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ANNUAL FINANCIAL REPORT

GRAINGER COUNTY, TENNESSEE FOR THE YEAR ENDED JUNE 30, 2019

DIVISION OF LOCAL GOVERNMENT AUDIT

ANNUAL FINANCIAL REPORT

GRAINGER COUNTY, TENNESSEE

FOR THE YEAR ENDED JUNE 30, 2019

COMPTROLLER OF THE TREASURY JUSTIN P. WILSON

DIVISION OF LOCAL GOVERNMENT AUDIT JAMES R. ARNETTE

Director

VERNA DAVIS, CPA CODY EIDSON MARK TREECE, CPA, CGFM GREG BRUSH, CISA Audit Manager 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

Grainger County Officials 8

FINANCIAL SECTION 9

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

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

Fund Financial Statements:Governmental Funds:

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

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

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

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

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

General Fund C-5 25-28Highway/Public Works Fund C-6 29

Fiduciary Funds:Statement of Fiduciary Assets and Liabilities D 30

Index and Notes to the Financial Statements 31-89REQUIRED SUPPLEMENTARY INFORMATION: 90

Schedule of Changes in Net Pension Liability (Asset) and Related Ratios Based on Participation in the Public Employee Pension Planof TCRS – Primary Government E-1 91

Schedule of Contributions Based on Participation in the Public EmployeePension Plan of TCRS – Primary Government E-2 92

Schedule of Contributions Based on Participation in the TeacherRetirement Plan of TCRS – Discretely Presented GraingerCounty School Department E-3 93

Schedule of Contributions Based on Participation in the TeacherLegacy Pension Plan of TCRS – Discretely Presented GraingerCounty School Department E-4 94

GRAINGER COUNTY, TENNESSEETABLE OF CONTENTS

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Exhibit Page(s)

Schedule of Proportionate Share of the Net Pension Liability (Asset)in the Teacher Pension Plan of TCRS – Discretely PresentedGrainger County School Department E-5 95

Schedule of Proportionate Share of the Net Pension Liability (Asset)in the Teacher Legacy Pension Plan of TCRS – Discretely PresentedGrainger County School Department E-6 93

Schedule of Changes in the Total OPEB Liability and Related Ratios - Local Education Plan – Discretely Presented Grainger County School Department E-7 97

Notes to the Required Supplemental Information 98COMBINING AND INDIVIDUAL FUND FINANCIAL

STATEMENTS AND SCHEDULES: 99Nonmajor Governmental Funds: 100-101

Combining Balance Sheet F-1 102-105Combining Statement of Revenues, Expenditures, and Changes

in Fund Balances F-2 106-109Schedules of Revenues, Expenditures, and Changes in Fund

Balances – Actual (Budgetary Basis) and Budget:Courthouse and Jail Maintenance Fund F-3 110Law Library Fund F-4 111Solid Waste/Sanitation Fund F-5 112Drug Control Fund F-6 113Sports and Recreation Fund F-7 114

Major Governmental Fund: 115Schedule of Revenues, Expenditures, and Changes in Fund

Balance – Actual and Budget:General Debt Service Fund G 116

Fiduciary Funds: 117Combining Statement of Fiduciary Assets and Liabilities H-1 118Combining Statement of Changes in Assets and Liabilities –

All Agency Funds H-2 119Component Unit:

Discretely Presented Grainger County School Department: 120Statement of Activities I-1 121Balance Sheet – Governmental Funds I-2 122Reconciliation of the Balance Sheet of Governmental Funds

to the Statement of Net Position I-3 123Statement of Revenues, Expenditures, and Changes in Fund

Balances – Governmental Funds I-4 124Reconciliation of the Statement of Revenues, Expenditures,

and Changes in Fund Balances of Governmental Fundsto the Statement of Activities I-5 125

Combining Balance Sheet – Nonmajor Governmental Funds I-6 126Combining Statement of Revenues, Expenditures, and

Changes in Fund Balances – Nonmajor Governmental Funds I-7 127Schedules of Revenues, Expenditures, and Changes in Fund

Balances – Actual (Budgetary Basis) and Budget:General Purpose School Fund I-8 128-129School Federal Projects Fund I-9 130Central Cafeteria Fund I-10 131

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Exhibit Page(s)

Miscellaneous Schedules: 132Schedule of Changes in Long-term Notes, Bonds, and Other Loans

Payable J-1 133Schedule of Long-term Debt Requirements by Year J-2 134-135Schedule of Salaries and Official Bonds of Principal Officials –

Primary Government and Discretely Presented GraingerCounty School Department J-3 136

Schedule of Detailed Revenues – All Governmental Fund Types J-4 137-148Schedule of Detailed Revenues – All Governmental Fund Types –

Discretely Presented Grainger County School Department J-5 149-152Schedule of Detailed Expenditures – All Governmental Fund Types J-6 153-169Schedule of Detailed Expenditures – All Governmental Fund Types –

Discretely Presented Grainger County School Department J-7 170-180Schedule of Detailed Receipts, Disbursements, and Changes in

Cash Balance – City Agency Fund J-8 181

SINGLE AUDIT SECTION 182

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

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

Schedule of Expenditures of Federal Awards and State Grants 188-189Summary Schedule of Prior-year Findings 190Schedule of Findings and Questioned Costs 191-196Management's Corrective Action Plan 197-201Best Practice 202

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Summary of Audit Findings Annual Financial Report

Grainger County, Tennessee For the Year Ended June 30, 2019

Scope

We have audited the basic financial statements of Grainger County as of and for the year ended June 30, 2019.

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

Findings

The following are summaries of the audit findings: OFFICE OF COUNTY MAYOR ♦ Ambulance Service employees received incentive pay without the approval of the county

commission. ♦ Competitive bids were not solicited for the construction of a building addition. OFFICE OF ROAD SUPERINTENDENT ♦ The office had deficiencies in payroll deductions. ♦ Expenditures exceeded appropriations in the Capital Outlay major appropriation cate-

gory.

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INTRODUCTORY SECTION

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Grainger County Officials June 30, 2019 Officials David M. Byrd, County Mayor Charlie McAnally, Road Superintendent Edwin Jarnagin, Director of Schools Rena Greer, Trustee Johnny Morgan, Assessor of Property Angie Lamb, County Clerk Sherry Clifton, Circuit and General Sessions Courts Clerk Vickie Greenlee, Clerk and Master Rick Diamond, Register of Deeds James Harville, Sheriff Board of County Commissioners Johnny Baker, Chairman Wendy Noe James Acuff Rodney Overbay Andy Cameron Leon Spoone Gary Wayne Dalton Darell Stratton Justin Epperson Luke Stratton Mike Holt Darrell Williams Larry Johnson Scott Wynn Rebecca Johnson Board of Education Harold Frazier, Chairman Karen McNish Johnny Brooks Gary Staley Donnie Kitts Norma Tate Marcus Long Larry Turley Steve Hodge Derek Williams Audit Committee Scott Wynn, Chairman James Acuff Justin Epperson Luke Stratton

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FINANCIAL SECTION

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Independent Auditor's Report

Grainger County Mayor and Board of County Commissioners Grainger 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 Grainger County, Tennessee, as of and for the year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise the county’s basic financial statements as listed in the table of contents.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the

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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 Grainger County, Tennessee, as of June 30, 2019, and the respective changes in financial position thereof and the respective budgetary comparison for the General and Highway/Public Works funds for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Other Matters

Required Supplementary Information

Management has omitted the management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information.

Accounting principles generally accepted in the United States of America require that the schedule of changes in the county’s net pension liability and related ratios, schedules of county and school contributions, schedule of school’s proportionate share of the net pension liability, and schedule of school changes in the total other postemployment benefits liability and related ratios, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

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Supplementary and Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise Grainger County’s basic financial statements. The combining and individual nonmajor fund financial statements, budgetary comparison schedules of nonmajor governmental funds and the General Debt Service Fund, combining and individual fund financial statements of the Grainger County School Department (a discretely presented component unit), miscellaneous schedules and the other information such as the introductory section and management’s corrective action plans are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedule of expenditures of federal awards is also presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and is not a required part of the basic financial statements.

The combining and individual nonmajor fund financial statements, budgetary comparison schedules of nonmajor governmental funds and the General Debt Service Fund, combining and individual fund financial statements of the Grainger County School Department (a discretely presented component unit), schedule of expenditures of federal awards, and miscellaneous schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion the combining and individual nonmajor fund financial statements, budgetary comparison schedules of nonmajor governmental funds and the General Debt Service Fund, combining and individual fund financial statements of the Grainger County School Department (a discretely presented component unit), schedule of expenditures of federal awards, and miscellaneous schedules are fairly stated in all material respects in relation to the basic financial statements as a whole.

The introductory section and management’s corrective action plans have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated October 28, 2019, on our consideration of Grainger County’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of Grainger

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County’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Grainger County’s internal control over financial reporting and compliance.

Very truly yours,

Justin P. Wilson Comptroller of the Treasury Nashville, Tennessee

October 28, 2019

JPW/tg

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BASIC FINANCIAL STATEMENTS

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Exhibit A

Grainger County, TennesseeStatement of Net PositionJune 30, 2019

ASSETS

Cash and Cash Equivalents $ 50,614 $ 830,412Equity in Pooled Cash and Investments 3,725,817 10,369,061Accounts Receivable 348,643 1,516Allowance for Uncollectible Accounts Receivable (102,072) 0Due from Other Governments 1,353,893 619,442Due from Primary Government 0 442,506Property Taxes Receivable 8,477,121 2,847,219Allowance for Uncollectible Property Taxes (233,969) (85,637)Net Pension Asset - Agent Plan 761,539 636,807Net Pension Asset - Teacher Retirement Plan 0 71,563Net Pension Asset - Teacher Legacy Pension Plan 0 1,190,747Restricted Assets: Amounts Accumulated for Pension Benefits 0 34,293Capital Assets: Assets Not Depreciated: Land 1,766,946 1,117,547 Construction in Progress 235,665 2,047,761 Assets Net of Accumulated Depreciation: Buildings and Improvements 7,445,387 31,432,864 Other Capital Assets 1,054,597 2,127,888 Infrastructure 1,973,488 0Total Assets $ 26,857,669 $ 53,683,989

DEFERRED OUTFLOWS OF RESOURCES

Deferred Charge on Refunding $ 568,677 $ 0Pension Changes in Experience 428,700 603,228Pension Changes in Assumptions 195,245 869,903Pension Contributions After Measurement Date 471,857 1,615,817Pension Changes in Proportion 0 183,828OPEB Changes in Assumptions 0 156,576OPEB Contributions After Measurement Date 0 320,113Total Deferred Outflows of Resources $ 1,664,479 $ 3,749,465

LIABILITIES

Accounts Payable $ 279,910 $ 418,176Accrued Payroll 17,549 95,710Payroll Deductions Payable 67,590 0Contracts Payable 110,056 557,980Retainage Payable 4,300 0Due to Component Unit 442,506 0Due to State of Tennessee 2,212 0Accrued Interest Payable 67,250 0Other Current Liabilities 317 829,817Noncurrent Liabilities: Due Within One Year - Debt 1,953,890 0 Due Within One Year - Other 88,153 49,400 Due in More Than One Year - Debt 19,508,259 0 Due in More Than One Year - Other 772,672 7,618,521Total Liabilities $ 23,314,664 $ 9,569,604

(Continued)

UnitComponent

Governmental School

Primary GraingerGovernment County

Activities Department

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Exhibit A

Grainger County, TennesseeStatement of Net Position (Cont.)

DEFERRED INFLOWS OF RESOURCES

Deferred Current Property Taxes $ 8,054,873 $ 2,684,958Pension Changes in Experience 52,915 1,653,510Pension Changes in Investment Earnings 67,410 319,566Pension Changes in Proportion 0 19,281OPEB Changes in Experience 0 239,211OPEB Changes in Assumptions 0 260,669OPEB Changes in Proportion 0 34,510Total Deferred Inflows of Resources $ 8,175,198 $ 5,211,705

NET POSITION

Net Investment in Capital Assets $ 8,962,390 $ 36,726,060Restricted for: General Government 41,348 0 Finance 112,032 0 Administration of Justice 55,369 0 Public Safety 249,319 0 Public Health and Welfare 148,974 0 Social, Cultural, and Recreational Services 4,430 0 Highways/Public Works 748,879 0 Education 0 742,609 Capital Projects 250,000 18,966 Pensions 761,539 1,933,410Unrestricted (14,301,994) 3,231,100

Total Net Position $ (2,967,714) $ 42,652,145

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

Governmental SchoolActivities Department

Component UnitPrimary Grainger

Government County

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Exhibit B

Grainger County, TennesseeStatement of ActivitiesFor the Year Ended June 30, 2019

Component UnitPrimary Grainger

Operating Capital Government CountyCharges for Grants and Grants and Governmental School

Functions/Programs Expenses Services Contributions Contributions Activities Department

Primary Government: Governmental Activities: General Government $ 1,727,812 $ 220,948 $ 34,170 $ 39,993 $ (1,432,701) $ 0 Finance 771,742 564,649 0 0 (207,093) 0 Administration of Justice 819,582 353,518 60,757 0 (405,307) 0 Public Safety 3,619,135 345,701 199,560 0 (3,073,874) 0 Public Health and Welfare 2,581,098 1,031,144 280,549 0 (1,269,405) 0 Social, Cultural, and Recreational Services 434,337 14,970 28,561 356,492 (34,314) 0 Agriculture and Natural Resources 170,794 0 12,615 0 (158,179) 0 Highways 2,655,362 6,240 2,062,803 646,380 60,061 0 Education 1,344,060 0 0 0 (1,344,060) 0 Debt Service: Interest 554,105 0 0 0 (554,105) 0Total Primary Government $ 14,678,027 $ 2,537,170 $ 2,679,015 $ 1,042,865 $ (8,418,977) $ 0

Component Unit: Grainger County School Department $ 31,852,678 $ 445,226 $ 4,194,270 $ 1,344,060 $ 0 $ (25,869,122)Total Component Unit $ 31,852,678 $ 445,226 $ 4,194,270 $ 1,344,060 $ 0 $ (25,869,122)

(Continued)

Program Revenues

Net (Expense) Revenue and Changes in Net Position

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Exhibit B

Grainger County, TennesseeStatement of Activities (Cont.)

Program Revenues Primary GraingerOperating 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 $ 4,539,370 $ 2,716,634 Property Taxes Levied for Solid Waste/Sanitation 591,206 0 Property Taxes Levied for Sports and Recreation 110,756 0 Property Taxes Levied for Highway 590,674 0 Property Taxes Levied for Debt Service 516,795 0 Sales Taxes 443,459 1,407,290 Litigation Tax 70,666 0 Business Tax 74,000 28,165 Mineral Severance Tax 23,256 0 Wholesale Beer Tax 96,269 0 Interstate Telecommunication Tax 5,111 0 Grants and Contributions Not Restricted to Specific Programs 2,076,324 23,851,645 Unrestricted Investment Income 71,926 1,075 Gain on Investments 0 1,731 Miscellaneous 48,617 25,156Total General Revenues $ 9,258,429 $ 28,031,696

Change in Net Position $ 839,452 $ 2,162,574Net Position, July 1, 2018 (3,807,166) 40,489,571

Net Position, June 30, 2019 $ (2,967,714) $ 42,652,145


Component Unit

Net (Expense) Revenue and Changes in Net Position

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Exhibit C-1

Grainger County, TennesseeBalance SheetGovernmental FundsJune 30, 2019

OtherHighway / General Govern- Total

Public Debt mental GovernmentalGeneral Works Service Funds Funds

ASSETS

Cash $ 400 $ 312 $ 0 $ 49,902 $ 50,614Equity in Pooled Cash and Investments 373,642 1,228,770 1,316,057 807,348 3,725,817Accounts Receivable 317,971 7,084 0 23,588 348,643Allowance for Uncollectibles (102,072) 0 0 0 (102,072)Due from Other Governments 259,063 367,474 89,472 637,884 1,353,893Due from Other Funds 33,347 0 0 0 33,347Property Taxes Receivable 5,938,400 650,793 1,115,111 772,817 8,477,121Allowance for Uncollectible Property Taxes (165,348) (19,574) (25,803) (23,244) (233,969)

Total Assets $ 6,655,403 $ 2,234,859 $ 2,494,837 $ 2,268,295 $ 13,653,394

LIABILITIES

Accounts Payable $ 57,381 $ 181,159 $ 0 $ 41,370 $ 279,910Accrued Payroll 0 17,549 0 0 17,549Payroll Deductions Payable 59,562 5,373 0 2,655 67,590Contracts Payable 28,356 0 0 81,700 110,056Retainage Payable 0 0 0 4,300 4,300Due to Other Funds 0 0 28,356 4,991 33,347Due to Component Units 0 0 0 442,506 442,506Due to State of Tennessee 1,714 123 0 375 2,212Other Current Liabilities 5 312 0 0 317Total Liabilities $ 147,018 $ 204,516 $ 28,356 $ 577,897 $ 957,787

(Continued)

Major FundsNonmajor

Funds

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Exhibit C-1

Grainger County, TennesseeBalance SheetGovernmental Funds (Cont.)




Deferred Current Property Taxes $ 5,638,412 $ 613,704 $ 1,073,983 $ 728,774 $ 8,054,873Deferred Delinquent Property Taxes 117,160 14,645 13,335 18,099 163,239Other Deferred/Unavailable Revenue 179,616 180,616 40,759 0 400,991Total Deferred Inflows of Resources $ 5,935,188 $ 808,965 $ 1,128,077 $ 746,873 $ 8,619,103

FUND BALANCES

Restricted:Restricted for General Government $ 41,348 $ 0 $ 0 $ 0 $ 41,348Restricted for Finance 50,265 0 0 61,767 112,032Restricted for Administration of Justice 31,607 0 0 23,762 55,369Restricted for Public Safety 215,470 0 0 33,849 249,319Restricted for Public Health and Welfare 25,231 0 0 123,743 148,974Restricted for Social, Cultural, and Recreational Services 1,572 0 0 0 1,572Restricted for Highways/Public Works 0 553,618 0 0 553,618Restricted for Capital Projects 0 0 0 455,850 455,850

Committed:Committed for Public Health and Welfare 0 0 0 83,829 83,829Committed for Social, Cultural, and Recreational Services 0 0 0 160,725 160,725Committed for Highways/Public Works 0 667,760 0 0 667,760Committed for Debt Service 0 0 1,338,404 0 1,338,404

Assigned:Assigned for General Government 108,735 0 0 0 108,735

Unassigned 98,969 0 0 0 98,969Total Fund Balances $ 573,197 $ 1,221,378 $ 1,338,404 $ 943,525 $ 4,076,504

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 6,655,403 $ 2,234,859 $ 2,494,837 $ 2,268,295 $ 13,653,394


Major FundsNonmajor

Funds

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Exhibit C-2

Grainger County, TennesseeReconciliation of the Balance Sheet of Governmental Funds to the Statement of Net PositionJune 30, 2019

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) $ 4,076,504

(1) Capital assets used in governmental activities are not financial resources and therefore are not reported inthe governmental funds. Add: land $ 1,766,946 Add: construction in progress 235,665 Add: infrastructure net of accumulated depreciation 1,973,488 Add: buildings and improvements net of accumulated depreciation 7,445,387 Add: other capital assets net of accumulated depreciation 1,054,597 12,476,083

(2) Long-term liabilities are not due in the current period andtherefore are not reported in the governmental funds. Less: notes payable $ (787,680) Less: bonds payable (19,090,000) Less: other loans payable (1,350,845) Add: deferred amount on refunding 568,677 Less: compensated absences payable (140,718) Less: landfill closure/postclosure care costs (720,107) Less: accrued interest on bonds and notes (67,250) Less: unamortized premium on debt (233,624) (21,821,547)

(3) Amounts reported as deferred outflows of resources and deferredinflows of resources related to pensions will be amortized andrecognized as components of pension expense in future years: Add: deferred outflows of resources related to pensions $ 1,095,802 Less: deferred inflows of resources related to pensions (120,325) 975,477

(4) Net pension assets of the agent plan are not current financialresources and therefore are not reported in the governmental funds. 761,539

(5) Other long-term assets are not available to pay for current-period expenditures and therefore are deferredin the governmental funds. 564,230

Net position of governmental activities (Exhibit A) $ (2,967,714)


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Exhibit C-3

Grainger County, TennesseeStatement of Revenues, Expenditures,

and Changes in Fund BalancesGovernmental FundsFor the Year Ended June 30, 2019



RevenuesLocal Taxes $ 5,131,613 $ 662,429 $ 999,540 $ 763,842 $ 7,557,424Licenses and Permits 63,448 0 0 0 63,448Fines, Forfeitures, and Penalties 104,887 2,734 2,160 10,284 120,065Charges for Current Services 916,710 1,997 0 445,589 1,364,296Other Local Revenues 89,955 5,188 71,926 323,124 490,193Fees Received From County Officials 448,497 0 0 0 448,497State of Tennessee 1,145,966 2,757,668 59,971 334,254 4,297,859Federal Government 181,255 0 0 0 181,255Other Governments and Citizens Groups 155,795 0 700,000 0 855,795

Total Revenues $ 8,238,126 $ 3,430,016 $ 1,833,597 $ 1,877,093 $ 15,378,832

ExpendituresCurrent:

General Government $ 1,303,654 $ 0 $ 0 $ 13 $ 1,303,667Finance 382,754 0 0 419,256 802,010Administration of Justice 742,905 0 0 20,460 763,365Public Safety 3,653,506 0 0 29,110 3,682,616Public Health and Welfare 1,828,979 0 0 825,030 2,654,009Social, Cultural, and Recreational Services 234,387 0 0 395,302 629,689Agriculture and Natural Resources 176,008 0 0 0 176,008Other Operations 561,624 0 0 0 561,624Highways 51,521 3,124,576 0 0 3,176,097

Debt Service:Principal on Debt 0 0 1,828,565 0 1,828,565Interest on Debt 0 0 454,643 6,785 461,428Other Debt Service 0 0 18,749 0 18,749

(Continued)

Major FundsNonmajor

Funds

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Exhibit C-3


and Changes in Fund BalancesGovernmental Funds (Cont.)



Expenditures (Cont.)Capital Projects - Donated $ 0 $ 0 $ 0 $ 1,344,060 $ 1,344,060

Total Expenditures $ 8,935,338 $ 3,124,576 $ 2,301,957 $ 3,040,016 $ 17,401,887

Excess (Deficiency) of RevenuesOver Expenditures $ (697,212) $ 305,440 $ (468,360) $ (1,162,923) $ (2,023,055)

Other Financing Sources (Uses)Notes Issued $ 340,000 $ 0 $ 0 $ 93,000 $ 433,000Other Loans Issued 0 0 0 1,350,845 1,350,845Insurance Recovery 26,072 0 0 0 26,072

Total Other Financing Sources (Uses) $ 366,072 $ 0 $ 0 $ 1,443,845 $ 1,809,917

Net Change in Fund Balances $ (331,140) $ 305,440 $ (468,360) $ 280,922 $ (213,138)Fund Balance, July 1, 2018 904,337 915,938 1,806,764 662,603 4,289,642

Fund Balance, June 30, 2019 $ 573,197 $ 1,221,378 $ 1,338,404 $ 943,525 $ 4,076,504


Major FundsNonmajor

Funds

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Exhibit C-4

Grainger 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, 2019

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) $ (213,138)

(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 asfollows: Add: capital assets purchased in the current period $ 1,225,374 Less: current-year depreciation expense (663,088) 562,286

(2) The net effect of various miscellaneous transactions to capital assets(sales, trade-ins, and donations) is to decrease net position. Less: book value of capital assets disposed (3,292)

(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, 2019 $ 564,230 Less: deferred delinquent property taxes and other deferred June 30, 2018 (425,583) 138,647

(4) The issuance of long-term debt (e.g., bonds, notes, other loans, leases) provides current financial resources to governmental funds, while the repaymentof the principal of long-term debt consumes the current financialresources of governmental funds. Neither transaction, however,has any effect on net position. Also, governmental funds report the effect of premiums, discounts, and similar items when debt is firstissued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the effect of these differences in the treatment of long-term debt and related items: Less: other loan proceeds $ (1,350,845) Less: note proceeds (433,000) Add: change in premium on debt 42,732 Add: principal payments on bonds 1,600,000 Add: principal payments on notes 228,565 Less: change in deferred amount on refunding debt (121,768) (34,316)

(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 $ 5,108 Change in compensated absences payable (1,371) Change in landfill closure/postclosure care costs 42,470 Change in net pension asset - agent plan 122,751 Change in deferred outflows related to pensions 229,776 Change in deferred inflows related to pensions (9,469) 389,265

Change in net position of governmental activities (Exhibit B) $ 839,452


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Exhibit C-5

Grainger County, TennesseeStatement of Revenues, Expenditures, and Changes

in Fund Balance - Actual (Budgetary Basis) and BudgetGeneral FundFor the Year Ended June 30, 2019

Actual VarianceRevenues/ with Final

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

RevenuesLocal Taxes $ 5,131,613 $ 0 $ 5,131,613 $ 5,208,200 $ 5,208,200 $ (76,587)Licenses and Permits 63,448 0 63,448 78,500 78,690 (15,242)Fines, Forfeitures, and Penalties 104,887 0 104,887 84,100 84,100 20,787Charges for Current Services 916,710 0 916,710 1,168,500 1,168,500 (251,790)Other Local Revenues 89,955 0 89,955 115,250 142,760 (52,805)Fees Received From County Officials 448,497 0 448,497 446,000 446,000 2,497State of Tennessee 1,145,966 0 1,145,966 1,124,000 1,109,304 36,662Federal Government 181,255 0 181,255 588,000 651,604 (470,349)Other Governments and Citizens Groups 155,795 0 155,795 20,000 134,773 21,022

Total Revenues $ 8,238,126 $ 0 $ 8,238,126 $ 8,832,550 $ 9,023,931 $ (785,805)

ExpendituresGeneral Government

County Commission $ 85,482 $ 0 $ 85,482 $ 88,060 $ 90,928 $ 5,446Board of Equalization 375 0 375 2,760 2,760 2,385Beer Board 0 0 0 2,070 1,870 1,870Budget and Finance Committee 5,000 0 5,000 4,800 5,000 0County Mayor/Executive 209,310 0 209,310 216,457 216,457 7,147Election Commission 237,641 0 237,641 260,487 265,298 27,657Register of Deeds 183,407 410 183,817 210,379 210,379 26,562Planning 22,725 0 22,725 28,250 28,250 5,525County Buildings 110,388 835 111,223 116,500 116,500 5,277Other Facilities 429,755 18,746 448,501 336,980 466,980 18,479Preservation of Records 19,571 0 19,571 24,270 24,270 4,699

FinanceProperty Assessor's Office 177,246 190 177,436 205,012 207,726 30,290

(Continued)

Budgeted Amounts

25

Exhibit C-5


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



Expenditures (Cont.)Finance (Cont.)

