OVERTON COUNTY TENNESSEE - TN Comptroller · Overton County management. etailed finding, recommendation, and management’s The d response are included in the Single Audit section

ANNUAL FINANCIAL REPORT

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

DIVISION OF LOCAL GOVERNMENT AUDIT

ANNUAL FINANCIAL REPORT

OVERTON COUNTY, TENNESSEE

FOR THE YEAR ENDED JUNE 30, 2018

COMPTROLLER OF THE TREASURY JUSTIN P. WILSON

DIVISION OF LOCAL GOVERNMENT AUDIT JAMES R. ARNETTE

Director

STEVE REEDER, CPA, CGFM, CFE Audit Manager GARY RAMSEY, CPA ANITA SCARLETT, CPA KELLEY J. McNEAL, CPA, CGFM Senior Auditor State Auditors

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

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http://www.comptroller.tn.gov/

Exhibit Page(s)

Summary of Audit Findings 6

INTRODUCTORY SECTION 7

Overton 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 25-28Solid Waste/Sanitation Fund C-6 29Highway/Public Works Fund C-7 30

Fiduciary Funds:Statement of Fiduciary Assets and Liabilities D 31

Index and Notes to the Financial Statements 32-117REQUIRED SUPPLEMENTARY INFORMATION: 118

Schedule of Changes in Net Pension Liability (Asset) and Related Ratios Based on Participation in the Public Employee Pension Planof TCRS – Primary Government E-1 119

Schedule of Contributions Based on Participation in the Public EmployeePension Plan of TCRS – Primary Government E-2 120

Schedule of Contributions Based on Participation in the TeacherRetirement Plan of TCRS – Discretely Presented OvertonCounty School Department E-3 121

Schedule of Contributions Based on Participation in the TeacherLegacy Pension Plan of TCRS – Discretely Presented OvertonCounty School Department E-4 122

OVERTON 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 PresentedOverton County School Department E-5 123

Schedule of Proportionate Share of the Net Pension Asset in theTeacher Legacy Pension Plan of TCRS – Discretely PresentedOverton County School Department E-6 124

Schedule of Changes in Total Other Postemployment Benefits Plan Liabilityand Related Ratios – Primary Government E-7 125-126

Schedule of Changes in Total Other Postemployment Benefits Plan Liabilityand Related Ratios – Discretely Presented Overton CountySchool Department E-8 127

Notes to the Required Supplementary Information 128COMBINING AND INDIVIDUAL FUND FINANCIAL

STATEMENTS AND SCHEDULES: 129Nonmajor Governmental Funds: 130

Combining Balance Sheet F-1 131Combining Statement of Revenues, Expenditures, and Changes

in Fund Balances F-2 132-135Schedules of Revenues, Expenditures, and Changes in Fund

Balances – Actual and Budget:Courthouse and Jail Maintenance Fund F-3 136Drug Control Fund F-4 137

Major Governmental Fund: 138Schedule of Revenues, Expenditures, and Changes in Fund

Balance – Actual and Budget:General Debt Service Fund G 139

Fiduciary Funds: 140Combining Statement of Fiduciary Assets and Liabilities H-1 141Combining Statement of Changes in Assets and Liabilities –

All Agency Funds H-2 142Component Unit:

Discretely Presented Overton County School Department: 143Statement of Activities I-1 144Balance Sheet – Governmental Funds I-2 145Reconciliation of the Balance Sheet of Governmental Funds

to the Statement of Net Position I-3 146Statement of Revenues, Expenditures, and Changes in Fund

Balances – Governmental Funds I-4 147Reconciliation of the Statement of Revenues, Expenditures,

and Changes in Fund Balances of Governmental Fundsto the Statement of Activities I-5 148

Combining Balance Sheet – Nonmajor Governmental Funds I-6 149Combining Statement of Revenues, Expenditures, and Changes

in Fund Balances – Nonmajor Governmental Funds I-7 150-151Schedules of Revenues, Expenditures, and Changes in Fund

Balances – Actual (Budgetary Basis) and Budget:General Purpose School Fund I-8 152-153School Federal Projects Fund I-9 154-155Central Cafeteria Fund I-10 156Education Debt Service Fund I-11 157

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Exhibit Page(s)

Miscellaneous Schedules: 158Schedule of Changes in Long-term Bonds and Notes J-1 159Schedule of Long-term Debt Requirements by Year J-2 160Schedule of Transfers – Primary Government and Discretely

Presented Overton County School Department J-3 161Schedule of Salaries and Official Bonds of Principal Officials –

Primary Government and Discretely Presented OvertonCounty School Department J-4 162

Schedule of Detailed Revenues – All Governmental Fund Types J-5 163-174Schedule of Detailed Revenues – All Governmental Fund Types –

Discretely Presented Overton County School Department J-6 175-178Schedule of Detailed Expenditures – All Governmental Fund Types J-7 179-196Schedule of Detailed Expenditures – All Governmental Fund Types –

Discretely Presented Overton County School Department J-8 197-208Schedule of Detailed Receipts, Disbursements, and Changes in

Cash Balance – City Agency Fund J-9 209

SINGLE AUDIT SECTION 210

Report on Internal Control Over Financial Reporting and on Complainceand Other Matters Based on an Audit of Financial StatementsPerformed in Accordance With Government Auditing Standards 211-212

Report on Compliance for Each Major Federal Program; Report onInternal Control Over Compliance; and Report on the Schedule ofExpenditures of Federal Awards Required by the Uniform Guidance 213-215

Schedule of Expenditures of Federal Awards and State Grants 216-217Summary Schedule of Prior-year Findings 218Schedule of Findings and Questioned Costs 219-221Management's Corrective Action Plan 222-223Best Practice 224

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Summary of Audit Findings Annual Financial Report

Overton County, Tennessee For the Year Ended June 30, 2018

Scope

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

Results

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

Findings The following is a summary of the audit finding: OFFICE OF DIRECTOR OF SCHOOLS ♦ The School Federal Projects Fund had a cash overdraft of $6,280 at June 30, 2018.

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INTRODUCTORY SECTION

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Overton County Officials June 30, 2018 Officials Ben Danner, County Executive James Norrod, Highway Superintendent Dr. Mark Winningham, Director of Schools Peggy Clark Smith, Trustee Cara Boone, Assessor of Property Victoria Looper, County Clerk Barbara Matthews, Circuit and General Sessions Courts Clerk Dorothy Stanton, Clerk and Master Franklin Smith, Register of Deeds John Garrett, Sheriff Connie York, Director of Accounts and Budgets Board of County Commissioners Ben Danner, County Executive, Chairman Rick Moles Randall Boswell Jean Moore Jesse Bowman Gregg Nivens Darwin Clark Billy Parrott James Clouse Billie Phipps Shaun Hale Lee Richards Frank Martin Donna Savage Robbie Melton Phillip Talley Board of Education Mike Gilpatrick, Chairman Jarmin Hicks William Abston Larry Looper Dolphus Dial Terry Melton Ricky Dodson Howard Miller Mike Hayes Mike Sullivan Budget and Purchasing Committee Audit Committee Darwin Clark, Chairman Dick Ward, Chairman Randall Boswell Robbie Melton Frank Martin Donna Savage Gregg Nivens Tina Williams Billie Phipps Vacant

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FINANCIAL SECTION

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Independent Auditor’s Report

Overton County Executive and Board of County Commissioners Overton County, Tennessee

To the County Executive 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 Overton County, Tennessee, as of and for the year ended June 30, 2018, and the related notes to the financial statements, which collectively comprise the county’s basic financial statements as listed in the table of contents.

Management's Responsibility for the Financial Statements

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

Auditor's Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of Overton County Health and Rehab Center. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for the Overton County Health and Rehab Center, is based solely on the report of the other auditors. We were unable to determine Overton County Health and Rehab Center’s respective percentage of the assets, net position, and revenues of the aggregate discretely presented component units because the Overton/Pickett County Emergency Communications District, a component unit requiring discrete presentation, was not included in the county’s financial statements. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

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

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

Opinions

In our opinion, based on our audit and the report of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Overton County, Tennessee, as of June 30, 2018, and the respective changes in financial position and the respective budgetary comparison for the General, Solid Waste/Sanitation, and Highway Public Works funds for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Change in Accounting Principle

As described in Note V.B., Overton County has adopted the provisions of Governmental Accounting Standards Board (GASB) Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. Our opinion is not modified with respect to this matter.

Emphasis of Matter

We draw attention to Note I.D.9. to the financial statements, which describes restatements increasing the beginning net position of the Governmental Activities of the primary government by $2,078 and reducing the beginning net position of the discretely presented Overton County School Department by $2,572,573, on the Government-wide Statement of Activities. These restatements were necessary because of the transitional requirements of GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. Our opinion is not modified with respect to this matter.

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

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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, and schedules of county and school changes in the total OPEB liability and related ratios on pages 119-128 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary and Other Information

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

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

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accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements, budgetary comparison schedules of nonmajor governmental funds and the General Debt Service Fund, combining and individual fund financial statements of the Overton County School Department (a discretely presented component unit), schedule of expenditures of federal awards, and miscellaneous schedules are fairly stated in all material respects in relation to the basic financial statements as a whole.

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

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated February 7, 2019, on our consideration of Overton 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 Overton 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 Overton County’s internal control over financial reporting and compliance.

Very truly yours,

Justin P. Wilson Comptroller of the Treasury Nashville, Tennessee

February 7, 2019

JPW/kp

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BASIC FINANCIAL STATEMENTS

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Exhibit A

Overton County, TennesseeStatement of Net PositionJune 30, 2018

OvertonOverton CountyCounty HealthSchool and Rehab

Department Center

ASSETS

Cash $ 1,266 $ 458 $ 7,986,838Equity in Pooled Cash and Investments 9,094,703 7,675,178 0Inventories 0 59,393 0Accounts Receivable 395,584 0 1,457,350Allowance for Uncollectibles (114,915) 0 (102,000)Due from Other Governments 1,705,984 1,100,705 0Due from Component Units 13,735,000 0 0Property Taxes Receivable 6,235,958 2,115,771 0Allowance for Uncollectible Property Taxes (141,008) (47,842) 0Prepaid Items 0 0 500Net Pension Asset - Agent Plan 427,567 342,257 246,982Net Pension Asset - Teacher Retirement Plan 0 33,781 0Net Pension Asset - Teacher Legacy Plan 0 102,835 0Capital Assets:

Assets Not Depreciated:Land 700,401 457,163 115,000Intangibles 10,701 0 0Construction in Progress 0 0 556,542

Assets Net of Accumulated Depreciation:Buildings and Improvements 6,648,913 12,549,313 6,218,976Infrastructure 9,949,980 595,044 36,736Other Capital Assets 1,725,366 1,712,776 352,618

Total Assets $ 50,375,500 $ 26,696,832 $ 16,869,542

DEFERRED OUTFLOWS OF RESOURCES

Pension Changes in Experience $ 78,492 $ 126,011 $ 45,340Pension Changes in Investment Earnings 0 15,610 0Pension Changes in Assumptions 218,007 1,048,432 125,931Pension Other Deferrals 0 84,198 0Pension Changes in Contributions after Measurement Date 254,385 1,228,736 171,681OPEB Contributions After Measurement Date 8,559 243,878 413Total Deferred Outflows of Resources $ 559,443 $ 2,746,865 $ 343,365

LIABILITIES

Accounts Payable $ 882,386 $ 0 $ 182,585Accrued Payroll 79,669 47,670 123,069Payroll Deductions Payable 122 0 74,752Cash Overdraft 0 6,280 0Accrued Interest Payable 53,555 0 57,950Due to Primary Government 0 5,605,000 8,130,000Customer Deposits Payable 0 0 14,706Noncurrent Liabilities:

Due Within One Year 1,612,876 38,937 152,601Due in More Than One Year 16,178,167 5,522,435 323,670

Total Liabilities $ 18,806,775 $ 11,220,322 $ 9,059,333

(Continued)

Component Units

Primary Government

Governmental Activities

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Exhibit A

Overton County, TennesseeStatement of Net Position (Cont.)

OvertonOverton CountyCounty HealthSchool and Rehab

Department Center

DEFERRED INFLOWS OF RESOURCES

Deferred Current Property Taxes $ 5,886,532 $ 1,997,216 $ 0Pension Changes in Experience 348,187 2,404,318 201,129Pension Changes in Investment Earnings 2,865 4,113 1,655Pension Other Deferrals 0 110,298 0OPEB Changes in Assumptions 55,318 288,911 26,706Total Deferred Inflow of Resources $ 6,292,902 $ 4,804,856 $ 229,490

NET POSITION

Net Investment in Capital Assets $ 15,853,584 $ 15,314,296 $ 3,706,016Restricted for:

General Government 214,669 0 0 Administration of Justice 90,034 0 0 Public Safety 102,302 0 0 Highways/Public Works 1,584,485 0 0 Education 0 286,248 0 Capital Projects 9,754 0 0 Pensions 427,567 478,873 246,982

Unrestricted 7,552,871 (2,660,898) 3,971,086

Total Net Position $ 25,835,266 $ 13,418,519 $ 7,924,084

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

Component Units

Primary Government

Governmental Activities

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Exhibit B

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

Primary OvertonOperating Capital Government Overton County

Charges Grants Grants Total County Health for and and Governmental School and Rehab

Functions/Programs Expenses Services Contributions Contributions Activities Department Center

Primary Government: Governmental Activities: General Government $ 2,029,255 $ 140,824 $ 257,272 $ 0 $ (1,631,159) $ 0 $ 0 Finance 633,290 564,642 27,566 0 (41,082) 0 0 Administration of Justice 765,387 530,077 117,318 0 (117,992) 0 0 Public Safety 3,638,185 826,074 150,871 0 (2,661,240) 0 0 Public Health and Welfare 3,158,622 1,445,609 286,571 0 (1,426,442) 0 0 Social, Cultural, and Recreational Services 308,458 5,710 46,051 0 (256,697) 0 0 Agriculture and Natural Resources 120,158 0 18,672 0 (101,486) 0 0 Highways/Public Works 2,818,771 0 2,152,081 786,914 120,224 0 0 Interest on Long-term Debt 537,565 0 0 0 (537,565) 0 0

Total Primary Government $ 14,009,691 $ 3,512,936 $ 3,056,402 $ 786,914 $ (6,653,439) $ 0 $ 0

Component Units: School Department $ 25,507,411 $ 503,098 $ 3,734,114 $ 124,000 $ 0 $ (21,146,199) $ 0 Health and Rehab Center 8,999,824 9,754,745 0 0 0 0 754,921

Total Component Units $ 34,507,235 $ 10,257,843 $ 3,734,114 $ 124,000 $ 0 $ (21,146,199) $ 754,921

Component Units

Net (Expense) Revenue and Changes in Net Position

Program Revenues

(Continued)

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Exhibit B

Overton County, Tennessee Statement of Activities (Cont.)

Primary OvertonOperating Capital Government Overton County

Charges Grants Grants Total County Health for and and Governmental School and Rehab

Functions/Programs Expenses Services Contributions Contributions Activities Department Center

General Revenues: Taxes: Property Taxes Levied for General Purposes $ 5,422,075 $ 1,968,598 $ 0 Property Taxes Levied for Debt Service 379,911 0 0 Local Option Sales Tax 1,077,461 2,040,541 0 Hotel/Motel Tax 35,957 0 0 Wheel Tax 0 610,196 0 Wholesale Beer Tax 0 109,698 0 Litigation Taxes 94,167 0 0 Mineral Severance Tax 110,346 0 0 Business Tax 150,873 0 0 Interstate Telecommunications Tax 76,941 0 0 Other Local Taxes 2,375 9,806 0 Grants and Contributions Not Restricted for Specific Programs 1,183,597 18,724,055 0 Unrestricted Investment Income 232,403 251 15,416 Miscellaneous 101,620 97,876 0 Amortized Premium 660,552 0 0Total General Revenues $ 9,528,278 $ 23,561,021 $ 15,416

Change in Net Position $ 2,874,839 $ 2,414,822 $ 770,337Net Position, July 1, 2017 22,958,349 13,576,270 7,477,720Restatements - See Notes I.D.9. and IV.M. 2,078 (2,572,573) (323,973)

Net Position, June 30, 2018 $ 25,835,266 $ 13,418,519 $ 7,924,084


Program RevenuesComponent Units

Net (Expense) Revenue and Changes in Net Position

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Exhibit C-1

Overton County, TennesseeBalance SheetGovernmental FundsJune 30, 2018

OtherSolid Highway / General Govern- Total

Waste / Public Debt mental GovernmentalGeneral Sanitation Works Service Funds Funds

ASSETS

Cash $ 0 $ 50 $ 0 $ 0 $ 1,216 $ 1,266Equity in Pooled Cash and Investments 5,049,858 1,611,635 1,186,795 1,132,133 114,282 9,094,703Accounts Receivable 367,702 15,463 759 0 11,660 395,584Allowance for Uncollectibles (114,915) 0 0 0 0 (114,915)Due from Other Governments 453,907 113,329 1,138,748 0 0 1,705,984Due from Other Funds 12,876 0 0 0 0 12,876Property Taxes Receivable 5,085,275 371,188 371,188 408,307 0 6,235,958Allowance for Uncollectible Property Taxes (114,989) (8,393) (8,393) (9,233) 0 (141,008)

Total Assets $ 10,739,714 $ 2,103,272 $ 2,689,097 $ 1,531,207 $ 127,158 $ 17,190,448

LIABILITIES

Accounts Payable $ 133,946 $ 7,500 $ 740,940 $ 0 $ 0 $ 882,386Accrued Payroll 61,848 4,660 13,161 0 0 79,669Payroll Deductions Payable 0 0 122 0 0 122Due to Other Funds 0 0 0 0 12,876 12,876Total Liabilities $ 195,794 $ 12,160 $ 754,223 $ 0 $ 12,876 $ 975,053


Deferred Current Property Taxes $ 4,800,326 $ 350,389 $ 350,389 $ 385,428 $ 0 $ 5,886,532Deferred Delinquent Property Taxes 162,434 11,856 11,857 13,042 0 199,189Other Deferred/Unavailable Revenue 237,680 57,448 186,397 0 0 481,525Total Deferred Inflows of Resources $ 5,200,440 $ 419,693 $ 548,643 $ 398,470 $ 0 $ 6,567,246

(Continued)

Major FundsNonmajor

Funds

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Exhibit C-1

Overton County, TennesseeBalance SheetGovernmental Funds (Cont.)



FUND BALANCES

Restricted:Restricted for General Government $ 1,412 $ 200,000 $ 0 $ 0 $ 13,257 $ 214,669Restricted for Administration of Justice 90,034 0 0 0 0 90,034Restricted for Public Safety 11,031 0 0 0 91,271 102,302Restricted for Highways/Public Works 0 0 1,386,231 0 0 1,386,231Restricted for Capital Projects 0 0 0 0 9,754 9,754

Committed:Committed for Public Health and Welfare 0 1,471,419 0 0 0 1,471,419Committed for Debt Service 0 0 0 1,132,737 0 1,132,737

Unassigned 5,241,003 0 0 0 0 5,241,003Total Fund Balances $ 5,343,480 $ 1,671,419 $ 1,386,231 $ 1,132,737 $ 114,282 $ 9,648,149

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 10,739,714 $ 2,103,272 $ 2,689,097 $ 1,531,207 $ 127,158 $ 17,190,448


Major FundsNonmajor

Funds

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Exhibit C-2

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

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

Total fund balances - balance sheet - governmental funds (Exhibit C-1) $ 9,648,149

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

Add: land $ 700,401Add: intangible assets 10,701Add: buildings and improvements net of accumulated depreciation 6,648,913Add: infrastructure net of accumulated depreciation 9,949,980Add: other capital assets net of accumulated depreciation 1,725,366 19,035,361

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

Less: bonds payable $ (16,916,777)Add: debt to be contributed by the School Department 5,605,000Add: debt to be contributed by the Health and Rehab Center 8,130,000Less: accrued interest on bonds (53,555)Less: compensated absences payable (131,859)Less: net OPEB liability (685,126)Less: landfill postclosure care costs (57,281) (4,109,598)

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

Add: deferred outflows of resources related to pensions $ 550,884Less: deferred inflows of resources related to pensions (351,052)Add: deferred outflows of resources related to OPEB 8,559Less: deferred inflows of resources related to OPEB (55,318) 153,073

(4) Net pension assets of the agent plan are not current financial resources and therefore are not reported in the governmental funds. 427,567

(5) Other long-term assets are not available to pay for current-periodexpenditures and therefore are deferred in the governmental funds. 680,714

Net position of governmental activities (Exhibit A) $ 25,835,266


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Exhibit C-3

Overton County, TennesseeStatement of Revenues, Expenditures,

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



RevenuesLocal Taxes $ 5,664,323 $ 952,163 $ 460,095 $ 384,764 $ 404 $ 7,461,749Licenses and Permits 475 0 0 0 0 475Fines, Forfeitures, and Penalties 103,863 0 0 0 24,653 128,516Charges for Current Services 1,367,946 243,255 0 0 3,038 1,614,239Other Local Revenues 137,345 104,388 25,130 232,379 2,026 501,268Fees Received From County Officials 941,053 0 0 0 0 941,053State of Tennessee 1,197,113 106,006 2,912,135 593,815 1,100 4,810,169Federal Government 243,208 0 0 115,764 0 358,972Other Governments and Citizens Groups 111,864 0 0 1,300,719 0 1,412,583

Total Revenues $ 9,767,190 $ 1,405,812 $ 3,397,360 $ 2,627,441 $ 31,221 $ 17,229,024

ExpendituresCurrent:

General Government $ 1,780,821 $ 69,476 $ 0 $ 0 $ 33,122 $ 1,883,419Finance 647,558 0 0 0 140 647,698Administration of Justice 766,866 0 0 0 2,898 769,764Public Safety 3,298,200 0 0 0 231,916 3,530,116Public Health and Welfare 1,918,353 1,110,372 0 0 91,550 3,120,275Social, Cultural, and Recreational Services 253,236 0 0 0 0 253,236Agriculture and Natural Resources 121,609 0 0 0 0 121,609Other Operations 237,078 0 0 0 4 237,082Highways 41,246 0 3,333,438 0 0 3,374,684

Debt Service:Principal on Debt 0 0 0 2,062,388 0 2,062,388Interest on Debt 0 0 0 547,728 0 547,728Other Debt Service 0 0 0 16,669 5,000 21,669

(Continued)

Major FundsNonmajor

Funds

22

Exhibit C-3


and Changes in Fund BalancesGovernmental Funds (Cont.)



Expenditures (Cont.)Capital Projects $ 0 $ 0 $ 0 $ 0 $ 149,968 $ 149,968

Total Expenditures $ 9,064,967 $ 1,179,848 $ 3,333,438 $ 2,626,785 $ 514,598 $ 16,719,636

Excess (Deficiency) of RevenuesOver Expenditures $ 702,223 $ 225,964 $ 63,922 $ 656 $ (483,377) $ 509,388

Other Financing Sources (Uses)Insurance Recovery $ 3,373 $ 0 $ 4,275 $ 0 $ 0 $ 7,648Transfers In 32,000 0 0 0 0 32,000Transfers Out 0 (32,000) 0 0 0 (32,000)

Total Other Financing Sources (Uses) $ 35,373 $ (32,000) $ 4,275 $ 0 $ 0 $ 7,648

Net Change in Fund Balances $ 737,596 $ 193,964 $ 68,197 $ 656 $ (483,377) $ 517,036Fund Balance, July 1, 2017 4,605,884 1,477,455 1,318,034 1,132,081 597,659 9,131,113

Fund Balance, June 30, 2018 $ 5,343,480 $ 1,671,419 $ 1,386,231 $ 1,132,737 $ 114,282 $ 9,648,149


Major FundsNonmajor

Funds

23

Exhibit C-4

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

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

Net change in fund balances - total governmental funds (Exhibit C-3) $ 517,036

(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 $ 1,343,502Less: current-year depreciation expense (727,446) 616,056

(2) The net effect of various miscellaneous transactions involving capital assets(sales, trade-ins, and donations) is to increase net position.Less: book value of capital assets disposed (15,124)

(3) Revenues in the statement of activities that do not provide currentfinancial resources are not reported in the funds.Add: deferred delinquent property taxes and other deferred June 30, 2018 $ 680,714Less: deferred delinquent property taxes and other deferred June 30, 2017 (766,647) (85,933)

(4) The issuance of long-term debt (e.g., bonds, notes, other loans, leases) providescurrent financial resources to governmental funds, while the repaymentof the principal of long-term debt consumes the current financialresources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effectof premiums, discounts, and similar items when debt isfirst issued, whereas these amounts are deferred and amortized in thestatement of activities. This amount is the net effect of these differencesin the treatment of long-term debt and related items:Add: principal payments on notes $ 729,208Add: principal payments on bonds 1,333,180Add: change in premium on debt issuances 660,552Less: change in deferred charge on refunding debt (48,557)Less: contributions from the School Department for bonds (735,000)Less: contributions from the Health and Rehab Center for bonds (170,000) 1,769,383

(5) Some expenses reported in the statement of activities do not requirethe use of current financial resources and therefore are not reportedas expenditures in governmental funds. Change in accrued interest payable $ 10,163 Change in postclosure care costs (24,730) Change in compensated absences payable (35,954) Change in pension liability/asset 175,279 Change in deferred outflows related to pensions (154,151) Change in deferred inflows related to pensions 147,781 Change in net OPEB liability (net of restatement) 1,792 Change in deferred outflows related to OPEB 8,559 Change in deferred inflows related to OPEB (55,318) 73,421

Change in net position of governmental activities (Exhibit B) $ 2,874,839


24

Exhibit C-5

Overton County, TennesseeStatement of Revenues, Expenditures, and Changes

in Fund Balance - Actual (Budgetary Basis) and BudgetGeneral FundFor the Year Ended June 30, 2018

Actual VarianceRevenues/ with Final

Actual Less: Expenditures Budget -(GAAP Encumbrances (Budgetary PositiveBasis) 7/1/2017 Basis) Original Final (Negative)

RevenuesLocal Taxes $ 5,664,323 $ 0 $ 5,664,323 $ 5,361,292 $ 5,396,448 $ 267,875Licenses and Permits 475 0 475 4,925 4,925 (4,450)Fines, Forfeitures, and Penalties 103,863 0 103,863 111,110 111,110 (7,247)Charges for Current Services 1,367,946 0 1,367,946 1,137,905 1,137,905 230,041Other Local Revenues 137,345 0 137,345 66,400 124,009 13,336Fees Received From County Officials 941,053 0 941,053 814,500 814,500 126,553State of Tennessee 1,197,113 0 1,197,113 1,192,037 1,292,822 (95,709)Federal Government 243,208 0 243,208 854,586 876,957 (633,749)Other Governments and Citizens Groups 111,864 0 111,864 198,225 198,225 (86,361)

Total Revenues $ 9,767,190 $ 0 $ 9,767,190 $ 9,740,980 $ 9,956,901 $ (189,711)

ExpendituresGeneral Government

County Commission $ 84,719 $ 0 $ 84,719 $ 93,849 $ 93,849 $ 9,130Board of Equalization 1,200 0 1,200 2,500 2,500 1,300County Mayor/Executive 193,081 0 193,081 196,428 197,378 4,297County Attorney 42,274 0 42,274 63,168 63,168 20,894Election Commission 145,749 0 145,749 160,038 160,038 14,289Register of Deeds 154,846 0 154,846 157,583 157,583 2,737Planning 15,603 0 15,603 16,480 16,480 877County Buildings 366,638 0 366,638 358,299 432,700 66,062Other General Administration 775,758 0 775,758 865,815 816,520 40,762Preservation of Records 953 0 953 1,000 1,000 47

FinanceAccounting and Budgeting 54,757 0 54,757 54,815 54,815 58Property Assessor's Office 207,893 0 207,893 208,977 209,177 1,284

(Continued)

Budgeted Amounts

25

Exhibit C-5


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



Expenditures (Cont.)Finance (Cont.)

