 through 5-14-207, Tennessee Code Annotated (TCA). This act provides for all purchases exceeding $10,000 to be made based on competitive bids solicited through newspaper advertisement. Office of Superintendent of Highways Purchasing procedures for the Highway Department are governed by provisions of the Uniform Road Law, Section 54-7-113, TCA, which provides for purchases exceeding $10,000 to be made on the basis of publicly advertised competitive bids. Office of Director of Schools

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Purchasing procedures for the discretely presented Perry County School Department are governed by purchasing laws applicable to schools as set forth in Section 49-2-203, TCA, which provides for the county Board of Education, through its executive committee (director of schools and chairman of the Board of Education), to make all purchases. This statute also requires competitive bids to be solicited through newspaper advertisement on all purchases exceeding $10,000.

J. Subsequent Events On August 3, 2018, the county’s General Debt Service Fund issued a $500,000 tax anticipation note to the General Fund for temporary operating funds. On August 23, 2018, the county’s General Debt Service Fund issued a $227,131 tax anticipation note to the General Fund for temporary operating funds. On August 31, 2018, Terry Richardson left the Office of County Mayor and was succeeded by John Carroll, Peggy Smotherman left the Office of Circuit and General Sessions Courts Clerk and was succeeded by Joy Breeding, and George Duncan left the Office of Trustee and was succeeded by Shane Copeland. On September 14, 2018, Perry County issued a capital outlay note totaling $180,835 for purchasing school buses. On November 1, 2018, the county’s Ambulance Service Fund issued a $40,000 tax anticipation note to the Solid Waste/Sanitation Fund for temporary operating funds.

VI. OTHER NOTES – DISCRETELY PRESENTED INDUSTRIAL DEVELOPMENT BOARD OF PERRY COUNTY

A. Summary of Significant Accounting Policies

1. Reporting Entity

The Industrial Development Board of Perry County, Tennessee, consists of members appointed by Perry County. As an agency for the county, the board has been delegated the authority to develop, operate, and maintain industrial sites for the benefit of the community. The accounting policies of the board conform to the generally accepted accounting principles as applicable to government. The following is a summary of the more significant policies.

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Government-wide and Fund Financial Statements The Government-wide Financial Statements, the Statement of Net Position and the Statement of Activities report information on all of the financial activities of the board. The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. 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 or segment and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Measurement Focus and Availability Governmental fund revenues 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 collectable within the current period or soon enough thereafter to be used to pay liabilities of the current period. The government considers most governmental revenues as available if received within 45 days of years end. Expenditures are recorded generally when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments are recorded only when payment is due. The Government-wide Financial Statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are reported 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. The board reports the following major fund: General (Operating) Fund – The General Fund is the general operating fund of the Industrial Development Board. It is used to account for all financial resources of the general government except those required to be accounted for in another fund. Cash and Cash Equivalents Cash and cash equivalents consist primarily of checking accounts and a money market account. When both restricted and unrestricted

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resources are available for use, it is the board’s policy to use restricted resources first, then unrestricted resources as they are needed. When unrestricted funds are used the board uses committed, assigned then unassigned funds. Capital Assets Capital assets, which include property, plant and equipment, and infrastructure assets consisting of certain improvements other than buildings are reported in the applicable governmental activities columns in the government-wide financial statements. Capital assets are defined by the board as assets with an individual cost of $5,000 and an estimated useful life in excess of three years. Donated capital assets are valued at their estimated fair value on the date donated. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Depreciation is provided over the estimated useful lives using the straight-line method. The estimated useful lives are as follows: Land Improvements 10-15 years Buildings 25-40 years Machinery and Equipment 5-10 years

Budget and Budgetary Accounting The board is not legally required to adopt a budget; therefore, no budget comparison is presented in these financial statements. Net Position Flow Assumption Sometimes the government will fund outlays for a particular purpose from both restricted and unrestricted resources. In order to calculate the amounts to report as restricted – net position and unrestricted – net position in the government-wide financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the board’s policy to consider restricted – net position to have been depleted before unrestricted – net position is applied. Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported

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amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Credit Risk Financial instruments that potentially subject the board to significant concentrations of credit risk consist principally of cash and cash equivalents. The board places its cash with federally-insured financial institutions or institutions participating in the State collateral pool. Long-term Obligations In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities Statement of Net Position. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds and are presented in the accompanying financial statements as other assets. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is 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. Fund Balance The board implemented GASB 54, which addresses issues related to how fund balances are reported. Fund balances are now reported in the following manner: Nonspendable fund balance – amounts that are not in a spendable form. Restricted fund balance – amounts constrained to specific purposes by their providers, provisions, or by enabling legislation. Committed fund balance – amounts constrained to specific purposes by a government itself, using its highest level of decision-making authority; to be reported as committed, amounts cannot be used for any other purpose unless the government takes the same highest-level action to remove or change the constraint. Assigned fund balance – amounts a government intends to use for a specific purpose; intent can be expressed by the governing body or by an official or body to which the governing body delegates the authority.

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Unassigned fund balance – amounts that are available for any purpose; these amounts are reported only in the General Fund. Only by board approval can fund balance amounts be classified as committed or assigned.

2. Cash and Cash Equivalents The board is authorized to invest funds in federal treasury bills and notes, State of Tennessee Local Government Investment Pool and financial institution demand deposit accounts and certificates of deposit. Deposits in financial institutions are required by state statute to be secured and collateralized by the institutions. The board has deposit policies to minimize custodial credit risks. The collateral must meet certain requirements and be deposited in an escrow account in a second bank for the benefit of the board and must total a minimum 105 percent of the value of the deposits placed in the institutions less the amount protected by federal depository insurance. The board’s deposits with financial institutions are fully insured or collateralized by securities held in the board’s name.

3. Capital Assets A summary of changes in general capital assets, as presented in the governmental activities column of the government-wide financial statements, is as follows:

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

Land $ 127,737 $ 0 $ 0 $ 127,737Buildings 240,000 0 0 240,000Improvements 2,699,109 0 0 2,699,109Total Capital Assets Being Depreciated $ 3,066,846 $ 0 $ 0 $ 3,066,846

Less Accumulated Depreciation (414,784) (517,785)

Total Capital Assets, Net $ 2,652,062 $ 2,549,061 Depreciation expenses for the year were $103,001 ($16,533 for buildings and $86,468 for improvements.)

4. Long-term Debt A summary of changes in long-term debt as presented in the governmental activities column of the government-wide financial statements is as follows:

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Balance Balance7-1-17 Deletions 6-30-18

Montrex building from Perry County $ 200,000 $ 0 $ 200,000Linden drug building from Perry County 106,809 0 106,809Loan from Bank of Perry County 609,776 20,942 588,834Total Capital Assets Being Depreciated $ 916,585 $ 20,942 $ 895,643

The board borrowed funds from Perry County, Tennessee, to purchase the Montrex, Fisher and Linden drug buildings. Repayment shall be at zero percent interest and shall be payable from rents and income derived from said properties. The board shall repay Perry County, Tennessee, as rents are paid to them by the tenants of these buildings until the amounts have been repaid. However, the board shall be entitled to hold sufficient funds for maintenance and other normal expenses associated with the ownership of properties during the course of repayment. The board borrowed funds from the Bank of Perry County to assist in financing the construction of a roofing project. The two loans from Perry County have no planned repayment schedule. The loan from the Bank of Perry County has no scheduled repayment schedule, but the board is planning to repay approximately $20,000 during the next fiscal year.

5. Commitments and Contingencies Litigation There are no pending lawsuits in which the board is involved, which are significant to the financial statements. Grants Amounts received from grantor agencies are subject to audit and adjustment by grantor agencies, principally the federal government. Any disallowed claims including amounts already collected, could become a liability of the applicable fund.

6. Insurance The board carries commercial insurance for the majority of risks of loss, including general liability and property. Settled claims from these risks have not exceeded commercial insurance coverage in any of the past three fiscal years.

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7. Rental Income The board leases its property to tenants, with annual lease payments of approximately $90,000 a year.

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REQUIRED SUPPLEMENTARY INFORMATION

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Exhibit E-1

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

2014 2015 2016 2017

Total Pension Liability Service Cost $ 372,604 $ 377,554 $ 386,824 $ 433,397Interest 920,989 966,925 1,016,023 1,066,221Differences Between Actual and Expected Experience (81,790) (98,092) (146,451) (525,032)Change of Assumptions 0 0 0 372,353Benefit Payments, Including Refunds of Employee Contributions (596,061) (612,475) (589,579) (677,739)Net Change in Total Pension Liability $ 615,742 $ 633,912 $ 666,817 $ 669,200Total Pension Liability, Beginning 12,205,281 12,821,023 13,454,935 14,121,752

Total Pension Liability, Ending (a) $ 12,821,023 $ 13,454,935 $ 14,121,752 $ 14,790,952

Plan Fiduciary Net PositionContributions - Employer $ 445,249 $ 439,736 $ 467,367 $ 472,252Contributions - Employee 224,649 225,739 242,009 242,431Net Investment Income 1,928,453 420,150 375,695 1,651,885Benefit Payments, Including Refunds of Employee Contributions (596,061) (612,475) (589,579) (677,739)Administrative Expense (6,737) (9,043) (13,703) (15,305)Net Change in Plan Fiduciary Net Position $ 1,995,553 $ 464,107 $ 481,789 $ 1,673,524Plan Fiduciary Net Position, Beginning 11,597,858 13,593,411 14,057,518 14,539,307

Plan Fiduciary Net Position, Ending (b) $ 13,593,411 $ 14,057,518 $ 14,539,307 $ 16,212,831

Net Pension Liability (Asset), Ending (a - b) $ (772,388) $ (602,583) $ (417,555) $ (1,421,879)

Plan Fiduciary Net Position as a Percentage of Total Pension Liability 106.02% 104.48% 102.96% 109.61%Covered Payroll $ 4,492,905 $ 4,514,741 $ 4,798,429 $ 4,831,334Net Pension Liability (Asset) as a Percentage of Covered Payroll (17.19)% (13.35)% (8.70)% (29.43)%

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

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

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Exhibit E-2Perry County, TennesseeSchedule of Contributions Based on Participation in the Public Employee Pension Plan of TCRSPrimary GovernmentFor the Fiscal Year Ended June 30

2014 2015 2016 2017 2018

Actuarially Determined Contribution $ 445,249 $ 439,736 $ 467,367 $ 200,500 $ 218,192Less Contributions in Relation to the Actuarially Determined Contribution (445,249) (439,736) (467,367) (472,252) (515,825)

Contribution Deficiency (Excess) $ 0 $ 0 $ 0 $ (271,752) $ (297,633)

Covered Payroll $ 4,492,905 $ 4,514,741 $ 4,798,429 $ 4,831,334 $ 5,295,932

Contributions as a Percentage of Covered Payroll 9.91% 9.74% 9.74% 9.77% 9.74%


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

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Exhibit E-3

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

2015 2016 2017 2018

Contractually Required Contribution $ 5,790 $ 10,082 $ 12,235 $ 17,494Less Contributions in Relation to the Contractually Required Contribution (5,790) (10,082) (12,235) (17,494)

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

Covered Payroll $ 144,738 $ 252,055 $ 305,877 $ 437,343

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


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Exhibit E-4Perry County, TennesseeSchedule of Contributions Based on Participation in the Teacher Legacy Pension Plan of TCRSDiscretely Presented Perry County School DepartmentFor the Fiscal Year Ended June 30

2014 2015 2016 2017 2018

Contractually Required Contribution $ 419,679 $ 432,305 $ 430,421 $ 439,627 $ 453,988Less Contributions in Relation to the Contractually Required Contribution (419,679) (432,305) (430,421) (439,627) (453,988)

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

Covered Payroll $ 4,726,117 $ 4,782,157 $ 4,761,304 $ 4,863,144 $ 4,999,901

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


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Exhibit E-5Perry County, TennesseeSchedule of Proportionate Share of the Net Pension Liability (Asset) in the Teacher Retirement Plan of TCRSDiscretely Presented Perry County School DepartmentFor the Fiscal Year Ended June 30 *

2016 2017 2018

School Department's Proportion of the Net Pension Liability (Asset) 0.068224% 0.057285% 0.046604%

School Department's Proportionate Share of the Net Pension Liability (Asset) $ (2,802) $ (5,964) $ (12,296)

Covered Payroll $ 144,738 $ 252,055 $ 305,877

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

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

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


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Exhibit E-6

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

2015 2016 2017 2018

School Department's Proportion of the Net Pension Liability (Asset) 0.120411% 0.127745% 0.131899% 0.137573%

School Department's Proportionate Share of the Net Pension Liability (Asset) $ (19,566) $ 52,329 $ 824,296 $ (45,010)

Covered Payroll $ 4,726,117 $ 4,782,157 $ 4,761,304 $ 4,863,144

School Department's Proportionate Share of the Net Pension Liability (Asset) as a Percentage of its Covered Payroll (0.414002)% 1.094250% 17.31% (0.93)%

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

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


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Exhibit E-7

Perry County, TennesseeSchedule of Changes in the Total OPEB Liability and Related Ratios - Local Government PlansFor the Fiscal Year Ended June 30 *

Perry County Plan 2017

Total OPEB LiabilityService Cost $ 5,346 Interest 1,858 Changes in Benefit Terms 0Differences Between Actual and Expected Experience 0Changes in Assumptions or Other Inputs (3,748)Benefit Payments 0Net Change in Total OPEB Liability $ 3,456 Total OPEB Liability, Beginning 58,295

Total OPEB Liability, Ending $ 61,751

Covered Employee Payroll $ 2,754,982 Net OPEB Liability as a Percentage of Covered Employee Payroll 2.24%

Highway Department Plan2017

Total OPEB LiabilityService Cost $ 4,154 Interest 1,399 Changes in Benefit Terms 0Differences Between Actual and Expected Experience 0Changes in Assumptions or Other Inputs (1,601)Benefit Payments 0Net Change in Total OPEB Liability $ 3,952 Total OPEB Liability, Beginning 43,749

Total OPEB Liability, Ending $ 47,701

Covered Employee Payroll $ 485,581 Net OPEB Liability as a Percentage of Covered Employee Payroll 9.82%

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

Note 2: Changes in assumptions. Changes in assumptions and other inputs reflect the effects of changes in the discount rate each period. The following are the discount rates used in each period:

2017 2.92%2018 3.56%

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

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Exhibit E-8

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

2017Total OPEB LiabilityService Cost $ 79,172 Interest 40,913 Changes in Benefit Terms 0Differences Between Actual and Expected Experience 0Changes in Assumptions or Other Inputs (61,380)Benefit Payments (63,947) Net Change in Total OPEB Liability $ (5,242) Total OPEB Liability, Beginning 1,353,917

Total OPEB Liability, Ending $ 1,348,675

Nonemployer Contributing Entity Proportionate Share of the Total OPEB Liability $ 463,771 Employer Proportionate Share of the Total OPEB Liability 884,904

Covered Employee Payroll $ 7,162,032 Net OPEB Liability as a Percentage of Covered Employee Payroll 12.36%

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

Note 2: changes in assumptions. Changes in assumptions and other inputs reflect the effects of changes in the discount rate each period. The following are the discount rates used in each period:

2017 2.92%2018 3.56%

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

106

PERRY COUNTY, TENNESSEE NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION


TENNESSEE CONSOLIDATED RETIREMENT SYSTEM Valuation Date: Actuarially determined contribution rates for fiscal year 2017 were calculated based on the June 30, 2106, actuarial valuation.