County Trustee's Office $ 107,228 $ 0 $ 107,228 $ 115,400 $ 115,400 $ 8,172County Clerk's Office 98,280 430 98,710 83,100 109,750 11,040

Administration of JusticeCircuit Court 217,944 1,192 219,136 213,375 240,190 21,054General Sessions Court 216,771 277 217,048 223,562 228,362 11,314Chancery Court 148,054 0 148,054 149,185 155,366 7,312Juvenile Court 98,822 137 98,959 116,100 116,100 17,141District Attorney General 48,380 0 48,380 50,218 50,218 1,838Victim Assistance Programs 12,934 0 12,934 0 12,934 0

Public SafetySheriff's Department 1,988,147 27,810 2,015,957 1,950,340 2,141,291 125,334Jail 1,398,746 27,834 1,426,580 1,550,500 1,559,096 132,516Fire Prevention and Control 1,500 0 1,500 1,500 1,500 0Civil Defense 36,604 0 36,604 72,008 72,008 35,404Other Emergency Management 225,000 0 225,000 225,000 225,000 0Inspection and Regulation 3,509 0 3,509 3,550 3,550 41

Public Health and WelfareLocal Health Center 109,928 0 109,928 135,884 135,884 25,956Ambulance/Emergency Medical Services 1,687,292 28,567 1,715,859 1,775,960 1,780,894 65,035Crippled Children Services 0 0 0 1,257 1,257 1,257Other Local Health Services 0 0 0 1,950 1,950 1,950Appropriation to State 20,759 0 20,759 21,483 21,483 724General Welfare Assistance 7,000 0 7,000 11,000 11,000 4,000Aid to Dependent Children 0 0 0 4,700 4,700 4,700Other Local Welfare Services 4,000 0 4,000 4,000 4,000 0

(Continued)

Budgeted Amounts

26

Exhibit C-5





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

Senior Citizens Assistance $ 49,358 $ 0 $ 49,358 $ 58,830 $ 58,830 $ 9,472Libraries 185,029 54 185,083 173,450 193,470 8,387

Agriculture and Natural ResourcesAgricultural Extension Service 67,503 0 67,503 68,840 68,840 1,337Soil Conservation 108,505 0 108,505 115,258 115,258 6,753

Other OperationsTourism 1,000 0 1,000 1,000 1,000 0Industrial Development 66,098 30 66,128 74,910 74,910 8,782Other Economic and Community Development 45,775 0 45,775 550,000 550,000 504,225Veterans' Services 13,047 0 13,047 19,030 19,030 5,983Other Charges 345,061 280 345,341 384,100 367,256 21,915Contributions to Other Agencies 3,551 0 3,551 4,140 4,140 589Miscellaneous 87,092 0 87,092 94,200 94,200 7,108

HighwaysLitter and Trash Collection 51,521 1,943 53,464 58,450 58,450 4,986

Total Expenditures $ 8,935,338 $ 108,735 $ 9,044,073 $ 9,808,305 $ 10,233,735 $ 1,189,662

Excess (Deficiency) of RevenuesOver Expenditures $ (697,212) $ (108,735) $ (805,947) $ (975,755) $ (1,209,804) $ 403,857

Other Financing Sources (Uses)Notes Issued $ 340,000 $ 0 $ 340,000 $ 250,000 $ 380,000 $ (40,000)Insurance Recovery 26,072 0 26,072 0 25,997 75

Total Other Financing Sources $ 366,072 $ 0 $ 366,072 $ 250,000 $ 405,997 $ (39,925)

(Continued)

Budgeted Amounts

27

Exhibit C-5





Net Change in Fund Balance $ (331,140) $ (108,735) $ (439,875) $ (725,755) $ (803,807) $ 363,932Fund Balance, July 1, 2018 904,337 0 904,337 967,792 967,792 (63,455)

Fund Balance, June 30, 2019 $ 573,197 $ (108,735) $ 464,462 $ 242,037 $ 163,985 $ 300,477


Budgeted Amounts

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Exhibit C-6


in Fund Balance - Actual and BudgetHighway/Public Works FundFor the Year Ended June 30, 2019

Variancewith FinalBudget -Positive

Actual Original Final (Negative)

RevenuesLocal Taxes $ 662,429 $ 667,600 $ 667,600 $ (5,171)Fines, Forfeitures, and Penalties 2,734 3,500 3,500 (766)Charges for Current Services 1,997 0 0 1,997Other Local Revenues 5,188 2,698 2,698 2,490State of Tennessee 2,757,668 2,440,838 2,574,146 183,522

Total Revenues $ 3,430,016 $ 3,114,636 $ 3,247,944 $ 182,072

ExpendituresHighways

Administration $ 197,480 $ 197,646 $ 205,071 $ 7,591Highway and Bridge Maintenance 1,733,777 1,930,550 1,877,150 143,373Operation and Maintenance of Equipment 225,538 336,400 322,375 96,837Other Charges 261,248 266,950 266,950 5,702Capital Outlay 706,533 404,000 597,308 (109,225)

Total Expenditures $ 3,124,576 $ 3,135,546 $ 3,268,854 $ 144,278

Excess (Deficiency) of RevenuesOver Expenditures $ 305,440 $ (20,910) $ (20,910) $ 326,350

Net Change in Fund Balance $ 305,440 $ (20,910) $ (20,910) $ 326,350Fund Balance, July 1, 2018 915,938 890,978 890,978 24,960

Fund Balance, June 30, 2019 $ 1,221,378 $ 870,068 $ 870,068 $ 351,310


Budgeted Amounts

29

Exhibit D

Grainger County, TennesseeStatement of Fiduciary Assets and LiabilitiesFiduciary FundsJune 30, 2019

ASSETS

Cash $ 690,516Due from Other Governments 168,970

Total Assets $ 859,486

LIABILITIES

Due to Other Taxing Units $ 168,970 Due to Litigants, Heirs, and Others 690,516

Total Liabilities $ 859,486


AgencyFunds

30

Note Page(s)

I. Summary of Significant Accounting PoliciesA. Reporting Entity 33B. Government-wide and Fund Financial Statements 34C. Measurement Focus, Basis of Accounting, and Financial

Statement Presentation 35D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and

Net Position/Fund Balance1. Deposits and Investments 372. Receivables and Payables 383. Restricted Assets 394. Capital Assets 395. Deferred Outflows/Inflows of Resources 406. Compensated Absences 417. Long-term Debt and Long-term Obligations 428. Net Position and Fund Balance 42

E. Pension Plans 44F. Other Postemployment Benefit (OPEB) Plans 45

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

Balance Sheet and the Government-wide Statement of Net Position 45B. Explanation of Certain Differences Between the Governmental Fund

Statement of Revenues, Expenditures, and Changes in Fund Balancesand the Government-wide Statement of Activities 45

III. Stewardship, Compliance, and AccountabilityA. Budgetary Information 46B. Expenditures Exceeded Appropriations 47

IV. Detailed Notes on All FundsA. Deposits and Investments 47B. Capital Assets 52C. Construction Commitments 55D. Interfund Receivables and Payables 55E. Long-term Debt 56F. Long-term Obligations 59G. On-Behalf Payments 61H. Short-term Debt 61

(Continued)

GRAINGER COUNTY, TENNESSEEIndex of Notes to the Financial Statements

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Note Page(s)

V. Other InformationA. Risk Management 62B. Accounting Changes 63C. Contingent Liabilities 63D. Change in Administration 63E. Landfill Postclosure Care Costs 64F. Joint Venture 64G. Jointly Governed Organization 65H. Retirement Commitments 65I. Other Postemployment Benefits (OPEB) 83J. Termination Benefits 88K. Purchasing Laws 89L. Subsequent Events 89

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

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GRAINGER COUNTY, TENNESSEE NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended June 30, 2019

I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Grainger 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 Grainger County:

A. Reporting Entity

Grainger County is a public municipal corporation governed by an elected 15-member board. As required by GAAP, these financial statements present Grainger County (the primary government) and its component units. The financial statements of the Grainger County Emergency Communications District, a component unit requiring discrete presentation, were excluded from this report due to materiality calculations; therefore, the effect of its 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 Grainger County School Department operates the public school system in the county, and the voters of Grainger 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 Grainger County Emergency Communications District provides a simplified means of securing emergency services through a uniform emergency number for the residents of Grainger County, and the Grainger 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 Grainger 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 Grainger 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 Grainger County Emergency Communications District can be obtained from its administrative office at the following address:

Administrative Office:

Grainger County Emergency Communications District P.O. Box 560 Rutledge, TN 37861

Related Organization – The Grainger County Industrial Development Board is a related organization of Grainger County. The Grainger County Commission elects the board members, but the county’s accountability does not extend beyond making the appointments.

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

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Grainger County issues all debt for the discretely presented Grainger County School Department. Net debt issues totaling $1,344,060 were contributed by the county to the School Department during the year ended June 30, 2019. Separate financial statements are provided for governmental funds and fiduciary funds. The fiduciary funds are excluded from the government-wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements.

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

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the fiduciary funds financial statements, except for agency funds, which have no measurement focus. Revenues are recorded when earned, and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Fund financial statements of Grainger 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. Grainger County has no proprietary funds to report. Separate financial statements are provided for governmental funds and fiduciary funds. Major individual governmental funds are reported as separate columns in the fund financial statements. All other governmental funds are aggregated into a single column on the fund financial statements. The fiduciary funds in total are reported in a single column. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they become both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the county considers revenues other than grants to be available if they are collected within 30 days after year-end. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met and the

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

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

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

Additionally, Grainger County reports the following fund types:

Capital Projects Fund – The General Capital Projects Fund is used to account for the acquisition or construction of major capital facilities and other capital assets and to account for the proceeds of debt issues contributed to the discretely presented School Department.

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Agency Funds – These funds account for amounts collected in an agency capacity by the constitutional officers and local sales taxes received from the state to be forwarded to the various cities in Grainger 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 Grainger County School Department reports the following major governmental fund:

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

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

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

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

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

1. Deposits and Investments

State statutes authorize the government to make direct investments in bonds, notes, or treasury bills of the U.S. government and obligations guaranteed by the U.S. government or any of its agencies; deposit accounts at state and federal chartered banks and savings and loans 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.

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The county trustee maintains a cash and internal investment pool that is used by all funds and the discretely presented Grainger 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. Grainger 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. Other than the School Department’s investment in the TCRS Stabilization Trust, as discussed in Note IV.A., no investments required to be reported at fair value were held at the balance sheet date.

2. Receivables and Payables

Activity between funds for unremitted current collections outstanding at the end of the fiscal year is referred to as due to/from other funds. All ambulance and property taxes receivables are shown with an allowance for uncollectibles. The allowance for uncollectible ambulance receivables is management’s estimate based on prior collections and aging reports. The allowance for uncollectible property taxes is equal to 1.59 percent of total taxes levied. Property taxes receivable are recognized as of the date an enforceable legal claim to the taxable property arises. This date is January 1 and is referred to as the lien date. However, revenues from property taxes are recognized in the period for which the taxes are levied, which is the ensuing fiscal year. Since the receivable is recognized before the period of revenue recognition, the entire amount of the receivable, less an estimated allowance for uncollectible taxes, is reported as a deferred inflow of resources as of June 30.

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

that are levied, collected, and reported as revenue during the current fiscal year. These property taxes receivable are presented on the balance sheet as a deferred inflow of resources to reflect amounts not available as of June 30. Property taxes collected within 30 days of year-end are considered available and accrued. The allowance for uncollectible taxes represents the estimated amount of the receivable that will be filed in court for collection. Delinquent taxes filed in court

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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. The Other Current Liabilities account reflected in the discretely presented School Department’s General Purpose School Fund represents the remaining balance in the retirement and teachers’ insurance clearing accounts. Retainage payable in the primary government’s nonmajor governmental funds represents amounts withheld from payments made on construction contracts pending completion of the projects. These amounts are held by the county trustee as Equity in Pooled Cash and Investments in the nonmajor governmental funds.

3. Restricted Assets Restricted assets consist of amounts held in a pension stabilization trust by the Tennessee Consolidated Retirement System (TCRS) for the benefit of the discretely presented Grainger County School Department’s Teacher Retirement Plan. The purpose of this trust is to accumulate funds to provide stabilization (smoothing) of retirement costs to the school system in times of fluctuating investment returns and market downturns. These funds are held and invested by TCRS pursuant to an irrevocable agreement and may only be used for the benefit of the Grainger County School Department to fund retirement benefits upon approval of the TCRS Board of Directors. To date, the Grainger County School Department has not withdrawn any funds from the trust to pay pension costs. Trust documents provide that the funds are not subject to the claims of general creditors of the School Department.

4. Capital Assets

Governmental funds do not capitalize the cost of capital outlays; these funds report capital outlays as expenditures upon acquisition.

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

Assets Years

Buildings and Improvements 50Other Capital Assets 5 - 25Infrastructure: Roads 20 Bridges 40

5. Deferred Outflows/Inflows of Resources In addition to assets, the Statement of Net Position will sometimes report a separate section for deferred outflows of resources. 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. They are pension changes in experience, pension changes in assumptions, employer contributions made to the pension and other postemployment benefit plans after the measurement date, pension other deferrals, other postemployment benefit changes in assumptions, and the deferred charge on refunding, which are reported in the government-wide Statement of Net Position. A deferred charge on refunding results from the difference in the carrying value of refunded debt and its acquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt.

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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/or the governmental funds balance sheet. These items are from the following sources: pension changes in experience, pension changes in investment earnings, pension other deferrals, other postemployment benefit changes in experience, other postemployment benefit changes in assumptions, other post employment benefit other deferrals, current and delinquent property taxes, and various receivables for revenues, which do not meet the availability criteria in governmental funds.

6. Compensated Absences

Primary Government It is the primary government’s policy to permit employees to accumulate earned but unused vacation, compensatory time, and sick pay benefits. All vacation and compensatory pay is accrued when incurred in the government-wide financial statements for the primary government. A liability for vacation pay and compensatory pay is reported in governmental funds only if amounts have matured, for example, as a result of employee resignations and retirements. There is no liability for unpaid accumulated sick leave for the primary government since there is no policy to pay any amounts when employees separate from service with the government.

Discretely Presented School Department

The discretely presented School Department’s policy allows employees to accumulate sick pay benefits but not vacation benefits nor compensatory time. The Grainger County Board of Education has adopted policies allowing certified and noncertified employees to receive payment for unused sick leave at retirement. Certified employees who meet all service guidelines will receive $90 per unused sick day accumulated at the time of retirement. Noncertified employees who meet all guidelines received $45 per unused sick day accumulated at the time of retirement. Three retirees qualified to receive this benefit in 2018-2019 and were paid a total of $40,875. The estimated cost of these future cash payments reported in the government-wide Statement of Net Position is $132,930.

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7. Long-term Debt and Long-term Obligations

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

8. Net Position and Fund Balance

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

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

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

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

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

As of June 30, 2019, Grainger County had $17,467,845 in outstanding debt for capital purposes for the discretely presented School Department. This debt is a liability of Grainger County, but the capital assets acquired are reported in the financial statements of the School Department. Therefore, Grainger 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. 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

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assignments for the general government. The Director of Schools, by resolution, was authorized to make assignments for the School Department for the 2018-19 year. Assigned fund balance in the General Fund consists of amounts assigned for encumbrances ($108,735). Assigned fund balance in the School Department’s General Purpose School Fund consists of amounts appropriated for use in the 2019-2020 budget ($744,518) and for future capital outlays ($2,855,295). Unassigned Fund Balance – the residual classification of the General and General Purpose School funds. This classification represents fund balance that has not been assigned to other funds and has not been restricted, committed, or assigned to specific purposes within the General and General Purpose School funds.

E. Pension Plans

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

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

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F. Other Postemployment Benefit (OPEB) Plan

Discretely Presented Grainger County School Department

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

II. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL

STATEMENTS A. Explanation of certain differences between the governmental fund

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

B. Explanation of certain differences between the governmental fund

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

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III. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY

A. Budgetary Information

Annual budgets are adopted on a basis consistent with generally accepted accounting principles (GAAP) for all governmental funds except the Constitutional Officers - Fees Fund (special revenue fund), which is not budgeted, and capital project funds, which adopt project length budgets. All annual appropriations lapse at fiscal year-end. The county is required by state statute to adopt annual budgets. Annual budgets are prepared on the basis in which current available funds must be sufficient to meet current expenditures. Expenditures and encumbrances may not legally exceed appropriations authorized by the county commission and any authorized revisions. Unencumbered appropriations lapse at the end of each fiscal year.

The budgetary level of control is at the major category level established by the County Uniform Chart of Accounts, as prescribed by the Comptroller of the Treasury of the State of Tennessee. Major categories are at the department level (examples of General Fund major categories: County Commission, Board of Equalization, County Mayor/Executive, Election Commission, 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. Any difference between the budgetary basis and GAAP basis is presented on the face of each budgetary schedule.

At June 30, 2019, Grainger County reported encumbrances in the following budgeted funds:

Funds Amount

Primary Government Major Fund: General $ 108,735 Nonmajor Governmental 802,835

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B. Expenditures Exceeded Appropriations

Expenditures exceeded appropriations approved by the county commission in the Capital Outlay major appropriations category (the legal level of control) of the Highway/Public Works Fund by $109,225. Also, expenditures exceed appropriations approved by the county commission in the General Government major appropriations category (the legal level of control) of the General Debt Service Fund by $238. Expenditures that exceed appropriations are a violation of state statutes. These expenditures in excess of appropriations were funded by available fund balance in the General Debt Service Fund and greater than anticipated revenues received in the Highway/Public Works Fund.

IV. DETAILED NOTES ON ALL FUNDS

A. Deposits and Investments Grainger County and the Grainger County School Department participate in an internal cash and investment pool through the Office of Trustee. The county trustee is the treasurer of the county and in this capacity is responsible for receiving, disbursing, and investing most county funds. Each fund’s portion of this pool is displayed on the balance sheets or statements of net position as Equity in Pooled Cash and Investments. Cash reflected on the balance sheets or statements of net position represents nonpooled amounts held separately by individual funds. Deposits Legal Provisions. All deposits with financial institutions must be secured by one of two methods. One method involves financial institutions that participate in the bank collateral pool administered by the state treasurer. Participating banks determine the aggregate balance of their public fund accounts for the State of Tennessee and its political subdivisions. The amount of collateral required to secure these public deposits must equal at least 105 percent of the average daily balance of public deposits held. Collateral securities required to be pledged by the participating banks to protect their public fund accounts are pledged to the state treasurer on behalf of the bank collateral pool. The securities pledged to protect these accounts are pledged in the aggregate rather than against each account. The members of the pool may be required by agreement to pay an assessment to cover any deficiency. Under this additional assessment agreement, public fund accounts covered by the pool are considered to be insured for purposes of credit risk disclosure. For deposits with financial institutions that do not participate in the bank collateral pool, state statutes require that all deposits be collateralized with collateral whose market value is equal to 105 percent of the uninsured amount of the deposits. The collateral must be placed by the depository bank in an escrow account in a second bank for the benefit of the county.

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Investments Legal Provisions. Counties are authorized to make direct investments in bonds, notes, or treasury bills of the U.S. government and obligations guaranteed by the U.S. government or any of its agencies; deposits at state and federal chartered banks and savings and loan associations; bonds of any state or political subdivision rated A or higher by any nationally recognized rating service; nonconvertible debt securities of certain federal government sponsored enterprises; and the county’s own legally issued bonds or notes. These investments may not have a maturity greater than two years. The county may make investments with longer maturities if various restrictions set out in state law are followed. Counties are also authorized to make investments in the State Treasurer’s Investment Pool and in repurchase agreements. Repurchase agreements must be approved by the state Comptroller’s Office and executed in accordance with procedures established by the State Funding Board. Securities purchased under a repurchase agreement must be obligations of the U.S. government or obligations guaranteed by the U.S. government or any of its agencies. When repurchase agreements are executed, the purchase of the securities must be priced at least two percent below the fair value of the securities on the day of purchase. Other than the School Department’s investment in the TCRS Stabilization Trust as discussed below, the county had no pooled or nonpooled investments as of June 30, 2019. TCRS Stabilization Trust

Legal Provisions. The Grainger County School Department is a member of the Tennessee Consolidated Retirement System (TCRS) Stabilization Reserve Trust. The School Department has placed funds into the irrevocable trust as authorized by statute under Tennessee Code Annotated (TCA), Title 8, Chapters 34-37. The TCRS Board of Trustees is responsible for the proper operation and administration of the trust. Funds of trust members are held and invested in the name of the trust for the benefit of each member. Each member’s funds are restricted for the payment of retirement benefits of that member’s employees. Trust funds are not subject to the claims of general creditors of the School Department. The trust is authorized to make investments as directed by the TCRS Board of Trustees. The Grainger County School Department may not impose any restrictions on investments placed by the trust on their behalf. Investment Balances. Assets of the TCRS, including the Stabilization Reserve Trust, are invested in the Tennessee Retiree Group Trust (TRGT). The TRGT is not registered with the Securities and Exchange Commission (SEC) as an investment company. The State of Tennessee has not obtained a credit quality rating for the TRGT from a nationally recognized credit ratings agency. The fair value of investment positions in the TRGT is determined

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daily based on the fair value of the pool’s underlying portfolio. Furthermore, TCRS had not obtained or provided any legally binding guarantees to support the value of participant shares during the fiscal year. There are no restrictions on the sale or redemption of shares. Investments are reported at fair value or amortized, which approximates fair value. Securities traded on a national exchange are valued at the last reported sales price. Investment income consists of realized and unrealized appreciation (depreciation) in the fair Securities and securities transactions are recorded in the financial statements on a trade-date basis. The fair value of assets of the TRGT held at June 30, 2019, represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Assets held are categorized for fair value measurement within the fair value hierarchy established by GAAP. The hierarchy is based on the valuation inputs used to measure the fair value of the asset and give the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). • Level 1 - Unadjusted quoted prices for identical assets or liabilities in active markets that can be accessed at the measurement date. • Level 2 - Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; assets or liabilities that have a bid-ask spread price in an inactive dealer market, brokered market and principal-to-principal market; and Level 1 assets or liabilities that are adjusted. • Level 3 - Valuations derived from valuation techniques in which significant inputs are unobservable.

Investments using the Net Asset Value (“NAV”) per share have no readily determinable fair value and have been determined using amortized cost, which approximates fair value. Where inputs used in the measurement of fair value fall into different levels of the hierarchy, fair value of the instrument in its entirety is categorized based on the lowest level input that is significant to the valuation. This assessment requires professional judgement and as such management of the TRGT developed a fair value committee that worked in conjunction with the plan’s custodian and investment professionals to make these valuations. All assets held were valued individually and aggregated into classes to be represented in the table below.

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Short-term securities generally include investments in money market-type securities reported at cost plus accrued interest. Equity and equity derivative securities classified in Level 1 are valued using last reported sales prices quoted in active markets that can be accessed at the measurement date. Equity and equity derivative securities classified in Level 2 are securities whose values are derived daily from associated traded securities. Equity securities classified in Level 3 are valued with last trade data having limited trading volume. U.S. Treasury Bills, Bonds, Notes and Futures classified in Level 1 are valued using last reported sales prices quoted in active markets that can be accessed at the measurement date. Debt and debt derivative securities classified in Level 2 are valued using a bid-ask spread price from multiple independent brokers, dealers, or market principals, which are known to be actively involved in the market. Level 3 debt securities are valued using proprietary information, a single pricing source, or other unobservable inputs related to similar assets or liabilities. Real estate investments classified in Level 3 are valued using the last valuations provided by external investment advisors or independent external appraisers. Generally, all direct real estate investments are appraised by a qualified independent appraiser(s) with the professional designation of Member of the Appraisal Institute (“MAI”), or its equivalent, every three (3) years beginning from the acquisition date of the property. The appraisals are performed using generally accepted valuation approaches applicable to the property type. Investments in private mutual funds, traditional private equity funds, strategic lending funds and real estate funds that report using GAAP, the fair value, as well as the unfunded commitments, were determined using the prior quarter’s NAV, as reported by the fund managers, plus the current cash flows. These assets were then categorized by investment strategy. In instances where the fund investment reported using non-GAAP standards, the investment was valued using the same method, but was classified in Level 3. At June 30, 2019, the Grainger County School Department had the following investments held by the trust on its behalf.

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WeightedAverageMaturity Fair

Investment (days) Maturities ValueInvestments at Fair Value: U.S. Equity N/A N/A $ 10,631 Developed Market International Equity N/A N/A 4,801 Emerging Market International Equity N/A N/A 1,372 U.S. Fixed Income N/A N/A 6,858 Real Estate N/A N/A 3,429 Short-term Securities N/A N/A 343 Investments at Amortized Cost using the NAV: Private Equity and Strategic Lending N/A N/A 6,859

Total $ 34,293

AmortizedQuoted Cost

Prices inActive Significant

Markets for Other SignificantIdentical Observable Unobservable

Fair Value Assets Inputs InputsInvestment by fair value level 6-30-19 (Level 1) (Level 2) (Level 3) NAV

U.S. Equity $ 10,631 $ 10,631 0 $ 0 $ 0Developed Market International Equity 4,801 4,801 0 0 0Emerging Market International Equity 1,372 1,372 0 0 0U.S. Fixed Income 6,858 0 6,859 0 0Real Estate 3,429 0 0 3,428 0Short-term Securities 343 0 343 0 0Private Equity and Strategic Lending 6,859 0 0 0 6,859

Total $ 34,293 $ 16,804 $ 7,202 $ 3,428 $ 6,859

Fair Value Measurements Using

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

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Interest Rate Risk. Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. The Grainger County School Department does not have the ability to limit trust investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. Credit Risk. Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The Grainger County School Department does not have the ability to limit the credit ratings of individual investments made by the trust. Concentration of Credit Risk. Concentration of credit risk is the risk of loss attributed to the magnitude of the county’s investment in a single issuer. Grainger County School Department places no limit on the amount the county may invest in one issuer. Custodial Credit Risk. Custodial credit risk for investments is the risk that, in the event of a failure of the counterparty to a transaction, the county will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. Pursuant to the trust agreement, investments are held in the name of the trust for the benefit of the Grainger County School Department to pay retirement benefits of the School Department employees. For further information concerning the School Department’s investments with the TCRS Stabilization Reserve Trust, audited financial statements of the Tennessee Consolidated Retirement System may be obtained at https://comptroller.tn.gov/content/dam/cot/sa/advanced-search/disclaimer/2019/ag18092.pdf

B. Capital Assets Capital assets activity for the year ended June 30, 2019, was as follows:

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https://comptroller.tn.gov/content/dam/cot/sa/advanced-search/disclaimer/2019/ag18092.pdf

https://comptroller.tn.gov/content/dam/cot/sa/advanced-search/disclaimer/2019/ag18092.pdf

Primary Government Governmental Activities:

Balance Balance7-1-18 Increases Decreases 6-30-19

Capital Assets Not Depreciated:Land $ 1,739,753 $ 27,193 $ 0 $ 1,766,946Construction in Progress 20,000 215,665 $ 0 235,665Total Capital Assets Not Depreciated $ 1,759,753 $ 242,858 $ 0 $ 2,002,611

Capital Assets Depreciated:Buildings and Improvements $ 11,422,068 $ 146,000 $ 0 $ 11,568,068Roads and Bridges 12,191,272 492,624 0 12,683,896Other Capital Assets 4,942,518 343,892 (139,337) 5,147,073Total Capital Assets Depreciated $ 28,555,858 $ 982,516 $ (139,337) $ 29,399,037

Less Accumulated Depreciation For:Buildings and Improvements $ 3,876,140 $ 246,541 $ 0 $ 4,122,681Roads and Bridges 10,647,729 62,679 0 10,710,408Other Capital Assets 3,874,653 353,868 (136,045) 4,092,476Total Accumulated Depreciation $ 18,398,522 $ 663,088 $ (136,045) $ 18,925,565Total Capital Assets Depreciated, Net $ 10,157,336 $ 319,428 $ (3,292) $ 10,473,472

Governmental Activities Capital Assets, Net $ 11,917,089 $ 562,286 $ (3,292) $ 12,476,083

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

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Governmental Activities:

General Government $ 33,123Administration of Justice 81,608Public Safety 298,673Public Health and Welfare 111,688Social, Cultural, and Recreational Services 25,547Highway/Public Works 112,449

Total Depreciation Expense - Governmental Activities $ 663,088



Balance Balance7-1-18 Increases 6-30-19

Capital Assets Not Depreciated:Land $ 1,117,547 $ 0 $ 1,117,547Construction in Progress 0 2,047,761 2,047,761Total Capital Assets Not Depreciated $ 1,117,547 $ 2,047,761 $ 3,165,308

Capital Assets Depreciated:Buildings and Improvements $ 47,273,095 $ 48,020 $ 47,321,115Other Capital Assets 5,462,028 266,257 5,728,285Total Capital Assets Depreciated $ 52,735,123 $ 314,277 $ 53,049,400

Less Accumulated Depreciation For:Buildings and Improvements $ 14,923,529 $ 964,722 $ 15,888,251Other Capital Assets 3,267,807 332,590 3,600,397Total Accumulated Depreciation $ 18,191,336 $ 1,297,312 $ 19,488,648Total Capital Assets Depreciated, Net $ 34,543,787 $ (983,035) $ 33,560,752

Governmental Activities Capital Assets, Net $ 35,661,334 $ 1,064,726 $ 36,726,060

There were no decreases in capital assets to report during the year ended June 30, 2019.

