UNION COUNTY TENNESSEE - TN Comptroller · Schedule of Changes in Net Pension Liability (Asset) and Related Ratios Based on Participation in the Public Employee Pension Plan ... Union

ANNUAL FINANCIAL REPORT

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

DIVISION OF LOCAL GOVERNMENT AUDIT

ANNUAL FINANCIAL REPORT

UNION COUNTY, TENNESSEE

FOR THE YEAR ENDED JUNE 30, 2016

COMPTROLLER OF THE TREASURY JUSTIN P. WILSON

DIVISION OF LOCAL GOVERNMENT AUDIT JAMES R. ARNETTE

Director

MARK TREECE, CPA, CGFM Audit Manager STEPHEN ALRED AMY MOORE, CGFM AMY SOSVILLE, CPA JACOB ROGERS Auditor 4 BRAD BURKE, CPA, CIA PAULA KNIGHT MARIE TIDWELL, CPA DOUG SANDIDGE, CISA, CFE Auditor 4 State Auditors

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

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Exhibit Page(s)

Summary of Audit Findings 6

INTRODUCTORY SECTION 7

Union County Officials 8-9

FINANCIAL SECTION 10

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

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

Fund Financial Statements:Governmental Funds:

Balance Sheet C-1 20-21Reconciliation of the Balance Sheet of Governmental Funds

to the Statement of Net Position C-2 22Statement of Revenues, Expenditures, and Changes in

Fund Balances C-3 23-24Reconciliation of the Statement of Revenues, Expenditures,

and Changes in Fund Balances of Governmental Fundsto the Statement of Activities C-4 25

Statements of Revenues, Expenditures, and Changes in FundBalances – Actual (Budgetary Basis) and Budget:

General Fund C-5 26-27Ambulance Service Fund C-6 28Highway/Public Works Fund C-7 29

Fiduciary Funds:Statement of Fiduciary Assets and Liabilities D 30

Index and Notes to the Financial Statements 31-82REQUIRED SUPPLEMENTARY INFORMATION: 83

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

Schedule of Changes in Net Pension Liability (Asset) and Related Ratios Based on Participation in the Public Employee Pension Planof TCRS – Primary Government - Highway Department and Discretely Presented Union County School Department - Non-Certified Employees E-2 85

Schedule of Contributions Based on Participation in the Public EmployeePension Plan of TCRS – Primary Government - General Fund and EMS E-3 86

Schedule of Contributions Based on Participation in the Public EmployeePension Plan of TCRS – Discretely Presented Union County SchoolDepartment – Non-Certified Employees and Primary GovernmentHighway Department Employees E-4 87

Schedule of Contributions Based on Participation in the TeacherRetirement Plan of TCRS – Discretely Presented UnionCounty School Department E-5 88

UNION COUNTY, TENNESSEETABLE OF CONTENTS

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Exhibit Page(s)

Schedule of Contributions Based on Participation in the TeacherLegacy Pension Plan of TCRS – Discretely Presented UnionCounty School Department E-6 89

Schedule of Proportionate Share of the Net Pension Asset in theTeacher Pension Plan of TCRS – Discretely PresentedUnion County School Department E-7 90

Schedule of Proportionate Share of the Net Pension Asset in theTeacher Legacy Pension Plan of TCRS – Discretely PresentedUnion County School Department E-8 91

Schedule of Funding Progress – Other Postemployment BenefitsPlans – Discretely Presented Union County School Department E-9 92

Notes to the Required Supplementary Information 93-94COMBINING AND INDIVIDUAL FUND FINANCIAL

STATEMENTS AND SCHEDULES: 95Nonmajor Governmental Funds: 96

Combining Balance Sheet F-1 97-98Combining Statement of Revenues, Expenditures, and Changes

in Fund Balances F-2 99-100Schedules of Revenues, Expenditures, and Changes in Fund

Balances – Actual and Budget:Drug Control Fund F-3 101General Capital Projects Fund F-4 102

Major Governmental Fund: 103Schedule of Revenues, Expenditures, and Changes in Fund

Balance – Actual and Budget:General Debt Service Fund G 104

Fiduciary Funds: 105Combining Statement of Fiduciary Assets and Liabilities H-1 106Combining Statement of Changes in Assets and Liabilities –

All Agency Funds H-2 107Component Unit:

Discretely Presented Union County School Department: 108Statement of Activities I-1 109Balance Sheet – Governmental Funds I-2 110Reconciliation of the Balance Sheet of Governmental Funds

to the Statement of Net Position I-3 111Statement of Revenues, Expenditures, and Changes in Fund

Balances – Governmental Funds I-4 112-113Reconciliation of the Statement of Revenues, Expenditures,

and Changes in Fund Balances of Governmental Fundsto the Statement of Activities I-5 114

Combining Balance Sheet – Nonmajor Governmental Funds I-6 115-116Combining Statement of Revenues, Expenditures, and Changes

in Fund Balances – Nonmajor Governmental Funds I-7 117-120Schedules of Revenues, Expenditures, and Changes in Fund

Balances – Actual (Budgetary Basis) and Budget:General Purpose School Fund I-8 121-122School Federal Projects Fund I-9 123Central Cafeteria Fund I-10 124Other Education Special Revenue Fund I-11 125

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Exhibit Page(s)

Miscellaneous Schedules: 126Schedule of Changes in Long-term Notes and Bonds J-1 127Schedule of Long-term Debt Requirements by Year J-2 128Schedule of Transfers – Primary Government and Discretely

Presented Union County School Department J-3 129Schedule of Salaries and Official Bonds of Principal Officials –

Primary Government and Discretely Presented UnionCounty School Department J-4 130

Schedule of Detailed Revenues – All Governmental Fund Types J-5 131-144Schedule of Detailed Revenues – All Governmental Fund Types –

Discretely Presented Union County School Department J-6 145-150Schedule of Detailed Expenditures – All Governmental Fund Types J-7 151-166Schedule of Detailed Expenditures – All Governmental Fund Types –

Discretely Presented Union County School Department J-8 167-177Schedule of Detailed Receipts, Disbursements, and Changes in

Cash Balance – City Agency Fund J-9 178

SINGLE AUDIT SECTION 179

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 180-181

Auditor's Report on Compliance for Each Major Federal Program; Report onInternal Control Over Compliance; and Report on the Schedule ofExpenditures of Federal Awards Required by Uniform Guidance 182-184

Schedule of Expenditures of Federal Awards and State Grants 185-186Summary Schedule of Prior-year Findings 187Schedule of Findings and Questioned Costs 188-191Management's Corrective Action Plan 192-193

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Summary of Audit Findings

Annual Financial Report Union County, Tennessee

For the Year Ended June 30, 2016

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

Results Our report on Union County’s financial statements is unmodified. Our audit resulted in one finding and recommendation, which we have reviewed with Union County management. The detailed finding, recommendation, and management’s responses are included in the Single Audit section of this report.

Finding The following is a summary of the audit finding: OFFICES OF CIRCUIT AND GENERAL SESSIONS COURTS CLERK, CLERK AND MASTER, REGISTER OF DEEDS, SHERIFF, AND THE AMBULANCE SERVICE ♦ Duties were not segregated adequately.

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INTRODUCTORY SECTION

7

Union County Officials June 30, 2016 Officials Micheal Williams, County Mayor David Cox, Highway Superintendent James Carter, Director of Schools Gina Buckner, Trustee Randy Turner, Assessor of Property Pam Ailor, County Clerk Barbara Williams, Circuit and General Sessions Courts Clerk Sandra Edmondson, Clerk and Master Mary Kitts, Register of Deeds Billy Breeding, Sheriff Ann Dyer, Finance Director Board of County Commissioners Micheal Williams, County Mayor, Chairman Jonathan Goforth Stanley Dail Kenny Hill James Greene R.L. Jones J.M. Bailey Janet Holloway Bill Cox Lynn Beeler Tony Strevel Mike Sexton Dawn Flatford Wayne Roach Doyle Welch Gary England Chris Upton Highway Commission Chester Sturgeon, Chairman Harold Brantley Darrell Dyer Paul Hill Allen Collins Jimmy DeVault Jerry Cooke Board of Education David Coppock, Chairman Marty Gibbs Brian Oaks Gerald Smith Casey Moore Danny Collins Brad Griffey

(Continued)

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Union County Officials (Continued) Financial Management Committee Micheal Williams, County Mayor, Chairman Janet Holloway David Cox, Highway Superintendent Wayne Roach James Carter, Director of Schools Dawn Flatford J.M. Bailey Audit Committee Gail Corum Jennifer Garren Janet Holloway

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FINANCIAL SECTION

10

STATE OF TENNESSEE COMPTROLLER OF THE TREASURY

DEPARTMENT OF AUDIT DIVISION OF LOCAL GOVERNMENT AUDIT

SUITE 1500 JAMES K. POLK STATE OFFICE BUILDING

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

Independent Auditor's Report

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

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An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Union County, Tennessee, as of June 30, 2016, and the respective changes in financial position thereof and the respective budgetary comparison for the General, 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., Union County has adopted the provisions of Governmental Accounting Standards Board (GASB) Statement No. 72, Fair Value Measurement and Application; GASB Statement No. 76, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments; GASB Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets that are not within the Scope of GASB Statement No. 68, and Amendments to Certain Provisions of GASB Statements No. 67 and No. 68; and GASB Statement No. 79, Certain External Investment Pools and Pool Participants. Our opinion is not modified with respect to these matters. Other Matters Required Supplementary Information Management has omitted the management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information.

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Accounting principles generally accepted in the United States of America require that the schedule of changes in the county’s net pension liability and related ratios, schedule of county contributions, schedule of school’s proportionate share of the net pension liability, and schedule of funding progress - other postemployment benefits plans on pages 84-94 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 Union County’s basic financial statements. The introductory section, combining and individual nonmajor fund financial statements, budgetary comparison schedules of nonmajor governmental funds and the General Debt Service Fund, combining and individual fund financial statements of the Union County School Department (a discretely presented component unit), and miscellaneous schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements, budgetary comparison schedules of nonmajor governmental funds and the General Debt Service Fund, combining and individual fund financial statements of the Union County School Department (a discretely presented component unit), and miscellaneous schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, based on our audit and the procedures performed as described above, the combining and individual nonmajor fund financial statements, budgetary comparison schedules of nonmajor governmental funds and the General Debt Service Fund, combining and individual fund financial statements of the Union County School Department (a discretely presented component unit), and miscellaneous schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory section has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it.

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Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 17, 2017, on our consideration of Union County’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Union County’s internal control over financial reporting and compliance. Very truly yours,

Justin P. Wilson Comptroller of the Treasury Nashville, Tennessee February 17, 2017 JPW/kp

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BASIC FINANCIAL STATEMENTS

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Exhibit A

Union County, TennesseeStatement of Net PositionJune 30, 2016

ComponentUnit

Primary UnionGovernment County

Governmental SchoolActivities Department

ASSETS

Cash $ 3,610 $ 0Equity in Pooled Cash and Investments 4,543,504 5,929,980Accounts Receivable 612,572 35,432Allowance for Uncollectibles (131,072) 0Due from Other Governments 519,925 631,593Property Taxes Receivable 5,140,211 2,714,899Allowance for Uncollectible Property Taxes (219,889) (116,139)Net Pension Asset - Agent Plan 64,488 40,541Net Pension Asset - Teacher Retirement Plan 0 8,312Capital Assets: Assets Not Depreciated: Land 566,080 1,598,528 Assets Net of Accumulated Depreciation: Buildings and Improvements 1,852,768 15,582,942 Infrastructure 3,042,468 44,852 Other Capital Assets 733,225 552,414Total Assets $ 16,727,890 $ 27,023,354

DEFERRED OUTFLOWS OF RESOURCES

Deferred Charge on Refunding $ 4,176 $ 0Pension Changes in Experience 77,163 148,549Pension Contributions After Measurement Date 286,210 1,220,744Pension Other Deferrals 0 35,923Total Deferred Outflows of Resources $ 367,549 $ 1,405,216

LIABILITIES

Accounts Payable $ 41,437 $ 21,917Accrued Payroll 69,751 1,216,745Payroll Deductions Payable 39,743 941,422Due to State 0 2,300Accrued Interest Payable 43,383 0Contracts Payable 0 159,087Other Current Liabilities 0 236,278Noncurrent Liabilities: Due Within One Year 1,653,574 0 Due in More Than One Year 11,093,441 2,327,815Total Liabilities $ 12,941,329 $ 4,905,564

(Continued)

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Exhibit A

Union County, TennesseeStatement of Net Position (Cont.)

ComponentUnit

Primary UnionGovernment County

Governmental SchoolActivities Department

DEFERRED INFLOWS OF RESOURCES

Deferred Current Property Taxes $ 4,668,932 $ 2,465,984Pension Changes in Experience 252,740 2,101,840Pension Changes in Investment Earnings 91,888 861,894Pension Other Deferrals 0 8,312Total Deferred Inflows of Resources $ 5,013,560 $ 5,438,030

NET POSITION

Net Investment in Capital Assets $ 5,731,981 $ 17,778,736Restricted for: Highways 765,771 0 Debt Service 1,097,770 0 Capital Projects 389,874 0 General Government 14,297 0 Finance 76,665 0 Administration of Justice 5,485 0 Public Safety 72,352 0 Public Health and Welfare 138,157 0 Social, Cultural, Reconreational 51,186 0 Other Purposes 64,488 0 Education 0 669,455 Capital Outlay 0 30,429Unrestricted (9,267,476) (393,644)

Total Net Position $ (859,450) $ 18,084,976

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

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Exhibit B

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

ComponentUnit

Primary UnionOperating Capital Government County

Charges for Grants and Grants and Governmental SchoolFunctions/Programs Expenses Services Contributions Contributions Activities Department

Primary Government: Governmental Activities: General Government $ 1,095,984 $ 227,050 $ 58,755 $ 0 $ (810,179) $ 0 Finance 1,058,811 732,750 0 0 (326,061) 0 Administration of Justice 598,238 355,711 14,925 0 (227,602) 0 Public Safety 2,942,872 155,134 0 22,210 (2,765,528) 0 Public Health and Welfare 2,320,914 981,304 217,770 488,698 (633,142) 0 Social, Cultural, and Recreational Services 306,761 0 0 0 (306,761) 0 Agriculture and Natural Resources 102,010 1,241 6,350 0 (94,419) 0 Highways 2,421,442 95,460 1,753,788 243,219 (328,975) 0 Interest on Long-term Debt 280,780 0 0 0 (280,780) 0Total Primary Government $ 11,127,812 $ 2,548,650 $ 2,051,588 $ 754,127 $ (5,773,447) $ 0

Component Unit: Union County School Department $ 34,018,062 $ 135,378 $ 4,358,633 $ 0 $ 0 $ (29,524,051)Total Component Unit $ 34,018,062 $ 135,378 $ 4,358,633 $ 0 $ 0 $ (29,524,051)

(Continued)

Net (Expense) Revenue

Program Revenues

and Changes in Net Position

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Exhibit B

Union County, TennesseeStatement of Activities (Cont.)

ComponentUnit

Primary UnionOperating Capital Government County

Charges for Grants and Grants and Governmental SchoolFunctions/Programs Expenses Services Contributions Contributions Activities Department

General Revenues: Taxes: Property Taxes Levied for General Purposes $ 3,077,897 $ 2,589,472 Property Taxes Levied for Ambulance Service 455,107 0 Property Taxes Levied for Highways 303,106 0 Property Taxes Levied for Debt Service 705,183 0 Property Taxes Levied for Capital Projects 214,091 0 Local Option Sales Taxes 367,712 994,512 Wheel Tax 461,084 0 Business Tax 88,323 0 Hotel/Motel Tax 47,706 0 Wholesale Beer Tax 104,016 0 Mixed Drink Tax 5,181 0 Mineral Severance Tax 86,541 0 Litigation Tax - General 29,929 0 Litigation Tax - Special Purpose 27,335 0 Litigation Tax - Jail, Workhouse, or Courthouse 11,990 0 Other Local Taxes 15,131 33,239 Grants and Contributions Not Restricted to Specific Programs 2,236,245 25,684,275 Unrestricted Investment Income 121,482 0 Miscellaneous 68,871 10,231Total General Revenues $ 8,426,930 $ 29,311,729

Change in Net Position $ 2,653,483 $ (212,322)Net Position, July 1, 2015 (3,512,933) 18,297,298Net Position, June 30, 2016 $ (859,450) $ 18,084,976


Program Revenues

Net (Expense) Revenueand Changes in Net Position

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Exhibit C-1

Union County, TennesseeBalance SheetGovernmental FundsJune 30, 2016

OtherHighway / General Govern- Total

Ambulance Public Debt mental GovernmentalGeneral Service Works Service Funds Funds

ASSETS

Cash $ 0 $ 0 $ 0 $ 0 $ 3,610 $ 3,610Equity in Pooled Cash and Investments 2,135,509 201,626 468,027 1,319,814 418,528 4,543,504Accounts Receivable 378,390 234,182 0 0 0 612,572Allowance for Uncollectibles 0 (131,072) 0 0 0 (131,072)Due from Other Governments 227,925 0 292,000 0 0 519,925Due from Other Funds 3,610 0 0 0 0 3,610Property Taxes Receivable 3,330,277 488,682 325,788 760,172 235,292 5,140,211Allowance for Uncollectible Property Taxes (142,464) (20,905) (13,936) (32,518) (10,066) (219,889)

Total Assets $ 5,933,247 $ 772,513 $ 1,071,879 $ 2,047,468 $ 647,364 $ 10,472,471

LIABILITIES

Accounts Payable $ 40,924 $ 0 $ 513 $ 0 $ 0 $ 41,437Accrued Payroll 38,580 26,031 5,140 0 0 69,751Payroll Deductions Payable 28,794 6,413 4,536 0 0 39,743Due to Other Funds 0 0 0 0 3,610 3,610Total Liabilities $ 108,298 $ 32,444 $ 10,189 $ 0 $ 3,610 $ 154,541


Deferred Current Property Taxes $ 3,024,941 $ 443,877 $ 295,919 $ 690,476 $ 213,719 $ 4,668,932Deferred Delinquent Property Taxes 131,960 19,364 12,909 30,122 9,323 203,678Other Deferred/Unavailable Revenue 71,667 50,132 138,114 0 0 259,913Total Deferred Inflows of Resources $ 3,228,568 $ 513,373 $ 446,942 $ 720,598 $ 223,042 $ 5,132,523

(Continued)

Major FundsNonmajor

Funds

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Exhibit C-1

Union County, TennesseeBalance SheetGovernmental Funds (Cont.)



FUND BALANCES

Restricted:Restricted for General Government $ 14,297 $ 0 $ 0 $ 0 $ 0 $ 14,297Restricted for Finance 76,665 0 0 0 0 76,665Restricted for Administration of Justice 5,485 0 0 0 0 5,485Restricted for Public Safety 32,191 0 0 0 40,161 72,352Restricted for Public Health and Welfare 68,661 0 0 0 0 68,661Restricted for Social, Cultural, and Recreational Services 51,186 0 0 0 0 51,186Restricted for Highways/Public Works 0 0 614,748 0 0 614,748Restricted for Debt Service 0 0 0 1,111,031 0 1,111,031Restricted for Capital Projects 0 0 0 0 380,551 380,551

Committed:Committed for Public Health and Welfare 0 226,696 0 0 0 226,696Committed for Other Operations 68,908 0 0 0 0 68,908Committed for Debt Service 0 0 0 215,839 0 215,839

Unassigned 2,278,988 0 0 0 0 2,278,988Total Fund Balances $ 2,596,381 $ 226,696 $ 614,748 $ 1,326,870 $ 420,712 $ 5,185,407

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 5,933,247 $ 772,513 $ 1,071,879 $ 2,047,468 $ 647,364 $ 10,472,471


Major FundsNonmajor

Funds

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Exhibit C-2

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

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

Total fund balances - balance sheet - governmental funds (Exhibit C-1) $ 5,185,407

(1) Capital assets used in governmental activities are not financial resources and therefore are not reported inthe governmental funds. Add: land $ 566,080 Add: buildings and improvements net of accumulated depreciation 1,852,768 Add: other capital assets net of accumulated depreciation 733,225 Add: infrastructure net of accumulated depreciation 3,042,468 6,194,541

(2) Long-term liabilities are not due and payable in the current period and therefore are not reported in the governmental funds. Less: notes payable $ (130,444) Less: bonds payable (12,021,593) Add: deferred charge on refunding 4,176 Less: unamortized premium on debt (473,177) Less: compensated absences (121,801) Less: accrued interest on bonds, notes, and other loans (43,383) (12,786,222)

(3) Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be amortized and recognized as components of pension expense in future years: Add: deferred outflows of resources related to pensions $ 363,373 Less: deferred inflows of resources related to pensions (344,628) 18,745

(4) Net pension assets of the agent plan are not current financial resourcesand therefore are not reported in the governmental funds. 64,488

(5) Other long-term assets are not available to pay forcurrent-period expenditures and therefore are deferredin the governmental funds. 463,591

Net position of governmental activities (Exhibit A) $ (859,450)


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Exhibit C-3

Union County, TennesseeStatement of Revenues, Expenditures,

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



RevenuesLocal Taxes $ 4,163,245 $ 461,121 $ 393,252 $ 1,170,831 $ 212,106 $ 6,400,555Licenses and Permits 55,987 0 0 0 0 55,987Fines, Forfeitures, and Penalties 88,158 0 0 0 46,961 135,119Charges for Current Services 382,640 977,091 210 0 1,382 1,361,323Other Local Revenues 103,350 11,460 33,767 121,482 1,425 271,484Fees Received From County Officials 751,900 0 0 0 0 751,900State of Tennessee 1,262,248 517 1,935,590 0 0 3,198,355Federal Government 573,167 0 0 0 0 573,167Other Governments and Citizens Groups 3,400 0 86,415 775,250 0 865,065

Total Revenues $ 7,384,095 $ 1,450,189 $ 2,449,234 $ 2,067,563 $ 261,874 $ 13,612,955

ExpendituresCurrent:

General Government $ 1,045,983 $ 0 $ 0 $ 0 $ 0 $ 1,045,983Finance 1,070,558 0 0 0 0 1,070,558Administration of Justice 585,552 0 0 0 1,382 586,934Public Safety 2,826,839 0 0 0 53,409 2,880,248Public Health and Welfare 296,068 1,375,316 0 0 0 1,671,384Social, Cultural, and Recreational Services 299,983 0 0 0 0 299,983Agriculture and Natural Resources 102,207 0 0 0 0 102,207Other Operations 637,905 0 118 0 0 638,023Highways 45,542 0 2,606,492 0 0 2,652,034

Debt Service:Principal on Debt 0 0 0 1,653,546 0 1,653,546Interest on Debt 0 0 0 335,667 0 335,667Other Debt Service 0 0 0 27,489 0 27,489

(Continued)

Major FundsNonmajor

Funds

23

Exhibit C-3


and Changes in Fund BalancesGovernmental Funds (Cont.)