Methods and assumptions used to determine contribution rates:

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

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

3.71% Based on Age, Including InflationInvestment 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


107

COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES

108

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. The proceeds of the tax must be used to pay for improvements or maintenance on the courthouse and jail. Special Purpose Fund – The Special Purpose Fund is used to account for the proceeds of a $2.50 increase in the litigation tax. The proceeds of the tax must be used to pay for computerization, a fax machine, and related costs for the circuit and general sessions courts clerk, and clerk and master. 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.

109

Capital Projects Fund ____________________________

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

____________________________ Education Capital Projects Fund – This fund accounts for debt issued by Perry County that is subsequently contributed to the discretely presented Perry County School Department for capital purchases.

110

Exhibit F-1

Perry County, TennesseeCombining Balance SheetNonmajor Governmental FundsJune 30, 2018

TotalCourthouse Nonmajor

and Jail Special Drug GovernmentalMaintenance Purpose Control Funds

ASSETS

Equity in Pooled Cash and Investments $ 8,234 $ 49,468 $ 123,959 $ 181,661

Total Assets $ 8,234 $ 49,468 $ 123,959 $ 181,661

FUND BALANCES

Restricted:Restricted for General Government $ 8,234 $ 0 $ 0 $ 8,234Restricted for Administration of Justice 0 49,468 0 49,468Restricted for Public Safety 0 0 123,959 123,959

Total Fund Balances $ 8,234 $ 49,468 $ 123,959 $ 181,661

Special Revenue Funds

111

Exhibit F-2

Perry County, TennesseeCombining Statement of Revenues, Expenditures,

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

Constitu -Courthouse tional

and Jail Special Drug Officers -Maintenance Purpose Control Fees Total

RevenuesLocal Taxes $ 22,621 $ 3,926 $ 0 $ 0 $ 26,547Fines, Forfeitures, and Penalties 3,308 1,079 6,234 0 10,621Charges for Current Services 0 0 0 50 50Other Local Revenues 20,000 0 64,900 0 84,900State of Tennessee 17,805 0 0 0 17,805

Total Revenues $ 63,734 $ 5,005 $ 71,134 $ 50 $ 139,923


General Government $ 7,459 $ 0 $ 0 $ 0 $ 7,459Administration of Justice 0 170 0 50 220Public Safety 190,510 0 54,342 0 244,852Other Operations 259 0 0 0 259

Debt Service:Other Debt Service 0 0 0 0 0

Capital Projects - Donated 0 0 0 0 0Total Expenditures $ 198,228 $ 170 $ 54,342 $ 50 $ 252,790

Excess (Deficiency) of RevenuesOver Expenditures $ (134,494) $ 4,835 $ 16,792 $ 0 $ (112,867)

Other Financing Sources (Uses)Notes Issued $ 90,000 $ 0 $ 0 $ 0 $ 90,000Transfers Out 0 0 0 0 0

Total Other Financing Sources (Uses) $ 90,000 $ 0 $ 0 $ 0 $ 90,000

Net Change in Fund Balances $ (44,494) $ 4,835 $ 16,792 $ 0 $ (22,867)Fund Balance, July 1, 2017 52,728 44,633 107,167 0 204,528

Fund Balance, June 30, 2018 $ 8,234 $ 49,468 $ 123,959 $ 0 $ 181,661

(Continued)


112

Exhibit F-2


and Changes in Fund BalancesNonmajor Governmental Funds (Cont.)

TotalEducation Nonmajor

Capital GovernmentalProjects Funds

RevenuesLocal Taxes $ 0 $ 26,547Fines, Forfeitures, and Penalties 0 10,621Charges for Current Services 0 50Other Local Revenues 0 84,900State of Tennessee 0 17,805

Total Revenues $ 0 $ 139,923


General Government $ 0 $ 7,459Administration of Justice 0 220Public Safety 0 244,852Other Operations 0 259

Debt Service:Other Debt Service 500 500

Capital Projects - Donated 232,522 232,522Total Expenditures $ 233,022 $ 485,812

Excess (Deficiency) of RevenuesOver Expenditures $ (233,022) $ (345,889)

Other Financing Sources (Uses)Notes Issued $ 240,000 $ 330,000Transfers Out (6,978) (6,978)

Total Other Financing Sources (Uses) $ 233,022 $ 323,022

Net Change in Fund Balances $ 0 $ (22,867)Fund Balance, July 1, 2017 0 204,528

Fund Balance, June 30, 2018 $ 0 $ 181,661

Capital Projects Fund

113

Exhibit F-3

Perry County, TennesseeSchedule of Revenues, Expenditures, and Changes

in Fund Balance - Actual and BudgetCourthouse and Jail Maintenance FundFor the Year Ended June 30, 2018



RevenuesLocal Taxes $ 22,621 $ 20,500 $ 20,500 $ 2,121Fines, Forfeitures, and Penalties 3,308 1,300 1,300 2,008Other Local Revenues 20,000 0 0 20,000State of Tennessee 17,805 0 90,000 (72,195)

Total Revenues $ 63,734 $ 21,800 $ 111,800 $ (48,066)

ExpendituresGeneral Government

County Buildings $ 7,459 $ 11,585 $ 11,585 $ 4,126Public Safety

Jail 190,510 11,500 200,435 9,925Other Operations

Other Charges 259 300 300 41Total Expenditures $ 198,228 $ 23,385 $ 212,320 $ 14,092

Excess (Deficiency) of RevenuesOver Expenditures $ (134,494) $ (1,585) $ (100,520) $ (33,974)

Other Financing Sources (Uses)Notes Issued $ 90,000 $ 0 $ 90,000 $ 0

Total Other Financing Sources $ 90,000 $ 0 $ 90,000 $ 0

Net Change in Fund Balance $ (44,494) $ (1,585) $ (10,520) $ (33,974)Fund Balance, July 1, 2017 52,728 50,232 50,232 2,496

Fund Balance, June 30, 2018 $ 8,234 $ 48,647 $ 39,712 $ (31,478)

Budgeted Amounts

114

Exhibit F-4


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



RevenuesLocal Taxes $ 3,926 $ 4,000 $ 4,000 $ (74)Fines, Forfeitures, and Penalties 1,079 2,000 2,000 (921)

Total Revenues $ 5,005 $ 6,000 $ 6,000 $ (995)

ExpendituresAdministration of Justice

Circuit Court $ 170 $ 10,100 $ 5,100 $ 4,930General Sessions Court 0 10,000 5,000 5,000Chancery Court 0 10,000 5,000 5,000

Total Expenditures $ 170 $ 30,100 $ 15,100 $ 14,930


Net Change in Fund Balance $ 4,835 $ (24,100) $ (9,100) $ 13,935Fund Balance, July 1, 2017 44,633 19,675 19,675 24,958

Fund Balance, June 30, 2018 $ 49,468 $ (4,425) $ 10,575 $ 38,893

Budgeted Amounts

115

Exhibit F-5


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



RevenuesFines, Forfeitures, and Penalties $ 6,234 $ 14,250 $ 14,250 $ (8,016)Other Local Revenues 64,900 74,000 74,000 (9,100)

Total Revenues $ 71,134 $ 88,250 $ 88,250 $ (17,116)

ExpendituresPublic Safety

Drug Enforcement $ 54,342 $ 92,900 $ 78,642 $ 24,300Total Expenditures $ 54,342 $ 92,900 $ 78,642 $ 24,300

Excess (Deficiency) of RevenuesOver Expenditures $ 16,792 $ (4,650) $ 9,608 $ 7,184

Net Change in Fund Balance $ 16,792 $ (4,650) $ 9,608 $ 7,184Fund Balance, July 1, 2017 107,167 111,234 111,234 (4,067)


Budgeted Amounts

116

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.

________________________________________

117

Exhibit G


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



RevenuesLocal Taxes $ 511,044 $ 519,450 $ 519,450 $ (8,406)Other Local Revenues 38,197 54,000 54,000 (15,803)State of Tennessee 231,280 186,000 196,000 35,280Other Governments and Citizens Groups 45,013 101,004 101,004 (55,991)

Total Revenues $ 825,534 $ 860,454 $ 870,454 $ (44,920)

ExpendituresPrincipal on Debt

General Government $ 704,550 $ 0 $ 704,550 $ 0Education 769,391 493,099 769,391 0

Interest on DebtGeneral Government 15,740 558,965 15,740 0Education 18,013 14,056 19,037 1,024

Other Debt ServiceGeneral Government 6,325 8,500 8,500 2,175Education 0 240,000 500 500


Excess (Deficiency) of RevenuesOver Expenditures $ (688,485) $ (454,166) $ (647,264) $ (41,221)

Other Financing Sources (Uses)Bonds Issued $ 0 $ 50,000 $ 50,000 $ (50,000)Notes Issued 0 240,000 0 0Transfers In 6,978 0 0 6,978

Total Other Financing Sources $ 6,978 $ 290,000 $ 50,000 $ (43,022)

Net Change in Fund Balance $ (681,507) $ (164,166) $ (597,264) $ (84,243)Fund Balance, July 1, 2017 2,129,305 2,087,329 2,087,329 41,976

Fund Balance, June 30, 2018 $ 1,447,798 $ 1,923,163 $ 1,490,065 $ (42,267)

Budgeted Amounts

118

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.

119

Exhibit H-1

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

Constitu-Cities - tionalSales Officers -Tax Agency Total

ASSETS

Cash $ 0 $ 462,181 $ 462,181Accounts Receivable 0 24 24Due from Other Governments 75,929 0 75,929

Total Assets $ 75,929 $ 462,205 $ 538,134

LIABILITIES

Due to Other Taxing Units $ 75,929 $ 0 $ 75,929Due to Litigants, Heirs, and Others 0 462,205 462,205

Total Liabilities $ 75,929 $ 462,205 $ 538,134

Agency Funds

120

Exhibit H-2

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

Beginning Ending Balance Additions Deductions Balance

Cities - Sales Tax Fund Assets Equity in Pooled Cash and Investments $ 0 $ 359,160 $ 359,160 $ 0 Due from Other Governments 69,044 75,929 69,044 75,929

Total Assets $ 69,044 $ 435,089 $ 428,204 $ 75,929

Liabilities Due to Other Taxing Units $ 69,044 $ 435,089 $ 428,204 $ 75,929

Total Liabilities $ 69,044 $ 435,089 $ 428,204 $ 75,929

Constitutional Officers - Agency Fund Assets Cash $ 176,345 $ 2,030,608 $ 1,744,772 $ 462,181 Accounts Receivable 46 24 46 24

Total Assets $ 176,391 $ 2,030,632 $ 1,744,818 $ 462,205

Liabilities Due to Litigants, Heirs, and Others $ 176,391 $ 2,030,632 $ 1,744,818 $ 462,205

Total Liabilities $ 176,391 $ 2,030,632 $ 1,744,818 $ 462,205

Totals - All Agency Funds Assets Cash $ 176,345 $ 2,030,608 $ 1,744,772 $ 462,181 Equity in Pooled Cash and Investments 0 359,160 359,160 0 Accounts Receivable 46 24 46 24 Due from Other Governments 69,044 75,929 69,044 75,929

Total Assets $ 245,435 $ 2,465,721 $ 2,173,022 $ 538,134

Liabilities Due to Other Taxing Units $ 69,044 $ 435,089 $ 428,204 $ 75,929 Due to Litigants, Heirs, and Others 176,391 2,030,632 1,744,818 462,205

Total Liabilities $ 245,435 $ 2,465,721 $ 2,173,022 $ 538,134

121

Perry County School Department _______________________________________

This section presents fund financial statements for the Perry County School Department, a discretely presented component unit. The School Department uses a General Fund and two Special Revenue Funds.

_______________________________________

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

122

Exhibit I-1

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

Net (Expense) Revenue andChanges in

Operating Capital Net PositionCharges Grants Grants Total

for and and GovernmentalFunctions/Programs Expenses Services Contributions Contributions Activities

Governmental Activities: Instruction $ 6,009,274 $ 740 $ 1,293,117 $ 223,000 $ (4,492,417) Support Services 3,878,937 21,522 25,945 0 (3,831,470) Operation of Non-instructional Services 1,163,999 163,033 441,696 0 (559,270)

Total Governmental Activities $ 11,052,210 $ 185,295 $ 1,760,758 $ 223,000 $ (8,883,157)

General Revenues: Taxes: Property Taxes Levied for General Purposes $ 1,564,271 Local Option Sales Tax 334,472 Other Local Taxes 5,916 Grants and Contributions Not Restricted to Specific Programs 7,259,793 Unrestricted Investment Earnings 14,158 Miscellaneous 39,839Total General Revenues $ 9,218,449

Change in Net Position $ 335,292Net Position, July 1, 2017 6,289,506Restatement - See Note I.D.8. (449,605)

Net Position, June 30, 2018 $ 6,175,193

Program Revenues

123

Exhibit I-2

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

OtherGeneral Govern- TotalPurpose mental GovernmentalSchool Funds Funds

ASSETS

Cash $ 106,545 $ 0 $ 106,545Equity in Pooled Cash and Investments 154,590 102,039 256,629Accounts Receivable 943 0 943Due from Other Governments 434,528 0 434,528Property Taxes Receivable 1,541,072 0 1,541,072Allowance for Uncollectible Property Taxes (39,384) 0 (39,384)

Total Assets $ 2,198,294 $ 102,039 $ 2,300,333

LIABILITIES

Payroll Deductions Payable $ 106,045 $ 0 $ 106,045Total Liabilities $ 106,045 $ 0 $ 106,045


Deferred Current Property Taxes $ 1,446,718 $ 0 $ 1,446,718Deferred Delinquent Property Taxes 49,687 0 49,687Other Deferred/Unavailable Revenue 55,075 0 55,075Total Deferred Inflows of Resources $ 1,551,480 $ 0 $ 1,551,480

FUND BALANCES

Restricted:Restricted for Education $ 23,970 $ 102,039 $ 126,009

Assigned:Assigned for Education 80,410 0 80,410

Unassigned 436,389 0 436,389Total Fund Balances $ 540,769 $ 102,039 $ 642,808

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 2,198,294 $ 102,039 $ 2,300,333

Nonmajor Funds

Major Fund

124

Exhibit I-3

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

Total fund balances - balance sheet - governmental funds (Exhibit I-2) $ 642,808

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

Add: land $ 138,512Add: buildings and improvements net of accumulated depreciation 5,145,751Add: other capital assets net of accumulated depreciation 362,110 5,646,373

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

Less: contributions due on primary government debt for capital leases $ (36,540)Less: other postemployment benefits liability (884,904)Less: compensated absences payable (44,658) (966,102)

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

Add: deferred outflows of resources related to pensions $ 1,297,935Less: deferred inflows of resources related to pensions (1,144,343)Add: deferred outflows of resources related to OPEB 43,067Less: deferred inflows of resources related to OPEB (36,121) 160,538

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

Add: net pension asset - agent plan $ 529,508Add: net pension asset - teacher retirement plan 12,296Add: net pension asset - teacher legacy retirement plan 45,010 586,814

(5) Other long-term assets are not available to pay for current-period expenditures and are therefore deferred in the governmental funds. 104,762

Net position of governmental activities (Exhibit A) $ 6,175,193

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

125

Exhibit I-4


and Changes in Fund Balances - Governmental Funds

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

OtherGeneral Govern- TotalPurpose mental GovernmentalSchool Funds Funds

RevenuesLocal Taxes $ 1,865,652 $ 0 $ 1,865,652Licenses and Permits 579 0 579Charges for Current Services 22,262 163,033 185,295Other Local Revenues 54,526 3,976 58,502State of Tennessee 7,491,799 5,069 7,496,868Federal Government 107,749 1,355,071 1,462,820Other Governments and Citizens Groups 32,000 0 32,000