County Trustee's Office $ 176,040 $ 0 $ 176,040 $ 182,078 $ 182,078 $ 6,038County Clerk's Office 208,868 0 208,868 219,354 219,254 10,386

Administration of JusticeCircuit Court 259,559 0 259,559 259,190 264,710 5,151General Sessions Court 146,020 0 146,020 150,948 150,948 4,928Drug Court 97,290 0 97,290 111,136 111,136 13,846Chancery Court 223,211 0 223,211 227,002 227,702 4,491Juvenile Court 21,607 0 21,607 25,517 25,517 3,910District Attorney General 0 0 0 26,275 26,275 26,275Judicial Commissioners 19,179 0 19,179 21,952 21,952 2,773

Public SafetySheriff's Department 1,394,440 (1,404) 1,393,036 1,660,784 1,685,291 292,255Special Patrols 35,731 0 35,731 39,850 39,850 4,119Jail 1,502,326 (6,841) 1,495,485 1,772,620 1,807,641 312,156Fire Prevention and Control 176,046 0 176,046 181,775 181,775 5,729Civil Defense 8,235 0 8,235 11,214 14,830 6,595Rescue Squad 10,000 0 10,000 10,000 10,000 0Other Emergency Management 150,000 0 150,000 150,000 150,000 0County Coroner/Medical Examiner 21,422 0 21,422 36,225 36,225 14,803Other Public Safety 0 0 0 3,000 3,000 3,000

Public Health and WelfareLocal Health Center 126,409 0 126,409 208,960 256,330 129,921Ambulance/Emergency Medical Services 1,782,387 0 1,782,387 2,074,561 2,122,362 339,975Other Local Health Services 3,230 0 3,230 2,500 3,300 70Regional Mental Health Center 6,327 0 6,327 6,327 6,327 0

(Continued)

Budgeted Amounts

26

Exhibit C-5





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

Senior Citizens Assistance $ 62,706 $ 0 $ 62,706 $ 63,464 $ 63,464 $ 758Libraries 151,280 0 151,280 154,711 156,286 5,006Other Social, Cultural, and Recreational 39,250 0 39,250 34,250 39,250 0

Agriculture and Natural ResourcesAgricultural Extension Service 60,155 0 60,155 71,306 71,306 11,151Soil Conservation 61,454 0 61,454 67,738 67,738 6,284

Other OperationsTourism 31,778 0 31,778 35,000 35,500 3,722Industrial Development 60,924 0 60,924 65,000 91,600 30,676Other Economic and Community Development 84,585 0 84,585 525,000 525,000 440,415Airport 7,200 0 7,200 37,200 37,200 30,000Veterans' Services 36,989 0 36,989 39,103 43,743 6,754Contributions to Other Agencies 15,602 0 15,602 15,603 15,603 1

HighwaysTraffic Control 3,044 0 3,044 14,080 14,080 11,036Litter and Trash Collection 38,202 0 38,202 44,600 44,600 6,398

Total Expenditures $ 9,064,967 $ (8,245) $ 9,056,722 $ 10,727,275 $ 10,957,081 $ 1,900,359

Excess (Deficiency) of RevenuesOver Expenditures $ 702,223 $ 8,245 $ 710,468 $ (986,295) $ (1,000,180) $ 1,710,648

Other Financing Sources (Uses)Insurance Recovery $ 3,373 $ 0 $ 3,373 $ 0 $ 13,525 $ (10,152)Transfers In 32,000 0 32,000 32,000 32,000 0

Total Other Financing Sources $ 35,373 $ 0 $ 35,373 $ 32,000 $ 45,525 $ (10,152)

(Continued)

Budgeted Amounts

27

Exhibit C-5





Net Change in Fund Balance $ 737,596 $ 8,245 $ 745,841 $ (954,295) $ (954,655) $ 1,700,496Fund Balance, July 1, 2017 4,605,884 (8,245) 4,597,639 4,320,046 4,320,046 277,593

Fund Balance, June 30, 2018 $ 5,343,480 $ 0 $ 5,343,480 $ 3,365,751 $ 3,365,391 $ 1,978,089


Budgeted Amounts

28

Exhibit C-6


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

Variancewith FinalBudget -Positive

Actual Original Final (Negative)

RevenuesLocal Taxes $ 952,163 $ 871,272 $ 871,272 $ 80,891Charges for Current Services 243,255 221,475 221,475 21,780Other Local Revenues 104,388 65,775 65,775 38,613State of Tennessee 106,006 219,300 227,890 (121,884)

Total Revenues $ 1,405,812 $ 1,377,822 $ 1,386,412 $ 19,400


Other General Administration $ 69,476 $ 97,000 $ 98,000 $ 28,524Public Health and Welfare

Convenience Centers 194,560 372,415 317,415 122,855Transfer Stations 790,540 950,588 979,178 188,638Recycling Center 92,087 124,800 153,800 61,713Other Waste Disposal 904 4,500 4,500 3,596Postclosure Care Costs 32,281 50,000 55,000 22,719

Total Expenditures $ 1,179,848 $ 1,599,303 $ 1,607,893 $ 428,045

Excess (Deficiency) of RevenuesOver Expenditures $ 225,964 $ (221,481) $ (221,481) $ 447,445

Other Financing Sources (Uses)Transfers Out $ (32,000) $ (32,000) $ (32,000) $ 0

Total Other Financing Sources $ (32,000) $ (32,000) $ (32,000) $ 0

Net Change in Fund Balance $ 193,964 $ (253,481) $ (253,481) $ 447,445Fund Balance, July 1, 2017 1,477,455 1,525,235 1,525,235 (47,780)

Fund Balance, June 30, 2018 $ 1,671,419 $ 1,271,754 $ 1,271,754 $ 399,665


Budgeted Amounts

29

Exhibit C-7


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



RevenuesLocal Taxes $ 460,095 $ 434,003 $ 434,003 $ 26,092Other Local Revenues 25,130 2,000 2,000 23,130State of Tennessee 2,912,135 3,038,011 3,038,011 (125,876)

Total Revenues $ 3,397,360 $ 3,474,014 $ 3,474,014 $ (76,654)

ExpendituresHighways

Administration $ 147,735 $ 144,243 $ 155,943 $ 8,208Highway and Bridge Maintenance 1,220,534 1,129,665 1,262,473 41,939Operation and Maintenance of Equipment 524,065 410,917 569,617 45,552Quarry Operations 158,394 244,258 204,758 46,364Other Charges 146,803 185,000 185,000 38,197Employee Benefits 367,684 407,628 407,628 39,944Capital Outlay 768,223 941,467 941,467 173,244


Excess (Deficiency) of RevenuesOver Expenditures $ 63,922 $ 10,836 $ (252,872) $ 316,794

Other Financing Sources (Uses)Insurance Recovery $ 4,275 $ 0 $ 0 $ 4,275

Total Other Financing Sources $ 4,275 $ 0 $ 0 $ 4,275

Net Change in Fund Balance $ 68,197 $ 10,836 $ (252,872) $ 321,069Fund Balance, July 1, 2017 1,318,034 1,393,410 1,393,410 (75,376)

Fund Balance, June 30, 2018 $ 1,386,231 $ 1,404,246 $ 1,140,538 $ 245,693


Budgeted Amounts

30

Exhibit D

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

ASSETS

Cash $ 821,812Due from Other Governments 179,751

Total Assets $ 1,001,563

LIABILITIES

Due to Other Taxing Units $ 179,751Due to Litigants, Heirs, and Others 821,812

Total Liabilities $ 1,001,563


AgencyFunds

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Note Page(s)

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

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

Net Position/Fund Balance1. Deposits and Investments 382. Receivables and Payables 383. Inventories 394. Capital Assets 395. Deferred Outflows/Inflows of Resources 406. Compensated Absences 417. Long-term Obligations 418. Net Position and Fund Balance 429. Restatements 44

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

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

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

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

III. Stewardship, Compliance, and AccountabilityA. Budgetary Information 46B. Cash Shortages - Prior and Current Year 46C. Cash Overdraft 47D. Investigations by Comptroller's Office 47

IV. Detailed Notes on All FundsA. Deposits and Investments 47B. Capital Assets 49C. Interfund Receivables, Payables, and Transfers 52D. Long-term Obligations 53E. On-Behalf Payments 57

V. Other InformationA. Risk Management 57B. Accounting Changes 58C. Contingent Liabilities 59D. Landfill Postclosure Care Costs 59E. Joint Venture 59F. Retirement Commitments 60G. Other Postemployment Benefits (OPEB) 78H. Office of Central Accounting and Budgeting 94I. Purchasing Laws 94J. Subsequent Events 95

VI. Other Notes - Discretely Presented Overton County Health andRehab Center 95

OVERTON COUNTY, TENNESSEEIndex of Notes to the Financial Statements

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OVERTON COUNTY, TENNESSEE NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended June 30, 2018

I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Overton County’s financial statements are presented -30 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 Overton County:

A. Reporting Entity

Overton County is a public municipal corporation governed by an elected 15-member board. As required by GAAP, these financial statements present Overton County (the primary government) and its component units. The financial statements of the Overton/Pickett County Emergency Communications District, a component unit requiring discrete presentation, were excluded from this report due to materiality calculations; therefore, the effect of this 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 Overton County School Department operates the public school system in the county, and the voters of Overton 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 Overton County Health and Rehab Center provides residential nursing care to the citizens of Overton County, and the Overton County Commission appoints its governing body. Patient charges provide the majority of the revenues for the entity. Before the issuance of debt instruments, the entity must obtain the county commission’s approval.

The Overton/Pickett County Emergency Communications District was established with the merger of the Pickett County Emergency Communications District and the Overton County Emergency Communications District. The merger was adopted by both boards with an effective date of

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February 1, 2002. The board of the district includes 13 members: nine are appointed by the Overton County Commission, and the remaining four are appointed by the Pickett County Commission. The district is funded primarily through a service charge levied on telephone services. Before the issuance of most debt, the district must obtain approval of the Overton County Commission. The financial statements of the Overton/Pickett County Emergency Communications District were not material to the component units’ opinion unit and therefore have been omitted from this report. The Overton 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 Overton County Health and Rehab Center and the Overton/Pickett County Emergency Communications District can be obtained from their administrative offices at the following addresses:

Administrative Offices:

Overton County Health and Rehab Center 318 Bilbrey Street Livingston, TN 38570

Overton/Pickett County Emergency Communications District 255 Industrial Drive Livingston, TN 38570

Related Organization – The Industrial Development Authority for Overton County provides assistance in industrial recruitment in Overton County, and the Overton County Commission appoints its seven-member board. Overton County did not contribute to the operations of the Industrial Development Authority during the year ended June 30, 2018.

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 Overton County does not have any business-type activities to report. Likewise, the primary government is reported separately from certain legally separate component

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units for which the primary government is financially accountable. The Overton 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. Overton County issues all debt for the discretely presented Overton County School Department and the discretely presented Overton County Health and Rehab Center. There were no debt issues contributed by the county to the School Department or the Health and Rehab Center during the year ended June 30, 2018. Separate financial statements are provided for governmental funds and fiduciary funds. The fiduciary funds are excluded from the government-wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements.

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

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

35

funds are aggregated into a single column on the fund financial statements. The fiduciary funds in total are reported in a single column. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they become both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the county considers revenues other than grants to be available if they are collected within 30 days after year-end. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met and the revenues are available. Overton 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 debt service funds for payments to be made early in the following year. Property taxes for the period levied, in-lieu-of tax payments, sales taxes, interest, and miscellaneous taxes are all considered to be susceptible to accrual and have been recognized as revenues of the current period. Applicable business taxes, litigation taxes, state-shared excise taxes, fines, forfeitures, and penalties are not susceptible to accrual since they are not measurable (reasonably estimable). All other revenue items are considered to be measurable and available only when the county receives cash.

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

General Fund – This is the county’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. Solid Waste/Sanitation Fund – This special revenue fund accounts for transactions related to the disposal of Overton County’s solid waste. Local taxes and general service charges are the foundational revenues of this fund. Highway/Public Works Fund – This special revenue fund accounts for transactions of the county’s Highway Department. Local and state gasoline/fuel taxes are the foundational revenues of this fund.

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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, Overton County reports the following fund types:

Capital Projects Funds – These funds account for and report financial resources used 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 Overton 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 Overton County School Department reports the following major governmental fund:

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

Additionally, the Overton 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. Debt Service Fund – The Education Debt Service Fund accounts for the accumulation of resources for, and the payment of, long-term debt principal, interest, and related costs on debt issued by the primary government for the School Department.

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.

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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 Overton County School Department. Each fund’s portion of this pool is displayed on the balance sheets or statements of net position as Equity in Pooled Cash and Investments. Most income from these pooled investments is assigned to the General Debt Service Fund. Overton County and the School Department have adopted a policy of reporting U.S. Treasury obligations, U.S. agency obligations, and repurchase agreements with maturities of one year or less when purchased on the balance sheet at amortized cost. Certificates of deposit are reported at cost. Investments in the State Treasurer’s Investment Pool are reported at amortized cost using a stable net asset value. State statutes require the state treasurer to administer the pool under the same terms and conditions, including collateral requirements, as prescribed for other funds invested by the state treasurer. All other investments are reported at fair value.

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 1.2 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

38

an estimated allowance for uncollectible taxes, is reported as a deferred inflow of resources as of June 30.

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

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

Most payables are disaggregated on the face of the financial statements.

3. Inventories

Inventories of the discretely presented Overton County School Department are recorded at cost, determined on the first-in, first-out method. Inventories of governmental funds are recorded as expenditures when consumed rather than when purchased. Inventories are offset in the nonspendable fund balance account in governmental funds.

4. Capital Assets

Governmental funds do not capitalize the cost of capital outlays; these funds report capital outlays as expenditures upon acquisition. Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, and similar items), are reported in the governmental column in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of $10,000 or more and an estimated useful life of more than one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition value at the date of donation.

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The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed.

Property, plant, equipment, and infrastructure of the primary government and the discretely presented School Department are depreciated using the straight-line method over the following estimated useful lives:

Assets Years

Buildings and Improvements 25 - 40Other Capital Assets 5 - 30Infrastructure: Roads 20 - 50 Bridges 30 - 50

5. Deferred Outflows/Inflows of Resources

In addition to assets, the Statement of Net Position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The government has items that qualify for reporting in this category. 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, changes in investment earnings, changes in assumptions, changes in proportionate share of contributions, employer contributions made to the pension plan after the measurement date, and OPEB contributions after measurement date. A deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. In addition to liabilities, the Statement of Net Position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government has items that qualify for reporting in this category. Accordingly, the items are reported in the government-wide Statement of Net Position and the governmental funds balance sheet. These items are from the following sources:

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current and delinquent property taxes, pension changes in experience, changes in investment earnings, changes in proportionate share of contributions, OPEB changes in assumptions, 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.

6. Compensated Absences

It is the county’s policy to permit employees to accumulate earned but unused vacation and sick pay benefits. Upon termination of employment for any purpose other than retirement, all unused sick leave will be forfeited. All vacation pay is accrued when incurred in the government-wide financial statements for the county. The general policy of the Overton County School Department permits employees to accumulate vacation and sick days beyond year-end. Non-certified 12-month support personnel earn vacation days that may be accumulated beyond year-end. School support personnel earn personal days and are compensated for any unused days before the end of each fiscal year. The general policy of the School Department for professional personnel (teachers) permits the unlimited accumulation of unused sick leave days. Upon retirement, employees have the option of applying accumulated sick leave toward retirement in the Tennessee Consolidated Retirement System or receiving a lump sum payment of $20 per day for all days accumulated up to 200 days. Since the payment of sick leave is at the option of employees as they retire, the amount cannot be reasonably estimated and is not accrued in the government-wide financial statements for the county. All vacation pay is accrued when incurred in the government-wide financial statements for the discretely presented School Department. A liability for vacation pay is reported in governmental funds of the county and the School Department only if amounts have matured, for example, as a result of employee resignations and retirements.

7. Long-term Obligations

In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities Statement of Net Position. Debt premiums and discounts are deferred and are amortized over the life of the new debt using the straight-line method. Debt issuance costs are expensed in the period incurred. In refunding transactions, the difference between the reacquisition price and the net carrying amount of the old debt is reported as a deferred outflow of resources or a deferred inflow of resources and recognized as a component of interest expense in a systematic and rational manner over the remaining life of the refunded debt or the life of the new debt issued, whichever is shorter.

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

8. Net Position and Fund Balance In the government-wide financial statements, equity is classified as net position and displayed in three components: a. Net investment in capital assets – Consists of capital assets,

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

b. Restricted net position – Consists of net position with constraints placed on 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, 2018, Overton County had $5,605,000 in outstanding debt for the discretely presented Overton County School Department and $8,130,000 in outstanding debt for the Overton County Health and Rehab Center. This debt is a liability of Overton County, but the capital assets acquired are reported in the financial statements of the School Department and the Health and Rehab Center.

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

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be reduced first, followed by assigned amounts, and then unassigned amounts when expenditures are incurred for purposes for which amounts in any of these unrestricted fund balance classifications could be used.

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

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

Restricted Fund Balance – includes amounts that have constraints placed on the use of the resources that are either (a) externally imposed by creditors, grantors, contributors or laws and regulations of other governments or (b) imposed by law through constitutional provisions or enabling legislation. Committed Fund Balance – includes amounts that can only be used for specific purposes pursuant to constraints imposed by formal resolutions of the county commission, the county’s highest level of decision-making authority and the Board of Education, the School Department’s highest level of decision-making authority, and shall remain binding unless removed in the same manner.

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

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

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9. Restatements In prior years, the government was required to recognize a liability for its other postemployment benefits plans under Governmental Accounting Standards Board (GASB) Statement No. 45. As of July 1, 2017, Overton County has adopted the provisions of GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. Restatements increasing the beginning net position of the Governmental Activities of the primary government by $2,078 and reducing the beginning net position of the discretely presented Overton County School Department by $2,572,573, have been recognized to account for the transitional requirements.

E. Pension Plans

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

F. Other Postemployment Benefit (OPEB) Plans

Primary Government For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, have been determined on the same basis as they are reported by

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Overton County. For this purpose, Overton County recognizes benefit payments when due and payable in accordance with benefit terms. Overton County’s OPEB plan is not administered through a trust. Discretely Presented Overton County School Department

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

II. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL

STATEMENTS A. Explanation of certain differences between the governmental fund

balance sheet and the government-wide Statement of Net Position

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

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

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

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III. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY A. Budgetary Information

Annual budgets are adopted on a basis consistent with generally accepted accounting principles (GAAP) for all governmental funds except the Constitutional Officers - Fees Fund (special revenue fund), which is not budgeted, and the capital projects funds, which adopts project length budgets. All annual appropriations lapse at fiscal year end.

The county is required by state statute to adopt annual budgets. Annual budgets are prepared on the basis in which current available funds must be sufficient to meet current expenditures. Expenditures and encumbrances may not legally exceed appropriations authorized by the county commission and any authorized revisions. Unencumbered appropriations lapse at the end of each fiscal year.

The budgetary level of control is at the major category level established by the County Uniform Chart of Accounts, as prescribed by the Comptroller of the Treasury of the State of Tennessee. Major categories are at the department level (examples of General Fund major categories: County Commission, Board of Equalization, County Executive, County Attorney, etc.). Management may make revisions within major categories, but only the county commission may transfer appropriations between major categories. During the year, several supplementary appropriations were necessary.

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.

At June 30, 2018, the discretely presented Overton County School Department reported the following encumbrances:

Fund Amount

Discretely Presented Overton County School Department: General Purpose School $ 13,390

B. Cash Shortages – Prior and Current Year

The State Comptroller issued a special report dated June 4, 2012, regarding allegations of suspected irregularities at the Millard Oakley Public Library, which is a department of the county’s General Fund. The investigation revealed a cash shortage of $5,999.53 at March 2, 2012, which was attributed to alleged illegal activity by the library’s deputy director. Refunds by the bank and funds returned by the deputy director reduced the shortage to $3,709.95 at March 26, 2012. On February 18, 2014, the defendant pled guilty to theft of

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property over $1,000 and received a three-year sentence suspended to three years of supervised probation and 100 hours community service as well as being ordered to pay restitution of $3,709.95. This shortage is not reflected in the financial statements of Overton County at June 30, 2018, due to the uncertainty of collection. Restitution of $440 was received during the prior and current years leaving a balance of $2,710 at June 30, 2018. Details of the shortage may be found on the Comptroller’s website at www.comptroller.tn.gov.

C. Cash Overdraft

The discretely presented School Federal Projects Fund had a cash overdraft of $6,280 at June 30, 2018. This cash overdraft resulted from the issuance of warrants exceeding cash on deposit with the county trustee. The cash overdraft was liquidated subsequent to June 30, 2018.

D. Investigations by Comptroller’s Office

The Comptroller of the Treasury, Division of Investigations, conducted an investigation related to allegations received involving the Overton/Pickett County Emergency Communications District. The investigation resulted in a report dated April 24, 2018, and noted questionable expenditures. That report is available on the Comptroller of the Treasury’s website https://comptroller.tn.gov. A review by the Comptroller’s Division of Investigations, is ongoing in the School Department. Findings, if any, resulting from the review will be included in a subsequent report.

IV. DETAILED NOTES ON ALL FUNDS

A. Deposits and Investments Overton County and the Overton 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

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http://www.comptroller.tn.gov/

https://comptroller.tn.gov/

required to secure these public deposits must equal at least 105 percent of the average daily balance of public deposits held. Collateral securities required to be pledged by the participating banks to protect their public fund accounts are pledged to the state treasurer on behalf of the bank collateral pool. The securities pledged to protect these accounts are pledged in the aggregate rather than against each account. The members of the pool may be required by agreement to pay an assessment to cover any deficiency. Under this additional assessment agreement, public fund accounts covered by the pool are considered to be insured for purposes of credit risk disclosure. For deposits with financial institutions that do not participate in the bank collateral pool, state statutes require that all deposits be collateralized with collateral whose market value is equal to 105 percent of the uninsured amount of the deposits. The collateral must be placed by the depository bank in an escrow account in a second bank for the benefit of the county. Investments Legal Provisions. Counties are authorized to make direct investments in bonds, notes, or treasury bills of the U.S. government and obligations guaranteed by the U.S. government or any of its agencies; deposits at state and federal chartered banks and savings and loan associations; bonds of any state or political subdivision rated A or higher by any nationally recognized rating service; nonconvertible debt securities of certain federal government sponsored enterprises; and the county’s own legally issued bonds or notes. These investments may not have a maturity greater than two years. The county may make investments with longer maturities if various restrictions set out in state law are followed. Counties are also authorized to make investments in the State Treasurer’s Investment Pool and in repurchase agreements. Repurchase agreements must be approved by the state Comptroller’s Office and executed in accordance with procedures established by the State Funding Board. Securities purchased under a repurchase agreement must be obligations of the U.S. government or obligations guaranteed by the U.S. government or any of its agencies. When repurchase agreements are executed, the purchase of the securities must be priced at least two percent below the fair value of the securities on the day of purchase. Investment Balances. As of June 30, 2018, Overton County had the following investments carried at amortized cost using a Stable Net Asset Value. All investments are in the county trustee’s investment pool. Separate disclosures concerning pooled investments cannot be made for Overton County and the discretely presented Overton County School Department since both pool their deposits and investments through the county trustee.

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WeightedAverage Maturity Amortized

Investment (days) Maturity Cost

State Treasurer's Investment Pool 2 to 113 N/A $ 15,426,453

Interest Rate Risk. Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. State statutes limit the maturities of certain investments as previously disclosed. Overton County does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. Credit Risk. Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. State statutes limit the ratings of certain investments as previously explained. Overton County has no investment policy that would further limit its investment choices. As of June 30, 2018, Overton County’s investment in the State Treasurer’s Investment Pool was unrated.

B. Capital Assets

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

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Primary Government Governmental Activities:

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

Capital Assets Not Depreciated:Land $ 661,901 $ 38,500 $ 0 $ 700,401Intangibles Assets -

Indefinite Life 10,701 0 0 10,701Total Capital Assets Not Depreciated $ 672,602 $ 38,500 $ 0 $ 711,102

Capital Assets Depreciated:Buildings and Improvements $ 10,814,471 $ 0 $ 0 $ 10,814,471Infrastructure 13,465,237 746,913 0 14,212,150Other Capital Assets 6,763,681 558,089 (283,646) 7,038,124Total Capital Assets Depreciated $ 31,043,389 $ 1,305,002 $ (283,646) $ 32,064,745

Less Accumulated Depreciation For:Buildings and Improvements $ 3,968,280 $ 197,278 $ 0 $ 4,165,558Infrastructure 4,186,606 75,564 0 4,262,170Other Capital Assets 5,126,676 454,604 (268,522) 5,312,758Total Accumulated Depreciation $ 13,281,562 $ 727,446 $ (268,522) $ 13,740,486

Total Capital Assets Depreciated, Net $ 17,761,827 $ 577,556 $ (15,124) $ 18,324,259

Governmental Activities Capital Assets, Net $ 18,434,429 $ 616,056 $ (15,124) $ 19,035,361

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

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Governmental Activities:

General Government $ 33,707Finance 2,130Administration of Justice 8,435Public Safety 335,406Public Health and Welfare 155,934Social, Cultural, and Recreational Services 28,475Highways/Public Works 163,359

Total Depreciation Expense - Governmental Activities $ 727,446

Discretely Presented Overton County School Department Governmental Activities:


Capital Assets Not Depreciated:Land $ 457,163 $ 0 $ 0 $ 457,163Construction on Progress 0 0 0 0Total Capital Assets Not Depreciated $ 457,163 $ 0 $ 0 $ 457,163

Capital Assets Depreciated:Buildings and Improvements $ 23,894,657 $ 0 $ 0 $ 23,894,657Infrastructure 963,193 0 0 963,193Other Capital Assets 3,814,897 159,588 (596,440) 3,378,045Total Capital Assets Depreciated $ 28,672,747 $ 159,588 $ (596,440) $ 28,235,895

Less Accumulated Depreciation For:Buildings and Improvements $ 10,880,366 $ 464,978 $ 0 $ 11,345,344Infrastructure 345,457 22,692 0 368,149Other Capital Assets 2,061,666 173,307 (569,704) 1,665,269Total Accumulated Depreciation $ 13,287,489 $ 660,977 $ (569,704) $ 13,378,762

Total Capital Assets Depreciated, Net $ 15,385,258 $ (501,389) $ (26,736) $ 14,857,133

Governmental Activities Capital Assets, Net $ 15,842,421 $ (501,389) $ (26,736) $ 15,314,296

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

Instruction $ 475,561Support Services 185,416

Total Depreciation Expense - Governmental Activities $ 660,977

C. Interfund Receivables, Payables, and Transfers

The composition of interfund balances as of June 30, 2018, was as follows:

Due to/from Other Funds:

Receivable Fund Payable Fund Amount

Primary Government:General Nonmajor governmental $ 12,876

Discretely Presented SchoolDepartment:

General Purpose School Nonmajor governmental 9,683

These balances resulted from the time lag between the dates that interfund goods and services are provided or reimbursable expenditures occur and payments between funds are made. The receivable in the General Purpose School Fund totaling $9,683 was in transit from the School Federal Projects Fund at June 30, 2018. Due to/from Primary Government and Component Units:

Receivable Fund Payable Fund Amount

Primary Government: Component Units:Governmental Activities School Department $ 5,605,000" Health and Rehab Center 8,130,000

The amounts reflected as Due to the Primary Government from the discretely presented component units on the government-wide Statement of Net Position represent debt issued by the primary government for the component units, the principal of which is being contributed by the component units to the primary government to retire the debt.

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

following amounts: Primary Government

General Transfers Out Fund

Solid Waste/Sanitation Fund $ 32,000 Operations

Total $ 32,000

Purpose

Transfers In

Discretely Presented Overton County School Department

General NonmajorPurpose Govern-School mental

Transfers Out Fund Fund Purpose

General Purpose School Fund $ 0 $ 412,178 Debt retirementNonmajor governmental fund 25,109 0 Indirect cost

Total $ 25,109 $ 412,178

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 Overton County issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities for the primary government, the discretely presented School Department, and the discretely presented Overton County Health and Rehab Center. In addition, general obligation bonds have been issued to refund other general obligation bonds. Capital outlay notes are also issued to fund capital facilities and other capital outlay purchases, such as equipment.

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General obligation bonds are direct obligations and pledge the full faith and credit of the government. General obligation bonds outstanding were issued for original terms of up to 25 years. Repayment terms are generally structured with increasing amounts of principal maturing as interest requirements decrease over the term of the debt. All bonds payable included in long-term debt as of June 30, 2018, will be retired from the General Debt Service Fund. General obligation bonds outstanding as of June 30, 2018, for governmental activities are as follows:

OriginalInterest Final Amount Balance

Type Rate Maturity of Issue 6-30-18

General Obligation Bonds 2.58 to 4.5 % 4-1-42 $ 10,765,000 $ 8,771,777General Obligation Bonds -

Refunding 2 to 4.1 6-1-25 13,965,000 8,145,000

The annual requirements to amortize all general obligation bonds and notes as of June 30, 2018, including interest payments, are presented in the following tables: Year EndingJune 30 Interest Total

2019 $ 1,505,798 $ 541,324 $ 2,047,1222020 1,543,534 501,442 2,044,9762021 1,571,393 460,124 2,031,5172022 1,634,381 409,410 2,043,7912023 1,692,503 356,658 2,049,1612024-2028 4,449,168 1,010,276 5,459,4442029-2033 2,250,000 567,476 2,817,4762034-2038 1,180,000 292,912 1,472,9122039-2042 1,090,000 89,863 1,179,863

Total $ 16,916,777 $ 4,229,485 $ 21,146,262

BondsPrincipal

There is $1,132,737 available in the General Debt Service Fund and $605,592 in the School Department’s Education Debt Service Fund to service long-term debt. Bonded debt per capita totaled $766, based on the 2010 federal census. The School Department and the Overton County Health and Rehab Center are 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

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Government in the financial statements of the School Department and the Health and Rehab Center as Due from Component Units in the financial statements of the primary government.

Description of Indebtedness

Bonds PayableContributions from the Health and Rehab Center

Nursing Home Improvements $ 3,165,000Nursing Home Renovation and Construction 4,965,000

Contributions from the Education Debt Service FundSchool Refunding Series 2014 1,450,000School Refunding Series 2015 4,155,000

Total $ 13,735,000

Outstanding 6-30-18

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

Bonds Notes

Balance, July 1, 2017 $ 18,249,957 $ 729,208Additions 0 0Reductions (1,333,180) (729,208)

Balance, June 30, 2018 $ 16,916,777 $ 0

Balance Due Within One Year $ 1,505,798 $ 0

Other

Balance, July 1, 2017 $ 686,918 $ 95,905 $ 32,551Additions 66,351 275,837 57,011Reductions (68,143) (239,883) (32,281)

Balance, June 30, 2018 $ 685,126 $ 131,859 $ 57,281

Balance Due Within One Year $ 0 $ 98,895 $ 8,183

Benefits*Postemployment Compensated

Absences

LandfillPostclosure

CareCosts

* Restated Beginning Balance – See Note I.D.9.

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Analysis of Noncurrent Liabilities Presented on Exhibit A:

Total Noncurrent Liabilities, June 30, 2018 $ 17,791,043Less: Balance Due Within One Year (1,612,876)

Noncurrent Liabilities - Due in More Than One Year - Exhibit A $ 16,178,167

Compensated absences and other postemployment benefits will be paid from the employing funds, primarily the General and Highway/Public Works funds. Landfill postclosure care costs will be paid from the Solid Waste/Sanitation Fund.