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Depreciation expense was charged to functions of the School Department as follows:


Instruction $ 964,722Support Services 273,128Operation of Non-instructional Services 59,462

Total Depreciation Expense - Governmental Activities $ 1,297,312

C. Construction Commitments

At June 30, 2019, the Sports and Recreation Department had uncompletedconstruction contracts of approximately $678,499 for the construction of anew ball field. Funding for these future expenditures has been receivedexcept for a state grant ($123,951). Due to the reimbursable nature of thestate grant, there is a budgetary basis fund balance deficit in the Sports andRecreation Fund of $61,924.

D. Interfund Receivables and Payables

The composition of interfund balances as of June 30, 2019, was as follows:

Primary Government

Due to/from Other Funds:

Receivable Fund Payable Fund Amount

General General Debt Service $ 28,356" Nonmajor governmental 4,991

Due to/from Primary Government and Component Unit:

Receivable Fund Payable Fund Amount

Component Unit: School Department: Primary Government: General Purpose School Nonmajor governmental $ 442,506

This balance represents amounts due to the School Department for loan proceeds borrowed by the primary government and contributed to the School Department for energy efficiency upgrades.

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E. Long-term Debt

Primary Government

General Obligation Bonds, Notes, and Other Loans

General Obligation Bonds - Grainger County issues general obligation bondsto provide funds for the acquisition and construction of major capital facilitiesfor the primary government and the discretely presented School Department.In addition, general obligation bonds have been issued to refund othergeneral obligation bonds. General obligation bonds are direct obligations andpledge the full faith, credit, and taxing authority of the government. Generalobligation bonds were issued for original terms of up to 20 years. Repaymentterms are generally structured with increasing amounts of principalmaturing as interest requirements decrease over the term of the debt. Allbonds included in long-term debt as of June 30, 2019, will be retired from theGeneral Debt Service Fund.

Direct Borrowing and Direct Placements - Grainger County issues otherloans to provide funds for the acquisition and construction of major capitalfacilities for the primary government and the discretely presented SchoolDepartment. Capital outlay notes are also issued to fund capital facilities andother capital outlay purchases, such as equipment. Capital outlay notes, andother loans are direct obligations and pledge the full faith, credit, and taxingauthority of the government. Capital outlay notes, and other loansoutstanding were issued for original terms of up to 5 years for notes and up to12 years for other loans. Repayment terms are generally structured withincreasing amounts of principal maturing as interest requirements decreaseover the term of the debt. All notes, and other loans included in long-termdebt as of June 30, 2019, will be retired from the General Debt Service Fund.The notes of Grainger County include a payable on demand clause, whichstates the payment is due upon the earlier to occur of (a) lender’s demand or(b) the maturity date.

General obligation bonds, capital outlay notes, and other loans outstanding as of June 30, 2019, for governmental activities were as follows:

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OriginalInterest Final Amount Balance

Type Rate Maturity of Issue 6-30-19

General Obligation Bonds: School Purposes 2 to 3.5 % 5-1-34 $ 2,500,000 $ 2,375,000General Obligation Bonds - Refunding: Primary Government Purposes 1.92 5-1-30 3,995,000 2,973,000 School Purposes 1.92 to 2 5-1-30 20,095,000 13,742,000Direct Borrowing and Direct Placement: Capital Outlay Notes 2.51 to 3.11 6-25-24 1,023,000 787,680 Other Loans- Energy Efficient Schools Initiative 1.5 10-1-31 1,350,845 1,350,845

The annual requirements to amortize all general obligation bonds, notes and other loans outstanding as of June 30, 2019, including interest payments, are presented in the following tables. Year EndingJune 30 Principal Interest Total

2020 $ 1,630,000 $ 403,499 $ 2,033,4992021 1,705,000 372,325 2,077,3252022 1,740,000 341,124 2,081,1242023 1,785,000 309,275 2,094,2752024 1,500,000 276,600 1,776,6002025-2029 8,050,000 894,636 8,944,6362030-2034 2,680,000 156,050 2,836,050Total $ 19,090,000 $ 2,753,509 $ 21,843,509

Bonds

Year EndingJune 30 Principal Interest Total

2020 $ 255,050 $ 24,909 $ 279,9592021 243,237 15,955 259,1922022 250,539 8,653 259,1922023 19,142 1,162 20,3042024 19,712 591 20,303Total $ 787,680 $ 51,270 $ 838,950

Notes - Direct Placement

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Year EndingJune 30 Principal Interest Total

2020 $ 68,840 $ 13,208 $ 82,0482021 104,556 18,516 123,0722022 106,140 16,932 123,0722023 107,736 15,336 123,0722024 109,368 13,704 123,0722025-2029 572,112 43,248 615,3602030-2032 282,093 5,119 287,212Total $ 1,350,845 $ 126,063 $ 1,476,908

Other Loans - Direct Placement

There is $1,338,404 available in the General Debt Service Fund to service long-term debt. Bonded debt per capita totaled $843, based on the 2010 federal census. Total debt per capita, including bonds, notes, other loans, and unamortized debt premiums, totaled $947 based on the 2010 federal census. The School Department is currently contributing funds to service some of the debt issued on its behalf by the primary government. During the year, the discretely presented School Department contributed $700,000 to the primary government to apply toward the retirement of school-related debt. Changes in Long-term Debt Long-term debt activity for the year ended June 30, 2019, was as follows:

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Governmental Activities:Notes -Direct

Bonds Placement

Balance, July 1, 2018 $ 20,690,000 $ 583,245Additions 0 433,000Reductions (1,600,000) (228,565)

Balance, June 30, 2019 $ 19,090,000 $ 787,680

Balance Due Within One Year $ 1,630,000 $ 255,050

Loans -

Balance, July 1, 2018 $ 0Additions 1,350,845Reductions 0

Balance, June 30, 2019 $ 1,350,845

Balance Due Within One Year $ 68,840

PlacementDirect

Other

Analysis of Noncurrent Liabilities for Debt Presented on Exhibit A:

Total Noncurrent Liabilities- Debt, June 30, 2019 $ 21,228,525Less: Balance Due Within One Year - Debt (1,953,890)Add: Unamortized Premium on Debt 233,624

Noncurrent Liabilities - Due in More Than One Year - Debt - Exhibit A $ 19,508,259

F. Long-term Obligations

Changes in Long-term Obligations

Long-term obligations activity for the year ended June 30, 2019, was as follows:

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Balance, July 1, 2018 $ 139,347 $ 762,577Additions 141,698 0Reductions (140,327) (42,470)

Balance, June 30, 2019 $ 140,718 $ 720,107

Balance Due Within One Year $ 28,144 $ 60,009

Compensated Absences

LandfillClosure/

PostclosureCare Costs

Compensated absences benefits will be paid from the employing funds, primarily the General and Highway/Public Works funds. Landfill postclosure care costs will be paid from the Solid Waste/Sanitation Fund. Analysis of Other Noncurrent Liabilities Presented on Exhibit A:

Total Other Noncurrent Liabilities, June 30, 2019 $ 860,825Less: Balance Due Within One Year (88,153)

Other Noncurrent Liabilities - Due in More Than One Year - Exhibit A $ 772,672


Changes in Long-term Obligations Long-term obligations activity for the year ended June 30, 2019, was as follows:

Retirement RetirementHonorarium Incentive

Balance, July 1, 2018 $ 354,100 $ 20,000Additions 25,900 30,000Reductions (17,700) (20,000)

Balance, June 30, 2019 $ 362,300 $ 30,000

Balance Due Within One Year $ 19,400 $ 30,000

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OtherCompensated Postemployment

Absences Benefits

Balance, July 1, 2018 $ 0 $ 6,966,000Additions 132,930 758,245Reductions 0 (581,554)

Balance, June 30, 2019 $ 132,930 $ 7,142,691

Balance Due Within One Year $ 0 $ 0

Analysis of Other Noncurrent Liabilities Presented on Exhibit A:

Total Noncurrent Liabilities, June 30, 2019 $ 7,667,921Less: Balance Due Within One Year - Other (49,400)

Noncurrent Liabilities - Due in More Than One Year - Other- Exhibit A $ 7,618,521

Retirement incentives and honorariums will be paid from the General Purpose School Fund. Compensated absences and other postemployment benefits will be paid from the employing funds (General Purpose School, School Federal Projects, and Central Cafeteria funds).

G. On-Behalf Payments – Discretely Presented Grainger County School Department

The State of Tennessee pays health insurance premiums for retired teachers on-behalf of the Grainger County School Department. These payments are made by the state to the Local Education Group Insurance Plan. This plan is administered by the State of Tennessee and reported in the state’s Comprehensive Annual Financial Report. Payments by the state to the Local Education Group Insurance Plan ended June 30, 2019, were $115,240. The School Department has recognized these on-behalf payments as revenues and expenditures in the General Purpose School Fund.

H. Short-term Debt

Grainger County issued tax anticipation notes in advance of property tax collections and deposited the proceeds in the following funds. These notes were necessary because funds were not available to meet obligations coming due before revenues were available. Short-term debt activity for the year ended June 30, 2019, was as follows:

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Balance BalanceFund 7-1-18 Issued Paid 6-30-19

General $ 0 $ 1,300,000 $ (1,300,000) $ 0Solid Waste / Sanitation 0 150,000 (150,000) 0

V. OTHER INFORMATION

A. Risk Management

Primary Government

The county is exposed to various risks related to general liability, property, casualty, and workers’ compensation. The county participates in the Local Government Property and Casualty Fund and the Local Government Workers' Compensation Fund, public entity risk pools. The county pays monthly or annual premiums for its insurance coverage. These pools are to be self-sustaining through member premiums. The county provides commercial health insurance coverage for its active employees. Retirees are not eligible to participate in the county’s health plan. Settled claims have not exceeded this commercial coverage in any of the past three fiscal years.


The discretely presented Grainger County School Department is exposed to various risks related to general liability, property, casualty, and workers’ compensation. The School Department participates in the Tennessee Risk Management Trust (TN-RMT), which is a public entity risk pool created under the auspices of the Tennessee Governmental Tort Liability Act to provide governmental insurance coverage. The School Department pays an annual premium to the TN-RMT for its general liability, property, casualty, and workers’ compensation insurance coverage. The creation of TN-RMT provides for it to be self-sustaining through member premiums. The discretely presented Grainger 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.

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B. Accounting Changes

Provisions of Governmental Accounting Standards Board (GASB) Statement No. 83, Certain Asset Retirement Obligations; Statement No. 88, Certain Disclosures Related to Debt, Including Direct Borrowing and Direct Placements became effective for the year ended June 30, 2019. In addition, Grainger County early implemented the provisions of GASB Statement No. 89, Accounting for Interest Costs Incurred Before the End of a Construction Period. GASB Statement No. 83, Certain Asset Retirement Obligations establishes accounting and reporting requirements for certain asset retirement obligations (AROs) associated with tangible capital assets. The scope of this statement establishes standards for recognizing and measuring liabilities, deferred outflows of resources, and expense/expenditures. In addition, this standard establishes note disclosure requirements for AROs. GASB Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowing and Direct Placements addresses note disclosure requirements related to debt, including direct borrowings and direct placements. It also clarifies which liabilities governments should report when disclosing information related to debt. These required disclosures include direct borrowings and direct placements, unused lines of credit, assets pledged as collateral for debt, terms specified in debt agreements related to significant events of default with finance-related consequences, significant termination events with finance-related consequences, and significant acceleration clauses. GASB Statement No. 89, Accounting for Interest Costs Incurred Before the End of a Construction Period amends paragraphs 5 through 22 of GASB Statement No. 62. This standard establishes that interest cost incurred before the end of a construction period should be recognized as an expense/expenditure. The changes adopted to conform with this standard are to be applied prospectively.

C. Contingent Liabilities

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

D. Changes in Administration

On August 31, 2018, Mark Hipsher left the Office of County Mayor and was succeeded by David M. Byrd, and Jim Renfro left the Office of Road Superintendent and was succeeded by Charlie McAnally.

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E. Landfill Postclosure Care Costs

Grainger County has an active permit on file with the state Department of Environment and Conservation for a sanitary landfill. The county has provided financial assurances for estimated postclosure liabilities as required by the State of Tennessee. These financial assurances are on file with the Department of Environment and Conservation. State and federal laws and regulations require the county to place a final cover on its sanitary landfill site when it stops accepting waste and to perform certain maintenance and monitoring functions at the site for 30 years after closure. Although closure and postclosure care costs will be paid only near or after the date that the landfill stops accepting waste, the county reports a portion of these closure and postclosure care costs as an operating expense in each period based on landfill capacity used as of each balance sheet date. Grainger County closed its sanitary landfill in 2002. The $720,107 reported as postclosure care liability at June 30, 2019, represents amounts based on what it would cost to perform all postclosure care in 2019. Actual costs may be higher due to inflation, changes in technology, or changes in regulations.

F. Joint Venture

The Fourth Judicial District Drug Task Force (DTF) is a joint venture formed by an interlocal agreement between the district attorney general of the Fourth Judicial District; Cocke, Grainger, Jefferson, and Sevier counties; and various cities within these counties. The purpose of the DTF is to provide multi-jurisdictional law enforcement to promote the investigation and prosecution of drug-related activities. Funds for the operations of the DTF come primarily from federal grants, drug fines, and the forfeiture of drug-related assets to the DTF. The DTF is overseen by the district attorney general and is governed by a board of directors including the district attorney general, sheriffs, and police chiefs of participating law enforcement agencies within each judicial district. Grainger County made no contributions to the DTF for the year ended June 30, 2019, and does not have any equity interest in this joint venture. Complete financial statements for the DTF can be obtained from its administrative office at the following address:

Administrative Office:

District Attorney General Fourth Judicial District 125 Court Avenue, Suite 301

Sevierville, TN 37862

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G. Jointly Governed Organization The East Tennessee Regional Agribusiness Marketing Authority was established through Title 64 of Tennessee Code Annotated, and includes the counties of Claiborne, Cocke, Grainger, Greene, Hamblen, Hancock, Hawkins, Jefferson, Johnson, Sullivan, Unicoi, and Washington. The purpose of the authority is to establish and operate a market for agricultural products of the region through a food distribution center and to further the economy and growth of the region served by developing, marketing, and promoting facilities for warehousing, distribution, light manufacturing, and agribusiness purposes. The authority is governed by a board of directors consisting of the county mayors/executives of each county or the county mayor’s/executive’s designee and one nonvoting member representing the Tennessee Department of Agriculture and the University of Tennessee’s Agricultural Extension Service. An executive committee, consisting of the chairman, vice chairman, secretary, and treasurer of the board of directors, along with the center manager as an ex-officio member, is in charge of daily operations of the center.

H. Retirement Commitments

1. Tennessee Consolidated Retirement System (TCRS)

Primary Government General Information About the Pension Plan Plan Description. Employees of Grainger County and non-certified employees of the discretely presented Grainger County School Department are provided a defined benefit pension plan through the Public Employee Retirement Plan, an agent multiple-employer pension plan administered by the TCRS. The primary government employees comprise 54.46 percent, the non-certified employees of the discretely presented School Department comprise 45.54 percent of the plan based on contribution data. The TCRS was created by state statute under Tennessee Code Annotated (TCA), Title 8, Chapters 34-37. The TCRS Board of Trustees is responsible for the proper operation and administration of the TCRS. The Tennessee Treasury Department, an agency in the legislative branch of state government, administers the plans of the TCRS. The TCRS issues a publicly available financial report that can be obtained at www.treasury.tn.gov/Retirement/Boards-and-Governance/Reporting-and-Investment-Policies. Benefits Provided. TCA, Title 8, Chapters 34-37 establish the benefit terms and can be amended only by the Tennessee General Assembly. The chief legislative body may adopt the benefit terms permitted by statute. Members are eligible to retire with an unreduced benefit at age 60 with five years of service credit or after 30 years of service

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


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, 2018, the following employees were covered by the benefit terms: Inactive Employees or Beneficiaries Currently Receiving Benefits 144Inactive Employees Entitled to But Not Yet Receiving Benefits 358Active Employees 305

Total 807

Contributions. Contributions for employees are established in the statutes governing the TCRS and may only be changed by the Tennessee General Assembly. Employees contribute five percent of salary. Grainger County elected to make employer contributions at a rate higher than the rate set by the Board of Trustees as determined by an actuarial valuation. For the year ended June 30, 2019, the employer contribution for Grainger County was $837,052 based on a rate of 9.76 percent of covered payroll. The minimum rate established by the Board of Trustees was 4.37 percent of covered payroll. By law, employer contributions are required to be paid. The TCRS may intercept Grainger 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

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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) Grainger County’s net pension liability (asset) was measured as of June 30, 2018, 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, 2018, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:

Inflation 2.5%Salary Increases Graded Salary Ranges from 8.72%

to 3.44% Based on Age, Including Inflation, Averaging 4%

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

Cost of Living Adjustment 2.25%

Mortality rates were based on actual experience including an adjustment for some anticipated improvement. The actuarial assumptions used in the June 30, 2018, actuarial valuation were based on the results of an actuarial experience study performed for the period July 1, 2012, through June 30, 2016. The demographic assumptions were adjusted to more closely reflect actual and expected future experience. The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees in conjunction with the June 30, 2016, actuarial experience study. A blend of future capital market projections and historic market returns was used in a building-block method in which a best-estimate of expected future real rates of return (expected returns, net of pension plan investments expense and inflation) is developed for each major asset class. These best-estimates are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target allocation percentage and by adding expected inflation of 2.5 percent. The best-estimates of geometric real rates of return and the TCRS investment policy target asset allocation for each major class are summarized in the following table:

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PercentageLong-termExpected PercentageReal Rate Target

Asset Class of Return Allocations

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

Total 100 %

The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees as 7.25 percent based on a blending of the factors described above. Discount Rate. The discount rate used to measure the total pension liability was 7.25 percent. The projection of cash flows used to determine the discount rate assumes that employee contributions will be made at the current rate and that contributions from Grainger 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)

NetTotal Plan Pension

Pension Fiduciary LiabilityLiability Net Position (Asset)

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

Balance, July 1, 2017 $ 23,854,648 $ 25,035,838 $ (1,181,190)

Changes for the Year: Service Cost $ 734,296 $ 0 $ 734,296 Interest 1,747,044 0 1,747,044 Differences Between Expected and Actual Experience 629,493 0 629,493 Changes in Assumptions 0 0 0 Contributions-Employer 0 837,405 (837,405) Contributions-Employees 0 430,319 (430,319) Net Investment Income 0 2,088,734 (2,088,734) Benefit Payments, Including Refunds of Employee Contributions (983,569) (983,569) 0 Administrative Expense 0 (28,469) 28,469 Other Changes 0 0 0Net Changes $ 2,127,264 $ 2,344,420 $ (217,156)

Balance, June 30, 2018 $ 25,981,912 $ 27,380,258 $ (1,398,346)

Increase (Decrease)

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

Plan NetTotal Fiduciary Pension

Pension Net LiabilityLiability Position (Asset)

Primary Government 54.46% $ 14,149,749 $ 14,911,289 $ (761,539)

School Department 45.54% 11,832,163 12,468,969 (636,807)

Total $ 25,981,912 $ 27,380,258 $ (1,398,346)

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

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Current1% Discount 1%

Decrease Rate Increase6.25% 7.25% 8.25%

Net Pension Liability $ 2,107,639 $ (1,398,346) $ (4,294,686)

Pension Expense (Income) and Deferred Outflows of Resources and Deferred Inflows of Resources to Pensions Pension Expense or Negative Pension Expense. For the year ended June 30, 2019, Grainger County recognized pension expense of $281,929. Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2019, Grainger 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 $ 787,184 $ 97,163Net Difference Between Projected and Actual Earnings on Pension Plan Investments 0 123,778Changes in Assumptions 358,511 0Contributions Subsequent to the Measurement Date of June 30, 2018 (1) 837,052 N/A

Total $ 1,982,747 $ 220,941

(1) The amount shown above for “Contributions Subsequent to the Measurement Date of June 30, 2018,” will be recognized as a reduction (increase) to net pension liability (asset) in the following measurement period.

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

Deferred DeferredOutflows of Inflows ofResources Resources

Primary Government $ 1,095,802 $ 120,325

School Department 886,945 100,616

Total $ 1,982,747 $ 220,941

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

2020 $ 346,8292021 260,3012022 22,9402023 189,7782024 104,916Thereafter 0

In the table shown above, positive amounts will increase pension expense while negative amounts will decrease pension expense. Discretely Presented Grainger County School Department Non-certified Employees General Information About the Pension Plan Plan Description. As noted above under the primary government, employees of Grainger County and non-certified employees of the discretely presented Grainger County School Department are provided a defined benefit pension plan through the Public Employee Retirement Plan, an agent multiple-employer pension plan administered by the TCRS. The primary government employees comprise 54.46 percent and the non-certified employees of the discretely presented School Department comprise 45.54 percent of the plan based on contribution data.

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

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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, 2019, to the Teacher Retirement Plan were $31,816, which is 1.94 percent of covered payroll. In addition, employer contributions of $32,562, which is 2.06 percent of covered payroll were made to the Pension Stabilization Reserve Trust Fund to fund future pension costs. The employer rate, when combined with member contributions and the stabilization reserve trust funds, is expected to finance the costs of benefits earned by members during the year, the cost of administration, as well as an amortized portion of any unfunded liability. Pension Liabilities (Assets), Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions Pension Liabilities (Assets). At June 30, 2019, the School Department reported a liability (asset) of ($71,563) for its proportionate share of the net pension liability (asset). The net pension liability (asset) was measured as of June 30, 2018, and the total pension liability (asset) used to calculate the net pension liability (asset) was determined by an actuarial valuation as of that date. The School Department’s proportion of the net pension liability (asset) was based on the School Department’s share of contributions to the pension plan relative to the contributions of all participating LEAs. At the measurement date of June 30, 2018, the School Department’s proportion was .157793 percent. The proportion as of June 30, 2017, was .164882 percent.

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Pension Expense. For the year ended June 30, 2019, the School Department recognized pension expense of $24,218. Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2019, the School Department reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:



Difference Between Expected and Actual Experience $ 4,053 $ 2,850Net Difference Between Projected and Actual Earnings on Pension Plan Investments 0 4,042Changes in Assumptions 3,376 0Changes in Proportion of Net Pension Liability (Asset) 1,716 4,256LEA's Contributions Subsequent to the Measurement Date of June 30, 2018 31,816 N/A

Total $ 40,961 $ 11,148

The School Department’s employer contributions of $31,816, reported as pension related deferred outflows of resources subsequent to the measurement date, will be recognized as an increase of net pension asset in the year ending June 30, 2020. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:


2020 $ (745)2021 (873)2022 (1,449)2023 (393)2024 145Thereafter 1,312

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

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Actuarial Assumptions. The total pension liability in the June 30, 2018, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:





Mortality rates are based on actual experience including an adjustment for some anticipated improvement. The actuarial assumptions used in the June 30, 2018, actuarial valuation were based on the results of an actuarial experience study performed for the period July 1, 2012, through June 30, 2016. The demographic assumptions were adjusted to more closely reflect actual and expected future experience. The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees in conjunction with the June 30, 2016, actuarial experience study. A blend of future capital market projections and historic market returns was used in a building-block method in which a best-estimate of expected future real rates of return (expected returns, net of pension plan investments expense and inflation) is developed for each major asset class. These best-estimates are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target allocation percentage and by adding expected inflation of 2.5 percent. The best-estimates of geometric real rates of return and the TCRS investment policy target asset allocation for each major class are summarized in the following table:

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Total 100 %

The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees as 7.25 percent based on a blending of the factors described above. Discount Rate. The discount rate used to measure the total pension liability was 7.25 percent. The projection of cash flows used to determine the discount rate assumes that employee contributions will be made at the current rate and that contributions from all the LEAs will be made at the actuarially determined contribution rate pursuant to an actuarial valuation in accordance with the funding policy of the TCRS Board of Trustees and as required to be paid by state statute. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make projected future benefit payments of current active and inactive members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the Proportionate Share of Net Pension Liability (Asset) to Changes in the Discount Rate. The following presents the School Department’s proportionate share of the net pension liability (asset) calculated using the discount rate of 7.25 percent, as well as what the School Department’s proportionate share of the net pension liability (asset) would be if it were calculated using a discount rate that is one percentage point lower (6.25%) or one percentage point higher (8.25%) than the current rate:

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School Department's Current Proportionate Share of 1% Discount 1% the Net Pension Decrease Rate Increase Liability (Asset) 6.25% 7.25% 8.25%

Net Pension Liability $ 11,064 $ (71,563) $ (132,440)

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

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eligibility criteria. Member and beneficiary annuitants are entitled to an automatic cost of living adjustment (COLA) after retirement. A COLA is granted each July for annuitants retired prior to the second of July of the previous year. The COLA is based on the change in the consumer price index (CPI) during the prior calendar year, capped at three percent, and applied to the current benefit. No COLA is granted if the change in the CPI is less than one-half percent. A one percent COLA is granted if the CPI change is between one-half and one percent. A member who leaves employment may withdraw their employee contributions, plus any accumulated interest. Under the Teacher Legacy Pension Plan, benefit terms and conditions, including COLAs can be adjusted on a prospective basis. Moreover, there are defined cost controls and unfunded liability controls that provide for the adjustment of benefit terms and conditions on an automatic basis. Contributions. Contributions for teachers are established in the statutes governing the TCRS and may only be changed by the Tennessee General Assembly. Teachers are required to contribute five percent of their salaries. The Local Education Agencies (LEAs) make employer contributions at the rate set by the Board of Trustees as determined by an actuarial valuation. By law, employer contributions for the Teacher Legacy Pension Plan are required to be paid. The TCRS may intercept the state shared taxes of the sponsoring governmental entity of the LEA if the required employer contributions are not remitted. Employer contributions by the Grainger County School Department for the year ended June 30, 2019, to the Teacher Legacy Pension Plan were $1,218,806, which is 10.46 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, 2019, the School Department reported a liability (asset) of ($1,190,747) for its proportionate share of the net pension liability (asset). The net pension liability (asset) was measured as of June 30, 2018, and the total pension liability used to calculate the net pension liability (asset) was determined by an actuarial valuation as of that date. The School Department’s proportion of the net pension liability (asset) was based on the School Department’s long-term share of contributions to the pension plan relative to the contributions of all participating LEAs. At the measurement date of June 30, 2018, the School Department’s proportion was .338385 percent. The proportion measured at June 30, 2017, was .343893 percent.

