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AUDIT: 1981-1982-1983 AUDIT REPORT e e MONTANA DEPARTMENT OF COMMERCE Al Aft JEFFERSON COUNTY BOULDER, MONTANA - Fiscal Years Ended June 30 1981 1982 and 1983 AUDIT REPORT T LOCAI,GOVERNMENT SERVICES DIVISION —AUDIT BUREAU- _ Capitol Station Helena, Montana 59620 (406) 443010 JEFFERSON COUNTY {rrY CLERK & RFCORD'ER Box H a Boulder, Montana 59632 • • • JEFFERSON COUNTY • BOULDER. MONTANA Fiscal Years Ended June 30. 1981 . 1982 and 1983 • • • • • JEFFERSON COUNTY BOULDER, MONTANA TABLE OF CONTENTS a Paae Organization 1 Fiscal Year Ended June 30. 1981 Auditor's Report (Opinion) and Financial Statements 2 Auditor's Report (Opinion) 3-4 • Financial Statements Combined Balance Sheet - All Fund Types and Account Groups 5-6 Combined Statement of Revenues, Expenditures, and Changes in Fund 7-8 Balances - All Governmental Fund Types Combined Statement of Revenues, Expenditures, and Changes in Fund 9-10 Balance - Budget and Actual - General and Special Revenue Fund Types Notes to Financial Statements 11-17 • Supplemental Schedules 18 Combined Statement of Cash Receipts and Disbursements - All Funds 19-20 Fiscal Year Ended June 10, 1982 Auditor's Report (Opinion) and Financial Statements 21 Auditor's Report (Opinion) 22-23 Financial Statements Combined Balance Sheet - All Fund Types and Account Groups 24-25 Combined Statement of Revenues, Expenditures, and Changes in Fund 26-27 Balances - All Governmental Fund Types Combined Statement of Revenues, Expenditures, and Changes in Fund 28-29 . Balance - Budget and Actual - General and Special Revenue Fund Types Notes to Financial Statements 30-36 Supplemental Schedules 37 Combined Statement of Cash Receipts and Disbursements - All Funds 38-39 s i ! JEFFERSON COUNTY BOULDER. MONTANA TABLE OF CONTENTS - cont. Pace Fiscal Year Ended June 40. 1981 ! Auditor's Report (Opinion) and Financial Statements 40 Auditor's Report (Opinion) 41-42 Financial Statements • Combined Balance Sheet - All Fund Types and Account Groups 43-44 Combined Statement of Revenues, Expenditures, and Changes in Fund 45-46 Balances - All Governmental Fund Types and Expendable Trust Funds Combined Statement of Revenues, Expenditures, and Changes in Fund 47-48 ! Balance - Budget and Actual - General and Special Revenue Fund Types Notes to Financial Statements 49-55 Supplemental Schedules 56 Combined Statement of Cash Receipts and Disbursements - All Funds 57-58 • Auditor's Comments 59 Report on Internal Accounting Control 60-61 Report on Compliance Matters 62-68 Report on Other Financial Matters 69-71 Report on Prior Audit Report Recommendations 72-73 ii • . JEFFERSON COUNTY BOULDER, MONTANA ORGANIZATION e BOARD OF COUNTY COMMISSIONERS Fiscal Years Ended June 30. 1981 and 1982 Chairman Mr. Leslie J. Sodorff Members Mr. Delbert H. Bullock Mr. Glen Stevens COUNTY OFFICIALS Attorney Mr. Cecil L. Woodgate f Clerk and Recorder Mrs. Joanne P. McFarlane Clerk of Court Mrs. Viola M. Trettin Coroner Mr. Leonard G. Scott • Justice of the Peace Mr. Joe Miller Sheriff Mr. Harold DeMers Superintendent of Schools Mrs. Mercedes Vosburgh e Treasurer Mrs. Eva Reiker ------------------------------------------------------------------------------- Fiscal Year Ended June 30, 1983 Chairman Mr. Delbert H. Bullock Members Mr. Glen Stevens Mr. Douglas Schmitz ,COUNTY OFFICIALS Attorney Mr. John P. Connor, Jr. Clerk and Recorder Mrs. Joanne P. McFarlane Clerk of Court Mrs. Viola M. Trettin Coroner Mr. Leonard G. Scott Justice of the Peace Mr. Joe Miller Public Administrator Mrs. Patricia Pomroy Sheriff Mr. Tom Dawson Superintendent of Schools Mrs. Mercedes Vosburgh Treasurer Mrs. Susan Miller I • • • JEFFERSON COUNTY AUDITOR'S REPORT AK • FINANCIAL STATEMENTS Fiscal Year Ended June 30. 1981 11 • • • -2- t • COMMERCE DEPARTMENT OF DIVISION OF LOCAL GOVERNMENT SERVICES H ' s TED SCHWIN DEN, GOVERNOR CA PITOL STATION + y - - STATE OF MONTANA d O - HELENA, MONTANA 69fi20 (906)949-3010 To the Honorable Board of County Commissioners Jefferson County Boulder, Montana 59632 We have examined the combined financial statements of Jefferson County as of and for the year ended June 30, 1981 , as listed in the table of contents. Our examination was made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. The County reflected a taxes/assessments receivable balance of $828,367.86 for all funds at June 30, 1981 . This balance reflected incorrect amounts which were accrued for 1980 real and personal property taxes and assessments. In addition, the County did not accrue 1981 personal property tax revenue in the fiscal year ended June 30, 1981 as required by generally accepted accounting principles. As a result, the General Fund taxes receivable and fund balance were overstated by $3,268.93 , the Special Revenue Fund taxes receivable and fund balance were overstated by $573.01 , the Special Assessments Fund assessments receivable and fund balance were overstated by $12,012.41 and the Trust and Agency Fund taxes receivable and due to other funds/governments were understated by $1 ,050,236.07. Actual total taxes/assesments receivable were $1 ,886,774.40, for a difference of $1 ,058,406.54. Real and personal property taxes/assessments remaining uncollected at year end and not expected to be collected in time to pay liabilities of the current period were not recorded as deferred revenue as required by generally accepted accounting principles. As a result, deferred revenue of the General Fund was understated and fund balance was overstated by $76,563.10, on June 30, 1981 • Deferred revenue of the Special Revenue Fund was understated and fund balance overstated by $90,030.27 , and deferred revenue of the Special Assessments Fund was understated and fund balance overstated by $19,772.76 on June 30, 1981 . The matters discussed in the preceding two paragraphs also affected i revenues; however, as a result of offsetting over and understatements, there were no material misstatements of revenues in the General Fund and the Special Revenue Fund. Revenue from assessments in the Special Assessment Fund was classified as miscellaneous revenue and was overstated by $12,012.41 . -3- • 41,19" 1 01n0111 mnv CMPIOIF" • The fixed assets and investment in fixed assets balances reflected in the General Fixed Assets Account Group had not been adjusted since March, 1979, when the Budgetary, Accounting and Reporting System for Montana • Cities and Counties was installed. Therefore, purchases and dispositions of assets since that time had not been recorded in the records of the County. As a result, the balance as recorded is materially understated by approximately $320,000.00 at June 30, 1981 . In our opinion, because of the effects of the matters discussed in the • preceding paragraphs, the combined financial statements referred to above do not present fairly the financial position of Jefferson County at June 30, 1981 , or the results of its operations for the year then ended, in conformity with generally accepted accounting principles. Our examination was made for the purpose of forming an opinion on the combined financial statements taken as a whole. The accompanying supplemental information listed in the table of contents is presented for purposes of additional analysis and is not a required part of the combined financial statements of Jefferson County. The information has been subjected to the auditing procedures applied in the examination of the combined financial statements and, in our opinion, except for the effects !� of the matters discussed above, is fairly stated in all material respects in relation to the combined financial statements taken as a whole. In connection with our examination, we also performed tests of compliance with the Revenue Sharing Act and regulations as detailed in the Commentary on the Audit Reeuirements of the 1980 Amendments to the State and Local Fiscal Assistance Act issued by the Office of Revenue Sharing, U. S. Department of the Treasury, and compared the data on the appropriate Bureau of Census corm with the audited records of Jefferson County. In our opinion, for the items tested, Jefferson County complied with the aforementioned provisions of the Revenue Sharing Act and regulations, • except for the following matters: 1 . There were differences between the data on the Bureau of Census Form RS-9 for the fiscal year ended June 30, 1981 , and the audited records of Jefferson County, as disclosed in the Auditor's Comments. 2. Use Reports contained amounts which did not agree with corresponding * amounts in the County's Annual Financial Report. 3. The public information publication requirements required for the Revenue Sharing Use Report were not met by the County. 4. Records were not maintained of property acquired with Revenue Sharing moneys having a value in excess of $1 ,000.00. • Further, except for the above matters, based on our examination and the procedures referred to above, nothing came to our attention to indicate that Jefferson County had not complied with the aforementioned provisions of the Revenue Sharing Act and regulations. AFnistrator E H. PENDERGOctober 5, 1983 * -4- JEFFERSON COUNTY • COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS June 40. 1981 • GOVERNMENTAL FUND TYPES Special Capital Special General Revenue Proiects Assessment Cash $ 440,111 .08 $ 390,415.32 $ 1 ,642.06 $ 66,108.24 • Petty Cash 200.00 - - - - - - Taxes/Assessments Receivable (Net of Uncollectables) 79,832.03 90,857.41 - - 7,760.35 Due from Other Funds/ Governments - - 66 ,993.03 - - - - Other Debits - - - - - - - Fixed Assets (Net of Accumulated Depreciation) - - - - - - - - TOTAL ASSETS $ 520.144.11 $ 648.265.76 $ x ,642.06 $ 74.868.59 LIABILITIES AND FUND EQUITY 7 Liabilities: Short-Term Payables $ - - $ 125,067.98 $ - - $ - - Due to Other Fund/ 66,993 .03 Governments - - - - - - Long-Term Liabilities - - - - - - - Total Liabilities $ -O- $ 125.067.98 $ -0- $ 66.994.04 Fund Equity: Investment in General Fixed Assets $ - - $ - - $ - - $ - - Fund Balance a Reserved - - - - - - - - Unreserved 520.144.11 424.197.78 1 .642.06 6.875.56 Total Fund Equity $ 520.144.11 $ 424.197.78 $ 1.642.06 $ 6.875.56 TOTAL LIABILITIES AND FUND EQUITY $ 520.144.11 $ 548.265.76 $ ] .642.06 $ 74.868.59 • See accompanying Notes to Financial Statements. • -5- 40 • FIDUCIARY TOTALS AND UM1 ACCOLINT GROUPS (MEMORANDUM ONLY) Trust General and General Long-Term Agency f xed Assets Debt June 90, 1981 June 30. 1980 $ 1 ,857,433.15 $ - - $ - - $ 2,755,709.85 $ 2,644,062.53 200.00 - - 649,918.07 - - - - 828,367.86 284,520.08 66,993.03 - - • 2,169.49 2, 169.49 2, 169. 19 615,120.52 - - 615.120.52 615.120.52 $ �,507.�51 .22 $ 615,.120.52 $ $ 4.268.560.75 $ I.5u5.872 ? • $ 145,893.13 $ - - $ - - $ 270,961 .11 $ 197,554.00 2,361,458.09 - - - - 2,428,451 .12 1 ,459 ,855.24 2. 169.49 — 2,169.49 2_.169.49 $ 9 507. 51.22 $ -0- _ $ 2,169.49 $ 9.701 .581 .72 $ 1 .6591578.7 • $ _ _ $ 615,120.52 $ - - $ 615,120.52 $ 615,120.52 - - - - - - 238,486. 12 951 .858.51 ? .02.687.25 $ _0-_ $ 1 .566.979.03 $ t .886.2u.89 $ 2,507. 51_22 $ X5,120.52 $ 2.169.49 $ 426 $ �.545,872.6z • -6- • JEFFERSON COUNTY � COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES TN FUND BALANCES - ALL GOVERNMENTAL FUND TYPES Fiscal Year Ended June 30. 1981 GOVERNMENTAL FUND TYPES Special General Revenue Revenues: Taxes $ 240,396.99 $ 321 ,362.60 Licenses and Permits 2,335.60 28,441 .19 Intergovernmental Revenue 69,520.82 470,468.83 Charges for Services 20,760.92 8,610.22 Fines and Forfeitures 20,059.80 - - Miscellaneous Revenues 168.955.26 139.283.08 Total Revenues $ 522.029.39 $ 968.165.92 ♦ Expenditures: General Government $ 345,024.57 $ 88,727.86 Public Safety 56,218.64 297,291 .85 Public Works 289.50 376,207.22 Public Health 57,050.62 6,838.00 Social & Economic Services 2,650.00 112,268.67 Culture & Recreation - - 38,942.07 Debt Service - - 940.17 Miscellaneous 26.641 .35 - Total Expenditures $ 487.874.68 $ 921 .215.84 r Excess (Deficiency) of Revenues Over Expenditures $ 34,154.71 $ 46,950.08 Fund Balances - July 1 , 1980 487,210.95 374,757.50 ♦ Prior Period Adjustments (1 .222.55) 1 .490.20 Fund Balances - June 30, 1981 $ 520. 