Total Revenues $ 9,574,567 $ 1,527,149 $ 11,101,716


Instruction $ 5,453,420 $ 767,729 $ 6,221,149Support Services 3,840,570 150,975 3,991,545Operation of Non-Instructional Services 485,160 665,400 1,150,560

Debt Service:Other Debt Service 13,184 0 13,184

Total Expenditures $ 9,792,334 $ 1,584,104 $ 11,376,438

Excess (Deficiency) of RevenuesOver Expenditures $ (217,767) $ (56,955) $ (274,722)

Other Financing Sources (Uses)Insurance Recovery $ 64,492 $ 0 $ 64,492

Total Other Financing Sources (Uses) $ 64,492 $ 0 $ 64,492

Net Change in Fund Balances $ (153,275) $ (56,955) $ (210,230)Fund Balance, July 1, 2017 694,044 158,994 853,038

Fund Balance, June 30, 2018 $ 540,769 $ 102,039 $ 642,808

Nonmajor Funds

Major Fund

126

Exhibit I-5

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

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

Net change in fund balances - total governmental funds (Exhibit I-4) $ (210,230)

(1) Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of these assets is allocated over their useful lives and reported as depreciation expense. The difference between capital outlays and depreciation is itemized as follows: Add: capital assets purchased in the current period $ 78,982 Less: current-year depreciation expense (362,241) (283,259)

(2) The net effect of various miscellaneous transactions involving capital assets (sales, trade-ins, and donations) is to increase net position. Add: assets donated and capitalized $ 223,000 Less: book value of capital assets disposed (44,233) 178,767

(3) Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. Less: deferred delinquent property taxes and other deferred June 30, 2017 $ (41,976) Add: deferred delinquent property taxes and other deferred June 30, 2018 104,762 62,786

(4) The contributions of long-term debt (e.g., notes, bonds, leases) by the primary government provide current financial resources to governmental funds, while the contributions by the School Department of the principal of long-term debt consumethe current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Add: principal contributions on capital leases to primary government 11,242

(5) Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in the governmental funds. Change in other postemployment benefits liability (net of restatement) $ 3,439 Change in deferred outflows of resources related to OPEB (net of restatement) 1,110 Change in deferred inflows of resources related to OPEB (36,121) Change in net pension asset - agent plan 372,800 Change in net pension asset - teacher retirement plan 6,332 Change in net pension asset - teacher legacy pension plan 869,306 Change in deferred outflows of resources related to pensions (570,800) Change in deferred inflows of resources related to pensions (67,369) Change in compensated absences payable (2,711) 575,986

Change in net position of governmental activities (Exhibit B) $ 335,292

127

Exhibit I-6

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

TotalSchool NonmajorFederal Central GovernmentalProjects Cafeteria Funds

ASSETS

Equity in Pooled Cash and Investments $ 830 $ 101,209 $ 102,039

Total Assets $ 830 $ 101,209 $ 102,039

FUND BALANCES

Restricted:Restricted for Education $ 830 $ 101,209 $ 102,039

Total Fund Balances $ 830 $ 101,209 $ 102,039


128

Exhibit I-7


and Changes in Fund Balances - Nonmajor Governmental Funds

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

TotalSchool NonmajorFederal Central GovernmentalProjects Cafeteria Funds

RevenuesCharges for Current Services $ 0 $ 163,033 $ 163,033Other Local Revenues 0 3,976 3,976State of Tennessee 0 5,069 5,069Federal Government 918,444 436,627 1,355,071

Total Revenues $ 918,444 $ 608,705 $ 1,527,149


Instruction $ 767,729 $ 0 $ 767,729Support Services 150,975 0 150,975Operation of Non-Instructional Services 0 665,400 665,400

Total Expenditures $ 918,704 $ 665,400 $ 1,584,104

Excess (Deficiency) of RevenuesOver Expenditures $ (260) $ (56,695) $ (56,955)

Net Change in Fund Balances $ (260) $ (56,695) $ (56,955)Fund Balance, July 1, 2017 1,090 157,904 158,994

Fund Balance, June 30, 2018 $ 830 $ 101,209 $ 102,039


129

Exhibit I-8


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



RevenuesLocal Taxes $ 1,865,652 $ 1,831,250 $ 1,835,370 $ 30,282Licenses and Permits 579 570 570 9Charges for Current Services 22,262 28,250 27,890 (5,628)Other Local Revenues 54,526 61,355 72,540 (18,014)State of Tennessee 7,491,799 7,298,135 7,407,105 84,694Federal Government 107,749 116,510 109,575 (1,826)Other Governments and Citizens Groups 32,000 0 32,000 0

Total Revenues $ 9,574,567 $ 9,336,070 $ 9,485,050 $ 89,517

ExpendituresInstruction

Regular Instruction Program $ 3,953,462 $ 3,753,435 $ 3,970,920 $ 17,458Alternative Instruction Program 87,983 94,715 88,870 887Special Education Program 928,645 900,200 930,780 2,135Career and Technical Education Program 483,330 371,700 484,710 1,380

Support ServicesAttendance 2,273 5,100 2,320 47Health Services 161,029 168,570 161,955 926Other Student Support 174,270 220,075 178,200 3,930Regular Instruction Program 388,993 332,225 412,725 23,732Special Education Program 84,605 154,600 100,250 15,645Career and Technical Education Program 90,564 10,355 90,785 221Other Programs 21,440 0 21,440 0Board of Education 163,787 154,790 174,440 10,653Director of Schools 167,835 145,190 171,000 3,165Office of the Principal 696,591 711,610 699,910 3,319Fiscal Services 129,734 131,870 129,990 256Operation of Plant 653,678 665,425 670,875 17,197Maintenance of Plant 347,276 337,930 355,200 7,924Transportation 741,821 702,180 761,240 19,419Central and Other 16,674 9,700 18,205 1,531

Operation of Non-Instructional ServicesFood Service 54,487 33,000 55,170 683Community Services 137,614 190,245 147,865 10,251Early Childhood Education 293,059 326,570 303,120 10,061

Principal on DebtEducation 0 13,185 1 1

Interest on DebtEducation 0 150,715 150,000 150,000

Other Debt ServiceEducation 13,184 0 13,184 0


Excess (Deficiency) of RevenuesOver Expenditures $ (217,767) $ (247,315) $ (608,105) $ 390,338

Budgeted Amounts

(Continued)

130

Exhibit I-8


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



Other Financing Sources (Uses)Insurance Recovery $ 64,492 $ 0 $ 64,490 $ 2Transfers In 0 15,000 6,500 (6,500)

Total Other Financing Sources $ 64,492 $ 15,000 $ 70,990 $ (6,498)

Net Change in Fund Balance $ (153,275) $ (232,315) $ (537,115) $ 383,840Fund Balance, July 1, 2017 694,044 693,640 693,640 404


Budgeted Amounts

131

Exhibit I-9


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



RevenuesFederal Government $ 918,444 $ 1,021,171 $ 1,019,772 $ (101,328)

Total Revenues $ 918,444 $ 1,021,171 $ 1,019,772 $ (101,328)

ExpendituresInstruction

Regular Instruction Program $ 483,373 $ 550,722 $ 540,095 $ 56,722Special Education Program 267,558 286,225 286,589 19,031Career and Technical Education Program 16,798 14,590 16,800 2

Support ServicesOther Student Support 5,129 7,232 10,155 5,026Regular Instruction Program 68,381 84,751 88,124 19,743Special Education Program 75,784 75,649 76,328 544Career and Technical Education Program 1,681 1,705 1,681 0

Total Expenditures $ 918,704 $ 1,020,874 $ 1,019,772 $ 101,068

Excess (Deficiency) of RevenuesOver Expenditures $ (260) $ 297 $ 0 $ (260)

Other Financing Sources (Uses)Transfers Out $ 0 $ (297) $ 0 $ 0

Total Other Financing Sources $ 0 $ (297) $ 0 $ 0

Net Change in Fund Balance $ (260) $ 0 $ 0 $ (260)Fund Balance, July 1, 2017 1,090 1,090 1,090 0

Fund Balance, June 30, 2018 $ 830 $ 1,090 $ 1,090 $ (260)

Budgeted Amounts

132

Exhibit I-10


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



RevenuesCharges for Current Services $ 163,033 $ 172,000 $ 164,000 $ (967)Other Local Revenues 3,976 1,500 2,800 1,176State of Tennessee 5,069 5,000 5,000 69Federal Government 436,627 456,000 478,254 (41,627)

Total Revenues $ 608,705 $ 634,500 $ 650,054 $ (41,349)

ExpendituresOperation of Non-Instructional Services

Food Service $ 665,400 $ 649,940 $ 710,494 $ 45,094Total Expenditures $ 665,400 $ 649,940 $ 710,494 $ 45,094

Excess (Deficiency) of RevenuesOver Expenditures $ (56,695) $ (15,440) $ (60,440) $ 3,745

Net Change in Fund Balance $ (56,695) $ (15,440) $ (60,440) $ 3,745Fund Balance, July 1, 2017 157,904 155,000 155,000 2,904


Budgeted Amounts

133

MISCELLANEOUS SCHEDULES

134

Exhibit J-1

Perry County, TennesseeSchedule of Changes in Long-term Bonds, Notes, and Capital LeasesFor the Year Ended June 30, 2018

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

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

BONDS PAYABLE Payable through General Debt Service Fund General Obligation Refunding Bond Series 2013 $ 1,851,000 1.89 % 12-23-13 3-13-18 $ 408,000 $ 0 $ 408,000 $ 0 General Obligation Refunding Bond Series 2013 2,409,370 2.03 12-23-13 3-13-18 501,000 0 501,000 0

Total Bonds Payable $ 909,000 $ 0 $ 909,000 $ 0

NOTES PAYABLE Payable through General Debt Service Fund Garbage Truck 224,000 2.45 11-4-15 6-27-18 $ 138,600 $ 0 $ 138,600 $ 0 School Bus 85,099 2.48 10-26-16 9-18-18 85,099 0 85,099 0 School Roof 240,000 2.68 10-18-17 6-27-18 0 240,000 240,000 0 Jail Roof 90,000 2.65 10-18-17 6-27-18 0 90,000 90,000 0

Total Notes Payable $ 223,699 $ 330,000 $ 553,699 $ 0

CAPITAL LEASES PAYABLE Contributions Due by the School Department from the General Purpose School Fund to the General Debt Service Fund School Bus 82,150 3.99 9-5-14 9-5-20 $ 47,782 $ 0 $ 11,242 $ 36,540

Total Capital Leases Payable $ 47,782 $ 0 $ 11,242 $ 36,540

135

Exhibit J-2

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

YearEndingJune 30 Principal Interest Total

2019 $ 11,698 $ 1,486 $ 13,1842020 12,174 1,010 13,1842021 12,668 513 13,181

Total $ 36,540 $ 3,009 $ 39,549

Capital Leases

136

Exhibit J-3

Perry County, TennesseeSchedule of Notes ReceivableJune 30, 2018

Original Date DateAmount of of Interest Balance

Description Debtor of Notes Issue Maturity Rate 6-30-18

General Debt Service Fund Senior Citizen Center Perry County Senior Citizen Center $ 110,000 7-1-10 6-1-20 0 % $ 20,992

137

Exhibit J-4

Perry County, TennesseeSchedule of TransfersFor the Year Ended June 30, 2018

From Fund To Fund Purpose Amount

Education Capital Projects General Debt Service Debt retirement $ 6,978

Total Transfers $ 6,978

138

Exhibit J-5

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

SalaryPaid

During Official Authorization for Salary Period Bond Surety

County Mayor Section 8-24-102, TCA $ 72,974 $ 100,000 Western Surety CompanySuperintendent of Highways Section 8-24-102, TCA 69,500 100,000 Auto-Owners Mutual Insurance CompanyDirector of Schools State Board of Education

and Perry County Board of Education 101,615 (1) 100,000 "Trustee Section 8-24-102, TCA 63,182 418,000 Western Surety CompanyAssessor of Property Section 8-24-102, TCA 63,182 50,000 Auto-Owners Mutual Insurance CompanyCounty Clerk Section 8-24-102, TCA 63,182 50,000 "Circuit and General Sessions Courts Clerk Section 8-24-102, TCA 63,182 50,000 "Clerk and Master Section 8-24-102, TCA,

and Chancery Court Judge 63,182 60,000 RLI Insurance CompanyRegister of Deeds Section 8-24-102, TCA 63,182 50,000 Western Surety CompanySheriff Section 8-24-102, TCA 69,500 (2) 100,000 Auto-Owners Mutual Insurance Company

Employee Blanket Bonds: Employee Fidelity - County Departments 400,000 Local Government Property and Casualty Fund Employee Fidelity - School Department 400,000 Tennessee Risk Management Trust

(1) Includes $7,452 for the director's portion of a family medical insurance plan. Does not include a chief executive officer trainingsupplement of $1,000 or a cell phone allowance of $750.

(2) Does not include law enforcement training supplements of $1,200.

139

Exhibit J-6

Perry County, TennesseeSchedule of Detailed Revenues -

All Governmental Fund TypesFor the Year Ended June 30, 2018

Courthouse Solidand Jail Waste / Ambulance Special Drug

General Maintenance Sanitation Service Purpose Control

Local TaxesCounty Property Taxes

Current Property Tax $ 2,492,588 $ 0 $ 430,374 $ 0 $ 0 $ 0Trustee's Collections - Prior Year 81,084 0 14,000 0 0 0Circuit Clerk/Clerk and Master Collections - Prior Years 48,090 0 8,303 0 0 0Interest and Penalty 14,775 0 2,553 0 0 0Payments in-Lieu-of Taxes - T.V.A. 2,021 0 349 0 0 0Payments in-Lieu-of Taxes - Other 460 0 79 0 0 0

County Local Option TaxesLocal Option Sales Tax 76,667 0 0 0 0 0Hotel/Motel Tax 12,094 0 0 0 0 0Litigation Tax - General 21,073 947 0 0 0 0Litigation Tax - Special Purpose 0 0 0 0 3,926 0Litigation Tax - Jail, Workhouse, or Courthouse 0 21,674 0 0 0 0Business Tax 36,609 0 0 0 0 0Mineral Severance Tax 0 0 0 0 0 0

Statutory Local TaxesBank Excise Tax 38,288 0 6,611 0 0 0Wholesale Beer Tax 40,367 0 0 0 0 0Interstate Telecommunications Tax 4,654 0 0 0 0 0

Total Local Taxes $ 2,868,770 $ 22,621 $ 462,269 $ 0 $ 3,926 $ 0

Licenses and PermitsPermits

Beer Permits $ 724 $ 0 $ 0 $ 0 $ 0 $ 0Other Permits 1,820 0 0 0 0 0

Total Licenses and Permits $ 2,544 $ 0 $ 0 $ 0 $ 0 $ 0

(Continued)


140

Exhibit J-6


All Governmental Fund Types (Cont.)



