macon county tennessee - tn comptroller · macon county, tennessee for the year ended june 30, ......

ANNUAL FINANCIAL REPORT

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

DIVISION OF LOCAL GOVERNMENT AUDIT

ANNUAL FINANCIAL REPORT

MACON COUNTY, TENNESSEE

FOR THE YEAR ENDED JUNE 30, 2017

COMPTROLLER OF THE TREASURY JUSTIN P. WILSON

DIVISION OF LOCAL GOVERNMENT AUDIT JAMES R. ARNETTE

Director

JEFF BAILEY, CPA, CGFM, CFE Audit Manager FERMAN PRIDE, CGFM LAUREN SHARPE KATIE ARMSTRONG, CPA, CGFM, CFE KELLEY McNEAL, CPA, CGFM Auditor 4 State Auditors

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

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Exhibit Page(s)

Summary of Audit Findings 6

INTRODUCTORY SECTION 7

Macon 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 31-74REQUIRED SUPPLEMENTARY INFORMATION: 75

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 76

Schedule of Contributions Based on Participation in the Public EmployeePension Plan of TCRS – Primary Government E-2 77

Schedule of Contributions Based on Participation in the TeacherRetirement Plan of TCRS – Discretely Presented MaconCounty School Department E-3 78

Schedule of Contributions Based on Participation in the TeacherLegacy Pension Plan of TCRS – Discretely Presented MaconCounty School Department E-4 79

MACON COUNTY, TENNESSEETABLE OF CONTENTS

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Exhibit Page(s)

Schedule of Proportionate Share of the Net Pension Asset in theTeacher Pension Plan of TCRS – Discretely PresentedMacon County School Department E-5 80

Schedule of Proportionate Share of the Net Pension Asset in theTeacher Legacy Pension Plan of TCRS – Discretely PresentedMacon County School Department E-6 81

Schedule of Funding Progress – Other Postemployment BenefitsPlan – Discretely Presented Macon County School Department E-7 82

Notes to the Required Supplementary Information 83COMBINING AND INDIVIDUAL FUND FINANCIAL

STATEMENTS AND SCHEDULES: 84Nonmajor Governmental Funds: 85-86

Combining Balance Sheet F-1 87-88Combining Statement of Revenues, Expenditures, and Changes

in Fund Balances F-2 89-92Schedules of Revenues, Expenditures, and Changes in Fund

Balances – Actual (Budgetary Basis) and Budget:Public Library Fund F-3 93Solid Waste/Sanitation Fund F-4 94Drug Control Fund F-5 95

Major Governmental Fund: 96Schedule of Revenues, Expenditures, and Changes in Fund

Balance – Actual and Budget:General Debt Service Fund G 97

Fiduciary Funds: 98Combining Statement of Fiduciary Assets and Liabilities H-1 99Combining Statement of Changes in Assets and Liabilities –

All Agency Funds H-2 100Component Unit:

Discretely Presented Macon County School Department: 101Statement of Activities I-1 102Balance Sheet – Governmental Funds I-2 103Reconciliation of the Balance Sheet of Governmental Funds

to the Statement of Net Position I-3 104Statement of Revenues, Expenditures, and Changes in Fund

Balances – Governmental Funds I-4 105Reconciliation of the Statement of Revenues, Expenditures,

and Changes in Fund Balances of Governmental Fundsto the Statement of Activities I-5 106

Combining Balance Sheet – Nonmajor Governmental Funds I-6 107Combining Statement of Revenues, Expenditures, and Changes

in Fund Balances – Nonmajor Governmental Funds I-7 108Schedules of Revenues, Expenditures, and Changes in Fund

Balances – Actual (Budgetary Basis) and Budget:General Purpose School Fund I-8 109-110School Federal Projects Fund I-9 111Central Cafeteria Fund I-10 112

Statement of Fiduciary Net Position I-11 113Statement of Changes in Fiduciary Net Position I-12 114

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Exhibit Page(s)

Miscellaneous Schedules: 115Schedule of Changes in Long-term Notes and Bonds J-1 116Schedule of Long-term Debt Requirements by Year J-2 117Schedule of Transfers – Primary Government and Discretely

Presented Macon County School Department J-3 118Schedule of Salaries and Official Bonds of Principal Officials –

Primary Government and Discretely Presented MaconCounty School Department J-4 119

Schedule of Detailed Revenues – All Governmental Fund Types J-5 120-131Schedule of Detailed Revenues – All Governmental Fund Types –

Discretely Presented Macon County School Department J-6 132-135Schedule of Detailed Expenditures – All Governmental Fund Types J-7 136-153Schedule of Detailed Expenditures – All Governmental Fund Types –

Discretely Presented Macon County School Department J-8 154-165Schedule of Detailed Receipts, Disbursements, and Changes in

Cash Balance – City Agency Fund J-9 166

SINGLE AUDIT SECTION 167

Auditor's Report on Internal Control Over Financial Reporting and onCompliance and Other Matters Based on an Audit of FinancialStatements Performed in Accordance With GovernmentAuditing Standards 168-169

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

Schedule of Expenditures of Federal Awards and State Grants 173-174Summary Schedule of Prior-year Findings 175-176Schedule of Findings and Questioned Costs 177-180Management's Corrective Action Plan 181-183Best Practice 184

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Summary of Audit Findings Annual Financial Report

Macon County, Tennessee For the Year Ended June 30, 2017

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

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

Findings

The following is a summary of the audit findings: OFFICE OF COUNTY MAYOR ♦ Solid Waste/Sanitation Fund appropriations exceeded estimated available funding. OFFICE OF COUNTY CLERK

♦ Duties were not segregated adequately.

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INTRODUCTORY SECTION

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Macon County OfficialsJune 30, 2017

Officials

Steve Jones, County MayorAudie Cook, Supervisor of RoadsTony Boles, Director of Schools Diane Cook, TrusteeRick Shoulders, Assessor of PropertyConnie Blackwell, County ClerkRick Gann, Circuit, General Sessions, and Juvenile Courts ClerkKristin Reid, Clerk and Master Cynthia Jones, Register of DeedsMark Gammons, Sheriff

Board of County Commissioners

Steve Jones, County Mayor, ChairmanShannon Wix Tony WixChris Wix Justin DyerKenneth Witte Kimmy WarfJeff Hughes Troy BrawnerTodd Gentry Bobby Ray KingPhillip Snow Helen HessonMike Jenkins Wendell JonesScott Gammons Don StevensCharles Porter Benton BartleyMichelle Phillips Barry King

Purchasing Commission

Steve Jones, County MayorConnie Blackwell, County ClerkKristin Reid, Clerk and Master

Board of Education

Wayne Marsh, ChairmanJimmy CookRebekah TuttleJeff HarperBryan Nichols

Audit CommitteeMike Prock, ChairmanLonnie StevensMarty ColeyBryan Carter

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FINANCIAL SECTION

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STATE OF TENNESSEE COMPTROLLER OF THE TREASURY

DEPARTMENT OF AUDIT DIVISION OF LOCAL GOVERNMENT AUDIT

SUITE 1500 JAMES K. POLK STATE OFFICE BUILDING

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

Independent Auditor's Report

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

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An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Macon County, Tennessee, as of June 30, 2017, and the respective changes in financial position and the respective budgetary comparison for the General and Highway/Public Works funds for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Management has omitted the management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information. Accounting principles generally accepted in the United States of America require that the schedule of changes in the county’s net pension liability (asset) and related ratios, schedules of county and school contributions, schedule of school’s proportionate share of the net pension liability (asset), and schedule of funding progress - other postemployment benefits plan on pages 76-83 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

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our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary and Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise Macon County’s basic financial statements. The introductory section, combining and individual nonmajor fund financial statements, budgetary comparison schedules of nonmajor governmental funds and the General Debt Service Fund, combining and individual fund financial statements of the Macon County School Department (a discretely presented component unit), and miscellaneous schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedule of expenditures of federal awards is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and is also not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements, budgetary comparison schedules of nonmajor governmental funds and the General Debt Service Fund, combining and individual fund financial statements of the Macon County School Department (a discretely presented component unit), miscellaneous schedules, and schedule of federal awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, 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 Macon County School Department (a discretely presented component unit), miscellaneous schedules, and schedule of federal awards are fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory section has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated September 15, 2017, on our consideration of Macon 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 Macon

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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 Macon County’s internal control over financial reporting and compliance. Very truly yours,

Justin P. Wilson Comptroller of the Treasury Nashville, Tennessee September 15, 2017

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BASIC FINANCIAL STATEMENTS

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Exhibit A

Macon County, TennesseeStatement of Net PositionJune 30, 2017

Component Unit

Cash $ 41,664 $ 100Equity in Pooled Cash and Investments 5,850,944 6,245,247Accounts Receivable 2,530,774 8,000Allowance for Uncollectibles (2,186,084) 0Due from Other Governments 540,111 1,073,897Due from Component Units 2,581,052 0Property Taxes Receivable 5,387,758 3,392,476Allowance for Uncollectible Property Taxes (361,780) (229,934)Net Pension Asset - Agent Plan 272,854 215,606Net Pension Asset - Teacher Retirement Plan 0 34,507Capital Assets: Assets Not Depreciated: Land 848,506 382,263 Assets Net of Accumulated Depreciation: Buildings and Improvements 7,148,857 9,615,738 Infrastructure 17,952,985 0 Other Capital Assets 3,468,891 2,124,563Total Assets $ 44,076,532 $ 22,862,463

Deferred Outflows - Pension Changes in Experience $ 190,297 $ 244,105Deferred Outflows - Pension Changes in Investment Earnings 363,922 2,691,364Deferred Outflows - Pension Contributions After Measurement Date 324,013 1,433,344Deferred Outflows - Pension Other Deferrals 0 139,240Total Deferred Outflows of Resources $ 878,232 $ 4,508,053

Accounts Payable $ 0 $ 11,297Accrued Interest Payable 49,135 0Payroll Deductions Payable 18,669 0Due to Primary Government 0 2,581,052Due to Litigants, Heirs, and Others 1,037 0Noncurrent Liabilities: Due Within One Year 2,561,685 0 Due in More Than One Year 5,236,269 4,273,877Total Liabilities $ 7,866,795 $ 6,866,226

Deferred Current Property Taxes $ 4,871,678 $ 3,057,425Deferred Inflows - Pension Changes in Experience 267,088 2,815,408Total Deferred Inflows of Resources $ 5,138,766 $ 5,872,833

(Continued)

SchoolDepartment

GovernmentPrimary

ASSETS

LIABILITIES

ActivitiesGovernmental

DEFERRED OUTFLOWS OF RESOURCES

DEFERRED INFLOWS OF RESOURCES

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Exhibit A

Macon County, TennesseeStatement of Net Position (Cont.)

Component Unit

Net Investment in Capital Assets $ 25,879,475 $ 12,122,564Restricted for:

Debt Service 2,125,837 0General Government 155,031 0Administration of Justice 9,716 0Public Safety 137,222 0Social, Cultural, and Recreational Services 4,329 0Highway/Public Works 906,623 0Highway/Public Works 86,720 0Pensions 272,854 250,113Central Cafeteria 0 640,453Education 0 132,574

Unrestricted 2,371,396 1,485,753

Total Net Position $ 31,949,203 $ 14,631,457

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

GovernmentalGovernment

Primary

SchoolActivities Department

NET POSITION

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Exhibit B

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

Primary Operating Capital Government Macon

Charges Grants Grants Total Countyfor and and Governmental School

Functions/Programs Expenses Services Contributions Contributions Activities Department

Primary Government: Governmental Activities: General Government $ 2,095,363 $ 196,648 $ 51,962 $ 620,000 $ (1,226,753) $ 0 Finance 1,148,123 622,161 0 0 (525,962) 0 Administration of Justice 901,808 730,076 9,000 0 (162,732) 0 Public Safety 3,373,419 818,092 223,975 233,081 (2,098,271) 0 Public Health and Welfare 2,872,944 61,358 246,023 0 (2,565,563) 0 Social, Cultural, and Recreational Services 359,681 41,948 1,346 0 (316,387) 0 Agriculture and Natural Resources 111,908 0 0 0 (111,908) 0 Highways 1,486,827 1,542 1,686,396 741,627 942,738 0 Education 913,495 0 0 0 (913,495) 0 Interest on Long-term Debt 161,617 0 0 0 (161,617) 0

Total Primary Government $ 13,425,185 $ 2,471,825 $ 2,218,702 $ 1,594,708 $ (7,139,950) $ 0

Component Unit: Macon County School Department $ 31,476,512 $ 563,186 $ 4,027,185 $ 0 $ 0 $ (26,886,141)

Total Component Units $ 31,476,512 $ 563,186 $ 4,027,185 $ 0 $ 0 $ (26,886,141)

(Continued)

Program Revenues

Net (Expense) Revenue and Changes in Net Position

Component Unit

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Exhibit B

Macon County, TennesseeStatement of Activities (Cont.)

Primary Operating Capital Government Macon

Charges Grants Grants Total Countyfor and and Governmental School

Functions/Programs Expenses Services Contributions Contributions Activities Department

General Revenues: Taxes: Property Taxes Levied for General Purposes $ 5,053,993 $ 3,436,913 Local Option Sales Tax 288,192 2,158,219 Hotel/Motel Tax 22,005 0 Wheel Tax 1,453,290 0 Litigation Tax 241,341 0 Business Tax 161,370 0 Mineral Severance Tax 29,802 0 Adequate Facilities/Development Tax 187,490 0 Wholesale Beer Tax 102,525 0 Interstate Telecommunications Tax 0 2,053 Grants and Contributions Not Restricted to Specific Programs 614,093 23,877,632 Unrestricted Investment Income 33,111 0 Miscellaneous 117,562 50,162Total General Revenues $ 8,304,774 $ 29,524,979

Change in Net Position $ 1,164,824 $ 2,638,838Net Position, July 1, 2016 30,784,379 11,992,619

Net Position, June 30, 2017 $ 31,949,203 $ 14,631,457


Program Revenues

Net (Expense) Revenue and Changes in Net Position

Component Unit

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Exhibit C-1

Macon County, TennesseeBalance SheetGovernmental FundsJune 30, 2017

OtherGovern- Total

Public Debt mental GovernmentalGeneral Works Service Funds Funds

ASSETS

Cash $ 425 $ 0 $ 0 $ 41,239 $ 41,664Equity in Pooled Cash and Investments 2,827,555 668,704 2,108,557 246,128 5,850,944Accounts Receivable 2,518,885 0 0 11,889 2,530,774Allowance for Uncollectibles (2,186,084) 0 0 0 (2,186,084)Due from Other Governments 201,841 271,855 66,415 0 540,111Due from Other Funds 4,475 0 0 0 4,475Property Taxes Receivable 4,738,784 466,386 0 182,588 5,387,758Allowance for Uncollectible Property Taxes (317,805) (31,601) 0 (12,374) (361,780)

Total Assets $ 7,788,076 $ 1,375,344 $ 2,174,972 $ 469,470 $ 11,807,862

LIABILITIES

Payroll Deductions Payable $ 58 $ 18,611 $ 0 $ 0 $ 18,669Due to Other Funds 0 4,475 0 0 4,475Due to Litigants, Heirs, and Others 0 0 0 1,037 1,037Total Liabilities $ 58 $ 23,086 $ 0 $ 1,037 $ 24,181


Deferred Current Property Taxes $ 4,286,750 $ 420,368 $ 0 $ 164,560 $ 4,871,678Deferred Delinquent Property Taxes 130,451 14,010 0 5,495 149,956Other Deferred/Unavailable Revenue 296,909 135,896 0 0 432,805Total Deferred Inflows of Resources $ 4,714,110 $ 570,274 $ 0 $ 170,055 $ 5,454,439

(Continued)

Nonmajor Funds

Major Funds

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Exhibit C-1

Macon County, TennesseeBalance SheetGovernmental Funds (Cont.)

OtherHighway / General Govern- Total


FUND BALANCES

Restricted:Restricted for General Government $ 155,031 $ 0 $ 0 $ 0 $ 155,031Restricted for Administration of Justice 9,716 0 0 0 9,716Restricted for Public Safety 7,879 0 0 129,343 137,222Restricted for Public Health and Welfare 0 0 0 28,200 28,200Restricted for Social, Cultural, and Recreational Services 4,329 0 0 0 4,329Restricted for Highways/Public Works 0 781,984 0 0 781,984Restricted for Debt Service 0 0 2,174,972 0 2,174,972Restricted for Capital Projects 0 0 0 86,720 86,720

Committed:Committed for Finance 0 0 0 51,991 51,991

Assigned:Assigned for General Government 3,417 0 0 0 3,417Assigned for Administration of Justice 325 0 0 0 325Assigned for Public Safety 11,463 0 0 0 11,463Assigned for Public Health and Welfare 12,057 0 0 2,124 14,181Assigned for Social, Cultural, and Recreational Services 120 0 0 0 120Assigned for Other Operations 128 0 0 0 128

Unassigned 2,869,443 0 0 0 2,869,443Total Fund Balances $ 3,073,908 $ 781,984 $ 2,174,972 $ 298,378 $ 6,329,242

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 7,788,076 $ 1,375,344 $ 2,174,972 $ 469,470 $ 11,807,862


Nonmajor Funds

Major Funds

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Exhibit C-2

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

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

Total fund balances - balance sheet - governmental funds (Exhibit C-1) $ 6,329,242

(1) Capital assets used in governmental activities are not financial resources and therefore are not reported inthe governmental funds. Add: land $ 848,506 Add: buildings and improvements net of accumulated depreciation 7,148,857 Add: infrastructure net of accumulated depreciation 17,952,985 Add: other capital assets net of accumulated depreciation 3,468,891 29,419,239

(2) Long-term liabilities are not due and payable in the current period and therefore are not reported in thegovernmental funds. Less: notes payable $ (5,748,973) Less: bonds payable (1,277,000) Add: debt to be contributed by the School Department 2,581,052 Less: compensated absences payable (318,908) Less: accrued interest on notes and bonds (49,135) Less: landfill postclosure care costs (453,073) (5,266,037)

(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 $ 878,232 Less: deferred inflows of resources related to pensions (267,088) 611,144

(4) Net pension assets of the agent plan are not current financialresources and therefore are not reported in the governmental funds. 272,854

(5) Other long-term assets are not available to pay forcurrent-period expenditures and therefore are deferredin the governmental funds. 582,761

Net position of governmental activities (Exhibit A) $ 31,949,203


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Exhibit C-3

Macon County, TennesseeStatement of Revenues, Expenditures,

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



RevenuesLocal Taxes $ 5,750,255 $ 507,186 $ 1,168,274 $ 187,640 $ 7,613,355Licenses and Permits 101,830 0 0 0 101,830Fines, Forfeitures, and Penalties 164,787 0 0 38,578 203,365Charges for Current Services 1,459,556 0 0 358,150 1,817,706Other Local Revenues 436,064 9,573 10,393 0 456,030Fees Received From County Officials 876,524 0 0 0 876,524State of Tennessee 692,725 2,367,450 643,399 47,280 3,750,854Federal Government 246,006 52,103 0 620,000 918,109Other Governments and Citizens Groups 21,275 0 855,386 0 876,661

Total Revenues $ 9,749,022 $ 2,936,312 $ 2,677,452 $ 1,251,648 $ 16,614,434

ExpendituresCurrent:

General Government $ 1,326,695 $ 0 $ 0 $ 70,000 $ 1,396,695Finance 800,335 0 0 209,553 1,009,888Administration of Justice 747,648 0 0 0 747,648Public Safety 3,207,838 0 0 12,428 3,220,266Public Health and Welfare 2,282,474 0 0 485,089 2,767,563Social, Cultural, and Recreational Services 226,224 0 0 0 226,224Agriculture and Natural Resources 113,103 0 0 0 113,103Other Operations 1,121,047 0 0 0 1,121,047Highways 0 2,910,686 0 0 2,910,686

Debt Service:Principal on Debt 0 0 3,075,680 0 3,075,680Interest on Debt 0 0 184,551 0 184,551Other Debt Service 0 0 11,638 0 11,638

(Continued)

Nonmajor Funds

Major Funds

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Exhibit C-3

Macon County, TennesseeStatement of Revenues, Expenditures,

and Changes in Fund BalancesGovernmental Funds (Cont.)