143.11 $ 423.197.78 ♦ See accompanying Notes to Financial Statements. -7- • TOTALS GOVERNMENTAL FUND TYPES - cont. (MEMORANDUM ONLY) • Capital Special Year Ended Protects Assessments June 30. 1981 June 10, 1980 $ - - $ - - $ 565,738.92 $ 435,885.91 - - 3,979.33 30,776.79 25,972.83 539,989.65 497,189.88 • _ _ _ - 29,371 .14 33,043.88 20,059.80 20,019.00 97,349,01 165.587.35 186.751 .88 $ -0- $ 61 .328.34 $ 1 .551 .523.65 $ 1 .198863.38 $ 433,752.43 $ 367,432.46 - - - - 353,510.49 264,978.73 f - - 98,035.12 474,531 .84 383,436.13 8,866.67 72,755.29 48,867.21 114,918.67 102,001 .30 - - - - 38,942.07 72,462.86 940. 17 - - 26.641 .35 1 .167.88 $ _0_ $ 106,901 .79 $ 1 .515.992.31 $ 1 ,240-146.57 $ -0- $ (45,573.45) $ 35,531 .34 $ (41 ,483.19) 1 ,642.06 52,449.01 916 ,059.52 942,104.76 -0- -0- X7_65 15.454.90 $ 1 .642.06 $ 6.875.56 $ 951 .858.51 $ 916.076.47 • -8- JEFFERSON COUNTY COMBINED STATEMENT OF REVENUES EXPENDITURES, AND CHANCES IN FUND BALANCE - BUDGET AND ACTUAL GENERAL AND SPECIAL. REVENUE FUND TYPES Fiscal Year Ended June 10. 1981 _ GENERAL FUND Variance - Favorable • Budaet Actual (Unfavorable) Revenues: Taxes $ 235,326.11 $ 240,396.99 $ 5,070.88 Licenses and Permits 1 ,210.00 2,335.60 1, 125.60 Intergovernmental Revenue 41,225.00 69,520.82 28,295.82 • Charges for Services 16,050.00 20,760.92 4,710.92 Fines and Forfeitures 12,000.00 20,059.80 8,059.80 Miscellaneous Revenues 25.078.00 168.955.26 143.877.26 Total Revenues $ 130.889.11 $ 522.029.39 $ 191 .140.28 • Expenditures: General Government $ 397,487.95 $ 345,024.57 $ 52,463.38 Public Safety 79,973.51 56,218.64 23,754.87 Public Works 625.00 289.50 335.50 • Public Health 68,321 .87 57,050.62 11 ,271 .25 Social & Economic Services 3,500.00 2,650.00 850.00 Culture & Recreation - - - - - Debt Service - - - - - Miscellaneous 29.558.00 26.641 .15 2.916.65 Total Expenditures $ 579.466.33 $ 487.874.68 $ 91 .591 .65 Excess (Deficiency) of Revenues Over Expenditures $ (248,577.22) $ 34,154.71 $ 282,731 .93 • Fund Balance - July 1 , 1980 487,210.95 487,210.95 - - Prior Period Adjustments -0- (1 .222.55) (1 .222.55) Fund Balance - June 30, 1981 $ 238.633.73 $ 520.143.11 $ See accompanying Notes to Financial Statements. -9- • • • TOTALS SP A • REVENUE FUNDS (MEMORANDUM ONLY) Variance - Variance - Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) $ 276,049.26 $ 321 ,362.60 $ 45,313.34 $ 511 ,375.37 $ 561 ,759.59 $ 50,384.22 • -0- 28,441 .19 28,441 .19 1 ,210.00 30,776.79 29,566.79 297,184.03 470,468.83 173,284.80 338,409.03 539,989.65 201 ,580.62 3,100.00 8,610.22 5,510.22 19,150.00 29,371 .14 10,221 .14 3,100.00 -0- (3,100.00) 15,100.00 20,059.80 4,959.80 123.685.27 139.283.08 15.597.81 148.763.27 308.238.34 159.475.07 • $ 703.118.56 $ 968.165.92 $ 265.047.36 $ 1 .034.007.67 $ 1,490,195.31 $ 456.187.64 $ 106,606.84 $ 88,727.86 $ 17,878.98 $ 504,094.79 $ 433,752.43 $ 70,342.36 256 ,954.00 297,291 .85 (40,337.85) 336,927.51 353,510.49 (16,582.98) 493,780.00 376,207.22 117,572.78 494,405.00 376,496.72 117,908.28 6,838.00 6,838.00 -0- 75,159.87 63,888.62 11 ,271 .25 117 ,510.05 112,268.67 5,241 .38 121 ,010.05 114,918.67 6,091 .38 51 ,092.00 38,942.07 12,149.93 51 ,092.00 38,942.07 12,149.93 2,742.01 940.17 1 ,801 .84 2,742.01 940.17 1 ,801 .84 29.558.00 26.641 .35 x.916.65 $ 1.035.522.90 $ q21 ,219,84 $ 114.107.06 $ 1.614.989.21 $ 1 .409.090.52 $ 295.898.71 • $ (332,404.34) $ 46,950.08 $ 379,354.42 $ (580,981 .56) $ 81 ,104.79 $ 662,086.35 374,757.50 374,757.50 - - 861 ,968.45 861 ,968.45 - - -0- 1 .490.20 1 .490.20 -0- 267.65 267.65 a $ 42.353.16 $ 423.197.78 $ 380.844.62 $ . 280.986.89 $ 943.340.89 $ 662.354.00 -10- 7♦ . JEFFERSON COUNTY NOTES TO FINANCIAL STATEMENTS June 30, 1981 1 , Summary of Significant Accounting Policies The accounting policies of Jefferson County conform to generally accepted accounting principles as applicable to governmental units. The following is a summary of the more significant policies: a. F»nd Accounting The accounts of the County are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for within a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and • expenditures or expenses, as appropriate. The following types of funds and groups of accounts are maintained by the County. GOVERNMENTAL. FUNDS general Fund - Used to account for all financial resources except those required to be accounted for in other funds. Special Revenue Funds - Used to account for the proceeds of special revenue sources (other than special assessments, expendable trusts, or for major capital projects) that are legally restricted to expenditures for specific purposes. Capital Proiects Funds - Used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by proprietary funds, special assessment funds, and trust funds). Special Assessment Funds - Used to account for financing of public improvements or services deemed to benefit the properties against which special assessments are levied. FIDUCIARY FUNDS Trust and Agency Funds - 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. These consist of agency funds. 3XED ASSETS AND LONG-TERM LIABILITIES General Fixed Assets Group of Accounts - Used to account for the fixed assets of the County which are not accounted for in the enterprise fund. General Long-Term Debt Account Croup - Used to account for all • long-term debt of the County except that accounted for in the enterprise funds, trust funds, and special assessment funds. _11_ r . JEFFERSON COUNII NOTES TO FINANCIAL STATEMENTS - cont- June 30, 1981 1 , Summary of Sianificant Accounting Policies - cont. b. Basis of Accounting The modified accural basis of accounting is followed by all funds. Under the modified accural basis of accounting, revenues are recorded when susceptible to accrual, that is, when they become both measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Jefferson County records real and personal property taxes levied for the current year as revenue. However, taxes receivable remaining unpaid at year end were not recorded as deferred revenue, with a corresponding reduction in revenues, as required by generally accepted accounting principles. In addition, prior period delinquent taxes collected in the current period were not recorded as revenue in the current period as required by generally accepted accounting principles. Because revenues from current year taxes were overstated, and revenues from prior period delinquent tax collections were understated, there was no material misstatement of property tax revenue, except in the Special Assessment Fund. Expenditures other than interest on long-term debt should be recorded when the liability is incurred. Jefferson County, however, records expenditures when paid rather than when the liability was incurred as required by generally accepted accounting principles. No material difference resulted. . C. Cash in Treasury Cash in Treasury may include cash and cash items; demand, time, savings and fiscal agent deposits; investments in the State Short-Term Investment Pool (S.T.I.P.) ; and direct obligations of the United States Government. Investments are stated at cost. The composition of Cash in Treasury on June 30, 1981 , was as follows: Cash on Hand $ 475.49 Cash in Banks: Demand Deposits 211 ,173.15 Savings Deposits 1 ,251 ,548.47 + Time Deposits 1 ,070,247.73 Fiscal Agent Deposits 32,086.10 Registered Warrants 46 ,237 .84 Protested Tax Money Held in U.S. District Court, Billings, Mt. 155.525.56 Sub-Total $ 2,767,294.34 Less: Unreceipted Interest _ 11 .584.49 Total $ 2.755.709.85 -12- JEFFERSON COUNTY NOTES TO FINANCIAL STATEMENTS - ont. ice 20. 1981 . 1 Summary of Significant Accounting Policies - cont. d. Budgets and Budgetary Accounting An operating budget is adopted each fiscal year for the General Fund and Special Revenue Funds. = The operating budgets cannot be increased except by a public emergency which could not have been reasonably foreseen at the time of adoption of the budget. Budget appropriation transfers may not be made between the general classifications of salaries and wages, maintenance and operation and capital outlay, except for road or bridge fund appropriations. Transfers may, : however, be made within those general classifications upon a resolution adopted by the governing body. e. Tnterfund Transactions Interfund transactions consisting of identified services performed for other funds or costs billed to other funds are ' treated as expenditures in the fund receiving the services and as revenue in the fund performing the services. Transactions which constitute reimbursements of a fund for expenditures or expenses initially made from it which are properly applicable to another fund are recorded as expenditures in the reimbursing fund and as reductions of the expenditures in the fund that is reimbursed. Advances between funds are accounted for in the appropriate interfund receivable and payable accounts. . The County passed a resolution in November, 1980 to transfer $66,993.03 from the Road Fund to the Solid Waste Fund with the provision that it be repaid within two years. The money had not been repaid as of June 30, 1981 . The "Due To" and "Due From" amounts are reflected on the Combined Balance Sheet. f. Faxed Assets Fixed assets were recorded at historical cost and estimated costs as determined by the County at the inception of the Budgetary, Accounting and Reporting System for Montana Cities and Counties. • The County researched information from old general ledgers in the 1978-79 fiscal year to determine the actual costs for land, buildings, and other assets. In March, 1979, the County recorded those assets, totaling $615,120.52, in the General Fixed Assets Account Group. Fixed assets purchased during the 1980-81 fiscal year were recorded as expenditures in the S various funds at the time of purchase. However, these fixed asset purchases were not capitalized. As a result, the General Fixed Assets Account Group does not reflect capital acquisitions or deletions made since March, 1979. It is estimated that capital acquisitions not recorded exceeded $320,000.00 as of June 30, 1981 . The dollar value of fixed assets sold, traded-in or otherwise disposed of could not be readily determined. -13- JEFFERSON COUNTY NOTES TO FINANCIAL STATEMENTS - cont. June 10, 1881 1. Summary of Significant Accounting Policies - cont. • f. Pixed Assets - cont. Public domain or infrastructure fixed assets are excluded from the general fixed assets group of accounts. Public domain or infrastructure assets include roads, bridges, curbs and • gutters, streets and sidewalks, drainage systems, lighting systems and similar assets that are immovable and of value only to the governmental unit. g. Taxes and Assessments An allowance for uncollectible accounts were not maintained for • real and personal property taxes and special assessments. The direct write-off method is used for these accounts. h. Inventories Inventories are expensed at the time of purchase and invento- ries on hand are not maintained. i. Warrants Payable The County pays its claims by issuing a warrant ordering the County Treasurer to pay for the warrant upon presentation. Warrants issued but not presented for payment are reported as warrants payable. J. Vgcation and Sick Leave Liabilities incurred because of unused vacation and sick leave accumulated by employees are not included in the financial statements. Expenditures are recognized when paid. k. Comparative Data Comparative total data for the prior year have been presented in the accompanying financial statements in order to provide an understanding of changes in the County's financial position and operations. However, comparative (i.e. , presentation of prior year totals by fund type) data have not been presented in each of the statements since their inclusion would make the statements unduly complex and difficult to read. 1. Total Columns on ombined Statements Total columns on the Combined Statements are captioned Memorandum Only to indicate that they are presented only to facilitate financial analysis. Data in these columns do not • present financial position, results of operations, or changes in financial position in conformity with generally accepted accounting principles. Neither is such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. • 2. Property Tax The County's real estate property tax is levied on the assessed value listed as of January 1 for all real property located in the County. Assessed values are established by the State Department of Revenue based on a market value. A revaluation of all property is • required to be completed on a periodic basis. Taxable value is defined by State statute as a fixed percentage of assessed value. -14- JEFFERSON COUNTY • NOTES TO FTNANCTAL. STATEMENTS - cont. June �0. 