Changes in Long-term Obligations Long-term obligations activity for the discretely presented Overton County School Department for the year ended June 30, 2018, was as follows: Governmental Activities:

Net PensionLiability -

Other TeacherPostemployment Compensated Retirement

Benefits* Absences Plan#

Balance, July 1, 2017 $ 5,487,717 $ 233,174 $ 1,971,325Additions 420,891 38,937 9,547Reductions (544,598) (74,749) (2,083,707)

Balance, June 30, 2018 $ 5,364,010 $ 197,362 $ (102,835)

Balance Due Within One Year $ 0 $ 38,937 $ 0

* Restated Beginning Balance – See Note I.D.9. # At June 30, 2018, the Teacher Legacy Plan had a net pension asset. Analysis of Noncurrent Liabilities Presented on Exhibit A:

Total Noncurrent Liabilities, June 30, 2018 $ 5,561,372Less: Balance Due Within One Year (38,937)

Noncurrent Liabilities - Due in More Than One Year - Exhibit A $ 5,522,435

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

E. On-Behalf Payments


The State of Tennessee pays health insurance premiums for retired teachers on-behalf of the Overton County School Department. These payments are made by the state to the Local Education Group Insurance Plan and the Medicare Supplement Plan. Both 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, 2018, were $84,122 and $52,193, 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

Overton County general government’s risks of loss relating to general liability, property, casualty, and workers’ compensation are covered by participation in the Local Government Property and Casualty Fund (LGPCF) and the Local Government Workers’ Compensation Fund, which are public entity risk pools established by the Tennessee County Services Association. The county pays annual premiums to the pools for the risk coverage noted above. The creation of these pools provides for them to be self-sustaining through member premiums. The LGPCF reinsures through commercial insurance companies for claims exceeding $100,000 for each insured event.

Overton County provides health insurance coverage to its employees through the Local Government Group Insurance Fund (LGGIF), a public entity risk pool established to provide a program of health insurance coverage for employees of local governments and quasi-governmental entities that was established for the primary purpose of providing services for or on behalf of state and local governments. In accordance with Section 8-27-207, Tennessee Code Annotated (TCA), all local governments and quasi-governmental entities described above are eligible to participate. The LGGIF is included in the Comprehensive Annual Financial Report of the State of Tennessee, but the state does not retain any risk for losses by the fund. The state statute provides for the LGGIF to be self-sustaining through member premiums. The discretely presented Overton County School Department participates in the Tennessee Risk Management Trust (TN-RMT), which is a public entity risk pool created under the auspices of the Tennessee Governmental Tort Liability Act to provide governmental insurance coverage. The School Department pays annual

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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. The School Department participates in the Local Education Group Insurance Fund (LEGIF), a public entity risk pool established to provide a program of health insurance coverage for employees of local education agencies. In accordance with Section 8-27-301, TCA, all local education agencies are eligible to participate. The LEGIF is included in the Comprehensive Annual Financial Report of the State of Tennessee, but the state does not retain any risk for losses by this fund. Section 8-27-303, TCA, provides for the LEGIF to be self-sustaining through member premiums.

B. Accounting Changes Provisions of Governmental Accounting Standards Board (GASB) Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions; Statement No. 81, Irrevocable Split-Interest Agreements; Statement No. 85, Omnibus 2017; and Statement No. 86, Certain Debt Extinguishment Issues became effective for the year ended June 30, 2018. GASB Statement No. 75, establishes accounting and reporting requirements for postemployment benefits other than pensions (other postemployment benefits or OPEB), which are included in the general purpose financial reports of state and local governmental OPEB plans. This statement replaces GASB Statements No. 45 and No. 57. The scope of this statement establishes standards for recognizing and measuring liabilities, deferred outflows of resources, deferred inflows of resources, and expense/expenditures. For defined benefit OPEB, this statement identifies the methods and assumptions that are required to be used to project benefit payments, discount projected benefit payments to their actuarial present value, and attribute that present value to periods of employee service. Note disclosure and required supplementary information requirements about defined benefit OPEB also are addressed. GASB Statement No. 81, establishes accounting and financial reporting guidance for irrevocable split-interest agreements in which a government is a beneficiary. GASB Statement No. 85, addresses practice issues that have been identified during implementation and application of certain GASB Statements. This statement addresses a variety of topics including issues related to blending component units, goodwill, fair value measurement and application, and postemployment benefits (pensions and other postemployment benefits [OPEB]). GASB Statement No. 86, establishes guidance for transactions in which cash and other monetary assets acquired with only existing resources—resources

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other than the proceeds of refunding debt—are placed in an irrevocable trust for the sole purpose of extinguishing debt. This statement also provides guidance for accounting and financial reporting for prepaid insurance on debt that is extinguished and notes to financial statements for debt that is defeased in substance.

C. Contingent Liabilities

The county and the sheriff are defendants in litigation seeking damages for alleged negligence and recklessness related to an accident involving a sheriff’s deputy. This case is in its early stages; therefore, the county attorney could not provide us an estimated outcome of this case. The county is involved in several other pending lawsuits. Attorneys representing the county estimate that the potential claims against the county not covered by insurance resulting from such litigation would not materially affect the financial statements of the county.

D. Landfill Postclosure Care Costs

Overton 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 landfill site when it stops accepting waste and to perform certain maintenance and monitoring functions at the site for 30 years after closure. These closure and postclosure care costs generally are paid near or after the date that the landfill stops accepting waste. Overton County closed its landfill in 1994. The Solid Waste/Sanitation Fund reports the postclosure care costs of the closed landfill as expenditures in each period in which they are incurred. The $57,281 reported as landfill postclosure care liability at June 30, 2018, represents the net amount reported to date based on 100 percent use of the estimated capacity of the landfill. Actual costs may be higher due to inflation, changes in technology, or changes in regulations.

E. Joint Venture The Thirteenth Judicial District Drug Task Force (DTF) is a joint venture formed by an interlocal agreement between the district attorney general of the Thirteenth Judicial District, Clay, Cumberland, DeKalb, Overton, Pickett, Putnam, and White counties, and participating municipalities within the district. The purpose of the DTF is to provide multi-jurisdictional law enforcement to promote the investigation and prosecution of drug-related activities. Funds for the operations of the DTF come primarily from federal grants, drug fines, and the forfeiture of drug-related assets to the DTF. The DTF is overseen by the district attorney general and is governed by a board of

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directors including the district attorney general, sheriffs, and police chiefs of participating law enforcement agencies within each judicial district. Overton County did not make appropriations to the DTF for the year ended June 30, 2018. Overton County does not have an equity interest in the DTF. Complete financial statements for the DTF can be obtained from its administrative office at the following address:

Administrative Office:

Office of District Attorney General Thirteenth Judicial District Drug Task Force

1519A East Spring Street Cookeville, TN 38506

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

Primary Government General Information About the Pension Plan Plan Description. Employees of Overton County, non-certified employees of the discretely presented Overton County School Department, and employees of the discretely presented Overton County Health and Rehab Center 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 42.05 percent, the non-certified employees of the discretely presented School Department comprise 33.67 percent, and the discretely presented Overton County Health and Rehab Center comprise 24.29 percent of the plan based on contribution data. The TCRS was created by state statute under Tennessee Code Annotated (TCA), Title 8, Chapters 34-37. The TCRS Board of Trustees is responsible for the proper operation and administration of the TCRS. The Tennessee Treasury Department, an agency in the legislative branch of state government, administers the plans of the TCRS. The TCRS issues a publicly available financial report that can be obtained at www.treasury.tn.gov/tcrs. Benefits Provided. TCA, Title 8, Chapters 34-37 establish the benefit terms and can be amended only by the Tennessee General Assembly. The chief legislative body may adopt the benefit terms permitted by statute. Members are eligible to retire with an unreduced benefit at age 60 with five years of service credit or after 30 years of service credit regardless of age. Benefits are determined by a formula using the member’s highest five consecutive year average compensation and

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the member’s years of service credit. Reduced benefits for early retirement are available to vested members at age 55. Members vest with five years of service credit. Service related disability benefits are provided regardless of length of service. Five years of service is required for non-service related disability eligibility. The service related and non-service related disability benefits are determined in the same manner as a service retirement benefit but are reduced ten percent and include projected service credits. A variety of death benefits is available under various eligibility criteria. Member and beneficiary annuitants are entitled to an automatic cost of living adjustment (COLA) after retirement. A COLA is granted each July for annuitants retired prior to the second of July of the previous year. The COLA is based on the change in the consumer price index (CPI) during the prior calendar year, capped at three percent, and applied to the current benefit. No COLA is granted if the change in the CPI is less than one-half percent. A one percent COLA is granted if the CPI change is between one-half percent and one percent. A member who leaves employment may withdraw their employee contributions plus any accumulated interest. Employees Covered by Benefit Terms. At the measurement date of June 30, 2017, the following employees were covered by the benefit terms: Inactive Employees or Beneficiaries Currently Receiving Benefits 207Inactive Employees Entitled to But Not Yet Receiving Benefits 464Active Employees 411

Total 1,082

Contributions. Contributions for employees are established in the statutes governing the TCRS and may only be changed by the Tennessee General Assembly. Employees contribute five percent of salary. Overton County makes employer contributions at the rate set by the Board of Trustees as determined by an actuarial valuation. For the year ended June 30, 2018, the employer contribution for Overton County was $606,389 based on a rate of 5.38 percent of covered payroll. By law, employer contributions are required to be paid. The TCRS may intercept Overton 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.

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Net Pension Liability (Asset) Overton County’s net pension liability (asset) was measured as of June 30, 2017, and the total pension liability (asset) used to calculate net pension liability (asset) was determined by an actuarial valuation as of that date. Actuarial Assumptions. The total pension liability as of the June 30, 2017, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:

Inflation 2.5%Salary Increases Graded Salary Ranges from 8.72%

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

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

Cost of Living Adjustment 2.25%

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

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PercentageLong-termExpected PercentageReal Rate Target

Asset Class of Return Allocations

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

Total 100 %

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

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Changes in the Net Pension Liability (Asset)

Total Plan Net PensionPension Fiduciary LiabilityLiability Net Position (Asset)

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

Balance, July 1, 2016 $ 26,079,361 $ 26,665,670 $ (586,309)

Changes for the Year: Service Cost $ 963,413 $ 0 $ 963,413 Interest 1,984,413 0 1,984,413 Differences Between Expected and Actual Experience 85,227 0 85,227 Changes in Assumptions 648,060 0 648,060 Contributions-Employer 0 581,712 (581,712) Contributions-Employees 0 547,104 (547,104) Net Investment Income 0 3,017,854 (3,017,854) Benefit Payments, Including Refunds of Employee Contributions (1,167,868) (1,167,868) 0 Administrative Expense 0 (35,061) 35,061 Other Changes 0 0 0Net Changes $ 2,513,245 $ 2,943,741 $ (430,496)

Balance, June 30, 2017 $ 28,592,606 $ 29,609,411 $ (1,016,805)

Increase (Decrease)

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

Plan NetTotal Fiduciary Pension

Pension Net LiabilityLiability Position (Asset)

Primary Government 42.05% $ 12,023,191 $ 12,450,757 $ (427,567)Health and Rehab. 24.29% 6,945,144 7,192,126 (246,982)School Department 33.67% 9,627,130 9,969,489 (342,358)

Total $ 28,592,606 $ 29,609,411 $ (1,016,805)

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

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Current1% Discount 1%

Decrease Rate IncreaseOverton County 6.25% 7.25% 8.25%

Net Pension Liability $ 2,823,715 $ (1,016,805) $ (4,188,330)

Pension Expense (Income) and Deferred Outflows of Resources and Deferred Inflows of Resources to Pensions Pension Expense or Negative Pension Expense. For the year ended June 30, 2018, Overton County recognized pension expense of $191,711. Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2018, Overton 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 $ 186,664 $ 828,031Net Difference Between Projected and Actual Earnings on Pension Plan Investments 0 6,816Changes in Assumptions 518,448 0Contributions Subsequent to the Measurement Date of June 30, 2017 (1) 606,389 N/A

Total $ 1,311,501 $ 834,847

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

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

Deferred DeferredOutflows of Inflows ofResources Resources

Primary Government $ 550,884 $ 351,052

Health and Rehab. 342,952 202,784

School Department 417,665 281,011

Total $ 1,311,501 $ 834,847

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

Year EndingJune 30 Amount

2019 $ (246,926)2020 145,7472021 28,9232022 (57,485)2023 0Thereafter 0

In the table shown above, positive amounts will increase pension expense while negative amounts will decrease pension expense. Discretely Presented Overton County School Department Non-certified Employees General Information About the Pension Plan Plan Description. As noted above under the primary government, employees of Overton County, non-certified employees of the discretely presented Overton County School Department, and employees of the discretely presented Overton County Health and Rehab Center 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 42.05 percent, the non-certified employees of the discretely

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presented School Department comprise 33.67 percent, and the discretely presented Overton County Health and Rehab Center comprise 24.29 percent of the plan based on contribution data. Certified Employees Teacher Retirement Plan General Information About the Pension Plan Plan Description. Teachers of the Overton 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

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than one-half percent. A one percent COLA is granted if the CPI change is between one-half percent and one percent. Members who leave employment may withdraw their employee contributions, plus any accumulated interest. Under the Teacher Retirement Plan, benefit terms and conditions, including COLA, can be adjusted on a prospective basis. Moreover, there are defined cost controls and unfunded liability controls that provide for the adjustment of benefit terms and conditions on an automatic basis. Contributions. Contributions for teachers are established in the statutes governing the TCRS and may only be changed by the Tennessee General Assembly or by automatic cost controls set out in law. Teachers are required to contribute five percent of their salary to the plan. The Local Education Agencies (LEAs) make employer contributions at the rate set by the Board of Trustees as determined by an actuarial valuation. Per the statutory provisions governing TCRS, the employer contribution rate cannot be less than four percent, except in years when the maximum funded level, approved by the TCRS Board of Trustees, is reached. By law, employer contributions for the Teacher Retirement Plan are required to be paid. The TCRS may intercept the state shared taxes of the sponsoring governmental entity of the LEA if the required employer contributions are not remitted. Employer contributions for the year ended June 30, 2018, to the Teacher Retirement Plan were $40,991, which is four percent of covered payroll. The employer rate, when combined with member contributions, is expected to finance the costs of benefits earned by members during the year, the cost of administration, as well as an amortized portion of any unfunded liability. Pension Liabilities (Assets), Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions Pension Liabilities (Assets). At June 30, 2018, the School Department reported a liability (asset) of ($33,781) for its proportionate share of the net pension liability (asset). The net pension liability (asset) was measured as of June 30, 2017, and the total pension liability (asset) used to calculate the net pension liability (asset) was determined by an actuarial valuation as of that date. The School Department’s proportion of the net pension liability (asset) was based on the School Department’s share of contributions to the pension plan relative to the contributions of all participating LEAs. At the measurement date of June 30, 2017, the School Department’s proportion was .128041 percent. The proportion as of June 30, 2016, was .121048 percent. Pension Expense. For the year ended June 30, 2018, the School Department recognized pension expense of $15,239.

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Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2018, the School Department reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:



Difference Between Expected and Actual Experience $ 1,184 $ 2,541Net Difference Between Projected and Actual Earnings on Pension Plan Investments 0 1,818Changes in Assumptions 2,968 0Changes in Proportion of Net Pension Liability (Asset) 0 870LEA's Contributions Subsequent to the Measurement Date of June 30, 2017 (1) 40,991 N/A

Total $ 45,143 $ 5,229

The School Department’s employer contributions of $40,991, reported as pension related deferred outflows of resources subsequent to the measurement date, will be recognized as an increase of net pension asset in the year ending June 30, 2019. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:


2019 $ (246)2020 (246)2021 (350)2022 (818)2023 39Thereafter 542

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

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

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Total 100 %

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

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

Net Pension Liability $ 6,740 $ (33,781) $ (63,505)

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 Overton 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

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55. Members are vested with five years of service credit. Service related disability benefits are provided regardless of length of service. Five years of service is required for non-service related disability eligibility. The service related and non-service related disability benefits are determined in the same manner as a service retirement benefit but are reduced ten percent and include projected service credits. A variety of death benefits is available under various eligibility criteria. Member and beneficiary annuitants are entitled to an automatic cost of living adjustment (COLA) after retirement. A COLA is granted each July for annuitants retired prior to the second of July of the previous year. The COLA is based on the change in the consumer price index (CPI) during the prior calendar year, capped at three percent, and applied to the current benefit. No COLA is granted if the change in the CPI is less than one-half percent. A one percent COLA is granted if the CPI change is between one-half and one percent. A member who leaves employment may withdraw their employee contributions, plus any accumulated interest. Under the Teacher Legacy Pension Plan, benefit terms and conditions, including COLAs can be adjusted on a prospective basis. Moreover, there are defined cost controls and unfunded liability controls that provide for the adjustment of benefit terms and conditions on an automatic basis. Contributions. Contributions for teachers are established in the statutes governing the TCRS and may only be changed by the Tennessee General Assembly. Teachers are required to contribute five percent of their salaries. The Local Education Agencies (LEAs) make employer contributions at the rate set by the Board of Trustees as determined by an actuarial valuation. By law, employer contributions for the Teacher Legacy Pension Plan are required to be paid. The TCRS may intercept the state shared taxes of the sponsoring governmental entity of the LEA if the required employer contributions are not remitted. Employer contributions by the Overton County School Department for the year ended June 30, 2018, to the Teacher Legacy Pension Plan were $1,007,420, which is 9.08 percent of covered payroll. The employer rate, when combined with member contributions, is expected to finance the costs of benefits earned by members during the year, the cost of administration, as well as an amortized portion of any unfunded liability. Pension Liabilities (Assets), Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions Pension Liability (Assets). At June 30, 2018, the School Department reported a liability (asset) of ($102,835) for its proportionate share of the net pension liability (asset). The net pension liability (asset) was measured as of June 30, 2017, and the total pension liability used to calculate the net pension liability (asset) was determined by an actuarial valuation as of that date. The School Department’s

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proportion of the net pension liability (asset) was based on the School Department’s long-term share of contributions to the pension plan relative to the contributions of all participating LEAs. At the measurement date of June 30, 2017, the School Department’s proportion was .314304 percent. The proportion measured at June 30, 2016, was .315440 percent. Pension Expense. For the year ended June 30, 2018, the School Department recognized pension expense of $169. Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2018, the School Department reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:



Difference Between Expected and Actual Experience $ 61,996 $ 2,123,062Changes in Assumptions 870,954 0Net Difference Between Projected and Actual Earnings on Pension Plan Investments 15,610 0Changes in Proportion of Net Pension Liability (Asset) 84,198 109,428LEA's Contributions Subsequent to the Measurement Date of June 30, 2017 1,007,420 N/A

Total $ 2,040,178 $ 2,232,490

The School Department’s employer contributions of $1,007,420 reported as pension related deferred outflows of resources subsequent to the measurement date, will be recognized as a decrease in net pension liability in the year ending June 30, 2019. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

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2019 $ (736,857)2020 315,1652021 (266,039)2022 (511,999)2023 0Thereafter 0

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





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

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




Total 100 %

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

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

Net Pension Liability $ 9,227,241 $ (102,835) $ (7,814,758)

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

2. Deferred Compensation

Primary Government Beginning October 1, 2016, Overton County offers its employees two deferred compensation plans, one established pursuant to IRC Section 457 and the other pursuant to IRC Section 401(k). All costs of administering and funding these programs are the responsibility of plan participants. The Section 401(k) and Section 457 plan assets remain the property of the contributing employees and are not presented in the accompanying financial statements. IRC Sections 401(k) and 457 establish participation, contribution, and withdrawal provisions for the plans. Discretely Presented Overton County School Department The discretely presented Overton County School Department offers its employees two deferred compensation plans, each established pursuant to IRC Section 403(b). All costs of administering and funding these programs are the responsibility of plan participants. The Section 403(b) plan assets remain the property of the contributing employees and are not presented in the accompanying financial statements. IRC Section 403(b) establishes participation, contribution, and withdrawal provisions for the plans. Teachers hired after July 1, 2014, by the School Department are required to participate in a hybrid pension plan consisting of a defined benefit portion, which is detailed in the pensions footnote above and is

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managed by the Tennessee Consolidated Retirement System, and a defined contribution portion, which is placed into the state’s 401 (K) plan and is managed by the employee. The defined contribution portion of the plan requires that the School Department contribute five percent of each teacher’s salary into their deferred compensation plan. In addition, teachers are required to contribute two percent of their salaries into this deferred compensation plan, unless they opt out of the employee portion. During the year the School Department contributed $46,974 and teachers contributed $10,158 to this deferred compensation pension plan.

G. Other Postemployment Benefits (OPEB)

Overton County and the discretely presented Overton County School Department provide OPEB benefits to its retirees under various OPEB plans. These include OPEB provided through state administered public entity risk pools and commercial health insurance plans. For reporting purposes, the plans are considered single employer defined benefit OPEB plans based on criteria in Statement No. 75 of the Governmental Accounting Standards Board (GASB). The plans are funded on a pay-as-you-go basis and there are no assets accumulating in a trust that meets the criteria of paragraph 4 of GASB Statement No. 75. OPEB Provided through State Administered Public Entity Risk Pools Primary Government Retirees of Overton County and the Overton County Highway Department (Hwy) are provided healthcare under separate Local Government Plans (LGPs) until they reach Medicare eligibility. The primary government’s LGPs are combined for presentation purposes.

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

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

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

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

Discount Rate 3.56%Healthcare Cost Trend Rates LGP -

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

Retirees Share of Benefit Related Cost Discussed under each plan

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

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

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

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Closed Local Government OPEB Plan (Primary Government)

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

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

Employees Covered by Benefit Terms

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

Overton HwyCounty Dept Total

Inactive Employees or Beneficiaries Currently Receiving Benefits 1 0 1Inactive Employees Entitled to But Not Yet Receiving Benefits 0 0 0Active Employees 110 19 129

Total 111 19 130

An insurance committee, created in accordance with TCA 8-27-701, establishes the required payments to the LGP by member employers and employees through the blended premiums established for active and retired

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employees. Claims liabilities of the plan are periodically computed using actuarial and statistical techniques to establish premium rates. For the fiscal year ended June 30, 2018, the county paid $4,358 (Overton County - $4,020, Highway Dept - $338) to the LGP for OPEB benefits as they came due.

Changes in the Total OPEB Liability

Overton Hwy Total OPEBCounty Dept. Liability

Balance July 1, 2016 $ 181,426 $ 49,512 $ 230,938Changes for the Year: Service Cost $ 15,735 $ 5,748 $ 21,483 Interest 5,707 1,614 7,321 Changes in Benefit Terms 0 0 Difference between 0 Expected and Actuarial Experience 0 0 Changes in Assumption and Other Inputs (9,653) (2,508) (12,161)

Benefit Payments (3,447) 0 (3,447)Net Changes $ 8,342 $ 4,854 $ 13,196

Balance June 30, 2017 $ 189,768 $ 54,366 $ 244,134

OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2018, the county recognized OPEB expense of $27,550 (Overton County - $20,467, Highway Dept - $7,083). At June 30, 2018, the county reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:



Difference Between Expected and Actual Experience (Overton County $0, Hwy $0) $ 0 $ 0Changes of Assumptions/Inputs (DI - County $8,678, Hwy $2,229) 0 10,907Net Difference Between Projected andBenefits paid after the measurement date (DO - County $4,020, Hwy $338) 4,358 0

Total $ 4,358 $ 10,907

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

Year Ending TotalJune 30 County Hwy Amount

2019 $ (975) $ (279) $ (1,254)2020 (975) (279) (1,254)2021 (975) (279) (1,254)2022 (975) (279) (1,254)2023 (975) (279) (1,254)Thereafter (3,803) (834) (4,637)

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


Decrease Rate Increase2.56% 3.56% 4.56%

County $ 205,026 $ 189,768 $ 175,364Hwy 58,281 54,366 50,707

Total OPEB Liability $ 263,307 $ 244,134 $ 226,071

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

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Current1% Trend 1%

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

County $ 167,238 189,768 216,584Hwy 48,508 54,366 61,265


Closed Tennessee Plan – Medicare (Primary Government) Plan Description. Employees of Overton County and the Overton County Highway Department who were hired prior to July 1, 2015, are provided with post-65 retiree health insurance benefits through the closed Tennessee Plan - Medicare (TNM) administered by the Tennessee Department of Finance and Administration. All eligible post-65 retirees and disability participants of local governments, who choose coverage, participate in the TNM. The TNM also includes eligible retirees of the state, certain component units of the state, and local education agencies. However, the amounts reflected in this note disclosure pertain only to the Overton County Primary Government. This plan is closed to the employees of all participating employers that were hired on or after July 1, 2015. Benefits Provided. The state offers the TNM to help fill most of the coverage gaps created by Medicare for eligible post-65 retirees and disabled participants of local governments. Insurance coverage is the only postemployment benefit provided to retirees. The TNM does not include pharmacy. In accordance with TCA 8-27-209, benefits of the TNM are established and amended by cooperation of insurance committees created by TCA Sections 8-27-201, 8-27-301 and 8-27-701. Retirees and disabled employees of the state, component units, local education agencies, and certain local governments who have reached the age of 65 are Medicare eligible and also receive a benefit from the Tennessee Consolidated Retirement System (TCRS) may participate in this plan. All plan members receive the same plan benefits at the same premium rates. Participating employers determine their own policy related to subsidizing the retiree premiums. Overton County provided a direct subsidy of $50 for eligible retirees with 30 or more years of service, $37.50 for eligible retirees with 20-29 years of service, and $20 for eligible retirees with less than 20 years of service. Employees Covered by Benefit Terms At the measurement date of June 30, 2017, the following employees were covered by the benefit terms:

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Overton HwyCounty Dept. Total

Inactive Employees or Beneficiaries Currently Receiving Benefits 7 0 7Inactive Employees Entitled to But Not Yet Receiving Benefits 1 0 1Active Employees 505 19 524

Total 513 19 532

In accordance with TCA 8-27-209, the state insurance committees established by TCA Sections 8-27-201, 8-27-301, and 8-27-701 determine the required payments to the plan by member employers and employees. Claims liabilities of the plan are periodically computed using actuarial and statistical techniques to establish premium rates. Administrative costs are allocated to plan participants. Employers contribute towards employee costs based on their own developed policies. For the fiscal year ended June 30, 2018, the county paid $4,201 ($4,088 county and $113 Highway Department) to the TNM for OPEB benefits as they came due.


Overton Hwy Total OPEBCounty Dept. Liability

Balance July 1, 2016 $ 442,397 $ 13,583 $ 455,980Changes for the Year: Service Cost $ 22,732 $ 849 $ 23,581 Interest 13,545 421 13,966 Changes in Benefit Terms 0 0 Difference between 0 Expected and Actuarial Experience 0 0 Changes in Assumption and Other Inputs (48,528) (1,457) (49,985)

Benefit Payments (2,550) 0 (2,550)Net Changes $ (14,801) $ (187) $ (14,988)

Balance June 30, 2017 $ 427,596 $ 13,396 $ 440,992

OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2018, the county recognized OPEB expense of $31,973 ($30,885 county and $1,088 Highway Department). At June 30, 2018, the county reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

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Difference Between Expected and Actual Experience (Overton County $0, $ 0 $ 0 Hwy $0)Changes of Assumptions/Inputs (Overton 0 44,411 County $43,136, Hwy $1,275)Net Difference Between Projected andBenefits Paid After the Measurement Date 4,201 0 (Overton County $4,088, Hwy $113)

Total $ 4,201 $ 44,411


Year Ending TotalJune 30 County Hwy Amount

2019 $ (5,392) $ (182) $ (5,574)2020 (5,392) (182) (5,574)2021 (5,392) (182) (5,574)2022 (5,392) (182) (5,574)2023 (5,392) (182) (5,574)Thereafter (16,176) (365) (16,541)

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

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Overton County $ 506,561 $ 427,596 $ 363,350 Hwy Dept. 15,758 13,396 11,453


Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rate. The premium subsidies provided to retirees in the TNM plan are assumed to remain unchanged for the entire projection period, therefore trend rates are not applicable to the plan calculations.

Closed Local Education (LEP) OPEB Plan (Discretely Presented School Department)

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

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

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SchoolDepartment

Inactive Employees or Beneficiaries Currently Receiving Benefits 25Inactive Employees Entitled to But Not Yet Receiving Benefits 0Active Employees 366

Total 391

A state insurance committee, created in accordance with TCA 8-27-301, establishes the required payments to the LEP by member employers and employees through the blended premiums established for active and retired employees. Claims liabilities of the plan are periodically computed using actuarial and statistical techniques to establish premium rates. Administrative costs are allocated to plan participants. Employers contribute towards employee costs based on their own developed policies. During the current reporting period, the School Department paid $190,523 to the LEP for OPEB benefits as they came due.

Changes in the Collective Total OPEB Liability

Overton County State ofSchool Department TN Total OPEB

65.17% 34.83% Liability

Balance July 1, 2016 $ 3,926,082 $ 2,098,741 $ 6,024,823Changes for the Year: Service Cost $ 220,152 $ 117,685 $ 337,837 Interest 118,651 63,426 182,077 Changes in Benefit Terms 0 0 0 Difference between Expected and Actuarial Experience 0 0 0 Changes in Assumption and Other Inputs (188,872) (100,964) (289,836)

Benefit Payments (165,694) (88,574) (254,268)Net Changes $ (15,763) $ (8,427) $ (24,190)

Balance June 30, 2017 $ 3,910,319 $ 2,090,314 $ 6,000,633

Share of Collective Liability

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The Overton County School Department has a special funding situation related to benefits paid by the State of Tennessee for its eligible retired employees participating in the LEP. The Overton County School Department's proportionate share of the collective total OPEB liability was based on a projection of the employers long-term share of benefit payments to the OPEB plan relative to the projected share of benefit payments of all participating employers and nonemployer contributing entities, actuarially determined. The School Department recognized $171,309 in revenue for subsidies provided by nonemployer contributing entities for benefits paid by the LEP for School Department retirees.

During the year, the Overton County School Department’s proportionate share of the collective OPEB liability was 65.17% and the State of Tennessee’s share was 34.83%.

OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2018, the School Department recognized OPEB expense of $491,775, including the state’s share of the expense. At June 30, 2018, the School Department reported deferred outflows of resources and deferred inflows of resources related to its proportionate share of OPEB from the following sources:



Difference Between Expected and Actual Experience $ 0 $ 0Changes of Assumptions/Inputs 0 170,535Changes in Proportion and Differences Between Amounts Paid as Benefits Came Due and Proportionate Share Amounts Paid by the Employee and Nonemployer Contributors As Benefits Came Due 0 0Benefits Paid After the Measurement Date 190,523 0

Total $ 190,523 $ 170,535


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Year Ending SchoolJune 30 Department

2019 $ (18,337)2020 (18,337)2021 (18,337)2022 (18,337)2023 (18,337)Thereafter (78,850)

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

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

1% Discount 1%Decrease Rate Increase

2.56% 3.56% 4.56%

Proportionate Share of the Collective Total OPEB Liability $ 4,207,788 $ 3,910,318 $ 3,626,569

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

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Healthcare Cost Trend Rate1% Curent 1%

Decrease Rates Increase6.5 to 2.71% 7.5 to 3.71% 8.5 to 4.71%

Proportionate Share of the Collective Total OPEB Liability $ 3,447,107 $ 3,910,318 $ 4,461,662

Closed Tennessee Plan – Medicare (Discretely Presented School Department)

Plan Description. Employees of the Overton County School Department, who were hired prior to July 1, 2015, are provided with post-65 retiree health insurance benefits through the closed Tennessee Plan - Medicare (TNM) administered by the Tennessee Department of Finance and Administration. All eligible post-65 retired teachers and disability participants of local education agencies, who choose coverage, participate in the TNM. The TNM also includes eligible retirees of the state, certain component units of the state, and certain local governmental entities. This plan is closed to the employees of all participating employers that were hired on or after July 1, 2015. The School Department’s total OPEB liability for the TNM Plan was measured as of June 30, 2017 and was determined by an actuarial valuation as of that date

Benefits Provided. The state offers the TNM to help fill most of the coverage gaps created by Medicare for eligible post-65 retired teachers and disabled participants of local education agencies. Insurance coverage is the only postemployment benefit provided to retirees. The TNM does not include pharmacy. In accordance with TCA 8-27-209, benefits of the TNM are established and amended by cooperation of insurance committees created by TCA Sections 8-27-201, 8-27-301 and 8-27-701. Retirees and disabled employees of the state, component units, local education agencies, and certain local governments who have reached the age of 65, are Medicare eligible and also receive a benefit from the Tennessee Consolidated Retirement System may participate in this plan. All plan members receive the same plan benefits at the same premium rates. Participating employers determine their own policy related to subsidizing the retiree premiums. The Overton County School Department provides a subsidy of $50 per month for retirees with 30 or more years of service, retirees with 20-29 years of service receive $37.50, and retirees with 15-19 years of service receive $25. The state, as a governmental nonemployer contributing entity, contributes to the premiums of eligible retirees of local education agencies based on years of service. The State of Tennessee provides a subsidy of $50 per month for retirees with 30 or more years of service, retirees with 20-29 years of service receive $37.50, and retirees with 15-19 years of service receive $25.

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SchoolDepartment


Total 487

In accordance with TCA 8-27-209, the state insurance committees established by TCA Sections 8-27-201, 8-27-301 and 8-27-701 determine the required payments to the plan by member employers and employees. Claims liabilities of the plan are periodically computed using actuarial and statistical techniques to establish premium rates. Administrative costs are allocated to plan participants. Employers contribute towards employee costs based on their own developed policies. For the fiscal year ended June 30, 2018, the School Department paid $53,355 to the TNM for OPEB benefits as they came due.

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Changes in the Collective Total OPEB Liability

Overton County State ofSchool Department TN Total OPEB

53.62% 46.38% Liability

Balance July 1, 2016 $ 1,561,635 $ 1,350,614 $ 2,912,249Changes for the Year: Service Cost $ 36,243 $ 31,346 $ 67,589 Interest 45,846 39,650 85,496 Changes in Benefit Terms 0 0 0 Difference between Expected and Actuarial Experience 0 0 0 Changes in Assumption and Other Inputs (134,372) (116,215) (250,587)

Benefit Payments (55,661) (48,139) (103,800)Net Changes $ (107,944) $ (93,358) $ (201,302)

Balance June 30, 2017 $ 1,453,691 $ 1,257,256 $ 2,710,947

Share of Collective Liability

The Overton County School Department has a special funding situation related to benefits paid by the State of Tennessee for its eligible retirees participating in the TNM. The Overton County School Department's proportionate share of the collective total OPEB liability was based on a projection of the employer’s long-term share of benefit payments to the OPEB plan relative to the projected share of benefit payments of all participating employers and nonemployer contributing entities, actuarially determined. The School Department recognized $57,161 in revenue for subsidies provided by nonemployer contributing entities for benefits paid by the TMN for School Department retirees.

During the year, the Overton County School Department’s proportionate share of the collective OPEB liability was 53.62 percent and the State of Tennessee’s share was 46.38 percent.

OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2018, the School Department recognized OPEB expense of $123,253 including the state’s share of the OPEB expense.

At June 30, 2018, the School Department reported deferred outflows of resources and deferred inflows of resources related to its proportionate share of OPEB from the following sources:

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Difference Between Expected and Actual Experience $ 0 $ 0Changes of Assumptions/Inputs 0 118,375Changes in Proportion and Differences Between Amounts Paid as Benefits Came Due and Proportionate Share Amounts Paid by the Employee and Nonemployer Contributors As Benefits Came Due 0 0Benefits Paid After the Measurement Date 53,355 0

Total $ 53,355 $ 118,375


Year Ending SchoolJune 30 Department

2019 $ (15,997)2020 (15,997)2021 (15,997)2022 (15,997)2023 (15,997)Thereafter (38,390)

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

Sensitivity of Proportionate Share of the Collective Total OPEB Liability to Changes in the Discount Rate. The following presents the School Department’s proportionate share of the collective total OPEB liability related to the TNM, as well as what the proportionate share of the collective total OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower or 1-percentage-point higher than the current discount rate.

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Discount Rate Current1% Discount 1%


Proportionate Share of the Collective Total OPEBLiability $ 1,671,429 $ 1,453,691 $ 1,274,526

Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rate. The premium subsidies provided to retirees in the TNM plan are assumed to remain unchanged for the entire projection period, therefore trend rates are not applicable to the plan calculations.

H. Office of Central Accounting and Budgeting

Office of Director of Accounts and Budgets Overton County operates under the provisions of the Fiscal Control Acts of 1957. These acts provide for a central system of accounting, budgeting, and purchasing covering all funds administered by the county executive and highway superintendent. These funds are maintained in the Office of Central Accounting and Budgeting under the supervision of the director of accounts and budgets.

I. Purchasing Laws

Offices of County Executive and Highway Superintendent Purchasing procedures for these offices are governed by provisions of the County Purchasing Law of 1957, Section 5-14-101, et seq., Tennessee Code Annotated (TCA). Purchasing procedures in the Highway Department are also governed by the Uniform Road Law, Section 54-7-113, TCA. These statutes provide for the purchasing agent to make all purchases for these departments, with purchases exceeding $10,000 to be made on the basis of competitive bids solicited through public advertisement. On December 11, 2017, the county commission approved an increase in the bid limit to $25,000. The county executive serves as purchasing agent for Overton County. Office of Director of Schools Purchasing procedures for the discretely presented Overton County School Department are governed by purchasing laws applicable to the 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 the chairman of the Board of Education), to make all purchases. This statute also requires that competitive bids be solicited through newspaper advertisement on all purchases exceeding $10,000.

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J. Subsequent Events Register of Deeds Franklin Smith retired August 31, 2017, and was succeeded by Kimberly Smith Copeland effective September 1, 2017. On December 28, 2018, Overton County issued capital outlay notes totaling $3,420,000 for the construction of a new administration facility. The county entered an Energy Efficiency School Initiative Loan totaling $2,925,917 for energy efficiency upgrades to various schools on January 22, 2018. However, this project did not begin until December 2018 and the county has not received any loan proceeds for this project as of the date of this report.

VI. OTHER NOTES – DISCRETELY PRESENTED OVERTON COUNTY HEALTH AND REHAB CENTER

A. Summary of Significant Accounting Policies

This summary of significant accounting policies of Overton County Health and Rehab Center is presented to assist in understanding the center's financial statements. The financial statements and notes are representations of the center's management who is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles. Organization Overton County Heath and Rehab Center is a nonprofit corporation chartered under the laws of the State of Tennessee on April 5, 1962, operating as a political subdivision of Overton County, Tennessee (the county). The purpose of the center is to provide nursing care to residents primarily from the Overton County area. The corporation is managed by a board of five directors who are county commissioners, appointed by the Overton County Commission. Financial Reporting Entity – Component Unit The center is a component unit of the primary government of Overton County, Tennessee. The center reports its financial information separately from Overton County; however, the county in its financial report also presents the center’s financial information. Legally, the center is a separate nonprofit entity that has considerable legal, financial, and administrative autonomy. However, as the governing board is not elected but instead is entirely appointed by the county’s Board of Commissioners, and the county is contingently liable for all of the center’s debt obligations, the center cannot be a primary government. Instead it qualifies as a component unit according to the directives of the Governmental Accounting Standards Board (GASB).

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The GASB specifies that component units must be legally separate organizations, which have financial accountability to a primary government. Financial accountability exists prima facie if a special-purpose government is not fiscally independent. GASB states that to be fiscally independent, the government has to have the authority to do all of three activities. One of these activities is to issue bonded debt without approval by another government. Overton County Health and Rehab Center may not issue debt without Overton County, Tennessee’s approval, and the county remains contingently liable for all debt obligations. Because the center is both a legal entity and financially accountable to the primary government of Overton County as the county commission appoints all members of the governing board and by the nature of its fiscal dependence on Overton County as described above, it is a component unit of Overton County, Tennessee. At June 30, 2018, there was an amount due to Overton County. This is described in detail in Note VI.J. The center did not engage in any other activities that were subject to the approval of Overton County. Basis of Presentation The financial statements are presented on the full accrual basis of accounting and conform to accounting principles generally accepted in the United States of America. As a component unit of Overton County, the accounts of the center are organized on the basis of a proprietary fund type, specifically an enterprise fund. The activities of this fund are accounted for with a separate set of self-balancing accounts that comprise the center’s assets, liabilities, net position, revenues, and expenses. Enterprise funds account for activities (i) that are financed with debt that is secured by a pledge of the net revenues from fees and charges of the activity, or (ii) that are required by laws or regulations that the activity’s costs of providing services, including capital costs (such as depreciation or debt service), be recovered with fees and charges, rather than with taxes or similar revenues; or (iii) that the pricing policies of the activity establish fees and charges designed to recover its costs, including capital costs (such as depreciation or debt service). The accounting and financial reporting treatment applied to the center is determined by its measurement focus. The transactions of the center are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and all liabilities associated with the operations are included on the balance sheet. Net position (i.e., total assets plus net deferred outflows net of total liabilities and net deferred inflows) is segregated into net investment in capital assets, restricted for capital projects, and unrestricted components. When both restricted and unrestricted resources are available for use, it is the center’s policy to use restricted resources first and then unrestricted resources as they are needed.

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Cash Flow - Cash and Cash Equivalents Overton County Health and Rehab Center presents its cash flow statement using the direct method. For purposes of cash flow presentation, the center considers cash in operating bank accounts, cash on hand, and certificates of deposit that have original maturities of three months or less as cash and cash equivalents. At June 30, 2018, there were no certificates of deposit that qualified as cash equivalents. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at the amount that the center expects to collect from outstanding balances. The center provides for probable uncollectible amounts through a provision for bad debt expense and an adjustment to a valuation allowance based upon a review of outstanding receivables, historical collection information, and existing economic conditions. The allowance for doubtful accounts was $102,000 at June 30, 2018. Account balances are charged against the allowance after reasonable collection efforts have been exhausted and the potential for recovery is considered remote. Net Patient Revenue Gross patient revenue is recorded on an accrual basis based on services rendered at amounts equal to established rates. Allowances for contractual adjustments are recorded for the differences between established rates and amounts estimated to be paid by the Medicare and Medicaid programs and other third-party payors. Contractual adjustments are deducted from gross patient revenue to determine net patient revenue. Amounts paid under the Medicare and Medicaid programs are generally based on fixed rates per patient day, adjusted prospectively. All amounts earned under the Medicare, Medicaid, and other governmental programs are subject to review by the third-party payors. Any differences between estimated settlements and final determinations are reflected in operations in the year finalized. Property and Equipment Property and equipment are stated at cost. Donated capital assets are recorded at estimated fair market value at the date of donation. Interest incurred during the construction phase of capital assets is included as part of the capitalized value of the assets constructed. Total interest cost incurred the year ended June 30, 2018, was $235,837 of which $150,776 was capitalized and $85,061 was expensed. Purchases of assets with useful lives greater than $1,000 are capitalized. For financial statement purposes, depreciation of property and equipment is provided using the straight-line method. The center estimates the useful lives of the respective classes of plant and equipment as follows:

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Assets Years

Land and Improvements 5 - 20Buildings and Improvements 5 - 50Transportation Equipment 4 - 5Equipment 3 - 25

Maintenance and repairs are charged to operations when incurred. The center eliminates the costs and related allowances from the accounts for properties sold or retired, and any resulting gains or losses are included in income. Accrued Vacation Employees of the center earn vacation by a prescribed formula based on length of service. Employees of the center accrue vacation pay when earned. Pensions For the purpose of measuring the net pension liability (asset), deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense (income), information about the fiduciary net position of Overton County’s participation in the Public Employee Retirement Plan of the Tennessee Consolidated Retirement System (TCRS), and additions to/deductions from the plan’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. Implementation of Accounting Pronouncement – GASB No. During the fiscal year ended June 30, 2018, the center implemented GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. GASB Statement No. 75 replaces the requirements of GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other than Pensions, as amended, and No. 57, OPEB Measurements by Agent Employers and Agent Multi-Employer Plans. GASB Statement No. 75 establishes standards for recognizing and measuring liabilities, deferred outflows of resources, deferred inflows of resources, and expenses. For defined benefit OPEB, this Statement identifies the methods and assumptions that are required to be used to project benefit payments, discount projected payments to their actuarial present value, and attribute the present value to periods of employee service.

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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 represented a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense) until then. The center has items that include actuarial losses related to the differences between expected and actual experience for the pension plan’s adopted economic and demographic assumptions, changes in actuarial assumptions that result in an actuarial loss, and employer contributions to the pension plan. In addition, employer payments of the OPEB plan are included in deferred outflows of resources. 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 center has items that include actuarial gains related to differences between expected and actual experience for the pension plan’s adopted economic and demographic assumptions and differences between projected and actual earnings on pension plan investments. In addition, the center has changed in actuarial assumptions that result in an actuarial gain on the OPEB plans that are included in deferred inflows of resources. Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Income Taxes The Internal Revenue Service has determined that the center is exempt from federal income taxes under Section 501(c)(3) of the United States Internal Revenue Code. Accordingly, the financial statements do not reflect a provision for income taxes. Operating Revenues and Expenses The center’s operating revenues and expenses consist of revenues earned and expenses incurred relating to the operation and maintenance of its principal ongoing operations. All other revenues and expenses are reported as nonoperating revenues and expenses and consist of those revenues and expenses that are related to financing and investing types of activities and result from nonexchange transactions or ancillary activities.

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Subsequent Events Management has evaluated subsequent events through the date the financial statements were available to be issued.

B. Cash and Certificates of Deposit

The center does not have a formal policy regarding types of investments authorized. State statutes authorize the center to make investments in bonds, notes, or treasury bills of the United States, Federal Loan Bank bonds, Federal Home Loan Bank notes and bonds, Federal National Mortgage Association notes and debentures, banks or cooperative debentures, or any of its other agencies, or obligations guaranteed as to principal and interest by the United States or any of its agencies with a maturity not greater than one year, or in the pooled investment fund established under Tennessee law. During the year ended June 30, 2018, the board of directors chose to limit the investment of funds to demand deposits and certificates of deposit accounts at banking institutions. At June 30, 2018, the carrying amount of cash deposits, including patient funds, was $5,963,190, and the bank balance was $6,048,996. At June 30, 2018, the carrying amount of the certificate of deposit was $2,023,449, and the bank balance was $2,023,449. For deposits with financial institutions, the center follows state statutes which require pledged collateral with a fair value equal to 105% of the funds on deposit, less insured amounts. At June 30, 2018, the entire bank balance was covered by federal depository insurance, or pledged securities held as collateral in another institution in the name of the center.

C. Patient Funds Held in Trust

At June 30, 2018, the center held funds totaling $14,706 on behalf of the residents. The center is required to maintain a cash account as a depository for patient funds. The fund is restricted in use and can be used only for providing spending money for patients, purchasing supplies for patients with cash in the fund, or paying amounts due to the center for patient care, provided the amount does not include monies stipulated for patients' use only. All funds in excess of $100 per recipient are required to be placed in an insured interest-bearing account.

D. Concentration of Credit Risk The center grants credits without collateral to its patients, most of whom are insured under third-party payor agreements. The mix of receivables from patients and third-party payors is as follows:

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Medicaid 34.87 %Medicare 34.86Insurance 24.06Private 6.21

E. Capital Assets

Capital assets are summarized as follows:


Capital Assets Not Depreciated:

Land $ 115,000 $ 0 $ 0 $ 115,000Construction in Progress 112,441 444,101 0 556,542

Total Capital Assets Not Depreciated $ 227,441 $ 444,101 $ 0 $ 671,542

Capital Assets Depreciated:Land/Improvements $ 106,849 $ 0 $ 0 $ 106,849Buildings/Improvements 8,941,983 0 (3,323) 8,938,660Tranportation Equipment 44,197 18,000 0 62,197Equipment 1,225,702 112,794 (118,043) 1,220,453

Total Capital Assets Depreciated $ 10,318,731 $ 130,794 $ (121,366) $ 10,328,159

Less Accumulated Depreciation For:

Land/Improvements $ 63,842 $ 6,271 $ 0 $ 70,113Buildings/Improvements 2,493,210 229,797 (3,323) 2,719,684Tranportation Equipment 39,880 3,181 0 43,061Equipment 947,009 58,005 (118,043) 886,971

Total Accumulated Depreciation $ 3,543,941 $ 297,254 $ (121,366) $ 3,719,829

Total Capital Assets Depreciated, Net $ 6,774,790 $ (166,460) $ 0 $ 6,608,330

Business-type Activities Capital Assets, Net $ 7,002,231 $ 277,641 $ 0 $ 7,279,872

F. Pension Plan

Plan Description. Employees of Overton County Health and Rehab Center, are provided a defined benefit pension plan through the Public Employee Retirement Plan, an agent multiple-employer defined benefit pension plan administered by the Tennessee Consolidated Retirement System (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 the TCRS. The Tennessee Treasury

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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. Since Overton County Health and Rehab Center is a component unit of Overton County and does not have its own distinct agent multiple-employer pension plan, the plan is treated as a cost-sharing plan for purposes of Overton County Health and Rehab Center’s stand-alone financial statements. 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.

Contributions. Contributions for employees are established in the statutes governing the TCRS and may only be changed by the Tennessee General Assembly. Employees contribute five percent of salary. Overton County Health and Rehab Center makes employer contributions at the rate set by the Board of Trustees as determined by an actuarial valuation. For the year ended June 30, 2018, the employer contributions for Overton County Health and Rehab Center was $171,681 based on a rate of 5.41 percent of covered payroll. By law, employer contributions are required to be paid. The TCRS may intercept Overton County’s state shared taxes if required employer contributions are not remitted. The employer’s actuarially determined contribution 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.

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http://www.treasury.tn.gov/tcrs

Net Pension Liability (Asset), Pension Expense (Income) and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions Pension Assets. At June 30, 2018, Overton County Health and Rehab Center reported an asset of $246,982 for its proportionate share of the net pension asset. The net pension asset was measured as of June 30, 2017, and the total pension liability used to calculate net pension asset was determined by an actuarial valuation as of that date. Overton County Health and Rehab Center’s proportion of the net pension asset was based on a projection of Overton County Health and Rehab Center’s contributions to the pension plan relative to the contributions of all participating entities. At the measurement date of June 30, 2017, Overton County Health and Rehab Center’s proportion was 24.29 percent. The proportion measured as of June 30, 2016, was 23.64 percent. Pension Expense. For the year ended June 30, 2018, Overton County Health and Rehab Center recognized pension expense of $46,567. Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2018, Overton County Health and Rehab Center reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:



Difference Between Expected and Actual Experience $ 45,340 $ 201,129Net Difference Between Projected and Actual Earnings on Pension Plan Investments 0 1,655Changes in Assumptions 125,931 0Contributions Subsequent to the Measurement Date of June 30, 2016 (1) 171,681 N/A

Total $ 342,952 $ 202,784

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

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

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2019 $ (59,978)2020 35,4022021 7,0252022 (13,963)2023 0Thereafter 0

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

Actuarial Assumptions. The total pension liability as of the June 30, 2017, actuarial valuation was determined using the following actuarial assumptions applied to all periods included in the measurement:

Inflation 3%Salary Increases Graded Salary Ranges from 8.72%



Cost of Living Adjustment 2.3% Mortality rates were based on actual experience including an adjustment for some anticipated improvement.

The actuarial assumptions used in the June 30, 2017, actuarial valuation were based on the results of an actuarial experience study performed for the period July 1, 2012, through June 30, 2016. The demographic assumptions were adjusted to more closely reflect actual and expected future experience. Changes in Assumptions. In 2017, the following assumptions were changed; decreased inflation rate from three percent to 2.5 percent; decreased the investment rate of return from 7.5 percent to 7.25 percent; decreased the cost-of-living adjustment from 2.5 percent to 2.25 percent; decreased salary growth graded ranges from an average of 4.25 percent to an average of four percent; and modified mortality assumptions.

The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees in conjunction with the June 30, 2016, actuarial experience study. A blend of future capital market projections and historical market returns was used in a building-block method in which a best-estimate of expected future real rate of return (expected returns, net of pension plan investment expense and inflation) are

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developed for each major asset class. These best-estimates are combined to produce 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 2.5 percent. The best-estimate of geometric real rates of return and the TCRS investment policy target asset allocation for each major asset class are summarized in the following table:




Total 100 %

The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees as 7.25 percent based on a blending of the three factors described above.

Discount Rate. The discount rate used to measure the total pension liability was 7.25 percent. The projection of cash flows used to determine the discount rate assumes that employee contributions will be made at the current rate and that contributions from Overton County Health and Rehab Center 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 Net Pension Liability (Asset) to Changes in the Discount Rate. The following presents the net pension liability (asset) of Overton County Health and Rehab Center’s proportionate share of the net pension liability (asset) calculated using the discount rate of 7.25 percent, as well as

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what Overton County Health and Rehab Center’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 (6.25%) or one percentage point higher (8.25%) than the current rate:


Decrease Rate IncreaseOverton County 6.3% 7.3% 8.3%

Net Pension Liability $ 685,880 $ (246,982) $ (1,017,345)

Payable to the Pension Plan. At June 30, 2018, Overton County Health and Rehab Center reported a payable of $33,200 for the outstanding amount of contributions to the pension plan required at the year ended June 30, 2018.

G. Risk Management

Risks related to the operation of the center are managed through the purchase of commercial insurance policies. Settled claims have not exceeded this commercial coverage in any of the past three fiscal years, and there have been no significant reductions in insurance coverage for the current year or for the prior five years.

H. Health Care Regulations

The health care industry is subject to numerous laws and regulations of federal, state, and local governments. These laws and regulations include, but are not necessarily limited to, matters such as licensure, accreditation, government health care program participation requirements, reimbursement for patient services, and Medicare and Medicaid fraud and abuse. Recently, government activity has increased with respect to investigations and allegations concerning possible violations of fraud and abuse statutes and regulations by health care providers. Violations of these laws and regulations could result in expulsion from government health care programs together with the imposition of significant fines and penalties, as well as repayments for patient services previously billed. Management believes that the center is in compliance with fraud and abuse statutes as well as other applicable government laws and regulations. Compliance with such laws and regulations can be subject to future government review and interpretation as well as regulatory actions unknown or unasserted at this time.

I. Professional Liability Claims and Insurance

The long-term health care industry has experienced a dramatic increase in personal injury and wrongful death claims based on alleged negligence by the center and its employees in providing care to residents. The center is subject to claims and suits, which arise in the ordinary course of business. In the

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opinion of management, the ultimate resolution of such pending legal proceedings has been adequately provided for through commercial insurance.

J. Due to Primary Government On February 13, 2012, Overton County, Tennessee, passed a resolution to issue general obligations bonds in the aggregate principal amount of $4,150,000, for the purpose of financing land acquisition, design, and site development for the construction and equipping of a health and rehab facility of the county. The bonds, known as the General Obligation Bonds, Series 2012, were issued May 9, 2012, and are payable from unlimited ad valorem taxes to be levied on all taxable property within the county. The bonds are additionally payable from, although not secured by, revenues of the facility. The full faith and credit of the county is irrevocably pledged for the payment of principal and interest on the bonds. Funds needed for the payment of the bonds may be reduced by revenues of the center. It is the intent of the center to repay the county bonds from revenues from the center. Therefore, the center has a note payable to the primary government in the exact amount of the balance of the bonds at June 30, 2018. The county has a liability for the bonds on the county’s books with a corresponding amount due from the center. The center is repaying the indebtedness to the county in the form of payments on the bonds to U.S. Bank National Association according to the terms of the bonds. The bonds have a maturity date of April 1, 2033, and bear fixed interest rates ranging from one percent to 3.125 percent. The annual debt service requirements to maturity are as follows:

Year EndingJune 30

2019 $ 175,000 $ 82,5062020 175,000 79,0062021 180,000 75,5062022 185,000 71,6812023 190,000 67,7502024-2028 1,035,000 266,7692029-2033 1,225,000 113,988

Total $ 3,165,000 $ 757,206

InterestPrincipal

On April 10, 2017, Overton County, Tennessee, passed a resolution to issue general obligation bonds in the aggregate principal amount of not to exceed $5,110,000, for the purpose of financing, in whole or in part, the (i) construction, renovation, and equipping of nursing home facility (the “center”) of the county; (ii) payment of legal, fiscal, administrative, architectural, and engineering costs incident to the foregoing; (iii) reimbursement to the county for funds previously expended for any of the

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foregoing; and (iv) payment of costs incident to the issuance and sale of the bonds authorized herein. The bonds, known as the General Obligation Bonds, Series 2017, were issued June 20, 2017, in the amount of $4,965,000 and are payable from unlimited ad valorem taxes to be levied on all taxable property within the county. The bonds are additionally payable from, although not secured by, revenues of the center. The full faith and credit of the county are irrevocably pledged for the payment of principal and interest on the bonds. Funds needed for the payment of the bonds may be reduced by revenues of the center. It is the intent of the center to repay the county bonds from revenues from the center. Therefore, the center has a due to primary government (the “county”) in the exact amount of the balance of the bonds at June 30, 2018. The county has a liability for the bonds on the county’s books with a corresponding amount due from the center. The center is repaying the indebtedness to the county in the form of payments on the bonds to U.S. Bank National Association according to terms of the bonds. The bonds have a maturity date of April 1, 2042, and bear fixed interest rates ranging from 2.50 percent to 3.25 percent. The annual debt service requirements to maturity related to the Overton County General Obligation Bonds, Series 2017 are as follows: 2019 $ 145,000 $ 150,5622020 150,000 146,2132021 155,000 141,7122022 160,000 137,0632023 165,000 132,2622024-2028 895,000 584,6622029-2033 1,025,000 453,4882034-2038 1,180,000 292,9132039-2042 1,090,000 89,863

Total $ 4,965,000 $ 2,128,738

Activity related to the note payable for the year ended June 30, 2018, was as follows:

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Series 2012 $ 3,335,000 $ 0 $ 170,000 $ 3,165,000 $ 175,000Series 2017 4,965,000 0 0 4,965,000 145,000Total Debt $ 8,300,000 $ 0 $ 170,000 $ 8,130,000 $ 320,000

Other Post-employment BenefitsLiability 323,973 30,494 30,797 323,670 0

Total Long-term Obligations $ 8,623,973 $ 30,494 $ 200,797 $ 8,453,670 $ 320,000

Balance7-1-17

Due WithinOne YearReductions

Balance6-30-18Additions

K. Other Postemployment Benefits (OPEB)

Employees of the Overton County Health and Rehab Center who were hired prior to July 1, 2015, are provided with pre-65 retiree health insurance benefits through the closed Local Government OPEB Plan (LGP) and with post-65 retiree health insurance benefits through the closed Tennessee Plan (TNP), both administered by the Tennessee Department of Finance and Administration. The following is a summary of each of these plans: Closed Local Government OPEB Plan

Plan Description. Employees of the Overton County Health and Rehab Center who were hired prior to July 1, 2015, are provided with pre-65 retiree health insurance benefits through the closed Local Government Plan (LGP) administered by the Tennessee Department of Finance and Administration. This plan is considered to be a multi-employer defined benefit plan that is used to provide postemployment benefits other than pensions (OPEB). However, for accounting purposes this plan will be treated as a single-employer plan. All eligible pre-65 retired employees and disability participants of local governments, who choose coverage, participate in the LGP. This plan is closed to the employees of all participating employers that were hired on or after July 1, 2015.

Benefits Provided. The center offers the LGP to provide health insurance coverage to eligible pre-65 retirees and disabled participants of local governments. Insurance coverage is the only postemployment benefit provided to retirees. An insurance committee created in accordance with TCA 8-27-701 establishes and amends the benefit terms of the LGP. All members have the option of choosing between the premier preferred provider organization (PPO), standard PPO, limited PPO or the wellness health savings consumer-driven health plan (CDHP) for healthcare benefits. Retired plan members, of the LGP, receives the same plan benefits as active employees, at a blended premium rate that considers the cost of all participants. This creates an implicit subsidy for retirees. Participating employers determine their own policy related to direct subsidies provided for the retiree premiums. The center does not provide a direct subsidy and is only subject to the implicit subsidy. The LGP is funded on a pay-as-you-go basis and there are no assets

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accumulating in a trust that meets the criteria of paragraph 4 of GASB Statement No. 75.