Expenditures (Cont.)Capital Projects $ 0 $ 435,423 $ 0 $ 1,499,609 $ 1,935,032

Total Expenditures $ 9,825,364 $ 3,346,109 $ 3,271,869 $ 2,276,679 $ 18,720,021

Excess (Deficiency) of RevenuesOver Expenditures $ (76,342) $ (409,797) $ (594,417) $ (1,025,031) $ (2,105,587)

Other Financing Sources (Uses)Notes Issued $ 0 $ 0 $ 0 $ 176,127 $ 176,127Insurance Recovery 72,110 14,313 0 5,000 91,423Transfers In 3,702 19,220 0 860,202 883,124Transfers Out (879,422) (2,400) 0 (1,302) (883,124)

Total Other Financing Sources (Uses) $ (803,610) $ 31,133 $ 0 $ 1,040,027 $ 267,550

Net Change in Fund Balances $ (879,952) $ (378,664) $ (594,417) $ 14,996 $ (1,838,037)Fund Balance, July 1, 2016 3,953,860 1,160,648 2,769,389 283,382 8,167,279

Fund Balance, June 30, 2017 $ 3,073,908 $ 781,984 $ 2,174,972 $ 298,378 $ 6,329,242


Nonmajor Funds

Major Funds

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Exhibit C-4

Macon County, TennesseeReconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of ActivitiesFor the Year Ended June 30, 2017

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

Net change in fund balances - total governmental funds (Exhibit C-3) $ (1,838,037)

(1) Governmental funds report capital outlays as expenditures. However,in the statement of activities, the cost of these assets is allocated over their useful lives and reported as depreciation expense. The difference between capital outlays and depreciation is itemized as follows: Add: capital assets purchased in the current period $ 3,042,895 Less: current-year depreciation expense (946,817) 2,096,078

(2) The net effect of various miscellaneous transactions involving capitalassets (sales, trade-ins, and donations) is to decrease net position. Less: book value of capital assets disposed (88,451)

(3) Revenues in the statement of activities that do not provide currentfinancial resources are not reported as revenues in the funds. Less: deferred delinquent property taxes and other deferred June 30, 2016 $ (1,894,709) Add: deferred delinquent property taxes and other deferred June 30, 2017 582,761 (1,311,948)

(4) The issuance of long-term debt (e.g., bond and notes) provides current financial resources to governmental funds, while the repaymentof the principal of long-term debt consumes the current financialresources of governmental funds. Neither transaction, however,has any effect on net position. This amount is the effect of thesedifferences in the treatment of long-term debt and related items: Add: principal payments on bonds $ 638,500 Add: principal payments on notes 2,437,180 Add: note proceeds contributed to the School Department 106,127 Less: notes proceeds (176,127) Less: contributions from the School Department for notes (805,104) 2,200,576

(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 net pension liability/asset $ (428,489) Change in deferred outflows of resources related to pensions 132,728 Change in deferred inflows of resources related to pensions 419,787 Change in accrued interest payable 22,934 Change in compensated absences payable (44,388) Change in landfill closure/postclosure care costs 4,034 106,606

Change in net position of governmental activities (Exhibit B) $ 1,164,824


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Exhibit C-5

Macon County, TennesseeStatement of Revenues, Expenditures, and Changes

in Fund Balance - Actual (Budgetary Basis) and BudgetGeneral FundFor the Year Ended June 30, 2017

Actual VarianceRevenues/ with Final

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

RevenuesLocal Taxes $ 5,750,255 $ 0 $ 5,750,255 $ 5,557,854 $ 5,557,854 $ 192,401Licenses and Permits 101,830 0 101,830 40,600 40,600 61,230Fines, Forfeitures, and Penalties 164,787 0 164,787 126,950 126,950 37,837Charges for Current Services 1,459,556 0 1,459,556 1,644,600 1,727,529 (267,973)Other Local Revenues 436,064 0 436,064 373,000 455,566 (19,502)Fees Received From County Officials 876,524 0 876,524 926,000 767,909 108,615State of Tennessee 692,725 0 692,725 577,400 634,204 58,521Federal Government 246,006 0 246,006 9,000 246,046 (40)Other Governments and Citizens Groups 21,275 0 21,275 90,000 90,000 (68,725)

Total Revenues $ 9,749,022 $ 0 $ 9,749,022 $ 9,345,404 $ 9,646,658 $ 102,364

ExpendituresGeneral Government

County Commission $ 117,352 $ 0 $ 117,352 $ 127,707 $ 127,707 $ 10,355Board of Equalization 900 0 900 2,500 2,500 1,600Beer Board 91 0 91 850 850 759Budget and Finance Committee 1,036 0 1,036 1,800 1,800 764Other Boards and Committees 2,372 0 2,372 3,000 3,000 628County Mayor/Executive 267,721 1,472 269,193 282,789 286,789 17,596County Attorney 8,431 0 8,431 8,431 8,431 0Election Commission 184,359 0 184,359 190,990 212,557 28,198Register of Deeds 134,859 0 134,859 134,629 139,639 4,780Planning 56,457 0 56,457 69,403 69,403 12,946Building 10,277 0 10,277 72,600 75,100 64,823County Buildings 148,943 413 149,356 134,030 182,224 32,868Other Facilities 364,547 1,532 366,079 314,420 371,035 4,956

(Continued)

Budgeted Amounts

25

Exhibit C-5


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



Expenditures (Cont.)General Government (Cont.)

Other General Administration $ 1,613 $ 0 $ 1,613 $ 1,623 $ 1,623 $ 10Preservation of Records 10,911 0 10,911 10,917 10,917 6Risk Management 16,826 0 16,826 18,861 18,861 2,035

FinanceCentral Services 388,504 0 388,504 386,861 399,906 11,402Property Assessor's Office 187,969 0 187,969 202,538 201,938 13,969Reappraisal Program 4,778 0 4,778 6,600 7,200 2,422County Trustee's Office 174,579 0 174,579 181,855 181,855 7,276County Clerk's Office 44,505 0 44,505 258,281 52,577 8,072

Administration of JusticeCircuit Court 329,928 300 330,228 360,522 374,808 44,580General Sessions Court 112,657 0 112,657 113,725 113,725 1,068Chancery Court 136,621 25 136,646 136,828 142,844 6,198Juvenile Court 38,738 0 38,738 47,484 47,484 8,746Judicial Commissioners 27,644 0 27,644 29,937 29,937 2,293Probation Services 102,060 0 102,060 103,278 103,278 1,218

Public SafetySheriff's Department 1,794,776 3,042 1,797,818 1,763,309 1,836,637 38,819Administration of the Sexual Offender Registry 2,124 0 2,124 2,000 2,200 76Jail 1,215,207 3,757 1,218,964 1,167,714 1,278,474 59,510Workhouse 66,487 4,475 70,962 89,719 81,819 10,857Fire Prevention and Control 1,946 0 1,946 6,660 6,660 4,714Rural Fire Protection 9,495 0 9,495 16,000 16,000 6,505Civil Defense 11,734 0 11,734 16,982 19,482 7,748Rescue Squad 1,617 30 1,647 14,250 14,250 12,603

(Continued)

Budgeted Amounts

26

Exhibit C-5





Expenditures (Cont.)Public Safety (Cont.)

Disaster Relief $ 35,654 $ 0 $ 35,654 $ 36,100 $ 36,101 $ 447Other Emergency Management 13,432 159 13,591 14,800 14,800 1,209County Coroner/Medical Examiner 40,750 0 40,750 27,750 42,025 1,275Other Public Safety 14,616 0 14,616 18,751 18,751 4,135

Public Health and WelfareLocal Health Center 53,237 3,048 56,285 51,277 71,062 14,777Rabies and Animal Control 31,183 240 31,423 45,801 45,801 14,378Ambulance/Emergency Medical Services 1,970,349 8,769 1,979,118 1,897,790 2,141,126 162,008Crippled Children Services 1,439 0 1,439 1,439 1,439 0Other Local Health Services 119,395 0 119,395 142,400 142,400 23,005Regional Mental Health Center 7,953 0 7,953 7,953 7,953 0Appropriation to State 41,140 0 41,140 41,140 41,140 0Other Local Welfare Services 57,778 0 57,778 59,723 59,723 1,945

Social, Cultural, and Recreational ServicesAdult Activities 6,000 0 6,000 6,000 6,000 0Senior Citizens Assistance 15,000 0 15,000 15,000 15,000 0Libraries 179,996 120 180,116 184,122 188,701 8,585Parks and Fair Boards 25,228 0 25,228 31,478 31,478 6,250

Agriculture and Natural ResourcesAgricultural Extension Service 59,111 0 59,111 60,085 61,285 2,174Soil Conservation 53,992 0 53,992 53,472 54,024 32

Other OperationsTourism 14,525 0 14,525 3,000 16,677 2,152Industrial Development 19,650 0 19,650 23,700 23,700 4,050Veterans' Services 27,374 0 27,374 30,069 30,069 2,695

(Continued)

Budgeted Amounts

27

Exhibit C-5





Expenditures (Cont.)Other Operations (Cont.)

Other Charges $ 1,003,523 $ 0 $ 1,003,523 $ 914,744 $ 1,030,398 $ 26,875Contributions to Other Agencies 11,032 0 11,032 13,700 13,700 2,668Employee Benefits 16,328 0 16,328 26,000 26,000 9,672Miscellaneous 28,615 128 28,743 5,700 33,500 4,757

Support ServicesOther Programs 0 0 0 12,800 0 0

Total Expenditures $ 9,825,364 $ 27,510 $ 9,852,874 $ 10,003,887 $ 10,576,363 $ 723,489

Excess (Deficiency) of RevenuesOver Expenditures $ (76,342) $ (27,510) $ (103,852) $ (658,483) $ (929,705) $ 825,853

Other Financing Sources (Uses)Insurance Recovery $ 72,110 $ 0 $ 72,110 $ 0 $ 72,110 $ 0Transfers In 3,702 0 3,702 120,506 120,506 (116,804)Transfers Out (879,422) 0 (879,422) (139,726) (879,422) 0

Total Other Financing Sources $ (803,610) $ 0 $ (803,610) $ (19,220) $ (686,806) $ (116,804)

Net Change in Fund Balance $ (879,952) $ (27,510) $ (907,462) $ (677,703) $ (1,616,511) $ 709,049Fund Balance, July 1, 2016 3,953,860 0 3,953,860 3,051,125 3,051,125 902,735

Fund Balance, June 30, 2017 $ 3,073,908 $ (27,510) $ 3,046,398 $ 2,373,422 $ 1,434,614 $ 1,611,784


Budgeted Amounts

28

Exhibit C-6


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

Variancewith FinalBudget -Positive

Actual Original Final (Negative)

RevenuesLocal Taxes $ 507,186 $ 472,626 $ 498,795 $ 8,391Other Local Revenues 9,573 7,000 7,000 2,573State of Tennessee 2,367,450 3,005,915 3,005,915 (638,465)Federal Government 52,103 82,950 82,950 (30,847)

Total Revenues $ 2,936,312 $ 3,568,491 $ 3,594,660 $ (658,348)

ExpendituresHighways

Administration $ 161,419 $ 166,487 $ 167,987 $ 6,568Highway and Bridge Maintenance 1,099,270 1,232,164 1,247,035 147,765Operation and Maintenance of Equipment 317,914 359,363 350,563 32,649Other Charges 137,940 143,475 142,875 4,935Employee Benefits 279,514 301,020 303,020 23,506Capital Outlay 914,629 1,721,504 1,738,701 824,072

Capital ProjectsHighway and Street Capital Projects 435,423 436,303 436,304 881

Total Expenditures $ 3,346,109 $ 4,360,316 $ 4,386,485 $ 1,040,376

Excess (Deficiency) of RevenuesOver Expenditures $ (409,797) $ (791,825) $ (791,825) $ 382,028

Other Financing Sources (Uses)Insurance Recovery $ 14,313 $ 0 $ 0 $ 14,313Transfers In 19,220 19,220 19,220 0Transfers Out (2,400) (2,400) (2,400) 0

Total Other Financing Sources $ 31,133 $ 16,820 $ 16,820 $ 14,313

Net Change in Fund Balance $ (378,664) $ (775,005) $ (775,005) $ 396,341Fund Balance, July 1, 2016 1,160,648 930,908 930,908 229,740

Fund Balance, June 30, 2017 $ 781,984 $ 155,903 $ 155,903 $ 626,081


Budgeted Amounts

29

Exhibit DMacon County, TennesseeStatement of Fiduciary Assets and LiabilitiesFiduciary FundsJune 30, 2017

ASSETS

Cash $ 814,565Accounts Receivable 52,724Due from Other Governments 328,575

Total Assets $ 1,195,864

LIABILITIES

Due to Other Taxing Units $ 328,575Due to Litigants, Heirs, and Others 867,289

Total Liabilities $ 1,195,864


AgencyFunds

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Note Page(s)

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

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

Net Position/Fund Balance1. Deposits and Investments 362. Receivables and Payables 373. Capital Assets 374. Deferred Outflows/Inflows of Resources 385. Compensated Absences 396. Long-term Obligations 397. Net Position and Fund Balance 40

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

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

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

III. Stewardship, Compliance, and AccountabilityA. Budgetary Information 43B. Budget Deficit 43

IV. Detailed Notes on All FundsA. Deposits and Investments 44B. Capital Assets 45C. Interfund Receivables, Payables, and Transfers 47D. Long-term Obligations 48E. On-Behalf Payments 52

V. Other InformationA. Risk Management 52B. Accounting Changes 53C. Contingent Liabilities 54D. Landfill Postclosure Care Costs 54E. Joint Venture 54F. Retirement Commitments 55G. Other Postemployment Benefits (OPEB) 71H. Purchasing Laws 73

MACON COUNTY, TENNESSEEIndex of Notes to the Financial Statements

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MACON COUNTY, TENNESSEE NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended June 30, 2017

I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Macon 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 Macon County: A. Reporting Entity

Macon County is a public municipal corporation governed by an elected 20-member board. As required by GAAP, these financial statements present Macon County (the primary government) and its component units. The financial statements of the Macon 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 Macon County School Department operates the public school system in the county, and the voters of Macon 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 Macon County Emergency Communications District provides a simplified means of securing emergency services through a uniform emergency number for the residents of Macon County, and the Macon 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 Macon 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 Macon 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 Macon County Emergency Communications District can be obtained from its administrative office at the following address:

Administrative Office:

Macon County Emergency Communications District 898 Hwy 52 By-Pass E Lafayette, TN 37083

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 Macon 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 Macon 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. Macon County issues all debt for the discretely presented Macon County School Department. Net debt issues totaling $106,127 were contributed by the county to the School Department during the year ended June 30, 2017. Separate financial statements are provided for governmental funds and fiduciary funds. The fiduciary funds are excluded from the government-wide

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financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements.

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

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

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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. Macon County reports the following major governmental funds:

General Fund – This is the county’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. Highway/Public Works Fund – This special revenue fund accounts for transactions of the county’s Highway Department. Local and state gasoline/fuel taxes are the foundational revenues of this fund. 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, Macon County reports the following fund types:

Capital Projects Funds – These funds account for 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. Agency Funds – These funds account for amounts collected in an agency capacity by the constitutional officers and local sales taxes received by the state to be forwarded to the various cities in Macon 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 Macon 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.

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Additionally, the Macon County School Department reports the following fund types:

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. Private-purpose Trust Fund – The Endowment Fund is used to account for an endowment received by the School Department to fund scholarships for deserving high school graduates to attend the University of Tennessee or Belmont University.

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

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

1. Deposits and Investments

State statutes authorize the government to make direct investments in bonds, notes, or treasury bills of the U.S. government and obligations guaranteed by the U.S. government or any of its agencies; deposit accounts at state and federal chartered banks and savings and loan associations; repurchase agreements; the State Treasurer’s Investment Pool; bonds of any state or political subdivision rated A or higher by any nationally recognized rating service; nonconvertible debt securities of certain federal government sponsored enterprises; and the county’s own legally issued bonds or notes. The county trustee maintains a cash and internal investment pool that is used by all funds and the discretely presented Macon 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 Fund. Macon 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

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reported at fair value. No investments required to be reported at fair value were held at the balance sheet date.

2. Receivables and Payables

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

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

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

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

3. Capital Assets

Governmental funds do not capitalize the cost of capital outlays; these funds report capital outlays as expenditures upon acquisition. Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, and similar items), are reported in the governmental column in the government-wide

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

Assets Years

Building and Improvements 5 - 40Other Capital Assets 5 - 20Infrastructure: Roads 20 - 50 Bridges 75 Waterway 30 - 50

4. Deferred Outflows/Inflows of Resources

In addition to assets, the Statement of Net Position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The government has items that qualify for reporting in this category. Accordingly, the items are reported in the government-wide Statement of Net Position and the governmental funds balance sheet. These items are for pension changes in experience, pension changes in investment earnings, changes in proportionate share of contributions, as well as employer contributions made to the pension plan after the measurement date. In addition to liabilities, the Statement of Net Position will sometimes report a separate section for deferred inflows of resources. 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

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reporting in this category. Accordingly, the items are reported in the government-wide Statement of Net Position and the governmental funds balance sheet. These revenues are from the following sources: current and delinquent property taxes, pension changes in experience, and various receivables for revenues, which do not meet the availability criteria in governmental funds. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available.

5. Compensated Absences

It is the county’s policy to permit employees to accumulate earned but unused vacation (excluding the Highway Department, which closes the week of Christmas and the week of July 4th for vacation) and sick leave benefits. There is no liability for unpaid accumulated sick leave (excluding the Highway Department, which guarantees payment) since Macon County does not have a policy to pay any amounts when employees separate from service with the government. All vacation pay is accrued when incurred in the government-wide financial statements for the county. A liability for vacation pay is reported in governmental funds only if amounts have matured, for example, as a result of employee resignations and retirements. It is the School Department’s policy to permit employees to accumulate earned but unused vacation and sick pay benefits. Custodians, maintenance employees, mechanics, bookkeepers, and cafeteria managers are paid for all unused sick leave at the end of the fiscal year. The School Department’s leave policy does not guarantee payment for accumulated vacation when employees separate from service with the department.

6. Long-term Obligations In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities Statement of Net Position. Debt premiums and discounts are deferred and 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 is reported as other financing sources. Premiums received on debt issuances are reported as other

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

7. Net Position and Fund Balance

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

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

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

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

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

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

As of June 30, 2017, Macon County had $3,486,209 in outstanding debt for capital purposes for the discretely presented Macon County School Department. This debt is a liability of Macon County, but the capital assets acquired are reported in the financial statements of the School Department. Therefore, Macon 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

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amounts when expenditures are incurred for purposes for which amounts in any of these unrestricted fund balance classifications could be used. In the fund financial statements, governmental funds report fund balance in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in these funds can be spent. These classifications may consist of the following:

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

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

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

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

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

E. Pension Plans

Primary Government For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension

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expense, information about the fiduciary net position of Macon County’s participation in the Public Employee Retirement Plan of the Tennessee Consolidated Retirement System (TCRS), and additions to/deductions from Macon 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 Macon County School Department

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

II. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL

STATEMENTS A. Explanation of certain differences between the governmental fund

balance sheet and the government-wide Statement of Net Position Primary Government

Exhibit C-2 includes explanations of the nature of individual elements of items required to reconcile the balance sheet of governmental funds with the government-wide Statement of Net Position.

Discretely Presented Macon 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

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

III. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY

A. Budgetary Information Annual budgets are adopted on a basis consistent with generally accepted accounting principles (GAAP) for all governmental funds except the Constitutional Officers - Fees (special revenue fund), which is not budgeted. 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, Beer Board, Budget and Finance Committee, etc.). Management may make revisions within major categories, but only the County Commission may transfer appropriations between major categories. During the year, several supplementary appropriations were necessary. The county's budgetary basis of accounting is consistent with GAAP, except instances in which encumbrances are treated as budgeted expenditures. The difference between the budgetary basis and GAAP basis is presented on the face of each budgetary schedule.

B. Budget Deficit

The budget and subsequent amendments approved by the County Commission for the Solid Waste Sanitation Fund resulted in appropriations exceeding estimated available funding by $61,127.

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IV. DETAILED NOTES ON ALL FUNDS

A. Deposits and Investments Macon County and the Macon County School Department participate in an internal cash and investment pool through the Office of Trustee. The county trustee is the treasurer of the county and in this capacity is responsible for receiving, disbursing, and investing most county funds. Each fund’s portion of this pool is displayed on the balance sheets or statements of net position as Equity in Pooled Cash and Investments. Cash reflected on the balance sheets or statements of net position represents nonpooled amounts held separately by individual funds. Deposits Legal Provisions. All deposits with financial institutions must be secured by one of two methods. One method involves financial institutions that participate in the bank collateral pool administered by the state treasurer. Participating banks determine the aggregate balance of their public fund accounts for the State of Tennessee and its political subdivisions. The amount of collateral required to secure these public deposits must equal at least 105 percent of the average daily balance of public deposits held. Collateral securities required to be pledged by the participating banks to protect their public fund accounts are pledged to the state treasurer on behalf of the bank collateral pool. The securities pledged to protect these accounts are pledged in the aggregate rather than against each account. The members of the pool may be required by agreement to pay an assessment to cover any deficiency. Under this additional assessment agreement, public fund accounts covered by the pool are considered to be insured for purposes of credit risk disclosure.

For deposits with financial institutions that do not participate in the bank collateral pool, state statutes require that all deposits be collateralized with collateral whose market value is equal to 105 percent of the uninsured amount of the deposits. The collateral must be placed by the depository bank in an escrow account in a second bank for the benefit of the county. Investments Legal Provisions. Counties are authorized to make direct investments in bonds, notes, or treasury bills of the U.S. government and obligations guaranteed by the U.S. government or any of its agencies; deposits at state and 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

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agreements. Repurchase agreements must be approved by the state Comptroller’s Office and executed in accordance with procedures established by the State Funding Board. Securities purchased under a repurchase agreement must be obligations of the U.S. government or obligations guaranteed by the U.S. government or any of its agencies. When repurchase agreements are executed, the purchase of the securities must be priced at least two percent below the fair value of the securities on the day of purchase. The county had no pooled and nonpooled investments as of June 30, 2017.

B. Capital Assets

Capital assets activity for the year ended June 30, 2017, was as follows: Governmental Activities:

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

Capital Assets Not Depreciated:Land $ 778,506 $ 70,000 $ 0 $ 848,506Total Capital Assets Not Depreciated $ 778,506 $ 70,000 $ 0 $ 848,506

Capital Assets Depreciated:Buildings and Improvements $ 11,163,399 $ 169,271 $ 0 $ 11,332,670Infrastructure 19,833,870 2,255,579 (124,689) 21,964,760Other Capital Assets 7,257,435 548,045 (337,189) 7,468,291Total Capital Assets Depreciated $ 38,254,704 $ 2,972,895 $ (461,878) $ 40,765,721

Less Accumulated Depreciation For:Buildings and Improvements $ 3,946,624 $ 237,189 $ 0 $ 4,183,813Infrastructure 3,830,059 244,061 (62,345) 4,011,775Other Capital Assets 3,844,915 465,567 (311,082) 3,999,400Total Accumulated Depreciation $ 11,621,598 $ 946,817 $ (373,427) $ 12,194,988

Total Capital Assets Depreciated, Net $ 26,633,106 $ 2,026,078 $ (88,451) $ 28,570,733

Governmental Activities Capital Assets, Net $ 27,411,612 $ 2,096,078 $ (88,451) $ 29,419,239

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

Governmental Activities:

General Government $ 16,074Finance 1,615Administration of Justice 110,735Public Safety 229,442Public Health and Welfare 187,335Social, Cultural, and Recreational 50,991Highway/Public Works 350,625

Total Depreciation Expense - Governmental Activities $ 946,817

Discretely Presented Macon County School Department Governmental Activities:

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

Capital Assets Not Depreciated:Land $ 382,263 $ 0 $ 0 $ 382,263Total Capital Assets Not Depreciated $ 382,263 $ 0 $ 0 $ 382,263

Capital Assets Depreciated:Buildings and Improvements $ 24,143,159 $ 0 $ 0 $ 24,143,159Other Capital Assets 4,156,856 352,967 0 4,509,823Total Capital Assets Depreciated $ 28,300,015 $ 352,967 $ 0 $ 28,652,982

Less Accumulated Depreciation For:Buildings and Improvements $ 13,915,376 $ 612,045 $ 0 $ 14,527,421Other Capital Assets 2,126,429 258,831 0 2,385,260Total Accumulated Depreciation $ 16,041,805 $ 870,876 $ 0 $ 16,912,681

Total Capital Assets Depreciated, Net $ 12,258,210 $ (517,909) $ 0 $ 11,740,301

Governmental Activities Capital Assets, Net $ 12,640,473 $ (517,909) $ 0 $ 12,122,564

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

Instruction $ 612,045Support Services 258,831

Total Depreciation Expense - Governmental Activities $ 870,876

C. Interfund Receivables, Payables, and Transfers

The composition of interfund balances as of June 30, 2017, was as follows: Due to/from Other Funds:

Receivable Fund Payable Fund Amount

General Highway/Public Works $ 4,475

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

Receivable Fund Payable Fund Amount

Component Unit:Primary Government: School Department: $ 2,581,052

The Due to the Primary Government is the balance of three notes issued by the county for the School Department. The School Department has agreed to contribute the funds necessary to retire these notes. This long-term debt obligation is reflected in the governmental activities on the Statement of Net Position. Interfund Transfers:

Interfund transfers for the year ended June 30, 2017, consisted of the

following amounts:

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Primary Government

Highway/ NonmajorGeneral Public Governmental

Transfers Out Fund Works Funds General $ 0 $ 19,220 $ 860,202Highway/Public Works Fund 2,400 0 0Nonmajor governmental funds 1,302 0 0

Total $ 3,702 $ 19,220 $ 860,202

Transfers In

Discretely Presented Macon County School Department

GeneralPurpose Nonmajor School Governmental

Transfers Out Fund Funds

General Purpose School Fund $ 0 $ 16,101Nonmajor governmental funds 12,283 0

Total $ 12,283 $ 16,101

Transfers In

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

D. Long-term Obligations

Primary Government General Obligation Bonds and Notes Macon County issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities for the primary government and the discretely presented School Department. In addition, general obligation bonds have been issued to refund other loans. Capital outlay notes are also issued to fund capital facilities and other capital outlay purchases, such as equipment.