19� • 2. Property Tax - cant. The County is permitted by State statutes to levy taxes up to certain fixed limits for various purposes. The taxes levied by the County for the year ended June 30, 1981 were within the legal limits, except for the Noxious Weed Fund. Taxes are due in two equal installments in November 30 and May 31 of each fiscal year. Current tax collections for the year ended June 30, 1981 were approximately 80.1% of the amount levied. The taxable value upon which the tax levies for the fiscal year • ended June 30, 1981 was based was $10,225,526 .00. 3, Long-Term Debt - Contracts Payable The Combined Balance Sheet reflects long-term debt in the amount of $2, 169.49 as of June 30, 1981 . The liability represents the balance due on the purchase of a photocopying machine. However, the actual • amount due as of June 30, 1981 was $1 ,793.20, or a difference of $376.29. Payments had not been recorded in this account group. 4. Amounts Due To and From Other Funds Due from Other Funds and Due to Other Funds consist of the following: Due From Other Funds • Special Revenue Fund (Road) - $66,993.03 due from Special Assess- ment Fund (Solid Waste) Due to Other Funds Special Assessment Fund (solid Waste) - $66,993.03 due to Special • Revenue Fund (Road) 5. Retirement Plans The County participates in the following Retirement Plans: Public Emo oyees' Retirement System All full-time employees except sheriff's department employees and the County School Superintendent are covered by the Montana Public Employees' Retirement System. This plan is administered by the State of Montana. All eligible employees contribute 6% of their salary to the plan, while the County contributes 5.9% of the employees' salaries to the plan, plus .3% of the salaries to the State for administrative expenses of the plan. • The County's contribution to this plan for the year ended June 30, 1981 , was $26,170.03. The unfunded past service costs and the actuarially computed value of vested benefits are determined periodically for the statewide plan and can be obtained from the Public Employees' Retirement Division. • -15- • JEFFERSON COUNTY NOTES TO FINANCIAL STATEMENTS - cont. June 30. 1981_ • 5. Retirement Plans - cont. Teachers, Retirement System The County School Superintendent is covered by the Teacher's Retirement System. The plan is administered by the State of Montana. The County School Superintendent contributes 6.187% of her salary to the plan, while the County contributes 6.312% of the employee' s salary to the plan. The County' s contribution to this plan for the year ended June 30, 1981 , was $822.73. The unfunded past service costs and the actuarially computed value of vested benefits are determined periodically for the statewide plan and can be obtained from the Teachers' Retirement Division. Sheriffs' Retirement System Members of the Sheriffs' Department are covered through the Sheriffs' Retirement Account within the Montana Public Employees' Retirement system. This plan is administered by the State of Montana. All employees contribute 7% of their salary to the plan, while the County, during the fiscal year ended June 30, 1981 , contributed 7.55% of the employees' salaries to the plan. The County' s contribution to this plan for that fiscal year was $7,756.60. The unfunded past service costs and actuarially computed value of vested benefits are determined . periodically for the statewide plan and can be obtained from the Public Employees' Retirement Division. 6, Contingent Liabilities The County has received several Federal grants during the year, many of which specify the terms and conditions under which the moneys may be expended. Although a review of the financial records and controls over these moneys has been completed in connection with this examination, a complete audit, including a review of compliance with the terms and conditions of the grants, has not been completed for all programs. A complete audit was only made for Federal Revenue Sharing Funds. �In the event of a noncompliance determined by a future audit of these grants, the County may be required to reimburse the appropriate Federal agency from County moneys. 7. Pending Litigation The following is a list of litigation pending against Jefferson . County and the amount of damages claimed by the Plaintiff. The County Attorney has made no evaluation as to the outcome of the case. Damages Case Recuested Kaiser Cement Corporation Tax recovery action vs. Jefferson County, et al -16- JEFFERSON_ COUNTY NOTES TO FTNAN TA . STATEMENTS - cont. ,tune 40. 1981 8. prior Period Adiustments • During the current fiscal year, adjustments relating to prior year's transactions were made to the fund balance and retained earnings accounts. The following is a schedule of these adjustments. Fund Amount Reason for Adiustment 0 General Fund $ (1 , 123.80) Correction to Taylor Grazing payment distribution (98.75) Adjustment to prior years' tax revenue Total General Fund $ ( 1 ,222.S5) 0 Special Revenue Funds: Road $ 1 ,498.40 Correction to Taylor Grazing payment distribution Road (14.32) Adjustment to prior years' tax revenue Poor (3.75) • Bridge (2.06) Predatory Animal 16.95 Fair ( .26) Weed (.77) Library (1 .49) Planning (.51) . Senior Citizens ( .26) County Extentiou Ageny ( .54) District Court (1 .19) Total Special Revenue Funds $ 1 .490.20 9. Adiustment The balance sheet of the Trust and Agency Fund reflected a fund balance of $407,482.47 and other credits of $684,019.63 as of June 30, 1981 in the Jefferson County Annual Report. Since there were no Expendable Trust Funds, Nonexpendable Trust Funds or Pension Trust • Funds, these balances have been reclassified as due to other funds/governments. • -17- 0 • • • • JEFFERSON COUNTY SUPPLEMENTAL SCHEDULES • Fiscal Year Ended June 30. 1981 • • • • • • JEFFERSON COUNTY COMBINED STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS ALL FUNDS Fiscal Year Ended June 40. 1981 Balance Transfers • July 1 . 1980 Receipts In FUND General $ 450,711 .41 $ 483,690.89 $ 8,221 .80 Special Revenue Funds: • Road 280,261 .82 210,545.75 3,544.79 Poor 28 ,934.50 68,192.53 339.26 Bridge 48,968.11 27,292.48 202.71 Weed Control 2,411 .04 32,600.40 6 ,097.56 Predatory Animal Control 648.52 6,229.21 - - County Fair 2,189.49 9,046 .45 38.18 Library 3,376.56 28,514.35 147 .07 Planning 8,999.78 10, 130.62 17.81 Senior Citizens 3,133.14 11 ,686.25 37.31 County Extension Agent 8,737.40 7,997.42 43.87 Junk Vehicle 2,260.63 2,989.37 - - Federal Revenue Sharing (33,497.67) 317,708.08 - - District Court 1 ,352.26 69,281 .75 208.83 Land Use 11 ,980.33 4,913.70 - - Flood Disaster -0- 115,354.00 - - Capital Project Funds: EDA County Building 1 ,642.06 - - - - • Trust & Agency Funds: Agency Funds: Agency (Special Districts) 31 , .816.43 41 ,425.74 48.66 Agency (State) 48,924.01 244 ,858.61 322.91 Agency (Schools) 1 ,364,737.15 4,372,535.42 780,234.87 . Agency (Cities and Towns) 43,736.21 180,744.39 971 .69 Agency (Other) 284,407.97 392,071 .18 1 ,368,268.06 Special Assessment Funds: Solid Waste 40,680.60 41 ,391 .67 67 ,056.03 Mosquito 6 ,266.55 15,887.99 73. 14 Basin Improvements 1 .184.23 642.99 - - TOTALS $ 7.643 .862.53 $ 6 .695 .731 .24 -19- f • • Transfers Balance Out Disbursements June 30. 1981 # 502,513.02 $ - - $ 440,111 .08 • 368,457.12 - - 125,895.24 82,094.49 4,626.79 10,745.01 37,198.52 - - 39,264.78 25,947.15 - - 15,161 .85 6 ,838.00 - - 39.73 • 11 ,096 .92 - - 177.20 27,903.69 - - 4,134.29 14,949.09 - - 4,199.12 10,102.03 - - 4,754.67 10,390.85 - - 6,387.84 5,250.00 -0- • 231 ,892.97 - - 52,317.44 986.49 66 ,432.23 3,424. 12 16 ,894.03 8,334.00 107,020.00 • _ _ _ _ 1 ,642.06 2.22 51 ,891 .48 21 ,397.13 87.33 283,918.00 10,100.20 • 772,471 .08 4,486,737.12 1 ,258,299.24 5.00 216,252.31 9,194.98 20,613.62 1 ,465,691 .99 558,441 .6 97,096.80 - - 13,361 .01 8,866.67 • - - 1 .111 .49 - 715.73 # x.235.874.55 $ b.583.883.92 $ 2.755.709.85 -20- • • • • JEFFERSON COUNTY AUDITOR'S REPORT A& • FrNANCI_A_L STATEMENTS Fiscal Year Ended June 40 1982 • • N N _21_ N • COMMERCE DEPARTMENT OF DIVISION OF LOCAL GOVERNMENT SERVICES T f S TED SCHWINDEN, GOVERNOR CAPITOL STATION w ` - STATE OF MONTANA • (406)449-3010 HELENA, MONTANA 59620 To the Honorable Board of County Commissioners • Jefferson County Boulder, Montana 59632 We have examined the combined financial statements of Jefferson County as of and for the year ended June 30 , 1982, as listed in the table of contents. Our examination was made in accordance with generally accepted • auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances, The County reflected a negative taxes/assessments receivable balance of $776 , 819 .19 for all funds at June 30, 1982• This balance reflected • incorrect amounts which were accrued for 1980 and 1981 real property taxes and assessments and for 1980 personal property taxes. In addition, the County did not accrue 1981 and 1982 personal property taxes as required by generally accepted accounting principles. As a result, the General Fund taxes receivable and fund balance were overstated by $23,508.83 , the Special Revenue Fund taxes and fund balance were overstated by $7,446.61 , • the Special Assessments Fund assessments receivable and fund balance were overstated by $37,875.48, and the Trust and Agency Fund taxes receivable and due to other funds/governments were understated by $2,273,703.42• Actual total taxes/assessments receivable were $1 ,503 ,804 .27, for a difference of $2,280,623.46. • Real and personal property taxes and assessments remaining uncollected at year end and not expected to be collected in time to pay liabilities of the current period were not recorded as deferred revenue as required by generally accepted accounting principles. As a result, deferred revenue of the General Fund was understated and fund balance was overstated by • $144,195.96, on June 30, 1982. Deferred revenue of the Special Revenue Fund was understated and fund balance overstated by $212,869.82 and deferred revenue of the Special Assessments Fund was understated and fund balance overstated by $59,391 .42 on June 30, 1982• The matters discussed in the preceding two paragraphs also affected • revenues from taxes. Consequently, the General Fund revenues from taxes were overstated by $84,003.96 , the Special Revenue Fund revenues from taxes were overstated by $130,286.16. The revenues from assessments in the Special Assessement Fund were classified as miscellaneous revenue and were understated by $1 ,743.18. _22 • dN/oo i n/P(}11111%,1V,lA • The fixed assets and investment in fixed assets balance reflected in the General Fixed Assets Account Group had not been adjusted since March, 1979, when the Budgetary, Accounting and Reporting System for Montana Cities and Counties was installed. Therefore, purchases and dispositions of assets since that time had not been recorded in the records of the County. As a result, the balance as recorded is materially understated by approximately $480,000.00 at June 30, 1982. In our opinion, because of the effects of the matters discussed in the preceding paragraphs, the combined financial statements referred to above do not present fairly the financial position of Jefferson County at June 30, 1982, or the results of its operations for the year then ended, in conformity with generally accepted accounting principles. Our examination was made for the purpose of forming an opinion on the combined financial statements taken as a whole. The accompanying supplemental information listed in the table of contents is presented for • purposes of additional analysis and is not a required part of the combined financial statements of Jefferson County. The information has been subjected to the auditing procedures applied in the examination of the combined financial statements and, in our opinion, except for the effects of the matters discussed above, is fairly stated in all material respects in relation to the combined financial statements taken as a whole. • In connection with our examination, we also performed tests of compliance with the Revenue Sharing Act and regulations as detailed in the Commentary on the Audit Reeuirements of the 1980 Amendments to the State and Local Fiscal Assistance Act issued by the Office of Revenue Sharing, U. S. Department of the Treasury, and compared the data on the appropriate • Bureau of Census form with the audited records of Jefferson County. In our opinion, for the items tested, Jefferson County complied with the aforementioned provisions of the Revenue Sharing Act and regulations, except for the following matters: • 1 . There were differences between the data on the Bureau of Census Form RS-9 for the fiscal year ended June 30, 1982, and the audited records of Jefferson County, as disclosed in the Auditor's Comments. 