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Pension Expense. For the year ended June 30, 2019, the School Department recognized negative pension expense of $276,984. Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2019, the School Department reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:



Difference Between Expected and Actual Experience $ 240,691 $ 1,606,412Changes in Assumptions 703,261 0Net Difference Between Projected and Actual Earnings on Pension Plan Investments 0 259,156Changes in Proportion of Net Pension Liability (Asset) 182,112 15,025LEA's Contributions Subsequent to the Measurement Date of June 30, 2018 1,218,806 N/A

Total $ 2,344,870 $ 1,880,593

The School Department’s employer contributions of $1,218,806 reported as pension related deferred outflows of resources subsequent to the measurement date, will be recognized as a decrease in net pension liability in the year ending June 30, 2020. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:


2020 $ 309,3382021 (316,395)2022 (633,630)2023 (113,843)2024 0Thereafter 0

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

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Actuarial Assumptions. The total pension liability in the June 30, 2018, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:





Mortality rates are based actual experience including an adjustment for some anticipated improvement. The actuarial assumptions used in the June 30, 2018, actuarial valuation were based on the results of an actuarial experience study performed for the period July 1, 2012, through June 30, 2016. The demographic assumptions were adjusted to more closely reflect actual and expected future experience. The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees in conjunction with the June 30, 2016, actuarial experience study. A blend of future capital market projections and historic market returns was used in a building-block method in which a best-estimate of expected future real rates of return (expected returns, net of pension plan investments expense and inflation) is developed for each major asset class. These best-estimates are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target allocation percentage and by adding expected inflation of 2.5 percent. The best-estimates of geometric real rates of return and the TCRS investment policy target asset allocation for each major class are summarized in the following table:

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Total 100 %

The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees as 7.25 percent based on a blending of the factors described above. Discount Rate. The discount rate used to measure the total pension liability was 7.25 percent. The projection of cash flows used to determine the discount rate assumes that employee contributions will be made at the current rate and that contributions from all the LEAs will be made at the actuarially determined contribution rate pursuant to an actuarial valuation in accordance with the funding policy of the TCRS Board of Trustees and as required to be paid by state statute. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make projected future benefit payments of current active and inactive members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the Proportionate Share of Net Pension Liability (Asset) to Changes in the Discount Rate. The following presents the School Department’s proportionate share of the net pension liability (asset) calculated using the discount rate of 7.25 percent, as well as what the School Department’s proportionate share of the net pension liability (asset) would be if it were calculated using a discount rate that is one percentage point lower (6.25%) or one percentage point higher (8.25%) than the current rate:

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School Department's Current Proportionate Share of 1% Discount 1% the Net Pension Decrease Rate Increase Liability (Asset) 6.25% 7.25% 8.25%

Net Pension Liability $ 9,179,028 $ (1,190,747) $ (9,770,291)

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

Primary Government Grainger County offers its employees two deferred compensation plans, one established pursuant to IRC Section 457 and the other pursuant to IRC Section 401(k). All costs of administering and funding these programs are the responsibility of plan participants. The Section 401(k) and Section 457 plan assets remain the property of the contributing employees and are not presented in the accompanying financial statements. IRC Section 401(k) and 457 establish participation, contribution, and withdrawal provisions for the plans. Discretely Presented Grainger County School Department Teachers hired after July 1, 2014, by the School Department are required to participate in a hybrid pension plan consisting of a defined benefit portion, which is detailed in the pensions footnote above and is managed by the Tennessee Consolidated Retirement System, and a defined contribution portion which is placed into the state’s 401 (K) plan and is managed by the employee. The defined contribution portion of the plan requires that the School Department contribute five percent of each teacher’s salary into their deferred compensation plan. In addition, teachers are required to contribute two percent of their salaries into this deferred compensation plan, unless they opt out of the employee portion. Some employees have elected to contribute amounts in addition to the two percent minimum requirement. During the year the School Department contributed $85,861 and teachers contributed $35,334 to this deferred compensation pension plan.

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I. Other Postemployment Benefits (OPEB) Grainger County primary government does not offer postemployment benefits to its retirees. The discretely presented Grainger County School Department provides OPEB benefits to its retirees through a state administered public entity risk pool. For reporting purposes the plan is considered a single employer defined benefit OPEB plan based on criteria in Statement No. 75 of the Governmental Accounting Standards Board (GASB). The plan is funded on a pay-as-you-go basis and there are no assets accumulating in a trust that meets the criteria of paragraph 4 of GASB Statement No. 75. The School Department provides healthcare benefits to its employees under the closed Local Education Plan (LEP) until they reach Medicare eligibility. The certified retirees of Grainger County School Department may then join the Tennessee Plan – Medicare (TNM), which provides supplemental medical insurance for retirees with Medicare. However, the School Department does not provide any subsidy (direct or indirect) to this plan and therefore does not recognize any OPEB liability associated with the TNM. The School Department’s total OPEB liability was measured as of June 30, 2018, and was determined by an actuarial valuation as of that date. Plan Description. Employees of the Grainger County School Department who were hired prior to July 1, 2015, are provided with pre-65 retiree health insurance benefits through the closed Local Education Plan (LEP) administered by the Tennessee Department of Finance and Administration. All eligible pre-65 retired teachers, support staff, and disability participants of local education agencies, who choose coverage, participate in the LEP. This plan is closed to the employees of all participating employers that were hired on or after July 1, 2015. Actuarial Assumptions and Other Inputs. The total OPEB liability in the June 30, 2018, actuarial valuation was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified:

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Actuarial Cost Method Entry Age NormalInflation 2.25%Salary Increases Salary increases used in the July 1, 2018

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

Discount Rate 3.62%Healthcare Cost Trend Rates Based on the Getzen Model, with trend

starting at 6.75% for the 2019 calendar year, and gradually decreasing over a 32-year period to an ultimate trend of rate of 3.53% with .32% added to approximate the effect of the excise tax

Retirees Share of Benefit Related Cost Discussed under Benefits Provided

The discount rate was 3.62%, based on the daily rate of Fidelity’s 20-year Municipal GO AA index closest to but not later than the measurement date. Mortality rates were based on the results of a statewide experience study undertaken on behalf of the Tennessee Consolidated Retirement System (TCRS). These mortality rates were used in the July 1, 2018, actuarial valuation of the TCRS. Unless noted otherwise, the actuarial demographic assumptions used in the June 30, 2018, valuations were the same as those employed in the July 1, 2018 Pension Actuarial Valuation of the Tennessee Consolidated Retirement System (TCRS). These assumptions were developed by TCRS based on the results of an actuarial experience study for the period July 1, 2012 - June 30, 2016. The demographic assumptions were adjusted to more closely reflect actual and expected future experience. Mortality tables are used to measure the probabilities of participants dying before and after retirement. The mortality rates employed in this valuation are taken from the RP-2014 Healthy Participant Mortality Table for Annuitants for non-disabled post-retirement mortality, with mortality improvement projected to all future years using Scale MP-2016. Post-retirement tables are Blue Collar and adjusted with a 2 percent load for males and a -3 percent load for females. Mortality rates for impaired lives are the same as those used by TCRS and are taken from a gender distinct table published in the IRS Ruling 96-7 for disabled lives with a 10 percent load. Changes in Assumptions. The discount rate changed from 3.56 percent as of the beginning of the measurement period to 3.62 percent as of the measurement date of June 30, 2018. The assumed initial costs and premium amounts were revised to reflect rates adopted for the 2019 plan year. The assumed initial trend rate applicable to the 2019 plan year was revised from 5.4 percent to 6.75 percent. Benefits Provided. The Grainger County School Department offers the LEP to provide health insurance coverage to eligible pre-65 retirees, support staff,

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and disabled participants of local education agencies. Retirees are required to discontinue coverage under the LEP upon obtaining Medicare eligibility. Insurance coverage is the only postemployment benefit provided to retirees. An insurance committee created in accordance with TCA 8-27-301 establishes and amends the benefit terms of the LEP. All members have the option of choosing between the premier preferred provider organization (PPO), standard PPO, limited PPO or the wellness health savings consumer-driven health plan (CDHP) for healthcare benefits. Retired plan members of the LEP receive the same plan benefits as active employees at a blended premium rate that considers the cost of all participants. This creates an implicit subsidy for retirees. Participating employers determine their own policy related to direct subsidies provided for retiree premiums. Grainger County School Department provides a direct subsidy of $340 per month toward pre-65 retirees insurance premiums. Retirees must be age 60 or older or have 30 years of service to qualify. The state, as a governmental non-employer contributing entity, provides a direct subsidy for eligible retirees premiums based on years of service. Retirees with 30 or more years of service will receive 45 percent; 20 but less than 30 years, 35 percent; and less than 20 years, 20 percent of the scheduled premium. No subsidy is provided for enrollees of the health savings CDHP. Employees Covered by Benefit Terms At the measurement date of June 30, 2018, the following employees were covered by the benefit terms:

SchoolDepartment

Retirees and Beneficiaries 35Inactive, Nonretired Members 0Active Members Eligible for Future Beneifts 352Active Members Not Eligible for Future Benefits 22Total 409

A state insurance committee, created in accordance with TCA 8-27-301, establishes the required payments to the LEP by member employers and employees through the blended premiums established for active and retired employees. Claims liabilities of the plan are periodically computed using actuarial and statistical techniques to establish premium rates. Administrative costs are allocated to plan participants. Employers contribute towards employee costs based on their own developed policies. During the current reporting period, the School Department paid $320,113 to the LEP for OPEB benefits as they came due.

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Changes in the Collective Total OPEB Liability

Grainger County State ofSchool Department TN Total OPEB

72.6899% 27.3101% Liability

Balance July 1, 2017 $ 6,966,000 $ 2,576,819 $ 9,542,819Changes for the Year: Service Cost $ 330,262 $ 124,082 $ 454,344 Interest 253,615 95,285 348,900 Changes in Benefit Terms 0 0 0 Difference between Expected and Actuarial Experience (266,394) (100,086) (366,480) Changes in Proportion (29,334) 29,334 0 Changes in Assumption and Other Inputs 174,368 65,511 239,879

Benefit Payments (285,826) (107,387) (393,213)Net Changes $ 176,691 $ 106,739 $ 283,430

Balance June 30, 2018 $ 7,142,691 $ 2,683,558 $ 9,826,249

Share of Collective Liability

The Grainger County School Department has a special funding situation related to benefits paid by the State of Tennessee for its eligible retired employees participating in the LEP. The Grainger County School Department's proportionate share of the collective total OPEB liability was based on a projection of the employers long-term share of benefit payments to the OPEB plan relative to the projected share of benefit payments of all participating employers and nonemployer contributing entities, actuarially determined. The School Department recognized $207,205 in revenue for subsidies provided by nonemployer contributing entities for benefits paid by the LEP for School Department retirees. During the year, the Grainger County School Department’s proportionate share of the collective OPEB liability was 72.6899% and the State of Tennessee’s share was 27.3101%. OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2019, the School Department recognized OPEB expense of $744,350, which includes expenses funded by subsidies provided by the state. At June 30, 2019, the School Department reported deferred outflows of resources and deferred inflows of resources related to its proportionate share of OPEB from the following sources:

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Difference Between Expected and Actual Experience $ 0 $ 239,211Changes of Assumptions/Inputs 156,575 260,669Changes in Proportion and Differences Between Amounts Paid as Benefits Came Due and Proportion Share Amounts Paid by the Employee and Nonemployers Contributors As Benefits Came Due 0 34,510Benefits Paid After the Measurement Date 320,113 0

Total $ 476,688 $ 534,390

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

Year Ending SchoolJune 30 Department

2020 $ (42,810)2021 (42,810)2022 (42,810)2023 (42,810)2024 (42,810)Thereafter (163,765)

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

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

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Discount Rate Current1% Discount 1%

Decrease Rate Increase2.62% 3.62% 4.62%

Proportionate Share of the Collective Total OPEB Liability $ 7,677,426 $ 7,142,691 $ 6,630,846

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

1% Curent 1%Decrease Rates Increase

5.75 to 2.85% 6.75 to 3.85% 7.75 to 4.85%

Proportionate Share of the Collective Total OPEB Liability $ 6,325,084 $ 7,142,691 $ 8,106,886

J. Termination Benefits

The discretely presented School Department has entered into a retirement incentive bonus payment plan in accordance with contract provisions. This plan is available to all certified teachers who retire from the School Department with at least ten years of service in Grainger County and are between the ages of 55 and 60, or have a minimum of 30 years of credited service in the Tennessee Consolidated Retirement System. The plan provides teachers who have met the noted requirements, a bonus of $5,000 paid in one lump sum. During the year, expenditures of $20,000 were recognized for retirement incentive bonus payments. At June 30, 2019, there were six individuals participating in the program. The estimated cost of these cash payments reported in the government-wide Statement of Net Position is $30,000. The entire amount is due within one year. In addition to the previously mentioned retirement incentive, the discretely presented School Department offers an additional retirement honorarium payment. To be eligible, certified employees must retire with at least ten years of service with the School Department. Under the terms of the plan, employees with 30 or more years of experience at the end of the 2005-06

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school year shall receive $100 for each school year of service with the School Department up to a maximum of $4,000. Employees with less than 30 years of experience at the end of the 2005-06 school year shall receive $100 for each school year of service in the School Department up to a maximum of $3,000. As of June 30, 2019, 189 employees met the requirements of this benefit. The estimated cost of these cash payments reported in the government-wide Statement of Net Position is $362,300. Of that amount, $19,400 is due within one year. The governmental funds’ financial statements reflect retirement honorarium expenditures of $17,700 in the General Purpose School Fund.

K. Purchasing Laws

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

Office of Road Superintendent

Chapter 232, Private Acts of 1980, and provisions of the Uniform Road Law, Section 54-7-113, TCA, govern purchasing procedures for this office. These statutes provide for purchases exceeding $10,000 to be made after public advertisement and solicitation of competitive bids.

Office of Director of Schools

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

L. Subsequent Events Subsequent to June 30, 2019, Grainger County issued $1,800,000 of interfund loans in the form of tax anticipation notes for the General Fund. Subsequent to June 30, 2019, Grainger County issued a $150,000 interfund loan in the form of a tax anticipation note for the Solid Waste/Sanitation Fund.

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REQUIRED SUPPLEMENTARY INFORMATION

90

Exhibit E-1

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

2014 2015 2016 2017 2018

Total Pension LiabilityService Cost $ 627,456 $ 598,290 $ 652,242 $ 709,108 $ 734,296Interest 1,398,557 1,441,288 1,543,903 1,642,729 1,747,044Changes in Benefit Terms 0 0 0 0 0Differences Between Actual and Expected Experience (582,968) 165,117 30,282 288,643 629,493Changes in Assumptions 0 0 0 537,767 0Benefit Payments, Including Refunds of Employee Contributions (803,478) (884,769) (896,132) (1,035,094) (983,569)Net Change in Total Pension Liability $ 639,567 $ 1,319,926 $ 1,330,295 $ 2,143,153 $ 2,127,264Total Pension Liability, Beginning 18,421,707 19,061,274 20,381,200 21,711,495 23,854,648

Total Pension Liability, Ending (a) $ 19,061,274 $ 20,381,200 $ 21,711,495 $ 23,854,648 $ 25,981,912

Plan Fiduciary Net PositionContributions - Employer $ 741,468 $ 720,013 $ 777,617 $ 787,980 $ 837,405Contributions - Employee 371,474 364,428 391,895 403,681 430,319Net Investment Income 2,921,738 640,417 574,352 2,541,156 2,088,734Benefit Payments, Including Refunds of Employee Contributions (803,478) (884,769) (896,132) (1,035,094) (983,569)Administrative Expense (11,205) (14,819) (22,488) (25,138) (28,469)

0 0 8,584 11,749 0Net Change in Plan Fiduciary Net Position $ 3,219,997 $ 825,270 $ 833,828 $ 2,684,334 $ 2,344,420Plan Fiduciary Net Position, Beginning 17,472,409 20,692,406 21,517,676 22,351,504 25,035,838

Plan Fiduciary Net Position, Ending (b) $ 20,692,406 $ 21,517,676 $ 22,351,504 $ 25,035,838 $ 27,380,258

Net Pension Liability (Asset), Ending (a - b) $ (1,631,132) $ (1,136,476) $ (640,009) $ (1,181,190) $ (1,398,346)

Plan Fiduciary Net Position as a Percentage of Total Pension Liability 108.56% 105.58% 102.95% 104.95% 105.38%Covered Payroll $ 7,422,102 $ 7,377,182 $ 8,005,131 $ 8,073,545 $ 8,579,973Net Pension Liability (Asset) as a Percentage of Covered Payroll (21.98%) (15.41%) (7.99%) (14.63%) (16.30%)

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

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

91

Exhibit E-2

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

2014 2015 2016 2017 2018 2019

Actuarially Determined Contribution $ 741,468 $ 720,013 $ 777,617 $ 338,282 $ 374,945 $ 374,797Less Contributions in Relation to the Actuarially Determined (741,468) (720,013) (777,617) (787,980) (837,405) (837,052) Contribution

Contribution Deficiency (Excess) $ 0 $ 0 $ 0 $ (449,698) $ (462,460) $ (462,255)

Covered Payroll $ 7,422,102 $ 7,377,182 $ 8,005,131 $ 8,073,545 $ 8,579,973 $ 8,576,592

Contributions as a Percentage of Covered Payroll 9.99% 9.76% 9.71% 9.76% 9.76% 9.76%


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

92

Exhibit E-3

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

2015 2016 2017 2018 2019*

Contractually Required Contribution $ 9,858 $ 22,060 $ 43,287 $ 55,157 $ 31,816Less Contributions in Relation to the Contractually Required Contribution (9,858) (22,060) (43,287) (55,157) (31,816)

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

Covered Payroll $ 246,445 $ 551,494 $ 1,086,370 $ 1,378,913 $ 1,639,838

Contributions as a Percentage of Covered Payroll 4.00% 4.00% 3.98% 4.00% 1.94%

* - In FY 2019 the School Department placed the actuarially determined contribution into the pension plan and placed $32,562 into the Pension Stabilization Reserve Trust.


93

Exhibit E-4

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

2014 2015 2016 2017 2018 2019

Contractually Required Contribution $ 1,057,354 $ 1,078,825 $ 1,065,451 $ 1,098,942 $ 1,075,901 $ 1,218,806Less Contributions in Relation to the Contractually Required Contribution (1,057,354) (1,078,825) (1,065,451) (1,098,942) (1,075,901) (1,218,806)

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

Covered Payroll $ 11,907,142 $ 11,933,926 $ 11,785,973 $ 12,152,255 $ 11,849,126 $ 11,652,060

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


94

Exhibit E-5

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

2015 2016 2017 2018

School Department's Proportion of the Net Pension Asset 0.118612% 0.125338% 0.164882% 0.157793%

School Department's Proportionate Share of the Net Pension Asset $ (4,772) $ (13,048) $ (43,501) $ (71,563)

Covered Payroll 246,445 $ 551,494 $ 1,086,370 $ 1,378,913

School Department's Proportionate Share of the Net Pension Asset as a Percentage of its Covered Payroll (1.94)% (2.37)% (4.00)% (5.19)%

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


95

Exhibit E-6

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

2014 2015 2016 2017 2018

School Department's Proportion of the Net Pension Liability (Asset) 0.303367% 0.318790% 0.326499% 0.343893% 0.338385%

School Department's Proportionate Share of the Net Pension Liability (Asset) $ (49,296) $ 130,587 $ 2,040,438 $ (112,515) $ (1,190,747)

Covered Payroll $ 11,907,142 $ 11,933,926 $ 11,785,973 $ 12,152,255 $ 11,849,127

School Department's Proportionate Share of the Net Pension Liability (Asset) as a Percentage of its Covered Payroll (.41%) 1.09% 17.31% (.93%) (10.05%)

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


96

Exhibit E-7

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

2017 2018Total OPEB LiabilityService Cost $ 494,077 $ 454,344 Interest 288,399 348,900 Changes in Benefit Terms 0 0Differences Between Actual and Expected Experience 0 (366,480)Changes in Assumptions or Other Inputs (450,554) 239,879Benefit Payments (343,401) (393,213) Net Change in Total OPEB Liability $ (11,479) $ 283,430 Total OPEB Liability, Beginning 9,554,298 9,542,819

Total OPEB Liability, Ending $ 9,542,819 $ 9,826,249

Nonemployer Contributing Entity Proportionate Share of the Total OPEB Liability $ 2,576,819 $ 2,683,558 Employer Proportionate Share of the Total OPEB Liability 6,966,000 7,142,691

Covered Employee Payroll $ 15,936,207 $ 16,202,533 Net OPEB Liability as a Percentage of Covered Employee Payroll 43.71% 44.08%

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

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

2017 2.92% 2018 3.56% 2019 3.62% (b) The assumed initial trend rate applicable to the 2019 plan year was revised

from 5.4% to 6.75%.

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

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GRAINGER COUNTY, TENNESSEE NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION


TENNESSEE CONSOLIDATED RETIREMENT SYSTEM Valuation Date: Actuarially determined contribution rates for fiscal year 2019 were calculated based on the June 30, 2017, actuarial valuation.

Methods and assumptions used to determine contribution rates:

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

Corridor to Market ValueInflation 2.50%Salary Increases Graded Salary Ranges from 8.72% to

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

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

Retirement Age Pattern of Retirement Determined by Experience Study

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


Changes of assumptions. In 2017, the following assumptions were changed: decreased inflation rate from 3 percent to 2.5 percent; decreased the investment rate of return from 7.5 percent to 7.25 percent; decreased the cost-of-living adjustment from 2.5 percent to 2.25 percent; decreased salary growth graded ranges from an average of 4.25 percent to an average of 4 percent; and modified mortality assumptions.

98

COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES

99

Nonmajor Governmental Funds

Special Revenue Funds ___________________________

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

___________________________

Courthouse and Jail Maintenance Fund – The Courthouse and Jail Maintenance Fund is used to account for a special tax levied by private act on litigation and the recording of certain instruments. The proceeds of the tax must be used to pay for improvements or maintenance on the courthouse and jail. Law Library Fund – The Law Library Fund is used to account for a special tax levied by private act on litigation. Proceeds of the tax must be expended for the benefit of the county’s law library. Solid Waste/Sanitation Fund – The Solid Waste/Sanitation Fund is used to account for transactions involving solid waste collection. Drug Control Fund – The Drug Control Fund is used to account for revenues received from drug-related fines, forfeitures, and seizures. Sports and Recreation Fund – The Sports and Recreation Fund is used to account for transactions of the Parks and Recreation Department. 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.

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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 and for debt issues contributed to the discretely presented School Department.

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Exhibit F-1

Grainger County, TennesseeCombining Balance SheetNonmajor Governmental FundsJune 30, 2019

Courthouse Solidand Jail Law Waste / Drug Sports and

Maintenance Library Sanitation Control RecreationASSETS

Cash $ 0 $ 0 $ 0 $ 0 $ 0Equity in Pooled Cash and Investments 19,553 4,209 126,127 34,065 623,394Accounts Receivable 0 0 11,711 0 0Due from Other Governments 0 0 110,012 0 85,366Property Taxes Receivable 0 0 650,793 0 122,024Allowance for Uncollectible Property Taxes 0 0 (19,574) 0 (3,670)

Total Assets $ 19,553 $ 4,209 $ 879,069 $ 34,065 $ 827,114

LIABILITIES

Accounts Payable $ 0 $ 0 $ 41,054 $ 216 $ 100Payroll Deductions Payable 0 0 1,166 0 1,489Contracts Payable 0 0 0 0 81,700Retainage Payable 0 0 0 0 4,300Due to Other Funds 0 0 0 0 4,979Due to Component Units 0 0 0 0 0Due to State of Tennessee 0 0 332 0 43Total Liabilities $ 0 $ 0 $ 42,552 $ 216 $ 92,611


Deferred Current Property Taxes $ 0 $ 0 $ 613,704 $ 0 $ 115,070Deferred Delinquent Property Taxes 0 0 15,241 0 2,858Total Deferred Inflows of Resources $ 0 $ 0 $ 628,945 $ 0 $ 117,928

(Continued)

Special Revenue Funds

102

Exhibit F-1

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


Maintenance Library Sanitation Control RecreationFUND BALANCES

Restricted:Restricted for Finance $ 0 $ 0 $ 0 $ 0 $ 0Restricted for Administration of Justice 19,553 4,209 0 0 0Restricted for Public Safety 0 0 0 33,849 0Restricted for Public Health and Welfare 0 0 123,743 0 0Restricted for Capital Projects 0 0 0 0 455,850

Committed:Committed for Public Health and Welfare 0 0 83,829 0 0Committed for Social, Cultural, and Recreational Services 0 0 0 0 160,725

Total Fund Balances $ 19,553 $ 4,209 $ 207,572 $ 33,849 $ 616,575

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 19,553 $ 4,209 $ 879,069 $ 34,065 $ 827,114

(Continued)


103

Exhibit F-1


Constitu - Totaltional General Nonmajor

Officers - Capital GovernmentalFees Total Projects Funds

ASSETS

Cash $ 49,902 $ 49,902 $ 0 $ 49,902Equity in Pooled Cash and Investments 0 807,348 0 807,348Accounts Receivable 11,877 23,588 0 23,588Due from Other Governments 0 195,378 442,506 637,884Property Taxes Receivable 0 772,817 0 772,817Allowance for Uncollectible Property Taxes 0 (23,244) 0 (23,244)

Total Assets $ 61,779 $ 1,825,789 $ 442,506 $ 2,268,295

LIABILITIES

Accounts Payable $ 0 $ 41,370 $ 0 $ 41,370Payroll Deductions Payable 0 2,655 0 2,655Contracts Payable 0 81,700 0 81,700Retainage Payable 0 4,300 0 4,300Due to Other Funds 12 4,991 0 4,991Due to Component Units 0 0 442,506 442,506Due to State of Tennessee 0 375 0 375Total Liabilities $ 12 $ 135,391 $ 442,506 $ 577,897


Deferred Current Property Taxes $ 0 $ 728,774 $ 0 $ 728,774Deferred Delinquent Property Taxes 0 18,099 0 18,099Total Deferred Inflows of Resources $ 0 $ 746,873 $ 0 $ 746,873

(Continued)

Special Revenue Funds (Cont.)

Capital Projects

Fund

104

Exhibit F-1




FUND BALANCES

Restricted:Restricted for Finance $ 61,767 $ 61,767 $ 0 $ 61,767Restricted for Administration of Justice 0 23,762 0 23,762Restricted for Public Safety 0 33,849 0 33,849Restricted for Public Health and Welfare 0 123,743 0 123,743Restricted for Capital Projects 0 455,850 0 455,850

Committed:Committed for Public Health and Welfare 0 83,829 0 83,829Committed for Social, Cultural, and Recreational Services 0 160,725 0 160,725

Total Fund Balances $ 61,767 $ 943,525 $ 0 $ 943,525

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 61,779 $ 1,825,789 $ 442,506 $ 2,268,295


Capital Projects

Fund

105

Exhibit F-2

Grainger County, TennesseeCombining Statement of Revenues, Expenditures,

and Changes in Fund BalancesNonmajor Governmental FundsFor the Year Ended June 30, 2019


Maintenance Library Sanitation Control Recreation

RevenuesLocal Taxes $ 1,288 $ 1,547 $ 641,268 $ 0 $ 119,739Fines, Forfeitures, and Penalties 0 0 2,533 7,265 486Charges for Current Services 0 0 0 0 10,455Other Local Revenues 0 0 69,307 31 253,786State of Tennessee 0 0 214,911 0 119,343

Total Revenues $ 1,288 $ 1,547 $ 928,019 $ 7,296 $ 503,809


General Government $ 13 $ 0 $ 0 $ 0 $ 0Finance 0 0 0 0 0Administration of Justice 0 0 0 0 0Public Safety 0 0 0 29,110 0Public Health and Welfare 0 0 825,030 0 0Social, Cultural, and Recreational Services 0 434 0 0 394,868

Debt Service:Interest on Debt 0 0 0 0 0

Capital Projects - Donated 0 0 0 0 0Total Expenditures $ 13 $ 434 $ 825,030 $ 29,110 $ 394,868

Excess (Deficiency) of RevenuesOver Expenditures $ 1,275 $ 1,113 $ 102,989 $ (21,814) $ 108,941

(Continued)


106

Exhibit F-2


and Changes in Fund BalancesNonmajor Governmental Funds (Cont.)