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General obligation bonds and capital outlay notes are direct obligations and pledge the full faith and credit of the government. General obligation bonds and capital outlay notes outstanding were issued for original terms of up to six years for bonds and up to 13 years for notes. Repayment terms are generally structured with increasing amounts of principal maturing as interest requirements decrease over the term of the debt. All bonds and notes included in long-term debt as of June 30, 2017, will be retired from the General Debt Service Fund. General obligation bonds and capital outlay notes outstanding as of June 30, 2017, for governmental activities are as follows:

Original

Interest Final Amount BalanceType Rate Maturity of Issue 6-30-17

General Obligation Bonds 1.96 % 6-1-19 $ 3,830,660 $ 1,277,000Capital Outlay Notes 0.75 to 3.66 6-1-24 15,349,479 5,748,973

The annual requirements to amortize all general obligation bonds and notes outstanding as of June 30, 2017, including interest payments, are presented in the following tables: Year EndingJune 30 Principal Interest Total

2018 $ 638,500 $ 25,030 $ 663,5302019 638,500 12,515 651,015

Total $ 1,277,000 $ 37,545 $ 1,314,545

Bonds

Year EndingJune 30 Principal Interest Total

2018 $ 1,862,977 $ 112,435 $ 1,975,4122019 1,293,385 56,977 1,350,3622020 1,293,194 33,618 1,326,8122021 493,687 10,930 504,6172022 296,934 5,022 301,9562023-2024 508,796 3,498 512,294

Total $ 5,748,973 $ 222,480 $ 5,971,453

Notes

There is $2,174,972 available in the General Debt Service Fund to service long-term debt. Debt per capita, including bonds and notes totaled $316, based on the 2010 federal census.

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The School Department is currently contributing funds to service some of the debt issued on its behalf by the primary government as noted in the table below. This debt is reflected in the government-wide financial statements as Due to the Primary Government in the financial statements of the School Department and as Due from Component Units in the financial statements of the primary government. OutstandingDescription of Indebtedness 6-30-17

Notes Payable Contributions from the General Purpose School Fund

School Refunding $ 609,607 Energy Efficient Loan 1,259,740 Energy Efficiency School Initiative 711,705

Total $ 2,581,052

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

Bonds Notes

Balance, July 1, 2016 $ 1,915,500 $ 8,010,026Additions 0 176,127Reductions (638,500) (2,437,180)

Balance, June 30, 2017 $ 1,277,000 $ 5,748,973

Balance Due Within One Year $ 638,500 $ 1,862,977

LandfillCompensated Postclosure

Absences Care Costs

Balance, July 1, 2016 $ 274,520 $ 457,107Additions 343,289 5,814Reductions (298,901) (9,848)

Balance, June 30, 2017 $ 318,908 $ 453,073

Balance Due Within One Year $ 31,891 $ 28,317

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Analysis of Noncurrent Liabilities Presented on Exhibit A:

Total Noncurrent Liabilities, June 30, 2017 $ 7,797,954Less: Balance Due Within One Year (2,561,685)

Noncurrent Liabilities - Due in More Than One Year - Exhibit A $ 5,236,269

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

Other Net Pension

Benefits Cost Sharing Plan

Balance, July 1, 2016 $ 2,062,294 $ 134,679Additions 337,689 5,507,707Reductions (273,994) (3,494,498)

Balance, June 30, 2017 $ 2,125,989 $ 2,147,888

Balance Due Within One Year $ 0 $ 0

Liability -Postemployment

Analysis of Noncurrent Liabilities Presented on Exhibit A:

Total Noncurrent Liabilities, June 30, 2017 $ 4,273,877Less: Balance Due Within One Year 0

Noncurrent Liabilities - Due in More Than One Year - Exhibit A $ 4,273,877

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

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E. On-Behalf Payments – Discretely Presented Macon County School Department The State of Tennessee pays health insurance premiums for retired teachers on-behalf of the Macon County School Department. These payments are made by the state to the Local Education Group Insurance Plan and the Medicare Supplement Plan. Both of these plans are administered by the State of Tennessee and reported in the state’s Comprehensive Annual Financial Report. Payments by the state to the Local Education Group Insurance Plan and the Medicare Supplement Plan for the year ended June 30, 2017, were $88,680 and $25,175, respectively. The School Department has recognized these on-behalf payments as revenues and expenditures in the General Purpose School Fund.

V. OTHER INFORMATION A. Risk Management

Macon County and the discretely presented Macon County School Department decided to purchase commercial insurance for the risks of employee health losses for the primary government and the School Department’s non-certified personnel to which it is exposed. Pre-65 retirees are not allowed to participate in the plan. Settled claims have not exceeded this commercial coverage in any of the past three fiscal years. Macon County is exposed to various risks related to general liability, property, casualty, and workers’ compensation. The primary government decided it was more economically feasible to join a public entity risk pool than to purchase commercial insurance for general liability, property, casualty, and workers’ compensation coverage. The government’s risks of loss relating to general liability, property, and casualty are covered by participation in the Local Government Property and Casualty Fund (LGPCF). The government’s risks of loss relating to workers’ compensation are covered by participation in the Local Government Workers’ Compensation Fund (LGWCF). These funds are public entity risk pools established by the Tennessee County Services Association, an association of member counties. The county pays annual premiums to the LGPCF and the LGWCF for its general liability, property, casualty, and workers’ compensation insurance coverage. The creation of the LGPCF and the LGWCF provide for them to be self-sustaining through member’s premiums. The School Department participates in the Local Education Group Insurance Fund (LEGIF) for its certified personnel, 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 of losses by this fund. Section 8-27-303, TCA, provides for the LEGIF to be self-sustaining through member premiums.

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

B. Accounting Changes

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

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

C. Contingent Liabilities

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

D. Landfill Postclosure Care Costs

Macon 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. Macon County closed its sanitary landfill in 1998. The $453,073 reported as postclosure care liability at June 30, 2017, represents amounts based on what it would cost to perform all postclosure care in 2017. Actual costs may be higher due to inflation, changes in technology, or changes in regulations.

E. Joint Venture

The Macon County Joint Economic and Community Development/Industrial Board is a joint venture between Macon County and the cities of Lafayette and Red Boiling Springs. The board comprises the county mayor, city mayors, and five additional members. The purpose of the board is to foster communication relative to economic and community development between and among governmental entities, industry, and private citizens. The county and cities will provide the majority of funding for the board based on the percentage of their population compared to the total census of the county when financial activity begins. During the year ended June 30, 2017, the

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county did not appropriate any operating subsidies to the Macon County Joint Economic and Community Development/Industrial Board.

F. Retirement Commitments Primary Government General Information About the Pension Plan

Plan Description. Employees of Macon County and non-certified employees of the discretely presented Macon 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 comprised 55.86 percent and the non-certified employees of the discretely presented School Department comprised 44.14 percent, of the plan based on contribution data. The TCRS was created by state statute under Tennessee Code Annotated (TCA), Title 8, Chapters 34-37. The TCRS Board of Trustees is responsible for the proper operation and administration of the TCRS. The Tennessee Treasury Department, an agency in the legislative branch of state government, administers the plans of the TCRS. The TCRS issues a publicly available financial report that can be obtained at www.treasury.tn.gov/tcrs.

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

Member and beneficiary annuitants are entitled to an automatic cost of living adjustment (COLA) after retirement. A COLA is granted each July for annuitants retired prior to the second of July of the previous year. The COLA is based on the change in the consumer price index (CPI) during the prior calendar year, capped at three percent, and applied to the current benefit. No COLA is granted if the change in the CPI is less than one-half percent. A one percent COLA is granted if the CPI change is between one-half percent and one percent. A member who leaves employment may withdraw their employee contributions plus any accumulated interest.

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Employees Covered by Benefit Terms. At the measurement date of June 30, 2016, the following employees were covered by the benefit terms:

Inactive Employees or Beneficiaries Currently Receiving Benefits 82Inactive Employees Entitled to But Not Yet Receiving Benefits 243Active Employees 375

Total 700

Contributions. Contributions for employees are established in the statutes governing the TCRS and may only be changed by the Tennessee General Assembly. Employees contribute five percent of their salary. Macon County makes employer contributions at the rate set by the Board of Trustees as determined by an actuarial valuation. For the year ended June 30, 2017, the employer contributions for Macon County were $541,286 based on a rate of 5.5 percent of covered payroll. By law, employer contributions are required to be paid. The TCRS may intercept Macon County’s state shared taxes if required employer contributions are not remitted. The employer’s actuarially determined contributions (ADC) and member contributions are expected to finance the costs of benefits earned by members during the year, the cost of administration, as well as an amortized portion of any unfunded liability.

Net Pension Liability (Asset)

Macon County’s net pension liability (asset) was measured as of June 30, 2016, and the total pension liability (asset) used to calculate net pension liability (asset) was determined by an actuarial valuation as of that date.

Actuarial Assumptions. The total pension liability as of the June 30, 2016, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:

Inflation 3%Salary Increases Graded Salary Ranges from 8.97%

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

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

Cost of Living Adjustment 2.5%

Mortality rates were based on actual experience from the June 30, 2012, actuarial experience study, adjusted for some of the expected future improvement in life expectancy.

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The actuarial assumptions used in the June 30, 2016, actuarial valuation were based on the results of an actuarial experience study performed for the period July 1, 2008, through June 30, 2012. The demographic assumptions were adjusted to more closely reflect actual and expected future experience.

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

PercentageLong-termExpected PercentageReal Rate Target

Asset Class of Return Allocations

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

Total 100 %

The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees as 7.5 percent based on a blending of the three factors described above.

Discount Rate. The discount rate used to measure the total pension liability was 7.5 percent. The projection of cash flows used to determine the discount

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rate assumes that employee contributions will be made at the current rate and that contributions from Macon 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.

Changes in the Net Pension Liability (Asset)

Total Plan NetPension Fiduciary PensionLiability Net Position Liability

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

Balance, July 1, 2015 $ 17,522,046 $ 18,779,383 $ (1,257,337)

Changes for the year: Service Cost $ 868,450 $ 0 $ 868,450 Interest 1,357,503 0 1,357,503 Differences Between Expected and Actual Experience (191,174) 0 (191,174) Contributions-Employer 0 313,116 (313,116) Contributions-Employees 0 479,781 (479,781) Net Investment Income 0 501,429 (501,429) Benefit Payments, Including Refunds of Employee Contributions (580,902) (580,902) 0 Administrative Expense 0 (28,424) 28,424 Other Changes 0 0 0Net Changes $ 1,453,877 $ 685,000 $ 768,877

Balance, June 30, 2016 $ 18,975,923 $ 19,464,383 $ (488,460)

Increase (Decrease)

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

Plan NetTotal Fiduciary Pension

Pension Net LiabilityLiability Position (Asset)

Primary Government 55.86% $ 10,599,951 $ 10,872,804 $ (272,854)

School Department 44.14% 8,375,972 8,591,579 (215,606)

Total $ 18,975,923 $ 19,464,383 $ (488,460)

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

Current

1% Discount 1%Decrease Rate Increase

Macon County 6.5% 7.5% 8.5%

Net Pension Liability (Asset) $ 2,296,013 $ (488,460) $ (2,770,093)

Pension Expense (Income) and Deferred Outflows of Resources and Deferred Inflows of Resources to Pensions

Pension Expense. For the year ended June 30, 2017, Macon County recognized pension expense of $384,576.

Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2017, Macon 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 $ 340,667 $ 478,136Net Difference Between Projected and Actual Earnings on Pension Plan Investments 651,489 0Contributions Subsequent to the Measurement Date of June 30, 2016 (1) 541,286 N/A

Total $ 1,533,442 $ 478,136

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

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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 $ 878,232 $ 267,088

School Department 655,210 211,048

Total $ 1,533,442 $ 478,136

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

2018 $ 25,3182019 25,3182020 304,8372021 145,0362022 40,823Thereafter (27,311)

In the table shown above, positive amounts will increase pension expense while negative amounts will decrease pension expense. Discretely Presented Macon County School Department

Non-certified Employees

General Information About the Pension Plan

Plan Description. As noted above under the primary government, employees of Macon County and non-certified employees of the discretely presented Macon 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 55.86 percent and the non-certified employees of the discretely presented School Department comprise 44.14 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 Macon County School Department with membership in the TCRS before July 1, 2014, are provided with pensions through the Teacher Legacy Pension Plan, a cost-sharing multiple-employer pension plan administered by the TCRS. The Teacher Legacy Pension Plan is closed to new membership. Teachers with membership in the TCRS after June 30, 2014, are provided with pensions through a legally separate plan referred to as the Teacher Retirement Plan, a cost-sharing multiple-employer pension plan administered by the TCRS. The TCRS was created by state statute under Tennessee Code Annotated (TCA), Title 8, Chapters 34-37. The TCRS Board of Trustees is responsible for the proper operation and administration of all employer pension plans in the TCRS. The Tennessee Treasury Department, an agency in the legislative branch of state government, administers the plans of the TCRS. The TCRS issues a publicly available financial report that can be obtained at www.treasury.tn.gov/tcrs.

Benefits Provided. TCA, Title 8, Chapters 34-37 establish the benefit terms and can be amended only by the Tennessee General Assembly. Members are eligible to retire with an unreduced benefit at age 65 with five years of service credit or pursuant to the rule of 90 in which the member’s age and service credit total 90. Benefits are determined by a formula using the member’s highest five consecutive year average compensation and the member’s years of service credit. A reduced early retirement benefit is available to vested members at age 60 or pursuant to the rule of 80. Members are vested with five years of service credit. Service related disability benefits are provided regardless of length of service. Five years of service is required for non-service related disability eligibility. The service related and non-service related disability benefits are determined in the same manner as a service retirement benefit but are reduced ten percent and include projected service credits. A variety of death benefits is available under various eligibility criteria. Member and beneficiary annuitants are entitled to an automatic cost of living adjustment (COLA) after retirement. A COLA is granted each July for annuitants retired prior to the second of July of the previous year. The COLA is based on the change in the consumer price index (CPI) during the prior calendar year, capped at three percent, and applied to the current benefit. No COLA is granted if the change in the CPI is less than one-half percent. A one percent COLA is granted if the CPI change is between one-half percent and one percent. Members who leave employment may withdraw their employee contributions, plus any accumulated interest. Under the Teacher Retirement Plan, 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.

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Contributions. Contributions for teachers are established in the statutes governing the TCRS and may only be changed by the Tennessee General Assembly or by automatic cost controls set out in law. Teachers are required to contribute five percent of their salary to the plan. The Local Education Agencies (LEAs) make employer contributions at the rate set by the Board of Trustees as determined by an actuarial valuation. Per the statutory provisions governing TCRS, the employer contribution rate cannot be less than four percent, except in years when the maximum funded level, approved by the TCRS Board of Trustees, is reached. By law, employer contributions for the Teacher Retirement Plan are required to be paid. The TCRS may intercept the state shared taxes of the sponsoring governmental entity of the LEA if the required employer contributions are not remitted. Employer contributions for the year ended June 30, 2017, to the Teacher Retirement Plan were $76,560, which is four percent of covered payroll. The employer rate, when combined with member contributions, is expected to finance the costs of benefits earned by members during the year, the cost of administration, as well as an amortized portion of any unfunded liability.

Pension Liabilities (Assets), Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions

Pension Liabilities (Assets). At June 30, 2017, the Macon County School Department reported an asset of $34,507 for its proportionate share of the net pension asset. The net pension asset was measured as of June 30, 2016, and the total pension liability used to calculate the net pension asset was determined by an actuarial valuation as of that date. The Macon County School Department’s proportion of the net pension asset was based on the Macon County School Department’s share of contributions to the pension plan relative to the contributions of all participating LEAs. At the measurement date of June 30, 2016, the Macon County School Department’s proportion was 0.331469 percent. The proportion measured as of June 30, 2015, was 0.441454 percent.

Pension Expense. For the year ended June 30, 2017, the Macon County School Department recognized pension expense of $29,147.

Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2017, the Macon County School Department reported deferred outflows of resources related to pensions from the following sources:

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Difference Between Expected and Actual Experience $ 3,344 $ 3,979Net Difference Between Projected and Actual Earnings on Pension Plan Investments 5,650 0Changes in proportion of Net Pension Liability (Asset) 3,085 0LEA's Contributions Subsequent to the Measurement Date of June 30, 2015 76,560 N/A

Total $ 88,639 $ 3,979

The Macon County School Department’s employer contributions of $76,560, reported as pension related deferred outflows of resources subsequent to the measurement date, will be recognized as an increase of net pension liability (asset) in the year ending June 30, 2018. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:


2018 $ 1,6542019 1,6542020 1,6542021 1,3842022 174Thereafter 1,580

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

Actuarial Assumptions. The total pension liability in the June 30, 2016, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:

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Mortality rates are customized based on the June 30, 2012, actuarial experience study and some included adjustment for expected future improvement in life expectancy.


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

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Total 100 %


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

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

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

Net Pension Liability (Asset) $ 16,295 $ (34,507) $ (71,938)

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

Benefits Provided. TCA, Title 8, Chapters 34-37 establish the benefit terms and can be amended only by the Tennessee General Assembly. Members of the Teacher Legacy Pension Plan are eligible to retire with an unreduced benefit at age 60 with five years of service credit or after 30 years of service credit regardless of age. Benefits are determined by a formula using the member’s highest five consecutive year average compensation and the member’s years of service credit. A reduced early retirement benefit is available to vested members at age 55. Members are vested with five years of service credit. Service 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,

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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 Macon County School Department for the year ended June 30, 2017, to the Teacher Legacy Pension Plan were $1,139,511, which is 9.04 percent of covered payroll. The employer rate, when combined with member contributions, is expected to finance the costs of benefits earned by members during the year, the cost of administration, as well as an amortized portion of any unfunded liability.

Pension Liabilities (Assets), Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions

Pension Liability (Assets). At June 30, 2017, the Macon County School Department reported a liability of $2,147,888 for its proportionate share of the net pension liability (asset). The net pension liability (asset) was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability (asset) was determined by an actuarial valuation as of that date. The Macon County School Department’s proportion of the net pension liability (asset) was based on the Macon County School Department’s long-term share of contributions to the pension plan relative to the contributions of all participating LEAs. At the measurement date of June 30, 2016, the Macon County School Department’s proportion was .343693 percent. The proportion measured at June 30, 2015, was .328779 percent.

Pension Expense. For the year ended June 30, 2017, the Macon County School Department recognized pension expense of $281,510.

Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2017, the Macon County School Department reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

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Difference Between Expected and Actual Experience $ 90,391 $ 2,600,381Net Difference Between Projected and Actual Earnings on Pension Plan Investments 2,398,147 0Changes in Proportion of Net Pension Liability (Asset) 136,155 0LEA's Contributions Subsequent to the Measurement Date of June 30, 2015 1,139,511 N/A

Total $ 3,764,204 $ 2,600,381

The Macon County School Department’s employer contributions of $1,139,511 reported as pension related deferred outflows of resources subsequent to the measurement date, will be recognized as an increase in net pension asset in the year ending June 30, 2018. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:


2018 $ (373,522)2019 (373,522)2020 776,8672021 141,3182022 (146,831)Thereafter 0

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

Actuarial Assumptions. The total pension liability in the June 30, 2016, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:

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Mortality rates are customized based on the June 30, 2012, actuarial experience study and some included adjustments for expected future improvement in life expectancy.


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

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Total 100 %


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

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

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

Net Pension Liability (Asset) $ 11,794,425 $ 2,147,888 $ (5,842,867)

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

G. Other Postemployment Benefits (OPEB)

Discretely Presented Macon County School Department Plan Description The School Department participates in the state-administered Local Education Group Insurance Plan for health care benefits. For accounting purposes, the plan is an agent multiple-employer defined benefit OPEB plan. Benefits are established and amended by an insurance committee created by Tennessee Code Annotated 8-27-302. Prior to reaching the age of 65, all members have the option of choosing between the standard or partnership preferred provider organization (PPO) plan for health care benefits. Subsequent to age 65, members who are also in the state’s retirement system may participate in a state-administered medicare supplement plan that does not include pharmacy. The plan is reported in the State of Tennessee Comprehensive Annual Financial Report (CAFR). The CAFR is available on the state’s website at http://tennessee.gov/finance/act/cafr.html. Funding Policy The premium requirements of plan members are established and may be amended by the insurance committee. The plan is self-insured and financed on a pay-as-you-go basis with the risk shared equally among the participants. Claims liabilities of the plan are periodically computed using actuarial and statistical techniques to establish premium rates. The employer in the plan develops its own contribution policy in terms of subsidizing active employees or retired employees’ premiums since the committee is not prescriptive on that issue. The state does not provide a subsidy for local government participants, however, the state does provide a partial subsidy to Local Education Agency pre-65 teachers and a full subsidy based on years of service for post-65 teachers in the Medicare Supplement Plan. During the year ended June 30, 2017, the School Department made contributions totaling $273,994 for other postemployment benefits.