TotalInactive Employees or Beneficiaries Currently Receiving Benefits 0Inactive Employees Entitled to But Not Yet Receiving Benefits 0Active Employees 143

Total 143

An insurance committee, created in accordance with TCA 8-27-701, establishes the required payments to the LGP by member employers and employees through the blended premiums established for active and retired employees. Claims liabilities of the plan are periodically computed using actuarial and statistical techniques to establish premium rates. For the fiscal year ended June 30, 2018, the center paid $370 to the LGP for OPEB benefits as they came due.

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

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

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

Discount Rate 3.56%Healthcare Cost Trend Rates LGP -

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

Retirees Share of Benefit Related Cost Discussed under each plan

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

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

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

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Total OPEBLiability

Balance July 1, 2016 $ 79,029Changes for the Year: Service Cost $ 10,578 Interest 2,617 Changes in Benefit Terms Difference between 0 Expected and Actuarial Experience Changes in Assumption and Other Inputs (5,410)

Benefit Payments 0Net Changes $ 7,785

Balance June 30, 2017 $ 86,814

OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2018, the center recognized OPEB expense of $12,535. At June 30, 2018, the center reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:



Difference Between Expected and Actual Experience $ 0 $ 0Changes of Assumptions/Inputs 0 4,750Net Difference Between Projected and Benefits paid after the measurement date 370 0

Total $ 370 $ 4,750


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Year EndingJune 30

2019 $ (660)2020 (660)2021 (660)2022 (660)2023 (660)Thereafter (1,450)

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



Total OPEB Liability $ 95,271 $ 86,814 $ 79,081 Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rate. The following presents the total OPEB liability of the center calculated using the current healthcare cost trend rate, as well as what the OPEB liability would be if it was calculated using a trend rate that is one percentage point lower or one percentage point higher than the current rate:

Current1% Trend 1%

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

Total OPEB Liability $ 74,742 $ 86,814 $ 101,541 Closed Tennessee Plan – Medicare Plan Description. Employees of Overton County Health and Rehab Center who were hired prior to July 1, 2015, are provided with post-65 retiree health insurance benefits through the closed Tennessee Plan - Medicare (TNM) administered by the Tennessee Department of Finance and Administration. This plan is considered a multi-employer defined benefit plan that is used to

113

provide postemployment benefits other than pensions (OPEB). However, for accounting purposes this plan will be treated as a single-employer plan. All eligible post-65 retirees and disability participants of local governments, who choose coverage, participate in the TNM. The TNM also includes eligible retirees of the state, certain component units of the state, and local education agencies. This plan is closed to the employees of all participating employers that were hired on or after July 1, 2015. Benefits Provided. The state offers the TNM to help fill most of the coverage gaps created by Medicare for eligible post-65 retirees and disabled participants of local governments. Insurance coverage is the only postemployment benefit provided to retirees. The TNM does not include pharmacy. In accordance with TCA 8-27-209, benefits of the TNM are established and amended by cooperation of insurance committees created by TCA Sections 8-27-201, 8-27-301 and 8-27-701. Retirees and disabled employees of the state, component units, local education agencies, and certain local governments who have reached the age of 65 are Medicare eligible and also receive a benefit from the Tennessee Consolidated Retirement System (TCRS) may participate in this plan. All plan members receive the same plan benefits at the same premium rates. Participating employers determine their own policy related to subsidizing the retiree premiums. The center provided a direct subsidy of $50 for eligible retirees with 30 or more years of service, $37.50 for eligible retirees with 20-29 years of service, and $20 for eligible retirees with less than 20 years of service. The TNP is funded on a pay-as-you-go basis and there are no assets accumulating in trust that meet the criteria of paragraph 4 of GAST Statement No. 75. Employees Covered by Benefit Terms At the measurement date of June 30, 2017, the following employees were covered by the benefit terms:


Total 143

In accordance with TCA 8-27-209, the state insurance committees established by TCA Sections 8-27-201, 8-27-301, and 8-27-701 determine the required payments to the plan by member employers and employees. Claims liabilities of the plan are periodically computed using actuarial and statistical techniques to establish premium rates. Administrative costs are allocated to

114

plan participants. Employers contribute towards employee costs based on their own developed policies. For the fiscal year ended June 30, 2018, the center paid $413 to the TNM for OPEB benefits as they came due.


Total OPEBLiability

Balance July 1, 2016 $ 244,944Changes for the Year: Service Cost $ 9,859 Interest 7,440 Changes in Benefit Terms Difference between 0 Expected and Actuarial Experience Changes in Assumption and Other Inputs (25,387)

Benefit Payments 0Net Changes $ (8,088)

Balance June 30, 2017 $ 236,856

OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2018, the center recognized OPEB expense of $13,868. At June 30, 2018, the center reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:



Difference Between Expected and Actual Experience $ 0 $ 0Changes of Assumptions/Inputs 0 21,956Net Difference Between Projected andBenefits Paid After the Measurement Date 413 0

Total $ 413 $ 21,956


115

Year EndingJune 30 County

2019 $ (3,431)2020 (3,431)2021 (3,431)2022 (3,431)2023 (3,431)Thereafter (4,801)

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


Decrease Rates Increase2.56% 3.56% 4.56%


Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rate. The premium subsidies provided to retirees in the TNM plan are assumed to remain unchanged for the entire projection period, therefore trend rates are not applicable to the plan calculations:

L. Operating Lease

The center had an operating lease for therapy equipment that began in the prior year. The lease is for one year and will automatically renew for successive periods of one year unless either party provides written notice of termination 60 days prior to the automatic renewal date. Rental expense for this lease totaled $18,950 for the year ended June 30, 2018. There are no future minimum rental payments under this operating lease.

M. Change in Accounting Principal/Restatement

The center adopted GASB Statement 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions for the year ended June 30, 2018. See Note VI.K. As a result, a restatement was made to retroactively restate net position to record the total OPEB liability at the beginning of the

116

measurement period (June 30, 2016) in the amount of $323,973. This adjustment was made to net position as of July 1, 2017.

117

REQUIRED SUPPLEMENTARY INFORMATION

118

Exhibit E-1

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

2014 2015 2016 2017

Total Pension Liability Service Cost $ 821,188 $ 873,441 $ 869,285 $ 963,413Interest 1,736,406 1,777,058 1,915,961 1,984,413Changes in Benefit Terms 0 0 0 0Differences Between Actual and Expected Experience (994,065) 296,202 (827,796) 85,227Changes in Assumptions 0 0 0 648,060Benefit Payments, Including Refunds of Employee Contributions (1,076,371) (1,071,132) (1,109,892) (1,167,868)Net Change in Total Pension Liability $ 487,158 $ 1,875,569 $ 847,558 $ 2,513,245Total Pension Liability, Beginning 22,869,076 23,356,234 25,231,803 26,079,361

Total Pension Liability, Ending (a) $ 23,356,234 $ 25,231,803 $ 26,079,361 $ 28,592,606

Plan Fiduciary Net PositionContributions - Employer $ 557,965 $ 537,490 $ 573,760 $ 581,712Contributions - Employee 515,219 496,759 532,213 547,104Net Investment Income 3,591,187 778,022 689,545 3,017,854Benefit Payments, Including Refunds of Employee Contributions (1,076,371) (1,071,132) (1,109,892) (1,167,868)Administrative Expense (15,473) (19,883) (30,836) (35,061)Other 0 0 3,500 0Net Change in Plan Fiduciary Net Position $ 3,572,527 $ 721,256 $ 658,290 $ 2,943,741Plan Fiduciary Net Position, Beginning 21,713,597 25,286,124 26,007,380 26,665,670

Plan Fiduciary Net Position, Ending (b) $ 25,286,124 $ 26,007,380 $ 26,665,670 $ 29,609,411

Net Pension Liability (Asset), Ending (a - b) $ (1,929,890) $ (775,577) $ (586,309) $ (1,016,805)

Plan Fiduciary Net Position as a Percentage of Total Pension Liability 108.26% 103.07% 102.25% 103.56%Covered Payroll $ 10,089,798 $ 9,935,118 $ 10,605,526 $ 10,752,516Net Pension Liability (Asset) as a Percentage of Covered Payroll (19.13)% (7.81)% (5.53)% (9.46)%

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

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

119

Exhibit E-2

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

2014 2015 2016 2017 2018

Actuarially Determined Contribution $ 557,965 $ 537,490 $ 573,760 $ 581,712 $ 606,389Less Contributions in Relation to the Actuarially

Determined Contribution (557,965) (537,490) (573,760) (581,712) (606,389)

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

Covered Payroll $ 10,089,798 $ 9,935,118 $ 10,605,526 $ 10,752,516 $ 11,267,251

Contributions as a Percentage of Covered Payroll 5.53% 5.41% 5.41% 5.41% 5.38%


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

120

Exhibit E-3

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

2015 2016 2017 2018

Contractually Required Contribution $ 9,956 $ 21,305 $ 33,615 $ 40,991Less Contributions in Relation to the Contractually

Required Contribution (9,956) (21,305) (33,615) (40,991)

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

Covered Payroll $ 248,908 $ 532,620 $ 840,382 $ 1,024,778

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


121

Exhibit E-4

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

2014 2015 2016 2017 2018

Contractually Required Contribution $ 1,053,143 $ 1,057,677 $ 1,029,362 $ 1,004,390 $ 1,007,420Less Contributions in Relation to the Contractually Required Contribution (1,053,143) (1,057,677) (1,029,362) (1,004,390) (1,007,420)

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

Covered Payroll $ 11,859,720 $ 11,699,966 $ 11,386,739 $ 11,110,501 $ 11,094,929

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


122

Exhibit E-5

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

2016 2017 2018

School Department's Proportion of the Net Pension Asset 0.117325% 0.121048% 0.128041%

School Department's Proportionate Share of the Net Pension Liability (Asset) $ (4,819) $ (12,601) $ (33,781)

Covered Payroll $ 248,908 $ 532,620 $ 840,382

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

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

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


123

Exhibit E-6

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

2015 2016 2017 2018

School Department's Proportion of the Net Pension Asset 0.302159% 0.312541% 0.315440% 0.314304%

School Department's Proportionate Share of the Net Pension Liability (Asset) $ (49,099) $ 128,027 $ 1,971,325 $ (102,835)

Covered Payroll $ 11,859,720 $ 11,699,966 $ 11,386,739 $ 11,110,501

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

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

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


124

Exhibit E-7

Overton County, TennesseeSchedule of Changes in the Total OPEB Liability and Related Ratios - Overton County PlanFor the Fiscal Year Ended June 30

Local Government Plan

Overton County Plan2017

Total OPEB LiabilityService Cost $ 15,735 Interest 5,707 Changes in Benefit Terms 0Differences Between Actual and Expected Experience 0Changes in Assumptions or Other Inputs (9,653)Benefit Payments (3,447)Net Change in Total OPEB Liability $ 8,342 Total OPEB Liability, Beginning 181,426

Total OPEB Liability, Ending $ 189,768

Covered Employee Payroll $ 3,973,352 Net OPEB Liability as a Percentage of Covered Employee Payroll 4.78%

Overton County Highway Plan2017

Total OPEB LiabilityService Cost $ 5,748Interest 1,614Changes in Benefit Terms 0Differences Between Actual and Expected Experience 0Changes in Assumptions or Other Inputs (2,508)Benefit Payments 0Net Change in Total OPEB Liability $ 4,854Total OPEB Liability, Beginning 49,512


Covered Employee Payroll $ 797,458 Net OPEB Liability as a Percentage of Covered Employee Payroll 6.82%

(Continued)

125

Exhibit E-7

Overton County, TennesseeSchedule of Changes in the Total OPEB Liability and Related Ratios - Overton County Plan (Cont.)

State Administered Medicare Plan

Overton County Plan2017

Total OPEB LiabilityService Cost $ 22,732Interest 13,545Changes in Benefit Terms 0Differences Between Actual and Expected Experience 0Changes in Assumptions or Other Inputs (48,528)Benefit Payments (2,550)Net Change in Total OPEB Liability $ (14,801)Total OPEB Liability, Beginning $ 442,397


Covered Employee Payroll $ N/ATotal OPEB Liability as a percentage of Covered Employee Payroll $ N/A

Overton County Highway Plan2017

Total OPEB LiabilityService Cost $ 849Interest 421Changes in Benefit Terms 0Differences Between Actual and Expected Experience 0Changes in Assumptions or Other Inputs (1,457)Benefit Payments 0Net Change in Total OPEB Liability $ (187)Total OPEB Liability, Beginning $ 13,583



Note 1: Ten years of data will be presented when available.Note 2: Changes in assumptions. Changes in assumptions and other inputs reflect the effects of changes in the discount rate each period. The following are the discount rates used in each period:

2017 2.92%2018 3.56%

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

126

Exhibit E-8

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

Local Education Plan2017

Total OPEB LiabilityService Cost $ 337,837 Interest 182,077 Changes in Benefit Terms 0Differences Between Actual and Expected Experience 0Changes in Assumptions or Other Inputs (289,836)Benefit Payments (254,268) Net Change in Total OPEB Liability $ (24,190) Total OPEB Liability, Beginning 6,024,823

Total OPEB Liability, Ending $ 6,000,633

Nonemployer Contributing Entity Proportionate Share of the Total OPEB Liability $ 2,090,315 Employer Proportionate Share of the Total OPEB Liability 3,910,318

Covered Employee Payroll $ 15,452,856 Net OPEB Liability as a Percentage of Covered Employee Payroll 38.83%

State Administered Medicare Plan2017

Total OPEB LiabilityService Cost $ 67,589Interest 85,496Changes in Benefit Terms 0Differences Between Actual and Expected Experience 0Changes in Assumptions or Other Inputs (250,587)Benefit Payments (103,800)Net Change in Total OPEB Liability $ (201,302)Total OPEB Liability, Beginning $ 2,912,249

Total OPEB Liability, Ending $ 2,710,947

Nonemployer Contributing Entity Proportionate Share of the Total OPEB Liability $ 1,257,256 Employer Proportionate Share of the Total OPEB Liability 1,453,691


Note 1: Ten years of data will be presented when available.Note 2: Changes in assumptions. Changes in assumptions and other inputs reflect the effects of changes in the discount rate each period. The following are the discount rates used in each period:

2017 2.92%2018 3.56%

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

127

OVERTON COUNTY, TENNESSEE NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION


TENNESSEE CONSOLIDATED RETIREMENT SYSTEM Valuation Date: Actuarially determined contribution rates for fiscal year 2017 were calculated based on the June 30, 2016, actuarial valuation. Methods and assumptions used to determine contribution rates:

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

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

3.71% Based on Age, Including InflationInvestment Rate of Return 7.5%, Net of Investment Expense,

Including InflationRetirement Age Pattern of Retirement Determined by

Experience StudyMortality Customized Table Based on Actual

Experience Including an Adjustment for Some Anticipated Improvement

Cost of Living Adjustments 2.5%

128

COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES

129

Nonmajor Governmental Funds

Special Revenue Funds ____________________________

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

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

Capital Projects 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 construction and renovation projects of the county. This fund closed during the year. County Vehicles and Equipment Fund – The County Vehicles and Equipment Fund is used to account for debt proceeds issued for the acquisition, repair, and equipping of county vehicles and buildings.

130

Exhibit F-1

Overton County, TennesseeCombining Balance SheetNonmajor Governmental FundsJune 30, 2018

Constitu - TotalCourthouse tional County Nonmajor

and Jail Drug Officers - Vehicles and GovernmentalMaintenance Control Fees Total Equipment Funds

ASSETS

Cash $ 0 $ 0 $ 1,216 $ 1,216 $ 0 $ 1,216Equity in Pooled Cash and Investments 13,257 91,271 0 104,528 9,754 114,282Accounts Receivable 0 0 11,660 11,660 0 11,660

Total Assets $ 13,257 $ 91,271 $ 12,876 $ 117,404 $ 9,754 $ 127,158

LIABILITIES

Due to Other Funds $ 0 $ 0 $ 12,876 $ 12,876 $ 0 $ 12,876Total Liabilities $ 0 $ 0 $ 12,876 $ 12,876 $ 0 $ 12,876

FUND BALANCES

Restricted:Restricted for General Government $ 13,257 $ 0 $ 0 $ 13,257 $ 0 $ 13,257Restricted for Public Safety 0 91,271 0 91,271 0 91,271Restricted for Capital Projects 0 0 0 0 9,754 9,754

Total Fund Balances $ 13,257 $ 91,271 $ 0 $ 104,528 $ 9,754 $ 114,282

Total Liabilities and Fund Balances $ 13,257 $ 91,271 $ 12,876 $ 117,404 $ 9,754 $ 127,158

Special Revenue FundsCapital

Projects Fund

131

Exhibit F-2

Overton County, TennesseeCombining Statement of Revenues, Expenditures,

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

Constitu -Courthouse tional General

and Jail Drug Officers - CapitalMaintenance Control Fees Total Projects

RevenuesLocal Taxes $ 404 $ 0 $ 0 $ 404 $ 0Fines, Forfeitures, and Penalties 0 24,653 0 24,653 0Charges for Current Services 0 0 3,038 3,038 0Other Local Revenues 0 2,026 0 2,026 0State of Tennessee 0 1,100 0 1,100 0

Total Revenues $ 404 $ 27,779 $ 3,038 $ 31,221 $ 0


General Government $ 0 $ 0 $ 0 $ 0 $ 0Finance 0 0 140 140 0Administration of Justice 0 0 2,898 2,898 0Public Safety 0 16,342 0 16,342 0Public Health and Welfare 0 0 0 0 0Other Operations 4 0 0 4 0

Debt Service:Other Debt Service 0 0 0 0 0

Capital Projects 0 0 0 0 149,968Total Expenditures $ 4 $ 16,342 $ 3,038 $ 19,384 $ 149,968

Excess (Deficiency) of RevenuesOver Expenditures $ 400 $ 11,437 $ 0 $ 11,837 $ (149,968)

(Continued)

Special Revenue Funds

Capital Projects Funds

132

Exhibit F-2


and Changes in Fund BalancesNonmajor Governmental Funds (Cont.)

Constitu -Courthouse tional General

and Jail Drug Officers - CapitalMaintenance Control Fees Total Projects

Net Change in Fund Balances $ 400 $ 11,437 $ 0 $ 11,837 $ (149,968)Fund Balance, July 1, 2017 12,857 79,834 0 92,691 149,968

Fund Balance, June 30, 2018 $ 13,257 $ 91,271 $ 0 $ 104,528 $ 0

(Continued)


Capital Projects Funds

133

Exhibit F-2



TotalCounty Nonmajor

Vehicles and GovernmentalEquipment Total Funds

RevenuesLocal Taxes $ 0 $ 0 $ 404Fines, Forfeitures, and Penalties 0 0 24,653Charges for Current Services 0 0 3,038Other Local Revenues 0 0 2,026State of Tennessee 0 0 1,100

Total Revenues $ 0 $ 0 $ 31,221


General Government $ 33,122 $ 33,122 $ 33,122Finance 0 0 140Administration of Justice 0 0 2,898Public Safety 215,574 215,574 231,916Public Health and Welfare 91,550 91,550 91,550Other Operations 0 0 4

Debt Service:Other Debt Service 5,000 5,000 5,000

Capital Projects 0 149,968 149,968Total Expenditures $ 345,246 $ 495,214 $ 514,598

Excess (Deficiency) of RevenuesOver Expenditures $ (345,246) $ (495,214) $ (483,377)

(Continued)

Capital Projects Funds (Cont.)

134

Exhibit F-2



TotalCounty Nonmajor

Vehicles and GovernmentalEquipment Total Funds

Net Change in Fund Balances $ (345,246) $ (495,214) $ (483,377)Fund Balance, July 1, 2017 355,000 504,968 597,659

Fund Balance, June 30, 2018 $ 9,754 $ 9,754 $ 114,282

Capital Projects Funds (Cont.)

135

Exhibit F-3

Overton County, TennesseeSchedule of Revenues, Expenditures, and Changes

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



RevenuesLocal Taxes $ 404 $ 342 $ 342 $ 62

Total Revenues $ 404 $ 342 $ 342 $ 62


County Buildings $ 0 $ 3,000 $ 3,000 $ 3,000Other Operations

Other Charges 4 30 30 26Total Expenditures $ 4 $ 3,030 $ 3,030 $ 3,026

Excess (Deficiency) of RevenuesOver Expenditures $ 400 $ (2,688) $ (2,688) $ 3,088

Net Change in Fund Balance $ 400 $ (2,688) $ (2,688) $ 3,088Fund Balance, July 1, 2017 12,857 12,468 12,468 389

Fund Balance, June 30, 2018 $ 13,257 $ 9,780 $ 9,780 $ 3,477

Budgeted Amounts

136

Exhibit F-4


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



RevenuesFines, Forfeitures, and Penalties $ 24,653 $ 22,775 $ 22,775 $ 1,878Other Local Revenues 2,026 3,500 3,500 (1,474)State of Tennessee 1,100 0 0 1,100

Total Revenues $ 27,779 $ 26,275 $ 26,275 $ 1,504

ExpendituresPublic Safety

Drug Enforcement $ 16,342 $ 18,900 $ 23,400 $ 7,058Total Expenditures $ 16,342 $ 18,900 $ 23,400 $ 7,058

Excess (Deficiency) of RevenuesOver Expenditures $ 11,437 $ 7,375 $ 2,875 $ 8,562

Net Change in Fund Balance $ 11,437 $ 7,375 $ 2,875 $ 8,562Fund Balance, July 1, 2017 79,834 82,344 82,344 (2,510)


Budgeted Amounts

137

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.

____________________________

138

Exhibit G


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



RevenuesLocal Taxes $ 384,764 $ 397,937 $ 397,937 $ (13,173)Other Local Revenues 232,379 79,000 79,000 153,379State of Tennessee 593,815 572,000 572,000 21,815Federal Government 115,764 158,412 158,412 (42,648)Other Governments and Citizens Groups 1,300,719 0 1,300,719 0

Total Revenues $ 2,627,441 $ 1,207,349 $ 2,508,068 $ 119,373

ExpendituresPrincipal on Debt

General Government $ 1,327,388 $ 1,212,388 $ 1,382,388 $ 55,000Education 735,000 0 735,000 0

Interest on DebtGeneral Government 353,528 190,000 390,919 37,391Education 194,200 0 194,200 0

Other Debt ServiceGeneral Government 16,069 26,300 26,300 10,231Education 600 0 600 0


Excess (Deficiency) of RevenuesOver Expenditures $ 656 $ (221,339) $ (221,339) $ 221,995

Net Change in Fund Balance $ 656 $ (221,339) $ (221,339) $ 221,995Fund Balance, July 1, 2017 1,132,081 1,119,736 1,119,736 12,345

Fund Balance, June 30, 2018 $ 1,132,737 $ 898,397 $ 898,397 $ 234,340

Budgeted Amounts

139

Fiduciary Funds ____________________________

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

____________________________ Cities - Sales Tax Fund – The Cities - Sales Tax Fund is used to account for the second half of the sales tax revenues collected inside incorporated cities of the county. These revenues are received by the county from the State of Tennessee and forwarded to the various cities on a monthly basis. Constitutional Officers - Agency Fund – The Constitutional Officers - Agency Fund is used to account for amounts collected in an agency capacity by the county clerk, circuit and general sessions courts clerk, clerk and master, register of deeds, and sheriff. Such collections include amounts due the state, cities, other county funds, litigants, heirs, and others.

140

Exhibit H-1

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

Constitu -Cities - tionalSales Officers -Tax Agency Total

ASSETS

Cash $ 0 $ 821,812 $ 821,812Due from Other Governments 179,751 0 179,751

Total Assets $ 179,751 $ 821,812 $ 1,001,563

LIABILITIES

Due to Other Taxing Units $ 179,751 $ 0 $ 179,751Due to Litigants, Heirs, and Others 0 821,812 821,812

Total Liabilities $ 179,751 $ 821,812 $ 1,001,563

Agency Funds

141

Exhibit H-2

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

Cities - Sales Tax FundAssets

Equity in Pooled Cash and Investments $ 0 $ 982,672 $ 982,672 $ 0Due from Other Governments 156,561 179,751 156,561 179,751

Total Assets $ 156,561 $ 1,162,423 $ 1,139,233 $ 179,751

LiabilitiesDue to Other Taxing Units $ 156,561 $ 1,162,423 $ 1,139,233 $ 179,751

Total Liabilities $ 156,561 $ 1,162,423 $ 1,139,233 $ 179,751

Constitutional Officers - Agency FundAssets

Cash $ 902,671 $ 5,357,875 $ 5,438,734 $ 821,812

Total Assets $ 902,671 $ 5,357,875 $ 5,438,734 $ 821,812

LiabilitiesDue to Litigants, Heirs, and Others $ 902,671 $ 5,357,875 $ 5,438,734 $ 821,812

Total Liabilities $ 902,671 $ 5,357,875 $ 5,438,734 $ 821,812

Totals - All Agency FundsAssets

Cash $ 902,671 $ 5,357,875 $ 5,438,734 $ 821,812Equity in Pooled Cash and Investments 0 982,672 982,672 0Due from Other Governments 156,561 179,751 156,561 179,751

Total Assets $ 1,059,232 $ 6,520,298 $ 6,577,967 $ 1,001,563

LiabilitiesDue to Other Taxing Units $ 156,561 $ 1,162,423 $ 1,139,233 $ 179,751Due to Litigants, Heirs, and Others 902,671 5,357,875 5,438,734 821,812

Total Liabilities $ 1,059,232 $ 6,520,298 $ 6,577,967 $ 1,001,563

EndingBalance

BeginningBalance Additions Deductions

142

Overton County School Department ____________________________

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

____________________________ General Purpose School Fund – The General Purpose School Fund is used to account for general operations of the School Department. School Federal Projects Fund – The School Federal Projects Fund is used to account for restricted federal revenues, which must be expended on specific education programs. Central Cafeteria Fund – The Central Cafeteria Fund is used to account for the cafeteria operations in each of the schools. Education Debt Service Fund – The Education Debt Service Fund is used to account for the accumulation of resources for, and the payment of, long-term debt principal, interest, and related costs.

143

Exhibit I-1

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

Net (Expense)Revenue andChanges in

Operating Capital Net PositionCharges Grants Grants Total

for and and GovernmentalFunctions/Programs Expenses Services Contributions Contributions Activities

Governmental Activities:Instruction $ 13,718,444 $ 0 $ 2,234,037 $ 124,000 $ (11,360,407)Support Services 8,782,670 40,201 142,033 0 (8,600,436)Operation of Non-instructional Services 2,812,097 462,897 1,358,044 0 (991,156)Interest on Long-term Debt 194,200 0 0 0 (194,200)

Total Governmental Activities $ 25,507,411 $ 503,098 $ 3,734,114 $ 124,000 $ (21,146,199)

General Revenues:Taxes:

Property Taxes Levied for General Purposes $ 1,968,598Local Option Sales Taxes 2,040,541Wheel Tax 610,196Wholesale Beer Tax 109,698Other Local Taxes 9,806

Grants and Contributions Not Restricted for Specific Programs 18,724,055 Unrestricted Investment Income 251 Miscellaneous 97,876Total General Revenues $ 23,561,021

Change in Net Position $ 2,414,822Net Position, July 1, 2017 13,576,270Restatement - See Note I.D.9. (2,572,573)

Net Position, June 30, 2018 $ 13,418,519

Program Revenues

144

Exhibit I-2

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

OtherGeneral Govern- TotalPurpose mental GovernmentalSchool Funds Funds

ASSETS

Cash $ 0 $ 458 $ 458Equity in Pooled Cash and Investments 6,875,696 789,799 7,665,495Inventories 0 59,393 59,393Due from Other Governments 963,409 137,296 1,100,705Due from Other Funds 9,683 0 9,683Property Taxes Receivable 2,115,771 0 2,115,771Allowance for Uncollectible Property Taxes (47,842) 0 (47,842)

Total Assets $ 9,916,717 $ 986,946 $ 10,903,663

LIABILITIES

Accrued Payroll $ 43,279 $ 4,391 $ 47,670Cash Overdraft 0 6,280 6,280Total Liabilities $ 43,279 $ 10,671 $ 53,950


Deferred Current Property Taxes $ 1,997,216 $ 0 $ 1,997,216Deferred Delinquent Property Taxes 67,582 0 67,582Other Deferred/Unavailable Revenue 191,495 0 191,495Total Deferred Inflows of Resources $ 2,256,293 $ 0 $ 2,256,293

FUND BALANCES

Nonspendable:Inventory $ 0 $ 59,393 $ 59,393

Restricted:Restricted for Education 82,429 144,426 226,855

Committed:Committed for Education 0 772,456 772,456

Assigned:Assigned for Education 13,390 0 13,390

Unassigned 7,521,326 0 7,521,326Total Fund Balances $ 7,617,145 $ 976,275 $ 8,593,420

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 9,916,717 $ 986,946 $ 10,903,663

Nonmajor Funds

Major Fund

145

Exhibit I-3

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

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) $ 8,593,420

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

Add: land $ 457,163Add: buildings and improvements net of accumulated depreciation 12,549,313Add: infrastructure net of accumulated depreciation 595,044Add: other capital assets net of accumulated depreciation 1,712,776 15,314,296

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

Less: contributions due on primary government debt for bonds $ (5,605,000)Less: net OPEB liability (5,364,010)Less: compensated absences payable (197,362) (11,166,372)

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

Add: deferred outflows of resources related to pensions $ 2,502,987Less: deferred inflows of resources related to pensions (2,518,729)Add: deferred outflows of resources related to OPEB 243,878Less: deferred inflows of resources related to OPEB (288,911) (60,775)

(4) Net pension assets of the pension plans are not current financialresources and therefore are not reported in the governmental funds.