2. Use Reports contained amounts which did not agree with corresponding amounts in the County's Annual Financial Report. 3. The public information publication requirements required for the 11 Revenue Sharing Use Report were not met by the County. 4. The County did not maintain a separate accounting of Revenue Sharing funds. 5. Records were not maintained of property acquired with Revenue Sharing moneys having a value in excess of $1 ,000.00. 11 Further, except for the above matters, based on our examination and the procedures referred to above, nothing came to our attention to indicate that Jefferson County had not complied with the aforementioned provisions of the Revenue Sharing Act and regulations. • G H. PENDER1Q1...9GAST G! October 5, 1983 Ad inistrator • -23- JEFFERSON COUNTY COMBINED BALANCE SHF. •T - ALL FUND DES AND ACCOUNT GROUPS June 30, 1982 GOVERNMENTAL FUND TYPES Special Capital Special General Revenue Proiects Assessment ASSETS Cash $ 570,582.18 $ 325,094.13 $ 1 ,642.06 $ 101 ,899.97 Petty Cash 200.00 - - - - - - Taxes/Assessments Receivable (Net of Uncollectables) 160,567.09 220,316.40 - - 21 ,515.94 Due from Other Funds/ Governments - - 66,993.03 - - - - Other Debits - - - - - - Fixed Assets (Net of Accumulated Depreciation) - - - - - - - - TOTAL ASSETS $ 731 .349.27 $ 612.408.56 $ 1.642.06 $ 1 3�415.91 LIABILITIES AND FUND EQUITY � Liabilities: Short-Term Payables $ - - $ 6,114,37 $ - - $ - - Due to Other Fund/ Governments - - - - - - 66 ,993.03 Long-Term Liabilities Total Liabilities $ -0- $ 6.114.57 $ -0- $ 66.993.03 Fund Equity: Investment in General Fixed Assets $ - - $ - - $ - - $ - - • Fund Balance Unreserved 781 .849.27 606.289.19 1 .642.06 56.422.88 Total Fund Equity $ 781 .849.27 $ 606.289.19 $ 1 .642.06 $ 56.422.88 TOTAL LIABILITIES AND FUND EQUITY $ 731 .349.27 $ 606.289.19 $ 1 .642.06 $ 123.415.91 See accompanying Notes to Financial Statements. -24- • • FIDUCIARY TOTALS FUND TYPES ACCOUNT GROUPS (MEMORANDUM ONLY) Trust General and General Long-Term Agency Fixed Assets Debt June 30. 1982 June 30. 1981 $ 2,392,689.36 $ - - $ - - $ 3,391 ,907.70 $ 2,775,709.85 200.00 200.00 (1 ,179,218.62) - - - - (776,819.19) 828,367.86 66,993.03 66,993.03 • _ _ - - 2,169.49 2,169.49 2, 169.49 _ _ _ j19,120.52 - - 615.120.52 615.120.52 $ 1 .213.470.74 $ ,{x.120.52 $ Za16q.4q $ 3.299.571 .55 $ 4.288.560.75 • $ 207,080.95 $ - - $ - - $ 213,195.32 $ 270,961 .11 1 ,006 ,389.79 - - - - 1 ,073,382.82 2,428,451 .12 2.169_49 2,169,49. 2.169.49 $ 1 .213.470.74 $ -0- $ 2,169.49 $ 1 .288.747.63 $ 2.701 .581 .72 $ - - $ 615,120.52 $ - - $ 615,120.52 $ 615,120.52 • 1 .395.703.40 951 .858.51 $ -0- $ 619,120,92 $ -0- $ 2.010.823.92 $ 1 .566.979.01 • $ 1 .213.470.74 $ ¢j5.120.52 $ 2, 61 9;49 $ 3.299.571 .55 $ 4. 6� 8 560`75 • • -25- • JEFFERSON COUNTY • COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES - ALL GOVERNMENTAL. FUND TYPES • Fiscal Year Ended June 80 1982 GOVERNMENTAL FUND TYPES Special General Revenue • Revenues: Taxes $ 343,873.57 $ 567,409.94 Licenses and Permits 2,862.24 43,124.09 Intergovernmental Revenue 243,059.85 267,589.26 Charges for Services 27,661 .19 14,423.85 • Fines and Forfeitures 18,908.95 - - Miscellaneous Revenues 227.684.99 66.204.68 Total Revenues $ 864.050.79 $ 958.751 .82 • Expenditures: General Government $ 340,884.07 $ 84,349.62 Public Safety 290,159.53 76,596 .94 Public Works 369.12 401 ,237.22 Public Health 70,389.54 1 ,421 .00 • Social & Economic Services 1,620.00 113,174.71 Culture & Recreation - - 51,487.98 Debt Service - - 716.40 Miscellaneous 646.00 - Total Expenditures - $ 704.068.26 $ 728.988.87 • Excess (Deficiency) of Revenues Over Expenditures $ 159,982.53 $ 229,767.95 Fund Balances - July 1 , 1981 520,143.11 423, 197.78 • Prior Period Adjustments (1 ,093.81 ) 5,640.90 Residual Equity Transfers 52.817.44 (52.817.44) Fund Balances - June 30, 1982 $ 781 .849.27 $ 606.289.19 • See accompanying Notes to Financial Statements. -26- • • • TOTALS COVERNMRNTAL FUND TYPES - cont. (MEMORANDUM ONLY) • Capital Special Year Ended Proleats Assessments June 40. 1982 .tune 40. 1981 $ - - $ 5,024.56 $ 916,308.07 $ 565,738.92 45,986.33 30,776.79 41 ,668.00 552,317.11 539,989.65 • _ _ 2,645.50 44,730.54 29,371 .14 18,908.95 20,059.80 146.028.97 419.918.64 465.587.45 $ _0_ $ 195.467.04 $ 2.018.169.64 $ 1 .551 .524.65 • $ 425,233.69 $ 433,752.43 366,756.47 353,510.49 • _ _ 133,677.65 535,283.99 474,531 .84 12,140.00 83,950.54 72,755.29 114,794.71 114,918.67 51 ,487.98 38,942.07 716.40 940.17 646.00 26.641 .45 • $ _0_ $ 145.817.65 $ 1 .578.869.78 $ 1 .575.992.41 $ -0- $ 49,549.38 $ 439,299.86 $ 35,531 .34 • 1 ,642.06 6,875.56 951 ,858.51 916,059.52 _0_ (2.06) 4,545.03 267.65 _0_ -0- -0- -0- • $ 1.642.06 $ 56.422.88 $ „],495.704.40 $ 957 .858.51 • • -27- JEFFERSON COUNTY • COMBINED STATEMENT OF REVENUES. EXEANDITURES. AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL GENERAL AND SPECIAL. REVENUE FUND TYPES • Fiscal Year Ended June 10, 1982 GENERAL. FUND Variance - Favorable • Budget Actual (Unfavorable) Revenues: Taxes $ 312,830.00 $ 343,873.57 $ 31 ,043.57 Licenses and Permits 1 ,777.60 2,862.24 1 ,084.64 Intergovernmental Revenue 185,216.00 243,059.85 57,843.85 • Charges for Services 17, 141 .00 27,661 .19 10,520.19 Fines and Forfeitures 16,000.00 18,908.95 2,908.95 Miscellaneous Revenues 110.106.00 227.684.99 117.578.99 Total Revenues $ 641.070.60 $ 864.050.79 $ 220.980.19 • Expenditures: General Government $ 406 ,244.28 $ 340,884.07 $ 65,360.21 Public Safety 332,142.87 290,159.53 41 ,983.34 Public Works 469.12 369.12 100.00 • Public Health 89,199.60 70,389.54 18,810.06 Social & Economic Services 3,400.00 1 ,620.00 1 ,780.00 Culture & Recreation - - - - - - Debt Service - - - - - - Miscellaneous 6.100.00 646.00 9.464.00 • Total Expenditures $ 837,.666.87 $ 704.068.26 $ 133.487.61 1 Excess (Deficiency) of Revenues \� Over Expenditures $ (194,485.27) $ 159,982.53 $ 354,467.80 • Fund Balance - July 1 , 1981 520,143.11 520,143.11 - - Prior Period Adjustments -0- 61 .221.61 61 .223.65 Fund Balance - June 30, 1982 $ �26.fi67.84 $ 7�1 .�49.27 $ s4Q • See accompanying Notes to Financial Statements. -28- • • s TOTALS SPECIAL REVENUE FUNDS (MEMORANDUM ONLY) Variance - Variance - Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) $ 830,554.08 $ 567,409.94 $ (263,144.14) $ 1 ,143,384.08 $ 911 ,283.51 $(232,100.57) • 20,000.00 43,124.09 23,124.09 21 ,777.60 45,986.33 24,208.73 216,260.00 267,589.26 51 ,329.26 401 ,476.00 510,649.11 109, 173.11 9,220.00 14,423.85 5,203.85 26,361.00 42,085.04 15,724.04 16,000.00 18,908.95 2,908.95 73.491 .00 66.204.68 (7.286.32) 183.597.00 293.889.67 110.292.67 $ 1 -14q .525.08 $ 95B.751 .82 $ (190.773.26) $ 1 .7g2.5g5.68 $ 1 .822.802.61 $ 30.206.93 • $ 105,510.53 $ 84,349.62 $ 21 ,160.91 $ 511 ,754.81 $ 425,233.69 $ 86 ,521 .12 • 178,541 .00 76,596.94 101 ,944.06 510,683.87 366,756.47 143,927.40 516,355.60 401 ,237.22 115,118.38 516,824.72 401 ,606 .34 115,218.38 7,100.00 1 ,421 .00 5,679.00 96,299.60 71 ,810.54 24,489.06 128,713.94 113,174.71 15,539.23 132,113.94 114,794.71 17,319.23 56,425.00 51 ,487.98 4,937.02 56 ,425.00 51 ,487.98 4,937.02 2,500.00 716.40 1 ,783.60 2,500.00 716.40 1 ,783.60 6.100.00 646.00 5.454.00 $ 995.146.07 $ 728.983.87 $ 266.162.20 $ 1 .832.701.94 $ 1 .433.052.13 $ 399.649.81 • $ 154,379.01 $ 229,767.95 $ 75,388.94 $ (40,706.26) $ 389,750.48 $ 429,856.74 370,880.34 370,880.34 - - 891 ,023.45 891 ,023.45 - - -0- 5.640.90 5.640.90 -0- 56.864.53 56.864.53 • $ 525.259.35 $ b06.289.19 $ 87 .029.84 $ 850.917.19 $ 1 .337.638.46 $ 486.721 .27 • -29- • • JEFFERSON COUNTY NOTES TO FINANCIAL STATEMENTS June S0. 102 •' 1 , Summary of Sianificant AecountiDE Policies The accounting policies of Jefferson County conform to generally accepted accounting principles as applicable to governmental units. The following is a summary of the more significant policies: • a. Fund Accounting The accounts of the County are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for within a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and . expenditures or expenses, as appropriate. The following types of funds and groups of accounts are maintained by the County. GOVERNMENTAL FUNDS General Fund - Used to account for all financial resources except those required to be accounted for in other funds. Special Revenue Funds - Used to account for the proceeds of special revenue sources (other than special assessments, expendable trusts, or for major capital projects) that are legally restricted to expenditures for specific purposes. • Capital Projects Funds - Used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by proprietary funds, special assessment funds, and trust funds). Special Assessment Funds - Used to account for financing of • public improvements or services deemed to benefit the properties against which special assessments are levied. FIDUCIARY FUNDS Trust and Agency Funds - 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. These consist of agency funds. FTYPD ASSETS AND LONG-TERM LIABILITTES general Fixed Assets Croup of Accounts - Used to account for the fixed assets of the County which are not accounted for in the enterprise fund. General Long-Term Debt Account Group - Used to account for all L' long-term debt of the County except that accounted for in the enterprise funds, trust funds, and special assessment funds. -30- • JEFFERSON COUNTY NOTES TO FINANCIAL STATEMENTS - cont. June 10, 1982 1 . ,Summary of Sianificant Accounting Policies - cont. b. Basis of Accounting The modified accural basis of accounting is followed by all funds. Under the modified accrral basis of accounting, revenues are recorded when susceptible to accrual, that is, when they become both measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Jefferson County records real and personal property taxes levied for the current year as revenue. However, taxes receivable remaining unpaid at year end were not recorded as deferred revenue, with a corresponding reduction in revenues, as required by generally accepted accounting principles. In addition, prior period delinquent taxes collected in the current period were not recorded as revenue in the current period as required by generally accepted accounting principles. Expenditures other than interest on long-term debt should be recorded when the liability is incurred. Jefferson County, however, records expenditures when paid rather than when the liability was incurred as required by generally accepted • accounting principles. No material difference resulted. p. Cash in Treasury Cash in Treasury may include cash and cash items; demand, time, savings and fiscal agent deposits; investments in the State Short-Term Investment Pool (S.T.I.P.) ; and direct obligations of the United States Government. Investments are stated at cost. The composition of Cash in Treasury on June 30, 1982, was as follows: Cash on Hand $ 306 .05 Cash in Banks: Demand Deposits 750,002.40 Savings Deposits 928,460.19 Time Deposits 1 ,280,544.04 Fiscal Agent Deposits 27,440.70 Registered Warrants 2,275.61 Protested Tax Money Held in U.S. District Court, Billings, Mt. 412.550.16 Sub-Total $ 3,401 ,579.15 Less: Unreceipted Interest 9.671 .45 Total $ j�391 .907.70 • f -31- • JEFFERSON COUNTY NOTES TO FINANCIAL. STATEMENTS - cont. June 30. 