Maintenance Library Sanitation Control Recreation

Other Financing Sources (Uses)Notes Issued $ 0 $ 0 $ 0 $ 0 $ 93,000Other Loans Issued 0 0 0 0 0

Total Other Financing Sources (Uses) $ 0 $ 0 $ 0 $ 0 $ 93,000

Net Change in Fund Balances $ 1,275 $ 1,113 $ 102,989 $ (21,814) $ 201,941Fund Balance, July 1, 2018 18,278 3,096 104,583 55,663 414,634

Fund Balance, June 30, 2019 $ 19,553 $ 4,209 $ 207,572 $ 33,849 $ 616,575

(Continued)


107

Exhibit F-2





RevenuesLocal Taxes $ 0 $ 763,842 $ 0 $ 763,842Fines, Forfeitures, and Penalties 0 10,284 0 10,284Charges for Current Services 435,134 445,589 0 445,589Other Local Revenues 0 323,124 0 323,124State of Tennessee 0 334,254 0 334,254

Total Revenues $ 435,134 $ 1,877,093 $ 0 $ 1,877,093


General Government $ 0 $ 13 $ 0 $ 13Finance 419,256 419,256 0 419,256Administration of Justice 20,460 20,460 0 20,460Public Safety 0 29,110 0 29,110Public Health and Welfare 0 825,030 0 825,030Social, Cultural, and Recreational Services 0 395,302 0 395,302

Debt Service:Interest on Debt 0 0 6,785 6,785

Capital Projects - Donated 0 0 1,344,060 1,344,060Total Expenditures $ 439,716 $ 1,689,171 $ 1,350,845 $ 3,040,016

Excess (Deficiency) of RevenuesOver Expenditures $ (4,582) $ 187,922 $ (1,350,845) $ (1,162,923)

(Continued)


Capital Projects

Fund

108

Exhibit F-2





Other Financing Sources (Uses)Notes Issued $ 0 $ 93,000 $ 0 $ 93,000Other Loans Issued 0 0 1,350,845 1,350,845

Total Other Financing Sources (Uses) $ 0 $ 93,000 $ 1,350,845 $ 1,443,845

Net Change in Fund Balances $ (4,582) $ 280,922 $ 0 $ 280,922Fund Balance, July 1, 2018 66,349 662,603 0 662,603

Fund Balance, June 30, 2019 $ 61,767 $ 943,525 $ 0 $ 943,525


Capital Projects

Fund

109

Exhibit F-3

Grainger County, TennesseeSchedule of Revenues, Expenditures, and Changes

in Fund Balance - Actual and BudgetCourthouse and Jail Maintenance FundFor the Year Ended June 30, 2019



RevenuesLocal Taxes $ 1,288 $ 1,350 $ 1,350 $ (62)

Total Revenues $ 1,288 $ 1,350 $ 1,350 $ (62)

ExpendituresGeneral Government

County Buildings $ 13 $ 15,020 $ 15,020 $ 15,007Total Expenditures $ 13 $ 15,020 $ 15,020 $ 15,007

Excess (Deficiency) of RevenuesOver Expenditures $ 1,275 $ (13,670) $ (13,670) $ 14,945

Net Change in Fund Balance $ 1,275 $ (13,670) $ (13,670) $ 14,945Fund Balance, July 1, 2018 18,278 18,415 18,415 (137)

Fund Balance, June 30, 2019 $ 19,553 $ 4,745 $ 4,745 $ 14,808

Budgeted Amounts

110

Exhibit F-4


in Fund Balance - Actual and BudgetLaw Library FundFor the Year Ended June 30, 2019



RevenuesLocal Taxes $ 1,547 $ 1,110 $ 1,110 $ 437

Total Revenues $ 1,547 $ 1,110 $ 1,110 $ 437

ExpendituresSocial, Cultural, and Recreational Services

Libraries $ 434 $ 1,520 $ 1,520 $ 1,086Total Expenditures $ 434 $ 1,520 $ 1,520 $ 1,086

Excess (Deficiency) of RevenuesOver Expenditures $ 1,113 $ (410) $ (410) $ 1,523

Net Change in Fund Balance $ 1,113 $ (410) $ (410) $ 1,523Fund Balance, July 1, 2018 3,096 3,286 3,286 (190)


Budgeted Amounts

111

Exhibit F-5


in Fund Balance - Actual (Budgetary Basis) and BudgetSolid Waste/Sanitation FundFor the Year Ended June 30, 2019



RevenuesLocal Taxes $ 641,268 $ 0 $ 641,268 $ 643,500 $ 643,500 $ (2,232)Fines, Forfeitures, and Penalties 2,533 0 2,533 4,050 4,050 (1,517)Other Local Revenues 69,307 0 69,307 48,000 48,000 21,307State of Tennessee 214,911 0 214,911 123,000 244,898 (29,987)

Total Revenues $ 928,019 $ 0 $ 928,019 $ 818,550 $ 940,448 $ (12,429)

ExpendituresPublic Health and Welfare

Sanitation Management $ 816,662 $ 124,336 $ 940,998 $ 868,950 $ 1,013,072 $ 72,074Recycling Center 0 0 0 35,000 12,776 12,776Postclosure Care Costs 8,368 0 8,368 17,500 17,500 9,132

Total Expenditures $ 825,030 $ 124,336 $ 949,366 $ 921,450 $ 1,043,348 $ 93,982

Excess (Deficiency) of RevenuesOver Expenditures $ 102,989 $ (124,336) $ (21,347) $ (102,900) $ (102,900) $ 81,553

Net Change in Fund Balance $ 102,989 $ (124,336) $ (21,347) $ (102,900) $ (102,900) $ 81,553Fund Balance, July 1, 2018 104,583 0 104,583 131,956 131,956 (27,373)

Fund Balance, June 30, 2019 $ 207,572 $ (124,336) $ 83,236 $ 29,056 $ 29,056 $ 54,180

Budgeted Amounts

112

Exhibit F-6


in Fund Balance - Actual and BudgetDrug Control FundFor the Year Ended June 30, 2019



RevenuesFines, Forfeitures, and Penalties $ 7,265 $ 26,000 $ 26,000 $ (18,735)Other Local Revenues 31 0 0 31

Total Revenues $ 7,296 $ 26,000 $ 26,000 $ (18,704)

ExpendituresPublic Safety

Drug Enforcement $ 29,110 $ 54,000 $ 54,000 $ 24,890Total Expenditures $ 29,110 $ 54,000 $ 54,000 $ 24,890

Excess (Deficiency) of RevenuesOver Expenditures $ (21,814) $ (28,000) $ (28,000) $ 6,186

Net Change in Fund Balance $ (21,814) $ (28,000) $ (28,000) $ 6,186Fund Balance, July 1, 2018 55,663 56,517 56,517 (854)


Budgeted Amounts

113

Exhibit F-7


in Fund Balance - Actual (Budgetary Basis) and BudgetSports and Recreation FundFor the Year Ended June 30, 2019



RevenuesLocal Taxes $ 119,739 $ 0 $ 119,739 $ 119,550 $ 119,550 $ 189Fines, Forfeitures, and Penalties 486 0 486 490 490 (4)Charges for Current Services 10,455 0 10,455 13,000 13,000 (2,545)Other Local Revenues 253,786 0 253,786 0 250,000 3,786State of Tennessee 119,343 0 119,343 243,992 243,992 (124,649)

Total Revenues $ 503,809 $ 0 $ 503,809 $ 377,032 $ 627,032 $ (123,223)

ExpendituresSocial, Cultural, and Recreational Services

Parks and Fair Boards $ 394,868 $ 678,499 $ 1,073,367 $ 638,634 $ 1,091,103 $ 17,736Total Expenditures $ 394,868 $ 678,499 $ 1,073,367 $ 638,634 $ 1,091,103 $ 17,736

Excess (Deficiency) of RevenuesOver Expenditures $ 108,941 $ (678,499) $ (569,558) $ (261,602) $ (464,071) $ (105,487)

Other Financing Sources (Uses)Notes Issued $ 93,000 $ 0 $ 93,000 $ 0 $ 93,000 $ 0

Total Other Financing Sources $ 93,000 $ 0 $ 93,000 $ 0 $ 93,000 $ 0

Net Change in Fund Balance $ 201,941 $ (678,499) $ (476,558) $ (261,602) $ (371,071) $ (105,487)Fund Balance, July 1, 2018 414,634 0 414,634 401,723 401,723 12,911

Fund Balance, June 30, 2019 $ 616,575 $ (678,499) $ (61,924) $ 140,121 $ 30,652 $ (92,576)

Budgeted Amounts

114

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.

____________________________________

115

Exhibit G


in Fund Balance - Actual and BudgetGeneral Debt Service FundFor the Year Ended June 30, 2019



RevenuesLocal Taxes $ 999,540 $ 903,000 $ 903,000 $ 96,540Fines, Forfeitures, and Penalties 2,160 2,900 2,900 (740)Other Local Revenues 71,926 60,000 60,000 11,926State of Tennessee 59,971 55,000 55,000 4,971Other Governments and Citizens Groups 700,000 700,000 700,000 0

Total Revenues $ 1,833,597 $ 1,720,900 $ 1,720,900 $ 112,697

ExpendituresPrincipal on Debt

General Government $ 410,565 $ 2,070,000 $ 646,143 $ 235,578Education 1,418,000 0 1,418,000 0

Interest on DebtGeneral Government 83,493 509,000 141,696 58,203Education 371,150 0 371,150 0

Other Debt ServiceGeneral Government 16,738 16,500 16,500 (238)Education 2,011 0 2,011 0


Excess (Deficiency) of RevenuesOver Expenditures $ (468,360) $ (874,600) $ (874,600) $ 406,240

Net Change in Fund Balance $ (468,360) $ (874,600) $ (874,600) $ 406,240Fund Balance, July 1, 2018 1,806,764 1,763,307 1,763,307 43,457

Fund Balance, June 30, 2019 $ 1,338,404 $ 888,707 $ 888,707 $ 449,697

Budgeted Amounts

116

Fiduciary Funds _______________________________

Agency Funds are used to account for assets held by the county 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.

117

Exhibit H-1

Grainger County, TennesseeCombining Statement of Fiduciary Assets and LiabilitiesFiduciary FundsJune 30, 2019

Constitu-Cities - tionalSales Officers -Tax Agency Total

ASSETS

Cash $ 0 $ 690,516 $ 690,516Due from Other Governments 168,970 0 168,970

Total Assets $ 168,970 $ 690,516 $ 859,486

LIABILITIES

Due to Other Taxing Units $ 168,970 $ 0 $ 168,970Due to Litigants, Heirs, and Others 0 690,516 690,516

Total Liabilities $ 168,970 $ 690,516 $ 859,486

Agency Funds

118

Exhibit H-2

Grainger County, TennesseeCombining Statement of Changes in Assets and Liabilities - All Agency FundsFor the Year Ended June 30, 2019

Cities - Sales Tax Fund Assets Equity in Pooled Cash and Investments $ 0 $ 963,842 $ 963,842 $ 0 Due from Other Governments 168,980 168,970 168,980 168,970

Total Assets $ 168,980 $ 1,132,812 $ 1,132,822 $ 168,970

Liabilities Due to Other Taxing Units $ 168,980 $ 1,132,812 $ 1,132,822 $ 168,970

Total Liabilities $ 168,980 $ 1,132,812 $ 1,132,822 $ 168,970

Constitutional Officers - Agency Fund Assets Cash $ 426,630 $ 4,693,265 $ 4,429,379 $ 690,516

Total Assets $ 426,630 $ 4,693,265 $ 4,429,379 $ 690,516

Liabilities Due to Litigants, Heirs, and Others $ 426,630 $ 4,693,265 $ 4,429,379 $ 690,516


Totals - All Agency Funds Assets Cash $ 426,630 $ 4,693,265 $ 4,429,379 $ 690,516 Equity in Pooled Cash and Investments 0 963,842 963,842 0 Due from Other Governments 168,980 168,970 168,980 168,970

Total Assets $ 595,610 $ 5,826,077 $ 5,562,201 $ 859,486

Liabilities Due to Other Taxing Units $ 168,980 $ 1,132,812 $ 1,132,822 $ 168,970 Due to Litigants, Heirs, and Others 426,630 4,693,265 4,429,379 690,516


Ending Balance

Beginning Balance Additions Deductions

119

Grainger County School Department ____________________________

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

____________________________

General Purpose School Fund – The General Purpose School Fund is used to account for general operations of the School Department.

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

120

Exhibit I-1

Grainger County, TennesseeStatement of ActivitiesDiscretely Presented Grainger County School DepartmentFor the Year Ended June 30, 2019

Operating CapitalCharges Grants Grants

for and andFunctions/Programs Expenses Services Contributions Contributions

Governmental Activities: Instruction $ 20,500,480 $ 110 $ 1,247,803 $ 1,344,060 $ (17,908,507) Support Services 8,896,771 0 1,039,284 0 (7,857,487) Operation of Non-instructional Services 2,455,427 445,116 1,907,183 0 (103,128)

Total Governmental Activities $ 31,852,678 $ 445,226 $ 4,194,270 $ 1,344,060 $ (25,869,122)

General Revenues: Taxes: Property Taxes Levied for General Purposes $ 2,716,634 Local Option Sales Taxes 1,407,290 Business Tax 28,165 Grants and Contributions Not Restricted for Specific Programs 23,851,645 Unrestricted Investment Earnings 1,075 Gain on Investments 1,731 Miscellaneous 25,156Total General Revenues $ 28,031,696

Change in Net Position $ 2,162,574Net Position, July 1, 2018 40,489,571

Net Position, June 30, 2019 $ 42,652,145

Program Revenues

GovernmentalActivities

Net (Expense)Revenue andChanges inNet Position

Total

121

Exhibit I-2

Grainger County, TennesseeBalance Sheet - Governmental FundsDiscretely Presented Grainger County School DepartmentJune 30, 2019

OtherGeneral Govern- TotalPurpose mental GovernmentalSchool Funds Funds

ASSETS

Cash $ 829,817 $ 595 $ 830,412Equity in Pooled Cash and Investments 9,561,841 807,220 10,369,061Accounts Receivable 1,502 14 1,516Due from Other Governments 414,404 205,038 619,442Due from Primary Government 442,506 0 442,506Property Taxes Receivable 2,847,219 0 2,847,219Allowance for Uncollectible Property Taxes (85,637) 0 (85,637)Restricted Assets 34,293 0 34,293

Total Assets $ 14,045,945 $ 1,012,867 $ 15,058,812

LIABILITIES

Accounts Payable $ 375,874 $ 42,302 $ 418,176Accrued Payroll 83,003 12,707 95,710Contracts Payable 557,980 0 557,980Other Current Liabilities 829,817 0 829,817Total Liabilities $ 1,846,674 $ 55,009 $ 1,901,683


Deferred Current Property Taxes $ 2,684,958 $ 0 $ 2,684,958Deferred Delinquent Property Taxes 64,068 0 64,068Other Deferred/Unavailable Revenue 125,244 0 125,244Total Deferred Inflows of Resources $ 2,874,270 $ 0 $ 2,874,270

FUND BALANCES

Restricted:Restricted for Education $ 184,751 $ 557,858 $ 742,609Restricted for Capital Projects 18,966 0 18,966Restricted for Hybrid Retirement Stabilization Funds 34,293 0 34,293

Committed:Committed for Education 0 400,000 400,000

Assigned:Assigned for Education 744,518 0 744,518Assigned for Capital Projects 2,855,295 0 2,855,295

Unassigned 5,487,178 0 5,487,178Total Fund Balances $ 9,325,001 $ 957,858 $ 10,282,859

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 14,045,945 $ 1,012,867 $ 15,058,812

Nonmajor Funds

Major Fund

122

Exhibit I-3

Grainger County, TennesseeReconciliation of the Balance Sheet of Governmental Funds to the Statement of Net PositionDiscretely Presented Grainger County School DepartmentJune 30, 2019

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) $ 10,282,859

(1) Capital assets used in governmental activities are not financial resources and therefore are not reported inthe governmental funds. Add: land $ 1,117,547 Add: construction in progress 2,047,761 Add: buildings and improvements net of accumulated depreciation 31,432,864 Add: other capital assets net of accumulated depreciation 2,127,888 36,726,060

(2) Long-term liabilities are not due and payablein the current period and therefore are not reportedin the governmental funds. Less: net OPEB liability $ (7,142,691) Less: retirement honorarium payable (362,300) Less: retirement incentive payable (30,000) Less: compensated absences payable (132,930) (7,667,921)

(3) Amounts reported as deferred outflows of resources and deferredinflows of resources related to pensions and OPEB will be amortized andrecognized as components of expense in future years: Add: deferred outflows of resources related to pensions $ 3,272,776 Less: deferred inflows of resources related to pensions (1,992,357) Add: deferred outflows of resources related to OPEB 476,689 Less: deferred inflows of resources related to OPEB (534,390) 1,222,718

(4) Net pension assetare not current financial resources andtherefore are not reported in the governmental funds. Add: net pension asset - agent plan $ 636,807 Add: net pension asset - teacher retirement plan 71,563 Add: net pension asset - teacher leagacy pension plan 1,190,747 1,899,117

(5) Other long-term assets are not available to pay forcurrent-period expenditures and therefore are deferredin the governmental funds. 189,312

Net position of governmental activities (Exhibit A) $ 42,652,145

123

Exhibit I-4


and Changes in Fund Balances - Governmental Funds

Discretely Presented Grainger County School DepartmentFor the Year Ended June 30, 2019

OtherGeneral Govern- TotalPurpose mental GovernmentalSchool Funds Funds

RevenuesLocal Taxes $ 4,151,701 $ 0 $ 4,151,701Licenses and Permits 618 0 618Fines, Forfeitures, and Penalties 11,336 0 11,336Charges for Current Services 110 445,116 445,226Other Local Revenues 40,705 2,881 43,586State of Tennessee 23,726,575 18,508 23,745,083Federal Government 108,437 4,072,853 4,181,290Other Governments and Citizens Groups 1,344,060 0 1,344,060

Total Revenues $ 29,383,542 $ 4,539,358 $ 33,922,900


Instruction $ 17,628,931 $ 1,781,748 $ 19,410,679Support Services 8,438,370 755,109 9,193,479Operation of Non-Instructional Services 352,367 2,066,789 2,419,156Capital Outlay 2,556,575 0 2,556,575

Debt Service:Other Debt Service 700,000 0 700,000

Total Expenditures $ 29,676,243 $ 4,603,646 $ 34,279,889

Excess (Deficiency) of RevenuesOver Expenditures $ (292,701) $ (64,288) $ (356,989)

Other Financing Sources (Uses)Insurance Recovery $ 74,040 $ 0 $ 74,040

Total Other Financing Sources (Uses) $ 74,040 $ 0 $ 74,040

Net Change in Fund Balances $ (218,661) $ (64,288) $ (282,949)Fund Balance, July 1, 2018 9,543,662 1,022,146 10,565,808

Fund Balance, June 30, 2019 $ 9,325,001 $ 957,858 $ 10,282,859

Nonmajor Funds

Major Fund

124

Exhibit I-5

Grainger County, TennesseeReconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of ActivitiesDiscretely Presented Grainger County School DepartmentFor the Year Ended June 30, 2019

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

Net changes in fund balances - total governmental funds (Exhibit I-4) $ (282,949)

(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. Thedifference between capital outlays and depreciation is itemized as follows: Add: capital assets purchased in the current period $ 2,362,038 Less: current-year depreciation expense (1,297,312) 1,064,726

(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, 2019 $ 189,312 Less: deferred delinquent property taxes and other deferred June 30, 2018 (188,924) 388

(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 net OPEB liability $ (176,691) Change in retirement incentive payable (10,000) Change in retirement honorarium (8,200) Change in compensated absences payable (132,930) Change in net pension asset/liability 1,200,698 Change in deferred outflows related to pensions 112,950 Change in deferred inflows related to pensions 434,924 Change in deferred outflows related to OPEB 198,716 Change in deferred inflows related to OPEB (239,058) 1,380,409

Change in net position of governmental activities (Exhibit B) $ 2,162,574

125

Exhibit I-6

Grainger County, TennesseeCombining Balance Sheet - Nonmajor Governmental FundsDiscretely Presented Grainger County School DepartmentJune 30, 2019

TotalSchool NonmajorFederal Central GovernmentalProjects Cafeteria Funds

ASSETS

Cash $ 0 $ 595 $ 595Equity in Pooled Cash and Investments 359,874 447,346 807,220Accounts Receivable 0 14 14Due from Other Governments 84,814 120,224 205,038

Total Assets $ 444,688 $ 568,179 $ 1,012,867

LIABILITIES

Accounts Payable $ 31,981 $ 10,321 $ 42,302Accrued Payroll 12,707 0 12,707Total Liabilities $ 44,688 $ 10,321 $ 55,009

FUND BALANCES

Restricted:Restricted for Education $ 0 $ 557,858 $ 557,858

Committed:Committed for Education 400,000 0 400,000

Total Fund Balances $ 400,000 $ 557,858 $ 957,858

Total Liabilities and Fund Balances $ 444,688 $ 568,179 $ 1,012,867


126

Exhibit I-7


and Changes in Fund Balances - Nonmajor Governmental Funds

Discretely Presented Grainger County School DepartmentFor the Year Ended June 30, 2019

TotalSchool NonmajorFederal Central GovernmentalProjects Cafeteria Funds

RevenuesCharges for Current Services $ 0 $ 445,116 $ 445,116Other Local Revenues 0 2,881 2,881State of Tennessee 0 18,508 18,508Federal Government 2,536,544 1,536,309 4,072,853

Total Revenues $ 2,536,544 $ 2,002,814 $ 4,539,358


Instruction $ 1,781,748 $ 0 $ 1,781,748Support Services 755,109 0 755,109Operation of Non-Instructional Services 0 2,066,789 2,066,789

Total Expenditures $ 2,536,857 $ 2,066,789 $ 4,603,646

Excess (Deficiency) of RevenuesOver Expenditures $ (313) $ (63,975) $ (64,288)

Net Change in Fund Balances $ (313) $ (63,975) $ (64,288)Fund Balance, July 1, 2018 400,313 621,833 1,022,146

Fund Balance, June 30, 2019 $ 400,000 $ 557,858 $ 957,858


127

Exhibit I-8


in Fund Balance - Actual and BudgetDiscretely Presented Grainger County School DepartmentGeneral Purpose School FundFor the Year Ended June 30, 2019



RevenuesLocal Taxes $ 4,151,701 $ 4,093,500 $ 4,093,500 $ 58,201Licenses and Permits 618 0 0 618Fines, Forfeitures, and Penalties 11,336 13,000 13,000 (1,664)Charges for Current Services 110 0 0 110Other Local Revenues 40,705 35,000 17,874 22,831State of Tennessee 23,726,575 22,408,794 23,244,646 481,929Federal Government 108,437 74,731 104,698 3,739Other Governments and Citizens Groups 1,344,060 0 1,344,060 0

Total Revenues $ 29,383,542 $ 26,625,025 $ 28,817,778 $ 565,764

ExpendituresInstruction

Regular Instruction Program $ 14,034,383 $ 14,709,216 $ 15,518,195 $ 1,483,812Alternative Instruction Program 58,312 63,833 63,833 5,521Special Education Program 2,292,477 2,207,606 2,428,285 135,808Career and Technical Education Program 1,095,132 1,172,209 1,172,209 77,077Student Body Education Program 32,949 38,000 38,000 5,051Adult Education Program 115,678 118,820 118,820 3,142

Support ServicesAttendance 7,881 7,966 7,966 85Health Services 477,513 379,757 492,757 15,244Other Student Support 628,955 570,248 785,666 156,711Regular Instruction Program 536,213 530,894 688,342 152,129Special Education Program 207,040 244,294 250,204 43,164Career and Technical Education Program 61,245 62,835 62,835 1,590Technology 238,526 275,448 275,448 36,922Other Programs 115,240 0 115,240 0Board of Education 413,285 471,473 494,953 81,668Director of Schools 269,501 276,040 284,790 15,289Office of the Principal 1,497,109 1,454,243 1,609,613 112,504Operation of Plant 1,764,156 1,898,955 1,958,955 194,799Maintenance of Plant 724,136 529,990 1,171,684 447,548Transportation 1,497,570 1,508,922 1,915,452 417,882

Operation of Non-Instructional ServicesCommunity Services 29,611 0 29,612 1Early Childhood Education 322,756 0 322,754 (2)

Capital OutlayRegular Capital Outlay 2,556,575 97,500 2,925,560 368,985

Principal on DebtEducation 0 700,000 0 0

Other Debt ServiceEducation 700,000 0 700,000 0

Total Expenditures $ 29,676,243 $ 27,318,249 $ 33,431,173 $ 3,754,930

Excess (Deficiency) of RevenuesOver Expenditures $ (292,701) $ (693,224) $ (4,613,395) $ 4,320,694

(Continued)

Budgeted Amounts

128

Exhibit I-8


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



Other Financing Sources (Uses)Insurance Recovery $ 74,040 $ 0 $ 74,530 $ (490)

Total Other Financing Sources $ 74,040 $ 0 $ 74,530 $ (490)

Net Change in Fund Balance $ (218,661) $ (693,224) $ (4,538,865) $ 4,320,204Fund Balance, July 1, 2018 9,543,662 9,543,662 9,543,662 0

Fund Balance, June 30, 2019 $ 9,325,001 $ 8,850,438 $ 5,004,797 $ 4,320,204

Budgeted Amounts

129

Exhibit I-9


in Fund Balance - Actual and BudgetDiscretely Presented Grainger County School DepartmentSchool Federal Projects FundFor the Year Ended June 30, 2019



RevenuesFederal Government $ 2,536,544 $ 2,096,722 $ 2,837,288 $ (300,744)

Total Revenues $ 2,536,544 $ 2,096,722 $ 2,837,288 $ (300,744)

ExpendituresInstruction

Regular Instruction Program $ 1,133,158 $ 943,710 $ 1,270,056 $ 136,898Special Education Program 597,654 521,670 652,172 54,518Career and Technical Education Program 50,936 44,332 50,936 0

Support ServicesHealth Services 17,819 18,929 18,929 1,110Other Student Support 49,452 86,654 80,050 30,598Regular Instruction Program 296,575 177,927 324,423 27,848Special Education Program 299,650 194,908 314,600 14,950Transportation 91,613 108,592 126,434 34,821


Excess (Deficiency) of RevenuesOver Expenditures $ (313) $ 0 $ (312) $ (1)

Net Change in Fund Balance $ (313) $ 0 $ (312) $ (1)Fund Balance, July 1, 2018 400,313 400,313 400,313 0

Fund Balance, June 30, 2019 $ 400,000 $ 400,313 $ 400,001 $ (1)

Budgeted Amounts

130

Exhibit I-10


in Fund Balance - Actual and BudgetDiscretely Presented Grainger County School DepartmentCentral Cafeteria FundFor the Year Ended June 30, 2019



RevenuesCharges for Current Services $ 445,116 $ 651,350 $ 655,350 $ (210,234)Other Local Revenues 2,881 4,500 4,500 (1,619)State of Tennessee 18,508 18,500 18,500 8Federal Government 1,536,309 1,475,000 1,622,285 (85,976)

Total Revenues $ 2,002,814 $ 2,149,350 $ 2,300,635 $ (297,821)

ExpendituresOperation of Non-Instructional Services

Food Service $ 2,066,789 $ 2,123,350 $ 2,284,635 $ 217,846Total Expenditures $ 2,066,789 $ 2,123,350 $ 2,284,635 $ 217,846

Excess (Deficiency) of RevenuesOver Expenditures $ (63,975) $ 26,000 $ 16,000 $ (79,975)

Other Financing Sources (Uses)Transfers Out $ 0 $ (26,000) $ (16,000) $ 16,000

Total Other Financing Sources $ 0 $ (26,000) $ (16,000) $ 16,000

Net Change in Fund Balance $ (63,975) $ 0 $ 0 $ (63,975)Fund Balance, July 1, 2018 621,833 621,833 621,833 0

Fund Balance, June 30, 2019 $ 557,858 $ 621,833 $ 621,833 $ (63,975)

Budgeted Amounts

131

MISCELLANEOUS SCHEDULES

132

Exhibit J-1

Grainger County, TennesseeSchedule of Changes in Long-term Notes, Bonds, and Other Loans PayableFor the Year Ended June 30, 2019

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

Description of Indebtedness of Issue Rate Issue Date 7-1-18 Period Period 6-30-19

BONDS PAYABLE Payable through General Debt Service Fund General Obligation Refunding Bonds - Series 2012 - Justice Center $ 3,995,000 1.92 % 12-12-12 5-1-30 $ 3,155,000 $ 0 $ 182,000 $ 2,973,000 General Obligation Refunding Bonds - Series 2012 - Schools 5,980,000 1.92 12-12-12 5-1-30 4,720,000 0 273,000 4,447,000 General Obligation Refunding Bonds - Series 2013 - Schools 9,800,000 1.94 2-15-13 5-1-30 8,705,000 0 270,000 8,435,000 General Obligation Refunding Bonds - Series 2014 - Schools 4,315,000 2 3-27-14 5-1-20 1,710,000 0 850,000 860,000 General Obligation School Bonds - Series 2014 2,500,000 2 to 3.5 3-27-14 5-1-34 2,400,000 0 25,000 2,375,000

Total Bonds Payable $ 20,690,000 $ 0 $ 1,600,000 $ 19,090,000

NOTES PAYABLE Payable through General Debt Service Fund Sheriff's Vehicles and Ambulance 250,000 2.91 6-29-15 6-29-19 $ 62,500 $ 0 $ 62,500 $ 0 Sheriff's Vehicles 120,000 3.11 6-17-16 6-17-19 41,248 0 41,248 0 Sheriff's Vehicles and Ambulance 300,000 3.11 5-26-17 11-14-21 239,726 0 57,173 182,553 Parks and Recreation Ball Field Project 250,000 3.11 5-26-17 11-14-21 199,771 0 47,644 152,127 Highway Paving and Road Repair 40,000 2.51 1-16-18 1-16-20 40,000 0 20,000 20,000 Sheriff's Vehicles and Ambulance 210,000 2.79 11-5-18 1-16-22 0 210,000 0 210,000 Justice Center Paving 130,000 2.79 3-5-19 3-15-22 0 130,000 0 130,000 Parks and Recreation Ball Field Project 93,000 2.95 6-25-19 6-25-24 0 93,000 0 93,000

Total Notes Payable $ 583,245 $ 433,000 $ 228,565 $ 787,680

OTHER LOANS PAYABLE

Payable through General Debt Service Fund Energy Efficient Schools Initiative 1,350,845 1.50 6-19-19 10-1-31 $ 0 $ 1,350,845 $ 0 $ 1,350,845

Total Other Loans Payable $ 0 $ 1,350,845 $ 0 $ 1,350,845

133

Exhibit J-2

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

YearEndingJune 30 Principal Interest Total

2020 $ 1,630,000 $ 403,499 $ 2,033,4992021 1,705,000 372,325 2,077,3252022 1,740,000 341,124 2,081,1242023 1,785,000 309,275 2,094,2752024 1,500,000 276,600 1,776,6002025 1,535,000 245,750 1,780,7502026 1,570,000 213,300 1,783,3002027 1,610,000 180,050 1,790,0502028 1,640,000 145,412 1,785,4122029 1,695,000 110,124 1,805,1242030 1,740,000 72,050 1,812,0502031 220,000 32,900 252,9002032 230,000 25,200 255,2002033 240,000 17,150 257,1502034 250,000 8,750 258,750

Total $ 19,090,000 $ 2,753,509 $ 21,843,509


2020 $ 255,050 $ 24,909 $ 279,9592021 243,237 15,955 259,1922022 250,539 8,653 259,1922023 19,142 1,162 20,3042024 19,712 591 20,303

Total $ 787,680 $ 51,270 $ 838,950

(Continued)

Bonds

Notes

134

Exhibit J-2

Grainger County, TennesseeSchedule of Long-term Debt Requirements by Year (Cont.)