Add: net pension asset - agent plan $ 342,257Add: net pension asset - teacher retirement plan 33,781Add: net pension asset - teacher legacy plan 102,835 478,873

(5) Other long-term assets are not available to pay forcurrent-period expenditures and therefore are deferredin the governmental funds. 259,077

Net position of governmental activities (Exhibit A) $ 13,418,519

146

Exhibit I-4


and Changes in Fund Balances - Governmental Funds

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

OtherGeneral Govern- TotalPurpose mental GovernmentalSchool Funds Funds

RevenuesLocal Taxes $ 4,121,578 $ 610,196 $ 4,731,774Licenses and Permits 1,473 0 1,473Charges for Current Services 35,929 450,047 485,976Other Local Revenues 155,314 13,087 168,401State of Tennessee 18,815,523 16,562 18,832,085Federal Government 453,444 3,209,818 3,663,262Other Governments and Citizens Groups 21,450 0 21,450

Total Revenues $ 23,604,711 $ 4,299,710 $ 27,904,421


Instruction $ 13,185,231 $ 1,172,339 $ 14,357,570Support Services 7,921,919 664,453 8,586,372Operation of Non-Instructional Services 997,432 1,814,795 2,812,227Capital Outlay 298,503 0 298,503

Debt Service:Principal on Debt 0 735,000 735,000Interest on Debt 0 194,200 194,200Other Debt Service 0 6,776 6,776

Total Expenditures $ 22,403,085 $ 4,587,563 $ 26,990,648

Excess (Deficiency) of RevenuesOver Expenditures $ 1,201,626 $ (287,853) $ 913,773

Other Financing Sources (Uses)Transfers In $ 25,109 $ 412,178 $ 437,287Transfers Out (412,178) (25,109) (437,287)

Total Other Financing Sources (Uses) $ (387,069) $ 387,069 $ 0

Net Change in Fund Balances $ 814,557 $ 99,216 $ 913,773Fund Balance, July 1, 2017 6,802,588 877,059 7,679,647

Fund Balance, June 30, 2018 $ 7,617,145 $ 976,275 $ 8,593,420

Nonmajor Funds

Major Fund

147

Exhibit I-5

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

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

Net change in fund balances - total governmental funds (Exhibit I-4) $ 913,773

(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 $ 159,588Less: current-year depreciation expense (660,977) (501,389)

(2)

Less: book value of capital assets disposed (26,736)

(3) Revenues in the statement of activities that do not provide currentfinancial resources are not reported in the funds.

Add: deferred delinquent property taxes and other deferred June 30, 2018 $ 259,077Less: deferred delinquent property taxes and other deferred June 30, 2017 (229,790) 29,287

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

Add: principal contributions on bonds for primary government 735,000

(5) Some expenses reported in the statement of activities do not require the use ofcurrent financial resources and therefore are not reported as expenditures ingovernmental funds. Change in OPEB liability (net of restatement) $ 123,707 Change in deferred outflows related to OPEB 243,878 Change in deferred inflows related to OPEB (288,911) Change in compensated absences payable 35,812 Change in net pension liability - agent plan 146,840 Change in net pension asset - teacher retirement plan 2,074,160 Change in net pension liability - legacy teacher plan 21,180 Change in deferred outflows related to pensions (1,485,552) Change in deferred inflows related to pensions 393,773 1,264,887

Change in net position of governmental activities (Exhibit B) $ 2,414,822

The net effect of various miscellaneous transactions involving capital assets (sales, trade-ins, and donations) is to decrease net position.

148

Exhibit I-6

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

TotalSchool Education NonmajorFederal Central Debt GovernmentalProjects Cafeteria Total Service Funds

ASSETS

Cash $ 0 $ 458 $ 458 $ 0 $ 458Equity in Pooled Cash and Investments 0 184,207 184,207 605,592 789,799Inventories 0 59,393 59,393 0 59,393Due from Other Governments 113,740 23,556 137,296 0 137,296

Total Assets $ 113,740 $ 267,614 $ 381,354 $ 605,592 $ 986,946

LIABILITIES

Accrued Payroll $ 0 $ 4,391 $ 4,391 $ 0 $ 4,391Cash Overdraft 6,280 0 6,280 0 6,280Total Liabilities $ 6,280 $ 4,391 $ 10,671 $ 0 $ 10,671

FUND BALANCES

Nonspendable:Inventory $ 0 $ 59,393 $ 59,393 $ 0 $ 59,393

Restricted:Restricted for Education 7,460 136,966 144,426 0 144,426

Committed:Committed for Education 100,000 66,864 166,864 605,592 772,456

Total Fund Balances $ 107,460 $ 263,223 $ 370,683 $ 605,592 $ 976,275

Total Liabilities and Fund Balances $ 113,740 $ 267,614 $ 381,354 $ 605,592 $ 986,946

Special Revenue FundsDebt Service

Fund

149

Exhibit I-7


and Changes in Fund Balances - Nonmajor Governmental Funds

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


RevenuesLocal Taxes $ 0 $ 0 $ 0 $ 610,196 $ 610,196Charges for Current Services 0 450,047 450,047 0 450,047Other Local Revenues 0 13,087 13,087 0 13,087State of Tennessee 0 16,562 16,562 0 16,562Federal Government 1,868,336 1,341,482 3,209,818 0 3,209,818

Total Revenues $ 1,868,336 $ 1,821,178 $ 3,689,514 $ 610,196 $ 4,299,710


Instruction $ 1,172,339 $ 0 $ 1,172,339 $ 0 $ 1,172,339Support Services 664,453 0 664,453 0 664,453Operation of Non-Instructional Services 0 1,814,795 1,814,795 0 1,814,795

Debt Service:Principal on Debt 0 0 0 735,000 735,000Interest on Debt 0 0 0 194,200 194,200Other Debt Service 0 0 0 6,776 6,776

Total Expenditures $ 1,836,792 $ 1,814,795 $ 3,651,587 $ 935,976 $ 4,587,563

Excess (Deficiency) of RevenuesOver Expenditures $ 31,544 $ 6,383 $ 37,927 $ (325,780) $ (287,853)

(Continued)


Fund

150

Exhibit I-7


and Changes in Fund Balances - Nonmajor Governmental Funds

Discretely Presented Overton County School Department (Cont.)


Other Financing Sources (Uses)Transfers In $ 0 $ 0 $ 0 $ 412,178 $ 412,178Transfers Out (25,109) 0 (25,109) 0 (25,109)

Total Other Financing Sources (Uses) $ (25,109) $ 0 $ (25,109) $ 412,178 $ 387,069

Net Change in Fund Balances $ 6,435 $ 6,383 $ 12,818 $ 86,398 $ 99,216Fund Balance, July 1, 2017 101,025 256,840 357,865 519,194 877,059

Fund Balance, June 30, 2018 $ 107,460 $ 263,223 $ 370,683 $ 605,592 $ 976,275


Fund

151

Exhibit I-8


in Fund Balance - Actual (Budgetary Basis) and BudgetDiscretely Presented Overton County School DepartmentGeneral Purpose School FundFor the Year Ended June 30, 2018


Actual Less: Add: Expenditures Budget -(GAAP Encumbrances Encumbrances (Budgetary PositiveBasis) 7/1/2017 6/30/2018 Basis) Original Final (Negative)

RevenuesLocal Taxes $ 4,121,578 $ 0 $ 0 $ 4,121,578 $ 3,846,273 $ 3,851,773 $ 269,805Licenses and Permits 1,473 0 0 1,473 1,400 1,400 73Charges for Current Services 35,929 0 0 35,929 24,000 24,000 11,929Other Local Revenues 155,314 0 0 155,314 96,000 96,000 59,314State of Tennessee 18,815,523 0 0 18,815,523 18,168,627 18,450,442 365,081Federal Government 453,444 0 0 453,444 600,956 637,400 (183,956)Other Governments and Citizens Groups 21,450 0 0 21,450 0 30,000 (8,550)

Total Revenues $ 23,604,711 $ 0 $ 0 $ 23,604,711 $ 22,737,256 $ 23,091,015 $ 513,696

ExpendituresInstruction

Regular Instruction Program $ 10,854,444 $ 0 $ 0 $ 10,854,444 $ 11,402,254 $ 11,312,163 $ 457,719Alternative Instruction Program 51,527 0 0 51,527 52,370 52,370 843Special Education Program 1,513,919 0 0 1,513,919 1,468,262 1,517,706 3,787Career and Technical Education Program 765,341 0 0 765,341 649,688 773,688 8,347

Support ServicesAttendance 88,448 0 0 88,448 105,169 105,502 17,054Health Services 220,315 0 843 221,158 239,150 238,817 17,659Other Student Support 724,712 0 0 724,712 786,850 767,289 42,577Regular Instruction Program 656,080 0 0 656,080 686,262 693,470 37,390Special Education Program 245,981 0 0 245,981 232,961 255,581 9,600Career and Technical Education Program 45,667 0 0 45,667 21,128 51,128 5,461Technology 165,148 0 0 165,148 10,690 172,398 7,250Other Programs 136,315 0 0 136,315 0 136,315 0Board of Education 398,313 0 0 398,313 406,857 406,857 8,544Director of Schools 138,000 0 0 138,000 140,635 140,635 2,635Office of the Principal 1,658,890 0 0 1,658,890 1,573,182 1,681,025 22,135Fiscal Services 271,148 0 0 271,148 252,955 282,214 11,066Operation of Plant 1,857,358 0 0 1,857,358 1,962,622 1,964,003 106,645

(Continued)

Budgeted Amounts

152

Exhibit I-8


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


Actual Less: Add: Expenditures Budget -(GAAP Encumbrances Encumbrances (Budgetary PositiveBasis) 7/1/2017 6/30/2018 Basis) Original Final (Negative)

Expenditures (Cont.)Support Services (Cont.)

Maintenance of Plant $ 256,076 $ 0 $ 0 $ 256,076 $ 378,312 $ 284,012 $ 27,936Transportation 1,059,468 0 0 1,059,468 976,861 1,122,451 62,983

Operation of Non-Instructional ServicesCommunity Services 478,326 0 0 478,326 552,609 552,609 74,283Early Childhood Education 519,106 (7,216) 12,547 524,437 519,139 535,540 11,103

Capital OutlayRegular Capital Outlay 298,503 (294,798) 0 3,705 0 421,070 417,365

Total Expenditures $ 22,403,085 $ (302,014) $ 13,390 $ 22,114,461 $ 22,417,956 $ 23,466,843 $ 1,352,382

Excess (Deficiency) of RevenuesOver Expenditures $ 1,201,626 $ 302,014 $ (13,390) $ 1,490,250 $ 319,300 $ (375,828) $ 1,866,078

Other Financing Sources (Uses)Transfers In $ 25,109 $ 0 $ 0 $ 25,109 $ 26,329 $ 26,329 $ (1,220)Transfers Out (412,178) 0 0 (412,178) (412,178) (474,056) 61,878

Total Other Financing Sources $ (387,069) $ 0 $ 0 $ (387,069) $ (385,849) $ (447,727) $ 60,658

Net Change in Fund Balance $ 814,557 $ 302,014 $ (13,390) $ 1,103,181 $ (66,549) $ (823,555) $ 1,926,736Fund Balance, July 1, 2017 6,802,588 (302,014) 0 6,500,574 5,989,906 5,989,906 510,668

Fund Balance, June 30, 2018 $ 7,617,145 $ 0 $ (13,390) $ 7,603,755 $ 5,923,357 $ 5,166,351 $ 2,437,404

Budgeted Amounts

153

Exhibit I-9


in Fund Balance - Actual (Budgetary Basis) and BudgetDiscretely Presented Overton County School DepartmentSchool Federal Projects FundFor the Year Ended June 30, 2018


Actual Add: Expenditures Budget -(GAAP Encumbrances (Budgetary PositiveBasis) 6/30/2018 Basis) Original Final (Negative)

RevenuesFederal Government $ 1,868,336 $ 0 $ 1,868,336 $ 1,954,720 $ 2,378,246 $ (509,910)

Total Revenues $ 1,868,336 $ 0 $ 1,868,336 $ 1,954,720 $ 2,378,246 $ (509,910)

ExpendituresInstruction

Regular Instruction Program $ 472,054 $ 5,695 $ 477,749 $ 511,483 $ 594,937 $ 117,188Special Education Program 633,570 0 633,570 645,778 701,266 67,696Career and Technical Education Program 66,715 1,765 68,480 70,757 78,883 10,403

Support ServicesOther Student Support 53,179 0 53,179 59,279 87,745 34,566Regular Instruction Program 424,438 0 424,438 453,488 612,376 187,938Special Education Program 108,574 0 108,574 100,858 176,461 67,887Career and Technical Education Program 4,565 0 4,565 7,129 6,026 1,461Board of Education 65 0 65 326 326 261Transportation 73,632 0 73,632 79,293 88,193 14,561

Total Expenditures $ 1,836,792 $ 7,460 $ 1,844,252 $ 1,928,391 $ 2,346,213 $ 501,961

Excess (Deficiency) of RevenuesOver Expenditures $ 31,544 $ (7,460) $ 24,084 $ 26,329 $ 32,033 $ (7,949)

Other Financing Sources (Uses)Transfers Out $ (25,109) $ 0 $ (25,109) $ (26,329) $ (32,033) $ 6,924

Total Other Financing Sources $ (25,109) $ 0 $ (25,109) $ (26,329) $ (32,033) $ 6,924

(Continued)

Budgeted Amounts

154

Exhibit I-9


in Fund Balance - Actual (Budgetary Basis) and BudgetDiscretely Presented Overton County School DepartmentSchool Federal Projects Fund (Cont.)


Actual Add: Expenditures Budget -(GAAP Encumbrances (Budgetary PositiveBasis) 6/30/2018 Basis) Original Final (Negative)

Net Change in Fund Balance $ 6,435 $ (7,460) $ (1,025) $ 0 $ 0 $ (1,025)Fund Balance, July 1, 2017 101,025 0 101,025 0 0 101,025

Fund Balance, June 30, 2018 $ 107,460 $ (7,460) $ 100,000 $ 0 $ 0 $ 100,000

Budgeted Amounts

155

Exhibit I-10


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



RevenuesCharges for Current Services $ 450,047 $ 586,000 $ 586,000 $ (135,953)Other Local Revenues 13,087 20,000 20,000 (6,913)State of Tennessee 16,562 27,000 27,000 (10,438)Federal Government 1,341,482 1,641,000 1,641,000 (299,518)

Total Revenues $ 1,821,178 $ 2,274,000 $ 2,274,000 $ (452,822)

ExpendituresOperation of Non-Instructional Services

Food Service $ 1,814,795 $ 2,274,000 $ 2,274,000 $ 459,205Total Expenditures $ 1,814,795 $ 2,274,000 $ 2,274,000 $ 459,205

Excess (Deficiency) of RevenuesOver Expenditures $ 6,383 $ 0 $ 0 $ 6,383

Net Change in Fund Balance $ 6,383 $ 0 $ 0 $ 6,383Fund Balance, July 1, 2017 256,840 250,188 250,188 6,652


Budgeted Amounts

156

Exhibit I-11


in Fund Balance - Actual and BudgetDiscretely Presented Overton County School DepartmentEducation Debt Service FundFor the Year Ended June 30, 2018



RevenuesLocal Taxes $ 610,196 $ 580,000 $ 580,000 $ 30,196

Total Revenues $ 610,196 $ 580,000 $ 580,000 $ 30,196

ExpendituresPrincipal on Debt

Education $ 735,000 $ 735,000 $ 735,000 $ 0Interest on Debt

Education 194,200 194,200 194,200 0Other Debt Service

Education 6,776 6,800 6,800 24Total Expenditures $ 935,976 $ 936,000 $ 936,000 $ 24

Excess (Deficiency) of RevenuesOver Expenditures $ (325,780) $ (356,000) $ (356,000) $ 30,220

Other Financing Sources (Uses)Transfers In $ 412,178 $ 412,178 $ 412,178 $ 0

Total Other Financing Sources $ 412,178 $ 412,178 $ 412,178 $ 0

Net Change in Fund Balance $ 86,398 $ 56,178 $ 56,178 $ 30,220Fund Balance, July 1, 2017 519,194 557,331 557,331 (38,137)

Fund Balance, June 30, 2018 $ 605,592 $ 613,509 $ 613,509 $ (7,917)

Budgeted Amounts

157

MISCELLANEOUS SCHEDULES

158

Exhibit J-1

Overton County, TennesseeSchedule of Changes in Long-term Bonds and NotesFor the Year Ended June 30, 2018

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

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

BONDS PAYABLEPayable through General Debt Service Fund

Industrial Park Land - F.H.A. $ 1,650,000 4.5 % 4-21-03 4-21-27 $ 699,957 $ 58,180 $ 641,777General Obligation Refunding - Series 2009 5,520,000 2 to 4.1 3-31-09 6-1-24 2,910,000 370,000 2,540,000

Total Payable through General Debt Service Fund $ 3,609,957 $ 428,180 $ 3,181,777

Contributions Due by the Overton County Health and Rehab Center to theGeneral Debt Service Fund

Nursing Home Improvements 4,150,000 2.58 5-9-12 4-1-33 $ 3,335,000 $ 170,000 $ 3,165,000Nursing Home Renovation and Construction 4,965,000 2.91 6-26-17 4-1-42 4,965,000 0 4,965,000

Total Contributions Due by the Overton County Health and Rehab Center to the General Debt Service Fund $ 8,300,000 $ 170,000 $ 8,130,000

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

School Refunding Bonds, Series 2014 4,215,000 2 1-8-14 4-1-20 $ 2,160,000 $ 710,000 $ 1,450,000School Refunding Bonds, Series 2015 4,230,000 2 to 4 3-5-15 6-1-25 4,180,000 25,000 4,155,000

Total Contributions Due by the School Department from the Education Debt Service Fund to the General Debt Service Fund $ 6,340,000 $ 735,000 $ 5,605,000

Total Bonds Payable $ 18,249,957 $ 1,333,180 $ 16,916,777

NOTES PAYABLEPayable through General Debt Service Fund

Ice Storm Clean-Up/Jail Equipment 1,265,000 2.24 5-21-15 8-9-17 $ 371,208 $ 371,208 $ 0County Vehicles 358,000 3.73 6-29-17 11-22-17 358,000 358,000 0

Total Notes Payable $ 729,208 $ 729,208 $ 0

159

Exhibit J-2

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

YearEndingJune 30 Principal Interest Total

2019 $ 1,505,798 $ 541,324 $ 2,047,1222020 1,543,534 501,442 2,044,9762021 1,571,393 460,124 2,031,5172022 1,634,381 409,410 2,043,7912023 1,692,503 356,658 2,049,1612024 1,760,765 293,333 2,054,0982025 1,339,175 226,872 1,566,0472026 467,737 177,659 645,3962027 471,491 163,412 634,9032028 410,000 149,000 559,0002029 425,000 138,201 563,2012030 435,000 126,712 561,7122031 450,000 114,163 564,1632032 465,000 101,175 566,1752033 475,000 87,225 562,2252034 220,000 72,650 292,6502035 230,000 66,050 296,0502036 235,000 59,150 294,1502037 245,000 51,512 296,5122038 250,000 43,550 293,5502039 260,000 35,425 295,4252040 270,000 26,975 296,9752041 275,000 18,200 293,2002042 285,000 9,263 294,263

Total $ 16,916,777 $ 4,229,485 $ 21,146,262

Bonds

160

Exhibit J-3

Overton County, TennesseeSchedule of TransfersPrimary Government and Discretely Presented Overton County School DepartmentFor the Year Ended June 30, 2018

From Fund To Fund Purpose Amount

PRIMARY GOVERNMENT

Solid Waste/Sanitation General Operations $ 32,000

Total Transfers Primary Government $ 32,000

DISCRETELY PRESENTED OVERTONCOUNTY SCHOOL DEPARTMENT

General Purpose School Education Debt Service Debt retirement $ 412,178School Federal Projects General Purpose School Indirect cost 25,109

Total Transfers Discretely Presented OvertonCounty School Department $ 437,287

161

Exhibit J-4

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

SalaryPaid

DuringOfficial Authorization for Salary Period Bond Surety

County Executive Section 8-24-102, TCA $ 79,326 $ 100,000 Western Surety CompanyHighway Superintendent Section 8-24-102, TCA 75,550 100,000 "Director of Schools State Board of Education and 82,257 (1) 100,000 RLI Insurance Company

County Board of EducationTrustee Section 8-24-102, TCA 68,682 926,000 Western Surety CompanyAssessor of Property Section 8-24-102, TCA 68,682 50,000 RLI Insurance CompanyCounty Clerk Section 8-24-102, TCA 68,682 100,000 Western Surety CompanyCircuit and General Sessions Courts Clerk Section 8-24-102, TCA 68,682 100,000 "Clerk and Master Section 8-24-102, TCA, and 68,682 (2) 125,000 "

Chancery Court JudgeRegister of Deeds Section 8-24-102, TCA 68,682 100,000 "Sheriff Section 8-24-102, TCA 75,550 (3) 100,000 "Director of Accounts and Budgets Section 5-13-103, TCA, and 47,951 150,000 "

County Commission

Employee Blanket Bonds:Public Employees Dishonesty - County Departments 400,000 Local Government Insurance PoolPublic Employees Dishonesty - School Department 400,000 Tennessee Risk Management Trust

(1) Does not include salary equity of $313.(2) Does not include special commissioner fees of $17,186.(3) Does not include a law enforcement training supplement of $600.

162

Exhibit J-5

Overton County, TennesseeSchedule of Detailed Revenues -

All Governmental Fund TypesFor the Year Ended June 30, 2018

Constitu -Courthouse Solid tional Highway /

and Jail Waste / Drug Officers - PublicGeneral Maintenance Sanitation Control Fees Works

Local TaxesCounty Property Taxes

Current Property Tax $ 4,182,987 $ 0 $ 305,296 $ 0 $ 0 $ 305,309Trustee's Collections - Prior Year 171,465 0 12,515 0 0 12,515Circuit Clerk/Clerk and Master Collections - Prior Years 33,449 0 2,442 0 0 2,442Interest and Penalty 44,764 0 3,267 0 0 3,267Payments in-Lieu-of Taxes - Local Utilities 302,633 0 22,102 0 0 22,089Payments in-Lieu-of Taxes - Other 3,813 0 278 0 0 278

County Local Option TaxesLocal Option Sales Tax 513,039 0 602,414 0 0 0Hotel/Motel Tax 35,957 0 0 0 0 0Litigation Tax - General 77,300 281 0 0 0 0Litigation Tax - Special Purpose 0 123 0 0 0 0Litigation Tax - Jail, Workhouse, or Courthouse 16,463 0 0 0 0 0Business Tax 150,873 0 0 0 0 0Mineral Severance Tax 0 0 0 0 0 110,346

Statutory Local TaxesBank Excise Tax 52,739 0 3,849 0 0 3,849Beer Privilege Tax 1,900 0 0 0 0 0Interstate Telecommunications Tax 76,941 0 0 0 0 0

Total Local Taxes $ 5,664,323 $ 404 $ 952,163 $ 0 $ 0 $ 460,095

Licenses and PermitsPermits

Beer Permits $ 475 $ 0 $ 0 $ 0 $ 0 $ 0Total Licenses and Permits $ 475 $ 0 $ 0 $ 0 $ 0 $ 0

(Continued)


163

Exhibit J-5


All Governmental Fund Types (Cont.)



Fines, Forfeitures, and PenaltiesCircuit Court

Fines $ 7,590 $ 0 $ 0 $ 0 $ 0 $ 0Officers Costs 5,723 0 0 0 0 0Drug Control Fines 0 0 0 6,787 0 0Veterans Treatment Court Fees 238 0 0 0 0 0Jail Fees 3,778 0 0 0 0 0DUI Treatment Fines 1,462 0 0 0 0 0Data Entry Fee - Circuit Court 1,634 0 0 0 0 0Courtroom Security Fee 8 0 0 0 0 0

Criminal CourtDrug Court Fees 2,017 0 0 0 0 0DUI Treatment Fines 2,190 0 0 0 0 0

General Sessions CourtFines 15,341 0 0 0 0 0Fines for Littering 4 0 0 0 0 0Officers Costs 28,133 0 0 0 0 0Game and Fish Fines 466 0 0 0 0 0Drug Control Fines 0 0 0 7,874 0 0Drug Court Fees 3,001 0 0 197 0 0Veterans Treatment Court Fees 1,476 0 0 0 0 0Jail Fees 17,573 0 0 0 0 0DUI Treatment Fines 373 0 0 0 0 0Data Entry Fee - General Sessions Court 5,973 0 0 0 0 0

Juvenile CourtFines 1,302 0 0 0 0 0Data Entry Fee - Juvenile Court 35 0 0 0 0 0

(Continued)


164

Exhibit J-5





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

Officers Costs $ 2,854 $ 0 $ 0 $ 0 $ 0 $ 0Data Entry Fee - Chancery Court 2,692 0 0 0 0 0

Other Fines, Forfeitures, and PenaltiesProceeds from Confiscated Property 0 0 0 9,795 0 0

Total Fines, Forfeitures, and Penalties $ 103,863 $ 0 $ 0 $ 24,653 $ 0 $ 0

Charges for Current ServicesGeneral Service Charges

Tipping Fees $ 0 $ 0 $ 227,390 $ 0 $ 0 $ 0Surcharge - Waste Tire Disposal 0 0 15,865 0 0 0Patient Charges 1,180,064 0 0 0 0 0Service Charges 2,941 0 0 0 0 0

FeesCopy Fees 3,195 0 0 0 0 0Library Fees 600 0 0 0 0 0Greenbelt Late Application Fee 150 0 0 0 0 0Telephone Commissions 34,398 0 0 0 0 0Constitutional Officers' Fees and Commissions 0 0 0 0 3,038 0Data Processing Fee - Register 7,700 0 0 0 0 0Data Processing Fee - Sheriff 1,788 0 0 0 0 0Sexual Offender Registration Fee - Sheriff 3,900 0 0 0 0 0Data Processing Fee - County Clerk 1,580 0 0 0 0 0

Education ChargesTuition - Other 128,172 0 0 0 0 0Other Charges for Services 3,458 0 0 0 0 0

Total Charges for Current Services $ 1,367,946 $ 0 $ 243,255 $ 0 $ 3,038 $ 0

(Continued)


165

Exhibit J-5





Other Local RevenuesRecurring Items

Investment Income $ 24 $ 0 $ 0 $ 0 $ 0 $ 0Lease/Rentals 30,395 0 0 0 0 0Commissary Sales 29,562 0 0 0 0 0Sale of Recycled Materials 994 0 89,605 0 0 102E-Rate Funding 965 0 0 0 0 0Miscellaneous Refunds 50,619 0 122 0 0 16,391

Nonrecurring ItemsSale of Equipment 22,235 0 14,651 0 0 8,237Damages Recovered from Individuals 87 0 0 2,026 0 400Contributions and Gifts 2,464 0 10 0 0 0

Total Other Local Revenues $ 137,345 $ 0 $ 104,388 $ 2,026 $ 0 $ 25,130

Fees Received From County OfficialsFees In-Lieu-of Salary

County Clerk $ 251,133 $ 0 $ 0 $ 0 $ 0 $ 0Circuit Court Clerk 83,286 0 0 0 0 0General Sessions Court Clerk 123,759 0 0 0 0 0Clerk and Master 68,568 0 0 0 0 0Register 90,058 0 0 0 0 0Sheriff 12,610 0 0 0 0 0Trustee 311,639 0 0 0 0 0

Total Fees Received From County Officials $ 941,053 $ 0 $ 0 $ 0 $ 0 $ 0

(Continued)


166

Exhibit J-5





State of TennesseeGeneral Government Grants

Juvenile Services Program $ 9,000 $ 0 $ 0 $ 0 $ 0 $ 0Aging Programs 8,183 0 0 0 0 0Solid Waste Grants 0 0 106,006 0 0 0

Public Safety GrantsLaw Enforcement Training Programs 11,400 0 0 0 0 0

Health and Welfare GrantsHealth Department Programs 59,091 0 0 0 0 0

Public Works GrantsBridge Program 0 0 0 0 0 52,767State Aid Program 0 0 0 0 0 734,147Litter Program 38,805 0 0 0 0 0

Other State RevenuesIncome Tax 63,058 0 0 0 0 0Beer Tax 17,839 0 0 0 0 0Vehicle Certificate of Title Fees 7,647 0 0 0 0 0Alcoholic Beverage Tax 58,151 0 0 0 0 0State Revenue Sharing - T.V.A. 0 0 0 0 0 0State Revenue Sharing - Telecommunications 3,440 0 0 0 0 0Contracted Prisoner Boarding 708,571 0 0 0 0 0Gasoline and Motor Fuel Tax 0 0 0 0 0 2,109,287Petroleum Special Tax 0 0 0 0 0 15,934Registrar's Salary Supplement 15,164 0 0 0 0 0Other State Grants 24,960 0 0 0 0 0Other State Revenues 171,804 0 0 1,100 0 0

Total State of Tennessee $ 1,197,113 $ 0 $ 106,006 $ 1,100 $ 0 $ 2,912,135

(Continued)


167

Exhibit J-5





Federal GovernmentFederal Through State

Community Development $ 84,585 $ 0 $ 0 $ 0 $ 0 $ 0Disaster Relief 0 0 0 0 0 0Other Federal through State 44,396 0 0 0 0 0

Direct Federal RevenueOther Direct Federal Revenue 114,227 0 0 0 0 0

Total Federal Government $ 243,208 $ 0 $ 0 $ 0 $ 0 $ 0

Other Governments and Citizens GroupsOther Governments

Prisoner Board $ 35,245 $ 0 $ 0 $ 0 $ 0 $ 0Contributions 67,619 0 0 0 0 0

OtherOther 9,000 0 0 0 0 0

Total Other Governments and Citizens Groups $ 111,864 $ 0 $ 0 $ 0 $ 0 $ 0

Total $ 9,767,190 $ 404 $ 1,405,812 $ 27,779 $ 3,038 $ 3,397,360

(Continued)


168

Exhibit J-5



GeneralDebt

Service Total


Current Property Tax $ 335,863 $ 5,129,455Trustee's Collections - Prior Year 13,768 210,263Circuit Clerk/Clerk and Master Collections - Prior Years 2,686 41,019Interest and Penalty 3,594 54,892Payments in-Lieu-of Taxes - Local Utilities 24,313 371,137Payments in-Lieu-of Taxes - Other 306 4,675