1982 mary of Significant Accounting Policies - cont d. Budgets And Rudy_etarY_AQQQ=L1UK An operating budget is adopted each fiscal year for the General Fund and Special Revenue Funds. The operating budgets cannot be increased except by a public emergency which could not have been reasonably foreseen at the time of adoption of the budget. Budget appropriation transfers may not be made between the general classifications of salaries and wages, maintenance and operation and capital outlay, except for road or bridge fund appropriations. Transfers may, however, be made within those general classifications upon a resolution adopted by the governing body. e, Tnterfund Transactions Interfund transactions consisting of identified services performed for other funds or costs billed to other funds are treated as expenditures in the fund receiving the services and as revenue in the fund performing the services. Transactions which constitute reimbursements of a fund for expenditures or expenses initially made from it which are properly applicable to another fund are recorded as • expenditures in the reimbursing fund and as reductions of the expenditures in the fund that is reimbursed. Advances between funds are accounted for in the appropriate interfund receivable and payable accounts. The County passed a resolution in November, 1980 to transfer $66,993.03 from the Road Fund to the Solid Waste Fund with the provision that it be repaid within two years. The money had not been repaid as of June 30, 1981 . The "Due To" and "Due From" amounts are reflected on the Combined Balance Sheet. ! f. Fixed Assets Fixed assets were recorded at historical cost and estimated costs as determined by the County at the inception of the Budgetary, Accounting and Reporting System for Montana Cities and Counties. The County researched information from old general ledgers in the 1978-79 fiscal year to determine the actual costs for land, buildings, and other assets. In March, 1979, the County recorded those assets, totaling $615,120.52, in the General Fixed Assets Account Group. Fixed assets purchased during the 1981-82 fiscal year were recorded as expenditures in the various funds at the time of purchase. However, these fixed asset purchases were not capitalized. As a result, the General Fixed Assets Account Group does not reflect capital acquisitions or deletions made since March, 1979. It is estimated that capital acquisitions not recorded exceeded $480,000.00 as of June 30, 1982. The dollar value of fixed • assets sold, traded-in or otherwise disposed of could not be readily determined. -32- JEFFERSON COUNTY NOTES TO FINANCIAL STATEMENTS - cont. .June 10. 1982 . 1 . Summary of Significant Accounting Pollo es - cont. f. Fixed Assets - eont. Public domain or infrastructure fixed assets are excluded from the general fixed assets group of accounts. Public domain or infrastructure assets include roads, bridges, curbs and gutters, streets and sidewalks, drainage systems, lighting systems and similar assets that are immovable and of value only to the governmental unit. g. Taxes and Assessments An allowance for uncollectible accounts were not maintained for real and personal property taxes and special assessments. The direct write-off method is used for these accounts. s h. Inventories Inventories are expensed at the time of purchase and invento- ries on hand are not maintained. i. Warrants Payable The County pays its claims by issuing a warrant ordering the County Treasurer to pay for the warrant upon presentation. Warrants issued but not presented for payment are reported as warrants payable. J. Vacation and Sick Leave Liabilities incurred because of unused vacation and sick leave accumulated by employees are not included in the financial statements. Expenditures are recognized when paid. k. Comparative Data • Comparative total data for the prior year have been presented in the accompanying financial statements in order to provide an understanding of changes in the County's financial position and operations. However, comparative (i.e. , presentation of prior year totals by fund type) data have not been presented in each of the statements since their inclusion would make the statements unduly complex and difficult to read. 1. Tot-' Columns on Combined Statements Total columns on the Combined Statements are captioned Memorandum Only to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations, or changes in financial position in conformity with generally accepted accounting principles. Neither is such data comparable to a consolidation. Interrund eliminations have not been made in the aggregation of this data. 2. Property Tax The County's real estate property tax is levied on the assessed value listed as of January 1 for all real property located in the County. Assessed values are established by the State Department of Revenue based on a market value. A revaluation of all property is required to be completed on a periodic basis. Taxable value is defined by State statute as a fixed percentage of assessed value. -33- • JEFFERSON COUNTY MOTES TO FINANCIAL• STATEMENTS - cont. June 30. 1982 • 2. roperty Tax - cont. 'ce e County is permitted by State sZea to lev taxes up to tain fixed limits for various purpoe tax s levied by the XCo ty for the year ended June 30 , re ithin the legal lima s, except for the Bride Fund. Taxes a due in two equal installmentmber 30 and May 31 of each fi cal year. Current tax collecr the year ended June 30, 1982 were approximately 76.2'% of th levied.The taxabl value upon which the tax for the fiscal year ended June 0, 1982 was based was $10,80. See � `� g ) 3. Long-TContracts erm D The Combined ante Sheet reflects ong-term debt in the amount of $2, 169.49 as of June 30, 1981 . Th liability represents the balance due on the pure se of a photocop ing machine. However, the actual • amount due as o June 30, 198 was $717.28 , or a difference of $1 ,452.21 . Paymen had not bee recorded in this account group. 4. Due from Other Funds a d Due o Other Funds consist of the following: • �� pie From Other Funds Special Revenue Fund (Roa - $66,993.03 due from Special Assess- 5 �,u4ry ment Fund (Solid Waste) F , P Due to Other Funds �J �( Special Assessment Fun (Soli Waste) - $66,993.03 due to Special • Revenue Fund (Road) 5. Retirement plans The County partici tes in the fol owing Retirement Plans: All full-t employees except sheriff's department employees and the Cc my School Superintend nt are covered by the Montana Public Em oyees' Retirement Syst . This plan is administered by the S to of Montana. All elig le employees contribute 6% of their salary to the plan, while t County contributes 6.32% of the employees ' salaries to t e plan. The County' s contrib ion to this plan for the year ded June 30, 1982, was • $30 , 78 . 94 . The unfunded past se ice costs and the actuar ly computed value of vested be fits are determined period tally for the statewide plan and as be obtained from the P lie Employees' Retirement Division. • -34- • JEFFERSON COUNTY NOTES TO FINANCIAL STATEMENTS - nont. ,Tune 30. 1982 . 5. Retirement Plans - cont. Teachers' Retirement System_ The County School Superintendent is covered by the Teacher's Retirement System. The plan is administered by the State of Montana. The County School Superintendent contributes 6.187% of her salary to the plan, while the County contributes 6.312% of the employee' s salary to the plan. The County' s contribution to this plan for the year ended June 30, 1982, was $974.64. The unfunded past service costs and the actuarially computed value of vested benefits are determined periodically for the statewide plan and can be obtained from the Teachers' Retirement Division. Sheriffs' Retirement System Members of the Sheriffs' Department are covered through the Sheriffs' Retirement Account within the Montana Public Employees' Retirement system. This plan is administered by the State of Montana. All employees contribute 7% of their salary to the plan, while the County, during the fiscal year ended June 30, 1982, contributed 7.62% of the employees' salaries to the plan. The County's contribution to this plan for that fiscal year was $8,530.02. The unfunded past service costs and actuarially computed value of vested benefits are determined periodically for the statewide plan and can be obtained from the Public Employees' Retirement Division. 6. Contingent Liabilities The County has received several Federal grants during the year, many of which specify the terms and conditions under which the moneys may be expended. Although a review of the financial records and controls over these moneys has been completed in connection with this examination, a complete audit, including a review of compliance with the terms and conditions of the grants, has not been completed for all programs. A complete audit was only made for Federal Revenue Sharing Funds. In the event of a noncompliance . determined by a future audit of these grants, the County may be required to reimburse the appropriate Federal agency from County moneys. 7. Pending Litigation The following is a list of litigation pending against Jefferson County and the amount of damages claimed by the Plaintiff. The County Attorney has made no evaluation as to the outcome of each case. Damages Case Recuested Flaherty vs Jefferson County, et al $ 5,000,000.00 Hutchinson vs Moran, et al Damages Kaiser Cement Corp. vs Jefferson County, et al Tax Recovery Action Campbell vs Jefferson County, at al $ 4,500,000.00 0 -35- JEFFERSON COUNTY NOTES TO FINANCIAL STATEMENTS - cont. June 30. 1982 S 8. Prior Period Adjustments During the current fiscal year, adjustments relating to prior year's transactions were made to the fund balance and retained earnings accounts. The following is a schedule of these adjustments. Fund Amount Reason for Adiustment General Fund $ (1 .093.81) Adjustment to prior years' tax revenue Special Revenue Funds: Road $ (2,066.25) Adjustment to prior years' tax revenue Poor (393.95) " Bridge (53.10) " Weed (76.41) " Fair (15.88) " District Court (12.35) " Library (58.60) " Planning (31 .16) " Senior Citizens (1 .93) " ep County Extention Ageny (33.47) " Fair 8.384.00 Cash Transfer from Park to Fair Fund Total Special Revenue Funds $ 5.640.90 0 Special Assessment Funds: Mosquito $ (2.06) Adjustment to prior years' tax revenue 9. Adjustment The balance sheet of the Trust and Agency Fund reflected a fund • balance - reserved of $(1 ,145 , 117 .06) and a fund balance - unreserved of $826,668.46 as of June 30, 1982 in the Jefferson County Annual Report. Since there were no Expendable Trust Funds, Nonexpendable Trust Funds, or Pension Trust Funds, these balances have been reclassified as due to other funds/governments. 0 10, Residual Fcuity Transfer The residual equity transfer represents the transfer of the balance of the Revenue Sharing Fund, a Special Revenue Fund, to the General Fund. • -36- • f • • JEFFERSON COUNTY SUPPLEMENTAL SCHEDULES i Fiscal Year Ended June �0 1982 • • • f i -37- • JEFFERSON COUNTY • COMBINED STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS - ALL FUNDS Fiscal Year Ended June 10. 1982 Balance Transfers July 1 . 1981 Receipts In FUND General $ 440,111 .08 $ 793 ,685.52 $ 55,979.51 Special Revenue Funds: Road 125,895.24 318,993 .49 18,969.80 Poor 10,745.01 135,310.45 804.75 Bridge 39,264.78 80,447.00 379.21 Weed Control 15 , 161 .85 31 ,234.25 160.75 Predatory Animal Control 39.73 1 ,339.11 - County Fair 177.20 21 ,096.65 8,459.94 • Library 4, 134.29 32,271 .58 222.86 Planning 4 ,199.12 8,357 .95 38.37 Senior Citizens 4,754.67 10,946.05 40.43 County Extension Agent 6 ,387.84 9,424.73 768.43 Land Use 16,894.03 5,605.72 - - Federal Revenue Sharing 52,317.44 - - - - Flood Disaster 107,020.00 63,187.00 - - District Court 3,424. 