Expenditures (Cont.)Capital Projects $ 0 $ 0 $ 0 $ 0 $ 34,210 $ 34,210

Total Expenditures $ 6,910,637 $ 1,375,316 $ 2,606,610 $ 2,016,702 $ 89,001 $ 12,998,266

Excess (Deficiency) of RevenuesOver Expenditures $ 473,458 $ 74,873 $ (157,376) $ 50,861 $ 172,873 $ 614,689

Other Financing Sources (Uses)Insurance Recovery $ 1,869 $ 14,658 $ 0 $ 0 $ 0 $ 16,527Transfers In 0 0 0 28,914 0 28,914Transfers Out 0 0 (28,914) 0 0 (28,914)

Total Other Financing Sources (Uses) $ 1,869 $ 14,658 $ (28,914) $ 28,914 $ 0 $ 16,527

Net Change in Fund Balances $ 475,327 $ 89,531 $ (186,290) $ 79,775 $ 172,873 $ 631,216Fund Balance, July 1, 2015 2,121,054 137,165 801,038 1,247,095 247,839 4,554,191

Fund Balance, June 30, 2016 $ 2,596,381 $ 226,696 $ 614,748 $ 1,326,870 $ 420,712 $ 5,185,407


Major FundsNonmajor

Funds

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Exhibit C-4

Union County, TennesseeReconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of ActivitiesFor the Year Ended June 30, 2016

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

Net change in fund balances - total governmental funds (Exhibit C-3) $ 631,216

(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 $ 430,491 Less: current-year depreciation expense (412,166) 18,325

(2) The net effect of various miscellaneous transactions involving capitalassets (sales, trade-ins, and donations) is to increase or decrease net position. Add: Assets donated and capitalized 48,600

(3) Revenues in the statement of activities that do not provide currentfinancial resources are not reported as revenues in the funds. Add: deferred delinquent property taxes and other deferred June 30, 2016 $ 463,591 Less: deferred delinquent property taxes and other deferred June 30, 2015 (360,378) 103,213

(4) The issuance of long-term debt (e.g., bonds, notes, other loans) provides current financial resources to governmental funds, while the repaymentof the principal of long-term debt consumes the current financialresources of governmental funds. Neither transaction, however, hasany effect on net position. Also, governmental funds report the effectof premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the effect of these differencesin the treatment of long-term debt and related items: Add: principal payments on notes $ 161,773 Add: principal payments on bonds 1,491,773 Change in deferred amount on refunding (1,213) Change in unamortized premium on debt 46,519 1,698,852

(5) Some expenses reported in the statement of activities do not requirethe use of current financial resources and therefore are not reportedas expenditures in the governmental funds. Change in accrued interest payable $ 9,581 Change in compensated absences payable 18,936 Change in net pension liability/asset (11,790) Change in deferred outflows related to pensions 62,405 Change in deferred inflows related to pensions 74,145 153,277

Change in net position of governmental activities (Exhibit B) $ 2,653,483


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Exhibit C-5

Union County, TennesseeStatement of Revenues, Expenditures, and Changes

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

Variancewith FinalBudget -Positive

Actual Original Final (Negative)

RevenuesLocal Taxes $ 4,163,245 $ 3,906,680 $ 3,925,643 $ 237,602Licenses and Permits 55,987 56,200 56,200 (213)Fines, Forfeitures, and Penalties 88,158 78,500 78,500 9,658Charges for Current Services 382,640 384,093 391,641 (9,001)Other Local Revenues 103,350 35,240 54,462 48,888Fees Received From County Officials 751,900 716,430 716,430 35,470State of Tennessee 1,262,248 1,535,674 1,580,696 (318,448)Federal Government 573,167 516,311 540,390 32,777Other Governments and Citizens Groups 3,400 0 2,525 875

Total Revenues $ 7,384,095 $ 7,229,128 $ 7,346,487 $ 37,608

ExpendituresGeneral Government

County Commission $ 58,575 $ 62,948 $ 61,948 $ 3,373Board of Equalization 780 800 800 20Beer Board 861 1,523 1,523 662County Mayor/Executive 153,234 156,203 156,627 3,393County Attorney 124,122 58,948 169,948 45,826Election Commission 149,289 171,051 171,377 22,088Register of Deeds 153,857 171,216 172,046 18,189Development 6,525 10,035 10,035 3,510County Buildings 359,743 391,556 382,542 22,799Other General Administration 38,997 41,788 47,788 8,791

FinanceAccounting and Budgeting 266,254 268,416 272,351 6,097Property Assessor's Office 183,260 190,230 191,492 8,232County Trustee's Office 211,728 232,037 233,326 21,598County Clerk's Office 314,353 346,359 348,765 34,412Other Finance 94,963 76,000 94,963 0

Administration of JusticeCircuit Court 254,769 256,700 258,354 3,585General Sessions Court 152,694 155,027 155,404 2,710Chancery Court 164,461 167,508 168,401 3,940Victim Assistance Programs 13,628 20,096 14,096 468

Public SafetySheriff's Department 1,256,707 1,312,421 1,368,939 112,232Special Patrols 150,086 144,431 151,342 1,256Jail 1,053,564 1,031,135 1,070,982 17,418Juvenile Services 84,113 93,945 94,843 10,730Fire Prevention and Control 78,000 75,000 78,000 0Rescue Squad 20,000 20,000 20,000 0Other Emergency Management 151,000 152,416 152,416 1,416County Coroner/Medical Examiner 33,369 30,000 35,000 1,631

Public Health and WelfareLocal Health Center 57,611 114,191 141,234 83,623Other Local Health Services 107,098 133,000 133,000 25,902Appropriation to State 22,788 23,500 22,788 0Sanitation Management 11,374 10,363 11,375 1

(Continued)

Budgeted Amounts

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Exhibit C-5


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



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

Convenience Centers $ 97,197 $ 97,197 $ 97,197 $ 0Social, Cultural, and Recreational Services

Senior Citizens Assistance 107,161 112,379 113,110 5,949Libraries 170,405 179,164 203,067 32,662Parks and Fair Boards 22,417 25,500 25,500 3,083

Agriculture and Natural ResourcesAgricultural Extension Service 49,337 50,677 50,677 1,340Forest Service 500 500 500 0Soil Conservation 52,370 52,602 53,153 783

Other OperationsOther Economic and Community Development 487,328 496,548 496,548 9,220Veterans' Services 17,000 18,257 18,257 1,257Other Charges 66,720 58,000 66,720 0Employee Benefits 49,065 49,065 49,065 0Payments to Cities 11,000 11,000 11,000 0Miscellaneous 6,792 0 9,440 2,648

HighwaysLitter and Trash Collection 45,542 50,531 50,867 5,325

Total Expenditures $ 6,910,637 $ 7,120,263 $ 7,436,806 $ 526,169

Excess (Deficiency) of RevenuesOver Expenditures $ 473,458 $ 108,865 $ (90,319) $ 563,777

Other Financing Sources (Uses)Insurance Recovery $ 1,869 $ 0 $ 1,869 $ 0Transfers In 0 0 1,631 (1,631)

Total Other Financing Sources $ 1,869 $ 0 $ 3,500 $ (1,631)

Net Change in Fund Balance $ 475,327 $ 108,865 $ (86,819) $ 562,146Fund Balance, July 1, 2015 2,121,054 2,170,092 2,170,092 (49,038)

Fund Balance, June 30, 2016 $ 2,596,381 $ 2,278,957 $ 2,083,273 $ 513,108


Budgeted Amounts

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Exhibit C-6


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



RevenuesLocal Taxes $ 461,121 $ 445,932 $ 475,932 $ (14,811)Charges for Current Services 977,091 1,050,000 1,050,000 (72,909)Other Local Revenues 11,460 0 11,460 0State of Tennessee 517 0 0 517

Total Revenues $ 1,450,189 $ 1,495,932 $ 1,537,392 $ (87,203)

ExpendituresPublic Health and Welfare

Ambulance/Emergency Medical Services $ 1,375,316 $ 1,394,315 $ 1,450,433 $ 75,117Total Expenditures $ 1,375,316 $ 1,394,315 $ 1,450,433 $ 75,117

Excess (Deficiency) of RevenuesOver Expenditures $ 74,873 $ 101,617 $ 86,959 $ (12,086)

Other Financing Sources (Uses)Insurance Recovery $ 14,658 $ 0 $ 14,658 $ 0Transfers Out 0 (33,833) (33,833) 33,833

Total Other Financing Sources $ 14,658 $ (33,833) $ (19,175) $ 33,833

Net Change in Fund Balance $ 89,531 $ 67,784 $ 67,784 $ 21,747Fund Balance, July 1, 2015 137,165 115,796 115,796 21,369

Fund Balance, June 30, 2016 $ 226,696 $ 183,580 $ 183,580 $ 43,116


Budgeted Amounts

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Exhibit C-7


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



RevenuesLocal Taxes $ 393,252 $ 357,175 $ 387,097 $ 6,155Charges for Current Services 210 10,000 93,890 (93,680)Other Local Revenues 33,767 23,200 46,829 (13,062)State of Tennessee 1,935,590 1,846,695 1,875,702 59,888Other Governments and Citizens Groups 86,415 25,000 25,000 61,415

Total Revenues $ 2,449,234 $ 2,262,070 $ 2,428,518 $ 20,716

ExpendituresOther Operations

Miscellaneous $ 118 $ 31,450 $ 118 $ 0Highways

Administration 273,869 233,302 277,357 3,488Highway and Bridge Maintenance 1,618,087 1,158,403 1,718,521 100,434Operation and Maintenance of Equipment 161,340 222,979 219,459 58,119Ferry Operations 76,508 78,426 79,251 2,743Other Charges 86,171 93,060 89,266 3,095Capital Outlay 390,517 444,450 464,329 73,812


Excess (Deficiency) of RevenuesOver Expenditures $ (157,376) $ 0 $ (419,783) $ 262,407

Other Financing Sources (Uses)Transfers Out $ (28,914) $ 0 $ (28,914) $ 0

Total Other Financing Sources $ (28,914) $ 0 $ (28,914) $ 0

Net Change in Fund Balance $ (186,290) $ 0 $ (448,697) $ 262,407Fund Balance, July 1, 2015 801,038 802,637 802,637 (1,599)



Budgeted Amounts

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Exhibit DUnion County, TennesseeStatement of Fiduciary Assets and LiabilitiesJune 30, 2016

AgencyFunds

ASSETS

Cash $ 784,890Due from Other Governments 96,266

Total Assets $ 881,156

LIABILITIES

Due to Other Taxing Units $ 96,266Due to Litigants, Heirs, and Others 784,890

Total Liabilities $ 881,156


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Note Page(s)

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

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

Net Position/Fund Balance1. Deposits and Investments 362. Receivables and Payables 373. Capital Assets 384. Deferred Outflows/Inflows of Resources 395. Compensated Absences 406. Long-term Obligations 407. Net Position and Fund Balance 41

E. Pension Plans 42II. Reconciliation of Government-wide and Fund Financial Statements

A. Explanation of Certain Differences Between the Governmental FundBalance Sheet and the Government-wide Statement of Net Position 43

B. Explanation of Certain Differences Between the Governmental FundStatement of Revenues, Expenditures, and Changes in Fund Balances

and the Government-wide Statement of Activities 43III. Stewardship, Compliance, and Accountability

Budgetary Information 44IV. Detailed Notes on All Funds

A. Deposits and Investments 44B. Capital Assets 46C. Interfund Receivables, Payables, and Transfers 48D. Long-term Obligations 49E. Pledge of Future Revenues 53F. On-Behalf Payments 53

V. Other InformationA. Risk Management 54B. Accounting Changes 54C. Contingent Liabilities 55D. Change in Administration 55E. Virtual Education Program 55F. Joint Venture 56G. Subsequent Events 57H. Retirement Commitments 57I. Other Postemployment Benefits (OPEB) 78J. Office of Central Accounting, Budgeting, and Purchasing 82K. Purchasing Law 82

UNION COUNTY, TENNESSEEIndex of Notes to the Financial Statements

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UNION COUNTY, TENNESSEE NOTES TO THE FINANCIAL STATEMENTS


I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Union County’s financial statements are presented in accordance with generally accepted accounting principles (GAAP). The Governmental Accounting Standards Board (GASB) is responsible for establishing GAAP for state and local governments. The following are the more significant accounting policies of Union County: A. Reporting Entity

Union County is a public municipal corporation governed by an elected 16-member board. As required by GAAP, these financial statements present Union County (the primary government) and its component units. Although required by GAAP, the financial statements of the Union County Emergency Communications District and the Union County Solid Waste Authority, component units requiring discrete presentation, were excluded from this report due to materiality calculations; therefore, the effect of the omission did not affect the independent auditor’s opinion thereon. The component units discussed below are included in the county's reporting entity because of the significance of their operational or financial relationships with the county.

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

The Union County School Department operates the public school system in the county, and the voters of Union 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 Union County Emergency Communications District provides a simplified

means of securing emergency services through a uniform emergency number for the residents of Union County, and the 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 Union 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 Union County Solid Waste Authority oversees the area’s solid waste disposal operations, including services provided through a private contractor. The County Commission appoints a majority of members of the authority’s governing body and must approve any debt issued by the authority. The financial statements of the Union County Solid Waste Authority were not material to the component units’ opinion unit and therefore have been omitted from this report. The Union 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 Union County Emergency Communications District and the Union County Solid Waste Authority can be obtained from their administrative offices at the following addresses:

Administrative Offices:

Union County Emergency Communications District 130 Veteran Street Suite A Maynardville, TN 37807 Union County Solid Waste Authority P.O. Box 727 Maynardville, TN 37807

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 Union 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 Union 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

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revenues include (1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. Taxes and other items not properly included among program revenues are reported instead as general revenues. Union County issues all debt for the discretely presented Union County School Department. No debt issues were contributed by the county to the School Department during the year ended June 30, 2016. 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 fund financial statements, except for agency funds, which have no measurement focus. Revenues are recorded when earned, and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Fund financial statements of Union County are organized into funds, each of which is considered to be a separate accounting entity. Each fund is accounted for by providing a separate set of self-balancing accounts that constitute its assets, deferred outflow of resources, liabilities, deferred inflow of resources, fund equity, revenues, and expenditures. Funds are organized into three major categories: governmental, proprietary, and fiduciary. An emphasis is placed on major funds within the governmental category. Union County has no proprietary funds to report. Separate financial statements are provided for governmental funds and fiduciary funds. Major individual governmental funds are reported as separate columns in the fund financial statements. All other governmental funds are aggregated into a single column on the fund financial statements. Fiduciary funds in total are reported in a single column. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they become both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay

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liabilities of the current period. For this purpose, the county considers revenues other than grants to be available if they are collected within 30 days after year-end. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met and the revenues are available. Union 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 wheel taxes, business taxes, litigation taxes, state-shared excise taxes, fines, forfeitures, and penalties are not susceptible to accrual since they are not measurable (reasonably estimable). All other revenue items are considered to be measurable and available only when the county receives cash. Fiduciary fund financial statements are reported using the economic resources measurement focus, except for agency funds, which have no measurement focus and the accrual basis of accounting. Revenues are recognized when earned, and expenses are recorded as a liability when incurred, regardless of the timing of related cash flows. Union 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. Ambulance Service Fund – This special revenue fund is used to account for transactions related to the Ambulance Service provided by the county. Patient 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.

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Additionally, Union County reports the following fund types: Capital Projects Funds – These funds are used to account for and report financial resources that are restricted or committed to expenditures for capital outlays, including the acquisition or construction of capital facilities and other capital assets. Agency Funds – These funds account for amounts collected in an agency capacity by the constitutional officers and local sales taxes received by the state to be forwarded to the various cities in Union County. Agency funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. They do, however, use the accrual basis of accounting to recognize receivables and payables.

The discretely presented Union County School Department reports the following major governmental funds:

General Purpose School Fund – This fund is the primary operating fund for the School Department. It is used to account for general operations of the School Department. Other Education Special Revenue Fund – This fund accounts for state revenues, which are committed for use in the virtual education program.

Additionally, the Union County School Department reports the following fund type:

Capital Projects Funds – These funds are used to account for and report resources that are restricted or committed to expenditures for capital outlays, including the acquisition or construction of capital facilities and other capital assets.

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;

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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 Union County School Department. Each fund’s portion of this pool is displayed on the balance sheets or statements of net position as Equity in Pooled Cash and Investments. Most income from these pooled investments is assigned to the General Debt Service Fund. Union 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/due from other funds. All ambulance and property taxes receivables are shown with an allowance for uncollectibles. Ambulance receivables allowance for uncollectibles are comprised of estimated amounts for write-offs involving Medicare and Medicaid and estimated amounts of other collections based on the history of the source of receipt (i.e., insurance companies and private citizens). The allowance for uncollectible property taxes is equal to 2.29 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.

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Property taxes receivable are also reported as of June 30 for the taxes that are levied, collected, and reported as revenue during the current fiscal year. These property taxes receivable are presented on the balance sheet as a deferred inflow of resources to reflect amounts not available as of June 30. Property taxes collected within 30 days of year-end are considered available and accrued. The allowance for uncollectible taxes represents the estimated amount of the receivable that will be filed in court for collection. Delinquent taxes filed in court for collection are not included in taxes receivable since they are neither measurable nor available. Property taxes are levied as of the first Monday in October. Taxes become delinquent and begin accumulating interest and penalty the following March 1. Suit must be filed in Chancery Court between the following February 1 to April 1 for any remaining unpaid taxes. Additional costs attach to delinquent taxes after a court suit has been filed.

Most payables are disaggregated on the face of the financial statements. Other Current Liabilities in the discretely presented School Department’s General Purpose School Fund ($236,278) represent balances in the health insurance clearing account that will be drawn for premiums subsequent to June 30.

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 $5,000 or more and an estimated useful life of more than two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Property, plant, equipment, and infrastructure of the primary government and the discretely presented School Department are

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depreciated using the straight-line method over the following estimated useful lives:

Assets Years

Building and Improvements 10 - 50Other Capital Assets 3 - 40Infrastructure 10 - 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. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The government has items that qualify for reporting in this category. Accordingly, the items are reported in the government-wide statement of Net Position. These items are the deferred charge on refunding, pension changes in experience, pension contributions after the measurement date, and pension other deferrals. In addition to liabilities, the Statement of Net Position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government has items that qualify for reporting in this category. Accordingly, the items are reported in the government-wide Statement of Net Position and the governmental funds balance sheet. These items are from the following sources: current and delinquent property taxes, pension changes in experience, pension changes in investment earnings, pension other deferrals, and various receivables for revenues, which do not meet the availability criteria in governmental funds.

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5. Compensated Absences Primary Government It is the county’s policy to permit employees to accumulate earned but unused vacation and sick pay benefits. There is no liability for unpaid accumulated sick leave since Union County does not have a policy to pay any amounts when employees separate from service with the government. All vacation pay is accrued when incurred in the government-wide financial statements for the county. A liability for vacation pay is reported in the governmental funds only if amounts have matured, for example, as a result of employee resignations and retirements. Discretely Presented Union County School Department Vacation for employees of the School Department does not vest or accumulate and must be used within the fiscal year. The granting of sick leave has no guaranteed payment attached and therefore requires no accrual.

6. Long-term Obligations

In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the governmental activities Statement of Net Position. Debt premiums and discounts are deferred and amortized over the life of the new debt using the straight-line method. Debt issuance costs are expensed in the period incurred. In refunding transactions, the difference between the reacquisition price and the net carrying amount of the old debt is reported as a deferred outflow of resources 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 fund types 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,

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including compensated absences 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.

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

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

Restricted for Other Purposes on the Statement of Net Position for the primary government ($64,488), and a portion of the Restricted for Education on the Statement of Net Position for the discretely presented School Department ($48,853), are attributable to net pension assets. As of June 30, 2016, Union County had $11,714,628 in outstanding debt for capital purposes for the discretely presented Union County School Department. The debt is a liability of Union County, but the capital assets acquired are reported in the financial statements of the School Department. Therefore, Union County has incurred a liability, significantly decreasing its unrestricted net position with no corresponding increase in the county’s capital assets. It is the county’s policy that restricted amounts would be reduced first followed by unrestricted amounts when expenditures are incurred for purposes for which both restricted and unrestricted fund balance is available. Also, it is the county’s policy that committed amounts would be reduced first, followed by assigned amounts, and then unassigned amounts when expenditures are incurred for purposes for which amounts in any of these unrestricted fund balance classifications could be used.

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

E. Pension Plans

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

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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 Union County School Department

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

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 Union County School Department Exhibit I-3 includes explanations of the nature of individual elements of items required to reconcile the balance sheet of governmental funds with the government-wide Statement of Net Position.

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

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

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Discretely Presented Union 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 Budgetary Information

Annual budgets are adopted on a basis consistent with generally accepted accounting principles (GAAP) for all governmental funds except the Constitutional Officers - Fees Fund (special revenue fund), which is not budgeted, and the Community Development/Industrial Park Fund (capital projects fund), for which no expenditures were incurred during the year. All annual appropriations lapse at fiscal year-end. The county is required by state statute to adopt annual budgets. Annual budgets are prepared on the basis in which current available funds must be sufficient to meet current expenditures. Expenditures and encumbrances may not legally exceed appropriations authorized by the County Commission and any authorized revisions. Unencumbered appropriations lapse at the end of each fiscal year. The budgetary level of control is at the major category level established by the County Uniform Chart of Accounts, as prescribed by the Comptroller of the Treasury of the State of Tennessee. Major categories are at the department level (examples of General Fund major categories: County Commission, Board of Equalization, County Mayor, County Attorney, etc.). Management may make revisions within major categories, but only the County Commission may transfer appropriations between major categories. During the year, several supplementary appropriations were necessary. The county’s budgetary basis of accounting is consistent with GAAP, except instances in which encumbrances are treated as budgeted expenditures. The difference between the budgetary basis and GAAP basis, if any, is presented on the face of each budgetary schedule.

IV. DETAILED NOTES ON ALL FUNDS

A. Deposits and Investments Union County and the Union County School Department participate in an internal cash and investment pool through the Office of Trustee. The county trustee is the treasurer of the county and in this capacity is responsible for receiving, disbursing, and investing most county funds. Each fund’s portion of this pool is displayed on the balance sheets or statements of net position as Equity in Pooled Cash and Investments. Cash reflected on the balance sheets

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or statements of net position represents nonpooled amounts held separately by individual funds. Deposits Legal Provisions. All deposits with financial institutions must be secured by one of two methods. One method involves financial institutions that participate in the bank collateral pool administered by the state treasurer. Participating banks determine the aggregate balance of their public fund accounts for the State of Tennessee and its political subdivisions. The amount of collateral required to secure these public deposits must equal at least 105 percent of the average daily balance of public deposits held. Collateral securities required to be pledged by the participating banks to protect their public fund accounts are pledged to the state treasurer on behalf of the bank collateral pool. The securities pledged to protect these accounts are pledged in the aggregate rather than against each account. The members of the pool may be required by agreement to pay an assessment to cover any deficiency. Under this additional assessment agreement, public fund accounts covered by the pool are considered to be insured for purposes of credit risk disclosure. For deposits with financial institutions that do not participate in the bank collateral pool, state statutes require that all deposits be collateralized with collateral whose market value is equal to 105 percent of the uninsured amount of the deposits. The collateral must be placed by the depository bank in an escrow account in a second bank for the benefit of the county. Investments Legal Provisions. Counties are authorized to make direct investments in bonds, notes, or treasury bills of the U.S. government and obligations guaranteed by the U.S. government or any of its agencies; deposits at state and federal chartered banks and savings and loan associations; bonds of any state or political subdivision rated A or higher by any nationally recognized rating service; nonconvertible debt securities of certain federal government sponsored enterprises; and the county’s own legally issued bonds or notes. These investments may not have a maturity greater than two years. The county may make investments with longer maturities if various restrictions set out in state law are followed. Counties are also authorized to make investments in the State Treasurer’s Investment Pool and in repurchase agreements. Repurchase agreements must be approved by the state Comptroller’s Office and executed in accordance with procedures established by the State Funding Board. Securities purchased under a repurchase agreement must be obligations of the U.S. government or obligations guaranteed by the U.S. government or any of its agencies. When repurchase agreements are executed, the purchase of the securities must be priced at least two percent below the fair value of the securities on the day of purchase. The county had no pooled and nonpooled investments as of June 30, 2016.

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B. Capital Assets

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

Primary Government Governmental Activities:

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

Capital Assets Not Depreciated:Land $ 566,080 $ 0 $ 0 $ 566,080Total Capital Assets Not Depreciated $ 566,080 $ 0 $ 0 $ 566,080

Capital Assets Depreciated:Buildings and Improvements $ 3,601,914 $ 0 $ 0 $ 3,601,914Infrastructure 3,587,168 321,350 0 3,908,518Other Capital Assets 2,552,590 157,741 (252,248) 2,458,083Total Capital Assets Depreciated $ 9,741,672 $ 479,091 $ (252,248) $ 9,968,515

Less Accumulated Depreciation For:Buildings and Improvements $ 1,656,001 $ 93,145 $ 0 $ 1,749,146Infrastructure 774,323 91,727 0 866,050Other Capital Assets 1,749,812 227,294 (252,248) 1,724,858Total Accumulated Depreciation $ 4,180,136 $ 412,166 $ (252,248) $ 4,340,054

Total Capital Assets Depreciated, Net $ 5,561,536 $ 66,925 $ 0 $ 5,628,461 Governmental Activities Capital Assets, Net $ 6,127,616 $ 66,925 $ 0 $ 6,194,541

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

General Government $ 27,641Finance 2,280Public Safety 145,394Public Health and Welfare 71,216Social, Cultural, and Recreational Services 650Highways 164,985

Total Depreciation Expense - Governmental Activities $ 412,166

Discretely Presented Union County School Department Governmental Activities:

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

Capital Assets Not Depreciated:Land $ 1,598,528 $ 0 $ 1,598,528Total Capital Assets Not Depreciated $ 1,598,528 $ 0 $ 1,598,528

Capital Assets Depreciated:Buildings and Improvements $ 27,907,743 $ 252,185 $ 28,159,928Infrastructure 31,500 45,906 77,406Other Capital Assets 1,558,774 129,413 1,688,187Total Capital Assets Depreciated $ 29,498,017 $ 427,504 $ 29,925,521

Less Accumulated Depreciation For:Buildings and Improvements $ 11,906,176 $ 670,810 $ 12,576,986Infrastructure 27,300 5,254 32,554Other Capital Assets 995,784 139,989 1,135,773Total Accumulated Depreciation $ 12,929,260 $ 816,053 $ 13,745,313

Total Capital Assets Depreciated, Net $ 16,568,757 $ (388,549) $ 16,180,208 Governmental Activities Capital Assets, Net $ 18,167,285 $ (388,549) $ 17,778,736

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There were no decreases in capital assets to report for the year ended June 30, 2016. Depreciation expense was charged to functions of the discretely presented Union County School Department as follows: Governmental Activities:

Instruction $ 23,567Support Services 789,945Operation of Non-instructional Services 2,541

Total Depreciation Expense - Governmental Activities $ 816,053

C. Interfund Receivables, Payables, and Transfers

The composition of interfund balances as of June 30, 2016, was as follows: Due to/from Other Funds: Receivable Fund Payable Fund Amount

Primary Government: General Nonmajor governmental $ 3,610Discretely Presented School Department: Nonmajor governmental General Purpose School 23,564

These balances resulted from the time lag between the dates that interfund goods and services are provided or reimbursable expenditures occur and payments between funds are made. Interfund Transfers: Interfund transfers for the year ended June 30, 2016, consisted of the following amounts:

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Primary Government

GeneralDebt Service

Transfers Out Fund

Highway/Public Works Fund $ 28,914

Total $ 28,914

Discretely Presented Union County School Department

GeneralPurpose NonmajorSchool Governmental

Transfers Out Fund Funds

Other Education Special Revenue Fund $ 266,231 $ 0General Purpose School Fund 0 286,446Nonmajor governmental funds 5,156 0

Total $ 271,387 $ 286,446

Transfers In

Transfers In

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

D. Long-term Obligations

Primary Government General Obligation Bonds and Notes Union 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 debt. 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. General obligation bonds were issued for original terms of up to 17 years. Outstanding capital outlay notes were issued with original terms of up to three years. Repayment terms