2020 $ 68,840 $ 13,208 $ 82,0482021 104,556 18,516 123,0722022 106,140 16,932 123,0722023 107,736 15,336 123,0722024 109,368 13,704 123,0722025 111,024 12,048 123,0722026 112,692 10,380 123,0722027 114,396 8,676 123,0722028 116,124 6,948 123,0722029 117,876 5,196 123,0722030 119,664 3,408 123,0722031 121,464 1,608 123,0722032 40,965 103 41,068

Total $ 1,350,845 $ 126,063 $ 1,476,908

Other Loans

135

Exhibit J-3

Grainger County, TennesseeSchedule of Salaries and Official Bonds of Principal OfficialsPrimary Government and Discretely Presented Grainger County School DepartmentFor the Year Ended June 30, 2019

Salary Paid

DuringOfficial Authorization for Salary Period Bond Surety

County Mayor: Mark Hipsher (7-1-18 through 8-31-18) Section 8-24-102, TCA $ 14,567 $ 100,000 RLI Insurance Company David M. Byrd (9-1-18 through 6-30-19) Section 8-24-102, TCA 72,822 400,000 Local Government Insurance PoolRoad Superintendent: Jim Renfro (7-1-18 through 8-31-18) Section 8-24-102, TCA 13,213 100,000 RLI Insurance Company Charlie McAnally (9-1-18 through 6-30-19) Section 8-24-102, TCA 66,063 400,000 Local Government Insurance PoolDirector of Schools State Board of Education

and County Board of Education 101,794 (1) 100,000 Western Surety CompanyTrustee Section 8-24-102, TCA 73,269 (2) 902,000 RLI Insurance CompanyAssessor of Property Section 8-24-102, TCA 72,069 50,000 Western Surety CompanyCounty Clerk Section 8-24-102, TCA 73,269 (2) 100,000 RLI Insurance CompanyCircuit and General Sessions Courts Clerk Section 8-24-102, TCA 72,069 100,000 "Clerk and Master Section 8-24-102, TCA

and Chancery Court Judge 72,069 (3) 100,000 "Register of Deeds Section 8-24-102, TCA 73,269 (2) 100,000 "Sheriff Section 8-24-102, TCA,

and County Commission 83,840 (4) 100,000 "

Employee Blanket Bonds: County Employees 400,000 Local Government Insurance Pool School Department Employees 400,000 Tennessee Risk Management Trust

perfect attendance payment of $300, an across the board bonus of $100, and chief executive officer training supplement of $1,000.(2) Includes a certified public admimistrator incentive supplement of $1,200.(3) Does not include special commissioner fees of $20,460(4) Includes $3,964 for serving as workhouse superintendent and includes $600 training supplement.

(1) Includes a salary equity bonus of $1,700, test administration payments of $132, career ladder payment of $1,000,

136

Exhibit J-4

Grainger County, TennesseeSchedule of Detailed Revenues -

All Governmental Fund TypesFor the Year Ended June 30, 2019


General Maintenance Library Sanitation Control Recreation

Local TaxesCounty Property Taxes

Current Property Tax $ 4,215,781 $ 0 $ 0 $ 547,961 $ 0 $ 102,818Trustee's Collections - Prior Year 156,629 0 0 23,300 0 3,885Circuit Clerk/Clerk and Master Collections - Prior Years 140,171 0 0 18,297 0 3,431Interest and Penalty 27,543 0 0 3,947 0 688Payments in-Lieu-of Taxes - T.V.A. 2,861 0 0 372 0 70Payments in-Lieu-of Taxes - Local Utilities 239,623 0 0 31,177 0 5,845Payments in-Lieu-of Taxes - Other 70,688 0 0 9,195 0 1,706

County Local Option TaxesLocal Option Sales Tax 0 0 0 0 0 0Litigation Tax - General 6,352 136 135 0 0 0Litigation Tax - Special Purpose 41,771 1,152 1,412 0 0 0Litigation Tax - Jail, Workhouse, or Courthouse 19,708 0 0 0 0 0Business Tax 53,026 0 0 7,019 0 1,296Mixed Drink Tax 88 0 0 0 0 0Mineral Severance Tax 0 0 0 0 0 0

Statutory Local TaxesBank Excise Tax 55,992 0 0 0 0 0Wholesale Beer Tax 96,269 0 0 0 0 0Interstate Telecommunications Tax 5,111 0 0 0 0 0

Total Local Taxes $ 5,131,613 $ 1,288 $ 1,547 $ 641,268 $ 0 $ 119,739

Licenses and PermitsLicenses

Marriage Licenses $ 589 $ 0 $ 0 $ 0 $ 0 $ 0Cable TV Franchise 62,024 0 0 0 0 0

(Continued)


137

Exhibit J-4


All Governmental Fund Types (Cont.)



Licenses and Permits (Cont.)Permits

Beer Permits $ 600 $ 0 $ 0 $ 0 $ 0 $ 0Other Permits 235 0 0 0 0 0

Total Licenses and Permits $ 63,448 $ 0 $ 0 $ 0 $ 0 $ 0

Fines, Forfeitures, and PenaltiesCircuit Court

Fines $ 759 $ 0 $ 0 $ 101 $ 0 $ 19Officers Costs 1,804 0 0 242 0 45Drug Control Fines 2,279 0 0 0 1,962 0Jail Fees 1,140 0 0 0 0 0DUI Treatment Fines 475 0 0 0 0 0Data Entry Fee - Circuit Court 992 0 0 0 0 0Courtroom Security Fee 1,637 0 0 0 0 0

Criminal CourtDUI Treatment Fines 152 0 0 20 0 4Victims Assistance Assessments 1,563 0 0 0 0 0

General Sessions CourtFines 6,153 0 0 827 0 149Officers Costs 9,758 0 0 1,304 0 262Game and Fish Fines 200 0 0 26 0 5Drug Control Fines 2,262 0 0 0 2,446 0Jail Fees 4,849 0 0 0 0 0DUI Treatment Fines 3,435 0 0 0 0 0Data Entry Fee - General Sessions Court 7,214 0 0 0 0 0Courtroom Security Fee 38,348 0 0 0 0 0Victims Assistance Assessments 10,702 0 0 0 0 0

(Continued)


138

Exhibit J-4





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

Fines $ 88 $ 0 $ 0 $ 13 $ 0 $ 2Officers Costs 743 0 0 0 0 0Data Entry Fee - Juvenile Court 192 0 0 0 0 0

Chancery CourtOfficers Costs 3,914 0 0 0 0 0Data Entry Fee - Chancery Court 2,824 0 0 0 0 0Courtroom Security Fee 3,404 0 0 0 0 0

Other Fines, Forfeitures, and PenaltiesProceeds from Confiscated Property 0 0 0 0 2,857 0

Total Fines, Forfeitures, and Penalties $ 104,887 $ 0 $ 0 $ 2,533 $ 7,265 $ 486

Charges for Current ServicesGeneral Service Charges

Other Employee Benefit Charges/Contributions $ 13,195 $ 0 $ 0 $ 0 $ 0 $ 0Patient Charges 816,672 0 0 0 0 0Past Due Collections - Ambulance 8,116 0 0 0 0 0Service Charges 14,799 0 0 0 0 0

FeesRecreation Fees 0 0 0 0 0 10,455Copy Fees 1,216 0 0 0 0 0Library Fees 4,515 0 0 0 0 0Archives and Records Management Fee 25,937 0 0 0 0 0Telephone Commissions 16,306 0 0 0 0 0Constitutional Officers' Fees and Commissions 0 0 0 0 0 0Special Commissioner Fees/Special Master Fees 0 0 0 0 0 0

(Continued)


139

Exhibit J-4





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

Data Processing Fee - Register $ 7,218 $ 0 $ 0 $ 0 $ 0 $ 0Data Processing Fee - Sheriff 3,798 0 0 0 0 0Sexual Offender Registration Fee - Sheriff 1,900 0 0 0 0 0Data Processing Fee - County Clerk 3,038 0 0 0 0 0

Education ChargesOther Charges for Services 0 0 0 0 0 0

Total Charges for Current Services $ 916,710 $ 0 $ 0 $ 0 $ 0 $ 10,455

Other Local RevenuesRecurring Items

Investment Income $ 0 $ 0 $ 0 $ 0 $ 0 $ 0Lease/Rentals 31,385 0 0 0 0 0Sale of Materials and Supplies 40 0 0 0 0 0Commissary Sales 23,665 0 0 0 0 0Sale of Recycled Materials 370 0 0 69,307 0 0Miscellaneous Refunds 8,384 0 0 0 0 0

Nonrecurring ItemsSale of Equipment 6,741 0 0 0 0 0Sale of Property 18,106 0 0 0 0 0Damages Recovered from Individuals 110 0 0 0 31 0Contributions and Gifts 1,072 0 0 0 0 253,786

Other Local RevenuesOther Local Revenues 82 0 0 0 0 0

Total Other Local Revenues $ 89,955 $ 0 $ 0 $ 69,307 $ 31 $ 253,786

(Continued)


140

Exhibit J-4





Fees Received From County OfficialsExcess Fees

Trustee $ 121,000 $ 0 $ 0 $ 0 $ 0 $ 0Fees In-Lieu-of Salary

Circuit Court Clerk 34,009 0 0 0 0 0General Sessions Court Clerk 111,647 0 0 0 0 0Clerk and Master 74,096 0 0 0 0 0Juvenile Court Clerk 6,800 0 0 0 0 0Register 89,485 0 0 0 0 0Sheriff 11,460 0 0 0 0 0

Total Fees Received From County Officials $ 448,497 $ 0 $ 0 $ 0 $ 0 $ 0

State of TennesseeGeneral Government Grants

Juvenile Services Program $ 9,000 $ 0 $ 0 $ 0 $ 0 $ 0Aging Programs 6,816 0 0 0 0 0Solid Waste Grants 0 0 0 146,372 0 0

Public Safety GrantsLaw Enforcement Training Programs 14,400 0 0 0 0 0

Health and Welfare GrantsPublic Health Nurses 61,299 0 0 0 0 0

Public Works GrantsBridge Program 0 0 0 0 0 0State Aid Program 0 0 0 0 0 0Litter Program 44,245 0 0 0 0 0

Other State RevenuesIncome Tax 41,198 0 0 0 0 0

(Continued)


141

Exhibit J-4





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

Alcoholic Beverage Tax $ 69,658 $ 0 $ 0 $ 0 $ 0 $ 0State Revenue Sharing - T.V.A. 526,892 0 0 68,539 0 12,851State Revenue Sharing - Telecommunications 34,859 0 0 0 0 0Contracted Prisoner Boarding 285,480 0 0 0 0 0Gasoline and Motor Fuel Tax 0 0 0 0 0 0Petroleum Special Tax 0 0 0 0 0 0Registrar's Salary Supplement 15,164 0 0 0 0 0Other State Grants 22,959 0 0 0 0 106,492Other State Revenues 13,996 0 0 0 0 0

Total State of Tennessee $ 1,145,966 $ 0 $ 0 $ 214,911 $ 0 $ 119,343

Federal GovernmentFederal Through State

Community Development $ 39,993 $ 0 $ 0 $ 0 $ 0 $ 0Homeland Security Grants 7,000 0 0 0 0 0Medicaid 39,782 0 0 0 0 0Other Federal through State 89,280 0 0 0 0 0

Direct Federal RevenueOther Direct Federal Revenue 5,200 0 0 0 0 0

Total Federal Government $ 181,255 $ 0 $ 0 $ 0 $ 0 $ 0

Other Governments and Citizens GroupsOther Governments

Contributions $ 155,795 $ 0 $ 0 $ 0 $ 0 $ 0Total Other Governments and Citizens Groups $ 155,795 $ 0 $ 0 $ 0 $ 0 $ 0

Total $ 8,238,126 $ 1,288 $ 1,547 $ 928,019 $ 7,296 $ 503,809

(Continued)


142

Exhibit J-4



Constitu -tional Highway / General

Officers - Public DebtFees Works Service Total


Current Property Tax $ 0 $ 548,942 $ 479,798 $ 5,895,300Trustee's Collections - Prior Year 0 20,711 18,122 222,647Circuit Clerk/Clerk and Master Collections - Prior Years 0 18,297 16,010 196,206Interest and Penalty 0 3,670 3,172 39,020Payments in-Lieu-of Taxes - T.V.A. 0 372 326 4,001Payments in-Lieu-of Taxes - Local Utilities 0 31,171 27,275 335,091Payments in-Lieu-of Taxes - Other 0 9,098 8,046 98,733

County Local Option TaxesLocal Option Sales Tax 0 0 441,044 441,044Litigation Tax - General 0 0 0 6,623Litigation Tax - Special Purpose 0 0 0 44,335Litigation Tax - Jail, Workhouse, or Courthouse 0 0 0 19,708Business Tax 0 6,912 5,747 74,000Mixed Drink Tax 0 0 0 88Mineral Severance Tax 0 23,256 0 23,256

Statutory Local TaxesBank Excise Tax 0 0 0 55,992Wholesale Beer Tax 0 0 0 96,269Interstate Telecommunications Tax 0 0 0 5,111

Total Local Taxes $ 0 $ 662,429 $ 999,540 $ 7,557,424


Marriage Licenses $ 0 $ 0 $ 0 $ 589Cable TV Franchise 0 0 0 62,024

(Continued)

Special Revenue FundsDebt Service

Fund

143

Exhibit J-4





Licenses and Permits (Cont.)Permits

Beer Permits $ 0 $ 0 $ 0 $ 600Other Permits 0 0 0 235

Total Licenses and Permits $ 0 $ 0 $ 0 $ 63,448


Fines $ 0 $ 95 $ 87 $ 1,061Officers Costs 0 242 206 2,539Drug Control Fines 0 0 0 4,241Jail Fees 0 0 0 1,140DUI Treatment Fines 0 0 0 475Data Entry Fee - Circuit Court 0 0 0 992Courtroom Security Fee 0 0 0 1,637

Criminal CourtDUI Treatment Fines 0 20 17 213Victims Assistance Assessments 0 0 0 1,563

General Sessions CourtFines 0 940 703 8,772Officers Costs 0 1,399 1,114 13,837Game and Fish Fines 0 26 23 280Drug Control Fines 0 0 0 4,708Jail Fees 0 0 0 4,849DUI Treatment Fines 0 0 0 3,435Data Entry Fee - General Sessions Court 0 0 0 7,214Courtroom Security Fee 0 0 0 38,348Victims Assistance Assessments 0 0 0 10,702

(Continued)


Fund

144

Exhibit J-4





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

Fines $ 0 $ 12 $ 10 $ 125Officers Costs 0 0 0 743Data Entry Fee - Juvenile Court 0 0 0 192

Chancery CourtOfficers Costs 0 0 0 3,914Data Entry Fee - Chancery Court 0 0 0 2,824Courtroom Security Fee 0 0 0 3,404

Other Fines, Forfeitures, and PenaltiesProceeds from Confiscated Property 0 0 0 2,857

Total Fines, Forfeitures, and Penalties $ 0 $ 2,734 $ 2,160 $ 120,065

Charges for Current ServicesGeneral Service Charges

Other Employee Benefit Charges/Contributions $ 0 $ 27 $ 0 $ 13,222Patient Charges 0 0 0 816,672Past Due Collections - Ambulance 0 0 0 8,116Service Charges 0 0 0 14,799

FeesRecreation Fees 0 0 0 10,455Copy Fees 0 0 0 1,216Library Fees 0 0 0 4,515Archives and Records Management Fee 0 0 0 25,937Telephone Commissions 0 0 0 16,306Constitutional Officers' Fees and Commissions 414,674 0 0 414,674Special Commissioner Fees/Special Master Fees 20,460 0 0 20,460

(Continued)


Fund

145

Exhibit J-4





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

Data Processing Fee - Register $ 0 $ 0 $ 0 $ 7,218Data Processing Fee - Sheriff 0 0 0 3,798Sexual Offender Registration Fee - Sheriff 0 0 0 1,900Data Processing Fee - County Clerk 0 0 0 3,038

Education ChargesOther Charges for Services 0 1,970 0 1,970

Total Charges for Current Services $ 435,134 $ 1,997 $ 0 $ 1,364,296


Investment Income $ 0 $ 0 $ 71,926 $ 71,926Lease/Rentals 0 0 0 31,385Sale of Materials and Supplies 0 0 0 40Commissary Sales 0 0 0 23,665Sale of Recycled Materials 0 4,129 0 73,806Miscellaneous Refunds 0 1,059 0 9,443

Nonrecurring ItemsSale of Equipment 0 0 0 6,741Sale of Property 0 0 0 18,106Damages Recovered from Individuals 0 0 0 141Contributions and Gifts 0 0 0 254,858

Other Local RevenuesOther Local Revenues 0 0 0 82

Total Other Local Revenues $ 0 $ 5,188 $ 71,926 $ 490,193

(Continued)


Fund

146

Exhibit J-4





Fees Received From County OfficialsExcess Fees

Trustee $ 0 $ 0 $ 0 $ 121,000Fees In-Lieu-of Salary

Circuit Court Clerk 0 0 0 34,009General Sessions Court Clerk 0 0 0 111,647Clerk and Master 0 0 0 74,096Juvenile Court Clerk 0 0 0 6,800Register 0 0 0 89,485Sheriff 0 0 0 11,460

Total Fees Received From County Officials $ 0 $ 0 $ 0 $ 448,497


Juvenile Services Program $ 0 $ 0 $ 0 $ 9,000Aging Programs 0 0 0 6,816Solid Waste Grants 0 0 0 146,372

Public Safety GrantsLaw Enforcement Training Programs 0 0 0 14,400

Health and Welfare GrantsPublic Health Nurses 0 0 0 61,299

Public Works GrantsBridge Program 0 492,624 0 492,624State Aid Program 0 153,756 0 153,756Litter Program 0 0 0 44,245

Other State RevenuesIncome Tax 0 0 0 41,198

(Continued)


Fund

147

Exhibit J-4





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

Alcoholic Beverage Tax $ 0 $ 0 $ 0 $ 69,658State Revenue Sharing - T.V.A. 0 68,539 59,971 736,792State Revenue Sharing - Telecommunications 0 0 0 34,859Contracted Prisoner Boarding 0 0 0 285,480Gasoline and Motor Fuel Tax 0 1,992,296 0 1,992,296Petroleum Special Tax 0 50,453 0 50,453Registrar's Salary Supplement 0 0 0 15,164Other State Grants 0 0 0 129,451Other State Revenues 0 0 0 13,996

Total State of Tennessee $ 0 $ 2,757,668 $ 59,971 $ 4,297,859


Community Development $ 0 $ 0 $ 0 $ 39,993Homeland Security Grants 0 0 0 7,000Medicaid 0 0 0 39,782Other Federal through State 0 0 0 89,280

Direct Federal RevenueOther Direct Federal Revenue 0 0 0 5,200

Total Federal Government $ 0 $ 0 $ 0 $ 181,255


Contributions $ 0 $ 0 $ 700,000 $ 855,795Total Other Governments and Citizens Groups $ 0 $ 0 $ 700,000 $ 855,795

Total $ 435,134 $ 3,430,016 $ 1,833,597 $ 15,378,832


Fund

148

Exhibit J-5


All Governmental Fund TypesDiscretely Presented Grainger County School DepartmentFor the Year Ended June 30, 2019

General SchoolPurpose Federal CentralSchool Projects Cafeteria Total


Current Property Tax $ 2,415,159 $ 0 $ 0 $ 2,415,159Trustee's Collections - Prior Year 77,067 0 0 77,067Circuit Clerk/Clerk and Master Collections - Prior Years 74,033 0 0 74,033Interest and Penalty 16,057 0 0 16,057Payments in-Lieu-of Taxes - T.V.A. 1,628 0 0 1,628Payments in-Lieu-of Taxes - Local Utilities 136,374 0 0 136,374Payments in-Lieu-of Taxes - Other 462 0 0 462

County Local Option TaxesLocal Option Sales Tax 1,402,756 0 0 1,402,756Business Tax 28,165 0 0 28,165

Total Local Taxes $ 4,151,701 $ 0 $ 0 $ 4,151,701


Marriage Licenses $ 618 $ 0 $ 0 $ 618Total Licenses and Permits $ 618 $ 0 $ 0 $ 618


Fines $ 433 $ 0 $ 0 $ 433Officers Costs 1,058 0 0 1,058

Criminal CourtDUI Treatment Fines 87 0 0 87

(Continued)


149

Exhibit J-5


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


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

Fines $ 3,474 $ 0 $ 0 $ 3,474Officers Costs 6,119 0 0 6,119Game and Fish Fines 114 0 0 114

Juvenile CourtFines 51 0 0 51

Total Fines, Forfeitures, and Penalties $ 11,336 $ 0 $ 0 $ 11,336

Charges for Current ServicesEducation Charges

Lunch Payments - Children $ 0 $ 0 $ 245,649 $ 245,649Lunch Payments - Adults 0 0 58,438 58,438Income from Breakfast 0 0 2,507 2,507A la Carte Sales 0 0 112,501 112,501Receipts from Individual Schools 0 0 1,306 1,306Community Service Fees - Adults 110 0 0 110Other Charges for Services 0 0 24,715 24,715

Total Charges for Current Services $ 110 $ 0 $ 445,116 $ 445,226


Investment Income $ 1,731 $ 0 $ 1,075 $ 2,806E-Rate Funding 12,012 0 0 12,012Miscellaneous Refunds 20,999 0 1,806 22,805

(Continued)


150

Exhibit J-5




Other Local Revenues (Cont.)Nonrecurring Items

Contributions and Gifts $ 3,612 $ 0 $ 0 $ 3,612Other Local Revenues

Other Local Revenues 2,351 0 0 2,351Total Other Local Revenues $ 40,705 $ 0 $ 2,881 $ 43,586


On-behalf Contributions for OPEB $ 115,240 $ 0 $ 0 $ 115,240State Education Funds

Basic Education Program 22,113,152 0 0 22,113,152Early Childhood Education 322,754 0 0 322,754School Food Service 0 0 18,508 18,508Driver Education 12,182 0 0 12,182Other State Education Funds 627,653 0 0 627,653Career Ladder Program 97,230 0 0 97,230

Other State RevenuesState Revenue Sharing - T.V.A. 299,857 0 0 299,857Other State Revenues 138,507 0 0 138,507

Total State of Tennessee $ 23,726,575 $ 0 $ 18,508 $ 23,745,083


USDA School Lunch Program $ 0 $ 0 $ 971,444 $ 971,444USDA - Commodities 0 0 147,285 147,285

(Continued)


151

Exhibit J-5




Federal Government (Cont.)Federal Through State (Cont.)