12 110,844.71 303.70 Junk Vehicle -0- 5,000.00 - - Capital Project Funds: EDA County Building 1 ,642.06 - - - - • Trust & Agency Funds: Agency Funds: Agency (Special Districts) 21 ,397.13 125,195.68 204.71 Agency (State) 10,100.20 245,973.80 333.88 Agency (Schools) 1 ,258,299.24 4,637, 157.04 904,513.19 • Agency (Cities and Towns) 9 ,194.98 183,411 .56 2,837.03 Agency (Other) 558,441 .60 619,718.55 1 ,498,790.22 Special Assessment Funds: Mosquito 13 ,361 .01 16 , 105.82 166 .36 Solid Waste 52,031 .50 154 ,621 .73 9 ,892.65 i Basin Improvements 715.7 905.51 - - TOTALS $ 21755.709.85 $ 7.610.83.92 $ 2.502.865.79 i • -38- • • Transfers Balance Out Disbursements June 30. 1982 $ 719,193.93 $ - - $ 570,582.18 • 372,670.04 - - 91 ,188.49 88,368.12 6,046.87 52,445.22 35,283.98 - - 84,807.01 8,314.28 - - 38,242.57 . 1 ,421 .00 _ _ (42.16) 21 ,167.02 8,566.77 30,408.42 - - 6,220.31 1 ,207.26 - - 11 ,388. 18 12,202.49 - - 3,538.66 14,011 .65 - - 2,569.35 - _ 22,499.75 40 52,317.44 - - -0- 16 ,528.50 152,595.44 1 ,083.06 25,819.66 86,165.95 2,586.92 5,000.00 - - -0- • _ _ _ _ 1 ,642.06 39.94 104,647.91 42,109.67 1 ,451 .44 243,399.49 11 ,556.95 905,204.49 4,599,433.74 1 ,295,331 .24 5.73 186,439.75 8,998.09 46.350.04 1 ,595,906.92 1 ,034,693.41 12,158.34 _ _ 17,474.85 132,579.49 83,966.39 1 .162.53 - 458.73 $ 2.502.865_ .79 $ 5.974.536 .07 $ 3.391 .907.70 -39- • s • • JEFFERSON COUNTY AUDITOR'S REPORT AU • FINANCIAL STATEMENTS Fiscal Year Ended June 40 1984 • • • • • -40- • • COMMERCE DEPARTMENT OF DIVISION OF LOCAL GOVERNMENT SERVICES TED SCHWINDEN, GOVERNOR CAPITOL STATION F _ - STATE OF MONTANA (406)449-3010 HELENA, MONTANA 59620 • To the Honorable Board of County Commissioners Jefferson County Boulder, Montana 59632 We have examined the combined financial statements of Jefferson County as • of and for the year ended June 30, 1983, as listed in the table of contents. Except as set forth in the following paragraph, our examination was made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. / We were unable to obtain sufficient evidence to support the cost of the • of land, buildings, furniture, fixtures, tools, machinery, equipment, roads \\ and bridges. The County' s records do not permit the application of adequate alternative procedures regarding the cost of the fixed assets. Real and personal property taxes/assessments remaining uncollected at year • end and not expected to be collected in time to pay liabilities of the current period were not recorded as deferred revenue as required by generally accepted accounting principles. As a result, deferred revenue of the General Fund was understated and fund balance was overstated by $79,037.43, on June 30, 1983• Deferred revenue of the Special Revenue Fund was understated and fund balance overstated by $93,0134.56 and the • deferred revenue of the Special Assessments Fund was understated and fund balance overstated by $64,600.85 on June 30, 1983• The matters discussed in the preceding paragraph also affected revenues from taxes and assessments. Consequently, if the deferred revenue account had been established in the prior years, collections of delinquent taxes . would be recorded as revenue in the year collected. As a result, revenue from taxes was understated in the General Fund by $65 ,158 .53 and was overstated in the Special Revenue Fund by $119,735.26. Assessment revenue was understated in the Special Assessment Fund by $5,209.43• In our opinion, because of the effects of the matters discussed in the preceding paragraphs, the combined financial statements referred to above do not present fairly the financial position of Jefferson County at June 30, 1983, or the results of its operations for the year then ended, in , conformity with generally accepted accounting principles. • -41- • AN IOUdI OGRORNINFry FMRI OVER • Our examination was made for the purpose of forming an opinion on the combined financial statements taken as a whole. The accompanying supplemental information listed in the table of contents is presented for • purposes of additional analysis and is not a required part of the combined financial statements of Jefferson County. The information has been subjected to the auditing procedures applied in the examination of the combined financial statements and, in our opinion, except for the effects of the matters discussed above, is fairly stated in all material respects in relation to the combined financial statements taken as a whole. • gnGXOctober 5, 1983 istrator • • • • • • -uz- • JEFFERSON COUNTY • COMBINED BALANCE SWEET - ALL FUND TYPES AND ACCOUNT GROUPS June 30. 1983 .OVERNMENTAL FUND TYPES Special Special General Revenue Assessment Cash $ 418,153.64 $ 458,321 .80 $ 99,923.08 • Petty Cash 200.00 - - - - Taxes/Assessments Receivable (Net of Uncollectables) 148,020.56 225,774.87 33,433.83 Due from Other Funds/ Governments - - 66,993.03 - - Other Debits - - _ _ • Fixed Assets (Net of Accumulated Depreciation) TOTAL ASSETS $ 566.374.2D $ 751 .089.70 $ 133.356.91 LIABILITIES AND FORD EQUITY • Liabilities: Short-Term Payables $ - - $ 2,219.84 $ - - Due to Other Fund/ Governments - - - - 66,993.03 Long-Term Liabilities - - - - • Total Liabilities $ -0- _ $ 2.219.84 $ 66.993.03 Fund Equity: Investment in General Fixed Assets $ - - $ - $ - Fund Balance Unreserved 566.374.20 748.869.86 66.364.88 Total Fund Equity $ 566.374.20 $ 748.869.86 $ 66.363.88 TOTAL LIABILITIES AND FUND EQUITY $ 566.374.20 $ 751 .089.70 $ 1331356.91 • • See accompanying Notes to Financial Statements. • -43- r • • FIDUCIARY TOTALS FUND TYPES ACCOUNT GROUPS (MEMORANDUM ONLY) Trust and General A¢enev Fixed Assets June 30, 1984 June 30. 1982 $ 2,353,903.70 $ - - $ 3.330.302.22 $ 3,391 ,907.70 200.00 200.00 1 ,266,582.36 - - 1 ,673,811 .62 (776,819.19) 66 ,993.03 66,993.03 • _ _ _ _ - - 2,169.49 - - 1217.750.25 1 .217.750.25 619.120.52 $ 3.620.48fi.06 $ 1 .217.750.25 $ b.289.057.12 $ 4.299.571 .55 $ 894,215.21 $ - - $ 896 ,435.05 $ 213,195.32 2,723,230.85 - - 2,790,223.88 1 ,073,382.82 2.169.49 $ 3.617.446.06 $ -0- _ $ 3,686.658.93 $ 1,288.747.64 • $ - - $ 1 ,217,750.25 $ 1 ,217,750.25 $ 615,120.52 3.040.00 1 .384.647.94 1,495.704.40 $ 3.040.00 $ 1 .917.750.25 $ 2.602.498.19 $ 2.010.824.92 $ 4.620.486.06 $ 1 .217.750.25 $ 6 .289.057.12 $ 4.299.571 .55 • • -44- • JEFFERSON COUNTY • COMBTNED STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES TN FUND BALANCES - ALL GOVERNMENTAL FUND TYPES AND EXPENDABLE TRUST FUNDS • Fiscal Year Ended June 30, 1983 GOVERNMENTAL FUND TYPES _ Special General Revenue • Revenues: Taxes $ 258,959.65 $ 399,279.95 Licenses and Permits 3,543.29 52,918.33 Intergovernmental Revenue 159,931 .63 366,572.25 Charges for Services 31 ,669.04 18,998.16 • Fines and Forfeitures 18,690.19 - - Miscellaneous Revenues 194.139.35 6.006.94 Total Revenues $ 666.933.15 $ 843.775.63 Expenditures: • General Government $ 398,614.04 $ 114,231 .96 Public Safety 303,312.29 - - Public Works - - 386,171 .87 Public Health 74,720.71 50.00 Social & Economic Services 1 ,634.10 111 ,596.41 Culture & Recreation - - 46,295.86 • Debt Service - - 88.70 Miscellaneous 24.975.94 35.158.00 Total Expenditures $ 803.257.08 $ 693.592.80 Excess (Deficiency) of Revenues • Over Expenditures $ (136.323.93) $ 150.182.81 Other Financing Sources (Uses): Operating Transfers Out $ (5.000.00) $ - Total Other Financing Sources (Uses) $ (5.000.00) $ -0- 0 Excess (Deficiency) of Revenues & Other Sources Over Expenditures & Other Uses $ (141 ,323.93) $ 150,182.83 Fund Balances - July 1 , 1982 731 ,349.27 606,289.19 • Prior Period Adjustments (23.651 .14) (7.602.16) Fund Balances - June 30, 1983 $ 566.374.20 $ 748.869.86 • See accompanying Notes to Financial Statements. -45- • • • FIDUCIARY TOTALS GOVERNMENTAL FUND TYPES - cont. FUND TYPES (MEMORANDUM ONLY) Capital Special Expendable Year Ended • _ Prod is Assessments Trust June 30, 1981 June 30. 1982 $ - - $ 134,045.56 $ - - $ 792,285.16 $ 916 ,308.07 56,461 .62 45,986.33 - - 1 ,260.19 - - 527,764.07 552,317.11 • _ _ 1 ,373.00 - - 52,040.20 44,730.54 18,690.19 18,908.95 2.065.28 3.040.00 205.251 .57 439.918.64 $ -0- $ 138.744.03 $ 3.040.00 $ 1,652.492.81 $ 2.018.169.64 • $ _ _ $ - - $ - - $ 512,846.00 $ 425,233.69 - - 303,312.29 366,756.47 - - 386, 171 .87 535,283.99 - - 13,220.00 - - 87,990.71 83,950.54 - - 130,199.12 - - 243,429.63 114,794.71 • _ _ _ _ _ _ 46,295.86 51 ,487.98 - - 88.70 716.40 60.133.94 646.00 $ _0_ $ 143.419.12 $ -0- $ 1 .640.269.00 $ 1.578.869.78 • $ _0- $ (4.675.09) $ 3.040.00 $ 12.223.81 $ 439.299.86 $ (1 .642.06) $ - - $ - - $ (6.642.06) • $ (1 .642.06) $ -0- $ -0- $ (6.642.06) $ -0- $ (1 ,642.06) $ (4,675.09) $ 3,040.00 $ 5,581 .75 $ 439,299.86 1 ,642.06 56,422.88 -0- 1 ,395,703.40 951 ,858.51 • -0- 14.616.09 -0- (16 .637.21 ) 4.545.03 $ -0- $ 66.363.88 $ 3,040.00 $ ],384.647.94 $ 1 .395.703.40 • -46- • JEFFERSON COUNTY • COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL GENERAL AND SPECIAL REVENUE FUND TYPES • Fiscal Year Ended June 10, 1981 GENERAL FUND Variance - Favorable • Budget Actual (Unfavorable) Revenues: Taxes $ 275,839.32 $ 258,959.65 $ (16,879.67) Licenses and Permits 2,297.00 3,543.29 1 ,246.29 Intergovernmental Revenue 123,854.73 159,931 .63 36,076.90 • Charges for Services 20,975.00 31 ,669.04 10,694.04 Fines and Forfeitures 15,100.00 18,690.19 3,590.19 Miscellaneous Revenues 112.610.00 194.119.15 81 .529.15 Total Revenues $ 550.676.05 $ 666.911.15 $ 116.257.10 • Expenditures: General Government $ 515,557.28 $ 398,614.04 $ 116,943.24 Public Safety 347,797.08 303,312.29 44,484.79 Public Works 505.00 - - 505.00 Public Health 93,433.42 74,720.71 18,712.71 Social & Economic Services 3,850.00 1 ,634.10 2,215.90 • Culture & Recreation Debt Service - Miscellaneous 19.000.00 24.975.94 14.024.06 Total Expenditures $ 1 .000.142.78 $ 801.257.08 $ 196.885.70 • Excess (Deficiency) of Revenues k Over Expenditures $ (449.466.71) $ (116.121.91) $ 111.142.80 Other Financing Sources (Uses) : Operating Transfers Out $ -0- $ (5.000.00) $ (5.000.00) • Total Other Financing Sources (Uses) $ -0- $ (5.000.00) $ (5.000.00) Excess (Deficiency) of Revenues & Other Sources Over Expenditures & Other Uses $ (449,466.73) $ (141 ,323.93) $ 308,142.80 • Fund Balance - July 1 , 1982 731 ,349.27 731 ,349.27 - Prior Period Adjustments -0- (21.651 .14) (21.651 .14) Fund Balance - June 30, 1983 $ 281 .882.54 $ 566.174.20 $ 284.491 .66 • See accompanying Notes to Financial Statements. • -47- • • TOTALS SPECIAL REVENUE FUNDS (MEMORANDUM ONLY) Variance - Variance - Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) $ 400,127.89 $ 399,279.95 $ (847.94) $ 675,967.21 $ 658,239.60 $ (17,727.61) • 30,900.00 52,918.33 22,018.33 33,197.00 56,461 .62 23,264.62 394,600.00 366,572.25 (28,027.75) 518,454.73 526,503.88 8,049.15 20,475.00 18,998.16 (1 ,476.84) 41 ,450.00 50,667.20 9,217.20 15.100.00 18,690.19 3,590.19 9.855.76 6.006.94 (4.848.82) 122-469.76 200,146.29 77.680.54 $ 55.958.65 $ 843.775.63 $ (12.183.02) $ 1 .406.644.70 $ 1 .510.708.78 $ 104.074.08 • $ 140,765.78 $ 114,231 .96 $ 26,533.82 $ 656,323.06 $ 512,846 .00 $ 143,477.06 347,797.08 303,312.29 44,484.79 618,840.00 386,171 .87 232,668.13 619,345.00 386 ,171 .87 233,173.13 • 7,150.00 50.00 7,100.00 100,583.42 74,770.71 25,812.71 142,312.02 111 ,596 .41 30,715.61 146,162.02 113,230.51 32,931 .51 43,500.00 46,295.86 (2,795.86) 43,500.00 46,295.86 (2,795.86) 2,200.00 88.70 2,111 .30 2,200.00 88.70 2,111 .30 112.499.75 45.158.00 77.341 .75 151 .499.75 60.143.94 91 .465.81 • $ 1 .067.267.55 $ 694.592.80 $ 373.674.75 $ 2.067.410.33 $ 1 .496.849.88 $ 570.560.45 $ (211 .308.90) $ 150.182.83 $ 361 .491 .73 $ (660.775.63) $ 13.858.90 $ 674.644.53 • $ _ _ $ _ _ $ _ _ $ _D_ $ (5.000.00) $ (5.000.00) $ -0- $ -0- $ -0- $ _0_ $ (5.000.00) $ (5.000.00) • $ (211 ,308.90) $ 150,182.83 $ 361 ,491 .73 $ (660,775.63) $ 8,858.90 $ 669,634.53 606,289.19 606,289.19 - - 1 ,337,638.46 1 ,337,638.46 - - -0- (7.602.16) (7.602.16) -0- (31 .253.30) (31 .253.30) • $ 394.980.29 $ 748.869.86 $ 353.889.57 $ 6706 8 $ 1 .315.244.06 $ 618,381 .23 • -48- JEFFERSON COUNTY • NOTES TO FINANCIAL STATEMENTS June 10. 