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are generally structured with increasing amounts of principal maturing as interest requirements decrease over the term of the debt. All bonds and notes outstanding as of June 30, 2016, will be retired from the General Debt Service Fund. General obligation bonds and capital outlay notes outstanding as of June 30, 2016, for governmental activities are as follows:

OriginalInterest Final Amount Balance

Type Rate Maturity of Issue 6-30-16

Qualified School Construction Bonds 1.515 % 9-1-26 $ 7,160,000 $ 4,516,593Refunding Bond Series 2013 2.25 to 5 4-1-26 7,110,000 4,205,000General Obligation Bonds 2.5 6-30-30 3,500,000 3,300,000Capital Outlay Notes 1.99 4-30-18 400,000 130,444

In prior years, Qualified School Construction Bonds were issued through the Tennessee State School Bond Authority and the proceeds loaned to Union County and various other local governments across Tennessee. The county pays interest of 1.515 percent on its share of the bonds and also pays a monthly administrative fee to the Tennessee School Bond Authority. The administrative fee totals $597 per month. The county and the other borrowers of the bond proceeds are required to comply with federal regulations established for the Qualified School Construction Bond program. Failure to comply with those requirements may result in the loss of the tax credit status on the bonds. This would result in further charges to the borrowers including the requirement to pay the tax-credit rate (5.86 percent) in addition to the 1.515 percent for a total rate of 7.375 percent. The annual requirements to amortize all notes and bonds outstanding as of June 30, 2016, including interest payments are presented in the following tables: Year EndingJune 30 Principal Interest Total

2017 $ 0 $ 5,250 $ 5,2502018 130,444 422 130,866

Total $ 130,444 $ 5,672 $ 136,116

Notes

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Year EndingJune 30 Principal Interest Total

2017 $ 1,531,773 $ 296,012 $ 1,827,7852018 1,561,773 272,512 1,834,2852019 1,606,773 239,062 1,845,8352020 1,646,773 204,261 1,851,0342021 771,773 178,111 949,8842022-2026 3,842,728 780,582 4,623,3102027-2030 1,060,000 71,900 1,131,900

Total $ 12,021,593 $ 2,042,440 $ 14,064,033

Bonds

There is $1,326,870 available in the General Debt Service Fund to service long-term debt. Debt per capita, including bonds and notes, totaled $636, based on the 2010 federal census. Changes in Long-term Obligations Long-term obligations activity for the year ended June 30, 2016, was as follows: Governmental Activities:

Bonds Notes

Balance, July 1, 2015 $ 13,513,366 $ 292,217 $ 140,737Additions 0 0 199,065Reductions (1,491,773) (161,773) (218,001)

Balance, June 30, 2016 $ 12,021,593 $ 130,444 $ 121,801

Balance Due Within One Year $ 1,531,773 $ 0 $ 121,801

CompensatedAbsences

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Analysis of Noncurrent Liabilities Presented on Exhibit A:

Total Noncurrent Liabilities, June 30, 2016 $ 12,273,838Add: Unamortized Premium on Debt 473,177Less: Balance Due Within One Year (1,653,574)

Noncurrent Liabilities - Due in More Than One Year - Exhibit A $ 11,093,441

Compensated absences will be paid from the employing funds, primarily from the General, Ambulance Service, and Highway/Public Works funds. Discretely Presented Union County School Department Changes in Long-term Obligations

Long-term obligations activity for the discretely presented Union County School Department for the year ended June 30, 2016, was as follows: Governmental Activities: Net Pension

Liability (Asset)Teacher

Legacy Plan*

Balance, July 1, 2015 $ (48,902) $ 1,992,121Additions 4,220,157 345,700Reductions (4,046,602) (134,659)

Balance, June 30, 2016 $ 124,653 $ 2,203,162

Balance Due Within One Year $ 0 $ 0

PostemploymentOther

Benefits

* - On July 1, 2015, the teacher legacy plan had a net pension asset balance. Analysis of Noncurrent Liabilities Presented on Exhibit A:

Total Noncurrent Liabilities, June 30, 2016 $ 2,327,815Less: Balance Due Within One Year 0

Noncurrent Liabilities - Due in More Than One Year - Exhibit A $ 2,327,815

Net pension liability and other postemployment benefits will be paid from the employing funds, primarily the General Purpose School and School Federal Projects funds.

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E. Pledge of Future Revenues Wheel Tax Approved by the County Commission The County Commission approved a wheel tax for vehicle title registrations and renewals effective January 1, 2010, and pledged the collections generated from this wheel tax to pay the debt service requirements of the $7,160,000 Qualified School Construction Bonds. The bonds are also guaranteed by the general obligation pledge of the county in the event the wheel tax revenue is insufficient to meet the debt service requirements on the bonds. The County Commission’s resolution notes that the wheel tax levy and collections will stop once adequate funding is provided to retire the bonds. As of June 30, 2016, future requirements for principal, interest, and administrative fees on the bonds total $5,674,126 payable on a monthly basis through September 1, 2026. For the current year, the sum of principal, interest, and fees for the bonds totaled $562,407. Investment earnings credited to the county’s account by the State School Bond Authority during the year amounted to $79,239. These earnings reduced the amount of required payments due from the county. Wheel tax collections totaled $461,084. Since January 2010, cumulative debt service requirements on the bonds have exceeded wheel tax revenues and investment earnings by $146,877. Component Unit Revenues Pledged for Primary Government Debt

The School Department has pledged to reimburse the county from future revenues principal, interest, fees, and other costs associated with the General Obligation Bond issued on June 1, 2015, which was used for energy efficient projects at various schools. Those requirements vary from $284,300 in fiscal year 2016-17 to $282,563 in 2029-30. In addition, the School Department has pledged to pay a minimum of $500,000 annually from its future revenues to the primary government’s General Debt Service Fund to be applied toward the retirement of other school debt until the year 2020. During the current fiscal year, the total contribution was $775,250.

F. On-Behalf Payments – Discretely Presented Union County School Department The State of Tennessee pays health insurance premiums for retired teachers on-behalf of the Union County School Department. These payments are made by the state to the Local Education Group Insurance Plan and the Medicare Supplement Plan. Both of these plans are administered by the State of Tennessee and reported in the state’s Comprehensive Annual Financial Report. Payments by the state to the Local Education Group Insurance Plan and the Medicare Supplement Plan for the year ended June 30, 2016, were $58,119 and $13,350, respectively. The School Department has recognized these on-behalf payments as revenues and expenditures in the General Purpose School Fund.

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V. OTHER INFORMATION A. Risk Management

The discretely presented Union 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. The primary government provides health insurance coverage through a commercial insurance provider. The county does not allow retirees to participate in the commercial insurance plan. Settled claims have not exceeded commercial insurance coverage for the past three fiscal years.

Union County and the discretely presented Union County School Department also participate 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 county and School Department pay an annual premium to the TN-RMT for 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.

B. Accounting Changes

Provisions of Governmental Accounting Standards Board (GASB) Statement No. 72, Fair Value Measurement and Application; Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets that are not within the Scope of GASB Statement No. 68, and Amendments to Certain Provisions of GASB Statements No. 67 and No. 68; Statement No. 76, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments; and Statement No. 79, Certain External Investment Pools and Pool Participants became effective for the year ended June 30, 2016. GASB Statement No. 72, establishes general principles for measuring fair value and standards of accounting and financial reporting for assets and liabilities measured at fair value. This standard supersedes previous statements as they relate to measuring fair value of certain assets and liabilities. GASB Statement No. 73, established accounting and reporting requirements for pensions that are not administered through a trust account and also addresses changes made to Statements No. 67 and No. 68. The changes to

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Statements No. 67 and No. 68 require new RSI disclosures concerning plan investments and address specific payables to defined benefit plans. GASB Statement No. 76, addresses changes made to the hierarchy of generally accepted accounting principles. This standard supersedes Statement No. 55 and reduces the hierarchy from four to two categories. GASB Statement No. 79, addresses issues related to certain external investment pools and pool participants because of changes in Security and Exchange rules relative to money market funds. This standard establishes criteria for an external investment pool to qualify for making the election to measure all of its investments at amortized cost rather than fair value for financial reporting purposes standards.

C. Contingent Liabilities The county is involved in several pending lawsuits. Based on letters from attorneys, management does not expect potential claims against the county not covered by insurance resulting from such litigation to materially affect the county’s financial statements.

D. Change in Administration The Assessor of Property, Donna Jones, died on March 20, 2016. County Commission appointed Randy Turner as Assessor of Property on May 10, 2016.

E. Virtual Education Program

In July 2011, pursuant to Title 49, Chapter 16, Tennessee Code Annotated, the Union County Board of Education entered into a contract with K12 Virtual Schools, L.L.C. (K12). The contract provided for the creation and operation of a virtual education program called the Tennessee Virtual Academy, which enrolls students from Union County and other districts from across the state. This virtual education program was available for kindergarten through eighth grade students during the year. The initial term of the agreement, which began July 1, 2011, terminated on June 30, 2014. However, the agreement is renewable and prior to the termination date, the school board approved a one-year extension to the contract. K12 is responsible for providing educational products, as well as, administrative and technology services according to the agreement. The Board of Education is responsible for setting program policies, budget adoption, and having final responsibility for regulatory compliance and financial reporting.

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Revenues of the virtual education program totaled $6,655,768 consisting of state Basic Education Program funds attributable to students enrolled in the program. The Board of Education retained an annual oversight fee of four percent from the program revenues. The oversight fee retained during the year totaled $266,231. K12’s compensation under the agreement as amended on August 8, 2013, is equal to ninety-six percent of the program revenues. Total compensation payable to K12 for the year ended June 30, 2016, was $6,389,537, which included $94,395 used per agreement by the School Department for local program expenditures. The program has been accounted for in a major special revenue fund of the School Department titled Other Education Special Revenue Fund. The oversight fee ($266,231) was transferred to the General Purpose School Fund and applied toward operations of the School Department’s traditional education program. On July 30, 2014, the School Department received a letter from the state commissioner of education directing the department to close the Tennessee Virtual Academy effective upon the completion of the 2014-2015 school year and no later than June 30, 2015. This action was a result of the Tennessee Virtual Academy demonstrating student achievement growth at a level of significantly below expectations (Level 1) for three consecutive years. Parents of two students who attend the virtual academy filed suit against the commissioner of education to invalidate the commissioner’s order to close the academy. That suit was successful with the court ruling that the commissioner had exceeded his statutory authority because the closure was based upon data that was generated prior to the passage of legislation authorizing such actions by the commissioner. On July 16, 2015, the School Board signed a one-year extension to their agreement with K12, Inc., for the period July 1, 2015, through June 30, 2016. During July 2016, the school board signed another one-year extension to their agreement with K12, Inc., for the period July 1, 2016, through June 30, 2017. As of July 2016, enrollment was approximately 570 students.

F. Joint Venture The Eighth Judicial District Drug Task Force (DTF) is a joint venture formed by an interlocal agreement between the district attorney general of the Eighth Judicial District; Scott, Campbell, Fentress, Claiborne, and Union counties; and various cities within these counties. The purpose of the DTF is to provide multi-jurisdictional law enforcement to promote the investigation and prosecution of drug-related activities. Funds for the operations of the DTF come primarily from federal grants, drug fines, and forfeiture of drug-related assets to the DTF. The DTF is overseen by the district attorney general and is governed by the Board of Directors, including the district attorney general, sheriffs, and police chiefs of participating law enforcement agencies within each judicial district. Union County made no contributions to the DTF for the year ended June 30, 2016, and does not have any equity

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interest in this joint venture. Complete financial statements for the DTF can be obtained from its administrative office at the following address:

Administrative Office:

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

G. Subsequent Events On August 12, 2016, Union County issued a capital outlay note of $130,000 for the purchase of an ambulance. On October 11, 2016, the Union County Commission authorized the issuance of a capital outlay note of $220,000 for the purchase of three dump trucks. Union County has not issued the capital outlay note as of the date of this report.

H. Retirement Commitments

1. Tennessee Consolidated Retirement System (TCRS)

Primary Government General Information About the Pension Plan

Plan Description. Employees of Union County (General Fund and EMS) and non-certified employees of the discretely presented Union 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. Non-certified employees of the discretely presented Union County School Department, along with Highway Department employees of the primary government, are provided benefits under a separate employer plan through TCRS which is discussed following the notes to the primary government plan. The primary government employees comprised 61.4 percent and the non-certified employees of the discretely presented School Department comprised 38.6 percent of the two plans combined, 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.

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

Member and beneficiary annuitants are entitled to an automatic cost of living adjustment (COLA) after retirement. A COLA is granted each July for annuitants retired prior to the second of July of the previous year. The COLA is based on the change in the consumer price index (CPI) during the prior calendar year, capped at three percent, and applied to the current benefit. No COLA is granted if the change in the CPI is less than one-half percent. A one percent COLA is granted if the CPI change is between one-half percent and one percent. A member who leaves employment may withdraw their employee contributions plus any accumulated interest. Employees Covered by Benefit Terms. At the measurement date of June 30, 2015, the following employees were covered by the benefit terms: Inactive Employees or Beneficiaries Currently Receiving Benefits 23Inactive Employees Entitled to But Not Yet Receiving Benefits 115Active Employees 115

Total 253 Contributions. Contributions for employees are established in the statutes governing the TCRS and may only be changed by the Tennessee General Assembly. Employees contribute five percent of their salary. Union County makes employer contributions at the rate set by the Board of Trustees as determined by an actuarial valuation. For the year ended June 30, 2015, the Actuarial Determined Contribution (ADC) for Union County was $234,294 based on a rate of 6.28 percent of covered payroll. By law, employer contributions are

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

Inflation 3%Salary Increases Graded Salary Ranges from 8.97%

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

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

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

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capital market projections were blended and utilized in the third technique. The blended capital market projection established the long-term expected rate of return by weighting the expected future real rate of return by the target asset allocation percentage and by adding inflation of three percent. The target allocation and best estimate of arithmetic real rates of return for each major asset class are summarized in the following table:

PercentageLong-termExpected PercentageReal Rate Target

Asset Class of Return Allocations

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

Total 100 %

The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees as 7.5 percent based on a blending of the three factors described above. Discount Rate. The discount rate used to measure the total pension liability was 7.5 percent. The projection of cash flows used to determine the discount rate assumes that employee contributions will be made at the current rate and that contributions from Union County will be made at the actuarially determined contribution rate pursuant to an actuarial valuation in accordance with the funding policy of the TCRS Board of Trustees and as required to be paid by state statute. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make projected future benefit payments of current active and inactive members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

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Changes in the Net Pension Liability (Asset)

Total Plan NetPension Fiduciary PensionLiability Net Position Liability

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

Balance, July 1, 2014 $ 6,066,355 $ 6,208,702 $ (142,347)

Changes for the year: Service Cost $ 279,057 $ 0 $ 279,057 Interest 468,264 0 468,264 Differences Between Expected and Actual Experience 72,604 0 72,604 Contributions-Employer 0 234,294 (234,294) Contributions-Employees 0 186,541 (186,541) Net Investment Income 0 193,958 (193,958) Benefit Payments, Including Refunds of Employee Contributions (203,774) (203,774) 0 Administrative Expense 0 (5,673) 5,673 Other Changes 0 0 0Net Changes $ 616,151 $ 405,346 $ 210,805

Balance, June 30, 2015 $ 6,682,506 $ 6,614,048 $ 68,458

Increase (Decrease)

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

Current1% Discount 1%

Decrease Rate Increase6.5% 7.5% 8.5%

Net Pension Liability $ 1,031,012 $ 68,458 $ (708,991)

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Pension Expense (Income) and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions Pension Expense. For the year ended June 30, 2016, Union County recognized pension expense of $76,893. Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2016, Union 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 $ 125,672 $ 0Net Difference Between Projected and Actual Earnings on Pension Plan Investments 223,698 284,892Contributions Subsequent to the Measurement Date of June 30, 2015 (1) 253,406 N/A

Total $ 602,776 $ 284,892

(1) The amount shown above for “Contributions Subsequent to the Measurement Date of June 30, 2015,” will be recognized as a reduction (increase) to net pension liability (asset) in the following measurement period. Amounts reported as deferred outflows of resources, with the exception of contributions subsequent to the measurement date, and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Year EndingJune 30 Amount

2017 $ (15,980)2018 (15,980)2019 (15,980)2020 78,9842021 23,060Thereafter 10,372

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

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Discretely Presented Union County School Department Non-certified Employees General Information About the Pension Plan Plan Description. Non-certified employees of the discretely presented Union County School Department, along with Highway Department employees of the primary government, are provided a defined benefit pension plan through the Public Employee Retirement Plan, an agent multiple-employer pension plan administered by the TCRS. Other employees of the primary government (General Fund and EMS) are provided pension benefits through a separate employer plan of TCRS as discussed under primary government. Benefits Provided. TCA, Title 8, Chapters 34-37 establish the benefit terms and can be amended only by the Tennessee General Assembly. The chief legislative body may adopt the benefit terms permitted by statute. Members are eligible to retire with an unreduced benefit at age 60 with five years of service credit or after 30 years of service credit regardless of age. Benefits are determined by a formula using the member’s highest five consecutive year average compensation and the member’s years of service credit. Reduced benefits for early retirement are available to vested members at age 55. Members vest with five years of service credit. Service related disability benefits are provided regardless of length of service. Five years of service is required for non-service related disability eligibility. The service related and non-service related disability benefits are determined in the same manner as a service retirement benefit but are reduced ten percent and include projected service credits. A variety of death benefits is available under various eligibility criteria. Member and beneficiary annuitants are entitled to an automatic cost of living adjustment (COLA) after retirement. A COLA is granted each July for annuitants retired prior to the second of July of the previous year. The COLA is based on the change in the consumer price index (CPI) during the prior calendar year, capped at three percent, and applied to the current benefit. No COLA is granted if the change in the CPI is less than one-half percent. A one percent COLA is granted if the CPI change is between one-half percent and one percent. A member who leaves employment may withdraw their employee contributions plus any accumulated interest. Employees Covered by Benefit Terms. At the measurement date of June 30, 2015, the following employees were covered by the benefit terms:

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Inactive Employees or Beneficiaries Currently Receiving Benefits 76Inactive Employees Entitled to But Not Yet Receiving Benefits 157Active Employees 162

Total 395

Contributions. Contributions for employees are established in the statutes governing the TCRS and may only be changed by the Tennessee General Assembly. Employees contribute five percent of their salary. The Union County School Department makes employer contributions at the rate set by the Board of Trustees as determined by an actuarial valuation. For the year ended June 30, 2015, the Actuarial Determined Contribution (ADC) for the Union County School Department was $202,052 based on a rate of 6.02 percent of covered payroll. By law, employer contributions are required to be paid. The TCRS may intercept Union County’s state shared taxes if required employer contributions are not remitted. The employer’s actuarially determined contributions (ADC) and member contributions are expected to finance the costs of benefits earned by members during the year, the cost of administration, as well as an amortized portion of any unfunded liability. Net Pension Liability (Asset) The Union County School Department’s net pension liability (asset) was measured as of June 30, 2015, and the total pension liability (asset) used to calculate net pension liability (asset) was determined by an actuarial valuation as of that date. Actuarial Assumptions. The total pension liability as of the June 30, 2015, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:




Cost of Living Adjustment 2.5%

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




Total 100 %

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The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees as 7.5 percent based on a blending of the three factors described above. Discount Rate. The discount rate used to measure the total pension liability was 7.5 percent. The projection of cash flows used to determine the discount rate assumes that employee contributions will be made at the current rate and that contributions from the Union County School Department will be made at the actuarially determined contribution rate pursuant to an actuarial valuation in accordance with the funding policy of the TCRS Board of Trustees and as required to be paid by state statute. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make projected future benefit payments of current active and inactive members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Changes in the Net Pension Liability (Asset)

Total Plan NetPension Fiduciary PensionLiability Net Position Liability

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

Balance, July 1, 2014 $ 8,189,929 $ 8,223,217 $ (33,288)

Changes for the year: Service Cost $ 292,832 $ 0 $ 292,832 Interest 623,518 0 623,518 Differences Between Expected and Actual Experience (441,503) 0 (441,503) Contributions-Employer 0 202,052 (202,052) Contributions-Employees 0 167,818 (167,818) Net Investment Income 0 253,356 (253,356) Benefit Payments, Including Refunds of Employee Contributions (338,367) (338,367) 0 Administrative Expense 0 (8,180) 8,180 Other Changes 0 0 0Net Changes $ 136,480 $ 276,679 $ (140,199)

Balance, June 30, 2015 $ 8,326,409 $ 8,499,896 $ (173,487)

Increase (Decrease)

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

Current1% Discount 1%

Decrease Rate Increase6.5% 7.5% 8.5%

Net Pension Liability $ 919,884 $ (173,487) $ (1,084,583)

Negative Pension Expense (Income) and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions Negative Pension Expense. For the year ended June 30, 2016, the Union County School Department recognized negative pension expense of $22,450. Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2016, Union County reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:



Difference Between Expected and Actual Experience $ 0 $ 411,629Net Difference Between Projected and Actual Earnings on Pension Plan Investments 291,408 379,868Contributions Subsequent to the Measurement Date of June 30, 2015 (1) 214,112 N/A

Total $ 505,520 $ 791,497

(1) The amount shown above for “Contributions Subsequent to the Measurement Date of June 30, 2015,” will be recognized as a reduction (increase) to net pension liability (asset) in the following measurement period.

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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:


2017 $ (161,546)2018 (161,546)2019 (161,546)2020 (15,449)2021 0Thereafter 0

In the table shown above, positive amounts will increase pension expense while negative amounts will decrease pension expense. Certified Employees Teacher Retirement Plan General Information About the Pension Plan Plan Description. Teachers of the Union County School Department with membership in the TCRS before July 1, 2014, are provided with pensions through the Teacher Legacy Pension Plan, a cost-sharing multiple-employer pension plan administered by the TCRS. The Teacher Legacy Pension Plan is closed to new membership. Teachers with membership in the TCRS after June 30, 2014, are provided with pensions through a legally separate plan referred to as the Teacher Retirement Plan, a cost-sharing multiple-employer pension plan administered by the TCRS. The TCRS was created by state statute under Tennessee Code Annotated (TCA), Title 8, Chapters 34-37. The TCRS Board of Trustees is responsible for the proper operation and administration of all employer pension plans in the TCRS. The Tennessee Treasury Department, an agency in the legislative branch of state government, administers the plans of the TCRS. The TCRS issues a publically available financial report that can be obtained at www.treasury.tn.gov/tcrs. Benefits Provided. TCA, Title 8, Chapters 34-37 establish the benefit terms and can be amended only by the Tennessee General Assembly. Members are eligible to retire with an unreduced benefit at age 65 with five years of service credit or pursuant to the rule of 90 in which the member’s age and service credit total 90. Benefits are determined by a formula using the member’s highest five consecutive year average

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compensation and the member’s years of service credit. A reduced early retirement benefit is available to vested members at age 60 or pursuant to the rule of 80. Members are vested with five years of service credit. Service related disability benefits are provided regardless of length of service. Five years of service is required for non-service related disability eligibility. The service related and non-service related disability benefits are determined in the same manner as a service retirement benefit but are reduced ten percent and include projected service credits. A variety of death benefits is available under various eligibility criteria. Member and beneficiary annuitants are entitled to an automatic cost of living adjustment (COLA) after retirement. A COLA is granted each July for annuitants retired prior to the second of July of the previous year. The COLA is based on the change in the consumer price index (CPI) during the prior calendar year, capped at three percent, and applied to the current benefit. No COLA is granted if the change in the CPI is less than one-half percent. A one percent COLA is granted if the CPI change is between one-half percent and one percent. Members who leave employment may withdraw their employee contributions, plus any accumulated interest. Under the Teacher Retirement Plan, benefit terms and conditions, including COLA, can be adjusted on a prospective basis. Moreover, there are defined cost controls and unfunded liability controls that provide for the adjustment of benefit terms and conditions on an automatic basis. Contributions. Contributions for teachers are established in the statutes governing the TCRS and may only be changed by the Tennessee General Assembly or by automatic cost controls set out in law. Teachers are required to contribute five percent of their salary to the plan. The Local Education Agencies (LEAs) make employer contributions at the rate set by the Board of Trustees as determined by an actuarial valuation. Per the statutory provisions governing TCRS, the employer contribution rate cannot be less than four percent, except in years when the maximum funded level, approved by the TCRS Board of Trustees, is reached. By law, employer contributions for the Teacher Retirement Plan are required to be paid. The TCRS may intercept the state shared taxes of the sponsoring governmental entity of the LEA if the required employer contributions are not remitted. Employer contributions for the year ended June 30, 2016, to the Teacher Retirement Plan were $28,638, 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.