Fines, Forfeitures, and PenaltiesCircuit Court

Jail Fees $ 104 $ 0 $ 0 $ 0 $ 0 $ 0DUI Treatment Fines 95 0 0 0 0 0Data Entry Fee - Circuit Court 0 0 0 0 344 0

Criminal CourtDUI Treatment Fines 0 0 0 0 0 855

General Sessions CourtFines 12,392 0 0 0 0 0Officers Costs 12,070 0 0 0 0 0Game and Fish Fines 551 0 0 0 0 0Drug Control Fines 0 0 0 0 0 5,379Drug Court Fees 1,211 0 0 0 0 0Jail Fees 5,060 3,308 0 0 0 0DUI Treatment Fines 950 0 0 0 0 0Courtroom Security Fee 0 0 0 0 13 0

Juvenile CourtFines 3,640 0 0 0 0 0

Chancery CourtOfficers Costs 1,015 0 0 0 0 0Data Entry Fee - Chancery Court 474 0 0 0 722 0Courtroom Security Fee 15,357 0 0 0 0 0

Total Fines, Forfeitures, and Penalties $ 52,919 $ 3,308 $ 0 $ 0 $ 1,079 $ 6,234

Charges for Current ServicesGeneral Service Charges

Self-Insurance Premiums/Contributions $ 1,125 $ 0 $ 0 $ 0 $ 0 $ 0

(Continued)


141

Exhibit J-6





Charges for Current Services (Cont.)General Service Charges (Cont.)

Tipping Fees $ 0 $ 0 $ 270 $ 0 $ 0 $ 0Solid Waste Disposal Fee 0 0 63,081 0 0 0Surcharge - Waste Tire Disposal 0 0 1,559 0 0 0Patient Charges 0 0 0 1,027,759 0 0

FeesAirport Fees 2,076 0 0 0 0 0Copy Fees 1,402 0 0 0 0 0Greenbelt Late Application Fee 100 0 0 0 0 0Telephone Commissions 28,726 0 0 0 0 0Constitutional Officers' Fees and Commissions 0 0 0 0 0 0Data Processing Fee - Register 3,266 0 0 0 0 0Data Processing Fee - Sheriff 780 0 0 0 0 0Sexual Offender Registration Fee - Sheriff 1,500 0 0 0 0 0Data Processing Fee - County Clerk 684 0 0 0 0 0Vehicle Insurance Coverage and Reinstatement Fees 290 0 0 0 0 0

Total Charges for Current Services $ 39,949 $ 0 $ 64,910 $ 1,027,759 $ 0 $ 0

Other Local RevenuesRecurring Items

Investment Income $ 53,739 $ 0 $ 0 $ 0 $ 0 $ 0Lease/Rentals 173,372 0 0 0 0 0Sale of Materials and Supplies 492 0 562 0 0 4,774Commissary Sales 5,219 0 0 0 0 0Sale of Recycled Materials 0 0 6,541 0 0 0Miscellaneous Refunds 674 0 0 0 0 694Expenditure Credits 2,291 0 0 0 0 0

(Continued)


142

Exhibit J-6





Other Local Revenues (Cont.)Nonrecurring Items

Sale of Equipment $ 0 $ 0 $ 0 $ 0 $ 0 $ 57,932Contributions and Gifts 10,785 20,000 0 0 0 1,500

Other Local RevenuesOther Local Revenues 2,500 0 0 0 0 0

Total Other Local Revenues $ 249,072 $ 20,000 $ 7,103 $ 0 $ 0 $ 64,900

Fees Received From County OfficialsExcess Fees

Other Officials $ 75 $ 0 $ 0 $ 0 $ 0 $ 0Fees In-Lieu-of Salary

County Clerk 75,540 0 0 0 0 0Circuit Court Clerk 19,028 0 0 0 0 0General Sessions Court Clerk 36,485 0 0 0 0 0Clerk and Master 40,218 0 0 0 0 0Register 41,583 0 0 0 0 0Sheriff 4,064 0 0 0 0 0Trustee 161,546 0 0 0 0 0

Total Fees Received From County Officials $ 378,539 $ 0 $ 0 $ 0 $ 0 $ 0

State of TennesseeGeneral Government Grants

Juvenile Services Program $ 9,000 $ 0 $ 0 $ 0 $ 0 $ 0Airport Maintenance Program 662 0 0 0 0 0Solid Waste Grants 0 0 6,134 0 0 0Other General Government Grants 39,760 0 0 0 0 0

(Continued)


143

Exhibit J-6





State of Tennessee (Cont.)Public Safety Grants

Law Enforcement Training Programs $ 11,400 $ 0 $ 0 $ 0 $ 0 $ 0Other Public Safety Grants 29,480 0 0 0 0 0

Public Works GrantsBridge Program 0 0 0 0 0 0State Aid Program 0 0 0 0 0 0Litter Program 35,362 0 0 0 0 0

Other State RevenuesIncome Tax 18,650 0 3,220 0 0 0Resort District Sales Tax 97,915 0 0 0 0 0Beer Tax 17,839 0 0 0 0 0Vehicle Certificate of Title Fees 11,350 0 0 0 0 0Alcoholic Beverage Tax 38,343 0 0 0 0 0State Revenue Sharing - T.V.A. 377,723 0 65,218 0 0 0State Revenue Sharing - Telecommunications 472 0 0 0 0 0Child Support Collections 3,791 0 0 0 0 0Contracted Prisoner Boarding 77,094 0 0 0 0 0Gasoline and Motor Fuel Tax 0 0 0 0 0 0Petroleum Special Tax 0 0 0 0 0 0Registrar's Salary Supplement 11,373 0 0 0 0 0Other State Grants 0 17,805 0 0 0 0Other State Revenues 685 0 0 0 0 0

Total State of Tennessee $ 780,899 $ 17,805 $ 74,572 $ 0 $ 0 $ 0

(Continued)


144

Exhibit J-6





Federal GovernmentFederal Through State

Community Development $ 162,798 $ 0 $ 0 $ 0 $ 0 $ 0Civil Defense Reimbursement 8,482 0 0 0 0 0Other Federal through State 49,879 0 0 0 0 0

Total Federal Government $ 221,159 $ 0 $ 0 $ 0 $ 0 $ 0

Other Governments and Citizens GroupsOther Governments

Prisoner Board $ 13,459 $ 0 $ 0 $ 0 $ 0 $ 0Contributions 20,000 0 0 0 0 0Contracted Services 150,000 0 0 0 0 0

OtherOther 0 0 0 0 0 0

Total Other Governments and Citizens Groups $ 183,459 $ 0 $ 0 $ 0 $ 0 $ 0

Total $ 4,777,310 $ 63,734 $ 608,854 $ 1,027,759 $ 5,005 $ 71,134

(Continued)


145

Exhibit J-6



Constitu -tional Highway / General

Officers - Public DebtFees Works Service Total


Current Property Tax $ 0 $ 0 $ 0 $ 2,922,962Trustee's Collections - Prior Year 0 0 0 95,084Circuit Clerk/Clerk and Master Collections - Prior Years 0 0 0 56,393Interest and Penalty 0 0 0 17,328Payments in-Lieu-of Taxes - T.V.A. 0 0 0 2,370Payments in-Lieu-of Taxes - Other 0 0 0 539

County Local Option TaxesLocal Option Sales Tax 0 0 510,354 587,021Hotel/Motel Tax 0 0 0 12,094Litigation Tax - General 0 0 0 22,020Litigation Tax - Special Purpose 0 0 0 3,926Litigation Tax - Jail, Workhouse, or Courthouse 0 0 690 22,364Business Tax 0 0 0 36,609Mineral Severance Tax 0 79,231 0 79,231

Statutory Local TaxesBank Excise Tax 0 0 0 44,899Wholesale Beer Tax 0 0 0 40,367Interstate Telecommunications Tax 0 0 0 4,654

Total Local Taxes $ 0 $ 79,231 $ 511,044 $ 3,947,861

Licenses and PermitsPermits

Beer Permits $ 0 $ 0 $ 0 $ 724Other Permits 0 0 0 1,820

Total Licenses and Permits $ 0 $ 0 $ 0 $ 2,544

(Continued)

Special Revenue FundsDebt Service

Fund

146

Exhibit J-6





Fines, Forfeitures, and PenaltiesCircuit Court

Jail Fees $ 0 $ 0 $ 0 $ 104DUI Treatment Fines 0 0 0 95Data Entry Fee - Circuit Court 0 0 0 344

Criminal CourtDUI Treatment Fines 0 0 0 855

General Sessions CourtFines 0 0 0 12,392Officers Costs 0 0 0 12,070Game and Fish Fines 0 0 0 551Drug Control Fines 0 0 0 5,379Drug Court Fees 0 0 0 1,211Jail Fees 0 0 0 8,368DUI Treatment Fines 0 0 0 950Courtroom Security Fee 0 0 0 13

Juvenile CourtFines 0 0 0 3,640

Chancery CourtOfficers Costs 0 0 0 1,015Data Entry Fee - Chancery Court 0 0 0 1,196Courtroom Security Fee 0 0 0 15,357

Total Fines, Forfeitures, and Penalties $ 0 $ 0 $ 0 $ 63,540

Charges for Current ServicesGeneral Service Charges

Self-Insurance Premiums/Contributions $ 0 $ 0 $ 0 $ 1,125

(Continued)


Fund

147

Exhibit J-6





Charges for Current Services (Cont.)General Service Charges (Cont.)

Tipping Fees $ 0 $ 0 $ 0 $ 270Solid Waste Disposal Fee 0 0 0 63,081Surcharge - Waste Tire Disposal 0 0 0 1,559Patient Charges 0 0 0 1,027,759

FeesAirport Fees 0 0 0 2,076Copy Fees 0 0 0 1,402Greenbelt Late Application Fee 0 0 0 100Telephone Commissions 0 0 0 28,726Constitutional Officers' Fees and Commissions 50 0 0 50Data Processing Fee - Register 0 0 0 3,266Data Processing Fee - Sheriff 0 0 0 780Sexual Offender Registration Fee - Sheriff 0 0 0 1,500Data Processing Fee - County Clerk 0 0 0 684Vehicle Insurance Coverage and Reinstatement Fees 0 0 0 290

Total Charges for Current Services $ 50 $ 0 $ 0 $ 1,132,668


Investment Income $ 0 $ 0 $ 5,599 $ 59,338Lease/Rentals 0 0 32,598 205,970Sale of Materials and Supplies 0 2,436 0 8,264Commissary Sales 0 0 0 5,219Sale of Recycled Materials 0 0 0 6,541Miscellaneous Refunds 0 22,279 0 23,647Expenditure Credits 0 0 0 2,291

(Continued)


Fund

148

Exhibit J-6





Other Local Revenues (Cont.)Nonrecurring Items

Sale of Equipment $ 0 $ 0 $ 0 $ 57,932Contributions and Gifts 0 0 0 32,285

Other Local RevenuesOther Local Revenues 0 0 0 2,500

Total Other Local Revenues $ 0 $ 24,715 $ 38,197 $ 403,987

Fees Received From County OfficialsExcess Fees

Other Officials $ 0 $ 0 $ 0 $ 75Fees In-Lieu-of Salary

County Clerk 0 0 0 75,540Circuit Court Clerk 0 0 0 19,028General Sessions Court Clerk 0 0 0 36,485Clerk and Master 0 0 0 40,218Register 0 0 0 41,583Sheriff 0 0 0 4,064Trustee 0 0 0 161,546

Total Fees Received From County Officials $ 0 $ 0 $ 0 $ 378,539


Juvenile Services Program $ 0 $ 0 $ 0 $ 9,000Airport Maintenance Program 0 0 0 662Solid Waste Grants 0 0 0 6,134Other General Government Grants 0 0 0 39,760

(Continued)


Fund

149

Exhibit J-6





State of Tennessee (Cont.)Public Safety Grants

Law Enforcement Training Programs $ 0 $ 0 $ 0 $ 11,400Other Public Safety Grants 0 0 0 29,480

Public Works GrantsBridge Program 0 122,807 0 122,807State Aid Program 0 46,157 0 46,157Litter Program 0 0 0 35,362

Other State RevenuesIncome Tax 0 0 0 21,870Resort District Sales Tax 0 0 0 97,915Beer Tax 0 0 0 17,839Vehicle Certificate of Title Fees 0 0 0 11,350Alcoholic Beverage Tax 0 0 0 38,343State Revenue Sharing - T.V.A. 0 0 0 442,941State Revenue Sharing - Telecommunications 0 0 0 472Child Support Collections 0 0 0 3,791Contracted Prisoner Boarding 0 0 231,280 308,374Gasoline and Motor Fuel Tax 0 1,948,595 0 1,948,595Petroleum Special Tax 0 5,711 0 5,711Registrar's Salary Supplement 0 0 0 11,373Other State Grants 0 0 0 17,805Other State Revenues 0 0 0 685

Total State of Tennessee $ 0 $ 2,123,270 $ 231,280 $ 3,227,826

(Continued)


Fund

150

Exhibit J-6






Community Development $ 0 $ 0 $ 0 $ 162,798Civil Defense Reimbursement 0 0 0 8,482Other Federal through State 0 0 0 49,879

Total Federal Government $ 0 $ 0 $ 0 $ 221,159


Prisoner Board $ 0 $ 0 $ 31,828 $ 45,287Contributions 0 0 13,184 33,184Contracted Services 0 0 0 150,000

OtherOther 0 0 1 1

Total Other Governments and Citizens Groups $ 0 $ 0 $ 45,013 $ 228,472

Total $ 50 $ 2,227,216 $ 825,534 $ 9,606,596


Fund

151

Exhibit J-7


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

General SchoolPurpose Federal CentralSchool Projects Cafeteria Total


Current Property Tax $ 1,470,448 $ 0 $ 0 $ 1,470,448Trustee's Collections - Prior Year 47,834 0 0 47,834Circuit Clerk/Clerk and Master Collections - Prior Years 29,286 0 0 29,286Interest and Penalty 8,721 0 0 8,721Payments in-Lieu-of Taxes - T.V.A. 1,192 0 0 1,192Payments in-Lieu-of Taxes - Other 271 0 0 271

County Local Option TaxesLocal Option Sales Tax 279,397 0 0 279,397

Statutory Local TaxesBank Excise Tax 22,587 0 0 22,587Interstate Telecommunications Tax 5,916 0 0 5,916

Total Local Taxes $ 1,865,652 $ 0 $ 0 $ 1,865,652

Licenses and PermitsLicenses

Marriage Licenses $ 579 $ 0 $ 0 $ 579Total Licenses and Permits $ 579 $ 0 $ 0 $ 579

Charges for Current ServicesEducation Charges

Tuition - Other State Systems $ 740 $ 0 $ 0 $ 740Lunch Payments - Children 0 0 136,526 136,526Lunch Payments - Adults 0 0 17,664 17,664Income from Breakfast 0 0 8,843 8,843

(Continued)


152

Exhibit J-7


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


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

Receipts from Individual Schools $ 20,575 $ 0 $ 0 $ 20,575TBI Criminal Background Fee 947 0 0 947

Total Charges for Current Services $ 22,262 $ 0 $ 163,033 $ 185,295


Investment Income $ 11,850 $ 0 $ 2,308 $ 14,158E-Rate Funding 8,723 0 0 8,723Commodity Rebates 0 0 1,598 1,598Miscellaneous Refunds 29,448 0 70 29,518

Nonrecurring ItemsContributions and Gifts 4,505 0 0 4,505

Total Other Local Revenues $ 54,526 $ 0 $ 3,976 $ 58,502


On-behalf Contributions for OPEB $ 21,440 $ 0 $ 0 $ 21,440State Education Funds

Basic Education Program 6,518,700 0 0 6,518,700Early Childhood Education 301,301 0 0 301,301School Food Service 0 0 5,069 5,069Other State Education Funds 351,547 0 0 351,547Internet Connectivity 2,737 0 0 2,737Family Resource Centers 27,451 0 0 27,451Career Ladder Program 34,791 0 0 34,791

(Continued)


153

Exhibit J-7




State of Tennessee (Cont.)Other State Revenues

Income Tax $ 11,002 $ 0 $ 0 $ 11,002State Revenue Sharing - T.V.A. 222,830 0 0 222,830