County Local Option TaxesLocal Option Sales Tax 0 1,115,453Hotel/Motel Tax 0 35,957Litigation Tax - General 0 77,581Litigation Tax - Special Purpose 0 123Litigation Tax - Jail, Workhouse, or Courthouse 0 16,463Business Tax 0 150,873Mineral Severance Tax 0 110,346

Statutory Local TaxesBank Excise Tax 4,234 64,671Beer Privilege Tax 0 1,900Interstate Telecommunications Tax 0 76,941

Total Local Taxes $ 384,764 $ 7,461,749

Licenses and PermitsPermits

Beer Permits $ 0 $ 475Total Licenses and Permits $ 0 $ 475

(Continued)

Debt Service Fund

169

Exhibit J-5



GeneralDebt

Service Total

Fines, Forfeitures, and PenaltiesCircuit Court

Fines $ 0 $ 7,590Officers Costs 0 5,723Drug Control Fines 0 6,787Veterans Treatment Court Fees 0 238Jail Fees 0 3,778DUI Treatment Fines 0 1,462Data Entry Fee - Circuit Court 0 1,634Courtroom Security Fee 0 8

Criminal CourtDrug Court Fees 0 2,017DUI Treatment Fines 0 2,190

General Sessions CourtFines 0 15,341Fines for Littering 0 4Officers Costs 0 28,133Game and Fish Fines 0 466Drug Control Fines 0 7,874Drug Court Fees 0 3,198Veterans Treatment Court Fees 0 1,476Jail Fees 0 17,573DUI Treatment Fines 0 373Data Entry Fee - General Sessions Court 0 5,973

Juvenile CourtFines 0 1,302Data Entry Fee - Juvenile Court 0 35

(Continued)

Debt Service Fund

170

Exhibit J-5



GeneralDebt

Service Total

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

Officers Costs $ 0 $ 2,854Data Entry Fee - Chancery Court 0 2,692

Other Fines, Forfeitures, and PenaltiesProceeds from Confiscated Property 0 9,795

Total Fines, Forfeitures, and Penalties $ 0 $ 128,516

Charges for Current ServicesGeneral Service Charges

Tipping Fees $ 0 $ 227,390Surcharge - Waste Tire Disposal 0 15,865Patient Charges 0 1,180,064Service Charges 0 2,941

FeesCopy Fees 0 3,195Library Fees 0 600Greenbelt Late Application Fee 0 150Telephone Commissions 0 34,398Constitutional Officers' Fees and Commissions 0 3,038Data Processing Fee - Register 0 7,700Data Processing Fee - Sheriff 0 1,788Sexual Offender Registration Fee - Sheriff 0 3,900Data Processing Fee - County Clerk 0 1,580

Education ChargesTuition - Other 0 128,172Other Charges for Services 0 3,458

Total Charges for Current Services $ 0 $ 1,614,239

(Continued)

Debt Service Fund

171

Exhibit J-5



GeneralDebt

Service Total


Investment Income $ 232,379 $ 232,403Lease/Rentals 0 30,395Commissary Sales 0 29,562Sale of Recycled Materials 0 90,701E-Rate Funding 0 965Miscellaneous Refunds 0 67,132

Nonrecurring ItemsSale of Equipment 0 45,123Damages Recovered from Individuals 0 2,513Contributions and Gifts 0 2,474

Total Other Local Revenues $ 232,379 $ 501,268

Fees Received From County OfficialsFees In-Lieu-of Salary

County Clerk $ 0 $ 251,133Circuit Court Clerk 0 83,286General Sessions Court Clerk 0 123,759Clerk and Master 0 68,568Register 0 90,058Sheriff 0 12,610Trustee 0 311,639

Total Fees Received From County Officials $ 0 $ 941,053

(Continued)

Debt Service Fund

172

Exhibit J-5



GeneralDebt

Service Total


Juvenile Services Program $ 0 $ 9,000Aging Programs 0 8,183Solid Waste Grants 0 106,006

Public Safety GrantsLaw Enforcement Training Programs 0 11,400

Health and Welfare GrantsHealth Department Programs 0 59,091

Public Works GrantsBridge Program 0 52,767State Aid Program 0 734,147Litter Program 0 38,805

Other State RevenuesIncome Tax 0 63,058Beer Tax 0 17,839Vehicle Certificate of Title Fees 0 7,647Alcoholic Beverage Tax 0 58,151State Revenue Sharing - T.V.A. 577,016 577,016State Revenue Sharing - Telecommunications 0 3,440Contracted Prisoner Boarding 0 708,571Gasoline and Motor Fuel Tax 0 2,109,287Petroleum Special Tax 0 15,934Registrar's Salary Supplement 0 15,164Other State Grants 16,799 41,759Other State Revenues 0 172,904

Total State of Tennessee $ 593,815 $ 4,810,169

(Continued)

Debt Service Fund

173

Exhibit J-5



GeneralDebt

Service Total


Community Development $ 0 $ 84,585Disaster Relief 115,764 115,764Other Federal through State 0 44,396

Direct Federal RevenueOther Direct Federal Revenue 0 114,227

Total Federal Government $ 115,764 $ 358,972

Other Governments and Citizens GroupsOther Governments

Prisoner Board $ 0 $ 35,245Contributions 1,300,719 1,368,338

OtherOther 0 9,000

Total Other Governments and Citizens Groups $ 1,300,719 $ 1,412,583

Total $ 2,627,441 $ 17,229,024

Debt Service Fund

174

Exhibit J-6


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

General School EducationPurpose Federal Central DebtSchool Projects Cafeteria Service Total


Current Property Tax $ 1,743,505 $ 0 $ 0 $ 0 $ 1,743,505Trustee's Collections - Prior Year 68,209 0 0 0 68,209Circuit Clerk/Clerk and Master Collections - Prior Years 13,917 0 0 0 13,917Interest and Penalty 18,676 0 0 0 18,676Payments in-Lieu-of Taxes - Local Utilities 125,913 0 0 0 125,913Payments in-Lieu-of Taxes - Other 1,586 0 0 0 1,586

County Local Option TaxesLocal Option Sales Tax 2,008,046 0 0 0 2,008,046Wheel Tax 0 0 0 610,196 610,196Mixed Drink Tax 9,806 0 0 0 9,806Other County Local Option Taxes 280 0 0 0 280

Statutory Local TaxesBank Excise Tax 21,942 0 0 0 21,942Wholesale Beer Tax 109,698 0 0 0 109,698

Total Local Taxes $ 4,121,578 $ 0 $ 0 $ 610,196 $ 4,731,774

Licenses and PermitsLicenses

Marriage Licenses $ 1,473 $ 0 $ 0 $ 0 $ 1,473Total Licenses and Permits $ 1,473 $ 0 $ 0 $ 0 $ 1,473

Charges for Current ServicesEducation Charges

Lunch Payments - Children $ 0 $ 0 $ 241,447 $ 0 $ 241,447

(Continued)

Debt Service FundSpecial Revenue Funds

175

Exhibit J-6


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


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

Lunch Payments - Adults $ 0 $ 0 $ 49,842 $ 0 $ 49,842Income from Breakfast 0 0 53,578 0 53,578A la Carte Sales 0 0 105,180 0 105,180Receipts from Individual Schools 23,079 0 0 0 23,079Community Service Fees - Children 12,850 0 0 0 12,850

Total Charges for Current Services $ 35,929 $ 0 $ 450,047 $ 0 $ 485,976


Investment Income $ 0 $ 0 $ 251 $ 0 $ 251Lease/Rentals 14,408 0 0 0 14,408Sale of Materials and Supplies 14,189 0 0 0 14,189E-Rate Funding 24,651 0 0 0 24,651Miscellaneous Refunds 85,040 0 12,836 0 97,876

Nonrecurring ItemsContributions and Gifts 17,026 0 0 0 17,026

Total Other Local Revenues $ 155,314 $ 0 $ 13,087 $ 0 $ 168,401


On-behalf Contributions for OPEB $ 136,315 $ 0 $ 0 $ 0 $ 136,315State Education Funds

Basic Education Program 17,351,000 0 0 0 17,351,000Early Childhood Education 535,540 0 0 0 535,540

(Continued)


Fund

176

Exhibit J-6




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

School Food Service $ 0 $ 0 $ 16,562 $ 0 $ 16,562Driver Education 11,170 0 0 0 11,170Other State Education Funds 497,593 0 0 0 497,593Career Ladder Program 68,149 0 0 0 68,149Vocational Equipment 124,000 0 0 0 124,000

Other State RevenuesOther State Grants 91,756 0 0 0 91,756

Total State of Tennessee $ 18,815,523 $ 0 $ 16,562 $ 0 $ 18,832,085


USDA School Lunch Program $ 0 $ 0 $ 854,237 $ 0 $ 854,237USDA - Commodities 0 0 105,885 0 105,885Breakfast 0 0 323,379 0 323,379USDA - Other 0 0 57,981 0 57,981Vocational Education - Basic Grants to States 0 68,453 0 0 68,453Other Vocational 0 15,148 0 0 15,148Title I Grants to Local Education Agencies 0 775,344 0 0 775,344Special Education - Grants to States 36,444 757,507 0 0 793,951Special Education Preschool Grants 0 69,087 0 0 69,087Safe and Drug-free Schools - State Grants 417,000 0 0 0 417,000Rural Education 0 29,052 0 0 29,052Eisenhower Professional Development State Grants 0 75,928 0 0 75,928Other Federal through State 0 77,817 0 0 77,817

Total Federal Government $ 453,444 $ 1,868,336 $ 1,341,482 $ 0 $ 3,663,262

(Continued)


Fund

177

Exhibit J-6




Other Governments and Citizens GroupsCitizens Groups

Donations $ 21,450 $ 0 $ 0 $ 0 $ 21,450Total Other Governments and Citizens Groups $ 21,450 $ 0 $ 0 $ 0 $ 21,450

Total $ 23,604,711 $ 1,868,336 $ 1,821,178 $ 610,196 $ 27,904,421


Fund

178

Exhibit J-7

Overton County, TennesseeSchedule of Detailed Expenditures -

All Governmental Fund TypesFor the Year Ended June 30, 2018

General FundGeneral Government

County CommissionBoard and Committee Members Fees $ 62,200Social Security 4,705Pensions 454Medical Insurance 4,800Audit Services 8,171Dues and Memberships 3,304Travel 1,085

Total County Commission $ 84,719

Board of EqualizationBoard and Committee Members Fees $ 1,200

Total Board of Equalization 1,200

County Mayor/ExecutiveCounty Official/Administrative Officer $ 79,326Supervisor/Director 26,595Deputy(ies) 24,586Social Security 9,289Pensions 7,061Medical Insurance 9,600Communication 5,046Data Processing Services 12,501Dues and Memberships 1,991Legal Notices, Recording, and Court Costs 1,783Maintenance and Repair Services - Vehicles 51Postal Charges 3,776Travel 2,628Office Supplies 8,149Office Equipment 699

Total County Mayor/Executive 193,081

County AttorneySocial Security $ 579Legal Services 41,695

Total County Attorney 42,274

Election CommissionCounty Official/Administrative Officer $ 61,633Deputy(ies) 25,331Election Commission 2,550Election Workers 9,341In-service Training 30Social Security 7,159Pensions 4,705Medical Insurance 400Communication 1,706Data Processing Services 6,556

(Continued)

179

Exhibit J-7



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

Election Commission (Cont.)Dues and Memberships $ 175Legal Notices, Recording, and Court Costs 1,531Maintenance and Repair Services - Equipment 10,500Postal Charges 1,135Printing, Stationery, and Forms 1,068Travel 1,410Other Contracted Services 9,075Office Supplies 1,274Office Equipment 170

Total Election Commission $ 145,749

Register of DeedsCounty Official/Administrative Officer $ 68,682Deputy(ies) 30,000Accountants/Bookkeepers 27,731Social Security 9,493Pensions 6,839Communication 3,133Data Processing Services 6,967Dues and Memberships 607Other Contracted Services 480Office Supplies 544Office Equipment 370

Total Register of Deeds 154,846

PlanningBoard and Committee Members Fees $ 2,650Social Security 203Contracts with Government Agencies 12,750

Total Planning 15,603

County BuildingsCustodial Personnel $ 27,343Maintenance Personnel 27,427Part-time Personnel 3,584Social Security 4,464Pensions 2,958Communication 6,576Maintenance and Repair Services - Buildings 121,542Maintenance and Repair Services - Vehicles 581Custodial Supplies 5,912Electricity 87,527Gasoline 2,320Natural Gas 19,374Small Tools 948Tires and Tubes 461Uniforms 2,320

(Continued)

180

Exhibit J-7



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

County Buildings (Cont.)Utilities $ 435Other Charges 372Land 38,500Motor Vehicles 9,018Office Equipment 599Other Equipment 4,377

Total County Buildings $ 366,638

Other General AdministrationTeachers $ 3,000Social Security 230On-behalf Payments to OPEB 750Evaluation and Testing 1,563Remittance of Revenue Collected 13,719Other Contracted Services 28,352Other Supplies and Materials 9,906Liability Insurance 305,047Premiums on Corporate Surety Bonds 8,141Trustee's Commission 131,019Workers' Compensation Insurance 264,133Other Charges 9,898

Total Other General Administration 775,758

Preservation of RecordsOffice Supplies $ 953

Total Preservation of Records 953

FinanceAccounting and Budgeting

County Official/Administrative Officer $ 47,951In-service Training 300Social Security 3,663Pensions 2,594Travel 249

Total Accounting and Budgeting 54,757

Property Assessor's OfficeCounty Official/Administrative Officer $ 68,682Deputy(ies) 26,890Assessment Personnel 29,118Clerical Personnel 21,493Social Security 10,660Pensions 7,882Medical Insurance 14,400Communication 3,927Data Processing Services 2,873Dues and Memberships 1,700

(Continued)

181

Exhibit J-7



General Fund (Cont.)Finance (Cont.)

Property Assessor's Office (Cont.)Maintenance and Repair Services - Vehicles $ 184Postal Charges 490Travel 529Other Contracted Services 9,665Gasoline 1,172Office Supplies 1,094Other Charges 4,874Office Equipment 2,260

Total Property Assessor's Office $ 207,893

County Trustee's OfficeCounty Official/Administrative Officer $ 68,682Deputy(ies) 26,890Accountants/Bookkeepers 24,610Social Security 8,772Pensions 6,502Medical Insurance 14,400Communication 2,204Data Processing Services 12,222Dues and Memberships 907Legal Notices, Recording, and Court Costs 175Postal Charges 3,403Travel 218Other Contracted Services 180Office Supplies 1,858Other Charges 3,326Office Equipment 1,691

Total County Trustee's Office 176,040

County Clerk's OfficeCounty Official/Administrative Officer $ 68,682Deputy(ies) 23,627Accountants/Bookkeepers 22,502Clerical Personnel 42,226Social Security 11,844Pensions 8,321Medical Insurance 4,800Communication 2,676Dues and Memberships 907Legal Notices, Recording, and Court Costs 92Postal Charges 8,506Travel 52Other Contracted Services 9,295Office Supplies 3,068Office Equipment 2,270

Total County Clerk's Office 208,868

(Continued)

182

Exhibit J-7



General Fund (Cont.)Administration of Justice

Circuit CourtCounty Official/Administrative Officer $ 68,682Deputy(ies) 26,099Accountants/Bookkeepers 45,044Clerical Personnel 41,384Jury and Witness Expense 6,016Social Security 13,776Pensions 8,779Medical Insurance 22,800Communication 4,147Data Processing Services 12,742Dues and Memberships 1,062Legal Notices, Recording, and Court Costs 506Postal Charges 2,071Tuition 130Other Contracted Services 540Office Supplies 2,671Office Equipment 3,110

Total Circuit Court $ 259,559

General Sessions CourtJudge(s) $ 100,110Deputy(ies) 19,626Social Security 9,115Pensions 6,276Medical Insurance 4,800Dues and Memberships 150Travel 4,122Office Supplies 1,821

Total General Sessions Court 146,020

Drug CourtSupervisor/Director $ 39,000Guidance Personnel 32,075Part-time Personnel 1,350In-service Training 417Social Security 103Communication 2,868Dues and Memberships 340Travel 11,076Drugs and Medical Supplies 6,998Office Supplies 1,008Other Charges 2,055

Total Drug Court 97,290

Chancery CourtCounty Official/Administrative Officer $ 68,682Deputy(ies) 28,829

(Continued)

183

Exhibit J-7



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

Chancery Court (Cont.)Accountants/Bookkeepers $ 26,385Clerical Personnel 42,661Social Security 12,119Pensions 4,862Medical Insurance 19,200Communication 3,291Data Processing Services 10,120Dues and Memberships 507Other Contracted Services 300Office Supplies 5,155Office Equipment 1,100

Total Chancery Court $ 223,211

Juvenile CourtGuidance Personnel $ 18,362Social Security 1,405Other Contracted Services 1,840

Total Juvenile Court 21,607

Judicial CommissionersCounty Official/Administrative Officer $ 17,683Social Security 1,350Travel 146

Total Judicial Commissioners 19,179

Public SafetySheriff's Department

County Official/Administrative Officer $ 75,550Supervisor/Director 23,591Deputy(ies) 400,284Investigator(s) 144,081Captain(s) 45,608Sergeant(s) 123,634Salary Supplements 11,400Clerical Personnel 42,848School Resource Officer 45,806Overtime Pay 42,109Other Salaries and Wages 360In-service Training 7,141Social Security 69,845Pensions 46,329Medical Insurance 87,900Communication 18,512Data Processing Services 7,289Dues and Memberships 1,525Freight Expenses 8Legal Notices, Recording, and Court Costs 124

(Continued)

184

Exhibit J-7



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

Sheriff's Department (Cont.)Maintenance and Repair Services - Equipment $ 1,103Maintenance and Repair Services - Vehicles 9,670Matching Share 4,178Postal Charges 1,089Travel 18Other Contracted Services 17,016Gasoline 77,307Instructional Supplies and Materials 615Law Enforcement Supplies 575Office Supplies 8,870Tires and Tubes 6,831Uniforms 947Vehicle Parts 14,181Other Supplies and Materials 7,300Law Enforcement Equipment 8,315Motor Vehicles 11,000Office Equipment 7,557Other Equipment 23,924

Total Sheriff's Department $ 1,394,440

Special PatrolsDeputy(ies) $ 22,854Social Security 1,677Pensions 1,230Medical Insurance 4,800Maintenance and Repair Services - Vehicles 728Disposal Fees 1,225Gasoline 3,139Other Supplies and Materials 78

Total Special Patrols 35,731

JailSupervisor/Director $ 38,693Sergeant(s) 179,887Guards 309,526Cafeteria Personnel 44,321Maintenance Personnel 40,138Overtime Pay 13,863Social Security 45,853Pensions 21,855Medical Insurance 80,721Evaluation and Testing 3,679Maintenance and Repair Services - Buildings 87,529Maintenance and Repair Services - Equipment 4,612Medical and Dental Services 337,260Travel 11,683Other Contracted Services 3,593

(Continued)

185

Exhibit J-7



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

Jail (Cont.)Custodial Supplies $ 44,932Electricity 45,833Food Supplies 117,818Natural Gas 49,297Prisoners Clothing 2,919Uniforms 1,444Other Supplies and Materials 11,387Other Charges 1,215Office Equipment 70Other Equipment 4,198

Total Jail $ 1,502,326

Fire Prevention and ControlContracts with Government Agencies $ 1,000Contributions 96,000Electricity 2,639Liability Insurance 65,626Workers' Compensation Insurance 10,781

Total Fire Prevention and Control 176,046

Civil DefenseSupervisor/Director $ 4,006In-service Training 470Social Security 306Communication 425Maintenance and Repair Services - Equipment 1,142Electricity 1,079Other Charges 807

Total Civil Defense 8,235

Rescue SquadContributions $ 10,000

Total Rescue Squad 10,000

Other Emergency ManagementContributions $ 150,000

Total Other Emergency Management 150,000

County Coroner/Medical ExaminerOther Contracted Services $ 21,422

Total County Coroner/Medical Examiner 21,422

Public Health and WelfareLocal Health Center

Other Salaries and Wages $ 40,398Social Security 3,151Communication 6,233

(Continued)

186

Exhibit J-7



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

Local Health Center (Cont.)Contracts with Other Public Agencies $ 18,180Maintenance and Repair Services - Buildings 4,950Travel 1,178Other Contracted Services 10,800Office Supplies 1,312Utilities 12,267Other Supplies and Materials 8,999Other Charges 18,521Other Equipment 420

Total Local Health Center $ 126,409

Ambulance/Emergency Medical ServicesSupervisor/Director $ 54,726Accountants/Bookkeepers 34,391Paraprofessionals 463,547Attendants 368,510Overtime Pay 243,175In-service Training 4,660Social Security 86,256Pensions 57,348Medical Insurance 105,998Communication 11,381Data Processing Services 6,170Dues and Memberships 450Evaluation and Testing 2,336Licenses 2,000Maintenance and Repair Services - Buildings 15,818Maintenance and Repair Services - Equipment 6,187Maintenance and Repair Services - Vehicles 42,443Travel 1,601Tuition 14,514Other Contracted Services 49,782Custodial Supplies 6,590Drugs and Medical Supplies 77,906Electricity 17,953Gasoline 47,795Natural Gas 6,718Office Supplies 6,635Tires and Tubes 6,184Uniforms 11,799Office Equipment 3,961Other Equipment 25,553

Total Ambulance/Emergency Medical Services 1,782,387

Other Local Health ServicesGasoline $ 3,230

Total Other Local Health Services 3,230

(Continued)

187

Exhibit J-7



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

Regional Mental Health CenterContracts with Other Public Agencies $ 6,327

Total Regional Mental Health Center $ 6,327

Social, Cultural, and Recreational ServicesSenior Citizens Assistance

Supervisor/Director $ 39,451Part-time Personnel 13,331Social Security 3,985Pensions 2,134Data Processing Services 470Licenses 225Maintenance and Repair Services - Vehicles 40Other Contracted Services 1,490Custodial Supplies 403Food Supplies 374Gasoline 82Office Supplies 534Premiums on Corporate Surety Bonds 187

Total Senior Citizens Assistance 62,706

LibrariesLibrarians $ 32,973Clerical Personnel 21,645Part-time Personnel 31,113Social Security 5,947Pensions 2,955Medical Insurance 9,600Communication 2,830Data Processing Services 1,728Dues and Memberships 159Maintenance and Repair Services - Buildings 10,892Travel 693Tuition 3,274Custodial Supplies 1,214Library Books/Media 1,336Office Supplies 3,079Utilities 15,425Other Supplies and Materials 2,220Other Charges 2,287Office Equipment 1,910

Total Libraries 151,280

Other Social, Cultural, and RecreationalContributions $ 14,250Other Charges 25,000

Total Other Social, Cultural, and Recreational 39,250

(Continued)

188

Exhibit J-7



General Fund (Cont.)Agriculture and Natural Resources

Agricultural Extension ServiceSalary Supplements $ 34,939Other Salaries and Wages 4,184Social Security 344Extension Service Medicare 2,545Pensions 3,780Medical Insurance 5,731Unemployment Compensation 12Other Fringe Benefits 997Communication 3,197Contributions 436Travel 2,444Workers' Compensation Insurance 46Office Equipment 1,500

Total Agricultural Extension Service $ 60,155

Soil ConservationAssistant(s) $ 27,000Deputy(ies) 23,393Social Security 3,759Pensions 2,502Medical Insurance 4,800

Total Soil Conservation 61,454

Other OperationsTourism

Advertising $ 6,178Other Equipment 25,600

Total Tourism 31,778

Industrial DevelopmentContributions $ 15,000Other Charges 5,324Right-of-Way 40,600

Total Industrial Development 60,924

Other Economic and Community DevelopmentOther Contracted Services $ 84,585

Total Other Economic and Community Development 84,585

AirportContracts with Government Agencies $ 7,200

Total Airport 7,200

Veterans' ServicesSupervisor/Director $ 19,657Social Security 1,467Communication 2,697

(Continued)

189

Exhibit J-7



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

Veterans' Services (Cont.)Contributions $ 5,527Data Processing Services 876Travel 2,393Other Contracted Services 240Office Supplies 1,012Other Charges 2,500Office Equipment 620

Total Veterans' Services $ 36,989

Contributions to Other AgenciesContributions $ 15,602

Total Contributions to Other Agencies 15,602

HighwaysTraffic Control

Supervisor/Director $ 486Social Security 37Pensions 26Gasoline 105Road Signs 2,390

Total Traffic Control 3,044

Litter and Trash CollectionSupervisor/Director $ 22,598Social Security 1,694Advertising 10,270Maintenance and Repair Services - Vehicles 449Custodial Supplies 652Gasoline 2,527Tires and Tubes 12

Total Litter and Trash Collection 38,202

Total General Fund $ 9,064,967

Courthouse and Jail Maintenance FundOther Operations

Other ChargesTrustee's Commission $ 4

Total Other Charges $ 4

Total Courthouse and Jail Maintenance Fund 4

Solid Waste/Sanitation FundGeneral Government

Other General AdministrationIn-service Training $ 80Data Processing Services 5,195

(Continued)

190

Exhibit J-7



Solid Waste/Sanitation Fund (Cont.)General Government (Cont.)

Other General Administration (Cont.)Evaluation and Testing $ 810Legal Notices, Recording, and Court Costs 434Other Contracted Services 180Office Supplies 1,213Liability Insurance 21,722Trustee's Commission 16,357Workers' Compensation Insurance 23,400Office Equipment 85

Total Other General Administration $ 69,476

Public Health and WelfareConvenience Centers

Laborers $ 107,037Social Security 8,127Pensions 547Communication 4,441Maintenance and Repair Services - Buildings 4,861Maintenance and Repair Services - Equipment 637Rentals 4,200Electricity 6,850Water and Sewer 5,998Other Equipment 51,862

Total Convenience Centers 194,560

Transfer StationsSupervisor/Director $ 47,450Foremen 30,514Equipment Operators 24,810Truck Drivers 56,437Laborers 22,651Social Security 12,803Pensions 9,083Medical Insurance 14,799Communication 940Licenses 18Maintenance and Repair Services - Buildings 33Maintenance and Repair Services - Equipment 41,017Disposal Fees 407,052Other Contracted Services 5,211Diesel Fuel 23,360Lubricants 848Tires and Tubes 4,756Other Supplies and Materials 222Other Charges 1,500Motor Vehicles 3,000Solid Waste Equipment 84,036

Total Transfer Stations 790,540

(Continued)

191

Exhibit J-7



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

Recycling CenterCommunication $ 2,274Maintenance and Repair Services - Buildings 807Maintenance and Repair Services - Equipment 6,580Other Contracted Services 22,999Custodial Supplies 989Electricity 4,089Gasoline 1,800Propane Gas 686Uniforms 3,437Water and Sewer 1,821Other Supplies and Materials 1,102Other Equipment 45,503

Total Recycling Center $ 92,087

Other Waste DisposalFertilizer, Lime, and Seed $ 904

Total Other Waste Disposal 904

Postclosure Care CostsTesting $ 31,281Other Charges 1,000

Total Postclosure Care Costs 32,281

Total Solid Waste/Sanitation Fund $ 1,179,848

Drug Control FundPublic Safety

Drug EnforcementConfidential Drug Enforcement Payments $ 7,000Dues and Memberships 300Maintenance and Repair Services - Buildings 540Towing Services 375Veterinary Services 295Animal Food and Supplies 1,183Trustee's Commission 149Other Equipment 6,500

Total Drug Enforcement $ 16,342

Total Drug Control Fund 16,342

Constitutional Officers - Fees FundFinance

County Trustee's OfficeConstitutional Officers' Operating Expenses $ 140

Total County Trustee's Office $ 140

(Continued)

192

Exhibit J-7



Constitutional Officers - Fees Fund (Cont.)Administration of Justice

Chancery CourtConstitutional Officers' Operating Expenses $ 2,898

Total Chancery Court $ 2,898

Total Constitutional Officers - Fees Fund $ 3,038

Highway/Public Works FundHighways

AdministrationCounty Official/Administrative Officer $ 75,550Supervisor/Director 31,904Overtime Pay 8,874Communication 4,805Dues and Memberships 3,159Evaluation and Testing 1,040Legal Notices, Recording, and Court Costs 1,487Licenses 59Maintenance and Repair Services - Buildings 2,076Travel 3,042Other Contracted Services 567Custodial Supplies 1,353Electricity 4,148Office Supplies 1,070Utilities 3,211Other Charges 500Office Equipment 4,890

Total Administration $ 147,735

Highway and Bridge MaintenanceSupervisor/Director $ 105,847Equipment Operators 271,038Truck Drivers 85,244Laborers 39,779Overtime Pay 58,134Rentals 3,064Asphalt - Cold Mix 312,314Asphalt - Liquid 124,526Crushed Stone 190,535Pipe 6,598Pipe - Metal 4,698Road Signs 4,340Salt 3,408Other Supplies and Materials 4,411Other Charges 6,598

Total Highway and Bridge Maintenance 1,220,534

Operation and Maintenance of EquipmentSupervisor/Director $ 30,278

(Continued)

193

Exhibit J-7



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

Operation and Maintenance of Equipment (Cont.)Mechanic(s) $ 58,849Overtime Pay 10,453Freight Expenses 2,699Maintenance and Repair Services - Equipment 73,568Equipment and Machinery Parts 54,479Gasoline 154,061Lubricants 7,391Small Tools 1,211Tires and Tubes 23,219Uniforms 1,425Highway Equipment 106,432

Total Operation and Maintenance of Equipment $ 524,065

Quarry OperationsSupervisor/Director $ 4,014Equipment Operators 54,869Overtime Pay 10,391Explosive and Drilling Services 16,423Operating Lease Payments 9,600Permits 2,104Electricity 33,949Equipment and Machinery Parts 25,480Uniforms 1,564

Total Quarry Operations 158,394

Other ChargesLiability Insurance $ 43,943Trustee's Commission 29,320Workers' Compensation Insurance 73,540