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Pension Liabilities (Assets), Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions Pension Liabilities (Assets). At June 30, 2016, the Union County School Department reported an asset of $8,312 for its proportionate share of the net pension asset. The net pension asset was measured as of June 30, 2015, and the total pension liability used to calculate the net pension asset was determined by an actuarial valuation as of that date. The Union County School Department’s proportion of the net pension asset was based on the Union County School Department’s share of contributions to the pension plan relative to the contributions of all participating LEAs. At the measurement date of June 30, 2015, the Union County School Department’s proportion was .206650 percent. Pension Expense. For the year ended June 30, 2016, the Union County School Department recognized pension expense of $10,893. Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2016, the Union County School Department reported deferred outflows of resources related to pensions from the following sources:



Difference Between Expected and Actual Experience $ 0 $ 2,705Net Difference Between Projected and Actual Earnings on Pension Plan Investments 672 0LEA's Contributions Subsequent to the Measurement Date of June 30, 2015 28,638 N/A

Total $ 29,310 $ 2,705

The Union County School Department’s employer contributions of $28,638, reported as pension related deferred outflows of resources subsequent to the measurement date, will be recognized as a decrease (increase) of net pension liability (asset) in the year ending June 30, 2017. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

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2017 $ (57)2018 (57)2019 (57)2020 (57)2021 (225)Thereafter (1,578)

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





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

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class. Four sources of capital market projections were blended and utilized in the third technique. The blended capital market projection established the long-term expected rate of return by weighting the expected future real rate of return by the target asset allocation percentage and by adding inflation of three percent. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:




Total 100 %

The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees as 7.5 percent based on a blending of the three factors described above. Discount Rate. The discount rate used to measure the total pension liability was 7.5 percent. The projection of cash flows used to determine the discount rate assumes that employee contributions will be made at the current rate and that contributions from all the LEAs will be made at the actuarially determined contribution rate pursuant to an actuarial valuation in accordance with the funding policy of the TCRS Board of Trustees and as required to be paid by state statute. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make projected future benefit payments of current active and inactive members. Therefore the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

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Sensitivity of the Proportionate Share of Net Pension Liability (Asset) to Changes in the Discount Rate. The following presents the Union County School Department’s proportionate share of the net pension liability (asset) calculated using the discount rate of 7.5 percent, as well as what the Union County School Department’s proportionate share of the net pension liability (asset) would be if it was calculated using a discount rate that is one percentage point lower (6.5%) or one percentage point higher (8.5%) than the current rate: School Department's Current Proportionate Share of 1% Discount 1% the Net Pension Decrease Rate Increase Liability (Asset) 6.5% 7.5% 8.5%

Net Pension Liability $ 1,474 $ (8,312) $ (15,488)

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 Union County School Department with membership in the TCRS before July 1, 2014, are provided with pensions through the Teacher Legacy Pension Plan, a cost-sharing multiple-employer pension plan administered by the TCRS. The Teacher Legacy Pension Plan closed to new membership on June 30, 2014, but will continue providing benefits to existing members and retirees. Beginning July 1, 2014, the Teacher Retirement Plan became effective for teachers employed by LEAs after June 30, 2014. The Teacher Retirement Plan is a separate cost-sharing, multiple-employer defined benefit plan. The TCRS was created by state statute under Tennessee Code Annotated (TCA), Title 8, Chapters 34-37. The TCRS Board of Trustees is responsible for the proper operation and administration of all employer pension plans in the TCRS. The Tennessee Treasury Department, an agency in the legislative branch of state government, administers the plans of the TCRS. The TCRS issues a publically available financial report that can be obtained at www.treasury.tn.gov/tcrs. Benefits Provided. TCA, Title 8, Chapters 34-37 establish the benefit terms and can be amended only by the Tennessee General Assembly. Members of the Teacher Legacy Pension Plan are eligible to retire with an unreduced benefit at age 60 with five years of service credit or after 30 years of service credit regardless of age. Benefits are determined by a formula using the member’s highest five consecutive

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year average compensation and the member’s years of service credit. A reduced early retirement benefit is available to vested members at age 55. Members are vested with five years of service credit. Service related disability benefits are provided regardless of length of service. Five years of service is required for non-service related disability eligibility. The service related and non-service related disability benefits are determined in the same manner as a service retirement benefit but are reduced ten percent and include projected service credits. A variety of death benefits is available under various eligibility criteria. Member and beneficiary annuitants are entitled to an automatic cost of living 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 Union County School Department for the year ended June 30, 2016, to the Teacher Legacy Pension Plan were $1,010,798, which is 9.04 percent of covered payroll. The employer rate, when combined with member contributions, is expected to finance the costs of benefits earned by members during the year, the cost of administration, as well as an amortized portion of any unfunded liability. Pension Liabilities (Assets), Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions Pension Liability (Assets). At June 30, 2016, the Union County School Department reported a liability of $124,653 for its proportionate share of the net pension liability (asset). The net pension liability (asset) was

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measured as of June 30, 2015, and the total pension liability used to calculate the net pension liability (asset) was determined by an actuarial valuation as of that date. The Union County School Department’s proportion of the net pension liability (asset) was based on the Union County School Department’s long-term share of contributions to the pension plan relative to the contributions of all participating LEAs. At the measurement date of June 30, 2015, the Union County School Department’s proportion was .304304 percent. The proportion measured at June 30, 2014, was .300944 percent. Negative Pension Expense. For the year ended June 30, 2016, the Union County School Department recognized negative pension expense of $99,717. Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2016, the Union County School Department reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:



Difference Between Expected and Actual Experience $ 100,039 $ 1,940,246Net Difference Between Projected and Actual Earnings on Pension Plan Investments 2,250,847 3,055,647Changes in Proportion of Net Pension Liability (Asset) 35,923 8,312LEA's Contributions Subsequent to the Measurement Date of June 30, 2015 1,010,798 N/A

Total $ 3,397,607 $ 5,004,205

The Union County School Department’s employer contributions of $1,010,798 reported as pension related deferred outflows of resources subsequent to the measurement date, will be recognized as a decrease (increase) in net pension liability (asset) in the year ending June 30, 2017. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

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2017 $ (818,356)2018 (818,356)2019 (818,356)2020 200,1932021 (362,519)Thereafter 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, 2015, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:





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

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class. Four sources of capital market projections were blended and utilized in the third technique. The blended capital market projection established the long-term expected rate of return by weighting the expected future real rate of return by the target asset allocation percentage and by adding inflation of three percent. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:




Total 100 %

The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees as 7.5 percent based on a blending of the three factors described above. Discount Rate. The discount rate used to measure the total pension liability was 7.5 percent. The projection of cash flows used to determine the discount rate assumes that employee contributions will be made at the current rate and that contributions from all the LEAs will be made at the actuarially determined contribution rate pursuant to an actuarial valuation in accordance with the funding policy of the TCRS Board of Trustees and as required to be paid by state statute. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make projected future benefit payments of current active and inactive members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

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Sensitivity of the Proportionate Share of Net Pension Liability (Asset) to Changes in the Discount Rate. The following presents the Union County School Department’s proportionate share of the net pension liability (asset) calculated using the discount rate of 7.5 percent, as well as what the Union County School Department’s proportionate share of the net pension liability (asset) would be if it was calculated using a discount rate that is one percentage point lower (6.5%) or one percentage point higher (8.5%) than the current rate: School Department's Current Proportionate Share of 1% Discount 1% the Net Pension Decrease Rate Increase Liability (Asset) 6.5% 7.5% 8.5%

Net Pension Liability $ 8,498,436 $ 124,653 $ (6,807,851)

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

2. Deferred Compensation Teachers hired after July 1, 2014, by the discretely presented Union

County School Department are required to participate in a hybrid pension plan (Teacher Retirement Plan) administered by the Tennessee Consolidated Retirement System. The Teacher Retirement Plan requires that these teachers contribute five percent of their salaries into a deferred compensation plan managed by the plan pursuant to IRC Section 401(k). As part of their employment package, the Union County School Department has assumed all costs of funding this program on-behalf of the plan participants. The Section 401(k) plan assets remain the property of the participating teachers and are not presented in the accompanying financial statements. IRC Section 401(k), establishes participation, contribution, and withdrawal provisions for the plans. During the year, the Union County School Department contributed $36,401 to the 401(k) portion of the pension plan on-behalf of the plan participants.

I. Other Postemployment Benefits (OPEB) Plan Description The Union County School Department participated in the state-administered Local Education Group Insurance Plan, and the Medicare Supplement Plan for healthcare benefits. For accounting purposes, the plans are agent multiple-employer defined benefit OPEB plans. Benefits are established and amended by an insurance committee created by Section 8-27-302, Tennessee Code Annotated (TCA), for local education employees, and Section 8-27-701,

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TCA, for the Medicare Supplement Plan. Prior to reaching the age of 65, all members have the option of choosing between the standard or partnership preferred provider organization (PPO) plan for healthcare benefits. Subsequent to age 65, members who are also in the state’s retirement system may participate in a state-administered Medicare Supplement Plan that does not include pharmacy. The plans are reported in the State of Tennessee Comprehensive Annual Financial Report (CAFR). The CAFR is available on the state’s website at http://tn.gov/finance/article/fa-accfin-cafr. Funding Policy The premium requirements of plan members are established and may be amended by the insurance committee. The plans are self-insured and financed on a pay-as-you-go basis with the risk shared equally among the participants. Claims liabilities of the plans are periodically computed using actuarial and statistical techniques to establish premium rates. The employers in each plan develop a contribution policy in terms of subsidizing active employees or retired employees’ premiums since the committee is not prescriptive on that issue. The state does not provide a subsidy for local government participants; however, the state does provide a partial subsidy to Local Education Agency pre-65 teachers and a full subsidy based on years of service for post-65 teachers in the Medicare Supplement Plan. Retirees in the Local Education Group Insurance plan contribute $175 to $200 per month depending on the type of coverage. During the year ended June 30, 2016, the discretely presented School Department contributed $134,658 for postemployment benefits.

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

Annual OPEB Cost and Net OPEB Obligation

LocalEducation Medicare

Group Supplement Plan Plan

ARC $ 257,000 $ 89,000Interest on the NOPEBO 59,507 15,198Adjustment to the ARC (59,746) (15,259)Annual OPEB cost $ 256,761 $ 88,939Amount of contribution (134,208) (450)

Increase/decrease in NOPEBO $ 122,553 $ 88,489Net OPEB obligation, 7-1-15 1,586,848 405,273

Net OPEB obligation, 6-30-16 $ 1,709,401 $ 493,762

PercentageFiscal Annual of Annual Net OPEBYear OPEB OPEB Cost Obligation

Ended Plans Cost Contributed at Year End

6-30-14 Local Education Group $ 221,449 64 % $ 1,485,3066-30-15 " 228,530 56 1,586,8486-30-16 " 256,761 52 1,709,401

6-30-14 Education Medicare Supplement 59,294 1 344,368

6-30-15 " 61,355 1 405,2736-30-16 " 88,939 1 493,762

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

LocalEducation Medicare

Group Supplement Plan Plan

Actuarial valuation date 7-1-15 7-1-15Actuarial accrued liability (AAL) $ 2,355,000 $ 998,000Actuarial value of plan assets $ 0 $ 0Unfunded actuarial accrued liability (UAAL) $ 2,355,000 $ 998,000Actuarial value of assets as a % of the AAL 0% 0%Covered payroll (active plan members) $ 12,751,241 $ N/AUAAL as a % of covered payroll 18% N/A Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future, and actuarially determined amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. The Schedule of Funding Progress, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. Actuarial Methods and Assumptions Calculations are based on the types of benefits provided under the terms of the substantive plan at the time of each valuation and on the pattern of sharing of costs between the employer and plan members to that point. Actuarial calculations reflect a long-term perspective. Consistent with that perspective, actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets. In the July 1, 2015 actuarial valuation for the Local Education Group Plan, the projected unit credit actuarial cost method was used, and the actuarial assumptions included a 3.75 percent investment rate of return (net of administrative expenses) and an annual healthcare cost trend rate of 6.5 percent initially. The trend will decrease to six percent in fiscal year 2016 and then will be reduced by decrements to an ultimate rate of 4.7 percent by fiscal year 2050. The annual healthcare premium trend rate for the Medicare Supplement Plan was six percent for fiscal year 2016 and will be reduced by decrements to an ultimate rate of 4.2 percent by fiscal year 2044. Both rates include a 2.5 percent inflation assumption. The unfunded actuarial accrued

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liability is being amortized as a level percentage of payroll on a closed basis over a 30-year period beginning with July 1, 2007. Payroll is assumed to grow at a rate of three percent.

J. Office of Central Accounting, Budgeting, and Purchasing Union County operates under the provisions of the County Financial Management System of 1981. This act provides for a central system of accounting, budgeting, and purchasing for all county departments. The act also provides for the creation of a Finance Department operated under the direction of the finance director.

K. Purchasing Law The County Financial Management System of 1981 provides for the finance director or a deputy appointed by the director to serve as the county purchasing agent. The finance director serves as the purchasing agent for Union County. Purchases of $9,999 and greater are required to be competitively bid for all departments.

82

REQUIRED SUPPLEMENTARY INFORMATION

83

Exhibit E-1

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

2014 2015

Total Pension Liability (Asset)Service Cost $ 250,764 $ 279,057Interest 423,613 468,264Changes in Benefit Terms 0 0Differences Between Actual and Expected Experience 88,816 72,604Changes in Assumptions 0 0Benefit Payments, Including Refunds of Employee Contributions (188,506) (203,774)Net Change in Total Pension Liability (Asset) $ 574,687 $ 616,151Total Pension Liability (Asset), Beginning 5,491,668 6,066,355

Total Pension Liability (Asset), Ending (a) $ 6,066,355 $ 6,682,506

Plan Fiduciary Net PositionContributions - Employer $ 233,174 $ 234,294Contributions - Employee 197,147 186,541Net Investment Income 866,565 193,958Benefit Payments, Including Refunds of Employee Contributions (188,506) (203,774)Administrative Expense (4,087) (5,673)Net Change in Plan Fiduciary Net Position $ 1,104,293 $ 405,346Plan Fiduciary Net Position, Beginning 5,104,409 6,208,702

Plan Fiduciary Net Position, Ending (b) $ 6,208,702 $ 6,614,048

Net Pension Liability (Asset), Ending (a - b) $ (142,347) $ 68,458

Plan Fiduciary Net Position as a Percentage of Total Pension Liability 102.35% 98.98%Covered Payroll $ 3,554,585 $ 3,730,787Net Pension Liability (Asset) as a Percentage of Covered Payroll (4.00%) 1.83%

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

Note: data presented includes the General Fund and EMS of the primary government.

84

Exhibit E-2

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

2014 2015

Total Pension Liability (Asset)Service Cost $ 268,929 $ 292,832Interest 590,914 623,518Changes in Benefit Terms 0 0Differences Between Actual and Expected Experience (97,377) (441,503)Changes in Assumptions 0 0Benefit Payments, Including Refunds of Employee Contributions (364,917) (338,367)Net Change in Total Pension Liability (Asset) $ 397,549 $ 136,480Total Pension Liability (Asset), Beginning 7,792,380 8,189,929

Total Pension Liability (Asset), Ending (a) $ 8,189,929 $ 8,326,409

Plan Fiduciary Net PositionContributions - Employer $ 205,763 $ 202,052Contributions - Employee 173,012 167,818Net Investment Income 1,162,398 253,356Benefit Payments, Including Refunds of Employee Contributions (364,917) (338,367)Administrative Expense (6,501) (8,180)Net Change in Plan Fiduciary Net Position $ 1,169,755 $ 276,679Plan Fiduciary Net Position, Beginning 7,053,462 8,223,217

Plan Fiduciary Net Position, Ending (b) $ 8,223,217 $ 8,499,896

Net Pension Liability (Asset), Ending (a - b) $ (33,288) $ (173,487)

Plan Fiduciary Net Position as a Percentage of Total Pension Liability 100.41% 102.08%Covered Payroll $ 3,464,027 $ 3,353,650Net Pension Liability (Asset) as a Percentage of Covered Payroll (0.96)% (5.17)%


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

85

Exhibit E-3

Union County, TennesseeSchedule of Contributions Based on Participation in the Public Employee Pension Plan of TCRSPrimary Government - General Fund and EMSFor the Fiscal Year Ended June 30

2014 2015 2016

Actuarially Determined Contribution $ 233,174 $ 234,294 $ 253,406Less Contributions in Relation to the Actuarially Determined Contribution (233,174) (234,294) (253,406)Contribution Deficiency (Excess) $ 0 $ 0 $ 0

Covered Payroll $ 3,554,585 $ 3,730,787 $ 4,105,980

Contributions as a Percentage of Covered Payroll 6.56% 6.28% 6.17%


Note: data includes General Fund and EMS employees of the primary government.

86

Exhibit E-4

Union County, TennesseeSchedule of Contributions Based on Participation in the Public Employee Pension Plan of TCRSDiscretely Presented Union County School Department - Non-Certified Employees and Primary Government - Highway Department EmployeesFor the Fiscal Year Ended June 30

2014 2015 2016

Actuarially Determined Contribution $ 205,763 $ 202,052 $ 214,112Less Contributions in Relation to the Actuarially Determined Contribution (205,763) (202,052) (214,112)Contribution Deficiency (Excess) $ 0 $ 0 $ 0

Covered Payroll $ 3,464,027 $ 3,353,650 $ 3,562,571

Contributions as a Percentage of Covered Payroll 5.94% 6.02% 6.01%


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

87

Exhibit E-5

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

2015 2016

Contractually Required Contribution $ 10,732 $ 17,899Less Contributions in Relation to the Contractually Determined Contribution (17,171) (28,638)Contribution Deficiency (Excess) $ (6,439) $ (10,739)

Covered Payroll $ 429,269 $ 728,019

Contributions as a Percentage of Covered Payroll 4.00% 3.93%


88

Exhibit E-6

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

2014 2015 2016

Contractually Required Contribution $ 1,048,909 $ 1,029,802 $ 1,010,798Less Contributions in Relation to the Contractually Determined Contribution (1,048,909) (1,029,802) (1,010,798)Contribution Deficiency (Excess) $ 0 $ 0 $ 0

Covered Payroll $ 11,812,035 $ 11,391,617 $ 11,186,763

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


89

Exhibit E-7

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

2016

School Department's Proportion of the Net Pension Asset 0.206605%

School Department's Proportionate Share of the Net Pension Liability (Asset) $ (8,312)

Covered Payroll 429,269

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

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

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


90

Exhibit E-8

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

2015 2016

School Department's Proportion of the Net Pension Asset 0.300944% 0.304304%

School Department's Proportionate Share of the Net Pension Liability ( Asset) $ (48,902) $ 124,653

Covered Payroll 11,812,016 11,391,617

School Department's Proportionate Share of the Net Pension Liability (Asset) as a Percentage of its Covered Payroll (0.41)% 1.094254%

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

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


91

Exhibit E-9

Union County, TennesseeSchedule of Funding Progress – Other Postemployment Benefits PlansDiscretely Presented Union County School DepartmentJune 30, 2016

(Dollar amounts in thousands)

ActuarialAccrued Liability

(AAL)Projected Unfunded

Actuarial Unit AAL Covered Valuation Credit (UAAL) Payroll

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

Local Education Group 7-1-11 $ 0 $ 3,133 $ 3,133 0 % $ 12,248 26 %" 7-1-13 0 1,988 1,988 0 12,487 16" 7-1-15 0 2,355 2,355 0 12,751 18

Medicare Supplement 7-1-11 0 800 800 0 N/A N/A" 7-1-13 0 723 723 0 N/A N/A" 7-1-15 0 998 998 0 N/A N/A

UAAL as a Percentage

((b-a)/c)

of CoveredPayroll

ActuarialValue of

Assets(a)

FundedRatio(a/b)

92


NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION


TENNESSEE CONSOLIDATED RETIREMENT SYSTEM

Valuation Date: Actuarially determined contribution rates for 2015 were calculated

based on the July 1, 2013, actuarial valuation.

Methods and assumptions used to determine contribution rates:

Primary Government - General Fund and EMS:

Actuarial Cost Method Frozen Initial Liability

Amortization Method Level Dollar, Closed (Not to Exceed 20 Years)

Remaining Amortization

Period 4 Years

Asset Valuation 10-Year Smoothed Within a 20%

Corridor to Market Value

Inflation 3%

Salary Increases Graded Salary Ranges from 8.97% to

3.71% Based on Age, Including Inflation,

Averaging 4.25%

Investment Rate of Return 7.5%, Net of Investment Expense,

Including Inflation

Retirement Age Pattern of Retirement Determined by

Experience Study

Mortality Customized Table Based on Actual

Experience Including an Adjustment for

Some Anticipated Improvement


(Continued)

93

TENNESSEE CONSOLIDATED RETIREMENT SYSTEM (Cont.)

Primary Government - Highway Department and

School Department - Non-Certified Employees:

Actuarial Cost Method Frozen Initial Liability

Amortization Method Level Dollar, Closed (Not to Exceed 20 Years)

Remaining Amortization

Period 9 Years

Asset Valuation 10-Year Smoothed Within a 20%

Corridor to Market Value

Inflation 3%

Salary Increases Graded Salary Ranges from 8.97% to

3.71% Based on Age, Including Inflation,

Averaging 4.25%

Investment Rate of Return 7.5%, Net of Investment Expense,

Including Inflation

Retirement Age Pattern of Retirement Determined by

Experience Study

Mortality Customized Table Based on Actual

Experience Including an Adjustment for

Some Anticipated Improvement

Cost of Living Adjustments 2.5%

94

COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES

95

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.

_______________________________

Drug Control Fund – The Drug Control Fund is used to account for revenues received from drug-related fines, forfeitures, and seizures. Constitutional Officers - Fees Fund – The Constitutional Officers - Fees Fund is used to account for operating expenses paid directly from the fee and commission accounts of the trustee, clerks, register of deeds, and sheriff.

Capital Projects Funds

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

_______________________________ General Capital Projects Fund – The General Capital Projects Fund is used to account for general capital expenditures of the county. Community Development/Industrial Park Fund – The Community Development/ Industrial Park Fund is used to account for capital projects related to industrial development.

96

Exhibit F-1

Union County, TennesseeCombining Balance SheetNonmajor Governmental FundsJune 30, 2016

Constitu -tional General

Drug Officers - CapitalControl Fees Total Projects

ASSETS

Cash $ 0 $ 3,610 $ 3,610 $ 0Equity in Pooled Cash and Investments 40,161 0 40,161 303,866Property Taxes Receivable 0 0 0 235,292Allowance for Uncollectible Property Taxes 0 0 0 (10,066)

Total Assets $ 40,161 $ 3,610 $ 43,771 $ 529,092

LIABILITIES

Due to Other Funds $ 0 $ 3,610 $ 3,610 $ 0Total Liabilities $ 0 $ 3,610 $ 3,610 $ 0


Deferred Current Property Taxes $ 0 $ 0 $ 0 $ 213,719Deferred Delinquent Property Taxes 0 0 0 9,323Total Deferred Inflows of Resources $ 0 $ 0 $ 0 $ 223,042

FUND BALANCES

Restricted:Restricted for Public Safety $ 40,161 $ 0 $ 40,161 $ 0Restricted for Capital Projects 0 0 0 306,050

Total Fund Balances $ 40,161 $ 0 $ 40,161 $ 306,050

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 40,161 $ 3,610 $ 43,771 $ 529,092

(Continued)

Special Revenue Funds


97

Exhibit F-1

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

Community TotalDevelopment/ Nonmajor

Industrial GovernmentalPark Total Funds

ASSETS

Cash $ 0 $ 0 $ 3,610Equity in Pooled Cash and Investments 74,501 378,367 418,528Property Taxes Receivable 0 235,292 235,292Allowance for Uncollectible Property Taxes 0 (10,066) (10,066)

Total Assets $ 74,501 $ 603,593 $ 647,364

LIABILITIES

Due to Other Funds $ 0 $ 0 $ 3,610Total Liabilities $ 0 $ 0 $ 3,610


Deferred Current Property Taxes $ 0 $ 213,719 $ 213,719Deferred Delinquent Property Taxes 0 9,323 9,323Total Deferred Inflows of Resources $ 0 $ 223,042 $ 223,042

FUND BALANCES

Restricted:Restricted for Public Safety $ 0 $ 0 $ 40,161Restricted for Capital Projects 74,501 380,551 380,551

Total Fund Balances $ 74,501 $ 380,551 $ 420,712

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 74,501 $ 603,593 $ 647,364

Capital Projects Funds (Cont.)

98

Exhibit F-2

Union County, TennesseeCombining Statement of Revenues, Expenditures,

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

Constitu -tional General

Drug Officers - CapitalControl Fees Total Projects

RevenuesLocal Taxes $ 0 $ 0 $ 0 $ 212,106Fines, Forfeitures, and Penalties 46,961 0 46,961 0Charges for Current Services 0 1,382 1,382 0Other Local Revenues 1,425 0 1,425 0

Total Revenues $ 48,386 $ 1,382 $ 49,768 $ 212,106


Administration of Justice $ 0 $ 1,382 $ 1,382 $ 0Public Safety 53,409 0 53,409 0

Capital Projects 0 0 0 34,210Total Expenditures $ 53,409 $ 1,382 $ 54,791 $ 34,210

Excess (Deficiency) of RevenuesOver Expenditures $ (5,023) $ 0 $ (5,023) $ 177,896

Net Change in Fund Balances $ (5,023) $ 0 $ (5,023) $ 177,896Fund Balance, July 1, 2015 45,184 0 45,184 128,154

Fund Balance, June 30, 2016 $ 40,161 $ 0 $ 40,161 $ 306,050

(Continued)

Special Revenue FundsCapital

Projects Funds

99

Exhibit F-2


and Changes in Fund BalancesNonmajor Governmental Funds (Cont.)