Total State of Tennessee $ 7,491,799 $ 0 $ 5,069 $ 7,496,868


USDA School Lunch Program $ 0 $ 0 $ 291,762 $ 291,762USDA - Commodities 0 0 45,254 45,254Breakfast 0 0 99,611 99,611Vocational Education - Basic Grants to States 0 23,574 0 23,574Title I Grants to Local Education Agencies 0 470,403 0 470,403Special Education - Grants to States 43,325 318,305 0 361,630Special Education Preschool Grants 0 25,440 0 25,440Rural Education 0 14,916 0 14,916Eisenhower Professional Development State Grants 0 53,595 0 53,595Other Federal through State 64,424 12,211 0 76,635

Total Federal Government $ 107,749 $ 918,444 $ 436,627 $ 1,462,820


Contributions $ 12,500 $ 0 $ 0 $ 12,500Citizens Groups

Donations 19,500 0 0 19,500Total Other Governments and Citizens Groups $ 32,000 $ 0 $ 0 $ 32,000

Total $ 9,574,567 $ 918,444 $ 608,705 $ 11,101,716


154

Exhibit J-8

Perry County, TennesseeSchedule of Detailed Expenditures -

All Governmental Fund TypesFor the Year Ended June 30, 2018

General FundGeneral Government

County CommissionBoard and Committee Members Fees $ 52,675Social Security 3,212Pensions 2,821Employer Medicare 751Advertising 378Audit Services 2,929Legal Notices, Recording, and Court Costs 910Printing, Stationery, and Forms 27Office Supplies 450

Total County Commission $ 64,153

County Mayor/ExecutiveCounty Official/Administrative Officer $ 72,974Accountants/Bookkeepers 33,883Salary Supplements 3,000Secretary(ies) 24,600Longevity Pay 2,000Other Salaries and Wages 3,000Social Security 8,017Pensions 13,453Medical Insurance 8,147Employer Medicare 1,875Communication 2,575Data Processing Services 11,033Dues and Memberships 1,200Legal Services 61,072Postal Charges 56Data Processing Supplies 35Office Supplies 541Other Supplies and Materials 35Furniture and Fixtures 475

Total County Mayor/Executive 247,971

Election CommissionCounty Official/Administrative Officer $ 56,436Deputy(ies) 26,814Longevity Pay 1,600Election Commission 500Social Security 5,041Pensions 8,264Medical Insurance 4,302Employer Medicare 1,179Communication 510Contracts with Private Agencies 23,045Dues and Memberships 1,925Legal Notices, Recording, and Court Costs 47Postal Charges 156

(Continued)

155

Exhibit J-8



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

Election Commission (Cont.)Printing, Stationery, and Forms $ 138Travel 1,689Electricity 255Natural Gas 53Office Supplies 475Water and Sewer 34Other Supplies and Materials 168

Total Election Commission $ 132,631

Register of DeedsCounty Official/Administrative Officer $ 63,182Deputy(ies) 28,600Longevity Pay 1,500Social Security 5,492Pensions 9,086Medical Insurance 4,302Employer Medicare 1,284Communication 758Data Processing Services 1,912Dues and Memberships 437Operating Lease Payments 928Postal Charges 56Printing, Stationery, and Forms 821Office Supplies 682Premiums on Corporate Surety Bonds 175

Total Register of Deeds 119,215

County BuildingsCustodial Personnel $ 21,800Longevity Pay 500Social Security 1,220Pensions 2,172Medical Insurance 4,302Employer Medicare 285Advertising 58Communication 9,231Contracts with Private Agencies 3,060Legal Notices, Recording, and Court Costs 120Maintenance and Repair Services - Buildings 13,296Maintenance and Repair Services - Equipment 8,657Pest Control 33Other Contracted Services 1,652Custodial Supplies 2,696Electricity 27,713Natural Gas 9,612Office Supplies 100Water and Sewer 2,578

(Continued)

156

Exhibit J-8



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

County Buildings (Cont.)Other Supplies and Materials $ 724Liability Insurance 109,379Refunds 100Workers' Compensation Insurance 138,728Other Charges 519

Total County Buildings $ 358,535

FinanceAccounting and Budgeting

Office Supplies $ 48Total Accounting and Budgeting 48

Property Assessor's OfficeCounty Official/Administrative Officer $ 63,182Deputy(ies) 28,600Longevity Pay 2,200Social Security 5,473Pensions 9,154Medical Insurance 3,542Employer Medicare 1,280Communication 3,404Contracts with Government Agencies 1,391Data Processing Services 3,360Operating Lease Payments 1,289Maintenance and Repair Services - Vehicles 222Postal Charges 362Office Supplies 1,815Other Supplies and Materials 44Other Charges 179

Total Property Assessor's Office 125,497

Reappraisal ProgramAssistant(s) $ 28,600Longevity Pay 900Other Salaries and Wages 1,800Board and Committee Members Fees 750Social Security 1,921Pensions 3,048Medical Insurance 215Employer Medicare 449Contracts with Government Agencies 5,600Postal Charges 20Travel 81Other Contracted Services 400Gasoline 99

Total Reappraisal Program 43,883

(Continued)

157

Exhibit J-8



General Fund (Cont.)Finance (Cont.)

County Trustee's OfficeCounty Official/Administrative Officer $ 63,182Deputy(ies) 22,600Social Security 5,150Pensions 8,355Medical Insurance 4,302Employer Medicare 1,204Communication 1,304Data Processing Services 9,861Dues and Memberships 537Legal Notices, Recording, and Court Costs 38Postal Charges 2,267Printing, Stationery, and Forms 3,801Office Supplies 774Premiums on Corporate Surety Bonds 2,425

Total County Trustee's Office $ 125,800

County Clerk's OfficeCounty Official/Administrative Officer $ 63,182Deputy(ies) 49,669Longevity Pay 1,600Social Security 6,730Pensions 9,970Medical Insurance 525Employer Medicare 1,574Advertising 54Communication 2,796Data Processing Services 26,133Dues and Memberships 537Operating Lease Payments 1,414Postal Charges 56Printing, Stationery, and Forms 795Travel 84Office Supplies 1,953Other Supplies and Materials 28Furniture and Fixtures 60

Total County Clerk's Office 167,160

Administration of JusticeCircuit Court

County Official/Administrative Officer $ 63,182Deputy(ies) 50,200Longevity Pay 700Jury and Witness Expense 2,686Social Security 6,449Pensions 11,267Medical Insurance 12,457Employer Medicare 1,508

(Continued)

158

Exhibit J-8



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

Circuit Court (Cont.)Advertising $ 101Communication 2,772Data Processing Services 13,487Dues and Memberships 160Operating Lease Payments 1,248Legal Notices, Recording, and Court Costs 296Maintenance and Repair Services - Office Equipment 75Postal Charges 56Printing, Stationery, and Forms 897Office Supplies 2,616Other Supplies and Materials 15Furniture and Fixtures 270

Total Circuit Court $ 170,442

General Sessions CourtJudge(s) $ 70,209Secretary(ies) 21,600Other Salaries and Wages 1,554Social Security 5,488Pensions 8,236Medical Insurance 4,302Employer Medicare 1,284Communication 1,060Dues and Memberships 755Operating Lease Payments 1,248Postal Charges 56Printing, Stationery, and Forms 63Travel 769Office Supplies 817Other Supplies and Materials 14

Total General Sessions Court 117,455

Chancery CourtCounty Official/Administrative Officer $ 63,182Deputy(ies) 24,600Longevity Pay 300Social Security 5,250Pensions 8,579Medical Insurance 4,302Employer Medicare 1,228Communication 1,675Data Processing Services 5,634Dues and Memberships 617Operating Lease Payments 1,248Legal Notices, Recording, and Court Costs 1,216Postal Charges 725Printing, Stationery, and Forms 1,375

(Continued)

159

Exhibit J-8



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

Chancery Court (Cont.)Travel $ 19Data Processing Supplies 684Office Supplies 1,447Premiums on Corporate Surety Bonds 173Office Equipment 206

Total Chancery Court $ 122,460

Juvenile CourtAssistant(s) $ 12,833Social Security 679Pensions 2,201Medical Insurance 4,302Employer Medicare 159Communication 1,372Travel 610Office Supplies 368

Total Juvenile Court 22,524

Judicial CommissionersDeputy(ies) $ 8,398Social Security 507Pensions 24Medical Insurance 33Employer Medicare 119Communication 275Dues and Memberships 150Travel 850

Total Judicial Commissioners 10,356

Other Administration of JusticeTeachers $ 136Social Security 8Pensions 13Medical Insurance 17Employer Medicare 2

Total Other Administration of Justice 176

Public SafetySheriff's Department

County Official/Administrative Officer $ 69,500Deputy(ies) 307,726Detective(s) 24,364Investigator(s) 39,600Captain(s) 48,924Lieutenant(s) 39,600Sergeant(s) 126,840Salary Supplements 10,800

(Continued)

160

Exhibit J-8



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

Sheriff's Department (Cont.)Guards $ 4,044Secretary(ies) 36,618Part-time Personnel 15,973School Resource Officer 28,365Longevity Pay 1,900In-service Training 600Social Security 46,114Pensions 70,490Medical Insurance 33,298Employer Medicare 10,785Communication 11,030Contracts with Government Agencies 2,826Contracts with Private Agencies 9,481Dues and Memberships 50Evaluation and Testing 470Operating Lease Payments 2,155Licenses 88Maintenance and Repair Services - Buildings 106Maintenance and Repair Services - Equipment 1,571Maintenance and Repair Services - Vehicles 6,937Postal Charges 1,869Printing, Stationery, and Forms 920Towing Services 1,000Travel 1,014Electricity 3,964Food Supplies 2,718Gasoline 55,597Office Supplies 2,207Tires and Tubes 9,459Uniforms 9,941Other Supplies and Materials 2,116Premiums on Corporate Surety Bonds 345Liability Claims 780In Service/Staff Development 10,335Communication Equipment 1,417Law Enforcement Equipment 11,191Office Equipment 719

Total Sheriff's Department $ 1,065,847

JailSupervisor/Director $ 37,368Deputy(ies) 252,568Captain(s) 30,240Accountants/Bookkeepers 102Guards 13,550Maintenance Personnel 30,352Part-time Personnel 47,886

(Continued)

161

Exhibit J-8




Jail (Cont.)Longevity Pay $ 1,000In-service Training 200Social Security 24,699Pensions 29,815Medical Insurance 11,857Employer Medicare 5,776Communication 8,700Contracts with Government Agencies 767Contracts with Private Agencies 189Dues and Memberships 1,000Evaluation and Testing 962Maintenance and Repair Services - Buildings 12,492Maintenance and Repair Services - Equipment 10,830Maintenance and Repair Services - Vehicles 2,482Medical and Dental Services 100,228Pest Control 1,250Postal Charges 447Travel 1,553Custodial Supplies 12,319Electricity 34,262Food Supplies 67,236Fuel Oil 269Gasoline 2,465Law Enforcement Supplies 1,202Natural Gas 13,527Office Supplies 2,109Prisoners Clothing 1,485Uniforms 88Water and Sewer 26,453Other Supplies and Materials 5,035Specialized Medical Treatment 263Other Charges 530Office Equipment 84

Total Jail $ 793,640

Civil DefenseSupervisor/Director $ 12,023Accountants/Bookkeepers 29,347Longevity Pay 600Social Security 2,581Pensions 4,088Medical Insurance 6,744Employer Medicare 604Communication 550Dues and Memberships 55Maintenance and Repair Services - Equipment 116Maintenance and Repair Services - Office Equipment 199

(Continued)

162

Exhibit J-8




Civil Defense (Cont.)Gasoline $ 921Other Supplies and Materials 14,295

Total Civil Defense $ 72,123

Rescue SquadCommunication $ 50Maintenance and Repair Services - Office Equipment 35Maintenance and Repair Services - Vehicles 1,039Gasoline 2,818Other Supplies and Materials 472Vehicle and Equipment Insurance 1,538Other Equipment 3,797

Total Rescue Squad 9,749

Other Emergency ManagementSupervisor/Director $ 32,184Dispatchers/Radio Operators 119,426Part-time Personnel 17,264Longevity Pay 3,500Overtime Pay 80Social Security 10,420Pensions 13,091Medical Insurance 6,186Employer Medicare 2,437Communication 477

Total Other Emergency Management 205,065

County Coroner/Medical ExaminerOther Contracted Services $ 14,052Other Equipment 7,487

Total County Coroner/Medical Examiner 21,539

Public Safety Grants ProgramOther Charges $ 34,797

Total Public Safety Grants Program 34,797

Other Public SafetyDeputy(ies) $ 4,994Foremen 9,090Guards 27,482Other Salaries and Wages 7,705Social Security 3,138Pensions 2,807Employer Medicare 734Other Supplies and Materials 26Law Enforcement Equipment 96

Total Other Public Safety 56,072

(Continued)

163

Exhibit J-8



General Fund (Cont.)Public Health and Welfare

Local Health CenterContracts with Government Agencies $ 21,310Dues and Memberships 200Janitorial Services 2,472Maintenance and Repair Services - Buildings 658Pest Control 135Printing, Stationery, and Forms 65Other Contracted Services 195Custodial Supplies 53Electricity 6,710Natural Gas 11Office Supplies 20Water and Sewer 279Other Supplies and Materials 360Other Charges 565

Total Local Health Center $ 33,033

Rabies and Animal ControlPest Control $ 344

Total Rabies and Animal Control 344

Other Local Health ServicesContributions $ 5,012Other Supplies and Materials 385Other Charges 9,727

Total Other Local Health Services 15,124

General Welfare AssistanceFood Supplies $ 90Other Supplies and Materials 4,684

Total General Welfare Assistance 4,774

Social, Cultural, and Recreational ServicesSenior Citizens Assistance

Contributions $ 15,000Total Senior Citizens Assistance 15,000

LibrariesSupervisor/Director $ 23,000Librarians 20,000Part-time Personnel 30,963Longevity Pay 400In-service Training 45Social Security 4,318Pensions 4,227Medical Insurance 6,402Employer Medicare 1,010Communication 1,937

(Continued)

164

Exhibit J-8



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

Libraries (Cont.)Operating Lease Payments $ 4,239Maintenance and Repair Services - Buildings 50Maintenance and Repair Services - Equipment 297Matching Share 3,187Travel 247Other Contracted Services 695Custodial Supplies 105Data Processing Supplies 412Electricity 8,522Library Books/Media 1,710Natural Gas 630Office Supplies 1,601Water and Sewer 1,141Other Supplies and Materials 422

Total Libraries $ 115,560

Parks and Fair BoardsContracts with Private Agencies $ 60,000Maintenance and Repair Services - Equipment 10Electricity 5,545Gasoline 1,546Natural Gas 510Water and Sewer 752Other Charges 10,000

Total Parks and Fair Boards 78,363

Other Social, Cultural, and RecreationalContributions $ 20,810Other Charges 24,645

Total Other Social, Cultural, and Recreational 45,455

Agriculture and Natural ResourcesAgricultural Extension Service

Salary Supplements $ 25,360Board and Committee Members Fees 100Social Security 1,451Pensions 3,631Employer Medicare 339Other Fringe Benefits 4,341Communication 1,768Dues and Memberships 315Travel 2,000Electricity 255Natural Gas 5Office Supplies 1,000Utilities 33Water and Sewer 11Other Supplies and Materials 2,616

Total Agricultural Extension Service 43,225

(Continued)