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Annual OPEB Cost and Net OPEB Obligation

LocalEducation

GroupInsurance

Plan

ARC $ 338,000Interest on the NOPEBO 77,336Adjustment to the ARC (77,647)Annual OPEB cost $ 337,689Amount of contribution (273,994)Increase/decrease in NOPEBO $ 63,695Net OPEB obligation, 7-1-16 2,062,294

Net OPEB obligation, 6-30-17 $ 2,125,989

PercentageFiscal Annual of Annual Net OPEBYear OPEB OPEB Cost Obligation

Ended Plan Cost Contributed at Year End

6-30-15 Local Education Group $ 268,862 61 % $ 1,912,063 6-30-16 " 326,712 54 2,062,294 6-30-17 " 337,689 81 2,125,989

Funded Status and Funding Progress

The funded status of the plan as of July 1, 2017, was as follows:

LocalEducation

GroupInsurance

Plan

Actuarial valuation date 7-1-15Actuarial accrued liability (AAL) $ 3,014,000Actuarial value of plan assets $ 0Unfunded actuarial accrued liability (UAAL) $ 3,014,000Actuarial value of assets as a % of the AAL 0%Covered payroll (active plan members) $ 13,107,000UAAL as a % of covered payroll 23%

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Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future, and actuarially determined amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. The Schedule of Funding Progress, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. Actuarial Methods and Assumptions Calculations are based on the types of benefits provided under the terms of the substantive plan at the time of each valuation and on the pattern of sharing of costs between the employer and plan members to that point. Actuarial calculations reflect a long-term perspective. Consistent with that perspective, actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets. In the July 1, 2015, actuarial valuation for the Local Education Plan, the projected unit credit actuarial cost method was used. The actuarial assumptions included a 3.75 percent investment rate of return (net of administrative expenses) and an annual health care cost trend rate of 6.5 percent initially. The trend rate will decrease to six percent in fiscal year 2017 and then be reduced by decrements to an ultimate rate of 4.645 percent by fiscal year 2050. The rate includes a 2.5 percent inflation assumption. The unfunded actuarial accrued liability is being amortized as a level percentage of payroll on a closed basis over a 30-year period beginning with July 1, 2007. Payroll is assumed to grow at a rate of three percent.

H. Purchasing Laws

Office of County Mayor

Purchasing procedures for the Office of County Mayor are governed by the County Purchasing Law of 1983, Sections 5-14-201 through 5-14-207, Tennessee Code Annotated (TCA), and Chapter 161, Private Acts of 1937. The private act provides for a purchasing committee, including the county mayor, county clerk, and clerk and master, to make all purchases for all county departments except the Highway and the School departments. The County Purchasing Law of 1983 provides for purchases exceeding $10,000 to be made on a competitive basis after public advertisement.

Office of Supervisor of Roads

Purchasing procedures for the Office of Supervisor of Roads are governed by Chapter 234, Private Acts of 1965, as amended, and the Uniform Road Law, Section 54-7-113, TCA. These statutes provide for the supervisor of roads to

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make all purchases and for all purchases exceeding $10,000 to be made on a competitive basis solicited through public advertisement. Office of Director of Schools Purchasing procedures for the 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 advertisements on all purchases exceeding $10,000.

REQUIRED SUPPLEMENTARY INFORMATION

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Exhibit E-1

Macon 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

Total Pension Liability (Asset)Service Cost $ 790,999 $ 804,543 $ 868,450Interest 1,136,097 1,205,650 1,357,503Changes in Benefit Terms 0 0 0Differences Between Actual and Expected Experience (549,980) 476,935 (191,174)Changes in Assumptions 0 0 0Benefit Payments, Including Refunds of Employee Contributions (454,825) (471,752) (580,902)Net Change in Total Pension Liability (Asset) $ 922,291 $ 2,015,376 $ 1,453,877Total Pension Liability (Asset), Beginning 14,584,379 15,506,670 17,522,046

Total Pension Liability (Asset), Ending (a) $ 15,506,670 $ 17,522,046 $ 18,975,923

Plan Fiduciary Net PositionContributions - Employer $ 587,705 $ 300,865 $ 313,116Contributions - Employee 447,413 460,037 479,781Net Investment Income 2,532,807 557,524 501,429Benefit Payments, Including Refunds of Employee Contributions (454,825) (471,752) (580,902)Administrative Expense (13,802) (19,488) (28,424)Net Change in Plan Fiduciary Net Position $ 3,099,298 $ 827,186 $ 685,000Plan Fiduciary Net Position, Beginning 14,852,899 17,952,197 18,779,383

Plan Fiduciary Net Position, Ending (b) $ 17,952,197 $ 18,779,383 $ 19,464,383

Net Pension Liability (Asset), Ending (a - b) $ (2,445,527) $ (1,257,337) $ (488,460)

Plan Fiduciary Net Position as a Percentage of Total Pension Liability 115.77% 107.18% 102.57%Covered Payroll $ 8,945,171 $ 9,200,754 $ 9,575,405Net Pension Liability (Asset) as a Percentage of Covered Payroll (27.34)% (13.67)% (5.10)%

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

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

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Exhibit E-2

Macon 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

Actuarially Determined Contribution $ 587,705 $ 300,865 $ 313,116 $ 541,286Less Contributions in Relation to the Actuarially Determined Contribution (587,705) (300,865) 316,116 (541,286)Contribution Deficiency (Excess) $ 0 $ 0 $ 629,232 $ 0

Covered Payroll $ 8,945,171 $ 9,200,754 $ 9,575,405 $ 9,840,937

Contributions as a Percentage of Covered Payroll 6.57% 3.27% 3.27% 5.50%


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

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Exhibit E-3Macon County, TennesseeSchedule of Contributions Based on Participation in the Teacher Retirement Plan of TCRSDiscretely Presented Macon County School DepartmentFor the Fiscal Year Ended June 30

2015 2016 2017

Contractually Required Contribution $ 23,414 $ 36,508 $ 46,702Less Contributions in Relation to the Contractually Required Contribution (37,462) (58,339) (76,560)Contribution Deficiency (Excess) $ (14,048) $ (21,831) $ (29,858)

Covered Payroll $ 936,549 $ 1,458,466 $ 1,914,002

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


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Exhibit E-4

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

2014 2015 2016 2017

Contractually Required Contribution $ 1,138,156 $ 1,112,630 $ 1,121,558 $ 1,139,511Less Contributions in Relation to the Actuarially Determined Contribution (1,138,156) (1,112,630) (1,121,558) (1,139,511)Contribution Deficiency (Excess) $ 0 $ 0 $ 0 $ 0

Covered Payroll $ 12,817,063 $ 12,307,885 $ 12,406,626 $ 12,603,549

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


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Exhibit E-5

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

2016 2017

School Department's Proportion of the Net Pension Asset 0.450758% 0.331469%

School Department's Proportionate Share of the Net Pension Liability (Asset) $ (18,134) $ (34,507)

Covered Employee Payroll $ 936,549 $ 1,458,466

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

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

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


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Exhibit E-6

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

2015 2016 2017

School Department's Proportion of the Net Pension Asset 0.326550% 0.328779% 0.343693%

School Department's Proportionate Share of the Net Pension Liability (Asset) $ (53,063) $ 134,679 $ 2,147,888

Covered Payroll $ 12,817,063 $ 12,307,885 $ 12,406,626

School Department's Proportionate Share of the Net Pension Liability (Asset) as a Percentage of its Covered Payroll (0.414002)% 1.094251% 17.31%

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

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


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Exhibit E-7Macon County, TennesseeSchedule of Funding Progress – Other Postemployment Benefits PlanDiscretely Presented Macon County School DepartmentJune 30, 2017

(Dollar amounts in thousands)

ActuarialAccrued Liability

(AAL)Actuarial Projected Unfunded

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

Plan Date (a) (b) (b)-(a) (a/b) (c)

Local Education Group 7-1-11 $ 0 $ 4,130 $ 4,130 0 % $ 11,909 35 % " 7-1-13 0 2,514 2,514 0 12,424 20 " 7-1-15 0 3,014 3,014 0 13,107 23

UAAL as a Percentageof Covered

Payroll((b-a)/c)

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MACON COUNTY, TENNESSEE NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION


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

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

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

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

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

Retirement Age Pattern of Retirement Determined by Experience Study

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


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COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES

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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.

____________________________ Public Library Fund – The Public Library Fund is used to account for revenues and expenditures of the Macon County Library System. Solid Waste/Sanitation Fund – The Solid Waste/Sanitation Fund is used to account for Macon County’s transfer station and postclosure costs associated with the closed landfill. Drug Control Fund – The Drug Control Fund is used to account for revenues received from drug-related fines, forfeitures, and seizures. Constitutional Officers - Fees Fund – The Constitutional Officers - Fees Fund is used to account for operating expenses paid directly from the fee and commission accounts of the trustee, clerks, register of deeds, and sheriff.

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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 the general capital expenditures of the county. Education Capital Projects Fund – The Education Capital Projects Fund accounts for debt issued by Macon County that is subsequently contributed to the discretely presented Macon County School Department for construction and renovation projects.

86

Exhibit F-1

Macon County, TennesseeCombining Balance SheetNonmajor Governmental FundsJune 30, 2017

Constitu - TotalSolid tional General Nonmajor

Waste / Drug Officers - Capital GovernmentalSanitation Control Fees Total Projects Funds

ASSETS

Cash $ 100 $ 0 $ 41,139 $ 41,239 $ 0 $ 41,239Equity in Pooled Cash and Investments 30,065 129,343 0 159,408 86,720 246,128Accounts Receivable 0 0 11,889 11,889 0 11,889Property Taxes Receivable 182,588 0 0 182,588 0 182,588Allowance for Uncollectible Property Taxes (12,374) 0 0 (12,374) 0 (12,374)

Total Assets $ 200,379 $ 129,343 $ 53,028 $ 382,750 $ 86,720 $ 469,470

LIABILITIES

Due to Litigants, Heirs, and Others $ 0 $ 0 $ 1,037 $ 1,037 $ 0 $ 1,037Total Liabilities $ 0 $ 0 $ 1,037 $ 1,037 $ 0 $ 1,037


Deferred Current Property Taxes $ 164,560 $ 0 $ 0 $ 164,560 $ 0 $ 164,560Deferred Delinquent Property Taxes 5,495 0 0 5,495 0 5,495Total Deferred Inflows of Resources $ 170,055 $ 0 $ 0 $ 170,055 $ 0 $ 170,055

FUND BALANCES

Restricted:Restricted for Public Safety $ 0 $ 129,343 $ 0 $ 129,343 $ 0 $ 129,343Restricted for Public Health and Welfare 28,200 0 0 28,200 0 28,200

(Continued)

Special Revenue FundsCapital

Projects Fund

87

Exhibit F-1

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

Constitu - TotalSolid tional General Nonmajor

Waste / Drug Officers - Capital GovernmentalSanitation Control Fees Total Projects Funds

FUND BALANCES (Cont.)

Restricted (Cont.):Restricted for Capital Projects $ 0 $ 0 $ 0 $ 0 $ 86,720 $ 86,720

Committed:Committed for Finance 0 0 51,991 51,991 0 51,991

Assigned:Assigned for Public Health and Welfare 2,124 0 0 2,124 0 2,124

Total Fund Balances $ 30,324 $ 129,343 $ 51,991 $ 211,658 $ 86,720 $ 298,378

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 200,379 $ 129,343 $ 53,028 $ 382,750 $ 86,720 $ 469,470

Special Revenue FundsCapital

Projects Fund

88

Exhibit F-2

Macon County, TennesseeCombining Statement of Revenues, Expenditures,

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

Constitu -Solid tional General

Public Waste / Drug Officers - CapitalLibrary Sanitation Control Fees Total Projects

RevenuesLocal Taxes $ 0 $ 187,640 $ 0 $ 0 $ 187,640 $ 0Fines, Forfeitures, and Penalties 0 0 38,578 0 38,578 0Charges for Current Services 0 147,105 0 211,045 358,150 0State of Tennessee 0 47,280 0 0 47,280 0Federal Government 0 0 0 0 0 620,000

Total Revenues $ 0 $ 382,025 $ 38,578 $ 211,045 $ 631,648 $ 620,000


General Government $ 0 $ 0 $ 0 $ 0 $ 0 $ 70,000Finance 0 0 0 209,553 209,553 0Public Safety 0 0 12,428 0 12,428 0Public Health and Welfare 0 485,089 0 0 485,089 0

Capital Projects 0 0 0 0 0 1,393,482Total Expenditures $ 0 $ 485,089 $ 12,428 $ 209,553 $ 707,070 $ 1,463,482

Excess (Deficiency) of RevenuesOver Expenditures $ 0 $ (103,064) $ 26,150 $ 1,492 $ (75,422) $ (843,482)

Other Financing Sources (Uses)Notes Issued $ 0 $ 0 $ 0 $ 0 $ 0 $ 70,000Insurance Recovery 0 5,000 0 0 5,000 0Transfers In 0 0 0 0 0 860,202Transfers Out (1,302) 0 0 0 (1,302) 0

Total Other Financing Sources (Uses) $ (1,302) $ 5,000 $ 0 $ 0 $ 3,698 $ 930,202

(Continued)

Special Revenue Funds

Capital Projects Funds

89

Exhibit F-2


and Changes in Fund BalancesNonmajor Governmental Funds (Cont.)

Constitu -Solid tional General

Public Waste / Drug Officers - CapitalLibrary Sanitation Control Fees Total Projects

Net Change in Fund Balances $ (1,302) $ (98,064) $ 26,150 $ 1,492 $ (71,724) $ 86,720Fund Balance, July 1, 2016 1,302 128,388 103,193 50,499 283,382 0

Fund Balance, June 30, 2017 $ 0 $ 30,324 $ 129,343 $ 51,991 $ 211,658 $ 86,720

(Continued)


Capital Projects Funds

90

Exhibit F-2



TotalEducation Nonmajor

Capital GovernmentalProjects Total Funds

RevenuesLocal Taxes $ 0 $ 0 $ 187,640Fines, Forfeitures, and Penalties 0 0 38,578Charges for Current Services 0 0 358,150State of Tennessee 0 0 47,280Federal Government 0 620,000 620,000

Total Revenues $ 0 $ 620,000 $ 1,251,648


General Government $ 0 $ 70,000 $ 70,000Finance 0 0 209,553Public Safety 0 0 12,428Public Health and Welfare 0 0 485,089

Capital Projects 106,127 1,499,609 1,499,609Total Expenditures $ 106,127 $ 1,569,609 $ 2,276,679

Excess (Deficiency) of RevenuesOver Expenditures $ (106,127) $ (949,609) $ (1,025,031)

Other Financing Sources (Uses)Notes Issued $ 106,127 $ 176,127 $ 176,127Insurance Recovery 0 0 5,000Transfers In 0 860,202 860,202Transfers Out 0 0 (1,302)

Total Other Financing Sources (Uses) $ 106,127 $ 1,036,329 $ 1,040,027

(Continued)

Capital Projects Funds (Cont.)

91

Exhibit F-2



TotalEducation Nonmajor

Capital GovernmentalProjects Total Funds

Net Change in Fund Balances $ 0 $ 86,720 $ 14,996Fund Balance, July 1, 2016 0 0 283,382

Fund Balance, June 30, 2017 $ 0 $ 86,720 $ 298,378

Capital Projects Funds (Cont.)

92

Exhibit F-3

Macon County, TennesseeSchedule of Revenues, Expenditures, and Changes

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



Total Revenues $ 0 $ 0 $ 0 $ 0

Total Expenditures $ 0 $ 0 $ 0 $ 0

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

Other Financing Sources (Uses)Transfers Out $ (1,302) $ 0 $ (1,302) $ 0

Total Other Financing Sources $ (1,302) $ 0 $ (1,302) $ 0

Net Change in Fund Balance $ (1,302) $ 0 $ (1,302) $ 0Fund Balance, July 1, 2016 1,302 0 1,302 0

Fund Balance, June 30, 2017 $ 0 $ 0 $ 0 $ 0

Budgeted Amounts

93

Exhibit F-4


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



RevenuesLocal Taxes $ 187,640 $ 0 $ 187,640 $ 186,035 $ 186,035 $ 1,605Charges for Current Services 147,105 0 147,105 120,000 120,000 27,105State of Tennessee 47,280 0 47,280 12,000 37,000 10,280

Total Revenues $ 382,025 $ 0 $ 382,025 $ 318,035 $ 343,035 $ 38,990

ExpendituresPublic Health and Welfare

Transfer Stations $ 485,089 $ 2,124 $ 487,213 $ 318,537 $ 536,444 $ 49,231Total Expenditures $ 485,089 $ 2,124 $ 487,213 $ 318,537 $ 536,444 $ 49,231

Excess (Deficiency) of RevenuesOver Expenditures $ (103,064) $ (2,124) $ (105,188) $ (502) $ (193,409) $ 88,221

Other Financing Sources (Uses)Insurance Recovery $ 5,000 $ 0 $ 5,000 $ 0 $ 5,000 $ 0

Total Other Financing Sources $ 5,000 $ 0 $ 5,000 $ 0 $ 5,000 $ 0

Net Change in Fund Balance $ (98,064) $ (2,124) $ (100,188) $ (502) $ (188,409) $ 88,221Fund Balance, July 1, 2016 128,388 0 128,388 127,282 127,282 1,106

Fund Balance, June 30, 2017 $ 30,324 $ (2,124) $ 28,200 $ 126,780 $ (61,127) $ 89,327

Budgeted Amounts

94

Exhibit F-5


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



RevenuesFines, Forfeitures, and Penalties $ 38,578 $ 5,000 $ 5,000 $ 33,578

Total Revenues $ 38,578 $ 5,000 $ 5,000 $ 33,578

ExpendituresPublic Safety

Drug Enforcement $ 12,428 $ 5,200 $ 15,000 $ 2,572Total Expenditures $ 12,428 $ 5,200 $ 15,000 $ 2,572

Excess (Deficiency) of RevenuesOver Expenditures $ 26,150 $ (200) $ (10,000) $ 36,150

Net Change in Fund Balance $ 26,150 $ (200) $ (10,000) $ 36,150Fund Balance, July 1, 2016 103,193 101,858 101,858 1,335


Budgeted Amounts

95

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.

__________________________

96

Exhibit G


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



RevenuesLocal Taxes $ 1,168,274 $ 1,055,000 $ 1,055,000 $ 113,274Other Local Revenues 10,393 9,600 9,600 793State of Tennessee 643,399 700,000 700,000 (56,601)Other Governments and Citizens Groups 855,386 0 849,906 5,480

Total Revenues $ 2,677,452 $ 1,764,600 $ 2,614,506 $ 62,946

ExpendituresPrincipal on Debt

General Government $ 949,470 $ 828,077 $ 950,510 $ 1,040Highways and Streets 1,118,232 444,715 1,118,644 412Education 1,007,978 117,732 1,007,978 0

Interest on DebtGeneral Government 51,869 0 51,903 34Highways and Streets 72,816 505,711 72,873 57Education 59,866 0 59,866 0

Other Debt ServiceGeneral Government 11,638 12,000 12,000 362

Total Expenditures $ 3,271,869 $ 1,908,235 $ 3,273,774 $ 1,905

Excess (Deficiency) of RevenuesOver Expenditures $ (594,417) $ (143,635) $ (659,268) $ 64,851

Other Financing Sources (Uses)Transfers Out $ 0 $ (120,506) $ (120,506) $ 120,506

Total Other Financing Sources $ 0 $ (120,506) $ (120,506) $ 120,506

Net Change in Fund Balance $ (594,417) $ (264,141) $ (779,774) $ 185,357Fund Balance, July 1, 2016 2,769,389 2,609,847 2,094,214 675,175

Fund Balance, June 30, 2017 $ 2,174,972 $ 2,345,706 $ 1,314,440 $ 860,532

Budgeted Amounts

97

Fiduciary Funds ____________________________

Agency Funds are used to account for assets held by the county in a trustee capacity or as an agent for individuals, private organizations, other governments, and/or other funds. Agency funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations.

____________________________

Cities - Sales Tax Fund – The Cities - Sales Tax Fund is used to account for the second half of the sales tax revenues collected inside incorporated cities of the county. These revenues are received by the county from the State of Tennessee and forwarded to the various cities on a monthly basis. Constitutional Officers - Agency Funds – The Constitutional Officers - Agency Fund is used to account for amounts collected in an agency capacity by the county clerk; circuit, general sessions, and juvenile 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.

98

Exhibit H-1Macon County, TennesseeCombining Statement of Fiduciary Assets and LiabilitiesFiduciary FundsJune 30, 2017

Constitu-Cities - tionalSales Officers -Tax Agency Total

ASSETS

Cash $ 0 $ 814,565 $ 814,565Accounts Receivable 0 52,724 52,724Due from Other Governments 328,575 0 328,575

Total Assets $ 328,575 $ 867,289 $ 1,195,864

LIABILITIES

Due to Other Taxing Units $ 328,575 $ 0 $ 328,575Due to Litigants, Heirs, and Others 0 867,289 867,289

Total Liabilities $ 328,575 $ 867,289 $ 1,195,864

Agency Funds

99

Exhibit H-2

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

Beginning EndingBalance Additions Deductions Balance

Cities - Sales Tax Fund Assets Equity in Pooled Cash and Investments $ 0 $ 1,860,077 $ 1,860,077 $ 0 Due from Other Governments 300,201 328,575 300,201 328,575

Total Assets $ 300,201 $ 2,188,652 $ 2,160,278 $ 328,575

Liabilities Due to Other Taxing Units $ 300,201 $ 2,188,652 $ 2,160,278 $ 328,575

Total Liabilities $ 300,201 $ 2,188,652 $ 2,160,278 $ 328,575

Constitutional Officers - Agency Fund Assets Cash $ 747,137 $ 6,265,080 $ 6,197,652 $ 814,565 Accounts Receivable 33,776 52,724 33,776 52,724

Total Assets $ 780,913 $ 6,317,804 $ 6,231,428 $ 867,289

Liabilities Due to Litigants, Heirs, and Others $ 780,913 $ 6,317,804 $ 6,231,428 $ 867,289

Total Liabilities $ 780,913 $ 6,317,804 $ 6,231,428 $ 867,289

Totals - All Agency Funds Assets Cash $ 747,137 $ 6,265,080 $ 6,197,652 $ 814,565 Equity in Pooled Cash and Investments 0 1,860,077 1,860,077 0 Accounts Receivable 33,776 52,724 33,776 52,724 Due from Other Governments 300,201 328,575 300,201 328,575

Total Assets $ 1,081,114 $ 8,506,456 $ 8,391,706 $ 1,195,864

Liabilities Due to Other Taxing Units $ 300,201 $ 2,188,652 $ 2,160,278 $ 328,575 Due to Litigants, Heirs, and Others 780,913 6,317,804 6,231,428 867,289

Total Liabilities $ 1,081,114 $ 8,506,456 $ 8,391,706 $ 1,195,864

100

Macon County School Department ________________________

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

________________________

General Purpose School Fund – The General Purpose School Fund is used to account for general operations of the School Department. School Federal Projects Fund – The School Federal Projects Fund is used to account for restricted federal revenues, which must be expended on specific education programs. Central Cafeteria Fund – The Central Cafeteria Fund is used to account for the cafeteria operations in each of the schools. Endowment Fund – The Endowment Fund is used to account for an endowment received by the School Department to fund scholarships for deserving high school graduates to attend the University of Tennessee or Belmont University.