Community TotalDevelopment/ Nonmajor

Industrial GovernmentalPark Total Funds

RevenuesLocal Taxes $ 0 $ 212,106 $ 212,106Fines, Forfeitures, and Penalties 0 0 46,961Charges for Current Services 0 0 1,382Other Local Revenues 0 0 1,425

Total Revenues $ 0 $ 212,106 $ 261,874


Administration of Justice $ 0 $ 0 $ 1,382Public Safety 0 0 53,409

Capital Projects 0 34,210 34,210Total Expenditures $ 0 $ 34,210 $ 89,001

Excess (Deficiency) of RevenuesOver Expenditures $ 0 $ 177,896 $ 172,873

Net Change in Fund Balances $ 0 $ 177,896 $ 172,873Fund Balance, July 1, 2015 74,501 202,655 247,839

Fund Balance, June 30, 2016 $ 74,501 $ 380,551 $ 420,712


100

Exhibit F-3

Union County, TennesseeSchedule of Revenues, Expenditures, and Changes

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



RevenuesFines, Forfeitures, and Penalties $ 46,961 $ 26,000 $ 49,000 $ (2,039)Other Local Revenues 1,425 0 0 1,425

Total Revenues $ 48,386 $ 26,000 $ 49,000 $ (614)

ExpendituresPublic Safety

Drug Enforcement $ 53,409 $ 42,617 $ 68,017 $ 14,608Total Expenditures $ 53,409 $ 42,617 $ 68,017 $ 14,608

Excess (Deficiency) of RevenuesOver Expenditures $ (5,023) $ (16,617) $ (19,017) $ 13,994

Net Change in Fund Balance $ (5,023) $ (16,617) $ (19,017) $ 13,994Fund Balance, July 1, 2015 45,184 45,184 45,184 0


Budgeted Amounts

101

Exhibit F-4


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



RevenuesLocal Taxes $ 212,106 $ 199,249 $ 199,249 $ 12,857

Total Revenues $ 212,106 $ 199,249 $ 199,249 $ 12,857

ExpendituresOther Operations

Miscellaneous $ 0 $ 0 $ 30 $ 30Capital Projects

General Administration Projects 4,210 1,400 4,500 290Administration of Justice Projects 20,000 20,000 20,000 0Public Health and Welfare Projects 0 150,000 146,870 146,870Social, Cultural, and Recreation Projects 10,000 10,000 10,000 0

Total Expenditures $ 34,210 $ 181,400 $ 181,400 $ 147,190

Excess (Deficiency) of RevenuesOver Expenditures $ 177,896 $ 17,849 $ 17,849 $ 160,047

Other Financing Sources (Uses)Notes Issued $ 0 $ 130,000 $ 130,000 $ (130,000)

Total Other Financing Sources $ 0 $ 130,000 $ 130,000 $ (130,000)

Net Change in Fund Balance $ 177,896 $ 147,849 $ 147,849 $ 30,047Fund Balance, July 1, 2015 128,154 0 0 128,154


Budgeted Amounts

102

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.

____________________________________

103

Exhibit G


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



RevenuesLocal Taxes $ 1,170,831 $ 1,165,174 $ 1,165,174 $ 5,657Other Local Revenues 121,482 38,000 117,239 4,243Other Governments and Citizens Groups 775,250 775,250 775,250 0

Total Revenues $ 2,067,563 $ 1,978,424 $ 2,057,663 $ 9,900

ExpendituresPrincipal on Debt

General Government $ 223,458 $ 225,950 $ 223,998 $ 540Education 1,430,088 1,430,095 1,509,252 79,164

Interest on DebtGeneral Government 16,520 32,700 33,422 16,902Education 319,147 319,174 319,256 109

Other Debt ServiceGeneral Government 20,329 21,400 21,400 1,071Education 7,160 7,200 7,200 40


Excess (Deficiency) of RevenuesOver Expenditures $ 50,861 $ (58,095) $ (56,865) $ 107,726

Other Financing Sources (Uses)Transfers In $ 28,914 $ 62,439 $ 62,439 $ (33,525)Transfers Out 0 0 (1,230) 1,230

Total Other Financing Sources $ 28,914 $ 62,439 $ 61,209 $ (32,295)

Net Change in Fund Balance $ 79,775 $ 4,344 $ 4,344 $ 75,431Fund Balance, July 1, 2015 1,247,095 1,243,054 1,243,054 4,041

Fund Balance, June 30, 2016 $ 1,326,870 $ 1,247,398 $ 1,247,398 $ 79,472

Budgeted Amounts

104

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.

105

Exhibit H-1

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

Constitu-Cities - tionalSales Officers -Tax Agency Total

ASSETS

Cash $ 0 $ 784,890 $ 784,890Due from Other Governments 96,266 0 96,266

Total Assets $ 96,266 $ 784,890 $ 881,156

LIABILITIES

Due to Other Taxing Units $ 96,266 $ 0 $ 96,266Due to Litigants, Heirs, and Others 0 784,890 784,890

Total Liabilities $ 96,266 $ 784,890 $ 881,156

Agency Funds

106

Exhibit H-2

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

Beginning EndingBalance Additions Deductions Balance

Cities - Sales Tax Fund Assets Equity in Pooled Cash and Investments $ 0 $ 628,433 $ 628,433 $ 0 Due from Other Governments 110,820 96,266 110,820 96,266

Total Assets $ 110,820 $ 724,699 $ 739,253 $ 96,266

Liabilities Due to Other Taxing Units $ 110,820 $ 724,699 $ 739,253 $ 96,266

Total Liabilities $ 110,820 $ 724,699 $ 739,253 $ 96,266

Constitutional Officers - Agency Fund Assets Cash $ 238,830 $ 3,857,065 $ 3,311,005 $ 784,890

Total Assets $ 238,830 $ 3,857,065 $ 3,311,005 $ 784,890

Liabilities Due to Litigants, Heirs, and Others $ 238,830 $ 3,857,065 $ 3,311,005 $ 784,890

Total Liabilities $ 238,830 $ 3,857,065 $ 3,311,005 $ 784,890

Totals - All Agency Funds Assets Cash $ 238,830 $ 3,857,065 $ 3,311,005 $ 784,890 Equity in Pooled Cash and Investments 0 628,433 628,433 0 Due from Other Governments 110,820 96,266 110,820 96,266

Total Assets $ 349,650 $ 4,581,764 $ 4,050,258 $ 881,156

Liabilities Due to Other Taxing Units $ 110,820 $ 724,699 $ 739,253 $ 96,266 Due to Litigants, Heirs, and Others 238,830 3,857,065 3,311,005 784,890

Total Liabilities $ 349,650 $ 4,581,764 $ 4,050,258 $ 881,156

107

Union County School Department ______________________________________

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

______________________________________

General Purpose School Fund – The General Purpose School Fund is used to account for general operations of the School Department. School Federal Projects Fund – The School Federal Projects Fund is used to account for restricted federal revenues, which must be expended on specific education programs. Central Cafeteria Fund – The Central Cafeteria Fund is used to account for the cafeteria operations in each of the schools. Other Education Special Revenue Fund – The Other Education Special Revenue Fund accounts for revenues and expenditures of the virtual education program. Other Capital Projects Fund – The Other Capital Projects Fund is used to account for funding for energy efficient upgrades of the School Department. Education Capital Projects Fund – The Education Capital Projects Fund is used to account for funding for building construction and renovations of the School Department.

108

Exhibit I-1

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

Net (Expense)Revenue andChanges in

Operating Capital Net PositionGrants Grants Total

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

Governmental Activities: Instruction $ 19,975,738 $ 0 $ 1,832,924 $ 0 $ (18,142,814) Support Services 12,183,555 510 475,151 0 (11,707,894) Operation of Non-instructional Services 1,858,769 134,868 2,050,558 0 326,657Total Governmental Activities $ 34,018,062 $ 135,378 $ 4,358,633 $ 0 $ (29,524,051)

General Revenues: Taxes: Property Taxes Levied for General Purposes $ 2,589,472 Local Option Sales Taxes 994,512 Other Local Taxes 33,239 Grants and Contributions Not Restricted to Specific Programs 25,684,275 Miscellaneous 10,231Total General Revenues $ 29,311,729

Change in Net Position $ (212,322)Net Position, July 1, 2015 18,297,298

Net Position, June 30, 2016 $ 18,084,976

Program Revenues

109

Exhibit I-2

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

OtherGeneral Govern- TotalPurpose mental GovernmentalSchool Funds Funds

ASSETS

Equity in Pooled Cash and Investments $ 4,713,341 $ 1,216,639 $ 5,929,980Accounts Receivable 35,217 215 35,432Due from Other Governments 373,686 257,907 631,593Due from Other Funds 0 23,564 23,564Property Taxes Receivable 2,714,899 0 2,714,899Allowance for Uncollectible Property Taxes (116,139) 0 (116,139)

Total Assets $ 7,721,004 $ 1,498,325 $ 9,219,329

LIABILITIES

Accounts Payable $ 20,377 $ 1,540 $ 21,917Accrued Payroll 1,108,024 108,721 1,216,745Payroll Deductions Payable 844,681 96,741 941,422Contracts Payable 0 159,087 159,087Due to Other Funds 23,564 0 23,564Due to State of Tennessee 1,544 756 2,300Other Current Liabilities 236,278 0 236,278Total Liabilities $ 2,234,468 $ 366,845 $ 2,601,313


Deferred Current Property Taxes $ 2,465,984 $ 0 $ 2,465,984Deferred Delinquent Property Taxes 107,576 0 107,576Other Deferred/Unavailable Revenue 97,082 0 97,082Total Deferred Inflows of Resources $ 2,670,642 $ 0 $ 2,670,642

FUND BALANCES

Restricted:Restricted for Education $ 0 $ 620,602 $ 620,602Restricted for Capital Outlay 0 30,429 30,429

Committed:Committed for Education 0 300,000 300,000Committed for Capital Projects 0 180,449 180,449

Unassigned 2,815,894 0 2,815,894Total Fund Balances $ 2,815,894 $ 1,131,480 $ 3,947,374

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 7,721,004 $ 1,498,325 $ 9,219,329

Nonmajor Funds

Major Fund

110

Exhibit I-3

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

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

Total fund balances - balance sheet - governmental funds (Exhibit I-2) $ 3,947,374

(1) Capital assets used in governmental activities are not financial resources and therefore are not reported inthe governmental funds. Add: land $ 1,598,528 Add: buildings and improvements net of accumulated depreciation 15,582,942 Add: infrastructure net of accumulated depreciation 44,852 Add: other capital assets net of accumulated depreciation 552,414 17,778,736

(2) Other long-term assets are not available to pay forcurrent-period expenditures and therefore are deferredin the governmental funds. 204,658

(3) Long-term liabilities are not due and payable in the current period and therefore are not reportedin the governmental funds. Less: other postemployment benefits liability $ (2,203,162) Less: net pension liability - teacher legacy plan (124,653) (2,327,815)

(4) Amounts reflected as deferred outflows of resources and deferred inflows of resources related to pensions will be amortized and recognized components of pension expense in future years: Add: deferred outflows of resources related to pensions $ 1,405,216 Less: deferred inflows of resources related to pensions (2,972,046) (1,566,830)

(5) Net pension assets are not current financial resourcesand are therefore not reported in the governmental funds Add: agent plan $ 40,541 Add: teacher retirement plan 8,312 48,853

Net position of governmental activities (Exhibit A) $ 18,084,976

111

Exhibit I-4


and Changes in Fund Balances - Governmental Funds

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

Other OtherGeneral Education Govern- TotalPurpose Special mental GovernmentalSchool Revenue Funds Funds

RevenuesLocal Taxes $ 3,592,651 $ 0 $ 0 $ 3,592,651Licenses and Permits 1,843 0 0 1,843Charges for Current Services 510 0 134,868 135,378Other Local Revenues 25,290 0 1,673 26,963State of Tennessee 18,727,789 6,655,768 15,475 25,399,032Federal Government 240,073 0 4,385,228 4,625,301

Total Revenues $ 22,588,156 $ 6,655,768 $ 4,537,244 $ 33,781,168


Instruction $ 12,854,097 $ 6,295,142 $ 1,656,452 $ 20,805,691Support Services 8,244,507 94,395 1,008,421 9,347,323Operation of Non-Instructional Services 379,586 0 1,518,076 1,897,662Capital Outlay 0 0 268,046 268,046

Debt Service:Other Debt Service 775,250 0 0 775,250

Capital Projects 0 0 1,747,898 1,747,898Total Expenditures $ 22,253,440 $ 6,389,537 $ 6,198,893 $ 34,841,870

Excess (Deficiency) of RevenuesOver Expenditures $ 334,716 $ 266,231 $ (1,661,649) $ (1,060,702)

Other Financing Sources (Uses)Insurance Recovery $ 6,929 $ 0 $ 540 $ 7,469Transfers In 271,387 0 286,446 557,833

(Continued)

Major FundsNonmajor

Funds

112

Exhibit I-4


and Changes in Fund Balances - Governmental Funds

Discretely Presented Union County School Department (Cont.)

Other OtherGeneral Education Govern- TotalPurpose Special mental GovernmentalSchool Revenue Funds Funds

Other Financing Sources (Uses) (Cont.)Transfers Out $ (286,446) $ (266,231) $ (5,156) $ (557,833)

Total Other Financing Sources (Uses) $ (8,130) $ (266,231) $ 281,830 $ 7,469

Net Change in Fund Balances $ 326,586 $ 0 $ (1,379,819) $ (1,053,233)Fund Balance, July 1, 2015 2,489,308 0 2,511,299 5,000,607

Fund Balance, June 30, 2016 $ 2,815,894 $ 0 $ 1,131,480 $ 3,947,374

Major FundsNonmajor

Funds

113

Exhibit I-5

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

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

Net change in fund balances - total governmental funds (Exhibit I-4) $ (1,053,233)

(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 $ 427,504 Less: current-year depreciation expense (816,053) (388,549)

(2) Revenues in the statement of activities that do not provide currentfinancial resources are not reported as revenues in the funds. Add: deferred delinquent property taxes and other deferred June 30, 2016 $ 204,658 Less: deferred delinquent property taxes and other deferred June 30, 2015 (180,086) 24,572

(3) Some expenses reported in the statement of activities do not requirethe use of current financial resources and therefore are not reportedas expenditures in the governmental funds. Change in other postemployment benefits liabilities $ (211,041) Change in net pension asset - agent plan (58,816) Change in net pension asset - teacher retirement plan 8,312 Change in net pension liability - teacher legacy retirement plan (173,555) Change in deferred outflows related to pensions 27,367 Change in deferred inflows related to pensions 1,612,621 1,204,888

Change in net position of governmental activities (Exhibit B) $ (212,322)

114

Exhibit I-6

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

School EducationFederal Central CapitalProjects Cafeteria Total Projects

ASSETS

Equity in Pooled Cash and Investments $ 408,977 $ 461,261 $ 870,238 $ 180,449Accounts Receivable 0 215 215 0Due from Other Governments 107,317 150,590 257,907 0Due from Other Funds 0 0 0 0

Total Assets $ 516,294 $ 612,066 $ 1,128,360 $ 180,449

LIABILITIES

Accounts Payable $ 1,540 $ 0 $ 1,540 $ 0Accrued Payroll 108,721 0 108,721 0Payroll Deductions Payable 95,306 1,435 96,741 0Contracts Payable 0 0 0 0Due to State of Tennessee 756 0 756 0Total Liabilities $ 206,323 $ 1,435 $ 207,758 $ 0

FUND BALANCES

Restricted:Restricted for Education $ 9,971 $ 610,631 $ 620,602 $ 0Restricted for Capital Outlay 0 0 0 0

Committed:Committed for Education 300,000 0 300,000 0Committed for Capital Projects 0 0 0 180,449

Total Fund Balances $ 309,971 $ 610,631 $ 920,602 $ 180,449

Total Liabilities and Fund Balances $ 516,294 $ 612,066 $ 1,128,360 $ 180,449

(Continued)



115

Exhibit I-6

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

TotalOther Nonmajor

Capital GovernmentalProjects Total Funds

ASSETS

Equity in Pooled Cash and Investments $ 165,952 $ 346,401 $ 1,216,639Accounts Receivable 0 0 215Due from Other Governments 0 0 257,907Due from Other Funds 23,564 23,564 23,564

Total Assets $ 189,516 $ 369,965 $ 1,498,325

LIABILITIES

Accounts Payable $ 0 $ 0 $ 1,540Accrued Payroll 0 0 108,721Payroll Deductions Payable 0 0 96,741Contracts Payable 159,087 159,087 159,087Due to State of Tennessee 0 0 756Total Liabilities $ 159,087 $ 159,087 $ 366,845

FUND BALANCES

Restricted:Restricted for Education $ 0 $ 0 $ 620,602Restricted for Capital Outlay 30,429 30,429 30,429

Committed:Committed for Education 0 0 300,000Committed for Capital Projects 0 180,449 180,449

Total Fund Balances $ 30,429 $ 210,878 $ 1,131,480

Total Liabilities and Fund Balances $ 189,516 $ 369,965 $ 1,498,325


116

Exhibit I-7


and Changes in Fund Balances - Nonmajor Governmental Funds

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


RevenuesCharges for Current Services $ 0 $ 134,868 $ 134,868 $ 0Other Local Revenues 0 571 571 0State of Tennessee 0 15,475 15,475 0Federal Government 2,670,029 1,666,704 4,336,733 48,495

Total Revenues $ 2,670,029 $ 1,817,618 $ 4,487,647 $ 48,495


Instruction $ 1,656,452 $ 0 $ 1,656,452 $ 0Support Services 1,008,421 0 1,008,421 0Operation of Non-Instructional Services 0 1,518,076 1,518,076 0Capital Outlay 0 0 0 268,046

Capital Projects 0 0 0 0Total Expenditures $ 2,664,873 $ 1,518,076 $ 4,182,949 $ 268,046

Excess (Deficiency) of RevenuesOver Expenditures $ 5,156 $ 299,542 $ 304,698 $ (219,551)

Other Financing Sources (Uses)Insurance Recovery $ 0 $ 540 $ 540 $ 0Transfers In 0 1,000 1,000 285,446Transfers Out (5,156) 0 (5,156) 0

Total Other Financing Sources (Uses) $ (5,156) $ 1,540 $ (3,616) $ 285,446

(Continued)


Projects Funds

117

Exhibit I-7





Net Change in Fund Balances $ 0 $ 301,082 $ 301,082 $ 65,895Fund Balance, July 1, 2015 309,971 309,549 619,520 114,554


(Continued)


Projects Funds

118

Exhibit I-7




TotalOther Nonmajor


RevenuesCharges for Current Services $ 0 $ 0 $ 134,868Other Local Revenues 1,102 1,102 1,673State of Tennessee 0 0 15,475Federal Government 0 48,495 4,385,228

Total Revenues $ 1,102 $ 49,597 $ 4,537,244


Instruction $ 0 $ 0 $ 1,656,452Support Services 0 0 1,008,421Operation of Non-Instructional Services 0 0 1,518,076Capital Outlay 0 268,046 268,046

Capital Projects 1,747,898 1,747,898 1,747,898Total Expenditures $ 1,747,898 $ 2,015,944 $ 6,198,893

Excess (Deficiency) of RevenuesOver Expenditures $ (1,746,796) $ (1,966,347) $ (1,661,649)

Other Financing Sources (Uses)Insurance Recovery $ 0 $ 0 $ 540Transfers In 0 285,446 286,446Transfers Out 0 0 (5,156)

Total Other Financing Sources (Uses) $ 0 $ 285,446 $ 281,830

(Continued)


119

Exhibit I-7




TotalOther Nonmajor


Net Change in Fund Balances $ (1,746,796) $ (1,680,901) $ (1,379,819)Fund Balance, July 1, 2015 1,777,225 1,891,779 2,511,299

Fund Balance, June 30, 2016 $ 30,429 $ 210,878 $ 1,131,480


120

Exhibit I-8


in Fund Balance - Actual (Budgetary Basis) and BudgetDiscretely Presented Union County School DepartmentGeneral Purpose School FundFor the Year Ended June 30, 2016

Actual VarianceRevenues/ with Final

Actual Less: Expenditures Budget -(GAAP Encumbrances (Budgetary PositiveBasis) 7/1/2015 Basis) Original Final (Negative)

RevenuesLocal Taxes $ 3,592,651 $ 0 $ 3,592,651 $ 3,496,700 $ 3,555,628 $ 37,023Licenses and Permits 1,843 0 1,843 1,570 1,570 273Charges for Current Services 510 0 510 266,431 200 310Other Local Revenues 25,290 0 25,290 0 6,000 19,290State of Tennessee 18,727,789 0 18,727,789 18,070,886 18,615,356 112,433Federal Government 240,073 0 240,073 0 237,021 3,052

Total Revenues $ 22,588,156 $ 0 $ 22,588,156 $ 21,835,587 $ 22,415,775 $ 172,381

ExpendituresInstruction

Regular Instruction Program $ 10,224,088 $ 0 $ 10,224,088 $ 10,294,645 $ 10,474,506 $ 250,418Special Education Program 1,696,137 0 1,696,137 1,794,185 1,738,094 41,957Vocational Education Program 933,872 0 933,872 973,439 973,439 39,567

Support ServicesHealth Services 219,718 0 219,718 117,957 222,880 3,162Other Student Support 555,372 0 555,372 518,014 568,442 13,070Regular Instruction Program 547,602 0 547,602 389,545 568,913 21,311Special Education Program 685,967 (64,244) 621,723 566,312 640,767 19,044Vocational Education Program 134,534 0 134,534 139,248 139,248 4,714Other Programs 71,469 0 71,469 0 71,469 0Board of Education 479,105 0 479,105 490,776 483,577 4,472Director of Schools 133,640 0 133,640 143,136 140,636 6,996Office of the Principal 1,481,312 0 1,481,312 1,473,352 1,498,442 17,130Fiscal Services 163,769 0 163,769 163,769 163,769 0Operation of Plant 1,715,130 0 1,715,130 1,813,546 1,772,353 57,223

(Continued)

Budgeted Amounts

121

Exhibit I-8


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

Actual VarianceRevenues/ with Final

Actual Less: Expenditures Budget -(GAAP Encumbrances (Budgetary PositiveBasis) 7/1/2015 Basis) Original Final (Negative)

Expenditures (Cont.)Support Services (Cont.)

Maintenance of Plant $ 427,587 $ 0 $ 427,587 $ 370,419 $ 428,348 $ 761Transportation 1,101,146 0 1,101,146 1,182,680 1,109,003 7,857Central and Other 528,156 0 528,156 592,245 586,161 58,005

Operation of Non-Instructional ServicesCommunity Services 52,865 0 52,865 37,069 70,132 17,267Early Childhood Education 326,721 0 326,721 0 326,723 2

Other Debt ServiceEducation 775,250 0 775,250 775,250 775,250 0

Total Expenditures $ 22,253,440 $ (64,244) $ 22,189,196 $ 21,835,587 $ 22,752,152 $ 562,956

Excess (Deficiency) of RevenuesOver Expenditures $ 334,716 $ 64,244 $ 398,960 $ 0 $ (336,377) $ 735,337

Other Financing Sources (Uses)Insurance Recovery $ 6,929 $ 0 $ 6,929 $ 0 $ 6,929 $ 0Transfers In 271,387 0 271,387 0 266,231 5,156Transfers Out (286,446) 0 (286,446) 0 (286,446) 0

Total Other Financing Sources $ (8,130) $ 0 $ (8,130) $ 0 $ (13,286) $ 5,156

Net Change in Fund Balance $ 326,586 $ 64,244 $ 390,830 $ 0 $ (349,663) $ 740,493Fund Balance, July 1, 2015 2,489,308 (64,244) 2,425,064 2,518,488 2,518,488 (93,424)

Fund Balance, June 30, 2016 $ 2,815,894 $ 0 $ 2,815,894 $ 2,518,488 $ 2,168,825 $ 647,069

Budgeted Amounts

122

Exhibit I-9


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



RevenuesFederal Government $ 2,670,029 $ 2,451,838 $ 3,339,641 $ (669,612)

Total Revenues $ 2,670,029 $ 2,451,838 $ 3,339,641 $ (669,612)


Regular Instruction Program $ 911,802 $ 745,303 $ 1,128,812 $ 217,010Special Education Program 686,271 684,798 930,055 243,784Vocational Education Program 58,379 0 58,415 36

Support ServicesOther Student Support 292,959 293,364 313,415 20,456Regular Instruction Program 356,610 441,552 511,235 154,625Special Education Program 229,531 212,789 257,890 28,359Vocational Education Program 1,771 0 1,771 0Transportation 127,550 69,032 132,892 5,342


Excess (Deficiency) of RevenuesOver Expenditures $ 5,156 $ 5,000 $ 5,156 $ 0

Other Financing Sources (Uses)Transfers Out $ (5,156) $ (5,000) $ (5,156) $ 0

Total Other Financing Sources $ (5,156) $ (5,000) $ (5,156) $ 0

Net Change in Fund Balance $ 0 $ 0 $ 0 $ 0Fund Balance, July 1, 2015 309,971 310,088 310,088 (117)

Fund Balance, June 30, 2016 $ 309,971 $ 310,088 $ 310,088 $ (117)

Budgeted Amounts

123

Exhibit I-10


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



RevenuesCharges for Current Services $ 134,868 $ 137,887 $ 137,887 $ (3,019)Other Local Revenues 571 0 0 571State of Tennessee 15,475 14,814 14,814 661Federal Government 1,666,704 1,346,361 1,423,698 243,006

Total Revenues $ 1,817,618 $ 1,499,062 $ 1,576,399 $ 241,219

ExpendituresOperation of Non-Instructional Services

Food Service $ 1,518,076 $ 1,500,062 $ 1,577,939 $ 59,863Total Expenditures $ 1,518,076 $ 1,500,062 $ 1,577,939 $ 59,863

Excess (Deficiency) of RevenuesOver Expenditures $ 299,542 $ (1,000) $ (1,540) $ 301,082

Other Financing Sources (Uses)Insurance Recovery $ 540 $ 0 $ 540 $ 0Transfers In 1,000 1,000 1,000 0

Total Other Financing Sources $ 1,540 $ 1,000 $ 1,540 $ 0

Net Change in Fund Balance $ 301,082 $ 0 $ 0 $ 301,082Fund Balance, July 1, 2015 309,549 309,286 309,286 263