165

Exhibit J-8



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

Forest ServiceForest Resource Services $ 2,000

Total Forest Service $ 2,000

Soil ConservationContracts with Government Agencies $ 17,500

Total Soil Conservation 17,500

Other OperationsTourism

Contributions $ 9,983Dues and Memberships 1,874Other Contracted Services 48,801Other Supplies and Materials 590Other Charges 1,199

Total Tourism 62,447

AirportContributions $ 2,210Maintenance and Repair Services - Buildings 719Maintenance and Repair Services - Equipment 791Matching Share 2,500Electricity 3,091Water and Sewer 271Other Supplies and Materials 100Refunds 450Airport Improvement 33,721

Total Airport 43,853

Veterans' ServicesPart-time Personnel $ 8,294Other Salaries and Wages 13,728Social Security 1,320Employer Medicare 309Communication 1,254Data Processing Services 399Dues and Memberships 50Operating Lease Payments 1,044Travel 3,093Office Supplies 247

Total Veterans' Services 29,738

Other ChargesTrustee's Commission $ 65,796

Total Other Charges 65,796

Employee BenefitsUnemployment Compensation $ 4,657

(Continued)

166

Exhibit J-8



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

Employee Benefits (Cont.)Specialized Medical Treatment $ 204Other Charges 2,153

Total Employee Benefits $ 7,014

MiscellaneousCommunication $ 1,225Contracts with Government Agencies 1,200Contracts with Private Agencies 2,277Dues and Memberships 2,212Operating Lease Payments 4,382Legal Services 300Postal Charges 8,146Printing, Stationery, and Forms 1,270Other Contracted Services 494Gasoline 124Office Supplies 1,182Other Supplies and Materials 2,079Other Charges 2,374Other Equipment 12,800

Total Miscellaneous 40,065

HighwaysLitter and Trash Collection

Foremen $ 18,032Educational Assistants 5,188In-service Training 4,880Social Security 1,410Pensions 515Medical Insurance 457Employer Medicare 330Maintenance and Repair Services - Equipment 372Diesel Fuel 368Food Supplies 2,310Gasoline 2,867Other Supplies and Materials 1,726

Total Litter and Trash Collection 38,455

Capital ProjectsPublic Health and Welfare Projects

Legal Notices, Recording, and Court Costs $ 22Other Charges 29Other Construction 154,673

Total Public Health and Welfare Projects 154,724

Total General Fund $ 4,899,608

(Continued)

167

Exhibit J-8



Courthouse and Jail Maintenance FundGeneral Government

County BuildingsMaintenance and Repair Services - Buildings $ 2,265Other Equipment 5,194

Total County Buildings $ 7,459

Public SafetyJail

Maintenance and Repair Services - Buildings $ 1,575Building Improvements 188,935

Total Jail 190,510

Other OperationsOther Charges

Trustee's Commission $ 259Total Other Charges 259

Total Courthouse and Jail Maintenance Fund $ 198,228

Solid Waste/Sanitation FundPublic Health and Welfare

Sanitation Education/InformationTrustee's Commission $ 10,615

Total Sanitation Education/Information $ 10,615

Convenience CentersLaborers $ 28,355Part-time Personnel 15,591Longevity Pay 100Social Security 2,783Pensions 2,771Employer Medicare 651Communication 1,041Maintenance and Repair Services - Buildings 18Maintenance and Repair Services - Equipment 364Electricity 1,543Natural Gas 239Water and Sewer 479Gravel and Chert 500Other Supplies and Materials 134Attendance Equipment 265

Total Convenience Centers 54,834

Transfer StationsEquipment Operators $ 74,091Longevity Pay 1,500Social Security 4,425Pensions 6,166Medical Insurance 7,686

(Continued)

168

Exhibit J-8



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

Transfer Stations (Cont.)Employer Medicare $ 1,035Advertising 56Communication 2,031Contracts with Private Agencies 216,654Dues and Memberships 125Evaluation and Testing 335Maintenance and Repair Services - Equipment 19,802Maintenance and Repair Services - Vehicles 65Medical and Dental Services 73Travel 486Other Contracted Services 20,764Diesel Fuel 24,759Electricity 5,626Food Supplies 442Gasoline 4,075Natural Gas 372Tires and Tubes 10,650Uniforms 5,464Water and Sewer 2,374Other Supplies and Materials 2,968Liability Claims 500Attendance Equipment 240Solid Waste Equipment 21,634

Total Transfer Stations $ 434,398

Landfill Operation and MaintenanceSupervisor/Director $ 34,083Equipment Operators 21,778Longevity Pay 2,800Social Security 3,571Pensions 5,412Employer Medicare 835Contracts with Private Agencies 30Evaluation and Testing 7,500Legal Services 150Maintenance Agreements 5,500Maintenance and Repair Services - Equipment 272Other Contracted Services 230Electricity 1,111Other Supplies and Materials 529Other Charges 2,217

Total Landfill Operation and Maintenance 86,018

Other OperationsEmployee Benefits

Other Charges $ 187Total Employee Benefits 187

Total Solid Waste/Sanitation Fund $ 586,052

(Continued)

169

Exhibit J-8



Ambulance Service FundPublic Health and Welfare

Ambulance/Emergency Medical ServicesSupervisor/Director $ 38,556Medical Personnel 331,482Part-time Personnel 239,541Longevity Pay 1,300Other Salaries and Wages 4,000In-service Training 7,986Social Security 38,158Pensions 36,396Medical Insurance 21,076Employer Medicare 8,924Communication 3,726Contracts with Private Agencies 66,880Dues and Memberships 700Legal Notices, Recording, and Court Costs 11Licenses 2,000Maintenance and Repair Services - Equipment 3,184Maintenance and Repair Services - Office Equipment 500Maintenance and Repair Services - Vehicles 33,543Postal Charges 281Other Contracted Services 14,687Custodial Supplies 1,154Diesel Fuel 28,828Drugs and Medical Supplies 29,023Electricity 6,668Food Supplies 414Natural Gas 840Office Supplies 896Uniforms 722Water and Sewer 621Other Supplies and Materials 723Refunds 1,319Trustee's Commission 10,373Other Charges 383Other Equipment 16,074

Total Ambulance/Emergency Medical Services $ 950,969

Total Ambulance Service Fund $ 950,969

Special Purpose FundAdministration of Justice

Circuit CourtData Processing Services $ 120Trustee's Commission 50

Total Circuit Court $ 170

Total Special Purpose Fund 170

(Continued)

170

Exhibit J-8



Drug Control FundPublic Safety

Drug EnforcementContributions $ 750Confidential Drug Enforcement Payments 4,500Payments to Schools - Other 325Travel 135Animal Food and Supplies 436Other Supplies and Materials 15,538Trustee's Commission 161Other Charges 445Law Enforcement Equipment 9,572Motor Vehicles 22,480

Total Drug Enforcement $ 54,342

Total Drug Control Fund $ 54,342

Constitutional Officers - Fees FundAdministration of Justice

Circuit Court ClerkPrinting, Stationery, and Forms $ 50

Total Circuit Court Clerk $ 50

Total Constitutional Officers - Fees Fund 50

Highway/Public Works FundHighways

AdministrationCounty Official/Administrative Officer $ 69,500Accountants/Bookkeepers 32,760Communication 1,542Data Processing Services 8,711Dues and Memberships 2,250Legal Services 1,206Postal Charges 253Electricity 2,031Food Supplies 661Natural Gas 2,445Office Supplies 2,717Water and Sewer 277Other Charges 2,936

Total Administration $ 127,289

Highway and Bridge MaintenanceForemen $ 133,541Equipment Operators 152,219Truck Drivers 161,883Other Contracted Services 15,210Asphalt - Hot Mix 14,989Asphalt - Liquid 113,210

(Continued)

171

Exhibit J-8



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

Highway and Bridge Maintenance (Cont.)Crushed Stone $ 66,971Fertilizer, Lime, and Seed 982General Construction Materials 29Riprap 20,134Other Road Materials 9,483Pipe 33,078Road Signs 1,953Wood Products 44Gravel and Chert 2,500

Total Highway and Bridge Maintenance $ 726,226

Operation and Maintenance of EquipmentMechanic(s) $ 30,101Diesel Fuel 34,241Equipment and Machinery Parts 23,554Garage Supplies 6,320Gasoline 18,353Lubricants 5,497Tires and Tubes 20,044

Total Operation and Maintenance of Equipment 138,110

Other ChargesBuilding and Contents Insurance $ 4,000Liability Insurance 4,728Trustee's Commission 22,224Vehicle and Equipment Insurance 9,000Workers' Compensation Insurance 49,817

Total Other Charges 89,769

Employee BenefitsSocial Security $ 43,798Pensions 55,020Life Insurance 500Medical Insurance 104,051Unemployment Compensation 2,600

Total Employee Benefits 205,969

Capital OutlayMatching Share $ 135,400Bridge Construction 82,471Highway Equipment 67,438Motor Vehicles 3,516Other Capital Outlay 11,462

Total Capital Outlay 300,287

Total Highway/Public Works Fund $ 1,587,650

(Continued)

172

Exhibit J-8



General Debt Service FundPrincipal on Debt

General GovernmentPrincipal on Bonds $ 475,950Principal on Notes 228,600

Total General Government $ 704,550

EducationPrincipal on Bonds $ 433,050Principal on Notes 325,099Principal on Capital Leases 11,242

Total Education 769,391

Interest on DebtGeneral Government

Interest on Bonds $ 8,996Interest on Notes 6,744

Total General Government 15,740

EducationInterest on Bonds $ 8,184Interest on Notes 7,887Interest on Capital Leases 1,942

Total Education 18,013

Other Debt ServiceGeneral Government

Trustee's Commission $ 6,325Total General Government 6,325

Total General Debt Service Fund $ 1,514,019

Education Capital Projects FundOther Debt Service

EducationOther Debt Issuance Charges $ 500

Total Education $ 500

Capital Projects - DonatedCapital Projects Donated to School Department

Contributions $ 9,522Building Improvements 223,000

Total Capital Projects Donated to School Department 232,522

Total Education Capital Projects Fund 233,022

Total Governmental Funds - Primary Government $ 10,024,110

173

Exhibit J-9


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

General Purpose School FundInstruction

Regular Instruction ProgramTeachers $ 2,899,941Career Ladder Program 21,000Career Ladder Extended Contracts 13,000Homebound Teachers 10,785Educational Assistants 90,557Certified Substitute Teachers 9,278Non-certified Substitute Teachers 45,702Social Security 173,137Pensions 275,356Medical Insurance 247,477Unemployment Compensation 2,219Employer Medicare 40,258Other Contracted Services 22,731Instructional Supplies and Materials 50,352Textbooks - Bound 38,087Fee Waivers 8,059Regular Instruction Equipment 5,523

Total Regular Instruction Program $ 3,953,462

Alternative Instruction ProgramTeachers $ 52,560Career Ladder Program 1,000Other Salaries and Wages 17,078Non-certified Substitute Teachers 663Social Security 4,117Pensions 6,527Medical Insurance 4,746Unemployment Compensation 45Employer Medicare 963Instructional Supplies and Materials 284

Total Alternative Instruction Program 87,983

Special Education ProgramTeachers $ 509,534Career Ladder Program 3,500Career Ladder Extended Contracts 1,000Homebound Teachers 716Educational Assistants 220,822Certified Substitute Teachers 9,052Non-certified Substitute Teachers 2,128Social Security 42,763Pensions 67,925Medical Insurance 44,939Unemployment Compensation 851Employer Medicare 10,001Instructional Supplies and Materials 12,136Special Education Equipment 3,278

Total Special Education Program 928,645

(Continued)

174

Exhibit J-9



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

Career and Technical Education ProgramTeachers $ 277,140Educational Assistants 10,083Certified Substitute Teachers 306Non-certified Substitute Teachers 4,488Social Security 17,313Pensions 26,081Medical Insurance 9,406Unemployment Compensation 205Employer Medicare 4,048Tuition 6,076Instructional Supplies and Materials 3,124Other Supplies and Materials 60Vocational Instruction Equipment 125,000

Total Career and Technical Education Program $ 483,330

Support ServicesAttendance

Other Contracted Services $ 2,018Other Supplies and Materials 142In Service/Staff Development 113

Total Attendance 2,273

Health ServicesMedical Personnel $ 71,194Other Salaries and Wages 53,886Social Security 7,275Pensions 11,827Medical Insurance 6,312Unemployment Compensation 173Employer Medicare 1,701Other Supplies and Materials 3,241In Service/Staff Development 5,420

Total Health Services 161,029

Other Student SupportCareer Ladder Program $ 1,500Guidance Personnel 118,238Other Salaries and Wages 23,065Social Security 8,687Pensions 9,144Medical Insurance 843Unemployment Compensation 94Employer Medicare 2,032Evaluation and Testing 8,799Travel 701Other Supplies and Materials 1,167

Total Other Student Support 174,270

(Continued)

175

Exhibit J-9



General Purpose School Fund (Cont.)Support Services (Cont.)

Regular Instruction ProgramSupervisor/Director $ 162,920Career Ladder Program 1,500Librarians 53,141Instructional Computer Personnel 83,260Other Salaries and Wages 3,115Social Security 18,239Pensions 23,846Medical Insurance 6,669Unemployment Compensation 150Employer Medicare 4,265Travel 1,256Other Contracted Services 16,500Other Supplies and Materials 1,444In Service/Staff Development 12,688

Total Regular Instruction Program $ 388,993

Special Education ProgramSupervisor/Director $ 43,639Clerical Personnel 1,429Social Security 2,342Pensions 4,102Medical Insurance 5,710Unemployment Compensation 20Employer Medicare 548Travel 2,051Other Contracted Services 17,025In Service/Staff Development 7,739


Career and Technical Education ProgramSupervisor/Director $ 69,737Clerical Personnel 3,290Social Security 4,209Pensions 6,653Medical Insurance 4,566Unemployment Compensation 30Employer Medicare 984Other Supplies and Materials 891In Service/Staff Development 204

Total Career and Technical Education Program 90,564

Other ProgramsOn-behalf Payments to OPEB $ 21,440

Total Other Programs 21,440

(Continued)

176

Exhibit J-9




Board of EducationBoard and Committee Members Fees $ 26,450Social Security 1,640Pensions 1,726Life Insurance 6,409Medical Insurance 850Employer Medicare 384Audit Services 8,000Dues and Memberships 3,050Legal Services 1,959Other Contracted Services 2,229Other Supplies and Materials 1,083Liability Insurance 14,341Trustee's Commission 48,932Workers' Compensation Insurance 45,560In Service/Staff Development 200Criminal Investigation of Applicants - TBI 947Other Charges 27

Total Board of Education $ 163,787

Director of SchoolsCounty Official/Administrative Officer $ 101,615Career Ladder Program 1,000Social Security 5,883Pensions 9,314Medical Insurance 6,533Unemployment Compensation 32Employer Medicare 1,376Communication 7,915Dues and Memberships 3,310Postal Charges 918Travel 543Other Contracted Services 22,193Office Supplies 2,100Other Supplies and Materials 2,770In Service/Staff Development 2,333

Total Director of Schools 167,835

Office of the PrincipalPrincipals $ 269,507Career Ladder Program 5,000Accountants/Bookkeepers 87,628Assistant Principals 147,520Secretary(ies) 43,708Social Security 31,551Pensions 51,112Medical Insurance 33,017

(Continued)

177

Exhibit J-9




Office of the Principal (Cont.)Unemployment Compensation $ 353Employer Medicare 7,379Communication 10,942Travel 303Other Contracted Services 8,393In Service/Staff Development 178

Total Office of the Principal $ 696,591

Fiscal ServicesSupervisor/Director $ 53,719Clerical Personnel 56,650Social Security 6,826Pensions 10,750Unemployment Compensation 73Employer Medicare 1,596Travel 120

Total Fiscal Services 129,734

Operation of PlantCustodial Personnel $ 212,162Social Security 12,852Pensions 18,036Medical Insurance 3,838Unemployment Compensation 259Employer Medicare 3,006Other Contracted Services 15,641Custodial Supplies 40,948Electricity 230,858Natural Gas 58,108Water and Sewer 16,057Boiler Insurance 2,181Building and Contents Insurance 39,732

Total Operation of Plant 653,678

Maintenance of PlantSupervisor/Director $ 27,056Maintenance Personnel 114,329Social Security 7,571Pensions 13,775Medical Insurance 14,148Unemployment Compensation 129Employer Medicare 1,771Maintenance and Repair Services - Buildings 12,077Maintenance and Repair Services - Equipment 3,006Maintenance and Repair Services - Vehicles 1,143Travel 1,790

(Continued)

178

Exhibit J-9




Maintenance of Plant (Cont.)Other Contracted Services $ 41,987Equipment and Machinery Parts 100,118Other Supplies and Materials 326In Service/Staff Development 50Maintenance Equipment 8,000

Total Maintenance of Plant $ 347,276

TransportationSupervisor/Director $ 27,056Mechanic(s) 12,958Bus Drivers 332,477Other Salaries and Wages 23,165In-service Training 857Social Security 21,934Pensions 35,088Medical Insurance 32,866Unemployment Compensation 459Employer Medicare 5,108Contracts with Parents 2,949Maintenance and Repair Services - Vehicles 30,900Medical and Dental Services 2,683Other Contracted Services 5,340Diesel Fuel 66,069Gasoline 6,635Tires and Tubes 12,740Vehicle Parts 25,862Other Supplies and Materials 4,828Vehicle and Equipment Insurance 12,267In Service/Staff Development 598Transportation Equipment 78,982

Total Transportation 741,821

Central and OtherOther Contracted Services $ 7,994Data Processing Supplies 977Data Processing Equipment 7,703

Total Central and Other 16,674

Operation of Non-Instructional ServicesFood Service

Medical Insurance $ 52,936Food Supplies 388Food Service Equipment 1,163

Total Food Service 54,487

(Continued)

179

Exhibit J-9



General Purpose School Fund (Cont.)Operation of Non-Instructional Services (Cont.)