101

Exhibit I-1Macon County, TennesseeStatement of ActivitiesDiscretely Presented Macon County School DepartmentFor the Year Ended June 30, 2017

Net (Expense)Revenue andChanges in

Operating Net PositionCharges Grants Total

for and GovernmentalFunctions/Programs Expenses Services Contributions Activities

Governmental Activities: Instruction $ 18,584,635 $ 4,490 $ 2,171,857 $ (16,408,288) Support Services 10,423,243 44,407 0 (10,378,836) Operation of Non-instructional Services 2,468,634 514,289 1,855,328 (99,017)

Total Governmental Activities $ 31,476,512 $ 563,186 $ 4,027,185 $ (26,886,141)

General Revenues: Taxes: Property Taxes Levied for General Purposes $ 3,436,913 Local Option Sales Tax 2,158,219 Interstate Telecommunications Tax 2,053 Grants and Contributions Not Restricted to Specific Programs 23,877,632 Miscellaneous 50,162Total General Revenues $ 29,524,979

Change in Net Position $ 2,638,838Net Position, July 1, 2016 11,992,619

Net Position, June 30, 2017 $ 14,631,457

Program Revenues

102

Exhibit I-2

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

OtherGeneral Govern- TotalPurpose mental GovernmentalSchool Funds Funds

ASSETS

Cash $ 0 $ 100 $ 100Equity in Pooled Cash and Investments 5,410,276 834,971 6,245,247Accounts Receivable 8,000 0 8,000Due from Other Governments 1,067,887 6,010 1,073,897Property Taxes Receivable 3,392,476 0 3,392,476Allowance for Uncollectible Property Taxes (229,934) 0 (229,934)

Total Assets $ 9,648,705 $ 841,081 $ 10,489,786

LIABILITIES

Accounts Payable $ 11,297 $ 0 $ 11,297Total Liabilities $ 11,297 $ 0 $ 11,297


Deferred Current Property Taxes $ 3,057,425 $ 0 $ 3,057,425Deferred Delinquent Property Taxes 102,159 0 102,159Other Deferred/Unavailable Revenue 178,000 0 178,000Total Deferred Inflows of Resources $ 3,337,584 $ 0 $ 3,337,584

FUND BALANCES

Restricted:Restricted for Education $ 131,946 $ 641,081 $ 773,027

Committed:Committed for Education 0 200,000 200,000

Unassigned 6,167,878 0 6,167,878Total Fund Balances $ 6,299,824 $ 841,081 $ 7,140,905

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 9,648,705 $ 841,081 $ 10,489,786

Nonmajor Funds

Major Fund

103

Exhibit I-3

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

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) $ 7,140,905

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

Add: land $ 382,263 Add: buildings and improvements net of accumulated depreciation 9,615,738 Add: other capital assets net of accumulated depreciation 2,124,563 12,122,564

(2) Long-term liabilities are not due and payablein the current period and therefore are not reportedin the governmental funds.

Less: contributions due on primary government debt for notes $ (2,581,052)Less: net pension liability - cost sharing legacy plan (2,147,888)Less: other postemployment benefits liability (2,125,989) (6,854,929)

(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 $ 4,508,053Less: deferred inflows of resources related to pensions (2,815,408) 1,692,645

(4) Net pension assets of the agent and cost-sharing hybrid pension plansare not current financial resources and therefore are not reported in the governmental funds. 250,113

(5) Other long-term assets are not available to pay for current-periodexpenditures and therefore are deferred in the governmental funds. 280,159

Net position of governmental activities (Exhibit A) $ 14,631,457

104

Exhibit I-4Macon County, TennesseeStatement of Revenues, Expenditures,

and Changes in Fund Balances - Governmental Funds

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

OtherGeneral Govern- TotalPurpose mental GovernmentalSchool Funds Funds

RevenuesLocal Taxes $ 5,631,461 $ 0 $ 5,631,461Licenses and Permits 1,672 0 1,672Charges for Current Services 90,674 428,105 518,779Other Local Revenues 105,762 589 106,351State of Tennessee 23,293,193 0 23,293,193Federal Government 133,293 4,413,114 4,546,407Other Governments and Citizens Groups 106,127 0 106,127

Total Revenues $ 29,362,182 $ 4,841,808 $ 34,203,990


Instruction $ 16,959,438 $ 1,656,710 $ 18,616,148Support Services 9,566,156 862,843 10,428,999Operation of Non-Instructional Services 378,954 2,126,348 2,505,302Capital Outlay 307,601 0 307,601

Debt Service:Other Debt Service 849,906 0 849,906

Total Expenditures $ 28,062,055 $ 4,645,901 $ 32,707,956

Excess (Deficiency) of RevenuesOver Expenditures $ 1,300,127 $ 195,907 $ 1,496,034

Other Financing Sources (Uses)Insurance Recovery $ 43,955 $ 1,396 $ 45,351Transfers In 12,283 16,101 28,384Transfers Out (16,101) (12,283) (28,384)

Total Other Financing Sources (Uses) $ 40,137 $ 5,214 $ 45,351

Net Change in Fund Balances $ 1,340,264 $ 201,121 $ 1,541,385Fund Balance, July 1, 2016 4,959,560 639,960 5,599,520

Fund Balance, June 30, 2017 $ 6,299,824 $ 841,081 $ 7,140,905

Nonmajor Funds

Major Fund

105

Exhibit I-5

Macon County, TennesseeReconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances

of Governmental Funds to the Statement of ActivitiesDiscretely Presented Macon County School DepartmentFor the Year Ended June 30, 2017

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

Net change in fund balances - total governmental funds (Exhibit I-4) $ 1,541,385

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

Add: capital assets purchased in the current period $ 352,967Less: current-year depreciation expense (870,876) (517,909)

(2) Revenues in the statement of activities that do not provide currentfinancial resources are not reported in the funds. Less: deferred delinquent property taxes and other deferred June 30, 2016 $ (262,672) Add: deferred delinquent property taxes and other deferred June 30, 2017 280,159 17,487

(3) The contributions of long-term debt (e.g., notes) by the primary government provides current financial resources to governmental funds, while the contributions by the School Department of the principal of long-term debt consumesthe current financial resources of governmental funds. Neither transaction, however, has any effect on net position.

Add: principal contributions on notes to the primary government $ 805,104 Less: note proceeds contributed from the primary government (106,127) 698,977

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

Change in pension asset - agent plan $ (340,388)Change in pension asset - teacher retirement plam 16,373Change in pension liability - teacher legacy retirement plan (2,013,209)Change in deferred outflows of resources related to pensions 167,085Change in deferred inflows of resources related to pensions 3,132,732Change in other postemployment benefits liability (63,695) 898,898

Change in net position of governmental activities (Exhibit B) $ 2,638,838

106

Exhibit I-6Macon County, TennesseeCombining Balance Sheet - Nonmajor Governmental FundsDiscretely Presented Macon County School DepartmentJune 30, 2017

TotalSchool NonmajorFederal Central GovernmentalProjects Cafeteria Funds

ASSETS

Cash $ 0 $ 100 $ 100Equity in Pooled Cash and Investments 194,618 640,353 834,971Due from Other Governments 6,010 0 6,010

Total Assets $ 200,628 $ 640,453 $ 841,081

FUND BALANCES

Restricted:Restricted for Education $ 628 $ 640,453 $ 641,081

Committed:Committed for Education 200,000 0 200,000

Total Fund Balances $ 200,628 $ 640,453 $ 841,081


107

Exhibit I-7Macon County, TennesseeCombining Statement of Revenues, Expenditures,

and Changes in Fund Balances - Nonmajor Governmental Funds

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

TotalSchool NonmajorFederal Central GovernmentalProjects Cafeteria Funds

RevenuesCharges for Current Services $ 0 $ 428,105 $ 428,105Other Local Revenues 0 589 589Federal Government 2,577,268 1,835,846 4,413,114

Total Revenues $ 2,577,268 $ 2,264,540 $ 4,841,808


Instruction $ 1,656,710 $ 0 $ 1,656,710Support Services 862,843 0 862,843Operation of Non-Instructional Services 46,023 2,080,325 2,126,348

Total Expenditures $ 2,565,576 $ 2,080,325 $ 4,645,901

Excess (Deficiency) of RevenuesOver Expenditures $ 11,692 $ 184,215 $ 195,907

Other Financing Sources (Uses)Insurance Recovery $ 0 $ 1,396 $ 1,396Transfers In 0 16,101 16,101Transfers Out (12,283) 0 (12,283)

Total Other Financing Sources (Uses) $ (12,283) $ 17,497 $ 5,214

Net Change in Fund Balances $ (591) $ 201,712 $ 201,121Fund Balance, July 1, 2016 201,219 438,741 639,960

Fund Balance, June 30, 2017 $ 200,628 $ 640,453 $ 841,081


108

Exhibit I-8


in Fund Balance - Actual and BudgetDiscretely Presented Macon County School DepartmentGeneral Purpose School FundFor the Year Ended June 30, 2017



RevenuesLocal Taxes $ 5,631,461 $ 5,382,870 $ 5,382,870 $ 248,591Licenses and Permits 1,672 2,000 2,000 (328)Charges for Current Services 90,674 48,000 48,000 42,674Other Local Revenues 105,762 76,800 70,410 35,352State of Tennessee 23,293,193 22,929,815 22,906,572 386,621Federal Government 133,293 110,000 110,000 23,293Other Governments and Citizens Groups 106,127 0 249,488 (143,361)

Total Revenues $ 29,362,182 $ 28,549,485 $ 28,769,340 $ 592,842

ExpendituresInstruction

Regular Instruction Program $ 13,621,006 $ 14,262,500 $ 14,333,500 $ 712,494Alternative Instruction Program 182,172 192,330 199,630 17,458Special Education Program 2,023,730 2,112,900 2,112,900 89,170Career and Technical Education Program 1,132,530 1,168,160 1,161,860 29,330

Support ServicesAttendance 112,257 130,090 130,090 17,833Health Services 413,697 419,100 433,100 19,403Other Student Support 709,499 733,400 764,700 55,201Regular Instruction Program 773,332 833,420 826,920 53,588Alternative Instruction Program 0 300 300 300Special Education Program 242,341 270,090 270,090 27,749Career and Technical Education Program 31,336 37,460 37,460 6,124Technology 174,975 186,120 186,120 11,145Other Programs 113,855 0 113,855 0Board of Education 549,043 517,290 571,890 22,847Director of Schools 156,834 160,110 160,110 3,276Office of the Principal 1,509,291 1,533,700 1,545,700 36,409Fiscal Services 245,795 246,620 252,620 6,825Operation of Plant 2,086,231 2,381,993 2,345,093 258,862Maintenance of Plant 658,752 683,630 684,130 25,378Transportation 1,788,918 1,924,550 1,932,550 143,632

Operation of Non-Instructional ServicesFood Service 81,184 81,670 82,670 1,486Early Childhood Education 297,770 308,087 308,087 10,317

Capital OutlayRegular Capital Outlay 307,601 500,000 500,000 192,399

Principal on DebtEducation 0 881,900 0 0

Interest on DebtEducation 0 48,636 0 0

Other Debt ServiceEducation 849,906 0 880,536 30,630

Total Expenditures $ 28,062,055 $ 29,614,056 $ 29,833,911 $ 1,771,856

Excess (Deficiency) of RevenuesOver Expenditures $ 1,300,127 $ (1,064,571) $ (1,064,571) $ 2,364,698

(Continued)

Budgeted Amounts

109

Exhibit I-8


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



Other Financing Sources (Uses)Insurance Recovery $ 43,955 $ 20,000 $ 20,000 $ 23,955Transfers In 12,283 15,000 15,000 (2,717)Transfers Out (16,101) (16,101) (16,101) 0


Net Change in Fund Balance $ 1,340,264 $ (1,045,672) $ (1,045,672) $ 2,385,936Fund Balance, July 1, 2016 4,959,560 4,481,110 4,481,110 478,450

Fund Balance, June 30, 2017 $ 6,299,824 $ 3,435,438 $ 3,435,438 $ 2,864,386

Budgeted Amounts

110

Exhibit I-9


in Fund Balance - Actual and BudgetDiscretely Presented Macon County School DepartmentSchool Federal Projects FundFor the Year Ended June 30, 2017



RevenuesFederal Government $ 2,577,268 $ 2,374,561 $ 2,992,676 $ (415,408)

Total Revenues $ 2,577,268 $ 2,374,561 $ 2,992,676 $ (415,408)

ExpendituresInstruction

Regular Instruction Program $ 836,407 $ 749,670 $ 953,765 $ 117,358Special Education Program 776,691 695,841 835,082 58,391Career and Technical Education Program 43,612 44,560 44,846 1,234

Support ServicesOther Student Support 49,983 63,140 137,993 88,010Regular Instruction Program 647,366 625,074 760,191 112,825Special Education Program 107,419 76,985 131,116 23,697Career and Technical Education Program 3,068 3,597 3,068 0Transportation 55,007 54,548 64,333 9,326

Operation of Non-Instructional ServicesCommunity Services 46,023 50,000 50,000 3,977

Total Expenditures $ 2,565,576 $ 2,363,415 $ 2,980,394 $ 414,818

Excess (Deficiency) of RevenuesOver Expenditures $ 11,692 $ 11,146 $ 12,282 $ (590)

Other Financing Sources (Uses)Transfers Out $ (12,283) $ (11,146) $ (12,283) $ 0

Total Other Financing Sources $ (12,283) $ (11,146) $ (12,283) $ 0

Net Change in Fund Balance $ (591) $ 0 $ (1) $ (590)Fund Balance, July 1, 2016 201,219 200,000 200,000 1,219

Fund Balance, June 30, 2017 $ 200,628 $ 200,000 $ 199,999 $ 629

Budgeted Amounts

111

Exhibit I-10


in Fund Balance - Actual and BudgetDiscretely Presented Macon County School DepartmentCentral Cafeteria FundFor the Year Ended June 30, 2017



RevenuesCharges for Current Services $ 428,105 $ 465,000 $ 465,000 $ (36,895)Other Local Revenues 589 1,000 1,000 (411)Federal Government 1,835,846 1,722,000 1,722,000 113,846

Total Revenues $ 2,264,540 $ 2,188,000 $ 2,188,000 $ 76,540

ExpendituresOperation of Non-Instructional Services

Food Service $ 2,080,325 $ 2,204,101 $ 2,204,101 $ 123,776Total Expenditures $ 2,080,325 $ 2,204,101 $ 2,204,101 $ 123,776

Excess (Deficiency) of RevenuesOver Expenditures $ 184,215 $ (16,101) $ (16,101) $ 200,316

Other Financing Sources (Uses)Insurance Recovery $ 1,396 $ 0 $ 0 $ 1,396Transfers In 16,101 16,101 16,101 0


Net Change in Fund Balance $ 201,712 $ 0 $ 0 $ 201,712Fund Balance, July 1, 2016 438,741 438,741 438,741 0


Budgeted Amounts

112

Exhibit I-11Macon County, TennesseeStatement of Fiduciary Net PositionDiscretely Presented Macon County School DepartmentFiduciary FundJune 30, 2017

Endowment Fund

ASSETS

Equity in Pooled Cash and Investments $ 356,990

NET POSITION

Held in Trust for Scholarships $ 356,990

Private-Purpose

Trust Fund

113

Exhibit I-12Macon County, TennesseeStatement of Changes in Fiduciary Net PositionDiscretely Presented Macon County School DepartmentFiduciary FundFor the Year Ended June 30, 2017

Endowment Fund

ADDITIONS

Other Local Revenues: Nonrecurring Items: Contributions and Gifts $ 356,990Total Additions $ 356,990

Change in Net Position $ 356,990Net Position July 1, 2016 0

Net Position June 30, 2017 $ 356,990

Private-Purpose

Trust Fund

114

MISCELLANEOUS SCHEDULES

115

Exhibit J-1

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

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

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

NOTES PAYABLE Payable through General Debt Service Fund

Highway and Refunding $ 4,645,531 2.04% 9-1-09 9-1-19 $ 1,692,608 $ 0 $ 410,111 $ 1,282,497 School Security, Equipment, and Patrol Cars 142,022 2.09 4-26-13 5-16-17 57,152 0 57,152 0 County Road Repairs 2,000,000 2.29 11-13-13 11-13-19 1,466,666 0 366,667 1,099,999 Rescue Equipment 137,838 1.74 9-1-15 5-16-17 137,838 0 137,838 0 Courthouse Roof & HVAC Renovations 435,319 1.96 2-18-15 3-18-21 435,319 0 83,129 352,190 Westside Elementary Roof 541,544 1.74 6-6-16 6-6-21 541,544 0 108,309 433,235 County Road Repairs 500,000 2.24 12-7-15 5-16-17 398,870 0 398,870 0 EMS Land 70,000 1.69 9-13-16 5-16-17 0 70,000 70,000 0

Total Payable through General Debt Service Fund $ 4,729,997 $ 70,000 $ 1,632,076 $ 3,167,921

Contributions Due by the School Department from the General Purpose School Fund to the General Debt Service Fund

School Refunding 4,766,431 3.66 9-29-10 10-1-18 $ 1,205,411 $ 0 $ 595,804 $ 609,607 Energy Efficiency Loan 2,223,244 .75 7-19-11 3-1-24 1,443,335 0 183,595 1,259,740 Energy Efficiency School Initiative 737,410 .75 6-17-15 6-1-24 631,283 106,127 25,705 711,705

Total Contributions Due by the School Department from the General Purpose School Fund to the General Debt Service Fund $ 3,280,029 $ 106,127 $ 805,104 $ 2,581,052

Total Notes Payable $ 8,010,026 $ 176,127 $ 2,437,180 $ 5,748,973

GENERAL BONDED DEBT Payable through General Debt Service Fund

General Obligation Refunding Bonds 3,830,660 1.96 5-30-13 6-1-19 $ 1,915,500 $ 0 $ 638,500 $ 1,277,000

Total General Bonded Debt $ 1,915,500 $ 0 $ 638,500 $ 1,277,000

116

Exhibit J-2Macon County, TennesseeSchedule of Long-term Debt Requirements by Year

YearEndingJune 30 Principal Interest Total

2018 $ 1,862,977 $ 112,435 $ 1,975,4122019 1,293,385 56,977 1,350,3622020 1,293,194 33,618 1,326,8122021 493,687 10,930 504,6172022 296,934 5,022 301,9562023 299,147 2,809 301,9562024 209,649 689 210,338

Total $ 5,748,973 $ 222,480 $ 5,971,453

YearEndingJune 30 Principal Interest Total

2018 $ 638,500 $ 25,030 $ 663,5302019 638,500 12,515 651,015

Total $ 1,277,000 $ 37,545 $ 1,314,545

Notes

Bonds

117

Exhibit J-3

Macon County, TennesseeSchedule of TransfersPrimary Government and Discretely Presented Macon County School DepartmentFor the Year Ended June 30, 2017

From Fund To Fund Purpose Amount

PRIMARY GOVERNMENT

General General Capital Projects Fund projects $ 860,202General Highway/Public Works Operations 19,220Public Library General Close fund 1,302Highway/Public Works General Risk management director's salary 2,400

Total Primary Government $ 883,124

DISCRETELY PRESENTED MACON COUNTY SCHOOL DEPARTMENT

General Purpose School Central Cafeteria Operations $ 16,101 School Federal Projects General Purpose School Indirect costs 12,283

Total Transfers Discretely Presented Macon County School Department $ 28,384

118

Exhibit J-4

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

SalaryPaid

DuringOfficial Authorization for Salary Period Bond Surety

County Mayor Section 8-24-102, TCA, and County Commission $ 75,329 (1) 100,000 Western Surety Company

Supervisor of Roads Section 8-24-102, TCA 71,743 100,000 "Director of Schools State Board of Education and

Local Board of Education 86,348 (2) 100,000 "Assessor of Property Section 8-24-102, TCA 65,221 50,000 RLI Insurance CompanyTrustee Section 8-24-102, TCA 65,221 1,149,074 Auto Owners Mutual Insurance CompanyCounty Clerk Section 8-24-102, TCA 65,221 (3) 100,000 RLI Insurance CompanyCircuit, General Sessions, and Juvenile Courts Clerk Section 8-24-102, TCA 65,221 110,000 Western Surety CompanyClerk and Master Section 8-24-102, TCA, and

Chancery Court Judge 65,221 125,000 Auto Owners Mutual Insurance CompanyRegister of Deeds Section 8-24-102, TCA 65,221 100,000 RLI Insurance CompanySheriff Section 8-24-102, TCA 71,743 (4) 100,000 Western Surety Company

Other Bonds County Employees Public Employee - Blanket Bond 400,000 Local Government Insurance Pool School Department Employees Public Employee - Blanket Bond 400,000 Tennessee Risk Management Trust

(1) Does not include $2,575 for serving as a consultant to the County Commission.(2) Does not include $1,000 for a chief executive officer training supplement or a one-time bonus of $1,200.(3) Does not include $1,250 for attending County Commission meetings.(4) Does not include $600 for a law enforcement training supplement.