Budgeted Amounts

124

Exhibit I-11


in Fund Balance - Actual and BudgetDiscretely Presented Union County School DepartmentOther Education Special Revenue FundFor the Year Ended June 30, 2016



RevenuesState of Tennessee $ 6,655,768 $ 6,655,768 $ 6,655,768 $ 0

Total Revenues $ 6,655,768 $ 6,655,768 $ 6,655,768 $ 0


Regular Instruction Program $ 6,295,142 $ 6,291,822 $ 6,295,142 $ 0Support Services

Office of the Principal 94,395 97,714 94,395 0Total Expenditures $ 6,389,537 $ 6,389,536 $ 6,389,537 $ 0

Excess (Deficiency) of RevenuesOver Expenditures $ 266,231 $ 266,232 $ 266,231 $ 0

Other Financing Sources (Uses)Transfers Out $ (266,231) $ (266,231) $ (266,231) $ 0

Total Other Financing Sources $ (266,231) $ (266,231) $ (266,231) $ 0

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

Fund Balance, June 30, 2016 $ 0 $ 1 $ 0 $ 0

Budgeted Amounts

125

MISCELLANEOUS SCHEDULES

126

Exhibit J-1

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

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

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

NOTES PAYABLE Payable through General Debt Service Fund Highway Department Tractor Note $ 85,840 2.75 % 9-24-13 9-24-16 $ 28,396 $ 28,396 $ 0 Sheriff Vehicles 140,000 1.99 7-18-14 7-15-17 93,374 46,700 46,674 Ambulances 260,000 1.99 3-4-15 4-30-18 170,447 86,677 83,770

Total Notes Payable $ 292,217 $ 161,773 $ 130,444

BONDS PAYABLE Payable though General Debt Service Fund Qualified School Construction Bond 7,160,000 1.515 12-17-09 9-1-26 $ 4,963,366 $ 446,773 $ 4,516,593 Refunding Series 2013 7,110,000 2.25 to 5 3-15-13 4-1-26 5,050,000 845,000 4,205,000 General Obligation Bonds Series 2015 3,500,000 2.5 6-1-15 6-30-30 3,500,000 200,000 3,300,000

Total Bonds Payable $ 13,513,366 $ 1,491,773 $ 12,021,593

127

Exhibit J-2

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

YearEndingJune 30 Principal Interest Total

2017 $ 0 $ 5,250 $ 5,2502018 130,444 422 130,866

Total $ 130,444 $ 5,672 $ 136,116

YearEndingJune 30 Principal Interest Total

2017 $ 1,531,773 $ 296,012 $ 1,827,7852018 1,561,773 272,512 1,834,2852019 1,606,773 239,062 1,845,8352020 1,646,773 204,261 1,851,0342021 771,773 178,111 949,8842022 781,773 169,411 951,1842023 786,773 162,711 949,4842024 736,773 155,649 892,4222025 741,773 149,724 891,4972026 795,636 143,087 938,7232027 255,000 27,863 282,8632028 260,000 21,488 281,4882029 270,000 14,988 284,9882030 275,000 7,561 282,561

Total $ 12,021,593 $ 2,042,440 $ 14,064,033

Bonds

Notes

128

Exhibit J-3

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

From Fund To Fund Purpose Amount

PRIMARY GOVERNMENT

Highway/Public Works General Debt Service Service highway equipment note $ 28,914

Total Transfers Primary Government $ 28,914

DISCRETELY PRESENTED UNION COUNTY SCHOOL DEPARTMENT

School Federal Projects General Purpose School Indirect costs $ 5,156 Other Education Special Revenue " Virtual academy revenue (4% per contract) 266,231 General Purpose School Central Cafeteria Career ladder for food service director 1,000 " Educational Capital Projects HVAC replacements in schools 285,446

Total Transfers Discretely Presented Union County School Department $ 557,833

129

Exhibit J-4

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

Salary Paid

DuringOfficial Authorization for Salary Period Bond Surety

County Mayor Section 8-24-102, TCA $ 73,738 $ 100,000 State Farm Fire and Casualty CompanyHighway Superintendent Section 8-24-102, TCA 70,228 100,000 "Director of Schools State Board of Education and

County Board of Education 95,900 (1) 100,000 Next Generation UnderwritersTrustee Section 8-24-102, TCA 63,843 1,067,682 Auto-Owners Mutual Insurance CompanyAssessor of Property: 50,000 State Farm Fire and Casualty Company Donna B. Jones (7-1-15 to 3-20-16) Section 8-24-102, TCA 46,655 50,000 Randy Turner (5-10-16 to 6-30-16) Section 8-24-102, TCA 7,366 50,000Finance Director Financial Management Committee 57,459 100,000 "County Clerk Section 8-24-102, TCA 63,843 100,000 "Circuit and General Sessions Courts Clerk Section 8-24-102, TCA 63,843 100,000 "Clerk and Master Section 8-24-102, TCA 63,843 (3) 100,000 State Farm Fire and Casualty Company

and Chancery Court JudgeRegister of Deeds Section 8-24-102, TCA 63,843 100,000 "Sheriff Section 8-24-102, TCA 70,828 (2) 100,000 "

Employee Blanket Bond - County and School Employees: Public Officials Liability Errors and Omissions 1,000,000 Tennessee Risk Management Trust Employee Fidelity 150,000 "

(1) Includes a career ladder supplement of $1,000 and a CEO supplement of $1,000.(2) Includes a law enforcement training supplement of $600.(3) Does not include $1,382 of special commissioner fees.

130

Exhibit J-5

Union County, TennesseeSchedule of Detailed Revenues -

All Governmental Fund TypesFor the Year Ended June 30, 2016

Constitu -tional Highway / General

Ambulance Drug Officers - Public DebtGeneral Service Control Fees Works Service

Local TaxesCounty Property Taxes

Current Property Tax $ 2,851,286 $ 417,676 $ 0 $ 0 $ 278,505 $ 648,038Trustee's Collections - Prior Year 97,173 18,308 0 0 11,834 25,389Circuit Clerk/Clerk and Master Collections - Prior Years 63,658 12,054 0 0 7,714 16,860Interest and Penalty 16,108 2,842 0 0 1,831 3,531Pickup Taxes 316 47 0 0 31 72Payments in-Lieu-of Taxes - T.V.A. 4,595 0 0 0 0 0Payments in-Lieu-of Taxes - Local Utilities 371,369 0 0 0 0 0Payments in-Lieu-of Taxes - Other 69,469 10,194 0 0 6,796 15,857

County Local Option TaxesLocal Option Sales Tax 361,499 0 0 0 0 0Hotel/Motel Tax 47,706 0 0 0 0 0Wheel Tax 0 0 0 0 0 461,084Litigation Tax - General 29,929 0 0 0 0 0Litigation Tax - Special Purpose 27,335 0 0 0 0 0Litigation Tax - Jail, Workhouse, or Courthouse 11,990 0 0 0 0 0Business Tax 88,323 0 0 0 0 0Mixed Drink Tax 5,181 0 0 0 0 0Mineral Severance Tax 0 0 0 0 86,541 0

Statutory Local TaxesWholesale Beer Tax 104,016 0 0 0 0 0Beer Privilege Tax 1,615 0 0 0 0 0Interstate Telecommunications Tax 11,677 0 0 0 0 0

Total Local Taxes $ 4,163,245 $ 461,121 $ 0 $ 0 $ 393,252 $ 1,170,831

(Continued)

Special Revenue FundsDebt Service

Fund

131

Exhibit J-5


All Governmental Fund Types (Cont.)



Licenses and PermitsLicenses

Cable TV Franchise $ 36,615 $ 0 $ 0 $ 0 $ 0 $ 0Permits

Beer Permits 712 0 0 0 0 0Building Permits 18,660 0 0 0 0 0

Total Licenses and Permits $ 55,987 $ 0 $ 0 $ 0 $ 0 $ 0

Fines, Forfeitures, and PenaltiesCircuit Court

Fines $ 4,521 $ 0 $ 0 $ 0 $ 0 $ 0Fines for Littering 57 0 0 0 0 0Officers Costs 4,127 0 0 0 0 0Drug Control Fines 0 0 1,625 0 0 0Jail Fees 309 0 0 0 0 0Data Entry Fee - Circuit Court 690 0 0 0 0 0Victims Assistance Assessments 1,964 0 0 0 0 0

Criminal CourtFines 2,546 0 0 0 0 0DUI Treatment Fines 997 0 0 0 0 0Courtroom Security Fee 128 0 0 0 0 0

General Sessions CourtFines 21,379 0 0 0 0 0Officers Costs 16,712 0 0 0 0 0Game and Fish Fines 549 0 0 0 0 0Drug Control Fines 0 0 5,546 0 0 0Jail Fees 475 0 0 0 0 0

(Continued)


Fund

132

Exhibit J-5





Fines, Forfeitures, and Penalties (Cont.)General Sessions Court (Cont.)

Data Entry Fee - General Sessions Court $ 15,732 $ 0 $ 0 $ 0 $ 0 $ 0Courtroom Security Fee 46 0 0 0 0 0Victims Assistance Assessments 12,146 0 0 0 0 0

Juvenile CourtFines 562 0 0 0 0 0Officers Costs 2,206 0 0 0 0 0Jail Fees 1,041 0 0 0 0 0Data Entry Fee - Juvenile Court 484 0 0 0 0 0

Chancery CourtOfficers Costs 859 0 0 0 0 0Data Entry Fee - Chancery Court 628 0 0 0 0 0

Other Fines, Forfeitures, and PenaltiesProceeds from Confiscated Property 0 0 39,790 0 0 0

Total Fines, Forfeitures, and Penalties $ 88,158 $ 0 $ 46,961 $ 0 $ 0 $ 0

Charges for Current ServicesGeneral Service Charges

Patient Charges $ 1,303 $ 977,091 $ 0 $ 0 $ 0 $ 0Other General Service Charges 117 0 0 0 89 0

FeesEngineer Review Fees 1,530 0 0 0 0 0Copy Fees 835 0 0 0 0 0Library Fees 1,241 0 0 0 0 0Archives and Records Management Fee 29,310 0 0 0 0 0Greenbelt Late Application Fee 200 0 0 0 0 0

(Continued)


Fund

133

Exhibit J-5





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

Telephone Commissions $ 30,574 $ 0 $ 0 $ 0 $ 0 $ 0Vending Machine Collections 16,773 0 0 0 0 0Special Commissioner Fees/Special Master Fees 0 0 0 1,382 0 0Data Processing Fee - Register 7,327 0 0 0 0 0Data Processing Fee - Sheriff 4,041 0 0 0 0 0Sexual Offender Registration Fee - Sheriff 1,800 0 0 0 0 0Data Processing Fee - County Clerk 1,869 0 0 0 0 0

Education ChargesOther Charges for Services 285,720 0 0 0 121 0

Total Charges for Current Services $ 382,640 $ 977,091 $ 0 $ 1,382 $ 210 $ 0

Other Local RevenuesRecurring Items

Investment Income $ 0 $ 0 $ 0 $ 0 $ 0 $ 121,482Lease/Rentals 34,490 0 0 0 0 0Sale of Materials and Supplies 0 0 0 0 129 0Commissary Sales 10,680 0 0 0 0 0Sale of Gasoline 0 0 0 0 9,045 0Sale of Recycled Materials 123 0 0 0 735 0Commodity Rebates 427 0 0 0 0 0Miscellaneous Refunds 12,760 0 0 0 229 0

Nonrecurring ItemsSale of Equipment 455 11,460 0 0 23,629 0Damages Recovered from Individuals 69 0 0 0 0 0Contributions and Gifts 43,591 0 1,425 0 0 0

(Continued)


Fund

134

Exhibit J-5





Other Local Revenues (Cont.)Other Local Revenues

Other Local Revenues $ 755 $ 0 $ 0 $ 0 $ 0 $ 0Total Other Local Revenues $ 103,350 $ 11,460 $ 1,425 $ 0 $ 33,767 $ 121,482

Fees Received From County OfficialsFees In-Lieu-of Salary

County Clerk $ 186,006 $ 0 $ 0 $ 0 $ 0 $ 0Circuit Court Clerk 50,405 0 0 0 0 0General Sessions Court Clerk 98,013 0 0 0 0 0Clerk and Master 72,174 0 0 0 0 0Register 77,226 0 0 0 0 0Sheriff 7,052 0 0 0 0 0Trustee 261,024 0 0 0 0 0

Total Fees Received From County Officials $ 751,900 $ 0 $ 0 $ 0 $ 0 $ 0

State of TennesseeGeneral Government Grants

Juvenile Services Program $ 13,500 $ 0 $ 0 $ 0 $ 0 $ 0Aging Programs 12,864 0 0 0 0 0Other General Government Grants 6,350 0 0 0 0 0

Public Safety GrantsLaw Enforcement Training Programs 28,800 0 0 0 0 0

Health and Welfare GrantsPublic Health Nurses 57,665 0 0 0 0 0

Public Works GrantsState Aid Program 0 0 0 0 194,619 0Litter Program 24,602 0 0 0 0 0

(Continued)


Fund

135

Exhibit J-5





State of Tennessee (Cont.)Other State Revenues

Income Tax $ 35,419 $ 0 $ 0 $ 0 $ 0 $ 0Beer Tax 18,488 0 0 0 0 0Vehicle Certificate of Title Fees 5,455 0 0 0 0 0Alcoholic Beverage Tax 37,024 0 0 0 0 0State Revenue Sharing - T.V.A. 874,867 0 0 0 0 0Contracted Prisoner Boarding 72,187 0 0 0 0 0Gasoline and Motor Fuel Tax 0 0 0 0 1,454,743 0Petroleum Special Tax 0 0 0 0 13,788 0Registrar's Salary Supplement 15,164 0 0 0 0 0Other State Revenues 59,863 517 0 0 272,440 0

Total State of Tennessee $ 1,262,248 $ 517 $ 0 $ 0 $ 1,935,590 $ 0

Federal GovernmentFederal Through State

Community Development $ 488,698 $ 0 $ 0 $ 0 $ 0 $ 0Homeland Security Grants 6,792 0 0 0 0 0Other Federal through State 77,677 0 0 0 0 0

Total Federal Government $ 573,167 $ 0 $ 0 $ 0 $ 0 $ 0

Other Governments and Citizens GroupsOther Governments

Paving and Maintenance $ 0 $ 0 $ 0 $ 0 $ 86,415 $ 0Contributions 0 0 0 0 0 775,250

Citizens GroupsDonations 1,400 0 0 0 0 0

(Continued)


Fund

136

Exhibit J-5





Other Governments and Citizens Groups (Cont.)Other

Other $ 2,000 $ 0 $ 0 $ 0 $ 0 $ 0Total Other Governments and Citizens Groups $ 3,400 $ 0 $ 0 $ 0 $ 86,415 $ 775,250

Total $ 7,384,095 $ 1,450,189 $ 48,386 $ 1,382 $ 2,449,234 $ 2,067,563

(Continued)


Fund

137

Exhibit J-5



GeneralCapitalProjects Total


Current Property Tax $ 202,022 $ 4,397,527Trustee's Collections - Prior Year 2,620 155,324Circuit Clerk/Clerk and Master Collections - Prior Years 1,929 102,215Interest and Penalty 605 24,917Pickup Taxes 22 488Payments in-Lieu-of Taxes - T.V.A. 0 4,595Payments in-Lieu-of Taxes - Local Utilities 0 371,369Payments in-Lieu-of Taxes - Other 4,908 107,224

County Local Option TaxesLocal Option Sales Tax 0 361,499Hotel/Motel Tax 0 47,706Wheel Tax 0 461,084Litigation Tax - General 0 29,929Litigation Tax - Special Purpose 0 27,335Litigation Tax - Jail, Workhouse, or Courthouse 0 11,990Business Tax 0 88,323Mixed Drink Tax 0 5,181Mineral Severance Tax 0 86,541

Statutory Local TaxesWholesale Beer Tax 0 104,016Beer Privilege Tax 0 1,615Interstate Telecommunications Tax 0 11,677

Total Local Taxes $ 212,106 $ 6,400,555

(Continued)

Capital Projects

Fund

138

Exhibit J-5





Cable TV Franchise $ 0 $ 36,615Permits

Beer Permits 0 712Building Permits 0 18,660

Total Licenses and Permits $ 0 $ 55,987

Fines, Forfeitures, and PenaltiesCircuit Court

Fines $ 0 $ 4,521Fines for Littering 0 57Officers Costs 0 4,127Drug Control Fines 0 1,625Jail Fees 0 309Data Entry Fee - Circuit Court 0 690Victims Assistance Assessments 0 1,964

Criminal CourtFines 0 2,546DUI Treatment Fines 0 997Courtroom Security Fee 0 128

General Sessions CourtFines 0 21,379Officers Costs 0 16,712Game and Fish Fines 0 549Drug Control Fines 0 5,546Jail Fees 0 475

(Continued)

Capital Projects

Fund

139

Exhibit J-5




Fines, Forfeitures, and Penalties (Cont.)General Sessions Court (Cont.)

Data Entry Fee - General Sessions Court $ 0 $ 15,732Courtroom Security Fee 0 46Victims Assistance Assessments 0 12,146

Juvenile CourtFines 0 562Officers Costs 0 2,206Jail Fees 0 1,041Data Entry Fee - Juvenile Court 0 484

Chancery CourtOfficers Costs 0 859Data Entry Fee - Chancery Court 0 628

Other Fines, Forfeitures, and PenaltiesProceeds from Confiscated Property 0 39,790

Total Fines, Forfeitures, and Penalties $ 0 $ 135,119

Charges for Current ServicesGeneral Service Charges

Patient Charges $ 0 $ 978,394Other General Service Charges 0 206

FeesEngineer Review Fees 0 1,530Copy Fees 0 835Library Fees 0 1,241Archives and Records Management Fee 0 29,310Greenbelt Late Application Fee 0 200

(Continued)

Capital Projects

Fund

140

Exhibit J-5




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

Telephone Commissions $ 0 $ 30,574Vending Machine Collections 0 16,773Special Commissioner Fees/Special Master Fees 0 1,382Data Processing Fee - Register 0 7,327Data Processing Fee - Sheriff 0 4,041Sexual Offender Registration Fee - Sheriff 0 1,800Data Processing Fee - County Clerk 0 1,869

Education ChargesOther Charges for Services 0 285,841

Total Charges for Current Services $ 0 $ 1,361,323


Investment Income $ 0 $ 121,482Lease/Rentals 0 34,490Sale of Materials and Supplies 0 129Commissary Sales 0 10,680Sale of Gasoline 0 9,045Sale of Recycled Materials 0 858Commodity Rebates 0 427Miscellaneous Refunds 0 12,989

Nonrecurring ItemsSale of Equipment 0 35,544Damages Recovered from Individuals 0 69Contributions and Gifts 0 45,016

(Continued)

Capital Projects

Fund

141

Exhibit J-5




Other Local Revenues (Cont.)Other Local Revenues

Other Local Revenues $ 0 $ 755Total Other Local Revenues $ 0 $ 271,484

Fees Received From County OfficialsFees In-Lieu-of Salary

County Clerk $ 0 $ 186,006Circuit Court Clerk 0 50,405General Sessions Court Clerk 0 98,013Clerk and Master 0 72,174Register 0 77,226Sheriff 0 7,052Trustee 0 261,024

Total Fees Received From County Officials $ 0 $ 751,900


Juvenile Services Program $ 0 $ 13,500Aging Programs 0 12,864Other General Government Grants 0 6,350

Public Safety GrantsLaw Enforcement Training Programs 0 28,800

Health and Welfare GrantsPublic Health Nurses 0 57,665

Public Works GrantsState Aid Program 0 194,619Litter Program 0 24,602

(Continued)

Capital Projects

Fund

142

Exhibit J-5





Income Tax $ 0 $ 35,419Beer Tax 0 18,488Vehicle Certificate of Title Fees 0 5,455Alcoholic Beverage Tax 0 37,024State Revenue Sharing - T.V.A. 0 874,867Contracted Prisoner Boarding 0 72,187Gasoline and Motor Fuel Tax 0 1,454,743Petroleum Special Tax 0 13,788Registrar's Salary Supplement 0 15,164Other State Revenues 0 332,820

Total State of Tennessee $ 0 $ 3,198,355


Community Development $ 0 $ 488,698Homeland Security Grants 0 6,792Other Federal through State 0 77,677

Total Federal Government $ 0 $ 573,167

Other Governments and Citizens GroupsOther Governments

Paving and Maintenance $ 0 $ 86,415Contributions 0 775,250

Citizens GroupsDonations 0 1,400

(Continued)

Capital Projects

Fund

143

Exhibit J-5




Other Governments and Citizens Groups (Cont.)Other

Other $ 0 $ 2,000Total Other Governments and Citizens Groups $ 0 $ 865,065

Total $ 212,106 $ 13,612,955

Capital Projects

Fund

144

Exhibit J-6


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

OtherGeneral School Education EducationPurpose Federal Central Special CapitalSchool Projects Cafeteria Revenue Projects


Current Property Tax $ 2,330,986 $ 0 $ 0 $ 0 $ 0Trustee's Collections - Prior Year 95,838 0 0 0 0Circuit Clerk/Clerk and Master Collections - Prior Years 70,393 0 0 0 0Interest and Penalty 16,464 0 0 0 0Pickup Taxes 260 0 0 0 0Payments in-Lieu-of Taxes - Other 56,633 0 0 0 0

County Local Option TaxesLocal Option Sales Tax 988,989 0 0 0 0Mixed Drink Tax 5,635 0 0 0 0

Statutory Local TaxesBank Excise Tax 25,771 0 0 0 0Interstate Telecommunications Tax 1,682 0 0 0 0

Total Local Taxes $ 3,592,651 $ 0 $ 0 $ 0 $ 0


Marriage Licenses $ 1,501 $ 0 $ 0 $ 0 $ 0Permits

Other Permits 342 0 0 0 0Total Licenses and Permits $ 1,843 $ 0 $ 0 $ 0 $ 0

Charges for Current ServicesEducation Charges

Lunch Payments - Adults $ 0 $ 0 $ 7,618 $ 0 $ 0

(Continued)



145

Exhibit J-6


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


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

Income from Breakfast $ 0 $ 0 $ 13,017 $ 0 $ 0A la Carte Sales 0 0 114,233 0 0Community Service Fees - Children 510 0 0 0 0

Total Charges for Current Services $ 510 $ 0 $ 134,868 $ 0 $ 0


Investment Income $ 0 $ 0 $ 154 $ 0 $ 0Sale of Recycled Materials 977 0 0 0 0Miscellaneous Refunds 9,814 0 417 0 0Expenditure Credits 5,801 0 0 0 0

Nonrecurring ItemsSale of Equipment 2,698 0 0 0 0Contributions and Gifts 6,000 0 0 0 0

Total Other Local Revenues $ 25,290 $ 0 $ 571 $ 0 $ 0


On-behalf Contributions for OPEB $ 71,469 $ 0 $ 0 $ 0 $ 0State Education Funds

Basic Education Program 17,494,232 0 0 6,655,768 0Early Childhood Education 334,540 0 0 0 0School Food Service 0 0 15,475 0 0Other State Education Funds 493,420 0 0 0 0Career Ladder Program 80,029 0 0 0 0

(Continued)



146

Exhibit J-6





State Revenue Sharing - T.V.A. $ 218,717 $ 0 $ 0 $ 0 $ 0Other State Grants 32,388 0 0 0 0Other State Revenues 2,994 0 0 0 0

Total State of Tennessee $ 18,727,789 $ 0 $ 15,475 $ 6,655,768 $ 0


USDA School Lunch Program $ 0 $ 0 $ 1,193,245 $ 0 $ 0USDA - Commodities 0 0 78,854 0 0Breakfast 0 0 378,865 0 0USDA - Other 0 0 12,697 0 0Vocational Education - Basic Grants to States 0 74,529 0 0 0Title I Grants to Local Education Agencies 0 1,304,040 0 0 0Special Education - Grants to States 18,365 1,006,031 0 0 0Special Education Preschool Grants 0 37,319 0 0 0English Language Acquisition Grants 0 1,513 0 0 0Rural Education 0 162,184 0 0 0Eisenhower Professional Development State Grants 17,000 84,413 0 0 0Other Federal through State 204,708 0 3,043 0 0

Direct Federal RevenueOther Direct Federal Revenue 0 0 0 0 48,495

Total Federal Government $ 240,073 $ 2,670,029 $ 1,666,704 $ 0 $ 48,495

Total $ 22,588,156 $ 2,670,029 $ 1,817,618 $ 6,655,768 $ 48,495

(Continued)



147

Exhibit J-6



OtherCapitalProjects Total


Current Property Tax $ 0 $ 2,330,986Trustee's Collections - Prior Year 0 95,838Circuit Clerk/Clerk and Master Collections - Prior Years 0 70,393Interest and Penalty 0 16,464Pickup Taxes 0 260Payments in-Lieu-of Taxes - Other 0 56,633

County Local Option TaxesLocal Option Sales Tax 0 988,989Mixed Drink Tax 0 5,635

Statutory Local TaxesBank Excise Tax 0 25,771Interstate Telecommunications Tax 0 1,682

Total Local Taxes $ 0 $ 3,592,651


Marriage Licenses $ 0 $ 1,501Permits

Other Permits 0 342Total Licenses and Permits $ 0 $ 1,843

Charges for Current ServicesEducation Charges

Lunch Payments - Adults $ 0 $ 7,618

(Continued)

Capital Projects

Fund

148

Exhibit J-6




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

Income from Breakfast $ 0 $ 13,017A la Carte Sales 0 114,233Community Service Fees - Children 0 510