Community ServicesEducational Assistants $ 67,365Part-time Personnel 4,938Other Salaries and Wages 20,445Social Security 5,349Pensions 8,016Medical Insurance 4,683Unemployment Compensation 135Employer Medicare 1,251Maintenance and Repair Services - Equipment 2,142Travel 4,080Instructional Supplies and Materials 2,618Other Supplies and Materials 15,323In Service/Staff Development 1,269

Total Community Services $ 137,614

Early Childhood EducationTeachers $ 157,620Educational Assistants 45,887Other Salaries and Wages 23,117Social Security 12,233Pensions 20,876Medical Insurance 22,400Unemployment Compensation 210Employer Medicare 2,861Travel 126Instructional Supplies and Materials 4,151In Service/Staff Development 3,578

Total Early Childhood Education 293,059

Other Debt ServiceEducation

Debt Service Contribution to Primary Government $ 13,184Total Education 13,184

Total General Purpose School Fund $ 9,792,334

School Federal Projects FundInstruction

Regular Instruction ProgramTeachers $ 274,580Educational Assistants 33,363Certified Substitute Teachers 420Non-certified Substitute Teachers 2,550Social Security 17,208Pensions 28,182Medical Insurance 25,634

(Continued)

180

Exhibit J-9



School Federal Projects Fund (Cont.)Instruction (Cont.)

Regular Instruction Program (Cont.)Unemployment Compensation $ 195Employer Medicare 4,020Instructional Supplies and Materials 56,549Regular Instruction Equipment 40,672


Special Education ProgramTeachers $ 42,577Educational Assistants 48,693Speech Pathologist 66,951Other Salaries and Wages 30,068Social Security 10,683Pensions 14,654Medical Insurance 10,497Unemployment Compensation 186Employer Medicare 2,499Other Contracted Services 39,325Instructional Supplies and Materials 130Special Education Equipment 1,295


Career and Technical Education ProgramEducational Assistants $ 6,200Social Security 384Pensions 604Unemployment Compensation 10Employer Medicare 90Instructional Supplies and Materials 512Other Supplies and Materials 1,961Vocational Instruction Equipment 7,037


Support ServicesOther Student Support

Travel $ 2,740Other Supplies and Materials 34In Service/Staff Development 2,355

Total Other Student Support 5,129

Regular Instruction ProgramOther Salaries and Wages $ 41,343Social Security 2,472Pensions 3,754Medical Insurance 240Unemployment Compensation 20Employer Medicare 578

(Continued)

181

Exhibit J-9



School Federal Projects Fund (Cont.)Support Services (Cont.)

Regular Instruction Program (Cont.)Travel $ 21In Service/Staff Development 19,778Other Charges 175


Special Education ProgramPsychological Personnel $ 57,115Social Security 3,274Pensions 5,186Medical Insurance 2,937Unemployment Compensation 28Employer Medicare 766Other Supplies and Materials 1,013In Service/Staff Development 5,465


Career and Technical Education ProgramTravel $ 100In Service/Staff Development 1,481Other Charges 100


Total School Federal Projects Fund $ 918,704

Central Cafeteria FundOperation of Non-Instructional Services

Food ServiceSupervisor/Director $ 67,552Clerical Personnel 8,047Cafeteria Personnel 261,019Social Security 17,027Pensions 29,638Unemployment Compensation 519Employer Medicare 3,982Communication 300Maintenance and Repair Services - Equipment 5,312Postal Charges 100Transportation - Other than Students 5,102Travel 333Other Contracted Services 737Food Preparation Supplies 10,626Food Supplies 206,638USDA - Commodities 45,254Other Supplies and Materials 1,603In Service/Staff Development 137Other Charges 397Food Service Equipment 1,077

Total Food Service $ 665,400

Total Central Cafeteria Fund 665,400

Total Governmental Funds - Perry County School Department $ 11,376,438

182

Exhibit J-10

Perry County, TennesseeSchedule of Detailed Receipts, Disbursements,

and Changes in Cash Balance - City Agency FundFor the Year Ended June 30, 2018

Cash Receipts Local Option Sales Tax $ 359,160Total Cash Receipts $ 359,160

Cash Disbursements Remittance of Revenues Collected $ 355,569 Trustee's Commission 3,591Total Cash Disbursements $ 359,160

Excess of Cash Receipts Over (Under) Cash Disbursements $ 0Cash Balance, July 1, 2017 0

Cash Balance, June 30, 2018 $ 0

Cities -Sales Tax

Fund

183

SINGLE AUDIT SECTION

184

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

Perry County Mayor and Board of County Commissioners Perry County, Tennessee To the County Mayor and Board of County Commissioners: We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Perry County, Tennessee, as of and for the year ended June 30, 2018, and the related notes to the financial statements, which collectively comprise Perry County’s basic financial statements, and have issued our report thereon dated December 4, 2018. Our report includes a reference to other auditors who audited the financial statements of the Industrial Development Board of Perry County, as described in our report on Perry County’s financial statements. This report does not include the results of the other auditors’ testing of internal control over financial reporting or compliance and other matters that are reported on separately by those auditors. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered Perry 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 Perry County’s internal control. Accordingly, we do not express an opinion on the effectiveness of Perry County’s internal control. Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as described in the accompanying Schedule of Findings and Questioned Costs, we identified certain deficiencies in internal control that we consider to be material weaknesses and significant deficiencies. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a

185

combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. We consider the deficiencies described in the accompanying Schedule of Findings and Questioned Costs to be material weaknesses: 2018-001 and 2018-002.

A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. We consider the deficiencies described in the accompanying Schedule of Findings and Questioned Costs to be significant deficiencies: 2018-004, 2018-006, 2018-007, and 2018-008.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Perry County’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed instances of noncompliance or other matters that are required to be reported under Government Auditing Standards and are described in the accompanying Schedule of Findings and Questioned Costs as items: 2018-003 and 2018-005.

Perry County's Responses to the Findings

Perry County's responses to the findings identified in our audit are described in the accompanying Schedule of Findings and Questioned Costs. Perry 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 Perry 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

December 4, 2018

JPW/yu

186

Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; and Report on the Schedule of Expenditures of Federal Awards

Required by the Uniform Guidance

Independent Auditor’s Report

Perry County Mayor and Board of County Commissioners Perry County, Tennessee

To the County Mayor and Board of County Commissioners:

Report on Compliance for Each Major Federal Program

We have audited Perry 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 Perry County’s major federal programs for the year ended June 30, 2018. Perry County’s major federal programs are identified in the summary of auditor's results section of the accompanying Schedule of Findings and Questioned Costs.

Management's Responsibility

Management is responsible for compliance with the federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs.

Auditor's Responsibility

Our responsibility is to express an opinion on compliance for each of Perry County’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Perry County’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.

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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 Perry County’s compliance.

Opinion on Each Major Federal Program

In our opinion, Perry County complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2018.

Report on Internal Control Over Compliance

Management of Perry 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 Perry 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 Perry County’s internal control over compliance.

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

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Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance

We have audited the financial statements of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Perry County, Tennessee, as of and for the year ended June 30, 2018, and the related notes to the financial statements, which collectively comprise Perry County’s basic financial statements. We issued our report thereon dated December 4, 2018, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on 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.

Very truly yours,

Justin P. Wilson Comptroller of the Treasury Nashville, Tennessee

December 4, 2018

JPW/yu

189

Perry County, Tennessee, and the Perry County School DepartmentSchedule of Expenditures of Federal Awards and State Grants (1) (2)For the Year-Ended June 30, 2018

Federal Pass-throughFederal/Pass-Through Agency/State CFDA Entity IdentifyingGrantor Program Title Number Number

U.S. Department of Agriculture: Passed-through State Department of Agriculture: Child Nutrition Cluster: (4) National School Lunch Program (Commodities - Noncash Assistance) 10.555 N/A $ 45,254 (5) Passed-through State Department of Education: Child Nutrition Cluster: (4) School Breakfast Program 10.553 N/A 99,611 National School Lunch Program 10.555 N/A 291,762 (5)Total U.S. Department of Agriculture $ 436,627

U.S. Department of Military: Passed-through State Department of General Services: Section 1033 Excess Property Program (Noncash Assistance) 12.U01 N/A $ 134,921 (6)Total U.S. Department of Military $ 134,921

U.S. Department of Housing and Urban Development: Passed-through State Department of Economic and Community Development: Community Development Block Grants/State's Program 14.228 (3) $ 162,798Total U.S. Department of Housing and Urban Development $ 162,798

U.S. Department of Transportation: Passed-through State Department of Transportation: Airport Improvement Program 20.106 (3) $ 48,302Total U.S. Department of Transportation $ 48,302

U.S. Institute of Museum and Library Services: Passed-through Tennessee State Library and Archives: Grants to States 45.310 (3) $ 1,577Total U.S. Institute of Museum and Library Services $ 1,577

U.S. Department of Education: Passed-through State Department of Education: Title I Grants to Local Educational Agencies 84.010 N/A $ 471,128 Special Education Cluster: (4) Special Education - Grants to States 84.027 N/A 360,952 Special Education - Preschool Grants 84.173 N/A 25,716 Career and Technical Education - Basic Grants to States 84.048 N/A 23,573 Rural Education 84.358 N/A 14,861 Supporting Effective Instruction State Grant 84.367 N/A 53,588 Student Support and Academic Enrichment Program 84.424 N/A 12,211Total U.S. Department of Education $ 962,029

U.S. Department of Health and Human Services: Passed-through State Department of Human Services: CCDF Cluster: Child Care and Development Block Grant 93.575 (3) $ 64,424Total U.S. Department of Health and Human Services $ 64,424

U.S. Department of Homeland Security: Passed-through State Department of Military: Emergency Management Performance Grants 97.042 (3) $ 132 Homeland Security Grant Program 97.067 (3) 8,350 Total U.S. Department of Homeland Security $ 8,482

Total Expenditures of Federal Grants $ 1,819,160

(Continued)

Expenditures

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Perry County, Tennessee, and the Perry County School DepartmentSchedule of Expenditures of Federal Awards and State Grants (1) (2) (Cont.)

FederalFederal/Pass-Through Agency/State CFDA ContractGrantor Program Title Number Number

State Grants: Clean Tennessee Energy Grant Program - State Department of Environment and Conservation N/A (3) $ 17,805 Convenience Center Grant - State Department of Environment and Conservation N/A (3) 6,134 Coordinated School Health - State Department of Education N/A (3) 89,047 Courthouse Security Grant - State Administration Office of the Courts N/A (3) 24,480 CTE Equipment Grant - State Department of Education N/A (3) 125,000 Early Childhood Education - State Department of Education N/A (3) 301,301 Family Resource Center - State Department of Education N/A (3) 27,451 General Aviation Airport Maintenance Program - State Department of Transportation N/A (3) 662 High Visibility Enforcement Grant - State Department of Transportation N/A (3) 5,000 Internet Connectivity - State Department of Education N/A (3) 2,737 Juvenile Justice and Delinquency Prevention - State Commission on Children and Youth N/A (3) 9,000 Litter Program - State Department of Transportation N/A (3) 35,362 LPRF 10-Year Park and Recreation Comprehensive Master Plan - State Department of Environment and Conservation N/A (3) 48,000 Save the Children Grant - State Department of Education N/A (3) 137,500 Three Star Grant - State of Economic and Community Development N/A (3) 28,972 Tourism Enhancement Grant - State Department of Economic and Community Development N/A (3) 8,788 Veteran's Services Grant - State Department of Human Services N/A (3) 2,000

Total State Grants $ 869,239

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) Perry county elected not to use the 10% de minimus cost rate permitted in the Uniform Guidance.(3) Information not available.(4) Child Nutrition Cluster total $436,627; Special Education Cluster total $386,668.(5) Total for CFDA No. 10.555 is $337,016.(6) During the year ended June 30, 2018, Perry County received excess military equipment from the U.S. Department of

Military valued at $134,921.

SUBRECIPIENTS Federal Amount CFDA Provided to

Program Title Number Subrecipient SubrecipientCommunity Development Block Grants/State's Program 14.228 $162,798 Town of Linden

Expenditures

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Perry County, TennesseeSummary Schedule of Prior-year FindingsFor the Year Ended June 30, 2018

Fiscal Page Finding CFDAYear Number Number Number

OFFICE OF TRUSTEE

2017 186 2017-001 N/A

2017 187 2017-002 N/A

There were no prior-year federal award findings to report.

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 whethercorrected or not. Presented below are financial statement findings along with their current status from theAnnual Financial Report for Perry County, Tennessee, for the year ended June 30, 2018.