119

Exhibit J-5

Macon County, TennesseeSchedule of Detailed Revenues -

All Governmental Fund TypesFor the Year Ended June 30, 2017

Constitu -Solid tional Highway / General

Waste / Drug Officers - Public DebtGeneral Sanitation Control Fees Works Service

Local TaxesCounty Property Taxes

Current Property Tax $ 4,201,390 $ 176,967 $ 0 $ 0 $ 452,178 $ 0Discount on Property Taxes (40,190) (1,685) 0 0 (4,327) 0Trustee's Collections - Prior Year 128,277 5,347 0 0 12,266 0Circuit Clerk/Clerk and Master Collections - Prior Years 69,472 2,878 0 0 7,710 0Interest and Penalty 27,407 1,153 0 0 2,657 0

County Local Option TaxesLocal Option Sales Tax 290,827 0 0 0 0 0Hotel/Motel Tax 22,005 0 0 0 0 0Wheel Tax 354,074 0 0 0 0 1,099,216Litigation Tax - General 170,456 0 0 0 0 23,051Litigation Tax - Special Purpose 1,857 0 0 0 0 0Litigation Tax - Jail, Workhouse, or Courthouse 1,213 0 0 0 0 45,995Business Tax 161,370 0 0 0 0 0Mineral Severance Tax 0 0 0 0 29,802 0Adequate Facilities/Development Tax 187,490 0 0 0 0 0

Statutory Local TaxesBank Excise Tax 71,938 2,980 0 0 6,900 12Wholesale Beer Tax 102,525 0 0 0 0 0Interstate Telecommunications Tax 144 0 0 0 0 0

Total Local Taxes $ 5,750,255 $ 187,640 $ 0 $ 0 $ 507,186 $ 1,168,274

Licenses and PermitsLicenses

Cable TV Franchise $ 69,582 $ 0 $ 0 $ 0 $ 0 $ 0

(Continued)

Special Revenue FundsDebt Service

Fund

120

Exhibit J-5


All Governmental Fund Types (Cont.)



Licenses and Permits (Cont.)Permits

Beer Permits $ 238 $ 0 $ 0 $ 0 $ 0 $ 0Building Permits 31,250 0 0 0 0 0Other Permits 760 0 0 0 0 0

Total Licenses and Permits $ 101,830 $ 0 $ 0 $ 0 $ 0 $ 0

Fines, Forfeitures, and PenaltiesCircuit Court

Fines $ 21,963 $ 0 $ 0 $ 0 $ 0 $ 0Jail Fees 835 0 0 0 0 0DUI Treatment Fines 4,241 0 0 0 0 0Data Entry Fee - Circuit Court 1,968 0 0 0 0 0

General Sessions CourtFines 33,295 0 0 0 0 0Fines for Littering 401 0 0 0 0 0Officers Costs 42,801 0 0 0 0 0Game and Fish Fines 14 0 0 0 0 0Drug Control Fines 0 0 38,413 0 0 0Jail Fees 15,508 0 0 0 0 0District Attorney General Fees 15,495 0 0 0 0 0DUI Treatment Fines 1,244 0 165 0 0 0Data Entry Fee - General Sessions Court 7,821 0 0 0 0 0Courtroom Security Fee 3,875 0 0 0 0 0

Juvenile CourtFines 2,919 0 0 0 0 0Officers Costs 5,267 0 0 0 0 0

(Continued)


Fund

121

Exhibit J-5





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

Interpreter Fee $ 414 $ 0 $ 0 $ 0 $ 0 $ 0Data Entry Fee - Juvenile Court 611 0 0 0 0 0Courtroom Security Fee 112 0 0 0 0 0

Chancery CourtOfficers Costs 3,935 0 0 0 0 0Data Entry Fee - Chancery Court 2,068 0 0 0 0 0

Total Fines, Forfeitures, and Penalties $ 164,787 $ 0 $ 38,578 $ 0 $ 0 $ 0

Charges for Current ServicesGeneral Service Charges

Transfer Waste Stations Collection Charge $ 0 $ 147,105 $ 0 $ 0 $ 0 $ 0Patient Charges 1,178,682 0 0 0 0 0Other General Service Charges 14,890 0 0 0 0 0

FeesCopy Fees 78 0 0 0 0 0Library Fees 20,785 0 0 0 0 0Greenbelt Late Application Fee 300 0 0 0 0 0Telephone Commissions 71,162 0 0 0 0 0Vending Machine Collections 93 0 0 0 0 0Constitutional Officers' Fees and Commissions 0 0 0 211,045 0 0Data Processing Fee - Register 7,682 0 0 0 0 0Probation Fees 158,014 0 0 0 0 0Data Processing Fee - Sheriff 3,520 0 0 0 0 0Sexual Offender Registration Fee - Sheriff 4,350 0 0 0 0 0

Total Charges for Current Services $ 1,459,556 $ 147,105 $ 0 $ 211,045 $ 0 $ 0

(Continued)


Fund

122

Exhibit J-5





Other Local RevenuesRecurring Items

Investment Income $ 33,111 $ 0 $ 0 $ 0 $ 0 $ 0Lease/Rentals 21,163 0 0 0 0 10,000Sale of Materials and Supplies 0 0 0 0 1,542 0Commissary Sales 50,210 0 0 0 0 0Sale of Animals/Livestock 125 0 0 0 0 0Miscellaneous Refunds 83,644 0 0 0 8,031 393

Nonrecurring ItemsSale of Equipment 12,994 0 0 0 0 0Sale of Property 26,000 0 0 0 0 0Contributions and Gifts 208,817 0 0 0 0 0

Total Other Local Revenues $ 436,064 $ 0 $ 0 $ 0 $ 9,573 $ 10,393

Fees Received From County OfficialsExcess Fees

County Clerk $ 106,000 $ 0 $ 0 $ 0 $ 0 $ 0Fees In-Lieu-of Salary

Circuit Court Clerk 98,297 0 0 0 0 0General Sessions Court Clerk 168,161 0 0 0 0 0Clerk and Master 68,667 0 0 0 0 0Juvenile Court Clerk 30,052 0 0 0 0 0Register 87,425 0 0 0 0 0Sheriff 12,806 0 0 0 0 0Trustee 305,116 0 0 0 0 0

Total Fees Received From County Officials $ 876,524 $ 0 $ 0 $ 0 $ 0 $ 0

(Continued)


Fund

123

Exhibit J-5





State of TennesseeGeneral Government Grants

Juvenile Services Program $ 9,000 $ 0 $ 0 $ 0 $ 0 $ 0Public Safety Grants

Law Enforcement Training Programs 15,600 0 0 0 0 0Other Public Safety Grants 4,475 0 0 0 0 0

Health and Welfare GrantsHealth Department Programs 145,626 0 0 0 0 0

Public Works GrantsBridge Program 0 0 0 0 190,878 0State Aid Program 0 0 0 0 550,749 0Litter Program 22,817 0 0 0 0 0

Other State RevenuesIncome Tax 94,921 0 0 0 0 0Beer Tax 18,415 0 0 0 0 0Alcoholic Beverage Tax 49,006 0 0 0 0 0State Revenue Sharing - T.V.A. 267,099 0 0 0 0 0Contracted Prisoner Boarding 0 0 0 0 0 643,399Gasoline and Motor Fuel Tax 0 0 0 0 1,609,770 0Petroleum Special Tax 0 0 0 0 16,053 0Registrar's Salary Supplement 15,164 0 0 0 0 0Other State Grants 20,744 47,280 0 0 0 0Other State Revenues 29,858 0 0 0 0 0

Total State of Tennessee $ 692,725 $ 47,280 $ 0 $ 0 $ 2,367,450 $ 643,399

(Continued)


Fund

124

Exhibit J-5





Federal GovernmentFederal Through State

USDA - Other $ 0 $ 0 $ 0 $ 0 $ 52,103 $ 0Community Development 0 0 0 0 0 0Homeland Security Grants 228,606 0 0 0 0 0Other Federal through State 17,400 0 0 0 0 0

Total Federal Government $ 246,006 $ 0 $ 0 $ 0 $ 52,103 $ 0

Other Governments and Citizens GroupsOther Governments

Prisoner Board $ 21,275 $ 0 $ 0 $ 0 $ 0 $ 0Contributions 0 0 0 0 0 855,386

Total Other Governments and Citizens Groups $ 21,275 $ 0 $ 0 $ 0 $ 0 $ 855,386

Total $ 9,749,022 $ 382,025 $ 38,578 $ 211,045 $ 2,936,312 $ 2,677,452

(Continued)


Fund

125

Exhibit J-5



GeneralCapitalProjects Total


Current Property Tax $ 0 $ 4,830,535Discount on Property Taxes 0 (46,202)Trustee's Collections - Prior Year 0 145,890Circuit Clerk/Clerk and Master Collections - Prior Years 0 80,060Interest and Penalty 0 31,217

County Local Option TaxesLocal Option Sales Tax 0 290,827Hotel/Motel Tax 0 22,005Wheel Tax 0 1,453,290Litigation Tax - General 0 193,507Litigation Tax - Special Purpose 0 1,857Litigation Tax - Jail, Workhouse, or Courthouse 0 47,208Business Tax 0 161,370Mineral Severance Tax 0 29,802Adequate Facilities/Development Tax 0 187,490

Statutory Local TaxesBank Excise Tax 0 81,830Wholesale Beer Tax 0 102,525Interstate Telecommunications Tax 0 144

Total Local Taxes $ 0 $ 7,613,355


Cable TV Franchise $ 0 $ 69,582

(Continued)

Capital Projects Fund

126

Exhibit J-5




Licenses and Permits (Cont.)Permits

Beer Permits $ 0 $ 238Building Permits 0 31,250Other Permits 0 760

Total Licenses and Permits $ 0 $ 101,830

Fines, Forfeitures, and PenaltiesCircuit Court

Fines $ 0 $ 21,963Jail Fees 0 835DUI Treatment Fines 0 4,241Data Entry Fee - Circuit Court 0 1,968

General Sessions CourtFines 0 33,295Fines for Littering 0 401Officers Costs 0 42,801Game and Fish Fines 0 14Drug Control Fines 0 38,413Jail Fees 0 15,508District Attorney General Fees 0 15,495DUI Treatment Fines 0 1,409Data Entry Fee - General Sessions Court 0 7,821Courtroom Security Fee 0 3,875

Juvenile CourtFines 0 2,919Officers Costs 0 5,267

(Continued)


127

Exhibit J-5




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

Interpreter Fee $ 0 $ 414Data Entry Fee - Juvenile Court 0 611Courtroom Security Fee 0 112

Chancery CourtOfficers Costs 0 3,935Data Entry Fee - Chancery Court 0 2,068

Total Fines, Forfeitures, and Penalties $ 0 $ 203,365

Charges for Current ServicesGeneral Service Charges

Transfer Waste Stations Collection Charge $ 0 $ 147,105Patient Charges 0 1,178,682Other General Service Charges 0 14,890

FeesCopy Fees 0 78Library Fees 0 20,785Greenbelt Late Application Fee 0 300Telephone Commissions 0 71,162Vending Machine Collections 0 93Constitutional Officers' Fees and Commissions 0 211,045Data Processing Fee - Register 0 7,682Probation Fees 0 158,014Data Processing Fee - Sheriff 0 3,520Sexual Offender Registration Fee - Sheriff 0 4,350

Total Charges for Current Services $ 0 $ 1,817,706

(Continued)


128

Exhibit J-5





Investment Income $ 0 $ 33,111Lease/Rentals 0 31,163Sale of Materials and Supplies 0 1,542Commissary Sales 0 50,210Sale of Animals/Livestock 0 125Miscellaneous Refunds 0 92,068

Nonrecurring ItemsSale of Equipment 0 12,994Sale of Property 0 26,000Contributions and Gifts 0 208,817

Total Other Local Revenues $ 0 $ 456,030

Fees Received From County OfficialsExcess Fees

County Clerk $ 0 $ 106,000Fees In-Lieu-of Salary

Circuit Court Clerk 0 98,297General Sessions Court Clerk 0 168,161Clerk and Master 0 68,667Juvenile Court Clerk 0 30,052Register 0 87,425Sheriff 0 12,806Trustee 0 305,116

Total Fees Received From County Officials $ 0 $ 876,524

(Continued)


129

Exhibit J-5





Juvenile Services Program $ 0 $ 9,000Public Safety Grants

Law Enforcement Training Programs 0 15,600Other Public Safety Grants 0 4,475

Health and Welfare GrantsHealth Department Programs 0 145,626

Public Works GrantsBridge Program 0 190,878State Aid Program 0 550,749Litter Program 0 22,817

Other State RevenuesIncome Tax 0 94,921Beer Tax 0 18,415Alcoholic Beverage Tax 0 49,006State Revenue Sharing - T.V.A. 0 267,099Contracted Prisoner Boarding 0 643,399Gasoline and Motor Fuel Tax 0 1,609,770Petroleum Special Tax 0 16,053Registrar's Salary Supplement 0 15,164Other State Grants 0 68,024Other State Revenues 0 29,858

Total State of Tennessee $ 0 $ 3,750,854

(Continued)


130

Exhibit J-5





USDA - Other $ 0 $ 52,103Community Development 620,000 620,000Homeland Security Grants 0 228,606Other Federal through State 0 17,400

Total Federal Government $ 620,000 $ 918,109


Prisoner Board $ 0 $ 21,275Contributions 0 855,386

Total Other Governments and Citizens Groups $ 0 $ 876,661

Total $ 620,000 $ 16,614,434


131

Exhibit J-6


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

General SchoolPurpose Federal CentralSchool Projects Cafeteria Total


Current Property Tax $ 3,290,882 $ 0 $ 0 $ 3,290,882Discount on Property Taxes (31,482) 0 0 (31,482)Trustee's Collections - Prior Year 92,344 0 0 92,344Circuit Clerk/Clerk and Master Collections - Prior Years 50,048 0 0 50,048Interest and Penalty 19,974 0 0 19,974

County Local Option TaxesLocal Option Sales Tax 2,155,879 0 0 2,155,879

Statutory Local TaxesBank Excise Tax 51,763 0 0 51,763Interstate Telecommunications Tax 2,053 0 0 2,053

Total Local Taxes $ 5,631,461 $ 0 $ 0 $ 5,631,461


Marriage Licenses $ 1,672 $ 0 $ 0 $ 1,672Total Licenses and Permits $ 1,672 $ 0 $ 0 $ 1,672

Charges for Current ServicesEducation Charges

Tuition - Regular Day Students $ 1,690 $ 0 $ 0 $ 1,690Tuition - Other 2,800 0 0 2,800Lunch Payments - Children 0 0 215,739 215,739Lunch Payments - Adults 0 0 65,061 65,061Income from Breakfast 0 0 14,553 14,553

(Continued)


132

Exhibit J-6


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


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

A la Carte Sales $ 0 $ 0 $ 132,752 $ 132,752Contract for Non-Instructional Services with Other LEA’s 19,920 0 0 19,920Receipts from Individual Schools 66,264 0 0 66,264

Total Charges for Current Services $ 90,674 $ 0 $ 428,105 $ 518,779


Lease/Rentals $ 3,950 $ 0 $ 0 $ 3,950Sale of Materials and Supplies 492 0 0 492E-Rate Funding 40,457 0 0 40,457Miscellaneous Refunds 37,113 0 589 37,702

Nonrecurring ItemsDamages Recovered from Individuals 11,968 0 0 11,968Contributions and Gifts 11,565 0 0 11,565

Other Local RevenuesOther Local Revenues 217 0 0 217

Total Other Local Revenues $ 105,762 $ 0 $ 589 $ 106,351


On-behalf Contributions for OPEB $ 113,855 $ 0 $ 0 $ 113,855State Education Funds

Basic Education Program 22,124,299 0 0 22,124,299Early Childhood Education 297,768 0 0 297,768

(Continued)


133

Exhibit J-6




State of Tennessee (Cont.)State Education Funds (Cont.)

School Food Service $ 19,482 $ 0 $ 0 $ 19,482Driver Education 13,030 0 0 13,030Other State Education Funds 291,451 0 0 291,451Career Ladder Program 100,573 0 0 100,573

Other State RevenuesState Revenue Sharing - T.V.A. 181,630 0 0 181,630Other State Grants 151,105 0 0 151,105

Total State of Tennessee $ 23,293,193 $ 0 $ 0 $ 23,293,193


USDA School Lunch Program $ 0 $ 0 $ 1,235,840 $ 1,235,840USDA - Commodities 0 0 125,848 125,848Breakfast 0 0 448,072 448,072USDA - Other 0 0 9,570 9,570USDA Food Service Equipment Grant 0 0 16,516 16,516Vocational Education - Basic Grants to States 0 73,063 0 73,063Title I Grants to Local Education Agencies 0 1,394,303 0 1,394,303Special Education - Grants to States 133,293 900,928 0 1,034,221Special Education Preschool Grants 0 37,127 0 37,127English Language Acquisition Grants 0 11,559 0 11,559Eisenhower Professional Development State Grants 0 115,406 0 115,406Other Federal through State 0 44,882 0 44,882

Total Federal Government $ 133,293 $ 2,577,268 $ 1,835,846 $ 4,546,407

(Continued)


134

Exhibit J-6





Contributions $ 106,127 $ 0 $ 0 $ 106,127Total Other Governments and Citizens Groups $ 106,127 $ 0 $ 0 $ 106,127

Total $ 29,362,182 $ 2,577,268 $ 2,264,540 $ 34,203,990


135

Exhibit J-7

Macon County, TennesseeSchedule of Detailed Expenditures -

All Governmental Fund TypesFor the Year Ended June 30, 2017

General FundGeneral Government

County CommissionCounty Official/Administrative Officer $ 2,575Board and Committee Members Fees 50,675Social Security 4,074Pensions 142Audit Services 8,009Consultants 452Dues and Memberships 1,350Legal Services 48,752Legal Notices, Recording, and Court Costs 1,323

Total County Commission $ 117,352

Board of EqualizationBoard and Committee Members Fees $ 900

Total Board of Equalization 900

Beer BoardLegal Notices, Recording, and Court Costs $ 91

Total Beer Board 91

Budget and Finance CommitteeLegal Notices, Recording, and Court Costs $ 375Other Supplies and Materials 661

Total Budget and Finance Committee 1,036

Other Boards and CommitteesLegal Notices, Recording, and Court Costs $ 1,812Other Supplies and Materials 560

Total Other Boards and Committees 2,372

County Mayor/ExecutiveCounty Official/Administrative Officer $ 75,329Accountants/Bookkeepers 123,966Overtime Pay 3,175Social Security 15,164Pensions 9,086Dues and Memberships 1,350Maintenance and Repair Services - Equipment 1,550Maintenance and Repair Services - Office Equipment 13,774Postal Charges 1,196Printing, Stationery, and Forms 3,165Travel 3,147Other Contracted Services 5,660Office Supplies 3,982Premiums on Corporate Surety Bonds 175Data Processing Equipment 3,087Office Equipment 3,915

Total County Mayor/Executive 267,721

(Continued)

136

Exhibit J-7



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

County AttorneyOther Contracted Services $ 8,431

Total County Attorney $ 8,431

Election CommissionCounty Official/Administrative Officer $ 58,699Deputy(ies) 27,951Temporary Personnel 6,285Election Commission 7,530Election Workers 10,040Social Security 6,907Pensions 4,766Dues and Memberships 175Legal Notices, Recording, and Court Costs 3,095Maintenance and Repair Services - Buildings 6,051Maintenance and Repair Services - Equipment 11,101Postal Charges 1,880Printing, Stationery, and Forms 165Rentals 400Travel 4,929Other Contracted Services 9,500Office Supplies 1,630Utilities 3,701Liability Insurance 2,154Data Processing Equipment 17,400

Total Election Commission 184,359

Register of DeedsCounty Official/Administrative Officer $ 65,221Deputy(ies) 39,432Social Security 7,905Pensions 5,074Dues and Memberships 587Legal Notices, Recording, and Court Costs 911Printing, Stationery, and Forms 2,957Travel 562Office Supplies 597Other Supplies and Materials 4,393Premiums on Corporate Surety Bonds 214Data Processing Equipment 6,986Office Equipment 20

Total Register of Deeds 134,859

PlanningSupervisor/Director $ 33,920Board and Committee Members Fees 1,825In-service Training 790Social Security 2,625

(Continued)

137

Exhibit J-7




Planning (Cont.)Pensions $ 1,866Contracts with Government Agencies 9,250Dues and Memberships 135Legal Notices, Recording, and Court Costs 494Maintenance and Repair Services - Vehicles 1,145Postal Charges 264Travel 572Gasoline 999Office Supplies 1,872Premiums on Corporate Surety Bonds 700

Total Planning $ 56,457

BuildingElectricity $ 9,191Water and Sewer 1,086

Total Building 10,277

County BuildingsSupervisor/Director $ 28,100Overtime Pay 3,350Social Security 2,272Pensions 1,730Communication 26,465Licenses 202Maintenance and Repair Services - Buildings 9,131Other Contracted Services 1,260Electricity 15,316Water and Sewer 4,805Other Supplies and Materials 864Building Improvements 53,917Office Equipment 1,531

Total County Buildings 148,943

Other FacilitiesCustodial Personnel $ 23,179Maintenance Personnel 28,101Social Security 3,787Pensions 2,539Communication 31,735Maintenance and Repair Services - Buildings 36,933Pest Control 1,870Custodial Supplies 4,933Electricity 101,834Water and Sewer 129,636

Total Other Facilities 364,547

(Continued)

138

Exhibit J-7




Other General AdministrationSupervisor/Director $ 1,431Social Security 103Pensions 79

Total Other General Administration $ 1,613

Preservation of RecordsPart-time Personnel $ 8,279Social Security 633Other Supplies and Materials 1,999

Total Preservation of Records 10,911

Risk ManagementSupervisor/Director $ 13,666Social Security 1,045Other Contracted Services 2,115

Total Risk Management 16,826

FinanceCentral Services

Dispatchers/Radio Operators $ 262,294Overtime Pay 58,423Social Security 23,708Pensions 16,063Maintenance and Repair Services - Buildings 460Utilities 14,011Liability Insurance 13,545

Total Central Services 388,504

Property Assessor's OfficeCounty Official/Administrative Officer $ 65,221Deputy(ies) 77,573Other Salaries and Wages 9,254Social Security 11,345Pensions 6,593Contracts with Other Public Agencies 14,510Postal Charges 185Travel 344Office Supplies 200Premiums on Corporate Surety Bonds 175Office Equipment 2,569

Total Property Assessor's Office 187,969

Reappraisal ProgramMaintenance and Repair Services - Vehicles $ 1,819Postal Charges 188Gasoline 1,383Office Supplies 75Data Processing Equipment 1,313

Total Reappraisal Program 4,778

(Continued)

139

Exhibit J-7



General Fund (Cont.)Finance (Cont.)