Total Charges for Current Services $ 0 $ 135,378


Investment Income $ 1,102 $ 1,256Sale of Recycled Materials 0 977Miscellaneous Refunds 0 10,231Expenditure Credits 0 5,801

Nonrecurring ItemsSale of Equipment 0 2,698Contributions and Gifts 0 6,000

Total Other Local Revenues $ 1,102 $ 26,963


On-behalf Contributions for OPEB $ 0 $ 71,469State Education Funds

Basic Education Program 0 24,150,000Early Childhood Education 0 334,540School Food Service 0 15,475Other State Education Funds 0 493,420Career Ladder Program 0 80,029

(Continued)

Capital Projects

Fund

149

Exhibit J-6





State Revenue Sharing - T.V.A. $ 0 $ 218,717Other State Grants 0 32,388Other State Revenues 0 2,994

Total State of Tennessee $ 0 $ 25,399,032


USDA School Lunch Program $ 0 $ 1,193,245USDA - Commodities 0 78,854Breakfast 0 378,865USDA - Other 0 12,697Vocational Education - Basic Grants to States 0 74,529Title I Grants to Local Education Agencies 0 1,304,040Special Education - Grants to States 0 1,024,396Special Education Preschool Grants 0 37,319English Language Acquisition Grants 0 1,513Rural Education 0 162,184Eisenhower Professional Development State Grants 0 101,413Other Federal through State 0 207,751

Direct Federal RevenueOther Direct Federal Revenue 0 48,495

Total Federal Government $ 0 $ 4,625,301

Total $ 1,102 $ 33,781,168

Capital Projects

Fund

150

Exhibit J-7

Union County, TennesseeSchedule of Detailed Expenditures -

All Governmental Fund TypesFor the Year Ended June 30, 2016

General FundGeneral Government

County CommissionBoard and Committee Members Fees $ 49,087Social Security 3,755Audit Services 5,733

Total County Commission $ 58,575

Board of EqualizationBoard and Committee Members Fees $ 780

Total Board of Equalization 780

Beer BoardBoard and Committee Members Fees $ 800Social Security 61

Total Beer Board 861

County Mayor/ExecutiveCounty Official/Administrative Officer $ 73,738Secretary(ies) 27,717Part-time Personnel 12,235Social Security 8,549Pensions 6,358Medical Insurance 3,403Unemployment Compensation 283Communication 5,098Dues and Memberships 1,025Legal Notices, Recording, and Court Costs 309Maintenance and Repair Services - Equipment 861Printing, Stationery, and Forms 247Travel 1,176Other Contracted Services 5,803Food Supplies 209Office Supplies 2,687Data Processing Equipment 905Office Equipment 2,631

Total County Mayor/Executive 153,234

County AttorneyCounty Official/Administrative Officer $ 11,163Legal Services 2,884Postal Charges 75Judgments 110,000

Total County Attorney 124,122

Election CommissionCounty Official/Administrative Officer $ 57,459Deputy(ies) 21,286Election Commission 2,200Election Workers 14,083

(Continued)

151

Exhibit J-7



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

Election Commission (Cont.)Social Security $ 5,825Pensions 4,935Medical Insurance 9,276Unemployment Compensation 224Communication 1,157Data Processing Services 18,750Dues and Memberships 225Legal Notices, Recording, and Court Costs 1,739Maintenance and Repair Services - Equipment 138Postal Charges 110Printing, Stationery, and Forms 2,372Travel 6,811Other Contracted Services 460Office Supplies 1,771Office Equipment 468

Total Election Commission $ 149,289

Register of DeedsCounty Official/Administrative Officer $ 63,843Clerical Personnel 54,286Social Security 8,784Pensions 7,393Medical Insurance 3,422Unemployment Compensation 224Communication 1,157Data Processing Services 5,924Dues and Memberships 483Maintenance and Repair Services - Office Equipment 684Other Contracted Services 2,302Office Supplies 1,501Office Equipment 3,854

Total Register of Deeds 153,857

DevelopmentBoard and Committee Members Fees $ 1,600Social Security 122Unemployment Compensation 3Consultants 4,800

Total Development 6,525

County BuildingsMaintenance Personnel $ 64,478Social Security 4,967Pensions 4,019Medical Insurance 3,403Unemployment Compensation 232Janitorial Services 19,462

(Continued)

152

Exhibit J-7



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

County Buildings (Cont.)Maintenance Agreements $ 6,705Maintenance and Repair Services - Buildings 51,679Maintenance and Repair Services - Vehicles 951Pest Control 420Other Contracted Services 2,000Custodial Supplies 6,986Electricity 46,162Gasoline 52Propane Gas 8,664Water and Sewer 29,030Building and Contents Insurance 107,604Building Improvements 117Furniture and Fixtures 2,812

Total County Buildings $ 359,743

Other General AdministrationCommunication $ 1,533Data Processing Services 2,588Dues and Memberships 3,888Legal Notices, Recording, and Court Costs 4,565Maintenance and Repair Services - Vehicles 1,538Postal Charges 20,484Other Contracted Services 1,200Gasoline 3,201

Total Other General Administration 38,997

FinanceAccounting and Budgeting

Supervisor/Director $ 57,459Accountants/Bookkeepers 125,566Social Security 12,706Pensions 11,435Medical Insurance 23,956Unemployment Compensation 764Communication 3,528Data Processing Services 14,994Dues and Memberships 170Legal Notices, Recording, and Court Costs 554Postal Charges 4,024Travel 255Other Contracted Services 1,920Custodial Supplies 212Office Supplies 4,652Premiums on Corporate Surety Bonds 915Trustee's Commission 1,751Office Equipment 1,393

Total Accounting and Budgeting 266,254

(Continued)

153

Exhibit J-7



General Fund (Cont.)Finance (Cont.)

Property Assessor's OfficeCounty Official/Administrative Officer $ 54,021Deputy(ies) 26,998Clerical Personnel 31,663Other Salaries and Wages 23,732Social Security 10,166Pensions 8,528Medical Insurance 6,790Unemployment Compensation 360Communication 1,349Contracts with Other Public Agencies 14,302Dues and Memberships 80Legal Notices, Recording, and Court Costs 40Printing, Stationery, and Forms 481Travel 1,868Other Contracted Services 1,789Office Supplies 1,069Office Equipment 24

Total Property Assessor's Office $ 183,260

County Trustee's OfficeCounty Official/Administrative Officer $ 63,843Clerical Personnel 85,321Social Security 10,089Pensions 9,269Medical Insurance 20,349Unemployment Compensation 349Communication 1,176Data Processing Services 7,477Dues and Memberships 458Legal Notices, Recording, and Court Costs 900Maintenance and Repair Services - Office Equipment 200Postal Charges 3,971Printing, Stationery, and Forms 3,765Travel 179Office Supplies 2,649Office Equipment 1,733

Total County Trustee's Office 211,728

County Clerk's OfficeCounty Official/Administrative Officer $ 63,843Clerical Personnel 157,556Educational Incentive - Other County Employees 800Social Security 15,969Pensions 13,831Medical Insurance 17,718Unemployment Compensation 721Communication 4,389

(Continued)

154

Exhibit J-7



General Fund (Cont.)Finance (Cont.)

County Clerk's Office (Cont.)Data Processing Services $ 11,609Dues and Memberships 1,875Janitorial Services 2,100Maintenance and Repair Services - Buildings 295Pest Control 528Postal Charges 5,760Printing, Stationery, and Forms 1,782Travel 2,567Maintenance and Repair Services - Records 6,879Duplicating Supplies 684Electricity 3,095Office Supplies 1,847Water and Sewer 505

Total County Clerk's Office $ 314,353

Other FinanceTrustee's Commission $ 94,963

Total Other Finance 94,963

Administration of JusticeCircuit Court

County Official/Administrative Officer $ 63,843Clerical Personnel 108,024Jury and Witness Expense 14,842Social Security 12,780Pensions 10,510Medical Insurance 5,979Unemployment Compensation 599Communication 1,174Data Processing Services 15,276Dues and Memberships 538Legal Notices, Recording, and Court Costs 135Maintenance and Repair Services - Office Equipment 450Travel 293Electricity 383Library Books/Media 9,067Office Supplies 7,746Office Equipment 3,130

Total Circuit Court 254,769

General Sessions CourtJudge(s) $ 98,817Other Salaries and Wages 24,663Social Security 8,968Pensions 7,792Medical Insurance 8,766Unemployment Compensation 112

(Continued)

155

Exhibit J-7



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

General Sessions Court (Cont.)Travel $ 2,660Office Supplies 916

Total General Sessions Court $ 152,694

Chancery CourtCounty Official/Administrative Officer $ 63,843Clerical Personnel 58,433Social Security 9,112Pensions 7,652Medical Insurance 6,222Unemployment Compensation 276Communication 1,157Data Processing Services 4,640Dues and Memberships 458Maintenance and Repair Services - Office Equipment 615Travel 453Electricity 383Office Supplies 7,765Office Equipment 3,452

Total Chancery Court 164,461

Victim Assistance ProgramsContributions $ 13,628

Total Victim Assistance Programs 13,628

Public SafetySheriff's Department

County Official/Administrative Officer $ 70,228Supervisor/Director 45,693Deputy(ies) 484,756Investigator(s) 169,418Salary Supplements 28,800Secretary(ies) 29,988Social Security 60,599Pensions 50,590Medical Insurance 56,788Unemployment Compensation 3,377Communication 16,248Contributions 2,000Data Processing Services 14,772Dues and Memberships 1,500Evaluation and Testing 350Janitorial Services 780Maintenance and Repair Services - Buildings 1,668Maintenance and Repair Services - Equipment 2,566Maintenance and Repair Services - Office Equipment 1,011Maintenance and Repair Services - Vehicles 19,854

(Continued)

156

Exhibit J-7



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

Sheriff's Department (Cont.)Pest Control $ 594Travel 703Tuition 4,021Custodial Supplies 164Electricity 11,933Food Supplies 1,013Gasoline 83,526Law Enforcement Supplies 21,642Office Supplies 11,317Tires and Tubes 9,890Uniforms 11,650Vehicle Parts 18,790Water and Sewer 1,043Criminal Investigation of Applicants - TBI 400Motor Vehicles 13,450Office Equipment 5,585

Total Sheriff's Department $ 1,256,707

Special PatrolsDeputy(ies) $ 118,703Social Security 8,317Pensions 7,396Medical Insurance 15,224Unemployment Compensation 446

Total Special Patrols 150,086

JailSupervisor/Director $ 37,570Guards 502,610Secretary(ies) 29,977Social Security 41,860Pensions 34,630Medical Insurance 49,463Unemployment Compensation 3,024Communication 3,202Evaluation and Testing 365Maintenance and Repair Services - Buildings 22,708Maintenance and Repair Services - Office Equipment 1,244Pest Control 420Travel 2,432Other Contracted Services 106,859Custodial Supplies 16,377Drugs and Medical Supplies 26,509Food Preparation Supplies 201Food Supplies 107,829Law Enforcement Supplies 10,987Office Supplies 10,935

(Continued)

157

Exhibit J-7



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

Jail (Cont.)Prisoners Clothing $ 4,263Uniforms 11,416Vehicle Parts 1,717Other Supplies and Materials 1,195Food Service Equipment 2,091Motor Vehicles 18,450Office Equipment 5,230

Total Jail $ 1,053,564

Juvenile ServicesYouth Service Officer(s) $ 23,635Psychological Personnel 35,145Social Security 4,175Pensions 3,664Medical Insurance 4,460Unemployment Compensation 224Communication 2,139Contracts with Private Agencies 5,375Maintenance and Repair Services - Buildings 1,334Travel 475Office Supplies 2,425Office Equipment 1,062

Total Juvenile Services 84,113

Fire Prevention and ControlContributions $ 78,000

Total Fire Prevention and Control 78,000

Rescue SquadContributions $ 20,000

Total Rescue Squad 20,000

Other Emergency ManagementContracts with Private Agencies $ 151,000

Total Other Emergency Management 151,000

County Coroner/Medical ExaminerOther Contracted Services $ 33,369

Total County Coroner/Medical Examiner 33,369

Public Health and WelfareLocal Health Center

Communication $ 3,025Contracts with Private Agencies 5,283Dues and Memberships 200Janitorial Services 6,900Legal Notices, Recording, and Court Costs 178

(Continued)

158

Exhibit J-7



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

Local Health Center (Cont.)Maintenance and Repair Services - Buildings $ 12,204Pest Control 420Postal Charges 1,764Electricity 7,391Food Supplies 145Instructional Supplies and Materials 6,232Office Supplies 969Water and Sewer 1,824Liability Insurance 11,076

Total Local Health Center $ 57,611

Other Local Health ServicesMedical Personnel $ 88,616Social Security 6,715Pensions 5,101Medical Insurance 2,576Unemployment Compensation 574Travel 3,403Workers' Compensation Insurance 113

Total Other Local Health Services 107,098

Appropriation to StateContracts with Government Agencies $ 22,788

Total Appropriation to State 22,788

Sanitation ManagementContracts with Private Agencies $ 11,374

Total Sanitation Management 11,374

Convenience CentersLaborers $ 44,176Social Security 3,439Unemployment Compensation 409Disposal Fees 49,173

Total Convenience Centers 97,197

Social, Cultural, and Recreational ServicesSenior Citizens Assistance

Supervisor/Director $ 48,231Part-time Personnel 8,755Social Security 4,183Pensions 2,983Medical Insurance 6,615Unemployment Compensation 363Communication 1,773Contributions 7,000Maintenance and Repair Services - Buildings 434

(Continued)

159

Exhibit J-7



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

Senior Citizens Assistance (Cont.)Maintenance and Repair Services - Office Equipment $ 495Maintenance and Repair Services - Vehicles 1,239Pest Control 417Rentals 6,400Electricity 15,161Gasoline 1,340Office Supplies 100Water and Sewer 1,672

Total Senior Citizens Assistance $ 107,161

LibrariesLibrarians $ 53,436Part-time Personnel 645Other Salaries and Wages 54,234Social Security 7,740Pensions 5,291Medical Insurance 9,238Unemployment Compensation 802Communication 1,672Contracts with Public Carriers 600Pest Control 417Travel 1,407Custodial Supplies 1,181Library Books/Media 1,798Office Supplies 8,294Other Charges 19,683Office Equipment 3,967

Total Libraries 170,405

Parks and Fair BoardsMaintenance and Repair Services - Buildings $ 6,399Maintenance and Repair Services - Equipment 823Maintenance and Repair Services - Vehicles 548Electricity 2,259Food Supplies 59Gasoline 442General Construction Materials 11,887

Total Parks and Fair Boards 22,417

Agriculture and Natural ResourcesAgricultural Extension Service

Part-time Personnel $ 5,000Social Security 383Unemployment Compensation 70Contracts with Government Agencies 27,966Contracts with Private Agencies 937Data Processing Services 1,712

(Continued)

160

Exhibit J-7



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

Agricultural Extension Service (Cont.)Operating Lease Payments $ 7,200Travel 917Custodial Supplies 348Electricity 3,273Office Supplies 1,051Water and Sewer 480

Total Agricultural Extension Service $ 49,337

Forest ServiceContributions $ 500

Total Forest Service 500

Soil ConservationSecretary(ies) $ 33,374Social Security 2,466Pensions 2,079Medical Insurance 3,307Unemployment Compensation 112Data Processing Services 1,549Dues and Memberships 685Rentals 3,000Travel 318Electricity 2,200Instructional Supplies and Materials 2,460Office Supplies 268Water and Sewer 552

Total Soil Conservation 52,370

Other OperationsOther Economic and Community Development

Other Capital Outlay $ 487,328Total Other Economic and Community Development 487,328

Veterans' ServicesSupervisor/Director $ 13,770Social Security 1,053Unemployment Compensation 126Communication 1,550Contracts with Private Agencies 399Office Supplies 102

Total Veterans' Services 17,000

Other ChargesContributions $ 66,720

Total Other Charges 66,720

(Continued)

161

Exhibit J-7



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

Employee BenefitsWorkers' Compensation Insurance $ 49,065

Total Employee Benefits $ 49,065

Payments to CitiesContributions $ 11,000

Total Payments to Cities 11,000

MiscellaneousState Aid Projects $ 6,792

Total Miscellaneous 6,792

HighwaysLitter and Trash Collection

Deputy(ies) $ 25,435Part-time Personnel 3,500Social Security 2,052Pensions 1,788Medical Insurance 3,732Unemployment Compensation 130Dues and Memberships 150Maintenance and Repair Services - Vehicles 817Custodial Supplies 524Gasoline 2,271Instructional Supplies and Materials 4,797Uniforms 346

Total Litter and Trash Collection 45,542

Total General Fund $ 6,910,637

Ambulance Service FundPublic Health and Welfare

Ambulance/Emergency Medical ServicesSupervisor/Director $ 47,953Clerical Personnel 31,620Attendants 770,609In-service Training 5,526Social Security 60,991Pensions 48,021Medical Insurance 93,320Communication 17,346Data Processing Services 5,742Dues and Memberships 945Fiscal Agent Charges 4,500Licenses 2,720Maintenance and Repair Services - Buildings 5,108Maintenance and Repair Services - Equipment 372Maintenance and Repair Services - Vehicles 47,619

(Continued)

162

Exhibit J-7



Ambulance Service Fund (Cont.)Public Health and Welfare (Cont.)

Ambulance/Emergency Medical Services (Cont.)Postal Charges $ 1,507Printing, Stationery, and Forms 779Travel 2,972Remittance of Revenue Collected 344Disposal Fees 2,560Other Contracted Services 8,815Custodial Supplies 3,162Data Processing Supplies 480Diesel Fuel 30,541Drugs and Medical Supplies 62,074Electricity 12,440Natural Gas 960Office Supplies 1,152Tires and Tubes 8,349Uniforms 1,468Water and Sewer 1,795Other Supplies and Materials 13,017Liability Insurance 7,209Premiums on Corporate Surety Bonds 320Trustee's Commission 19,293Vehicle and Equipment Insurance 7,032Workers' Compensation Insurance 43,451Interest on Notes 500Building Improvements 702Data Processing Equipment 979Furniture and Fixtures 1,023

Total Ambulance/Emergency Medical Services $ 1,375,316

Total Ambulance Service Fund $ 1,375,316

Drug Control FundPublic Safety

Drug EnforcementConfidential Drug Enforcement Payments $ 9,000Veterinary Services 1,126Animal Food and Supplies 680Law Enforcement Supplies 32,485Trustee's Commission 468Building Construction 4,950Motor Vehicles 4,700

Total Drug Enforcement $ 53,409

Total Drug Control Fund 53,409

(Continued)

163

Exhibit J-7



Constitutional Officers - Fees FundAdministration of Justice

Chancery CourtSpecial Commissioner Fees/Special Master Fees $ 1,382

Total Chancery Court $ 1,382

Total Constitutional Officers - Fees Fund $ 1,382

Highway/Public Works FundOther Operations

MiscellaneousTransfers to Other Funds $ 118

Total Miscellaneous $ 118

HighwaysAdministration

County Official/Administrative Officer $ 70,228Assistant(s) 36,343Secretary(ies) 27,486Board and Committee Members Fees 16,200Social Security 10,946Pensions 8,040Medical Insurance 38,388Dues and Memberships 2,168Fiscal Agent Charges 15,000Maintenance and Repair Services - Buildings 50Remittance of Revenue Collected 48,580Office Supplies 440

Total Administration 273,869

Highway and Bridge MaintenanceForemen $ 60,718Equipment Operators - Heavy 102,703Equipment Operators - Light 91,356Truck Drivers 25,308Laborers 48,805Social Security 23,610Pensions 19,742Medical Insurance 97,462Rentals 273Other Contracted Services 92,786Asphalt - Cold Mix 1,233Asphalt - Hot Mix 1,025,600Crushed Stone 21,289Other Road Materials 1,750Pipe - Metal 3,420Road Signs 2,032

Total Highway and Bridge Maintenance 1,618,087

(Continued)

164

Exhibit J-7



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

Operation and Maintenance of EquipmentMechanic(s) $ 30,374Social Security 2,134Pensions 1,813Medical Insurance 12,777Other Contracted Services 776Diesel Fuel 26,799Equipment Parts - Heavy 18,070Equipment Parts - Light 29,154Garage Supplies 2,240Gasoline 27,283Lubricants 1,337Tires and Tubes 8,583

Total Operation and Maintenance of Equipment $ 161,340

Ferry OperationsEquipment Operators - Heavy $ 52,908Social Security 3,821Pensions 3,209Medical Insurance 16,570

Total Ferry Operations 76,508

Other ChargesCommunication $ 5,035Electricity 4,763Water and Sewer 644Trustee's Commission 22,463Vehicle and Equipment Insurance 25,317Workers' Compensation Insurance 27,949

Total Other Charges 86,171

Capital OutlayBridge Construction $ 261,429Highway Equipment 129,088

Total Capital Outlay 390,517

Total Highway/Public Works Fund $ 2,606,610

General Debt Service FundPrincipal on Debt

General GovernmentPrincipal on Bonds $ 61,685Principal on Notes 161,773

Total General Government $ 223,458

EducationPrincipal on Bonds $ 1,430,088

Total Education 1,430,088

(Continued)

165

Exhibit J-7



General Debt Service Fund (Cont.)Interest on Debt

General GovernmentInterest on Bonds $ 10,664Interest on Notes 5,856

Total General Government $ 16,520

EducationInterest on Bonds $ 319,147

Total Education 319,147

Other Debt ServiceGeneral Government

Trustee's Commission $ 19,176Other Debt Service 1,153

Total General Government 20,329

EducationOther Debt Service $ 7,160

Total Education 7,160

Total General Debt Service Fund $ 2,016,702

General Capital Projects FundCapital Projects

General Administration ProjectsTrustee's Commission $ 4,210

Total General Administration Projects $ 4,210

Administration of Justice ProjectsMotor Vehicles $ 20,000

Total Administration of Justice Projects 20,000

Social, Cultural, and Recreation ProjectsAsphalt - Hot Mix $ 10,000

Total Social, Cultural, and Recreation Projects 10,000

Total General Capital Projects Fund 34,210

Total Governmental Funds - Primary Government $ 12,998,266

166

Exhibit J-8


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

General Purpose School FundInstruction

Regular Instruction ProgramTeachers $ 7,038,726Career Ladder Program 44,417Career Ladder Extended Contracts 9,342Homebound Teachers 3,832Educational Assistants 147,708Longevity Pay 37,940Bonus Payments 143,070Other Salaries and Wages 32,767Certified Substitute Teachers 18,350Non-certified Substitute Teachers 104,205Social Security 443,904Pensions 661,097Employee and Dependent Insurance 11,005Life Insurance 4,160Medical Insurance 834,951Unemployment Compensation 13,410Employer Medicare 103,838Maintenance and Repair Services - Equipment 500Tuition 21,049Instructional Supplies and Materials 96,085Textbooks 248,313Regular Instruction Equipment 205,419

Total Regular Instruction Program $ 10,224,088

Special Education ProgramTeachers $ 953,615Career Ladder Program 6,000Homebound Teachers 6,591Educational Assistants 246,567Longevity Pay 5,705Other Salaries and Wages 15,204Certified Substitute Teachers 1,509Non-certified Substitute Teachers 18,519Social Security 72,646Pensions 100,139Employee and Dependent Insurance 14,481Life Insurance 882Medical Insurance 109,478Unemployment Compensation 3,058Employer Medicare 17,293Maintenance and Repair Services - Equipment 204Instructional Supplies and Materials 43,075Other Supplies and Materials 14,291Special Education Equipment 66,880

Total Special Education Program 1,696,137

(Continued)

167

Exhibit J-8



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

Vocational Education ProgramTeachers $ 669,865Career Ladder Program 1,000Longevity Pay 3,780Certified Substitute Teachers 2,421Non-certified Substitute Teachers 11,303Social Security 39,327Pensions 60,948Life Insurance 390Medical Insurance 105,494Unemployment Compensation 1,347Employer Medicare 9,227Operating Lease Payments 2,028Maintenance and Repair Services - Buildings 3,961Maintenance and Repair Services - Equipment 1,288Rentals 109Duplicating Supplies 2,768Instructional Supplies and Materials 14,890Textbooks 309Vocational Instruction Equipment 3,417

Total Vocational Education Program $ 933,872

Support ServicesHealth Services

Supervisor/Director $ 53,107Medical Personnel 89,689Clerical Personnel 17,336Social Security 9,257Pensions 13,131Employee and Dependent Insurance 2,387Life Insurance 95Medical Insurance 14,291Unemployment Compensation 296Employer Medicare 2,165Communication 2,063Travel 7,364Drugs and Medical Supplies 1,910Other Supplies and Materials 6,627

Total Health Services 219,718

Other Student SupportGuidance Personnel $ 302,984Secretary(ies) 19,938Other Salaries and Wages 46,711Social Security 22,260Pensions 27,541Life Insurance 194

(Continued)

168

Exhibit J-8



General Purpose School Fund (Cont.)Support Services (Cont.)