Breakfast $ 0 $ 0 $ 402,951 $ 402,951USDA - Other 0 0 14,629 14,629Vocational Education - Basic Grants to States 0 67,915 0 67,915Title I Grants to Local Education Agencies 0 1,096,593 0 1,096,593Special Education - Grants to States 29,967 943,030 0 972,997Special Education Preschool Grants 0 63,394 0 63,394English Language Acquisition Grants 0 24,052 0 24,052Rural Education 0 51,595 0 51,595Eisenhower Professional Development State Grants 0 173,901 0 173,901Other Federal through State 0 116,064 0 116,064

Direct Federal RevenueROTC Reimbursement 78,470 0 0 78,470

Total Federal Government $ 108,437 $ 2,536,544 $ 1,536,309 $ 4,181,290


Contributions $ 1,344,060 $ 0 $ 0 $ 1,344,060Total Other Governments and Citizens Groups $ 1,344,060 $ 0 $ 0 $ 1,344,060

Total $ 29,383,542 $ 2,536,544 $ 2,002,814 $ 33,922,900


152

Exhibit J-6

Grainger County, TennesseeSchedule of Detailed Expenditures -

All Governmental Fund TypesFor the Year Ended June 30, 2019

General FundGeneral Government

County CommissionBoard and Committee Members Fees $ 68,823Social Security 5,265Pensions 5,348Unemployment Compensation 104Dues and Memberships 1,450Travel 4,492

Total County Commission $ 85,482

Board of EqualizationBoard and Committee Members Fees $ 375

Total Board of Equalization 375

Budget and Finance CommitteeBoard and Committee Members Fees $ 5,000

Total Budget and Finance Committee 5,000

County Mayor/ExecutiveCounty Official/Administrative Officer $ 87,389Longevity Pay 300Other Salaries and Wages 66,044Social Security 11,156Pensions 13,751Medical Insurance 5,375Unemployment Compensation 434Communication 2,615Data Processing Services 10,602Dues and Memberships 1,450Maintenance Agreements 1,448Postal Charges 1,650Printing, Stationery, and Forms 970Travel 2,274Office Supplies 2,494Other Supplies and Materials 186Office Equipment 1,172

Total County Mayor/Executive 209,310

Election CommissionCounty Official/Administrative Officer $ 64,862Assistant(s) 26,225Salary Supplements 1,200Longevity Pay 500Election Commission 43,200Election Workers 27,484In-service Training 2,625Social Security 6,371Pensions 8,890Medical Insurance 3,250

(Continued)

153

Exhibit J-6



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

Election Commission (Cont.)Unemployment Compensation $ 168Communication 3,390Dues and Memberships 450Legal Notices, Recording, and Court Costs 6,638Maintenance Agreements 12,769Maintenance and Repair Services - Equipment 1,361Maintenance and Repair Services - Office Equipment 589Postal Charges 2,151Printing, Stationery, and Forms 3,207Rentals 9,600Travel 5,736Electricity 1,621Office Supplies 1,727Propane Gas 2,224Water and Sewer 568Other Charges 835

Total Election Commission $ 237,641

Register of DeedsCounty Official/Administrative Officer $ 72,069Salary Supplements 1,200Clerical Personnel 53,992Part-time Personnel 3,302Longevity Pay 1,950Other Salaries and Wages 1,886Social Security 9,691Pensions 12,304Medical Insurance 7,414Unemployment Compensation 312Communication 1,801Data Processing Services 2,025Dues and Memberships 1,231Maintenance Agreements 6,409Maintenance and Repair Services - Office Equipment 1,310Postal Charges 244Printing, Stationery, and Forms 275Travel 3,270Office Supplies 1,738Office Equipment 984

Total Register of Deeds 183,407

PlanningBoard and Committee Members Fees $ 12,550Other Contracted Services 10,175

Total Planning 22,725

(Continued)

154

Exhibit J-6



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

County BuildingsCustodial Personnel $ 30,016Longevity Pay 350Social Security 2,323Pensions 2,930Unemployment Compensation 84Maintenance and Repair Services - Buildings 14,299Travel 649Custodial Supplies 1,792Electricity 20,852Propane Gas 14,195Water and Sewer 3,834Building Improvements 19,064

Total County Buildings $ 110,388

Other FacilitiesMaintenance Personnel $ 29,016Longevity Pay 250Social Security 1,954Pensions 2,832Medical Insurance 3,000Unemployment Compensation 84Communication 582Maintenance and Repair Services - Buildings 179,836Other Contracted Services 1,265Custodial Supplies 2,436Electricity 118,385Propane Gas 28,209Water and Sewer 61,906

Total Other Facilities 429,755

Preservation of RecordsPart-time Personnel $ 12,990Social Security 994Unemployment Compensation 85Communication 2,794Postal Charges 119Office Supplies 1,309Other Supplies and Materials 360Other Charges 920

Total Preservation of Records 19,571

FinanceProperty Assessor's Office

County Official/Administrative Officer $ 72,069Assistant(s) 24,209Secretary(ies) 33,543Longevity Pay 1,150

(Continued)

155

Exhibit J-6



General Fund (Cont.)Finance (Cont.)

Property Assessor's Office (Cont.)Social Security $ 9,848Pensions 10,445Medical Insurance 5,714Unemployment Compensation 187Communication 1,549Contracts with Private Agencies 1,700Data Processing Services 11,904Maintenance Agreements 688Maintenance and Repair Services - Vehicles 669Postal Charges 699Gasoline 1,405Office Supplies 1,170Other Supplies and Materials 297

Total Property Assessor's Office $ 177,246

County Trustee's OfficeSocial Security $ 13,314Pensions 16,813Medical Insurance 3,000Unemployment Compensation 252Communication 4,101Data Processing Services 28,487Dues and Memberships 1,086Legal Notices, Recording, and Court Costs 200Maintenance Agreements 1,377Maintenance and Repair Services - Office Equipment 39Postal Charges 8,140Printing, Stationery, and Forms 1,000Travel 4,737Office Supplies 4,762Data Processing Equipment 15,793Office Equipment 4,127

Total County Trustee's Office 107,228

County Clerk's OfficeSocial Security $ 17,104Pensions 18,590Medical Insurance 9,000Unemployment Compensation 514Communication 5,565Data Processing Services 20,715Dues and Memberships 1,126Maintenance Agreements 1,597Postal Charges 6,780Printing, Stationery, and Forms 3,369Travel 3,810Office Supplies 6,661Other Charges 3,449

Total County Clerk's Office 98,280

(Continued)

156

Exhibit J-6



General Fund (Cont.)Administration of Justice

Circuit CourtCounty Official/Administrative Officer $ 72,069Deputy(ies) 32,498Secretary(ies) 30,345Longevity Pay 1,350Jury and Witness Expense 5,818Social Security 10,223Pensions 13,167Medical Insurance 10,582Unemployment Compensation 168Communication 3,715Dues and Memberships 866Legal Notices, Recording, and Court Costs 235Maintenance Agreements 27,262Postal Charges 2,035Printing, Stationery, and Forms 594Travel 886Office Supplies 4,156Data Processing Equipment 1,975

Total Circuit Court $ 217,944

General Sessions CourtJudge(s) $ 99,662Secretary(ies) 76,002Longevity Pay 800Social Security 13,211Pensions 15,445Medical Insurance 6,125Unemployment Compensation 435Maintenance Agreements 800Postal Charges 190Printing, Stationery, and Forms 714Travel 887Library Books/Media 1,000Office Supplies 1,500

Total General Sessions Court 216,771

Chancery CourtCounty Official/Administrative Officer $ 72,069Deputy(ies) 28,750Longevity Pay 950Social Security 7,164Pensions 9,815Medical Insurance 17,181Unemployment Compensation 84Communication 2,196Dues and Memberships 651Maintenance Agreements 5,049

(Continued)

157

Exhibit J-6



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

Chancery Court (Cont.)Postal Charges $ 1,502Printing, Stationery, and Forms 509Library Books/Media 326Office Supplies 694Office Equipment 1,114

Total Chancery Court $ 148,054

Juvenile CourtAssistant(s) $ 28,610Supervisor/Director 38,613Probation Officer(s) 4,379Longevity Pay 450Social Security 4,968Pensions 6,574Medical Insurance 6,000Unemployment Compensation 211Communication 2,863Contracts with Other Public Agencies 2,135Postal Charges 110Travel 1,023Food Preparation Supplies 122Office Supplies 1,202Other Supplies and Materials 500Office Equipment 1,062

Total Juvenile Court 98,822

District Attorney GeneralOther Salaries and Wages $ 36,168Social Security 2,705Pensions 3,530Medical Insurance 3,000Unemployment Compensation 84Travel 2,032Office Supplies 861

Total District Attorney General 48,380

Victim Assistance ProgramsContracts with Private Agencies $ 12,934

Total Victim Assistance Programs 12,934

Public SafetySheriff's Department

County Official/Administrative Officer $ 83,240Deputy(ies) 614,782Investigator(s) 47,219Sergeant(s) 174,216Medical Personnel 41,767

(Continued)

158

Exhibit J-6



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

Sheriff's Department (Cont.)Salary Supplements $ 14,400Secretary(ies) 47,492School Resource Officer 210,944Longevity Pay 4,750In-service Training 12,043Social Security 88,054Pensions 96,649Medical Insurance 42,242Unemployment Compensation 3,031Communication 22,192Data Processing Services 2,997Dues and Memberships 3,430Operating Lease Payments 10,480Maintenance Agreements 19,802Maintenance and Repair Services - Vehicles 49,883Postal Charges 886Printing, Stationery, and Forms 1,734Travel 7,300Gasoline 102,392Law Enforcement Supplies 33,171Office Supplies 5,178Tires and Tubes 11,469Uniforms 9,934Other Supplies and Materials 15,425Other Charges 10,148Communication Equipment 6,954Motor Vehicles 193,943

Total Sheriff's Department $ 1,988,147

JailGuards $ 640,178Cafeteria Personnel 58,883Longevity Pay 2,150Social Security 52,102Pensions 67,629Medical Insurance 34,759Unemployment Compensation 2,328Medical and Dental Services 205,658Other Contracted Services 67,516Drugs and Medical Supplies 10,113Food Preparation Supplies 172,875Uniforms 6,960Other Supplies and Materials 73,076Other Charges 4,519

Total Jail 1,398,746

(Continued)

159

Exhibit J-6



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

Fire Prevention and ControlContracts with Government Agencies $ 1,500

Total Fire Prevention and Control $ 1,500

Civil DefenseSupervisor/Director $ 10,057In-service Training 263Social Security 769Unemployment Compensation 82Communication 3,358Maintenance and Repair Services - Equipment 2,178Maintenance and Repair Services - Office Equipment 127Maintenance and Repair Services - Vehicles 3,362Printing, Stationery, and Forms 120Rentals 3,170Diesel Fuel 886Food Preparation Supplies 218Gasoline 836Office Supplies 296Communication Equipment 5,217Surplus Equipment 5,085Other Capital Outlay 580

Total Civil Defense 36,604

Other Emergency ManagementContributions $ 225,000

Total Other Emergency Management 225,000

Inspection and RegulationSupervisor/Director $ 3,246Social Security 257Unemployment Compensation 6

Total Inspection and Regulation 3,509

Public Health and WelfareLocal Health Center

Other Salaries and Wages $ 61,102Social Security 4,507Pensions 5,385Medical Insurance 2,500Unemployment Compensation 321Communication 3,224Dues and Memberships 200Maintenance Agreements 10,129Maintenance and Repair Services - Buildings 1,604Postal Charges 64Travel 3,077Drugs and Medical Supplies 444

(Continued)

160

Exhibit J-6



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

Local Health Center (Cont.)Office Supplies $ 994Utilities 12,538Other Charges 3,839

Total Local Health Center $ 109,928

Ambulance/Emergency Medical ServicesSupervisor/Director $ 27,584Medical Personnel 993,223Paraprofessionals 6,000Longevity Pay 2,600Other Salaries and Wages 32,136In-service Training 5,849Social Security 78,796Pensions 79,564Medical Insurance 39,437Unemployment Compensation 3,184Communication 14,675Debt Collection Services 64,641Licenses 3,250Maintenance Agreements 10,075Maintenance and Repair Services - Vehicles 100,950Postal Charges 398Rentals 6,600Travel 2,220Diesel Fuel 49,985Drugs and Medical Supplies 57,967Electricity 10,117Office Supplies 2,537Tires and Tubes 6,421Uniforms 9,024Water and Sewer 2,452Other Supplies and Materials 5,347Building Improvements 9,888Communication Equipment 3,759Motor Vehicles 58,613

Total Ambulance/Emergency Medical Services 1,687,292

Appropriation to StateContracts with Government Agencies $ 20,759

Total Appropriation to State 20,759

General Welfare AssistanceContributions $ 7,000

Total General Welfare Assistance 7,000

Other Local Welfare ServicesContributions $ 4,000

Total Other Local Welfare Services 4,000

(Continued)

161

Exhibit J-6



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

Senior Citizens AssistanceSupervisor/Director $ 24,358Longevity Pay 250Social Security 1,773Pensions 2,377Medical Insurance 2,000Unemployment Compensation 128Communication 1,471Contributions 13,000Maintenance and Repair Services - Office Equipment 75Travel 3,464Office Supplies 223Office Equipment 239

Total Senior Citizens Assistance $ 49,358

LibrariesAssistant(s) $ 12,315Librarians 78,226Part-time Personnel 577Longevity Pay 1,900Social Security 6,405Pensions 7,635Medical Insurance 11,250Unemployment Compensation 465Communication 7,272Data Processing Services 5,518Maintenance and Repair Services - Buildings 1,685Maintenance and Repair Services - Office Equipment 1,852Postal Charges 436Travel 374Other Contracted Services 180Electricity 10,040Library Books/Media 14,704Office Supplies 933Periodicals 740Water and Sewer 718Other Supplies and Materials 2,178Other Charges 19,626

Total Libraries 185,029

Agriculture and Natural ResourcesAgricultural Extension Service

Salary Supplements $ 55,760Communication 1,644Contributions 7,994Travel 2,105

Total Agricultural Extension Service 67,503

(Continued)

162

Exhibit J-6



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

Soil ConservationSupervisor/Director $ 27,663Secretary(ies) 22,740Longevity Pay 1,350Other Salaries and Wages 28,140Social Security 6,041Pensions 7,666Medical Insurance 250Unemployment Compensation 252Communication 2,710Contributions 5,500Rentals 4,200Other Supplies and Materials 1,077Other Charges 426Office Equipment 490

Total Soil Conservation $ 108,505

Other OperationsTourism

Contributions $ 1,000Total Tourism 1,000

Industrial DevelopmentOther Salaries and Wages $ 41,247Social Security 3,155Unemployment Compensation 168Maintenance and Repair Services - Equipment 300Other Contracted Services 420Electricity 13,717Water and Sewer 747Other Supplies and Materials 2,716Other Charges 2,198Other Construction 1,430

Total Industrial Development 66,098

Other Economic and Community DevelopmentOther Construction $ 45,775

Total Other Economic and Community Development 45,775

Veterans' ServicesSupervisor/Director $ 10,031Social Security 767Unemployment Compensation 82Communication 2,111Postal Charges 56

Total Veterans' Services 13,047

(Continued)

163

Exhibit J-6



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

Other ChargesOther Contracted Services $ 3,797Building and Contents Insurance 25,170Liability Insurance 45,763Trustee's Commission 120,922Vehicle and Equipment Insurance 42,822Workers' Compensation Insurance 106,587

Total Other Charges $ 345,061

Contributions to Other AgenciesContributions $ 3,551

Total Contributions to Other Agencies 3,551

MiscellaneousAudit Services $ 9,700Contributions 38,000Legal Services 9,720Maintenance Agreements 4,944Premiums on Corporate Surety Bonds 6,289Other Charges 18,439

Total Miscellaneous 87,092

HighwaysLitter and Trash Collection

Guards $ 32,440Longevity Pay 450Social Security 2,516Pensions 3,166Unemployment Compensation 84Gasoline 1,433Instructional Supplies and Materials 9,172Other Supplies and Materials 2,260

Total Litter and Trash Collection 51,521

Total General Fund $ 8,935,338

Courthouse and Jail Maintenance FundGeneral Government

County BuildingsTrustee's Commission $ 13

Total County Buildings $ 13

Total Courthouse and Jail Maintenance Fund 13

Law Library FundSocial, Cultural, and Recreational Services

LibrariesLibrary Books/Media $ 419Trustee's Commission 15

Total Libraries $ 434

Total Law Library Fund 434

(Continued)

164

Exhibit J-6



Solid Waste/Sanitation FundPublic Health and Welfare

Sanitation ManagementAttendants $ 228,657Longevity Pay 1,400Social Security 16,907Pensions 9,945Medical Insurance 1,591Unemployment Compensation 1,205Communication 1,959Maintenance and Repair Services - Vehicles 1,112Disposal Fees 430,735Other Contracted Services 1,572Asphalt - Hot Mix 7,410Diesel Fuel 5,830Lubricants 228Utilities 11,913Other Supplies and Materials 3,665Liability Insurance 10,488Trustee's Commission 13,447Vehicle and Equipment Insurance 16,697Workers' Compensation Insurance 19,830Solid Waste Equipment 32,071

Total Sanitation Management $ 816,662

Postclosure Care CostsOther Contracted Services $ 1,000Testing 7,368

Total Postclosure Care Costs 8,368

Total Solid Waste/Sanitation Fund $ 825,030

Drug Control FundPublic Safety

Drug EnforcementData Processing Services $ 670Instructional Supplies and Materials 5,642Law Enforcement Supplies 9,870Other Supplies and Materials 1,355Trustee's Commission 73Motor Vehicles 11,500

Total Drug Enforcement $ 29,110

Total Drug Control Fund 29,110

Sports and Recreation FundSocial, Cultural, and Recreational Services

Parks and Fair BoardsSupervisor/Director $ 35,297Clerical Personnel 13,560

(Continued)

165

Exhibit J-6



Sports and Recreation Fund (Cont.)Social, Cultural, and Recreational Services (Cont.)

Parks and Fair Boards (Cont.)Custodial Personnel $ 33,085Longevity Pay 550Social Security 5,934Pensions 6,674Medical Insurance 6,000Unemployment Compensation 245Communication 3,829Contributions 8,578Maintenance and Repair Services - Equipment 1,995Postal Charges 316Travel 102Other Contracted Services 2,261Electricity 5,589Gasoline 2,879Office Supplies 496Other Supplies and Materials 2,021Trustee's Commission 2,569Vehicle and Equipment Insurance 4,767Other Charges 23,050Maintenance Equipment 3,025Office Equipment 319Other Equipment 927Other Construction 230,800

Total Parks and Fair Boards $ 394,868

Total Sports and Recreation Fund $ 394,868

Constitutional Officers - Fees FundFinance

County Trustee's OfficeConstitutional Officers' Operating Expenses $ 175,029

Total County Trustee's Office $ 175,029

County Clerk's OfficeConstitutional Officers' Operating Expenses $ 244,227

Total County Clerk's Office 244,227

Administration of JusticeChancery Court

Special Commissioner Fees/Special Master Fees $ 20,460Total Chancery Court 20,460

Total Constitutional Officers - Fees Fund 439,716

(Continued)

166

Exhibit J-6



Highway/Public Works FundHighways

AdministrationCounty Official/Administrative Officer $ 79,276Accountants/Bookkeepers 38,500Salary Supplements 1,822Secretary(ies) 23,523Social Security 10,776Pensions 13,238Life Insurance 58Medical Insurance 5,320Unemployment Compensation 940Data Processing Services 7,119Legal Notices, Recording, and Court Costs 290Postal Charges 498Travel 1,161Office Supplies 2,319Other Charges 12,640

Total Administration $ 197,480

Highway and Bridge MaintenanceSalary Supplements $ 11,650Foremen 80,098Equipment Operators 149,954Truck Drivers 183,204Laborers 230,774Social Security 46,965Pensions 58,029Employee and Dependent Insurance 15Life Insurance 739Medical Insurance 39,985Unemployment Compensation 4,005Rentals 3,803Asphalt - Cold Mix 3,463Asphalt - Hot Mix 846,979Crushed Stone 48,523Pipe - Metal 15,873Road Signs 4,847Small Tools 154Other Supplies and Materials 1,261Other Charges 3,456

Total Highway and Bridge Maintenance 1,733,777

Operation and Maintenance of EquipmentSalary Supplements $ 1,250Mechanic(s) 41,816Nightwatchmen 37,120Social Security 5,057Pensions 5,926Life Insurance 43

(Continued)

167

Exhibit J-6



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

Operation and Maintenance of Equipment (Cont.)Medical Insurance $ 7,291Unemployment Compensation 1,086Maintenance and Repair Services - Equipment 240Diesel Fuel 46,922Electricity 3,201Equipment and Machinery Parts 32,278Gasoline 25,584Lubricants 3,832Small Tools 1,300Tires and Tubes 10,750Other Supplies and Materials 1,842

Total Operation and Maintenance of Equipment $ 225,538

Other ChargesCommunication $ 7,020Electricity 2,581Water and Sewer 517Trustee's Commission 33,930Vehicle and Equipment Insurance 95,340Workers' Compensation Insurance 121,460Other Self-insured Claims 400

Total Other Charges 261,248

Capital OutlayBridge Construction $ 492,624Highway Equipment 59,486State Aid Projects 154,423

Total Capital Outlay 706,533

Total Highway/Public Works Fund $ 3,124,576

General Debt Service FundPrincipal on Debt

General GovernmentPrincipal on Bonds $ 182,000Principal on Notes 228,565

Total General Government $ 410,565

EducationPrincipal on Bonds $ 1,418,000

Total Education 1,418,000

Interest on DebtGeneral Government

Interest on Bonds $ 63,000Interest on Notes 20,493

Total General Government 83,493

(Continued)

168

Exhibit J-6



General Debt Service Fund (Cont.)Interest on Debt (Cont.)

EducationInterest on Bonds $ 371,150

Total Education $ 371,150

Other Debt ServiceGeneral Government

Trustee's Commission $ 16,738Total General Government 16,738

EducationOther Debt Service $ 2,011

Total Education 2,011

Total General Debt Service Fund $ 2,301,957

General Capital Projects FundInterest on Debt

EducationInterest on Other Loans $ 6,785

Total Education $ 6,785

Capital Projects - DonatedCapital Projects Donated to School Department

Contributions $ 1,344,060Total Capital Projects Donated to School Department 1,344,060

Total General Capital Projects Fund 1,350,845

Total Governmental Funds - Primary Government $ 17,401,887

169

Exhibit J-7


All Governmental Fund TypesDiscretely Presented Grainger County School DepartmentFor the Year Ended June 30, 2019

General Purpose School FundInstruction

Regular Instruction ProgramTeachers $ 8,335,911Career Ladder Program 53,029Career Ladder Extended Contracts 19,972Homebound Teachers 63,251Educational Assistants 288,738Bonus Payments 227,379Other Salaries and Wages 325,853Social Security 534,797Pensions 903,128Life Insurance 5,098Medical Insurance 1,906,989Unemployment Compensation 655Employer Medicare 122,589Maintenance and Repair Services - Equipment 1,560Contracts for Substitute Teachers - Certified 65,877Contracts for Substitute Teachers - Non-certified 243,504Other Contracted Services 7,167Instructional Supplies and Materials 77,013Textbooks - Bound 235,503Other Charges 189,232Regular Instruction Equipment 427,138

Total Regular Instruction Program $ 14,034,383

Alternative Instruction ProgramTeachers $ 45,425Social Security 2,816Pensions 4,751Life Insurance 29Medical Insurance 4,125Unemployment Compensation 3Employer Medicare 659Other Supplies and Materials 504

Total Alternative Instruction Program 58,312

Special Education ProgramTeachers $ 833,860Career Ladder Program 6,175Homebound Teachers 31,508Educational Assistants 264,883Speech Pathologist 170,230Bonus Payments 37,348Other Salaries and Wages 12,230Social Security 75,725Pensions 133,858Life Insurance 634Medical Insurance 210,599

(Continued)

170

Exhibit J-7



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

Special Education Program (Cont.)Unemployment Compensation $ 124Employer Medicare 18,067Contracts with Private Agencies 203,590Maintenance and Repair Services - Equipment 546Contracts for Substitute Teachers - Certified 8,303Contracts for Substitute Teachers - Non-certified 188,249Other Contracted Services 58,255Instructional Supplies and Materials 3,615Other Supplies and Materials 13,682Other Charges 2,476Special Education Equipment 18,520

Total Special Education Program $ 2,292,477

Career and Technical Education ProgramTeachers $ 737,512Career Ladder Program 4,000Other Salaries and Wages 28,678Social Security 44,570Pensions 80,055Life Insurance 461Medical Insurance 157,171Unemployment Compensation 55Employer Medicare 10,424Contracts for Substitute Teachers - Certified 4,642Contracts for Substitute Teachers - Non-certified 12,791Instructional Supplies and Materials 8,518T&I Construction Materials 5,487Vocational Instruction Equipment 768

Total Career and Technical Education Program 1,095,132

Student Body Education ProgramInstructional Supplies and Materials $ 32,949

Total Student Body Education Program 32,949

Adult Education ProgramTeachers $ 44,710Other Salaries and Wages 42,555Social Security 4,953Pensions 8,830Life Insurance 29Medical Insurance 13,100Unemployment Compensation 7Employer Medicare 1,158Instructional Supplies and Materials 336

Total Adult Education Program 115,678

(Continued)

171

Exhibit J-7



General Purpose School Fund (Cont.)Support Services

AttendanceSupervisor/Director $ 6,751Social Security 419Pensions 613Employer Medicare 98

Total Attendance $ 7,881

Health ServicesSupervisor/Director $ 49,968Medical Personnel 251,997Other Salaries and Wages 24,126Social Security 18,222Pensions 31,536Life Insurance 230Medical Insurance 74,162Unemployment Compensation 32Employer Medicare 4,262Travel 1,748Drugs and Medical Supplies 5,241Other Supplies and Materials 4,726In Service/Staff Development 11,100Other Charges 163

Total Health Services 477,513

Other Student SupportCareer Ladder Program $ 2,000Guidance Personnel 302,660Other Salaries and Wages 30,180Social Security 19,851Pensions 35,072Life Insurance 151Medical Insurance 54,831Unemployment Compensation 24Employer Medicare 4,643Contracts with Government Agencies 144,481Evaluation and Testing 34,483Travel 214Other Supplies and Materials 365

Total Other Student Support 628,955

Regular Instruction ProgramSupervisor/Director $ 96,836Career Ladder Program 2,000Librarians 189,385Other Salaries and Wages 60,149Social Security 20,027Pensions 32,269

(Continued)

172

Exhibit J-7



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

Regular Instruction Program (Cont.)Life Insurance $ 144Medical Insurance 29,833Unemployment Compensation 22Employer Medicare 4,681Communication 3,698Travel 14,079Other Contracted Services 2,934Food Supplies 3,779Library Books/Media 3,378In Service/Staff Development 20,201Other Charges 52,798

Total Regular Instruction Program $ 536,213

Special Education ProgramSupervisor/Director $ 35,907Career Ladder Program 1,000Clerical Personnel 20,045Other Salaries and Wages 66,810Social Security 7,365Pensions 12,805Life Insurance 58Medical Insurance 13,101Unemployment Compensation 7Employer Medicare 1,722Communication 4,315Operating Lease Payments 3,490Travel 5,663Other Contracted Services 13,160Other Supplies and Materials 65In Service/Staff Development 15,449Other Charges 6,078

Total Special Education Program 207,040

Career and Technical Education ProgramSupervisor/Director $ 24,833Career Ladder Program 1,000Clerical Personnel 20,045Social Security 2,706Pensions 4,659Medical Insurance 2,694Unemployment Compensation 5Employer Medicare 633Travel 2,458In Service/Staff Development 2,212

Total Career and Technical Education Program 61,245

(Continued)

173

Exhibit J-7




TechnologySupervisor/Director $ 78,426Career Ladder Program 1,000Other Salaries and Wages 80,839Social Security 9,297Pensions 15,497Life Insurance 29Medical Insurance 12,800Unemployment Compensation 10Employer Medicare 2,174Maintenance and Repair Services - Equipment 7,342Travel 81Other Contracted Services 1,740Other Equipment 29,291

Total Technology $ 238,526

Other ProgramsOn-behalf Payments to OPEB $ 115,240

Total Other Programs 115,240

Board of EducationOther Salaries and Wages $ 20,045Board and Committee Members Fees 40,400Social Security 3,438Pensions 5,509Employer Medicare 860Audit Services 11,025Dues and Memberships 14,335Legal Services 26,092Travel 15,156Liability Insurance 78,716Premiums on Corporate Surety Bonds 350Trustee's Commission 97,065Workers' Compensation Insurance 97,245Other Charges 3,049

Total Board of Education 413,285

Director of SchoolsCounty Official/Administrative Officer $ 97,562Career Ladder Program 1,000Secretary(ies) 29,751Overtime Pay 10,486Other Salaries and Wages 40,228Social Security 10,756Pensions 18,150Life Insurance 29Medical Insurance 10,297

(Continued)

174

Exhibit J-7




Director of Schools (Cont.)Unemployment Compensation $ 7Employer Medicare 2,516Communication 15,713Postal Charges 3,258Travel 1,659Other Contracted Services 8,888Office Supplies 8,452In Service/Staff Development 4,535Other Charges 6,214

Total Director of Schools $ 269,501

Office of the PrincipalPrincipals $ 477,567Career Ladder Program 4,000Assistant Principals 364,645Secretary(ies) 203,534Other Salaries and Wages 6,242Social Security 60,611Pensions 107,382Life Insurance 374Medical Insurance 155,555Unemployment Compensation 74Employer Medicare 14,175Communication 15,816Other Charges 87,134

Total Office of the Principal 1,497,109

Operation of PlantCustodial Personnel $ 481,515Other Salaries and Wages 23,829Social Security 24,626Pensions 42,336Unemployment Compensation 66Employer Medicare 5,993Other Contracted Services 4,600Custodial Supplies 67,073Electricity 925,943Natural Gas 22,832Water and Sewer 64,534Other Supplies and Materials 26,153Building and Contents Insurance 74,656

Total Operation of Plant 1,764,156

Maintenance of PlantSupervisor/Director $ 67,116Other Salaries and Wages 224,271

(Continued)

175

Exhibit J-7




Maintenance of Plant (Cont.)Social Security $ 16,775Pensions 28,776Life Insurance 29Medical Insurance 12,870Unemployment Compensation 24Employer Medicare 3,916Maintenance and Repair Services - Buildings 283,590Travel 341Other Supplies and Materials 9,943Other Charges 76,485

Total Maintenance of Plant $ 724,136

TransportationBus Drivers $ 189,769Other Salaries and Wages 64,774Social Security 13,285Pensions 19,063Unemployment Compensation 59Employer Medicare 3,136Contracts with Parents 57,518Contracts with Vehicle Owners 827,064Maintenance and Repair Services - Vehicles 67,018Medical and Dental Services 4,244Travel 4,371Diesel Fuel 84,529Gasoline 26,638Lubricants 2,783Tires and Tubes 7,456Vehicle and Equipment Insurance 50,000Other Charges 9,058Transportation Equipment 66,805

Total Transportation 1,497,570

Operation of Non-Instructional ServicesCommunity Services

Other Salaries and Wages $ 25,003Social Security 1,528Pensions 2,422Unemployment Compensation 3Employer Medicare 361Travel 74Other Supplies and Materials 220

Total Community Services 29,611

Early Childhood EducationTeachers $ 142,596

(Continued)

176

Exhibit J-7



General Purpose School Fund (Cont.)Operation of Non-Instructional Services (Cont.)