Prior-year Financial Statement Findings

Multiple employees operated from the same cash drawer

Not Corrected - See Explanation on Corrective Action Plan

Prior-year Federal Awards Findings

Duties were not Segregated Adequately Not Corrected - See Explanation on Corrective Action Plan

Title of Finding Current Status

192

Financial Statements:

1. Our report on the financial statements of Perry County is unmodified.

2. Internal Control Over Financial Reporting:

* Material weakness identified? YES

* Significant deficiency identified? YES

3. Noncompliance material to the financial statements noted? NO

Federal Awards:

4. Internal Control Over Major Federal Programs:

* Material weakness identified? NO

* Significant deficiency identified? NONE REPORTED

5. Type of report auditor issued on compliance for major programs. UNMODIFIED

6. Any audit findings disclosed that are required to be reported inaccordance with 2 CFR 200.516(a)? NO

7. Identification of Major Federal Programs:

* CFDA Numbers: 10.553 and 10.555 Nutrition Cluster: School Breakfast Program and National School Lunch Program

8. Dollar threshold used to distinguish between Type A and Type B Programs. $750,000

9. Auditee qualified as low-risk auditee? YES

PERRY 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, are presented below. We reviewed these findings and recommendations with management to provide an opportunity for their response. Written responses for all findings are paraphrased and presented following each finding and recommendation. Management’s corrective action plans, whether related to the financial statements or federal awards, are presented separately in the Management’s Corrective Action Plan in the Single Audit Section of this report. Findings relating specifically to the audit of federal awards, if any, are separately presented under Part III, Findings and Questioned Costs for Federal Awards.

OFFICE OF COUNTY MAYOR

FINDING 2018-001 MATERIAL AUDIT ADJUSTMENTS WERE REQUIRED FOR PROPER FINANCIAL STATEMENT PRESENTATION (Internal Control – Material Weakness Under Government Auditing Standards)

At June 30, 2018, certain general ledger account balances in the General and Ambulance Service funds were not materially correct, and audit adjustments were required for the financial statements to be materially correct at year-end. Material audit adjustments were required to increase receivables ($206,821), deferred revenues ($69,624), and payables ($191,793) in the General Fund. Material audit adjustments were required to increase patient receivables ($424,279), allowance for uncollectible accounts ($307,897), and deferred revenues ($116,382) in the Ambulance Service Fund. Generally accepted accounting principles require Perry County to have adequate internal controls over the maintenance of its accounting records. Material audit adjustments were required because the county’s financial reporting system did not prevent, detect, or correct potential misstatements in the accounting records. It is a strong indicator of a material weakness in internal controls if the county has ineffective controls over the maintenance of its accounting records, which are used to prepare the financial statements, including the related notes to the financial statements. This deficiency is the result of a lack of management oversight. We presented audit adjustments to management that they approved and posted to properly present the financial statements in this report.

RECOMMENDATION

Perry County should have appropriate processes in place to ensure its general ledgers are materially correct.

MANAGEMENT’S RESPONSE – COUNTY MAYOR

I concur with the finding. Additional explanation is included in the corrective action plan.

____________________________

194

FINDING 2018-002 THE AMBULANCE SERVICE HAD ACCOUNTING DEFICIENCIES (Internal Control – Material Weakness Under Government Auditing Standards)

The following accounting deficiencies were noted in the operation of the Ambulance Service. These deficiencies are the result of a lack of management oversight.

A. The Ambulance Service accounts receivable control account was not reconciledwith billings, collections, and write-offs for a contracted collection agency.Contrary to sound business practice, management has not required thecollection agency to furnish the Ambulance Service with any documentationrelated to the actual billing and posting of payments or write-offs to patientaccounts; therefore, the Ambulance Service is unable to perform any type ofaccount reconciliation. The failure to reconcile accounts receivable withbillings, collections, and write-offs is a significant deficiency in internalcontrols, which could lead to inaccurate billing and a loss of county revenue.

B. Patient receivable account listings were not reviewed on a routine basis todetermine collection status and to write-off amounts deemed uncollectible. OnMay 18, 2009, the County Commission adopted a billing write-off policy foruncollectible customer accounts of the Ambulance Service; however, thelanguage in the policy was ambiguous, leaving considerable discretion in theinterpretation and application of the policy. Also, the policy did not addresswho authorizes write-offs and the proper documentation for write-offs. Soundbusiness practices dictate that written policies governing the collection andwrite-off of customer accounts be clearly written and consistently applied.Without detailed formal policies for the collection and write-off of customeraccounts, employees have no guidance for consistent and uniform treatment ofcustomers.

RECOMMENDATION

Adequate records should be maintained by the Ambulance Service, so reconciliations can be regularly performed to ensure the collection agency is properly billing delinquent accounts and payments and write-offs are properly posted to patients’ accounts. All patient accounts should be reviewed periodically to determine their collection status. Written policies concerning the billing, collection, and write-off of customer accounts should be revised for clarity and presented to the County Commission for its consideration. These policies should be followed to ensure consistent and uniform treatment of customers.



_________________________ 195

FINDING 2018-003 EXPENDITURES EXCEEDED APPROPRIATIONS (Noncompliance Under Government Auditing Standards)

Expenditures exceeded appropriations approved by the County Commission in the following major appropriation categories (the legal level of control) of the General Fund as reflected in the following table:

AmountMajor Appropriation Category Overspent

Parks and Fair Boards $ 54,413Agricultural Extension Service 617Public Health and Welfare Projects 4,724

Section 5-9-401, Tennessee Code Annotated, states “All funds from whatever source derived, including, but not limited to, taxes, county aid funds, federal funds, and fines, that are to be used in the operation and respective programs for the various departments, commissions, institutions, boards, offices, and agencies of county governments shall be appropriated to such use by the county legislative bodies.” This deficiency exists because management failed to hold spending to the limits authorized by the County Commission, which resulted in unauthorized expenditures.

RECOMMENDATION

Expenditures should be held within appropriations approved by the County Commission.



____________________________

FINDING 2018-004 AN INVESTIGATIVE REPORT DATED OCTOBER 30, 2018, IDENTIFIED DEFICIENCIES AT THE PERRY COUNTY RESCUE SQUAD AND THE PERRY COUNTY EMERGENCY MEDICAL SERVICES (Internal Control – Significant Deficiency Under Government Auditing Standards)

An investigation by the Comptroller’s Division of Investigations reported deficiencies at the Perry County Rescue Squad (PCRS), a nonprofit organization, and the Perry County Emergency Medical Services (EMS), a county-managed agency that operates ambulance services for the county. It should be noted that the director of EMS also serves as the captain of the PCRS. Details of these deficiencies can be found in a report dated October 30, 2018, released by the Division of Investigations, which can be accessed at www.comptroller.tn.gov/ia. A summary of this report includes the following:

196

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

A. Insufficient records and lack of proper oversight of time charges resulted inquestionable expenses to the county totaling $61,067.

B. The PCRS failed to document a vehicle sale to the rescue squad captain.

C. Some PCRS and county assets are not properly identified.

D. The director failed to properly account for leave accrued.

E. EMS had questionable fuel purchases totaling $966.58.

F. The PCRS did not maintain adequate controls over its financial transactions._________________________

OFFICE OF DIRECTOR OF SCHOOLS

FINDING 2018-005 COMPETITIVE BIDS WERE NOT SOLICITED FOR THE PURCHASE OF HVAC UNITS AND CUSTODIAL SUPPLIES (Noncompliance Under Government Auditing Standards)

As part of our audit procedures for determining whether the purchasing process was operating as designed, we selected a sample of 31 disbursements totaling $58,605 from a population of 2,297 vendor checks totaling $6,222,870. Our sample revealed that in two applicable purchases, competitive bids were not solicited as required by state statute. The School Department purchased four HVAC units and supplies totaling $17,188 and custodial supplies totaling $11,738; however, competitive bids were not solicited for these purchases. Purchasing procedures for the School Department are governed by purchasing laws applicable to schools as set forth in Section 49-2-203, Tennessee Code Annotated. This statute requires competitive bids to be solicited through newspaper advertisement on all purchases exceeding $10,000. This deficiency is the result of a lack of management oversight. The failure to solicit competitive bids could result in the School Department paying more than the most competitive price.

RECOMMENDATION

Purchases exceeding $10,000 should be competitively bid as required by state statute.

MANAGEMENT’S RESPONSE – DIRECTOR OF SCHOOLS


____________________________

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OFFICE OF TRUSTEE FINDING 2018-006 THE OFFICE DID NOT IMPLEMENT ADEQUATE

CONTROLS TO PROTECT ITS INFORMATION RESOURCES (Internal Control – Significant Deficiency Under Government Auditing Standards)

The office did not implement adequate controls to protect its information resources. This finding does not identify specific vulnerabilities that could allow someone to exploit the office’s information system or misuse county funds. Disclosing those vulnerabilities could present a potential security risk by providing the readers with information that might be confidential pursuant to Section 10-7-504(i), Tennessee Code Annotated. Sound business practices dictate that proper controls be implemented. Without these controls, unauthorized system activity could occur. This deficiency was the result of a lack of management oversight. RECOMMENDATION The office should ensure that adequate controls over its information systems and the resources associated with those systems are implemented. MANAGEMENT’S RESPONSE – FORMER TRUSTEE GEORGE DUNCAN I concur with the finding. Additional explanation is included in the corrective action plan.

__________________________________ FINDING 2018-007 MULTIPLE EMPLOYEES OPERATED FROM THE SAME

CASH DRAWER (Internal Control – Significant Deficiency Under Government Auditing Standards)

Multiple employees operated from the same cash drawer in the Office of Trustee. Good internal controls dictate that each employee have their own cash drawer, start the day with a standard fixed amount of cash, and remove all but that beginning amount at the end of the day. This amount should be verified to the employee’s receipts at the end of each day. Failure to adhere to this control regimen increases the risks that a cash shortage may not be detected in a timely manner. Furthermore, in the event of a cash shortage, the official would not be able to determine who was responsible for the shortage because multiple employees were working from one cash drawer. This deficiency is the result of a lack of management oversight related to safeguarding assets. Also, this deficiency is the result of management’s failure to correct the finding noted in the prior-year audit report. RECOMMENDATION The trustee should assign each employee their own cash drawer.

198

MANAGEMENT’S RESPONSE – CURRENT TRUSTEE SHANE COPELAND


__________________________________

FINDING 2018-008 DUTIES WERE NOT SEGREGATED ADEQUATELY (Internal Control – Significant Deficiency Under Government Auditing Standards)

Duties were not segregated adequately among the official and employees in the Office of Trustee. The official and employees responsible for maintaining accounting records 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 control that increases the risks 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

The trustee should segregate duties to the extent possible using available resources.

MANAGEMENT’S RESPONSE – CURRENT TRUSTEE SHANE COPELAND


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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, 2018.

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FindingNumber

OFFICE OF COUNTY MAYOR

2018-001

2018-002

2018-003

OFFICE OF DIRECTOR OF SCHOOLS

2018-005

OFFICE OF TRUSTEE

2018-006

2018-007

2018-008

Perry County, TennesseeManagement's Corrective Action Plan


Title of Finding

Multiple Employees Operated from the Same Cash Drawer

Corrective ActionPlan Page Number

207

Material Audit Adjustments were Required for Proper Financial Statement Presentation

The Ambulance Service had Accounting Deficiencies 203

Expenditures Exceeded Appropriations 204

Competitive Bids were not Solicited for the Purchase of HVAC Units and Custodial Supplies

The Office did not Implement Adequate Controls to Protect Its Information Resources

202

205

206

Duties were not Segregated Adequately

We reviewed the financial statement and federal award findings and recommendations withmanagement to provide an opportunity for their response as required by the auditee requirementswithin Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, CostPrinciples, and Audit Requirements for Federal Awards (Uniform Guidance). Management’s correctiveaction plans for all financial statement findings and federal award findings are presented in this sectionand have been indexed below. The corrective action plans were prepared by management and havebeen presented as they were submitted.

207

201

FINDING:

PERRY COUNTY John H Carroll, County Mayor

P.O. Box 16 · Linden, TN 37096 · (931)589-2216

Corrective Action Plan

MATERIAL AUDIT ADJUSTMENTS WERE REQUIRED FOR

PROPER FINANCIAL STATEMENT PRESENTATION

Response and Corrective Action Plan Prepared by:

John Carroll, County Mayor

Person Responsible for Implementing the Corrective Action:

Same as above

Anticipated Completion Date of Corrective Action:

June 30, 2019

Repeat Finding:

No

Planned Corrective Action:

The adjustments required for the General Fund were related to grants that were awarded during the fiscal year after the budget had been approved. Thus, the original budget did not include either the anticipated revenues or anticipated expenses of the grant. In the future budget amendments will be made upon receipt of grants which were not captured in the original budget so that anticipated revenues and expenses can be accurately reflected.

The adjustments for the Ambulance Fund were related largely to delinquent patient accounts. Delinquent accounts that were within the statutory period have been turned over to a collection agency. While the agency experienced some success with the collection of delinquent accounts, they were slow to provide feedback on account status despite numerous request from Perry County Ambulance Service and the Auditors from the State of Tennessee Comptroller's Office, making it cumbersome to reconcile what was outstanding and what had expired due to statutory limitations. Thus, a new collection agency has been identified and will be handling new collections. A process has been implemented between the new collection agency and Perry County Ambulance Service whereby the accounts are reconciled a minimum of monthly to accurately account for what has been added, collected and statutorily expired.

202

203

204

MARTH JANET

t R. SHARP, CHAlRPERSON LlNDEN

Ron SP • CARROLL, LINDEN

DON BARNETTE, VICE-CHM, LOBELVILLE

JACKIE C. DUNCAN, LINDEN AID, LINDEN

12-05-2018

PHILLIP TATUM, LINDEN

PERRY COUNTY SCHOOLS Eric Lomax, DIRECTOR OF SCHOOLS

857 SQUIRREL HOLLOW DRIVE Ll.l'.l)EN, TENNESSEE 37096

PHONE: (931)589-2102 FAX: (931)589-5110


U

FINDIN G: COMPETITIVE BIDS WERE NOT SOLICITED FOR THE PRCHASE OF HVAC UNITS AND CUSTODIAL SUPPLIES

Response and Corrective Action Plan P1·epru:ed by; Eric Lomax, Director of Schools


Eric Lomax, Director of Schools

Anticipated Completion Date of Corrective Action:

June 30, 2019

Repeat Finding:

No

Planned Corre_ctive Action:

We are currently setting up the bidcting proeess for any supplies for the rest of this year and will take bids irl the future for items that go over our $10,000 limit.

205

206

PERRY COUNTY TRUSTEE

Shane Copeland, Trustee PO Box910

Linden, TN 37096

(931)589-2313

Fax: (931)589-3232

[email protected]


FINDING: MULTIPLE EMPLOYEES OPERATED FROM THE SAME

CASH DRAWER

Response and Corrective Action Plan Prepared by:

Shane Copeland, Trustee


Same as above

Anticipated Completion Date of Corrective Action: September 4, 2018

Repeat Finding:

Yes

Reason Corrective Action was Not Taken in the Prior Year: Prior Trustee refused to implement the corrective measures.

Planned Corrective Action: As of September 4, 2018, I added 2 cash drawers.

FINDING: DUTIES WERE NOT SEGREGATED ADEQUATELY

Response and Corrective Action Plan Prepared by: Shane Copeland, Trustee

Person Responsible for Implementing the Corrective Action: Same as above

Anticipated Completion Date of Corrective Action: September 4, 2018

Repeat Finding: Yes

Reason Corrective Action was Not Taken in the Prior Year: Prior Trustee refused to implement the corrective measures.

Planned Corrective Action:

As of September 4, 2018, I delegated duties between myself

and my deputy. This will avoid any conflicts of interest and

promote a more transparent process by helping us keep each

other in check with each other's duties.

�,:,.,__ 4,,L�✓ l.:1-0'{-/'i'r Shane Copeland, Perry CountyTrustee Date

207

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 Perry County.

PERRY COUNTY SHOULD ADOPT A CENTRAL SYSTEM OF ACCOUNTING, BUDGETING, AND PURCHASING

Perry 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 Perry 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.

208

Documents

PERRY COUNTY TENNESSEE - TN Comptroller · Perry County management. recommendationsDetailed findings, , and management’s responses are included in the Single Audit section of this