County Trustee's OfficeCounty Official/Administrative Officer $ 65,221Deputy(ies) 54,686Overtime Pay 1,002Other Salaries and Wages 12,080Social Security 9,905Pensions 6,650Data Processing Services 9,857Dues and Memberships 672Maintenance and Repair Services - Office Equipment 10,425Postal Charges 1,825Printing, Stationery, and Forms 333Travel 366Office Supplies 687Office Equipment 870

Total County Trustee's Office $ 174,579

County Clerk's OfficeSocial Security $ 15,500Pensions 11,591Maintenance and Repair Services - Office Equipment 2,239Postal Charges 4,132Printing, Stationery, and Forms 1,319Office Supplies 1,069Other Supplies and Materials 8,114Office Equipment 541

Total County Clerk's Office 44,505

Administration of JusticeCircuit Court

County Official/Administrative Officer $ 65,221Deputy(ies) 159,794Overtime Pay 8,106Board and Committee Members Fees 160Jury and Witness Expense 6,100Social Security 17,053Pensions 12,244Dues and Memberships 472Legal Notices, Recording, and Court Costs 57Maintenance and Repair Services - Equipment 227Postal Charges 3,768Printing, Stationery, and Forms 2,092Travel 1,324Other Contracted Services 3,578Instructional Supplies and Materials 1,726Office Supplies 9,575Premiums on Corporate Surety Bonds 400Other Charges 1,074

(Continued)

140

Exhibit J-7



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

Circuit Court (Cont.)Data Processing Equipment $ 32,236Office Equipment 1,998Other Equipment 2,723

Total Circuit Court $ 329,928

General Sessions CourtJudge(s) $ 98,915Social Security 7,567Pensions 5,440Dues and Memberships 150Travel 585

Total General Sessions Court 112,657

Chancery CourtCounty Official/Administrative Officer $ 65,221Deputy(ies) 27,951Temporary Personnel 16,331Social Security 8,243Pensions 5,125Dues and Memberships 472Legal Notices, Recording, and Court Costs 80Maintenance and Repair Services - Office Equipment 8,840Postal Charges 908Travel 516Office Supplies 1,633Data Processing Equipment 923Office Equipment 378

Total Chancery Court 136,621

Juvenile CourtYouth Service Officer(s) $ 31,259Social Security 2,391Pensions 1,719Contracts with Government Agencies 700Dues and Memberships 300Printing, Stationery, and Forms 484Travel 594Office Supplies 944Other Supplies and Materials 347

Total Juvenile Court 38,738

Judicial CommissionersCounty Official/Administrative Officer $ 25,567Social Security 1,943Pensions 120Office Supplies 14

Total Judicial Commissioners 27,644

(Continued)

141

Exhibit J-7



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

Probation ServicesProbation Officer(s) $ 81,420Overtime Pay 1,698Social Security 5,575Pensions 4,571Evaluation and Testing 5,433Postal Charges 100Printing, Stationery, and Forms 831Travel 216Office Supplies 918Premiums on Corporate Surety Bonds 300Office Equipment 998

Total Probation Services $ 102,060

Public SafetySheriff's Department

County Official/Administrative Officer $ 71,743Deputy(ies) 1,077,090Salary Supplements 16,200Clerical Personnel 118,731Overtime Pay 7,443Other Salaries and Wages 36,349In-service Training 6,576Social Security 98,130Pensions 72,125Contracts with Private Agencies 4,412Confidential Drug Enforcement Payments 2,212Dues and Memberships 1,500Maintenance and Repair Services - Equipment 1,764Maintenance and Repair Services - Vehicles 17,868Travel 5,076Other Contracted Services 5,758Gasoline 54,996Lubricants 1,679Office Supplies 5,789Tires and Tubes 7,453Uniforms 17,863Premiums on Corporate Surety Bonds 3,610Workers' Compensation Insurance 5,270Law Enforcement Equipment 18,732Motor Vehicles 134,002Office Equipment 2,405

Total Sheriff's Department 1,794,776

Administration of the Sexual Offender RegistryContracts with Government Agencies $ 950Law Enforcement Equipment 1,174

Total Administration of the Sexual Offender Registry 2,124

(Continued)

142

Exhibit J-7



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

JailCounty Official/Administrative Officer $ 33,051Medical Personnel 81,914Guards 513,857Cafeteria Personnel 48,428Overtime Pay 12,910Other Salaries and Wages 45,193In-service Training 500Social Security 54,661Pensions 39,119Medical and Dental Services 107,031Travel 4,268Custodial Supplies 21,290Food Supplies 169,984Office Supplies 5,008Uniforms 1,634Other Supplies and Materials 11,214Communication Equipment 7,522Data Processing Equipment 13,980Law Enforcement Equipment 5,406Office Equipment 742Other Equipment 37,495

Total Jail $ 1,215,207

WorkhouseTruck Drivers $ 19,172Guards 22,671Social Security 3,201Pensions 143Maintenance and Repair Services - Vehicles 523Instructional Supplies and Materials 6,541Other Charges 2,853Motor Vehicles 10,000Other Equipment 1,383

Total Workhouse 66,487

Fire Prevention and ControlContributions $ 1,500Diesel Fuel 446

Total Fire Prevention and Control 1,946

Rural Fire ProtectionOther Salaries and Wages $ 4,495Contributions 2,500Maintenance Agreements 2,500

Total Rural Fire Protection 9,495

(Continued)

143

Exhibit J-7




Civil DefenseSupervisor/Director $ 6,504Social Security 498Maintenance and Repair Services - Vehicles 968Gasoline 397Office Supplies 16Utilities 2,266Maintenance Equipment 965Other Equipment 120

Total Civil Defense $ 11,734

Rescue SquadIn-service Training $ 50Maintenance and Repair Services - Vehicles 842Gasoline 556Other Equipment 169

Total Rescue Squad 1,617

Disaster ReliefOther Salaries and Wages $ 3,500In-service Training 166Maintenance and Repair Services - Buildings 586Maintenance and Repair Services - Vehicles 1,060Gasoline 483Utilities 3,045Other Equipment 26,814

Total Disaster Relief 35,654

Other Emergency ManagementIn-service Training $ 710Maintenance and Repair Services - Buildings 757Maintenance and Repair Services - Equipment 340Maintenance and Repair Services - Vehicles 580Other Contracted Services 250Custodial Supplies 271Drugs and Medical Supplies 866Gasoline 293Office Supplies 295Utilities 3,838Other Equipment 5,232

Total Other Emergency Management 13,432

County Coroner/Medical ExaminerMedical Personnel $ 1,900Medical and Dental Services 38,850

Total County Coroner/Medical Examiner 40,750

(Continued)

144

Exhibit J-7




Other Public SafetyMaintenance Personnel $ 2,717In-service Training 418Road Signs 7,964Other Equipment 3,517

Total Other Public Safety $ 14,616

Public Health and WelfareLocal Health Center

Advertising $ 492Janitorial Services 6,000Maintenance and Repair Services - Buildings 4,899Custodial Supplies 724Drugs and Medical Supplies 893Instructional Supplies and Materials 23,228Office Supplies 1,100Uniforms 466Utilities 15,169Other Supplies and Materials 266

Total Local Health Center 53,237

Rabies and Animal ControlAttendants $ 19,391Social Security 1,483Pensions 772Maintenance and Repair Services - Buildings 1,682Maintenance and Repair Services - Vehicles 547Veterinary Services 2,477Gasoline 1,225Uniforms 859Utilities 1,430Other Supplies and Materials 1,317

Total Rabies and Animal Control 31,183

Ambulance/Emergency Medical ServicesSupervisor/Director $ 55,000Accountants/Bookkeepers 56,885Medical Personnel 581,689Overtime Pay 418,185In-service Training 16,846Social Security 82,420Pensions 57,215Dues and Memberships 620Laundry Service 6,513Licenses 2,650Maintenance and Repair Services - Buildings 43,342Maintenance and Repair Services - Vehicles 34,913Postal Charges 646

(Continued)

145

Exhibit J-7



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

Ambulance/Emergency Medical Services (Cont.)Travel $ 489Other Contracted Services 46,198Custodial Supplies 3,509Drugs and Medical Supplies 68,800Gasoline 36,315Instructional Supplies and Materials 7,232Office Supplies 8,748Tires and Tubes 5,533Uniforms 9,335Utilities 45,991Premiums on Corporate Surety Bonds 100Workers' Compensation Insurance 629Communication Equipment 352Motor Vehicles 114,577Other Equipment 265,617

Total Ambulance/Emergency Medical Services $ 1,970,349

Crippled Children ServicesContracts with Government Agencies $ 1,439

Total Crippled Children Services 1,439

Other Local Health ServicesSocial Workers $ 59,294Part-time Personnel 38,419Social Security 7,303Pensions 3,261Travel 3,110Other Supplies and Materials 8,008

Total Other Local Health Services 119,395

Regional Mental Health CenterContributions $ 7,953

Total Regional Mental Health Center 7,953

Appropriation to StateOther Contracted Services $ 41,140

Total Appropriation to State 41,140

Other Local Welfare ServicesContributions $ 57,723Drugs and Medical Supplies 55

Total Other Local Welfare Services 57,778

Social, Cultural, and Recreational ServicesAdult Activities

Matching Share $ 6,000Total Adult Activities 6,000

(Continued)

146

Exhibit J-7



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

Senior Citizens AssistanceContributions $ 15,000

Total Senior Citizens Assistance $ 15,000

LibrariesSupervisor/Director $ 27,064Clerical Personnel 75,545Custodial Personnel 8,279Social Security 8,113Pensions 3,504Communication 4,075Dues and Memberships 395Maintenance and Repair Services - Buildings 5,725Postal Charges 188Printing, Stationery, and Forms 799Travel 500Other Contracted Services 1,489Custodial Supplies 929Library Books/Media 7,030Office Supplies 390Utilities 13,386Other Supplies and Materials 2,692Other Charges 16,316Data Processing Equipment 2,680Office Equipment 897

Total Libraries 179,996

Parks and Fair BoardsContributions $ 25,228

Total Parks and Fair Boards 25,228

Agriculture and Natural ResourcesAgricultural Extension Service

Salary Supplements $ 32,785Secretary(ies) 9,112Social Security 10,473Dues and Memberships 305Maintenance and Repair Services - Buildings 2,091Utilities 4,345

Total Agricultural Extension Service 59,111

Soil ConservationClerical Personnel $ 29,255Social Security 2,128Pensions 1,609Contributions 21,000

Total Soil Conservation 53,992

(Continued)

147

Exhibit J-7



General Fund (Cont.)Other Operations

TourismContributions $ 12,500Other Supplies and Materials 2,025

Total Tourism $ 14,525

Industrial DevelopmentContributions $ 15,800Other Contracted Services 3,850

Total Industrial Development 19,650

Veterans' ServicesSupervisor/Director $ 19,994Social Security 1,530Legal Notices, Recording, and Court Costs 60Other Contracted Services 5,399Office Supplies 391

Total Veterans' Services 27,374

Other ChargesEmployee and Dependent Insurance $ 420,837Liability Insurance 196,914Trustee's Commission 120,272Workers' Compensation Insurance 265,500

Total Other Charges 1,003,523

Contributions to Other AgenciesMaintenance and Repair Services - Buildings $ 972Matching Share 10,060

Total Contributions to Other Agencies 11,032

Employee BenefitsUnemployment Compensation $ 15,943Other Charges 385

Total Employee Benefits 16,328

MiscellaneousDues and Memberships $ 4,311Other Contracted Services 4,594Other Supplies and Materials 19,710

Total Miscellaneous 28,615

Total General Fund $ 9,825,364

Solid Waste/Sanitation FundPublic Health and Welfare

Transfer StationsAccountants/Bookkeepers $ 37,461Equipment Operators - Heavy 81,821

(Continued)

148

Exhibit J-7



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

Transfer Stations (Cont.)Overtime Pay $ 3,917Social Security 9,007Pensions 6,260Employee and Dependent Insurance 15,355Maintenance and Repair Services - Vehicles 24,747Travel 200Contracts for Landfill Facilities 87,096Custodial Supplies 545Gasoline 16,643Office Supplies 2,676Utilities 5,417Other Supplies and Materials 9,519Trustee's Commission 3,741Workers' Compensation Insurance 2,000Landfill Closure/Postclosure Care Costs 9,848Other Charges 121,410Motor Vehicles 47,426

Total Transfer Stations $ 485,089

Total Solid Waste/Sanitation Fund $ 485,089

Drug Control FundPublic Safety

Drug EnforcementConfidential Drug Enforcement Payments $ 1,500Other Charges 9,800Law Enforcement Equipment 1,128

Total Drug Enforcement $ 12,428

Total Drug Control Fund 12,428

Constitutional Officers - Fees FundFinance

County Clerk's OfficeConstitutional Officers' Operating Expenses $ 209,553

Total County Clerk's Office $ 209,553

Total Constitutional Officers - Fees Fund 209,553

Highway/Public Works FundHighways

AdministrationCounty Official/Administrative Officer $ 71,743Secretary(ies) 62,811Overtime Pay 8,149Advertising 982Data Processing Services 8,758

(Continued)

149

Exhibit J-7



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

Administration (Cont.)Dues and Memberships $ 2,378Evaluation and Testing 677Janitorial Services 1,315Laundry Service 916Postal Charges 331Printing, Stationery, and Forms 583Travel 203Custodial Supplies 451Office Supplies 1,034Other Charges 1,088

Total Administration $ 161,419

Highway and Bridge MaintenanceEquipment Operators $ 201,133Truck Drivers 187,956Laborers 244,093Overtime Pay 14,763Rentals 895Asphalt 83,683Asphalt - Cold Mix 26,840Concrete 3,524Crushed Stone 242,343Diesel Fuel 69,117Ice 38Pipe - Metal 6,403Road Signs 2,145Salt 5,892Small Tools 816Wood Products 4,811Other Supplies and Materials 4,518Other Charges 300

Total Highway and Bridge Maintenance 1,099,270

Operation and Maintenance of EquipmentMechanic(s) $ 86,092Overtime Pay 1,220Freight Expenses 1,875Maintenance and Repair Services - Equipment 25,091Towing Services 250Other Contracted Services 2,374Equipment and Machinery Parts 108,361Garage Supplies 6,800Gasoline 15,512Lubricants 16,517Small Tools 1,693Tires and Tubes 52,129

Total Operation and Maintenance of Equipment 317,914

(Continued)

150

Exhibit J-7



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

Other ChargesCommunication $ 5,629Pest Control 115Electricity 5,153Water and Sewer 509Liability Insurance 99,064Premiums on Corporate Surety Bonds 350Trustee's Commission 26,126Liability Claims 994

Total Other Charges $ 137,940

Employee BenefitsSocial Security $ 54,433Pensions 44,650Medical Insurance 100,418Unemployment Compensation 7,283Employer Medicare 12,730Workers' Compensation Insurance 60,000

Total Employee Benefits 279,514

Capital OutlayGeneral Construction Materials $ 10,588Bridge Construction 147,348Highway Construction 206,326Highway Equipment 7,108State Aid Projects 543,259

Total Capital Outlay 914,629

Capital ProjectsHighway and Street Capital Projects

Asphalt $ 208,114Crushed Stone 163,248Diesel Fuel 41,073Pipe - Metal 22,988

Total Highway and Street Capital Projects 435,423

Total Highway/Public Works Fund $ 3,346,109

General Debt Service FundPrincipal on Debt

General GovernmentPrincipal on Bonds $ 638,500Principal on Notes 310,970

Total General Government $ 949,470

Highways and StreetsPrincipal on Notes $ 1,118,232

Total Highways and Streets 1,118,232

(Continued)

151

Exhibit J-7



General Debt Service Fund (Cont.)Principal on Debt (Cont.)

EducationPrincipal on Notes $ 1,007,978

Total Education $ 1,007,978

Interest on DebtGeneral Government

Interest on Bonds $ 37,544Interest on Notes 14,325

Total General Government 51,869

Highways and StreetsInterest on Notes $ 72,816

Total Highways and Streets 72,816

EducationInterest on Notes $ 59,866

Total Education 59,866

Other Debt ServiceGeneral Government

Trustee's Commission $ 11,638Total General Government 11,638

Total General Debt Service Fund $ 3,271,869

General Capital Projects FundGeneral Government

Other General AdministrationLand $ 70,000

Total Other General Administration $ 70,000

Capital ProjectsGeneral Administration Projects

Consultants $ 32,500Engineering Services 46,845Legal Notices, Recording, and Court Costs 50Site Development 506,719

Total General Administration Projects 586,114

Education Capital ProjectsOther Charges $ 115,028Building Improvements 197,220Site Development 495,120

Total Education Capital Projects 807,368

Total General Capital Projects Fund 1,463,482

(Continued)

152

Exhibit J-7



Education Capital Projects FundCapital Projects

Education Capital ProjectsContributions $ 106,127

Total Education Capital Projects $ 106,127

Total Education Capital Projects Fund $ 106,127

Total Governmental Funds - Primary Government $ 18,720,021

153

Exhibit J-8


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

General Purpose School FundInstruction

Regular Instruction ProgramTeachers $ 9,280,601Career Ladder Program 53,456Career Ladder Extended Contracts 15,385Homebound Teachers 9,742Educational Assistants 399,953Bonus Payments 181,350Other Salaries and Wages 11,530Certified Substitute Teachers 56,540Non-certified Substitute Teachers 85,104Social Security 582,917Pensions 875,752Life Insurance 5,920Medical Insurance 1,297,473Unemployment Compensation 8,593Employer Medicare 137,609Contracts with Other Public Agencies 2,294Maintenance and Repair Services - Equipment 206,533Instructional Supplies and Materials 72,587Textbooks - Bound 95,955Fee Waivers 32,218Regular Instruction Equipment 209,494

Total Regular Instruction Program $ 13,621,006

Alternative Instruction ProgramTeachers $ 108,098Career Ladder Program 2,000Educational Assistants 29,273Bonus Payments 2,400Certified Substitute Teachers 495Non-certified Substitute Teachers 1,690Social Security 8,781Pensions 10,750Life Insurance 65Medical Insurance 11,335Unemployment Compensation 214Employer Medicare 2,064Instructional Supplies and Materials 188Regular Instruction Equipment 4,819

Total Alternative Instruction Program 182,172

Special Education ProgramTeachers $ 1,194,304Career Ladder Program 5,000Homebound Teachers 16,684Educational Assistants 138,510Speech Pathologist 49,491

(Continued)

154

Exhibit J-8



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

Special Education Program (Cont.)Bonus Payments $ 24,300Certified Substitute Teachers 3,742Non-certified Substitute Teachers 13,827Social Security 84,095Pensions 122,998Life Insurance 842Medical Insurance 237,730Unemployment Compensation 1,346Employer Medicare 19,836Contracts with Private Agencies 37,310Maintenance and Repair Services - Equipment 70Other Contracted Services 50,757Instructional Supplies and Materials 1,222Other Supplies and Materials 593Special Education Equipment 21,073

Total Special Education Program $ 2,023,730

Career and Technical Education ProgramTeachers $ 595,301Career Ladder Program 2,000Bonus Payments 9,750Certified Substitute Teachers 3,292Non-certified Substitute Teachers 7,546Social Security 37,002Pensions 54,800Life Insurance 400Medical Insurance 48,436Unemployment Compensation 544Employer Medicare 8,722Contracts with Other School Systems 320,336Other Contracted Services 3,000Instructional Supplies and Materials 9,000Vocational Instruction Equipment 32,401

Total Career and Technical Education Program 1,132,530

Support ServicesAttendance

Supervisor/Director $ 64,800Career Ladder Program 1,000Bonus Payments 1,200Social Security 3,975Pensions 6,057Life Insurance 29Medical Insurance 5,156Unemployment Compensation 32Employer Medicare 930

(Continued)

155

Exhibit J-8



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

Attendance (Cont.)Contracts with Private Agencies $ 9,928Travel 8,229Other Supplies and Materials 3,585Attendance Equipment 7,336

Total Attendance $ 112,257

Health ServicesAssistant(s) $ 23,190Supervisor/Director 77,418Medical Personnel 175,640Social Security 16,080Pensions 20,807Medical Insurance 63,466Unemployment Compensation 352Employer Medicare 3,761Communication 1,200Travel 5,446Other Contracted Services 5,832Drugs and Medical Supplies 5,882Other Supplies and Materials 2,450Other Charges 3,435Health Equipment 8,738

Total Health Services 413,697

Other Student SupportCareer Ladder Program $ 5,000Guidance Personnel 323,935Bonus Payments 5,850Social Security 19,193Pensions 30,265Life Insurance 175Medical Insurance 42,669Unemployment Compensation 224Employer Medicare 4,489Contracts with Government Agencies 200,019Evaluation and Testing 13,566Other Contracted Services 55,500Other Supplies and Materials 3,774Other Equipment 4,840

Total Other Student Support 709,499

Regular Instruction ProgramSupervisor/Director $ 73,383Career Ladder Program 8,000Librarians 341,778Clerical Personnel 20,331

(Continued)

156

Exhibit J-8




Regular Instruction Program (Cont.)Bonus Payments $ 9,150Other Salaries and Wages 64,208In-service Training 840Social Security 27,181Pensions 41,054Life Insurance 234Medical Insurance 38,273Unemployment Compensation 449Employer Medicare 7,161Travel 6,008Other Contracted Services 5,190Library Books/Media 29,082Other Supplies and Materials 19,511In Service/Staff Development 8,948Other Charges 54,580Other Equipment 17,971

Total Regular Instruction Program $ 773,332

Special Education ProgramSupervisor/Director $ 70,624Career Ladder Program 1,000Psychological Personnel 54,629Assessment Personnel 38,366Clerical Personnel 26,699Bonus Payments 1,650Social Security 9,056Pensions 13,031Life Insurance 58Medical Insurance 17,922Unemployment Compensation 160Employer Medicare 2,669Travel 5,122In Service/Staff Development 1,355

Total Special Education Program 242,341

Career and Technical Education ProgramOther Salaries and Wages $ 26,073Unemployment Compensation 32Employer Medicare 367Travel 4,118In Service/Staff Development 746

Total Career and Technical Education Program 31,336

TechnologySupervisor/Director $ 72,536Bonus Payments 1,200

(Continued)

157

Exhibit J-8




Technology (Cont.)Social Security $ 4,319Pensions 6,673Life Insurance 28Medical Insurance 5,937Unemployment Compensation 32Employer Medicare 1,010Internet Connectivity 60,097Software 23,143

Total Technology $ 174,975

Other ProgramsOn-behalf Payments to OPEB $ 113,855

Total Other Programs 113,855

Board of EducationOther Salaries and Wages $ 400Board and Committee Members Fees 14,600Social Security 930Pensions 22Employer Medicare 218Payments to Retirees 30,120Audit Services 4,300Dues and Memberships 19,398Legal Services 23,034Travel 3,806Judgments 5,944Trustee's Commission 124,845Workers' Compensation Insurance 268,524Refund to Applicant for Criminal Investigation 1,789Other Charges 51,113