Early Childhood Education (Cont.)Educational Assistants $ 66,681Bonus Payments 5,388Other Salaries and Wages 11,746Social Security 11,594Pensions 20,083Life Insurance 58Medical Insurance 23,647Employer Medicare 2,981Travel 800Contracts for Substitute Teachers - Non-certified 10,922Food Supplies 325Instructional Supplies and Materials 16,790Other Supplies and Materials 5,633In Service/Staff Development 288Other Charges 3,224

Total Early Childhood Education $ 322,756

Capital OutlayRegular Capital Outlay

Architects $ 41,785Building Improvements 2,205,331Other Capital Outlay 309,459

Total Regular Capital Outlay 2,556,575

Other Debt ServiceEducation

Debt Service Contribution to Primary Government $ 700,000Total Education 700,000

Total General Purpose School Fund $ 29,676,243

School Federal Projects FundInstruction

Regular Instruction ProgramTeachers $ 436,811Educational Assistants 317,318Bonus Payments 18,025Other Salaries and Wages 13,425Social Security 42,697Pensions 69,517Life Insurance 259Medical Insurance 68,466Unemployment Compensation 85Employer Medicare 10,354Tuition 1,265Contracts for Substitute Teachers - Certified 562

(Continued)

177

Exhibit J-7



School Federal Projects Fund (Cont.)Instruction (Cont.)

Regular Instruction Program (Cont.)Contracts for Substitute Teachers - Non-certified $ 16,989Other Contracted Services 1,137Instructional Supplies and Materials 135,810Other Supplies and Materials 438

Total Regular Instruction Program $ 1,133,158

Special Education ProgramHomebound Teachers $ 4,031Educational Assistants 310,863Speech Pathologist 53,920Bonus Payments 500Social Security 21,066Pensions 36,178Life Insurance 29Medical Insurance 7,479Unemployment Compensation 79Employer Medicare 4,927Contracts with Private Agencies 74,320Contracts for Substitute Teachers - Non-certified 47,292Instructional Supplies and Materials 28,464Other Supplies and Materials 1,640Special Education Equipment 6,866


Career and Technical Education ProgramInstructional Supplies and Materials $ 13,275Other Supplies and Materials 1,170Vocational Instruction Equipment 36,491

Total Career and Technical Education Program 50,936

Support ServicesHealth Services

Medical Personnel $ 15,174Social Security 941Pensions 1,481Unemployment Compensation 3Employer Medicare 220

Total Health Services 17,819

Other Student SupportSocial Workers $ 19,727Bonus Payments 500Social Security 1,254Pensions 2,116Unemployment Compensation 3Employer Medicare 293

(Continued)

178

Exhibit J-7



School Federal Projects Fund (Cont.)Support Services (Cont.)

Other Student Support (Cont.)Travel $ 13,583In Service/Staff Development 3,396Other Charges 8,580

Total Other Student Support $ 49,452

Regular Instruction ProgramSupervisor/Director $ 96,283Clerical Personnel 28,010Bonus Payments 2,075Other Salaries and Wages 22,379Social Security 5,680Pensions 9,649Life Insurance 29Medical Insurance 11,576Unemployment Compensation 9Employer Medicare 2,122Travel 3,243Contracts for Substitute Teachers - Certified 8,360Contracts for Substitute Teachers - Non-certified 2,456Library Books/Media 8,409Other Supplies and Materials 9,242In Service/Staff Development 42,122Other Charges 44,931

Total Regular Instruction Program 296,575

Special Education ProgramClerical Personnel $ 4,431In-service Training 15,144Social Security 1,214Pensions 1,962Employer Medicare 284Travel 3,920Other Contracted Services 202,755Other Supplies and Materials 1,498In Service/Staff Development 68,442


TransportationBus Drivers $ 66,920Other Salaries and Wages 14,501Social Security 3,998Pensions 5,071Employer Medicare 1,123

Total Transportation 91,613

Total School Federal Projects Fund $ 2,536,857

(Continued)

179

Exhibit J-7



Central Cafeteria FundOperation of Non-Instructional Services

Food ServiceSupervisor/Director $ 42,904Clerical Personnel 19,188Cafeteria Personnel 649,768Bonus Payments 24,450Other Salaries and Wages 100Social Security 40,313Pensions 70,382Unemployment Compensation 145Employer Medicare 9,428Communication 4,463Maintenance and Repair Services - Equipment 46,565Travel 1,963Other Contracted Services 44,844Food Preparation Supplies 79,706Food Supplies 803,531USDA - Commodities 147,285Workers' Compensation Insurance 17,654In Service/Staff Development 5,720Other Charges 28,354Food Service Equipment 30,026

Total Food Service $ 2,066,789

Total Central Cafeteria Fund $ 2,066,789

Total Governmental Funds - Grainger County School Department $ 34,279,889

180

Exhibit J-8

Grainger County, TennesseeSchedule of Detailed Receipts, Disbursements,

and Changes in Cash Balance - City Agency FundFor the Year Ended June 30, 2019

Cities -Sales Tax

Fund

Cash ReceiptsLocal Option Sales Tax $ 963,842

Total Cash Receipts $ 963,842

Cash DisbursementsRemittance of Revenues Collected $ 954,204Trustee's Commission 9,638

Total Cash Disbursements $ 963,842

Excess of Cash Receipts Over (Under) Cash Disbursements $ 0Cash Balance, July 1, 2018 0

Cash Balance, June 30, 2019 $ 0

181

SINGLE AUDIT SECTION

182

Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With

Government Auditing Standards

Independent Auditor’s Report



We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Grainger County, Tennessee, as of and for the year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise Grainger County's basic financial statements, as listed in the table of contents, and have issued our report thereon dated October 28, 2019.

Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered Grainger 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 Grainger County's internal control. Accordingly, we do not express an opinion on the effectiveness of Grainger County's internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

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. Given these limitations, during our audit we did

183

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: 2019-003.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Grainger County's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed instances of noncompliance or other matters that are required to be reported under Government Auditing Standards and are described in the accompanying Schedule of Findings and Questioned Costs as items: 2019-001, 2019-002, and 2019-004.

Grainger County's Responses to the Findings

Grainger County's responses to the findings identified in our audit are described in the accompanying Schedule of Findings and Questioned Costs. Grainger 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 Grainger County’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Very truly yours,


October 28, 2019

JPW/tg

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Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; and Report on the Schedule of Expenditures of Federal Awards

Required by the Uniform Guidance

Independent Auditor’s Report



Report on Compliance for Each Major Federal Program

We have audited Grainger 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 Grainger County's major federal programs for the year ended June 30, 2019. Grainger County's major federal programs are identified in the summary of auditor's results section of the accompanying Schedule of Findings and Questioned Costs.

Management's Responsibility

Management is responsible for compliance with the federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs.

Auditor's Responsibility

Our responsibility is to express an opinion on compliance for each of Grainger County's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Grainger County's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.

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We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of Grainger County's compliance.

Opinion on Each Major Federal Program

In our opinion, Grainger 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, 2019.

Report on Internal Control Over Compliance

Management of Grainger 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 Grainger 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 Grainger County's internal control over compliance.

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

186

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 Grainger County, Tennessee, as of and for the year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise Grainger County’s basic financial statements. We issued our report thereon dated October 28, 2019, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Schedule of Expenditures of Federal Awards is fairly stated in all material respects in relation to the basic financial statements as a whole.

Very truly yours,


October 28, 2019

JPW/tg

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Grainger County, Tennessee, and the Grainger County School DepartmentSchedule of Expenditures of Federal Awards and State Grants (1) (2)For the Year-Ended June 30, 2019

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: (5) School Breakfast Program 10.553 N/A $ 400,430 National School Lunch Program 10.555 N/A 988,594 (4) Passed-through State Department of Agriculture: Child Nutrition Cluster: (5) National School Lunch Program (Commodities - Noncash Assistance) 10.555 N/A 147,285 (4) Environmental Quality Incentives Program 10.912 N/A 2,427 Passed-through State Department of Health: Special Supplemental Nutrition Program for Women, Infants, and Children 10.557 GG-1959269 6,733Total U.S. Department of Agriculture $ 1,545,469

U.S. Department of Housing and Urban Development: Passed-through State Department of Economic and Community Development: Community Development Block Grants/State's Program 14.228 4940-53088 $ 39,993Total U.S. Department of Housing and Urban Development $ 39,993

U.S. Department of Justice: Passed-through State Department of Justice: Crime Victim Assistance 16.575 (3) $ 41,055Total U.S. Department of Justice $ 41,055

U.S. Department of Transportation: Passed-through State Department of Transportation: Alcohol Open Container Requirements 20.607 Z-19-THS109 $ 17,165Total U.S. Department of Transportation $ 17,165

U.S. Department of Education: Passed-through State Department of Education: Title 1 Grants to Local Educational Agencies 84.010 N/A $ 1,096,593 Special Education Cluster: (5) Special Education - Grants to States 84.027 N/A 972,997 Special Education - Preschool Grants 84.173 N/A 63,394 Career and Technical Education - Basic Grants to States 84.048 N/A 67,915 Gaining Early Awareness and Readiness for Undergraduate Programs 84.334 N/A 116,064 Rural Education 84.358 N/A 51,595 English Language Acquisition Grants 84.365 N/A 24,052 Improving Teacher Quality State Grants 84.367 N/A 173,901Total U.S. Department of Education $ 2,566,511

U.S. Department of Health and Human Services: Passed-through East Tennessee Human Resource Agency: Aging Cluster: (5) Special Program for the Aging - Title III, Part B - Grants for Supportive Services and Senior Centers 93.044 (3) $ 14,529 Passed-through State Department of Health: Injury Prevention and Control Research and State and Community Based Programs 93.136 GG-1959269 602 Family Planning Services 93.217 GG-1959269 1,929 National State Based Tobacco Control Programs 93.305 GG-1959269 275 Medicaid Cluster: (5) Medical Assistance Program 93.778 GG-1959269 3,519

(Continued)

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Grainger County, Tennessee, and the Grainger County School Department (Cont.)Schedule of Expenditures of Federal Awards and State Grants (1) (2)

Federal Pass-throughFederal/Pass-Through Agency/State CFDA Entity IdentifyingGrantor Program Title Number Number Expenditures

U.S. Department of Health and Human Services (Cont.): Passed-through State Department of Human Services: Maternal and Child Health Services Block Grants to States 93.994 GG-1959269 $ 1,045Total U.S. Department of Health and Human Services $ 21,899

U.S. Department of Homeland Security: Passed-through State Department of Military: Homeland Security Grant Program 97.067 (3) $ 7,000Total U.S. Department of Homeland Security $ 7,000

Total Expenditures of Federal Grants $ 4,239,092

ContractState Grants Number Health Department Programs - State Department of Health N/A GG-1959269 $ 61,299 Public Health Nurses - State Department of Health N/A (3) 0 Health Department Addition - State Department of Health N/A (3) 0 Litter Program - State Department of Transportation N/A (3) 44,245 Waste Tire Grant - State Department of Environment and Conservation N/A (3) 5,417 Juvenile Service Program - State Commission on Children and Youth N/A (3) 9,000 Three Star Grant - State Department of Economic and Community Development N/A (3) 5,000 Special Programs for the Aging - East Tennessee Human Resource Agency N/A (3) 6,816 Driver Education - State Department of Education (3) 12,182 Family Resource Center - State Department of Education N/A (3) 29,612 Early Childhood Education Pilot Project - State Department of Education N/A (3) 322,754 Safe Schools Act Grant - State Department of Education N/A (3) 144,481 Read to be Ready Summer Coaching Network- Department of Human Services N/A (3) 7,163 Coordinated School Health - State Department of Education N/A (3) 100,000 Library Technology Grant - State Library and Archives N/A (3) 17,959 Used Oil Grant - State Department of Environment and Conservation N/A (3) 21,587 Material Management Household Hazardous Waste - State Department of Environment and Conservation N/A (3) 9,356 Waste Reduction Grant - State Department of Environment and Conservation N/A (3) 110,012 Local Park and Recreation Fund - State Department of Environment and Conservation N/A (3) 106,492

Total State Grants $ 1,013,375

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) Grainger County elected not to use the 10% de minimis cost rate permitted in the Uniform Guidance.(3) Information not available.(4) Total for CFDA No. 10.555 is $1,135,879. (5) Child Nutrition Cluster total $1,536,309; Special Education Cluster total $1,036,391; Aging Cluster total $14,529; Medicaid Cluster total is $3,519

SUBRECIPIENTS Federal Amount CFDA Provided to

Program Title Number Subrecipient SubrecipientTitle 1 Grants to Local Educational Agencies 84.010 $33,800 Kingswood School/

Home for Children

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Grainger County, TennesseeSummary Schedule of Prior-year FindingsFor the Year Ended June 30, 2019

Fiscal Page Finding CFDAYear Number Number Number

OFFICE OF COUNTY MAYOR

2018 180 2018-001 N/A

OFFICE OF ROAD SUPERINTENDENT

2018 181 20018-002 N/A

2018 182 20018-003 N/A

OFFICE OF CIRCUIT, GENERAL SESSIONS, AND JUVENILE COURTS CLERK

2018 182 2018-004 N/A

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.In addition, OMB's Uniform Guidance requires auditees to report the status of all prior-year findings whethercorrected or not. Presented below are financial statement findings along with their current status from theAnnual Financial Report for Grainger County, Tennessee, for the year ended June 30, 2019.

Prior-year Financial Statement Findings

CorrectedThe Office had Deficiences in Budget Operations

Not Corrected -

Prior-year Federal Awards Findings

Corrected

The Office had Deficiences in Payroll Deductions

The Office had Deficiences in Purchasing Procedures

Corrected

The Office had Deficiencies in Controls Related to the Processing and Accounting for Daily Collections

See Explanationon Corrective Action Plan

190

Financial Statements:

1. Our report on the financial statements of Grainger 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: 10.553 and 10.555 Child Nutrition Cluster: School Breakfast Programand National School Lunch Program

8. Dollar threshold used to distinguish between Type A and Type B Programs. $750,000

9. Auditee qualified as low-risk auditee? YES

GRAINGER COUNTY, TENNESSEE

SCHEDULE OF FINDINGS AND QUESTIONED COSTS


PART I, SUMMARY OF AUDITOR'S RESULTS

191

PART II, FINDINGS RELATING TO THE FINANCIAL STATEMENTS

Findings and recommendations, as a result of our audit, are presented below. We reviewed these findings and recommendations with management to provide an opportunity for their response. Written responses for all findings are paraphrased and presented following each finding and recommendation. Management’s corrective action plans, whether related to the financial statements or federal awards, are presented separately in the Management’s Corrective Action Plan in the Single Audit Section of this report. Findings relating specifically to the audit of federal awards, if any, are separately presented under Part III, Findings and Questioned Costs for Federal Awards.

OFFICE OF COUNTY MAYOR FINDING 2019-001 AMBULANCE SERVICE EMPLOYEES RECEIVED

INCENTIVE PAY WITHOUT THE APPROVAL OF THE COUNTY COMMISSION (Noncompliance Under Government Auditing Standards)

As a part of our audit procedures for determining whether the payroll process was operating as designed, we selected as sample of ten disbursements totaling $10,927 from a population of 4,207 payroll checks totaling $5,770,517. Our examination revealed that from September 2018 through February 2019, employees of the Ambulance Service Department received an $8 per trip incentive payment for transporting patients on high mileage transport trips. The incentive pay was approved by the county mayor; however, the incentive pay was not approved by the county commission. The total amount paid for the incentives was $19,854. In addition, these incentive payments were not classified as salaries in the expenditure accounts of the General Fund but were instead classified as Contracted Services – Debt Collection Services. After this issue was brought to management’s attention by the auditor, journal entries were completed to expense the incentive pay in the correct expenditure account. Section 5-9-401, Tennessee Code Annotated, states that “All funds from whatever source derived, including, but not limited to, taxes, county aid funds, federal funds, and fines, that are to be used in the operation and respective programs of the various departments, commissions, institutions, boards, offices and agencies of county governments shall be appropriated to such use by the county legislative bodies.” This deficiency was the result of a lack of management oversight and resulted in unauthorized compensation. RECOMMENDATION All compensation should be approved by the county commission and should be classified properly in the accounting records. The county commission should determine the propriety of the incentive payments for these employees. MANAGEMENT’S RESPONSE – COUNTY MAYOR We concur with this finding. The incentive plan was put in place under the previous administration (Mayor) without the county commission’s approval. Also, these incentive payments were incorrectly classified as debt collection services prior to correction. Once the issue was brought to management’s attention the issue was corrected.

192

FINDING 2019-002 COMPETITIVE BIDS WERE NOT SOLICITED FOR THE CONSTRUCTION OF A BUILDING ADDITION

(Noncompliance Under Government Auditing Standards) As a part of our audit procedures for determining whether the purchasing process was operating as designed, we selected as sample of 28 disbursements totaling $67,669 from a population of 3,543 vendor checks totaling $6,394,119. Our examination revealed that competitive bids were not solicited for the construction of a building addition at Thorn Hill Community Center totaling $16,000. Purchasing procedures for the County Mayor’s Office are governed by Sections 5-14-201 through 5-14-207, Tennessee Code Annotated. These statutes require competitive bids to be solicited through newspaper advertisement on all purchases exceeding $10,000. This deficiency is due to a lack of management oversight. As a result, the best and lowest price may not have been obtained for the construction of the building addition. RECOMMENDATION All purchases should be made in compliance with applicable state statutes. MANAGEMENT’S RESPONSE – COUNTY MAYOR We concur with this finding. The referenced Thorn Hill project was completed under the previous administration. It is my understanding competitive bids were received; however, no bids were solicited through local newspaper advertisement per statutes.

________________________________________

OFFICE OF ROAD SUPERINTENDENT FINDING 2019-003 THE OFFICE HAD DEFICIENCIES IN PAYROLL

DEDUCTIONS (Internal Control – Significant Deficiency Under Government Auditing Standards)

Our examination of the payroll process in the Highway Department revealed the following deficiencies. These deficiencies exist due to lack of management oversight, the failure to correct the prior-year audit finding, and the failure to implement their corrective action plan.

A. General ledger payroll deduction accounts were not reconciled with payroll

reports and payments in the Highway/Public Works Fund. Sound business practices dictate that these reconciliations be performed monthly. The failure to regularly reconcile payroll deduction accounts allows errors to remain undiscovered and uncorrected.

193

B. The Highway Department maintains a clearing account for the payroll taxes due to the Internal Revenue Service (IRS). An employee of the Highway Department is required to notify the IRS of the tax deposit, so the IRS can process the withdrawal from the county’s account. In several instances, the employee did not notify the IRS timely of the tax deposit. This delay resulted in the department being assessed penalties totaling $9,514 by the IRS. The penalties assessed were for payroll processes under the prior administration.

RECOMMENDATION General ledger payroll liability accounts should be reconciled monthly with payroll reports and payments, and any errors should be corrected promptly. Federal payroll taxes deposited to the clearing account should be reported to the IRS on a timely basis to avoid interest and penalty assessments. MANAGEMENT’S RESPONSE – ROAD SUPERINTENDENT

We concur with this finding. The taxes and penalties occurred during the previous administration. This problem has been corrected. A new bookkeeper has been hired. Taxes are being called in and deposited on time, within the three-day period. We will reconcile each month.

________________________________________ FINDING 2019-004 EXPENDITURES EXCEEDED APPROPRIATIONS IN

THE CAPITAL OUTLAY MAJOR APPROPRIATION CATEGORY

(Noncompliance Under Government Auditing Standards) Expenditures exceeded appropriations in the Capital Outlay major appropriation category (the legal level of control) of the Highway/Public Works Fund by $109,225. Section 5-9-401, Tennessee Code Annotated, states that “All funds from whatever source derived, including, but not limited to, taxes, county aid funds, federal funds, and fines, that are to be used in the operation and respective programs for the various departments, commissions, institutions, boards, offices, and agencies of county governments shall be appropriated to such use by the county legislative bodies.” This deficiency exists because management did not get a budget amendment approved by the county commission for a state-aid project. RECOMMENDATION Expenditures should be held within appropriations approved by the county commission. Additionally, management should seek approval of a budget amendment from the county commission when necessary.

194

MANAGEMENT’S RESPONSE – ROAD SUPERINTENDENT We concur with this finding. We failed to get a budget amendment in a timely manner. Money should be approved by the county commission when a project is approved. Once monies came in for the project from the state it was too late to get it approved. This will be done and approved when necessary.

________________________________________

195

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, 2019.

196

FindingNumber

OFFICE OF COUNTY MAYOR

2019-001 198

2019-002 199

OFFICE OF ROAD SUPERINTENDENT

2019-003 200

2019-004 200

The Office had Deficiencies in Payroll Deductions

We reviewed the financial statement and federal award findings and recommendations with management toprovide an opportunity for their response as required by the auditee requirements within Title 2 U.S. Code ofFederal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements forFederal Awards (Uniform Guidance). Management’s corrective action plans for all financial statement findingsand federal award findings are presented in this section and have been indexed below. The corrective action planswere prepared by management and have been presented as they were submitted.

Grainger County, TennesseeManagement's Corrective Action Plan


Title of Finding

Competitive Bids were not Solicited for the Construction of a Building Addition

Expenditures Exceeded Appropriations in the Capital Outlay Major Appropriation Category

Ambulance Service Employees Received Incentive Pay Without the Approval of the County Commission

Corrective ActionPlan Page Number

197

Grainger County Mayor's Office 8095 Rutledge Pike, Suite 100 PO Box 126 Rutledge, TN. 37861 Phone: 865-828-3513 Fax: 865-828-4284 E-Mail: mike.hvrcititerainaercountvtmeov

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* * * &It 0-96 * * *

Corrective Action Plan

FINDING: 2019-001 Ambulance Service Employees received incentive pay without the approval of the County Commission

Response and Corrective Action Plan Prepared by: David M Byrd, Grainger County Mayor

Person Responsible for Implementing the Corrective Action: David M Byrd, Grainger County Mayor

Anticipated Completion Date of Corrective Action: March 21, 2019

Repeat Finding: No

Reason Corrective Action was Not Taken in the Prior Year:

Planned Corrective Action: Office Management will ensure salary line items receive County Commission approval. Management will also ensure proper accounting procedures are utilized for salary expenditures.

David M. Byrd Grainger County Mayor

198

Grainger County Mayor's Office 8095 Rutledge Pike, Suite 100 PO Box 126 Rutledge, TN. 37861 Phone: 865-828-3513 Fax: 865-828-4284 E-Mail: mike.hyrd(iegraingercountvtn.gov

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FINDING: 2019-002 Competitive bids were not solicited for the construction of building addition at Thorn Hill.

Response and Corrective Action Plan Prepared by: David M Byrd, Grainger County Mayor

Person Responsible for Implementing the Corrective Action: David M Byrd, Grainger County Mayor

Anticipated Completion Date of Corrective Action: March 21, 2019

Repeat Finding: No

Reason Corrective Action was Not Taken in the Prior Year:

Planned Corrective Action: Office Management will ensure under normal operating procedures competitive bids are solicited through newspaper advertisement for projects exceeding $10,000. Circumstances may arise in emergency situations where the bid process is not practical. Management will ensure bids solicited in emergency situations will be documented as such.

/in 0 David M. Byrd Grainger County Mayor

199

GRAINGER COUNTY HIGHWAY DEPARTMENT

P.O. BOX 91

FINDING:

RUTLEDGE, TN 37861


THE OFFICE HAD DEFICIENCIES IN PAYROLL DEDUCTIONS

Response and Corrective Action Plan Prepared by:

Charlie McAnally, Road Superintendent

Person Responsible for Implementing the Corrective Action: Charlie McAnally, Road Superintendent

Anticipated Completion Date of Corrective Action: September 25,2019

Repeat Finding: Yes

Reason Corrective Action was Not Taken in the Prior Year: Repeat issue from previous year.

Planned Corrective Action: Will reconcile each month on payroll and purchasing. The changes are effective immediately. The bookkeeper will be responsible for ensuring deposits are made within three days of collection.

FINDING: EXPENDUTURES EXCEEDED APPROPRIATIONS IN THE CAPITAL OUTLAY MAJOR APPROPRIATION CATEGORY

Response and Corrective Action Plan Prepared by: Charlie McAnally, Road Superintendent

Person Responsible for Implementing the Corrective Action: Charlie McAnally, Road Superintendent

Anticipated Completion Date of Corrective Action: September 25, 2019

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Repeat Finding: No

Reason Co1·rective Action was Not Taken in the Prior Year: Money was t·eccived after county commission meeting. Project was signed under previous

administration.

Planned Corrective Action: Budget nmcndment will be sent to county commission when project is signed.

Signature:

201

BEST PRACTICE Accounting literature describes a best practice as a recommended policy, procedure, or technique that aids management in improving financial performance. Historically, a best practice has consistently shown superior results over conventional methods. The Division of Local Government Audit strongly believes that the item noted below is a best practice that should be adopted by the governing body as a means of significantly improving accountability and the quality of services provided to the citizens of Grainger County.

GRAINGER COUNTY SHOULD ADOPT A CENTRAL SYSTEM OF ACCOUNTING, BUDGETING, AND PURCHASING

Grainger County does not have a central system of accounting, budgeting, and purchasing. Sound business practices dictate that establishing a central system would significantly improve internal controls over the accounting, budgeting, and purchasing processes. The absence of a central system of accounting, budgeting, and purchasing has been a management decision by the county commission resulting in decentralization and some duplication of effort. The Division of Local Government Audit strongly believes that the adoption of a central system of accounting, budgeting, and purchasing is a best practice that would significantly improve accountability and the quality of services provided to the citizens of Grainger County. Therefore, we recommend the adoption of the County Financial Management System of 1981 or a private act, which would provide for a central system of accounting, budgeting, and purchasing covering all county departments.

202