1981 Summary of Significant Accounting Policies a. Reporting Entity The financial statements of Jefferson County include all the County's operations controlled by the Board of County Commis- sioners. The County participates in three retirement plans administered and controlled by the State of Montana. (See Note • 5.) These retirement plans are not inclued in the accompanying financial statements. b. Fund Accounting The accounts of the County are organized on the basis of funds • and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for within a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures or expenses, as appropriate. The following types of funds and groups of accounts are maintained by the County. GOVERNMENTAL FUNDS General Fund - Used to account for all financial resources except those required to be accounted for in other funds. Special Revenue Funds - Used to account for the proceeds of • special revenue sources (other than special assessments, expendable trusts, or for major capital projects) that are legally restricted to expenditures for specific purposes. capital Protects Funds - Used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by proprietary funds, special assessment funds, and trust funds) . Special Assessment Funds - Used to account for financing of public improvements or services deemed to benefit the . properties against which special assessments are levied. FIDUCIARY FUNDS Trust and Agency Funds - 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. These include expendable Trust Funds and agency funds. -49- • • JEFFERSON COUNTY NOTES TO FINANCIAL STATRMFNTS - Cont. June 30. 1983 • 1 , summary of Significant Accounting Policies - cont b. Fund A counting - Cont. FIXED ASSETS AND LONG--TERM TTABILITIES • General Fixed Assetg Group of Accounts - Used to account for the fixed assets of the County which are not accounted for in the enterprise fund. C. Basis of Accounting The modified accural basis of accounting is followed by all • funds. Under the modified accural basis of accounting, revenues are recorded when susceptible to accrual, that is, when they become both measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. • Jefferson County records real and personal property taxes levied for the current year as revenue. However, taxes receivable remaining unpaid at year end were not recorded as deferred revenue, with a corresponding reduction in revenues, as required by generally accepted accounting principles. In addition, prior period delinquent taxes collected in the • current period were not recorded as revenue in the current period as required by generally accepted accounting principles. Expenditures other than interest on long-term debt should be recorded when the liability is incurred. Jefferson County, however, records expenditures when paid rather than when the • liability was incurred as required by generally accepted accounting principles. No material difference resulted. d. Cash in Treasury_ Cash in Treasury may include cash and cash items; demand, time, savings and fiscal agent deposits; investments in the State • Short-Term Investment Pool (S.T.I.P.) ; and direct obligations of the United States Government. Investments are stated at cost. The composition of Cash in Treasury on June 30, 1983, was as follows: Cash on Hand $ 589.04 • Cash in Banks: Demand Deposits 183,617.37 Savings Deposits 1 ,198,262.23 Time Deposits 1 ,921 ,616.14 Fiscal Agent Deposits 24,355.50 Registered Warrants _ 2.275.61 Sub-Total $ 3,330,715.89 • Less: Unreceipted Interest 413.67 Total $ 3.330.302.22 -50- • JEFFERSON COUNTY NOTRS To FINANCIAL STATEMENTS_- cont. June 30. 1983 • 1 , Summary of Significant Accounting Policies - cant. e. Budgets and Budgetary Accountina An operating budget is adopted each fiscal year for the General Fund and Special Revenue Funds. . The final budget is legally enacted by the County Commissioners on the second Monday in August, after holding public hearings as required by state statutes. The operating budgets cannot be increased except by a public emergency which could not have been reasonably foreseen at the time of adoption of the budget. Budget appropriation transfers may not be made between the general classifications of salaries and wages, maintenance and operation and capital outlay, except for road or bridge fund appropriations. Transfers may, however, be made within those general classifications upon a resolution adopted by the governing body. f, rnterfund Transactions Interfund transactions consisting of identified services performed for other funds or costs billed to other funds are treated as expenditures in the fund receiving the services and as revenue in the fund performing the services. 0 Transactions which constitute reimbursements of a fund for expenditures or expenses initially made from it which are properly applicable to another fund are recorded as expenditures in the reimbursing fund and as reductions of the expenditures in the fund that is reimbursed. 0 Advances between funds are accounted for in the appropriate interfund receivable and payable accounts. The County passed a resolution in November, 1980 to transfer $66,993.03 from the Road Fund to the Solid Waste Fund with the • provision that it be repaid within two years. The money had not been repaid as of June 30, 1983. The "Due To" and "Due From" amounts are reflected on the Combined Balance Sheet. g. Fixed Assets The County researched information from old general ledgers in the 1978-79 fiscal year to determine the actual costs for land, 1, buildings, and other assets. In March, 1979, the County recorded those assets, totaling $615,120.52, in the General Fixed Assets Account Group. In June of 1983 , the County recorded an additional $602,629.73 of fixed assets representing the asset acquistions from March, 1974 through June 30, 1983. The dollar value of fixed assets sold, traded-in or otherwise disposed of could not be readily determined. -51- • JEFFERSON COUNTY NOTES TO FINANCIAL STATEMENTS - cont. June 30, 1981 1 Summary of Significant AccOuntin'K Policies - cont. g. Fixed Assets_ - Cont. Public domain or infrastructure fixed assets are excluded from the general fixed assets group of accounts. Public domain or infrastructure assets include roads, bridges, curbs and gutters, streets and sidewalks, drainage systems, lighting . systems and similar assets that are immovable and of value only to the governmental unit. h. Taxes and Assessments An allowance for uncollectible accounts were not maintained for real and personal property taxes and special assessments. The . direct write-off method is used for these accounts. i, Inventories Inventories are expensed at the time of purchase and invento- ries on hand are not maintained. . j. Warrants Payable The County pays its claims by issuing a warrant ordering the County Treasurer to pay for the warrant upon presentation. Warrants issued but not presented for payment are reported as warrants payable. k, vacation and Sick Leave Liabilities incurred because of unused vacation and sick leave accumulated by employees are not included in the financial statements. Expenditures are recognized when paid. 1. Comparative Data Comparative total data for the prior year have been presented in the accompanying financial statements in order to provide an understanding of changes in the County's financial position and operations. However, comparative (i.e. , presentation of prior year totals by fund type) data have not been presented in each of the statements since their inclusion would make the i statements unduly complex and difficult to read. M. Total Qol U=s on Combined Statements Total columns on the Combined Statements are captioned Memorandum Only to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations, or changes in financial position in conformity with generally accepted accounting principles. Neither is such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. I, 2. Property Tax The County's real estate property tax is levied on the assessed value listed as of January 1 for all real property located in the County. Assessed values are established by the State Department of Revenue based on a market value. A revaluation of all property is required to be completed on a periodic basis. Taxable value is • defined by State statute as a fixed percentage of assessed value. -52- • JEFFERSON COUNTY NOTES TO FTNANCTAi STATEMENTS - cont. June 10, 1981 2. Property Tax - cont. The County is permitted by State statutes to levy taxes up to certain fixed limits for various purposes. The taxes levied by the County for the year ended June 30, 1983 were within the legal limits. Taxes are due in two equal installments in November 30 and May 31 of each fiscal year. Current tax collections for the year ended June 30, 1983 were approximately 76.3% of the amount levied. The taxable value upon which the tax levies for the fiscal year Z ended June 30, 1983 was based was 10,887,163.00. 3. Fixed Assets w f lows '0 A summary of changes in general fixed assets follows: Balance Balance -July 982 Additions Deletions June U. 1983 Land $ 2,700.00 $ $ $ 2,700.00 Buildings 263,332.51 3,561 .15 266,893.66 Improvements Other Than Buildings 100,679.77 100,679.77 Machinery & Equipment 149.088.01 498.188.81 847.476.82 Total $ $ $ -0- $ ] ,217.750.25 • 4. Amounts Due To and From Other Funds Due from Other Funds and Due to Other Funds consist of the following: Due From Other Funds Special Revenue Fund (Road) - $66,993.03 due from Special Assess- ment Fund (Solid Waste) Due to Other Funds Special Assessment Fund (Solid Waste) - $66,993.03 due to Special Revenue Fund (Road) 5. Retirement Plans The County participates in the following Retirement Plans: Public Fmplovees' Retirement System All full-time employees except sheriff's department employees and the County School Superintendent are covered by the Montana Public Employees' Retirement System. This plan is administered by the State of Montana. All eligible employees contribute 6% of their salary to the plan, while the County contributes 6.32% of the employees' salaries to the plan. The County' s contribution to this plan for the year ended June 30, 1983, was $33 , 476 .73 . The unfunded past service costs and the actuarially computed value of vested benefits are determined periodically for the statewide plan and can be obtained from the Public Employees' Retirement Division. -53- • JEFFERSON COUNTY NOTRS TO FINANCIAL STATEMENTS - nont. June 40. 1981 • 5. Retirement Plans - cont. Teachers' Retirement System The County School Superintendent is covered by the Teacher's Retirement System. The plan is administered by the State of Montana. The County School Superintendent contributes 6.187$ of her salary to the plan, while the County contributes 6.312$ • of the employee' s salary to the plan. The County ' s contribution to this plan for the year ended June 30, 1983, was $1,045.32. The unfunded past service costs and the actuarially computed value of vested benefits are determined periodically for the statewide plan and can be obtained from the Teachers' • Retirement Division. Sheriffa' Retirement System Members of the Sheriffs' Department are covered through the Sheriffs' Retirement Account within the Montana Public Employees' Retirement system. This plan is administered by the • State of Montana. All employees contribute 7$ of their salary to the plan, while the County, during the fiscal year ended June 30, 1983, contributed 7.62% of the employees' salaries to the plan. The County' s contribution to this plan for that fiscal year was $9,063.11. The unfunded past service costs and actuarially computed value of vested benefits are determined • periodically for the statewide plan and can be obtained from the Public Employees' Retirement System. 6. Contingent Liabilities The County has received several Federal grants during the year, many of which specify the terms and conditions under which the moneys may • be expended. Although a review of the financial records and controls over these moneys has been completed in connection with this examination, a complete audit, including a review of compliance with the terms and conditions of the grants, has not been completed for all programs. A complete audit was only made for Federal Revenue Sharing Funds. In the event of a noncompliance • determined by a future audit of these grants, the County may be required to reimburse the appropriate Federal agency from County moneys. 