Total Other Charges 146,803

Employee BenefitsSocial Security $ 60,868Pensions 43,142Medical Insurance 257,087Unemployment Compensation 6,587

Total Employee Benefits 367,684

Capital OutlayEngineering Services $ 52,086Asphalt 716,137

Total Capital Outlay 768,223

Total Highway/Public Works Fund $ 3,333,438

(Continued)

194

Exhibit J-7



General Debt Service FundPrincipal on Debt

General GovernmentPrincipal on Bonds $ 598,180Principal on Notes 729,208

Total General Government $ 1,327,388

EducationPrincipal on Bonds $ 735,000

Total Education 735,000

Interest on DebtGeneral Government

Interest on Bonds $ 345,492Interest on Notes 8,036

Total General Government 353,528

EducationInterest on Bonds $ 194,200


Other Debt ServiceGeneral Government

Fiscal Agent Charges $ 350Trustee's Commission 15,719

Total General Government 16,069

EducationOther Debt Service $ 600

Total Education 600

Total General Debt Service Fund $ 2,626,785

General Capital Projects FundCapital Projects

Highway and Street Capital ProjectsAsphalt - Cold Mix $ 149,968

Total Highway and Street Capital Projects $ 149,968

Total General Capital Projects Fund 149,968

County Vehicles and Equipment FundGeneral Government

County BuildingsMaintenance and Repair Services - Buildings $ 8,173Motor Vehicles 24,949

Total County Buildings $ 33,122

(Continued)

195

Exhibit J-7



County Vehicles and Equipment Fund (Cont.)Public Safety

Sheriff's DepartmentMotor Vehicles $ 207,012Other Equipment 8,562

Total Sheriff's Department $ 215,574

Public Health and WelfareAmbulance/Emergency Medical Services

Motor Vehicles $ 91,550Total Ambulance/Emergency Medical Services 91,550

Other Debt ServiceGeneral Government

Fiscal Agent Charges $ 5,000Total General Government 5,000

Total County Vehicles and Equipment Fund $ 345,246

Total Governmental Funds - Primary Government $ 16,719,636

196

Exhibit J-8


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

General Purpose School FundInstruction

Regular Instruction ProgramTeachers $ 7,214,250Career Ladder Program 38,500Homebound Teachers 3,712Educational Assistants 138,477Other Salaries and Wages 143,590Certified Substitute Teachers 57,801Non-certified Substitute Teachers 167,210Social Security 443,524Pensions 638,674Life Insurance 6,071Medical Insurance 1,443,319Unemployment Compensation 4,563Local Retirement 32,035Employer Medicare 104,468Payments to Retirees 72,194Maintenance and Repair Services - Equipment 817Other Contracted Services 64,851Food Supplies 673Instructional Supplies and Materials 56,229Textbooks - Bound 7,423Other Supplies and Materials 81,003In Service/Staff Development 6,561Fee Waivers 46,217Other Charges 450Regular Instruction Equipment 81,832

Total Regular Instruction Program $ 10,854,444

Alternative Instruction ProgramTeachers $ 36,379Social Security 2,024Pensions 3,303Medical Insurance 9,328Unemployment Compensation 20Employer Medicare 473

Total Alternative Instruction Program 51,527

Special Education ProgramTeachers $ 945,816Career Ladder Program 7,000Homebound Teachers 6,255Educational Assistants 72,526Speech Pathologist 45,820Other Salaries and Wages 24Social Security 61,912Pensions 86,443Medical Insurance 219,490

(Continued)

197

Exhibit J-8



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

Special Education Program (Cont.)Unemployment Compensation $ 587Local Retirement 7,630Employer Medicare 14,479Instructional Supplies and Materials 3,837Other Supplies and Materials 461In Service/Staff Development 1,217Other Charges 1,049Regular Instruction Equipment 319Special Education Equipment 39,054

Total Special Education Program $ 1,513,919

Career and Technical Education ProgramTeachers $ 369,335Social Security 21,347Pensions 31,714Medical Insurance 69,425Unemployment Compensation 177Local Retirement 1,793Employer Medicare 4,992Maintenance and Repair Services - Equipment 935Travel 230Tuition 129,644Other Contracted Services 366Instructional Supplies and Materials 3,135Textbooks - Bound 1,032Other Supplies and Materials 6,594In Service/Staff Development 215Other Charges 328Vocational Instruction Equipment 124,079

Total Career and Technical Education Program 765,341

Support ServicesAttendance

Supervisor/Director $ 55,581Social Security 3,214Pensions 5,048Medical Insurance 9,275Unemployment Compensation 21Employer Medicare 752Travel 182Other Contracted Services 9,613Other Supplies and Materials 96In Service/Staff Development 1,861Attendance Equipment 2,805

Total Attendance 88,448

(Continued)

198

Exhibit J-8



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

Health ServicesMedical Personnel $ 91,761Other Salaries and Wages 60,196Social Security 7,841Pensions 11,778Medical Insurance 35,532Unemployment Compensation 99Employer Medicare 1,834Travel 2,711Other Supplies and Materials 3,966In Service/Staff Development 4,597

Total Health Services $ 220,315

Other Student SupportCareer Ladder Program $ 1,000Guidance Personnel 458,744Bus Drivers 474Social Security 26,025Pensions 41,749Medical Insurance 88,825Unemployment Compensation 198Employer Medicare 6,086Contracts with Government Agencies 70,000Evaluation and Testing 30,362Other Contracted Services 1,159Other Supplies and Materials 90

Total Other Student Support 724,712

Regular Instruction ProgramSupervisor/Director $ 138,886Career Ladder Program 6,800Librarians 280,769Clerical Personnel 14,774Other Salaries and Wages 38,504Social Security 27,715Pensions 42,975Medical Insurance 72,427Unemployment Compensation 47Employer Medicare 6,749Travel 10,772Library Books/Media 3,496Other Supplies and Materials 4,802In Service/Staff Development 7,045Other Charges 44Regular Instruction Equipment 275

Total Regular Instruction Program 656,080

(Continued)

199

Exhibit J-8




Special Education ProgramSupervisor/Director $ 54,103Psychological Personnel 52,520Clerical Personnel 14,774Other Salaries and Wages 8,294Social Security 7,183Pensions 10,929Medical Insurance 22,670Unemployment Compensation 67Employer Medicare 1,680Travel 5,425Other Contracted Services 65,504In Service/Staff Development 2,832

Total Special Education Program $ 245,981

Career and Technical Education ProgramSupervisor/Director $ 13,306Career Ladder Program 200Other Salaries and Wages 11,500Social Security 737Pensions 1,226Medical Insurance 2,468Unemployment Compensation 22Employer Medicare 339Travel 1,190Instructional Supplies and Materials 3,162Other Charges 5,865Special Education Equipment 5,652


TechnologyOther Salaries and Wages $ 88,745Social Security 4,609Pensions 5,464Medical Insurance 12,712Unemployment Compensation 50Employer Medicare 1,078Internet Connectivity 13,355Other Contracted Services 38,498Other Supplies and Materials 562Regular Instruction Equipment 75

Total Technology 165,148

Other ProgramsOn-behalf Payments to OPEB $ 136,315

Total Other Programs 136,315

(Continued)

200

Exhibit J-8




Board of EducationSecretary to Board $ 1,705Board and Committee Members Fees 21,680Social Security 740Pensions 92Unemployment Compensation 1Employer Medicare 320Audit Services 7,000Legal Services 9,241Medical and Dental Services 2,379Travel 636Other Contracted Services 2,500Custodial Supplies 27Other Supplies and Materials 516Liability Insurance 27,763Premiums on Corporate Surety Bonds 350Trustee's Commission 103,207Workers' Compensation Insurance 207,248In Service/Staff Development 12,483Other Charges 425

Total Board of Education $ 398,313

Director of SchoolsCounty Official/Administrative Officer $ 82,257Assistant(s) 5,000Social Security 5,119Pensions 7,923Medical Insurance 13,205Unemployment Compensation 22Employer Medicare 1,197Dues and Memberships 16,099Postal Charges 3,977Office Supplies 615Other Supplies and Materials 497In Service/Staff Development 1,565Other Charges 404Administration Equipment 120

Total Director of Schools 138,000

Office of the PrincipalPrincipals $ 427,337Career Ladder Program 5,000Assistant Principals 405,861Secretary(ies) 410,442Other Salaries and Wages 17,642Social Security 71,753Pensions 95,573

(Continued)

201

Exhibit J-8




Office of the Principal (Cont.)Medical Insurance $ 172,289Unemployment Compensation 736Local Retirement 3,289Employer Medicare 16,869Other Fringe Benefits 540Communication 8,247Dues and Memberships 900Travel 126Other Contracted Services 7,623Excess Risk Insurance 12,889In Service/Staff Development 182Administration Equipment 1,592

Total Office of the Principal $ 1,658,890

Fiscal ServicesAccountants/Bookkeepers $ 82,846Secretary(ies) 68,933Other Salaries and Wages 34,205Social Security 11,377Pensions 10,156Medical Insurance 23,742Unemployment Compensation 110Employer Medicare 2,682Other Fringe Benefits 22,816Maintenance and Repair Services - Equipment 178Other Contracted Services 9,520Data Processing Supplies 766Office Supplies 842Other Supplies and Materials 734In Service/Staff Development 2,241

Total Fiscal Services 271,148

Operation of PlantCustodial Personnel $ 565,615Social Security 31,780Pensions 29,898Medical Insurance 104,388Unemployment Compensation 699Employer Medicare 7,494Communication 55,002Janitorial Services 7,725Maintenance and Repair Services - Equipment 5,067Pest Control 11,255Other Contracted Services 64,577Custodial Supplies 58,240Electricity 627,432

(Continued)

202

Exhibit J-8




Operation of Plant (Cont.)Natural Gas $ 73,259Propane Gas 26,929Water and Sewer 47,941Chemicals 10,750Other Supplies and Materials 5,862Boiler Insurance 6,346Building and Contents Insurance 115,612Other Charges 1,229Plant Operation Equipment 258

Total Operation of Plant $ 1,857,358

Maintenance of PlantSupervisor/Director $ 29,111Maintenance Personnel 148,839Social Security 10,554Pensions 10,752Medical Insurance 14,758Unemployment Compensation 93Employer Medicare 2,468Maintenance and Repair Services - Buildings 14,055Maintenance and Repair Services - Equipment 9,922Maintenance and Repair Services - Vehicles 215Rentals 282Other Contracted Services 4,771Custodial Supplies 386Equipment and Machinery Parts 4,454General Construction Materials 2,653Uniforms 1,762Other Supplies and Materials 1,001

Total Maintenance of Plant 256,076

TransportationSupervisor/Director $ 27,362Mechanic(s) 75,545Bus Drivers 437,379Social Security 29,915Pensions 19,172Medical Insurance 52,915Unemployment Compensation 589Employer Medicare 7,597Maintenance and Repair Services - Equipment 2,212Maintenance and Repair Services - Vehicles 2,341Medical and Dental Services 2,776Other Contracted Services 2,259Crushed Stone 1,433Custodial Supplies 2,452

(Continued)

203

Exhibit J-8




Transportation (Cont.)Diesel Fuel $ 114,593Garage Supplies 4,289Gasoline 8,965Lubricants 7,874Small Tools 6,007Tires and Tubes 7,757Uniforms 947Vehicle Parts 45,502Other Supplies and Materials 895Vehicle and Equipment Insurance 35,695In Service/Staff Development 961Other Charges 2,448Transportation Equipment 159,588

Total Transportation $ 1,059,468

Operation of Non-Instructional ServicesCommunity Services

Supervisor/Director $ 37,943Teachers 245,876Bus Drivers 21,662Educational Assistants 9,520Custodial Personnel 2,055Other Salaries and Wages 69,958Social Security 21,873Pensions 27,956Medical Insurance 5,942Unemployment Compensation 243Employer Medicare 5,177Travel 228Instructional Supplies and Materials 2,724Other Supplies and Materials 12,670In Service/Staff Development 935Other Charges 12,911Regular Instruction Equipment 653

Total Community Services 478,326

Early Childhood EducationSupervisor/Director $ 4,158Teachers 217,394Clerical Personnel 3,869Educational Assistants 84,922Other Salaries and Wages 45,075Certified Substitute Teachers 70Non-certified Substitute Teachers 1,860Social Security 20,757Pensions 28,670

(Continued)

204

Exhibit J-8



General Purpose School Fund (Cont.)Operation of Non-Instructional Services (Cont.)

Early Childhood Education (Cont.)Medical Insurance $ 51,010Unemployment Compensation 254Employer Medicare 4,555Travel 2,023Food Supplies 5,903Instructional Supplies and Materials 4,333Other Supplies and Materials 10,017In Service/Staff Development 8,648Other Charges 289Other Equipment 25,299

Total Early Childhood Education $ 519,106

Capital OutlayRegular Capital Outlay

Architects $ 26,135Building Improvements 272,368

Total Regular Capital Outlay 298,503

Total General Purpose School Fund $ 22,403,085

School Federal Projects FundInstruction

Regular Instruction ProgramTeachers $ 32,562Educational Assistants 62,052Other Salaries and Wages 188,238Certified Substitute Teachers 805Non-certified Substitute Teachers 3,420Social Security 16,832Pensions 22,743Life Insurance 105Medical Insurance 36,055Unemployment Compensation 162Employer Medicare 3,948Other Fringe Benefits 1,491Instructional Supplies and Materials 21,493Other Supplies and Materials 993Other Charges 282Regular Instruction Equipment 80,873

Total Regular Instruction Program $ 472,054

Special Education ProgramTeachers $ 39,359Educational Assistants 439,645Certified Substitute Teachers 350Non-certified Substitute Teachers 2,130

(Continued)

205

Exhibit J-8



School Federal Projects Fund (Cont.)Instruction (Cont.)

Special Education Program (Cont.)Social Security $ 26,806Pensions 25,715Life Insurance 26Medical Insurance 75,151Unemployment Compensation 684Employer Medicare 6,283Other Fringe Benefits 2,845Evaluation and Testing 3,281Instructional Supplies and Materials 7,693Other Supplies and Materials 669Special Education Equipment 2,933

Total Special Education Program $ 633,570

Career and Technical Education ProgramTeachers $ 6,000Clerical Personnel 10,623Other Salaries and Wages 3,417Certified Substitute Teachers 140Non-certified Substitute Teachers 360Social Security 1,297Pensions 1,319Unemployment Compensation 28Employer Medicare 310Instructional Supplies and Materials 5,997Vocational Instruction Equipment 37,224


Support ServicesOther Student Support

Bus Drivers $ 280Social Security 17Pensions 15Employer Medicare 4Travel 5,156Other Supplies and Materials 22,137In Service/Staff Development 6,108Other Charges 19,462

Total Other Student Support 53,179

Regular Instruction ProgramSupervisor/Director $ 52,150Other Salaries and Wages 218,062In-service Training 3,250Social Security 15,261Pensions 23,369Life Insurance 133

(Continued)

206

Exhibit J-8



School Federal Projects Fund (Cont.)Support Services (Cont.)

Regular Instruction Program (Cont.)Medical Insurance $ 41,986Unemployment Compensation 132Employer Medicare 3,800Other Fringe Benefits 1,574Travel 4,360Other Supplies and Materials 3,475In Service/Staff Development 56,569Other Charges 317

Total Regular Instruction Program $ 424,438

Special Education ProgramSupervisor/Director $ 4,938Psychological Personnel 42,270Other Salaries and Wages 9,224Social Security 3,471Pensions 2,361Life Insurance 32Medical Insurance 981Unemployment Compensation 46Local Retirement 1,892Employer Medicare 812Other Fringe Benefits 335Communication 1,947Travel 1,002Other Contracted Services 6,659Other Supplies and Materials 3,510In Service/Staff Development 29,094

Total Special Education Program 108,574

Career and Technical Education ProgramClerical Personnel $ 2,664In Service/Staff Development 1,362Other Charges 539


Board of EducationCriminal Investigation of Applicants - TBI $ 65

Total Board of Education 65

TransportationBus Drivers $ 38,906Other Salaries and Wages 12,243Social Security 2,329Pensions 1,449Unemployment Compensation 73Employer Medicare 545

(Continued)

207

Exhibit J-8



School Federal Projects Fund (Cont.)Support Services (Cont.)

Transportation (Cont.)Other Fringe Benefits $ 2,330Contracts with Parents 15,757

Total Transportation $ 73,632

Total School Federal Projects Fund $ 1,836,792

Central Cafeteria FundOperation of Non-Instructional Services

Food ServiceSupervisor/Director $ 65,532Clerical Personnel 34,266Cafeteria Personnel 629,033Temporary Personnel 20,481Social Security 42,340Pensions 40,526Medical Insurance 116,905Unemployment Compensation 1,089Employer Medicare 9,928Other Fringe Benefits 22,737Dues and Memberships 479Maintenance and Repair Services - Equipment 7,832Travel 1,055Other Contracted Services 37,743Food Supplies 592,336USDA - Commodities 105,885Other Supplies and Materials 64,158In Service/Staff Development 12,396Food Service Equipment 10,074

Total Food Service $ 1,814,795

Total Central Cafeteria Fund 1,814,795

Education Debt Service FundPrincipal on Debt

EducationDebt Service Contribution to Primary Government $ 735,000

Total Education $ 735,000

Interest on DebtEducation

Debt Service Contribution to Primary Government $ 194,200Total Education 194,200

Other Debt ServiceEducation

Trustee's Commission $ 6,176Debt Service Contribution to Primary Government 600


Total Education Debt Service Fund 935,976

Total Governmental Funds - Overton County School Department $ 26,990,648

208

Exhibit J-9

Overton County, TennesseeSchedule of Detailed Receipts, Disbursements,

and Changes in Cash Balance - City Agency FundFor the Year Ended June 30, 2018

Cities -Sales Tax

Fund

Cash ReceiptsLocal Option Sales Tax $ 982,672

Cash DisbursementsRemittance of Revenues Collected $ 972,845Trustee's Commission 9,827

Total Cash Disbursements $ 982,672

Excess of Cash Receipts Over(Under) Cash Disbursements $ 0

Cash Balance, July 1, 2017 0

Cash Balance, June 30, 2018 $ 0

209

SINGLE AUDIT SECTION

210

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




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 Overton County, Tennessee, as of and for the year ended June 30, 2018, and the related notes to the financial statements, which collectively comprise Overton County's basic financial statements, and have issued our report thereon dated February 7, 2019. Our report includes a reference to other auditors who audited the financial statements of the Overton County Health and Rehab Center, as described in our report on Overton County’s financial statements. This report does not include the results of the other auditors testing of internal control over financial reporting or compliance and other matters that are reported on separately by those auditors.

Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered Overton 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 Overton County's internal control. Accordingly, we do not express an opinion on the effectiveness of Overton 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 the attention by those charged with governance.

211

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: 2018-001.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Overton County’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Overton County's Response to the Finding

Overton County's response to the finding identified in our audit is described in the accompanying Schedule of Findings and Questioned Costs. Overton County's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it.

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 Overton County’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Very truly yours,


February 7, 2019

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Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; and Report on the Schedule of Expenditures of Federal

Awards Required by the Uniform Guidance




Report on Compliance for Each Major Federal Program

We have audited Overton 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 Overton County's major federal programs for the year ended June 30, 2018. Overton County's major federal programs are identified in the summary of auditor's results section of the accompanying Schedule of Findings and Questioned Costs.

Management's Responsibility

Management is responsible for compliance with the federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs.

Auditor's Responsibility

Our responsibility is to express an opinion on compliance for each of Overton County's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Overton County's compliance with those

213

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 Overton County's compliance.

Opinion on Each Major Federal Program

In our opinion, Overton County complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2018.

Report on Internal Control Over Compliance

Management of Overton 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 Overton 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 Overton County's internal control over compliance.

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the

214

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 Overton County, Tennessee, as of and for the year ended June 30, 2018, and the related notes to the financial statements, which collectively comprise Overton County’s basic financial statements. We issued our report thereon dated February 7, 2019, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Schedule of Expenditures of Federal Awards is fairly stated in all material respects in relation to the basic financial statements as a whole.

Very truly yours,


February 7, 2019

JPW/kp

215

Overton County, Tennessee, and the Overton County School DepartmentSchedule of Expenditures of Federal Awards and State Grants (1)For the Year Ended June 30, 2018

Pass throughFederal EntityCFDA Identifying

Federal/Pass-through Agency/State Grantor Program Title Number Number

U.S. Department of Agriculture:Direct Programs:

Conservation Reserve Program 10.069 N/A $ 9,672Passed-through State Department of Education:

Child Nutrition Cluster: (4)School Breakfast Program 10.553 N/A 323,379National School Lunch Program 10.555 N/A 912,218 (5)

Passed-through State Department of Agriculture:Child Nutrition Cluster: (4)

National School Lunch Program (Commodities - Noncash Assistance) 10.555 N/A 105,885 (5)Total U.S. Department of Agriculture $ 1,351,154

U.S. Department of Defense:Passed-through State Department of General Services:

Section 1033 Excess Property Program (Noncash Assistance) 12.U01 N/A $ 57,901

U.S. Department of Housing and Urban Development:Passed-through State Department of Economic and Community Development:

Hurricane Sandy Community Development Block Grant Disaster Recovery 14.269 (3) $ 84,585Grants (CDBG -DR)

U.S. Department of Interior:Direct Program:

Payments in-lieu-of Taxes 15.226 N/A $ 6,261

U.S. Department of Justice:Direct Program:

Drug Court Discretionary Grant Program: Implementation 16.585 N/A $ 97,030Passed-through Tennessee Bureau of Investigation:

Public Safety Partnership and Community Policing Grants 16.710 (3) 267Total U.S. Department of Justice $ 97,297

U.S. Department of Transportation:Passed-through State Department of Transportation:

Alcohol Open Container Requirements 20.607 (6) $ 13,591

U.S. Institute of Museum and Library Services:Passed-through Tennessee Secretary of State:

Grants to States 45.310 (3) $ 823

U.S. Department of Education:Passed-through State Department of Education:

Title I Grants to Local Educational Agencies 84.010 N/A $ 769,649Special Education Cluster: (4)

Special Education - Grants to States 84.027 N/A 793,951Special Education - Preschool Grants 84.173 N/A 69,087

Career and Technical Education - Basic Grants to States 84.048 N/A 69,872 (7)Twenty-first Century Community Learning Centers 84.287 N/A 417,000Rural Education 84.358 N/A 29,052Improving Teacher Quality State Grants 84.367 N/A 83,508Student Support and Academic Enrichment Program 84.424 N/A 21,048

Passed-through Putnam County, Tennessee Board of Education:Career and Technical Education - Basic Grants to States 84.048 N/A 12,989 (7)

Total U.S. Department of Education $ 2,266,156

(Continued)

Expenditures

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Overton County, Tennessee, and the Overton County School DepartmentSchedule of Expenditures of Federal Awards and State Grants (1) (Cont.)

Pass throughFederal EntityCFDA Identifying

Federal/Pass-through Agency/State Grantor Program Title Number Number

U.S. Department of Health and Human Services:Passed-through Upper Cumberland Development District:

Special Programs for the Aging - Title III, Part B Aging Cluster:

Grants for Supportive Services and Senior Centers 93.044 (3) $ 7,963National Family Caregiver Support, Title III Part E 93.052 (3) 13,908

Passed-through State Department of Education: CCDF Cluster:

Child Care and Development Block Grant 93.575 G1701TNCCDF 49,189Total U.S. Department of Health and Human Services $ 71,060

Executive Office of the President:Passed-through Laurel County, Kentucky, Fiscal Court:

High Intensity Drug Trafficking Areas Program 95.001 (3) $ 7,844

U.S. Department of Homeland Security:Passed-through State Department of Military:

Disaster Grants - Public Assistance (Presidentially Declared Disasters) 97.036 (3) $ 115,764

Total Expenditures of Federal Awards $ 4,072,436

Contract State Grants Number

Juvenile Justice - State Commission on Children and Youth N/A (3) $ 9,000Aging Program - Upper Cumberland Development District N/A (3) 8,183Rural Local Health Services - State Department of Health N/A GG-18-55006-00 59,091Courtroom Security Grant - State Administrative Office of the Courts N/A (3) 11,288Litter Program - State Department of Transportation N/A (3) 38,805ThreeStar Grant Program - State Department of Economic and

Community Development N/A (3) 24,960Used Oil Grant - State Department of Environment and Conservation N/A (3) 106,006Disaster Grants - Public Assistance (Presidentially Declared Disasters) -

State Department of Military N/A (3) 16,799Early Childhood Education - State Department of Education N/A (3) 535,540Lottery for Education - PreK - State Department of Education N/A (3) 71,927Read to Be Ready Coaching Network - State Department of Education N/A (3) 10,052ConnectTenn - State Department of Education N/A (3) 7,946Coordinated School Health Project - State Department of Education N/A (3) 91,756CTE Equipment Grant - State Department of Education N/A (3) 124,000Safe Schools Act - State Department of Education N/A (3) 17,680

Total State Grants $ 1,133,033

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) Overton County elected not to use the 10% de minimis cost rate permitted in the Uniform Guidance.(3) Information not available.(4) Child Nutrition Cluster total $1,341,482; Special Education Cluster total $863,038.(5) Total for CFDA No. 10.555 is $1,018,103.(6) Z-17-THS266: $7,128; Z-18-THS241: $6,463.(7) Total for CFDA No. 84.048 is $82,861.

Expenditures

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Overton County, TennesseeSummary Schedule of Prior-year FindingsFor the Year Ended June 30, 2018

Fiscal Page Finding CFDAYear Number Number Number

OFFICE OF DIRECTOR OF SCHOOLS

2017 197 2017-001 The General Purpose School Fund N/Arequired material adjustments for proper financial statement presentation

2017 198 2017-002 Expenditures exceeded appropriations N/A

2017 198 2017-003 Amounts withheld from contractor N/Apayments were not deposited into an escrow account

OFFICE OF SHERIFF

2017 199 2017-004 Inmate funds totaling $851 were missing N/Afrom the Sheriff's Department

2017 199 2017-005 The sheriff did not report missing inmate N/Afunds to the Comptroller of the Treasury

There were no prior-year federal award findings to report.

Corrected

Prior-year Federal Awards Findings

Corrected

Government Auditing Standards require auditors to report the status of uncorrected findings from prioraudits. In addition, OMB's Uniform Guidance requires auditees to report the status of all prior-yearfindings whether corrected or not. Presented below are financial statement findings along with theircurrent status from the Annual Financial Report for Overton County, Tennessee, for the year ended June30, 2018.

Prior-year Financial Statement Findings

Title of Finding Current Status

Corrected

Corrected

Corrected

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Financial Statements:

1. Our report on the financial statements of Overton 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 Nutrition Cluster: School Breakfast Program and National School Lunch Program

* CFDA Number: 84.010 Title I Grants to Local EducationalAgencies

8. Dollar threshold used to distinguish between Type A and Type B Programs. $750,000

9. Auditee qualified as low-risk auditee? NO

OVERTON COUNTY, TENNESSEE

SCHEDULE OF FINDINGS AND QUESTIONED COSTS


PART I, SUMMARY OF AUDITOR'S RESULTS

219

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 DIRECTOR OF SCHOOLS FINDING 2018-001 THE SCHOOL FEDERAL PROJECTS FUNDS HAD A CASH

OVERDRAFT OF $6,280 AT JUNE 30, 2018 (Internal Control – Significant Deficiency Under Government Auditing Standards)

The School Federal Projects fund had a cash overdraft of $6,280 At June 30, 2018. This cash overdraft resulted from the issuance of warrants exceeding cash on deposit with the county trustee. Sound business practices dictate that expenditures be held within available funds. The cash overdraft was liquidated subsequent to June 30, 2018. RECOMMENDATION The School Department should not issue warrants exceeding cash on deposit with the county trustee. MANAGEMENT’S RESPONSE – DIRECTOR OF SCHOOLS I concur with this finding.

____________________________

220

PART III, FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS There were no findings and questioned costs related to federal awards for the year ended June 30, 2018.

221

FindingNumber

OFFICE OF DIRECTOR OF SCHOOLS

2018-001 The School Federal Projects Fund had a cash overdraft of $6,280 at June 30, 2018

223

Overton County, TennesseeManagement's Corrective Action Plan


Title of FindingCorrective Action

Plan Page Number

We reviewed the financial statement and federal award findings and recommendations with management toprovide an opportunity for their response as required by the auditee requirements within Title 2 U.S. Code 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 been indexedbelow. The corrective action plans were prepared by management and have been presented as they weresubmitted.

222

302 Zachary Street, Livingston, TN 38570 I Phone: (931) 823-1287 I Fax: (931) 823-4673 I Website: overtoncountyschools.net

FINDING:

Corrective Action Plan

THE SCHOOL FEDERAL PROJECTS FUNDS HAD A CASH OVERDRAFT OF $6, 280 AT JUNE 30, 2018

Response and Corrective Action Plan Prepared by: Dr. Mark Winningham, Director of Schools

Person Responsible for Implementing the Corrective Action:

Dr. Mark Winningham, Director of Schools

Anticipated Completion Date of Corrective Action:

6-30-2019

Repeat Finding: No

Planned Corrective Action:

Funds totaling an additional$100,000 will be placed into an account in 142 (Federal) from 141 (GP) to ensure that there are sufficient funds to cover all allocations.

(J/\{Y)d t L]� Mark Winningham, Director of Schools

223

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 Overton County.

OVERTON COUNTY SHOULD ADOPT A CENTRAL SYSTEM

OF ACCOUNTING, BUDGETING, AND PURCHASING Overton County does not have a central system of accounting, budgeting, and purchasing for all departments. Overton County operates under the provisions of the Fiscal Control Acts of 1957. These acts provide for a central system of accounting, budgeting, and purchasing covering all funds administered by the county executive and highway superintendent, but exclude the School Department. 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 that includes all departments is a best practice that would significantly improve accountability and the quality of services provided to the citizens of Overton 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.

224

Documents

OVERTON COUNTY TENNESSEE - TN Comptroller · Overton County management. etailed finding, recommendation, and management’s The d response are included in the Single Audit section