Total Board of Education 549,043

Director of SchoolsCounty Official/Administrative Officer $ 86,348Career Ladder Program 1,000Bonus Payments 1,200Social Security 5,476Pensions 8,005Life Insurance 29Medical Insurance 6,529Unemployment Compensation 32Employer Medicare 1,281Communication 23,764Dues and Memberships 2,458Postal Charges 5,484Travel 2,402

(Continued)

158

Exhibit J-8




Director of Schools (Cont.)Other Contracted Services $ 3,151Office Supplies 5,047Administration Equipment 4,628

Total Director of Schools $ 156,834

Office of the PrincipalPrincipals $ 567,322Career Ladder Program 3,000Accountants/Bookkeepers 176,780Assistant Principals 240,343Clerical Personnel 210,370Bonus Payments 11,400Social Security 72,871Pensions 93,623Life Insurance 325Medical Insurance 102,895Unemployment Compensation 1,008Employer Medicare 17,044Communication 2,321Travel 433Other Charges 3,000Administration Equipment 6,556

Total Office of the Principal 1,509,291

Fiscal ServicesAccountants/Bookkeepers $ 76,519Clerical Personnel 98,124Social Security 10,262Pensions 9,605Medical Insurance 19,828Unemployment Compensation 178Employer Medicare 2,400Data Processing Services 12,293Travel 1,976Other Contracted Services 1,377Data Processing Supplies 1,389Office Supplies 882Administration Equipment 10,962

Total Fiscal Services 245,795

Operation of PlantCustodial Personnel $ 591,047Other Salaries and Wages 9,457Social Security 35,757Pensions 29,264Medical Insurance 93,421

(Continued)

159

Exhibit J-8




Operation of Plant (Cont.)Unemployment Compensation $ 949Employer Medicare 8,363Contracts with Private Agencies 99,737Maintenance and Repair Services - Equipment 33,295Disposal Fees 35,100Custodial Supplies 120,785Electricity 638,201Natural Gas 40,980Propane Gas 1,542Water and Sewer 116,965Other Supplies and Materials 5,477Building and Contents Insurance 215,217Plant Operation Equipment 10,674

Total Operation of Plant $ 2,086,231

Maintenance of PlantSupervisor/Director $ 43,690Clerical Personnel 23,907Maintenance Personnel 225,543Other Salaries and Wages 5,328Social Security 17,742Pensions 15,820Medical Insurance 55,178Unemployment Compensation 356Employer Medicare 4,149Travel 1,700Other Contracted Services 74,788Other Supplies and Materials 186,101Maintenance Equipment 4,450

Total Maintenance of Plant 658,752

TransportationSupervisor/Director $ 43,690Mechanic(s) 153,321Bus Drivers 595,173Clerical Personnel 26,660Other Salaries and Wages 20,352Social Security 48,266Pensions 37,671Medical Insurance 31,047Unemployment Compensation 1,260Employer Medicare 12,153Medical and Dental Services 8,686Travel 2,691Diesel Fuel 215,482Garage Supplies 36,318

(Continued)

160

Exhibit J-8




Transportation (Cont.)Lubricants $ 23,108Tires and Tubes 33,098Vehicle Parts 200,959Other Charges 27,966Transportation Equipment 271,017

Total Transportation $ 1,788,918

Operation of Non-Instructional ServicesFood Service

Supervisor/Director $ 62,179Career Ladder Program 1,000Bonus Payments 1,050Social Security 3,774Pensions 5,806Life Insurance 29Medical Insurance 6,431Unemployment Compensation 32Employer Medicare 883

Total Food Service 81,184

Early Childhood EducationSupervisor/Director $ 3,153Teachers 145,855Career Ladder Program 1,000Clerical Personnel 2,017Educational Assistants 46,957Bonus Payments 3,300Non-certified Substitute Teachers 2,066Social Security 11,657Pensions 16,371Life Insurance 88Medical Insurance 24,524Unemployment Compensation 212Employer Medicare 2,727Travel 1,993Other Contracted Services 163Instructional Supplies and Materials 23,025In Service/Staff Development 2,980Other Equipment 9,682

Total Early Childhood Education 297,770

Capital OutlayRegular Capital Outlay

Architects $ 36,366Building Improvements 34,194Other Capital Outlay 237,041

Total Regular Capital Outlay 307,601

(Continued)

161

Exhibit J-8



General Purpose School Fund (Cont.)Other Debt Service

EducationDebt Service Contribution to Primary Government $ 849,906

Total Education $ 849,906

Total General Purpose School Fund $ 28,062,055

School Federal Projects FundInstruction

Regular Instruction ProgramTeachers $ 242,851Educational Assistants 327,738Certified Substitute Teachers 2,020Non-certified Substitute Teachers 3,621Social Security 33,471Pensions 37,438Life Insurance 115Medical Insurance 12,680Unemployment Compensation 867Employer Medicare 8,002Other Contracted Services 250Instructional Supplies and Materials 100,422Other Supplies and Materials 1,411Regular Instruction Equipment 65,521

Total Regular Instruction Program $ 836,407

Special Education ProgramEducational Assistants $ 461,033Other Salaries and Wages 9,270Social Security 26,409Pensions 21,803Medical Insurance 59,711Unemployment Compensation 1,133Employer Medicare 6,211Maintenance and Repair Services - Equipment 1,241Other Contracted Services 172,692Instructional Supplies and Materials 14,656Special Education Equipment 2,532


Career and Technical Education ProgramInstructional Supplies and Materials $ 1,173Other Supplies and Materials 1,116Vocational Instruction Equipment 41,323


(Continued)

162

Exhibit J-8



School Federal Projects Fund (Cont.)Support Services

Other Student SupportOther Salaries and Wages $ 1,500Social Security 93Pensions 136Employer Medicare 22Travel 14,389In Service/Staff Development 9,243Other Charges 24,600

Total Other Student Support $ 49,983

Regular Instruction ProgramSupervisor/Director $ 78,196Clerical Personnel 27,761Other Salaries and Wages 334,225Social Security 24,083Pensions 36,764Life Insurance 201Medical Insurance 31,231Unemployment Compensation 268Employer Medicare 5,957Other Supplies and Materials 548In Service/Staff Development 73,354Other Charges 29,998Other Equipment 4,780

Total Regular Instruction Program 647,366

Special Education ProgramOther Salaries and Wages $ 4,508Social Security 273Pensions 415Life Insurance 2Medical Insurance 489Employer Medicare 64Maintenance and Repair Services - Equipment 504Travel 5,068Other Contracted Services 66,375Other Supplies and Materials 16,214In Service/Staff Development 13,507


Career and Technical Education ProgramIn Service/Staff Development $ 3,068


TransportationBus Drivers $ 17,522Other Salaries and Wages 32,795

(Continued)

163

Exhibit J-8



School Federal Projects Fund (Cont.)Support Services (Cont.)

Transportation (Cont.)Social Security $ 3,071Pensions 387Unemployment Compensation 187Employer Medicare 719Diesel Fuel 326

Total Transportation $ 55,007

Operation of Non-Instructional ServicesCommunity Services

Supervisor/Director $ 10,132Teachers 15,080Clerical Personnel 2,000Other Salaries and Wages 9,210Social Security 2,252Pensions 2,401Life Insurance 1Medical Insurance 172Unemployment Compensation 14Employer Medicare 527Food Supplies 466Instructional Supplies and Materials 2,318In Service/Staff Development 976Other Charges 474

Total Community Services 46,023

Total School Federal Projects Fund $ 2,565,576

Central Cafeteria FundOperation of Non-Instructional Services

Food ServiceAccountants/Bookkeepers $ 16,560Cafeteria Personnel 617,468In-service Training 3,379Social Security 36,860Pensions 31,455Medical Insurance 123,424Unemployment Compensation 1,275Employer Medicare 8,664Communication 4,077Maintenance and Repair Services - Equipment 11,486Travel 3,405Other Contracted Services 16,491Food Supplies 1,024,258Office Supplies 1,226USDA - Commodities 125,848Other Supplies and Materials 6,917

(Continued)

164

Exhibit J-8



Central Cafeteria Fund (Cont.)Operation of Non-Instructional Services (Cont.)

Food Service (Cont.)Workers' Compensation Insurance $ 22,674Other Charges 4,501Administration Equipment 3,841Food Service Equipment 16,516

Total Food Service $ 2,080,325

Total Central Cafeteria Fund $ 2,080,325

Total Governmental Funds - Macon County School Department $ 32,707,956

165

Exhibit J-9

Macon County, TennesseeSchedule of Detailed Receipts, Disbursements, and Changes in Cash Balance - City Agency FundFor the Year Ended June 30, 2017

Cities -Sales Tax

Fund

Cash Receipts Local Option Sales Tax $ 1,860,077Total Cash Receipts $ 1,860,077

Cash Disbursements Remittance of Revenues Collected $ 1,841,476 Trustee's Commission 18,601Total Cash Disbursements $ 1,860,077

Excess of Cash Receipts Over (Under) Cash Disbursements $ 0Cash Balance, July 1, 2016 0

Cash Balance, June 30, 2017 $ 0

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SINGLE AUDIT SECTION

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Independent Auditor’s Report on Internal Control Over Financial Reporting and on

Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards

Macon County Mayor and Board of County Commissioners Macon County, Tennessee To the County Mayor and Board of County Commissioners: We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Macon County, Tennessee, as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise Macon County’s basic financial statements, and have issued our report thereon dated September 15, 2017. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered Macon 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 Macon County’s internal control. Accordingly, we do not express an opinion on the effectiveness of Macon County’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

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Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. We did identify a deficiency in internal control, described in the accompanying Schedule of Findings and Questioned Costs that we consider to be a significant deficiency: 2017-002. Compliance and Other Matters As part of obtaining reasonable assurance about whether Macon County’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed an instance of noncompliance or other matter that is required to be reported under Government Auditing Standards and is described in the accompanying Schedule of Findings and Questioned Costs as item: 2017-001. Macon County’s Responses to Findings Macon County’s responses to the findings identified in our audit are described in the accompanying Schedule of Findings and Questioned Costs. Macon County’s responses were not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on them. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the result of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Macon County’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Very truly yours,

Justin P. Wilson Comptroller of the Treasury Nashville, Tennessee September 15, 2017 JPW/yu

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Independent Auditor’s Report on Compliance for Each Major Program and on Internal Control Over Compliance and on the Schedule of Expenditures of

Federal Awards Required by the Uniform Guidance Macon County Mayor and Board of County Commissioners Macon County, Tennessee To the County Mayor and Board of County Commissioners: Report on Compliance for Each Major Federal Program We have audited Macon 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 Macon County’s major federal programs for the year ended June 30, 2017. Macon County’s major federal programs are identified in the summary of auditor's results section of the accompanying Schedule of Findings and Questioned Costs.

Management's Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Auditor's Responsibility Our responsibility is to express an opinion on compliance for each of Macon County’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether

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noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Macon County’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of Macon County’s compliance. Opinion on Each Major Federal Program In our opinion, Macon County complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2017. Report on Internal Control Over Compliance Management of Macon 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 Macon 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 Macon County’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

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The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Macon County, Tennessee, as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise Macon County’s basic financial statements. We issued our report thereon dated September 15, 2017, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Schedule of Expenditures of Federal Awards is fairly stated in all material respects in relation to the basic financial statements as a whole. Very truly yours,

Justin P. Wilson Comptroller of the Treasury Nashville, Tennessee September 15, 2017 JPW/yu

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Macon County, TennesseeSchedule of Expenditures of Federal Awards and State Grants (1) (2)For the Year Ended June 30, 2017

Federal Pass-throughFederal/Pass-through Agency/State CFDA Entity IdentifyingGrantor Program Title Number Number Expenditures

U.S. Department of Agriculture: Direct Program: Emergency Watershed Protection Program 10.923 N/A $ 52,103 Passed-through State Department of Agriculture: Child Nutrition Cluster: (4) National School Lunch Program (Commodities - Noncash Assistance) 10.555 (3) 125,848 Passed-through State Department of Education: Child Nutrition Cluster: (4) School Breakfast Program 10.553 (3) 448,072 National School Lunch Program 10.555 (3) 1,245,410 Child Nutrition Discretionary Grants Limited Availability 10.579 (3) 16,516Total U.S. Department of Agriculture $ 1,887,949

U.S. Department of Housing and Urban Development: Passed-through Tennessee Housing Development Agency: Community Development Block Grants/State's Program and Non-Entitlement Grants in Hawaii 14.228 (3) $ 620,000Total U.S. Department of Housing and Urban Development $ 620,000

U.S. Department of Education: Passed-through State Department of Education: Title I Grants to Local Educational Agencies 84.010 (3) $ 1,393,753 Special Education Cluster: (4) Special Education - Grants to States 84.027 (3) 1,034,221 Special Education - Preschool Grants 84.173 (3) 37,127 Vocational Education - Basic Grants to States 84.048 (3) 73,063 Twenty-first Century Community Learning Centers 84.287 (3) 46,023 English Language Acquisiton Grants 84.365 (3) 11,559 Improving Teacher Quality State Grants 84.367 (3) 115,406Total U.S. Department of Education $ 2,711,152

U.S. Elections Assistance Commission: Passed-through Tennessee Department of State: Help America Vote Act Requirements Payments 90.401 (3) $ 17,400Total U.S. Elections Assistance Commission: $ 17,400

U.S. Department of Homeland Security: Direct Program: Assistance to Firefighters Grant Program 97.044 N/A $ 228,606Total U.S. Department of Homeland Security $ 228,606

Total Expenditures of Federal Grants $ 5,465,107

(Continued)

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Macon County, TennesseeSchedule of Expenditures of Federal Awards and State Grants (1) (Cont.)

FederalFederal/Pass-through Agency/State CFDA ContractGrantor Program Title Number Number Expenditures

State Grants Safe Schools Act - State Department of Education N/A (3) $ 22,870 ConnecTN - State Department of Education N/A (3) 9,891 Coordinated School Health - State Department of Education N/A (3) 115,000 Three Star Program - State Department on Economic and Community Development N/A (3) 19,742 Student Ticket Subsidy - Tennessee Arts Commission N/A (3) 3,000 Early Childhood Education - Pilot/State - State Department of Education N/A (3) 297,768 High Visibility Enforcement Grant - Governor's Highway Safety Grant N/A (3) 4,475 Technology Grant - State Library and Archives N/A (3) 1,346

Juvenile Justice State Supplement Funds - State Commission on Children and Youth N/A (3) 9,000 Waste Tire Grant - State Department of Environment and Conservation N/A (3) 22,280 Recycling Equipment Grant - State Department of Environment and Conservation N/A (3) 25,000 Rural Health Services - State Department of Health N/A (3) 145,626 Litter Program - State Department of Transportation N/A (3) 22,817

Total State Grants $ 698,815

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) Macon County elected not to use the 10% de minimus cost rate permitted in the Uniform Guidance.(3) Information not available. (4) Child Nutrition Cluster total $1,819,330; Special Education Cluster total $1,071,348.

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Macon County, TennesseeSummary Schedule of Prior-year FindingsFor the Year Ended June 30, 2017

Fiscal Page Finding CFDAYear Number Number Number

OFFICE OF COUNTY MAYOR

2016 173-174 2016-001 N/A Corrected

2016 174 2016-002 N/A Corrected

2016 175 2016-003 N/A Corrected

OFFICE OF CIRCUIT, GENERAL SESSIONS, AND JUVENILE COURTS CLERK

2016 175-176 2016-004 N/A Corrected

2016 176 2016-005 N/A Corrected

2016 177-178 2016-006 N/A Corrected

2016 177-178 2016-006 N/A Corrected

General ledger payroll deduction accounts were not reconciled with payroll reports and payments

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 Macon County, Tennessee, for the year ended June 30, 2017.

Prior-year Financial Statement Findings

The Public Library Fund was not maintained in accordance with generally accepted accounting principles and state statute

The office did not deposit some funds within three days of collection

Cash on deposit with the trustee was not reconciled timely

Execution docket trial balances were not reconciled with cash journal controls

OFFICES OF COUNTY MAYOR; SUPERVISOR OF ROADS; COUNTY CLERK; AND CIRCUIT, GENERAL SESSIONS, AND JUVENILE COURTS CLERK

Duties were not segregated adequately - County Mayor

Duties were not segregated adequately - Supervisor of Roads

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2016 177-178 2016-006 N/A

2016 177-178 2016-006 N/A Corrected

2016 178 2016-007 N/A Corrected

2016 178 2016-007 N/A Corrected

There were no prior-year federal award findings to report.

Prior-year Federal Awards Findings

Multiple employees operated from the same cash drawer - County Clerk

Duties were not segregated adequately - Circuit, General Sessions, and Juvenile Courts Clerk

OFFICES OF COUNTY CLERK AND CIRCUIT, GENERAL SESSIONS, AND JUVENILE COURTS CLERK

Duties were not segregated adequately - County Clerk

Not Corrected - See Explanation on Corrective Action Plan

Multiple employees operated from the same cash drawer - Circuit, General Sessions, and Juvenile Courts Clerk

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Financial Statements:

1. Our report on the financial statements of Macon 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 Program and National School Lunch Program

8. Dollar threshold used to distinguish between Type A and Type B Programs. $750,000

9. Auditee qualified as low-risk auditee? YES

MACON COUNTY, TENNESSEE

SCHEDULE OF FINDINGS AND QUESTIONED COSTS


PART I, SUMMARY OF AUDITOR'S RESULTS

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PART II, FINDINGS RELATING TO THE FINANCIAL STATEMENTS Findings and recommendations, as a result of our audit, are presented below. We reviewed these findings and recommendations with management to provide an opportunity for their response. Written responses for all findings are paraphrased and presented following each finding and recommendation. Management’s corrective action plans, whether related to the financial statements or federal awards, are presented separately in the Management’s Corrective Action Plan in the Single Audit Section of this report. Findings relating specifically to the audit of federal awards, if any, are separately presented under Part III, Findings and Questioned Costs for Federal Awards.

OFFICE OF COUNTY MAYOR FINDING 2017-001 SOLID WASTE/SANITATION FUND APPROPRIATIONS

EXCEEDED ESTIMATED AVAILABLE FUNDING (Noncompliance Under Government Auditing Standards)

The budget and subsequent amendments approved by the county commission for the Solid Waste/Sanitation Fund resulted in appropriations exceeding estimated available funding by $61,127. Sound budgetary principles dictate that appropriations be held within estimated available funding. This deficiency was the result of a lack of management oversight. RECOMMENDATION Appropriations that exceed estimated available funding should not be submitted to the county commission, and the county commission should not approve such appropriations. MANAGEMENT’S RESPONSE – COUNTY MAYOR I accept the finding and will follow-up with a plan of action for correction.

________________________________________ OFFICE OF COUNTY CLERK FINDING 2017-002 DUTIES WERE NOT SEGREGATED ADEQUATELY

(Internal Control – Significant Deficiency Under Government Auditing Standards)

Duties were not segregated adequately among the official and employees in the Office of County Clerk. The official and employees responsible for maintaining the accounting records were also involved in receipting, depositing, and/or disbursing funds. Sound business practices dictate that management is responsible for designing internal controls to give reasonable assurance of the reliability in financial reporting and of the effectiveness and efficiency of operations. This lack of segregation of duties is the result of management’s decisions based on the availability of financial resources and is a significant deficiency in internal control that increases the risk of unauthorized transactions. Also, this deficiency exists because management failed to correct the finding noted in the prior-year audit report and the failure to implement their corrective action plan.

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RECOMMENDATION The county clerk should segregate duties to the extent possible using available resources. MANAGEMENT’S RESPONSE – COUNTY CLERK I have worked hard to the best of my ability to segregate the duties of my office since last fiscal year so this finding would not recur. In our daily business, I have all paperwork (renewals, title transactions, receipts, etc.) examined up to three different times before releasing the data to the State of Tennessee. Each person signs off on the paperwork to document it is being reviewed. At the end of the work day, each deputy clerk is responsible for doing a cash drawer count on their own cash drawer, which must be in balance with the Daily Check/Cash Report. Another deputy clerk and I will verify each person’s total. Then the work is rechecked by another deputy clerk who will then post the check register, and finally another deputy clerk takes the money to the bank for deposit. That is a total of four times that the money and checks are balanced. I have been training another deputy clerk to be able to do General Ledger work in my absence. My office is a smaller office, and I do not have the luxury of not working with the public from time to time. I try to have the deputies work the front counter with my guidance, but there are times that a title transaction requires me to complete it for the customer due to the complexity of the situation. However, I still have other things in place to have my work double checked. I do not reconcile my two bank accounts; I have a deputy clerk do that at the end of each month. She opens the envelopes and takes the checkbooks and balances each account. So in my opinion, I have several things in place that show I have tried very hard to segregate all duties in the office. We have long lines standing in the hall at certain times, and I must wait on customers so that may never change. I feel an obligation to make sure the customers are taken care of in a prompt and efficient manner.

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PART III, FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS There were no findings and questioned costs related to federal awards for the year ended June 30, 2017.

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FindingNumber

OFFICE OF COUNTY MAYOR

2017-001 182

OFFICE OF COUNTY CLERK

2017-002 183Duties were not segregated adequately

We reviewed the financial statement and federal award findings and recommendations with managementto provide an opportunity for their response as required by the auditee requirements within Title 2 U.S.Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and AuditRequirements for Federal Awards (Uniform Guidance). Management’s corrective action plans for allfinancial statement findings and federal award findings are presented in this section and have beenindexed below. The corrective action plans were prepared by management and have been presented asthey were submitted.

Macon County, TennesseeManagement's Corrective Action Plan


Title of Finding

Solid Waste Sanitation Fund appropriations exceeded estimated available funding

Corrective ActionPlan Page Number

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BEST PRACTICE

Accounting literature describes a best practice as a recommended policy, procedure, or technique that aids management in improving financial performance. Historically, a best practice has consistently shown superior results over conventional methods. The Division of Local Government Audit strongly believes that the item noted below is a best practice that should be adopted by the governing body as a means of significantly improving accountability and the quality of services provided to the citizens of Macon County.

MACON COUNTY SHOULD ADOPT A CENTRAL SYSTEM OF ACCOUNTING, BUDGETING, AND PURCHASING

Macon 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 Macon County. Therefore, we recommend the adoption of the County Financial Management System of 1981 or a private act, which would provide for a central system of accounting, budgeting, and purchasing covering all county departments.

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macon county tennessee - tn comptroller · macon county, tennessee for the year ended june 30, ......

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