Other Student Support (Cont.)Medical Insurance $ 34,639Unemployment Compensation 692Employer Medicare 5,206Contracts with Government Agencies 88,895Evaluation and Testing 6,215Travel 97

Total Other Student Support $ 555,372

Regular Instruction ProgramSupervisor/Director $ 165,554Career Ladder Program 4,000Librarians 92,923Longevity Pay 840Non-certified Substitute Teachers 1,700Social Security 16,376Pensions 24,535Life Insurance 101Medical Insurance 16,806Unemployment Compensation 273Employer Medicare 3,830Communication 1,416Contracts with Private Agencies 24,750Dues and Memberships 200Printing, Stationery, and Forms 3,206Rentals 1,200Travel 54,283Other Contracted Services 45,760Food Supplies 329Library Books/Media 979Office Supplies 3,500Other Supplies and Materials 41,590In Service/Staff Development 31,066Other Charges 3,215Data Processing Equipment 9,170

Total Regular Instruction Program 547,602

Special Education ProgramCareer Ladder Program $ 1,000Secretary(ies) 147,554Longevity Pay 1,435Other Salaries and Wages 71,920Social Security 13,399Pensions 14,913Employee and Dependent Insurance 11,433Life Insurance 198Medical Insurance 8,826

(Continued)

169

Exhibit J-8




Special Education Program (Cont.)Unemployment Compensation $ 561Employer Medicare 3,134Communication 1,973Operating Lease Payments 39Postal Charges 980Travel 4,224Other Contracted Services 158,645Duplicating Supplies 3,291Other Supplies and Materials 60,983In Service/Staff Development 68,857Other Equipment 112,602

Total Special Education Program $ 685,967

Vocational Education ProgramSupervisor/Director $ 74,244Career Ladder Program 1,000Secretary(ies) 24,952Longevity Pay 805Social Security 5,909Pensions 8,353Employee and Dependent Insurance 2,795Life Insurance 47Medical Insurance 11,388Unemployment Compensation 128Employer Medicare 1,382Travel 3,531

Total Vocational Education Program 134,534

Other ProgramsOn-behalf Payments to OPEB $ 71,469

Total Other Programs 71,469

Board of EducationSecretary to Board $ 3,600Clerical Personnel 44,297Longevity Pay 700Board and Committee Members Fees 24,900Social Security 4,531Pensions 3,034Life Insurance 25Unemployment Compensation 69Employer Medicare 1,060Audit Services 11,700Contracts with Private Agencies 100Contributions 2,500Dues and Memberships 17,467

(Continued)

170

Exhibit J-8




Board of Education (Cont.)Operating Lease Payments $ 1,404Legal Services 18,559Legal Notices, Recording, and Court Costs 170Duplicating Supplies 3,839Other Supplies and Materials 7,722Liability Insurance 101,521Trustee's Commission 92,416Workers' Compensation Insurance 130,855In Service/Staff Development 1,333Fee Waivers 7,303

Total Board of Education $ 479,105

Director of SchoolsCounty Official/Administrative Officer $ 93,900Career Ladder Program 2,000Social Security 5,752Pensions 8,554Life Insurance 25Medical Insurance 11,164Unemployment Compensation 17Employer Medicare 1,346Communication 3,202Postal Charges 1,090Travel 5,185Office Supplies 240Premiums on Corporate Surety Bonds 490Fines, Assessments, and Penalties 675

Total Director of Schools 133,640

Office of the PrincipalPrincipals $ 603,039Career Ladder Program 6,000Assistant Principals 149,944Secretary(ies) 302,766Longevity Pay 8,925Social Security 64,246Pensions 89,592Employee and Dependent Insurance 10,050Life Insurance 663Medical Insurance 92,884Unemployment Compensation 1,784Employer Medicare 15,033Communication 78,073Operating Lease Payments 20,328Remittance of Revenue Collected 540Duplicating Supplies 32,242Other Charges 5,203

Total Office of the Principal 1,481,312

(Continued)

171

Exhibit J-8




Fiscal ServicesFiscal Agent Charges $ 163,769

Total Fiscal Services $ 163,769

Operation of PlantCustodial Personnel $ 553,572Longevity Pay 1,575Social Security 34,087Pensions 30,628Employee and Dependent Insurance 18,292Life Insurance 708Unemployment Compensation 2,737Employer Medicare 7,972Contracts with Government Agencies 425Contracts with Private Agencies 62,224Permits 1,540Custodial Supplies 57,832Electricity 658,197Natural Gas 48,407Water and Sewer 95,140Building and Contents Insurance 141,794

Total Operation of Plant 1,715,130

Maintenance of PlantMaintenance Personnel $ 121,122Social Security 7,177Pensions 7,376Life Insurance 74Medical Insurance 14,168Unemployment Compensation 178Employer Medicare 1,679Communication 1,297Contracts with Private Agencies 37,480Maintenance and Repair Services - Buildings 134,123Maintenance and Repair Services - Equipment 99,900Maintenance and Repair Services - Vehicles 136Travel 414Gasoline 2,353Uniforms 110

Total Maintenance of Plant 427,587

TransportationOther Salaries and Wages $ 43,167Social Security 2,649Pensions 1,141Unemployment Compensation 280Employer Medicare 620

(Continued)

172

Exhibit J-8




Transportation (Cont.)Contracts with Parents $ 6,638Contracts with Vehicle Owners 1,043,149Evaluation and Testing 3,502

Total Transportation $ 1,101,146

Central and OtherOther Salaries and Wages $ 268,195Social Security 16,093Pensions 17,840Employee and Dependent Insurance 900Life Insurance 147Medical Insurance 14,417Unemployment Compensation 384Employer Medicare 3,764Communication 3,674Contracts with Other Public Agencies 42,803Maintenance Agreements 2,246Maintenance and Repair Services - Equipment 54,597Maintenance and Repair Services - Office Equipment 72,678Travel 2,110Gasoline 267Office Supplies 394Vehicle Parts 38Other Equipment 27,609

Total Central and Other 528,156

Operation of Non-Instructional ServicesCommunity Services

Other Salaries and Wages $ 36,912Social Security 1,968Pensions 2,222Life Insurance 25Medical Insurance 11,214Unemployment Compensation 64Employer Medicare 460

Total Community Services 52,865

Early Childhood EducationSupervisor/Director $ 6,747Teachers 119,966Educational Assistants 50,290Other Salaries and Wages 4,853Certified Substitute Teachers 70Non-certified Substitute Teachers 2,206Social Security 10,274Pensions 13,867

(Continued)

173

Exhibit J-8



General Purpose School Fund (Cont.)Operation of Non-Instructional Services (Cont.)

Early Childhood Education (Cont.)Life Insurance $ 169Medical Insurance 19,315Unemployment Compensation 589Employer Medicare 2,403Travel 743Instructional Supplies and Materials 17,075Other Supplies and Materials 17,344In Service/Staff Development 1,664Other Equipment 59,146

Total Early Childhood Education $ 326,721

Other Debt ServiceEducation

Other Debt Service $ 775,250Total Education 775,250

Total General Purpose School Fund $ 22,253,440

School Federal Projects FundInstruction

Regular Instruction ProgramTeachers $ 181,313Educational Assistants 258,100Longevity Pay 3,465Other Salaries and Wages 20,901Certified Substitute Teachers 1,895Non-certified Substitute Teachers 20,499Social Security 28,532Pensions 33,382Employee and Dependent Insurance 8,384Life Insurance 537Medical Insurance 37,654Unemployment Compensation 1,897Employer Medicare 6,676Instructional Supplies and Materials 141,557Other Supplies and Materials 21,644Regular Instruction Equipment 145,366

Total Regular Instruction Program $ 911,802

Special Education ProgramTeachers $ 286,105Educational Assistants 152,822Speech Pathologist 77,980Longevity Pay 2,590Other Salaries and Wages 7,312Certified Substitute Teachers 526

(Continued)

174

Exhibit J-8



School Federal Projects Fund (Cont.)Instruction (Cont.)

Special Education Program (Cont.)Non-certified Substitute Teachers $ 4,247Social Security 30,844Pensions 42,343Employee and Dependent Insurance 12,001Life Insurance 439Medical Insurance 49,180Unemployment Compensation 1,362Employer Medicare 7,217Special Education Equipment 11,303

Total Special Education Program $ 686,271

Vocational Education ProgramInstructional Supplies and Materials $ 9,964Other Supplies and Materials 8,000Vocational Instruction Equipment 40,415


Support ServicesOther Student Support

Longevity Pay $ 1,715Other Salaries and Wages 214,172Social Security 12,910Pensions 19,516Life Insurance 98Medical Insurance 20,619Unemployment Compensation 256Employer Medicare 3,019Travel 11,150In Service/Staff Development 3,073Other Charges 6,431

Total Other Student Support 292,959

Regular Instruction ProgramSupervisor/Director $ 87,666Clerical Personnel 44,297Other Salaries and Wages 110,958In-service Training 1,750Social Security 14,500Pensions 20,756Life Insurance 98Medical Insurance 23,929Unemployment Compensation 251Employer Medicare 3,391Communication 2,075Travel 2,891Other Supplies and Materials 7,760

(Continued)

175

Exhibit J-8



School Federal Projects Fund (Cont.)Support Services (Cont.)

Regular Instruction Program (Cont.)In Service/Staff Development $ 29,020Other Charges 7,268

Total Regular Instruction Program $ 356,610

Special Education ProgramSupervisor/Director $ 81,962Psychological Personnel 52,085Other Salaries and Wages 39,021Social Security 10,518Pensions 15,645Life Insurance 74Medical Insurance 10,578Unemployment Compensation 192Employer Medicare 2,460Other Supplies and Materials 3,101In Service/Staff Development 13,895

Total Special Education Program 229,531

Vocational Education ProgramIn Service/Staff Development $ 1,771


TransportationContracts with Parents $ 1,778Contracts with Vehicle Owners 125,772

Total Transportation 127,550

Total School Federal Projects Fund $ 2,664,873

Central Cafeteria FundOperation of Non-Instructional Services

Food ServiceSupervisor/Director $ 56,053Career Ladder Program 1,000Cafeteria Personnel 485,057Social Security 32,924Pensions 31,159Life Insurance 733Medical Insurance 27,753Unemployment Compensation 3,490Employer Medicare 7,700Communication 406Fiscal Agent Charges 13,556Maintenance and Repair Services - Equipment 23,504Travel 1,945Other Contracted Services 29,749

(Continued)

176

Exhibit J-8



Central Cafeteria Fund (Cont.)Operation of Non-Instructional Services (Cont.)

Food Service (Cont.)Food Preparation Supplies $ 67,847Food Supplies 646,059Office Supplies 2,131USDA - Commodities 74,187Other Supplies and Materials 1,576Refunds 15Other Charges 1,260Food Service Equipment 9,972

Total Food Service $ 1,518,076

Total Central Cafeteria Fund $ 1,518,076

Other Education Special Revenue FundInstruction

Regular Instruction ProgramContracts with Private Agencies $ 6,288,413Instructional Supplies and Materials 4,080Textbooks 2,649

Total Regular Instruction Program $ 6,295,142

Support ServicesOffice of the Principal

Principals $ 75,000Social Security 4,650Pensions 6,780Life Insurance 21Unemployment Compensation 72Employer Medicare 1,088Communication 500Data Processing Services 6,284

Total Office of the Principal 94,395

Total Other Education Special Revenue Fund 6,389,537

Education Capital Projects FundCapital Outlay

Regular Capital OutlayBuilding Improvements $ 268,046

Total Regular Capital Outlay $ 268,046

Total Education Capital Projects Fund 268,046

Other Capital Projects FundCapital Projects

Education Capital ProjectsContracts with Private Agencies $ 1,747,898

Total Education Capital Projects $ 1,747,898

Total Other Capital Projects Fund 1,747,898

Total Governmental Funds - Union County School Department $ 34,841,870

177

Exhibit J-9

Union County, TennesseeSchedule of Detailed Receipts, Disbursements, and Changes in Cash Balance - City Agency FundFor the Year Ended June 30, 2016

Cities -Sales Tax

Fund

Cash Receipts Local Option Sales Tax $ 628,433Total Cash Receipts $ 628,433

Cash Disbursements Remittance of Revenues Collected $ 622,149 Trustee's Commission 6,284Total Cash Disbursements $ 628,433

Excess of Cash Receipts Over (Under) Cash Disbursements $ 0Cash Balance, July 1, 2015 0

Cash Balance, June 30, 2016 $ 0

178

SINGLE AUDIT SECTION

179





Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements

Performed in Accordance With Government Auditing Standards Union County Mayor and Board of County Commissioners Union 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 Union County, Tennessee, as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise Union County’s basic financial statements, and have issued our report thereon dated February 17, 2017. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered Union 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 Union County’s internal control. Accordingly, we do not express an opinion on the effectiveness of Union County’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less

180

severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. We did identify a certain deficiency in internal control, described in the accompanying Schedule of Findings and Questioned Costs that we consider to be a significant deficiency: 2016-001. Compliance and Other Matters As part of obtaining reasonable assurance about whether Union 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 no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Union County’s Responses to the Finding Union County’s responses to the finding identified in our audit are described in the accompanying Schedule of Findings and Questioned Costs. Union County’s responses were not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on them. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Union County’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Very truly yours,


181





Independent Auditor’s Report on Compliance for Each Major Federal Program;

Report on Internal Control Over Compliance; and Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance

Union County Mayor and Board of County Commissioners Union County, Tennessee To the County Mayor and Board of County Commissioners: Report on Compliance for Each Major Federal Program We have audited Union 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 Union County's major federal programs for the year ended June 30, 2016. Union County's major federal programs are identified in the summary of auditor's results section of the accompanying Schedule of Findings and Questioned Costs.

Management's Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Auditor's Responsibility Our responsibility is to express an opinion on compliance for each of Union 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

182

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 Union County's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of Union County's compliance. Opinion on Each Major Federal Program In our opinion, Union County complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2016. Report on Internal Control Over Compliance Management of Union 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 Union 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 Union County's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

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The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Union County, Tennessee, as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise Union County’s basic financial statements. We issued our report thereon dated February 17, 2017, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Schedule of Expenditures of Federal Awards is fairly stated in all material respects in relation to the basic financial statements as a whole. Very truly yours,


184

Union County, TennesseeSchedule of Expenditures of Federal Awards and State Grants (1) (2)For the Year-Ended June 30, 2016

Federal Pass-throughFederal/Pass-Through Agency/State CFDA Entity IdentifyingGrantor Program Title Number Number Expenditures

U.S. Department of Agriculture: Passed-through State Department of Education: Child Nutrition Cluster: School Breakfast Program 10.553 N/A $ 378,865 National School Lunch Program 10.555 N/A 1,205,942 (4) Healthy, Hunger-Free Kids Act of 2010 Childhood Hunger Research and and Demonstration Projects 10.592 N/A 3,043 Passed-through State Department of Agriculture: Child Nutrition Cluster: National School Lunch Program (Commodities - Noncash Assistance) 10.555 N/A 74,187 (4) National School Lunch Program (Commodities - Cash Assistance) 10.555 N/A 4,667 (4) Passed-through State Department of Human Services: Special Supplement Nutrition Program for Women, Infants, and Children 10.557 N/A 12,156Total U.S. Department of Agriculture $ 1,678,860

U.S. Department of Housing and Urban Development: Passed-through State Department of Economic and Community Development: Community Development Block Grants/State's Program and Non-Entitlement Grants in Hawaii 14.228 (3) $ 488,698Total U.S. Department of Housing and Urban Development $ 488,698

U.S. Department of Transportation: Passed-through Governor's Highway Safety Office: National Priority Safety Programs 20.616 (3) $ 15,418Total U.S. Department of Transportation $ 15,418

U.S. Department of Education: Passed-through State Department of Education: Title 1 Grants to Local Educational Agencies 84.010 N/A $ 1,268,055 Special Education Cluster: Special Education-Grants to States 84.027 N/A 1,024,396 Special Education - Preschool Grants 84.173 N/A 37,319 Career and Technical Education-Basic Grants to States 84.048 N/A 74,529 Gaining Early Awareness and Readiness for Undergraduate Programs 84.334 N/A 105,856 Rural Education 84.358 N/A 174,179 English Language Acquisition Grants 84.365 N/A 1,513 Improving Teacher Quality State Grants 84.367 N/A 125,403 Passed-through State Department of Human Services: Rehabilitation Services - Vocational Rehabilitation Grants to States 84.126 N/A 33,685 Total U.S. Department of Education $ 2,844,935

(Continued)

185

Union County, TennesseeSchedule of Expenditures of Federal Awards and State Grants (1) (2) (Cont.)

Federal Pass-throughFederal/Pass-Through Agency/State CFDA Entity IdentifyingGrantor Program Title Number Number Expenditures

U.S. Department of Health and Human Services: Passed-through East Tennessee Human Resource Agency: Special Programs for the Aging - Title III, Part B - Grants for Supportive Services and Senior Centers 93.044 N/A $ 12,207 Passed-through State Department of Health and Human Services: Injury Prevention and Control Research and State and Community Based Programs 93.136 N/A 995 Family Planning Services 93.217 N/A 2,790 Medical Assistance Program 93.778 N/A 30,774 HIV Prevention Activities: Health Department Based 93.940 N/A 366 Maternal and Child Health Services Block Grant to States 93.994 N/A 3,328 Passed-through State Department of Mental Health and Developmental Disabilities: Block Grants for Prevention and Treatment of Substance Abuse 93.959 (3) 65,167Total U.S. Department of Health and Human Services $ 115,627

U.S. Department of Homeland Security: Passed-through State Department of Military: Homeland Security Grant Program 97.067 (3) $ 6,792 Total U.S. Department of Homeland Security $ 6,792

Total Expenditures of Federal Grants $ 5,150,330

ContractNumber

State Grants Juvenile Services Program - State Children's Services Commission N/A (3) $ 13,500 Litter Program - State Department of Transportation N/A (3) 24,602 Law Enforcement Training Program N/A (3) 28,800 Early Childhood Education- State Department of Education N/A (3) 334,540 Internet Connectivity Grant - State Department of Education N/A (3) 11,183 Coordinated School Health Program N/A (3) 90,000 Family Resource Centers - State Department of Education N/A (3) 29,612 Safe Schools Act - State Department of Education N/A (3) 27,120

Total State Grants $ 559,357

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) Union County elected not to use the 10% de minimus cost rate permitted in the Uniform Guidance.(3) Information not available.(4) Total for CFDA No. 10.555 is $1,284,796.

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Union County, TennesseeSummary Schedule of Prior-year FindingsFor the Year Ended June 30, 2016

Fiscal Page Finding CFDAYear Number Number Number

2015 175 2015-001 Duties were not Segregated Adequately N/A Not Corrected - Seein the Offices of Circuit and General Explanation on CorrectiveSessions Courts Clerk, Clerk and Master Action PlanRegister of Deeds, Sheriff, and theAmbulance Service

There were no prior-year federal award findings to report.

Title of Finding Current Status

Government Auditing Standards require auditors to report the status of uncorrected findings from prior audits. Inaddition, OMB's Uniform Guidance requires auditees to report the status of all prior-year findings whether corrected ornot. Presented below are financial statement findings along with their current status from the Annual Financial Reportfor Union County, Tennessee, for the year ended June 30, 2016

Prior-year Financial Statement Findings

Prior-year Federal Awards Findings

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Financial Statements:

1. Our report on the financial statements of Union County is unmodified.

2. Internal Control Over Financial Reporting:

* Material weakness identified? NO

* Significant deficiency identified? YES

3. Noncompliance material to the financial statements noted? NO

Federal Awards:

4. Internal Control Over Major Federal Programs:

* Material weakness identified? NO

* Significant deficiency identified? NONE REPORTED

5. Type of report auditor issued on compliance for major programs: UNMODIFIED

6. Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? NO

7. Identification of Major Federal Programs:

* CFDA Numbers: 84.027 and 84.173 Special Education Cluster: SpecialEducation - Grants to States andSpecial Education - Preschool Grants

8. Dollar threshold used to distinguish between Type A and Type B Programs: $750,000

9. Auditee qualified as low-risk auditee? YES


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 A finding and recommendation, as a result of our audit are presented below. We reviewed this finding and recommendation with management to provide an opportunity for their response. Written responses are paraphrased and presented following the finding and recommendation. The circuit and general sessions courts clerk, clerk and master, register of deeds, sheriff, and county mayor provided corrective action plans, which are paraphrased and presented separately in the Management’s Corrective Action Plan in the Single Audit Section of this report. Findings relating specifically to the audit of federal awards, if any, are separately presented under Part III, Findings and Questioned Costs for Federal Awards. OFFICES OF CIRCUIT AND GENERAL SESSIONS COURTS CLERK, CLERK AND MASTER, REGISTER OF DEEDS, SHERIFF, AND THE AMBULANCE SERVICE FINDING 2016-001 DUTIES WERE NOT SEGREGATED ADEQUATELY (Internal Control – Significant Deficiency Under Government

Auditing Standards) Duties were not segregated adequately among officials and employees in the Offices of Circuit and General Sessions Court Clerk, Clerk and Master, Register of Deeds, Sheriff, and the Ambulance Service. Officials 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 provide reasonable assurance of the reliability of financial reporting and of the effectiveness and efficiency of operations. This lack of segregation of duties is the result of management’s decisions based on the availability of financial resources and is a significant deficiency in internal controls that increases the risk of unauthorized transactions. Also, this deficiency is the result of management’s failure to correct the finding noted in the prior-year audit report. RECOMMENDATION Officials should segregate duties to the extent possible using available resources. MANAGEMENT’S RESPONSE – CIRCUIT AND GENERAL SESSIONS COURTS CLERK I agree with the finding and have corrected the finding. MANAGEMENT’S RESPONSE – CLERK AND MASTER For a number of years this has been an audit finding for this office. Since my appointment, I have put several segregation of duties and internal controls in place. I understand the audit finding. I have put into place a very detailed segregation of duties based on the checklist and developed internal controls earlier in fiscal year 2017. My office staff has been preforming their duties by these guidelines. In conclusion, I accept the 2016 audit finding. All measures have been put in place to avoid this finding in the future.

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MANAGEMENT’S RESPONSE – REGISTER OF DEEDS I agree with the finding, but we are taking steps to correct this problem. MANAGEMENT’S RESPONSE – SHERIFF The Union County Sheriff's Office agrees with the audit finding for the year 2015-2016. This office implemented the internal controls segregation of duties checklist in July 2016 in an effort to avoid this audit finding in the future. MANAGEMENT’S RESPONSE – COUNTY MAYOR I concur with the above finding and I will implement internal controls to segregate duties to the extent possible using available resources. I will utilize the segregation of duties checklists on the Division of Local Government Audit's website as a guide for how to adequately segregate duties in small offices.

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PART III, FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS There were no findings and questioned costs related to federal awards for the year ended June 30, 2016.

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Union County, Tennessee Management’s Corrective Action Plan

For the Year Ended June 30, 2016 We reviewed the financial statement and federal award findings and recommendations with management to provide an opportunity for their response as required by the auditee requirements within Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Management’s corrective action plans for all financial statement findings and federal award findings are presented below:

Corrective Action - Financial Statement Findings OFFICES OF CIRCUIT AND GENERAL SESSIONS COURTS CLERK, CLERK AND MASTER, REGISTER OF DEEDS, SHERIFF, AND THE AMBULANCE SERVICE FINDING 2016-001 DUTIES WERE NOT SEGREGATED ADEQUATELY Response and Corrective Action Plan Prepared by: Barbara J. Williams, Circuit and General Sessions Courts Clerk; Sandra Edmondson, Clerk and Master; Mary Beth Kitts, Register of Deeds; Billy Breeding, Sheriff, Brian Smith, Chief Deputy, and Christi Raby, Secretary Sheriff’s Department; Michael Williams, County Mayor Persons Responsible for Implementing the Corrective Action: Barbara J. Williams, Circuit and General Sessions Court Clerk; Sandra Edmondson, Clerk and Master; Mary Beth Kitts, Register of Deeds; Billy Breeding, Sheriff, Brian Smith, Chief Deputy, and Christi Raby, Secretary - Sheriff’s Department; Andrew Reed, EMS Director Anticipated Completion Date of Corrective Action: Various Repeat Finding: Yes Reason Why Corrective Action was Not Taken – PY: Circuit and General Sessions Courts Clerk: No reason given. Clerk and Master: This small office has limited resources available which effects the number of personnel. Register: This office has had this finding in the previous years. We are a very small county that has very limited monies available. I have two employees and with vacations, sick days, etc., this leaves us with limited employees to segregate the duties. I have been in office for 18 years and was not aware of the website to utilize in developing an internal control manual. Sheriff: The Union County Sheriff's Office did not feel resources were available to correct this finding and we did not want to free up staff from other duties to implement segregation of duties.

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County Mayor: Mr. Reed did not believe they had the resources to correct this finding. Planned Corrective Action: Circuit and General Sessions Courts Clerk: Action has been taken to correct the finding. I have my internal controls manual in place and started implementing the internal controls to segregate duties in February 2016. I have utilized the segregation of duties checklists on the Division of Local Government Audit's website as a guide for how to adequately segregate duties in small offices. Clerk and Master: This has been an audit finding for this office long before my appointment in February 2014. Since 2014, I have put into place many of the segregation of duties on the checklist and the internal controls. In my conversations with the auditors and with their guidance, a more detailed segregation of duties and internal control manual have been prepared and have already been implemented in the 2017 fiscal year. A copy of each is in the Handbook of the Clerk and Master and are practiced daily by all staff. Register of Deeds: I began in April of 2016 implementing the internal control manual. I have at this time finished the manual segregating the duties in this office by utilizing the segregation of duties checklists on the Local Government website. I have at this time completed this manual and to the best of my knowledge, we are taking all the steps necessary to correct this problem. Sheriff: The Union County Sheriff's Office will implement internal controls to segregate duties to the extent possible using available resources. We will utilize the segregation of duties checklists on the Division of Local Government Audit's website as a guide for how to adequately segregate duties in small offices. County Mayor: I will implement internal controls to segregate duties to the extent possible using available resources. I will utilize the segregation of duties checklists on the Division of Local Government Audit's website as a guide for how to adequately segregate duties in small offices.

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Documents

UNION COUNTY TENNESSEE - TN Comptroller · Schedule of Changes in Net Pension Liability (Asset) and Related Ratios Based on Participation in the Public Employee Pension Plan ... Union