7. Pendipa L.itiaation The following is a list of litigation pending against Jefferson • County and the amount of damages claimed by the Plaintiff. The County Attorney has made no evaluation as to the outcome of each case. Damages Case Reeuested • Flaherty vs Jefferson County, et al $5,000,000.00 Hutchinson vs Moran, et al Damages Raiser Cement Corporation vs Tax Recovery Jefferson County, et al Action Campbell vs Jefferson County, et al $4,500,000.00 • -54- • JEFFERSON COUNTY NOTES TO FINANCIAL. STATEMENTS - cont. June 30. 1983 • 8. Prior Period Adiustments During the current fiscal year, adjustments relating to prior year's transactions were made to the fund balance and retained earnings accounts. The following is a schedule of these adjustments. Fund Amount Reason for Adiusstment • Cenral Fund $ (23.551 .14) Adjustment to prior years' tax revenue Special Revenue Funds: Road $ 15,453.48 Adjustment to prior years' tax revenue Poor (5,719.01) " Bridge 2,690.95 " • Weed (6,202.39) " Predatory Animal 29.49 " Fair 114.19 " Library (5,278.32) " Planning (261 .62) " Senior Citizens 867.71 " • County Extention Ageny (1 ,412.29) " Distrist Court (7.884.35) " Total Special Revenue Funds • Special Assessment Funds: Mosquito $ (3,606.98) Adjustment to prior years' tax revenue Basin Improvement 1 ,319.22 " Solid Waste 16.903.85 " Total Special Assessment Funds $ 14.616.09 s • • -55- • • • • JEFFERSON COUNTY • SUPPLEMENTAL SCHEDULES Fiscal Year Ended June �0. 1981 • • ! • • -56- s JEFFERSON COUNTY • COMBINED STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS - ALL FUNDS Fiscal Year Ended June 30, 1983 Balance Transfers 0 July 1 . 1982 Receipts In FUND General $ 570,582.18 $ 632,864.08 $ 33,604.63 Special Revenue Funds: 0 Road 91 ,188.49 431 ,075.14 18,587.70 Poor 52,445.22 83,503.74 11 ,806.37 Bridge 84,807.01 38,869. 11 5,349. 17 Weed Control 38,242.57 5,686.47 1 , 237.46 Predatory Animal Control (42.16) 103.43 8.30 County Fair 8,566.77 9,894.81 771 .30 0 Library 6,220.31 30,857.79 4,418.35 Planning 11 ,388.18 1 ,950.44 477.25 Senior Citizens 3,538.66 10,669.71 769.98 County Extension Agent 2,569.35 12,733.54 1 ,670.30 Land Use Planning 22,499.75 5,304.84 - - Flood Disaster 1 ,083.06 34,205.00 - - 0 District Court 2,586 .92 121 ,833.51 5,958.33 Junk Vehicle -0- 5,000.00 - - Capital Project Funds: EDA County Building 1 ,642.06 1 ;Trust & Agency Funds: . Trust Funds: New County Parks -0- 3,040.00 - Agency Funds: Agency (Special Districts) 42,109.67 79,318.09 13,246 .44 Agency (State) 11 ,556.95 268,810.65 8,619.74 0 Agency (Schools) 1 ,295,331 .24 5,004,447.99 1 ,216 ,300.06 Agency (Cities and Towns) 8,998.09 184,491 .80 15,833.83 Agency (Other) 1 ,034,693.41 731 ,285.10 1 ,575,253.41 Sp€bial Assessment Funds: Mosquito 17,474.85 15,901 .07 1 ,932.03 0 Solid Waste 83,966.39 120,370.70 2,554.72 Basin Improvements 458.73 1 .327 .76 135.59 TOTALS $ 3 .391 .907.70 $ 7.833.544.77 $ 2.918.534 .96_ i _57_ i • • Transfers Balance Out Disbursements June 40. 1984 $ 818,897.25 $ - - $ 418,153.64 1 358,262.28 - - 182,589.05 83,514,81 - - 64,240.52 15,535.57 - - 113,489.72 17,731 .35 - - 27,435.15 • 50.00 _ _ 19.57 14,102.56 5,130.32 32,218.53 - - 9,277.92 808.35 - - 13,007.52 15,526.57 - - (548.22) 13,489.41 - - 3,483.78 6,300.60 21 ,503.99 • _ _ 28,888.27 6,399.79 51 ,789.14 66,326 .93 12,262.69 4,970.00 - - 30.00 • 1 ,642.06 - - -0- 3,040.00 23.88 82,131 .86 52,518.46 • 46.13 278,062.63 10,878.58 982,175.65 5,146,095.52 1 ,387,808.12 194.80 204,733.59 4,395.33 357,057.26 2,088,911 .45 895,263.21 13,273.04 - - 22,034.91 129,676.48 - - 77,215.33 1 .249.24 - - 672.84 $ 2.918.544.96 $ 7.8QF.1�0.25 $ 4.340.402.22 -58- • 0 cc A CA Ln . JEFFERSON COUNTY AUDITOR'S COMMENTS REPORT ON INTERNAL ACCOUNTING CONTROL 40 We have examined the financial statements of Jefferson County for the years ended June 30, 1981 , 1982, and 1983, and have issued our report thereon dated October 5, 1983• As part of our examination, we made a study and evaluation of the County' s system of internal accounting control to the extent we considered necessary to evaluate the system as required by generally accepted auditing standards. The purpose of our study and . evaluation was to determine the nature, timing and extent of the auditing procedures necessary for expressing an opinion on the County' s financial statements. Our study and evaluation was more limited than would be necessary to express an opinion on the system of internal accounting control taken as a whole. The management of Jefferson County is responsible for establishing and maintaining a system of internal accounting control. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of control procedures. The objectives of a system are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from S unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any system of internal accounting control, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the system to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the degree of compliance with the procedures may deteriorate. Our study and evaluation made for the limited purpose described in the first paragraph would not necessarily disclose all material weaknesses in the system. Accordingly, we do not express an opinion on the system of internal accounting control of Jefferson County taken as a whole. However, our study and evaluation disclosed no condition that we believed to be a material weakness. 0 - This report is intended primarily for the use of Jefferson County's Board of County Commissioners and the other elected officials. Its use for any other purpose is not appropriate. Other internal control weaknesses disclosed by our study and evaluation, i although not considered to be material, are disclosed below for your information, along with our recommendations for improvement where applicable. Centralized Purchasing_ The County has neither a centralized purchasing system nor an established s policy for purchasing. Requisitions are not processed centrally and are not compared to the budget of the department which is requesting the items. Purchase orders are not prenumbered, controlled or accounted for, and they are not verified to the goods at the time such goods are received. Internal accounting control requires management to implement a purchasing system that will prevent unauthorized purchasing and budget 0 overdrafts. -60- JEFFERSON COUNTY AUDITOR'S COMMENTS - cont. REPORT ON INTERNAL ACCOUNTING CONTROL - cont. • Untralized Purchasing - cont. � RP�ommendation The County Commissioners should implement a centralized purchasing system. Requisitions or purchase orders should be required for all items which exceed a specified amount. These prenumbered purchase orders should be approved by the designated individual(s) , if there is sufficient budget. Finally, purchase orders should be compared to the goods received and the invoice to assure that all items ordered were received and that the amount charged is accurate. Fixed Assets The County maintained a detailed card file of County-owned fixed assets, however, no entry had been made to the general fixed asset account group from March of 1979 until June of 1983. As a result, fixed assets were understated by approximately $320,000.00 and $480,000.00 on June 30, 1981 S and 1982 , respectively. In June of 1983 , the County recorded an additional $602,629.73 of fixed assets, representing the assets purchased from March, 1979 through June, 1983. Fixed assets sold, traded-in or otherwise disposed of were not deleted from the general ledger accounts. Recommendation A complete physical inventory, as required by statute, should be taken each year of the County-owned land, buildings, property and equipment. The information from the inventory should be used to update the fixed asset card file and to adjust the general ledger fixed asset accounts. Also, the card file and general ledger fixed asset accounts should be adjusted for new property purchased and for old items which are traded-in, sold or otherwise disposed of. Noxious Weed d Predatory Animal r ntrol Billing and Collection The Clerk and Recorder prepares the bills and collects the money for noxious weed and predatory animal control services, and then deposits the money with the County Treasurer. Since the Clerk performs both the billing and collection functions, there is a lack of segregation of duties, resulting in poor internal control. Recommendation The Clerk should utilize prenumbered duplicate billing forms for all noxious weed and predatory animal control charges. The forms should state that all remittances are to be made to the Jefferson County Treasurer. This procedure will result in a segregation ofd}duties and improve internal control. -61- • .rRFFF.RSON COUNTY AUDTTOR' S COMMENTS - cent. • REPORT ON COMPLIANCE MATTERS Our audit covering the fiscal years ended June 30, 1981 , 1982 and 1983 , included tests for compliance with statutes, regulations and other requirements that the County is required to adhere to. For the items and areas tested, the County was in compliance with the applicable provisions referred to above, except for the areas listed below. In addition, based • on the procedures employed, nothing came to our attention that caused us to believe the untested items and areas were not in compliance with applicable statutes, regulations and other requirements. Distribution of Motor Vehicle UUQ and Registration Eees Motor vehicle title fees and state payments of motor vehicle registration • fees were distributed to the town and county road funds based on road mileage. Section 61-3-203, MCA, states that title fees retained by the County should be distributed to the city and town road funds and to the county road fund based on the number of vehicles registered in each city or town and outside the corporate limits of the cities and towns. Section 7-14-2512, MCA, requires that 50% of the registration fees paid by owners • residing within the incorporated city limits shall go to the city road fund and the balance shall be paid into the county road fund. Recommendation Motor vehicle title and registration fees should be distributed as required by Sections 61-3-203 and 7-14-2512, MCA. • Gas Tax Revenues A total of $4,112.60 of the gas tax monies received by the County from the Department of Highways was distributed incorrectly to the Town of Boulder ($2,504.79) and the Town Whitehall ($1 ,607.81 ) during the audit period. State law does not authorize the distribution of County gas tax monies to • other local governments. Recommendation In the future, all gas tax monies received by the County from the Department of Highways should be retained and utilized by the County. The Board of County Commissioners should contact the Town of Boulder and the Town of Whitehall regarding repayment of incorrectly distributed County gas tax monies. Liauor Tax Revenues Liquor tax revenues received from the Department of Institutions are restricted by Section 53-24-206, MCA, "for purposes pertaining to the • problems of alcoholism. " County records did not facilitate the tracing of $1 ,223.00, $1 ,111 .00, and $ o liquor tax monies receive y e County in the 1980-81 , 1981 -82, and 1982-83 fiscal years, to assure compliance with the law. Recommendation • All liquor tax monies received from the Department of Institutions should be expended according to law for problems of alcoholism and adequate documentation should be maintained by the County to substantiate compliance with the law. 1-�A EW� 1. • -62- JEFFERSON COUNTY AUDITOR'S COMMENTS - Cont. . REPORT ON COMPLIANCE MATTERS - Cont. Distribution of Delineuent Taxes to School Districts and Towns Delinquent taxes collected by the County Treasurer were distributed to the various school districts and towns based on the current year's mill levies, rather than being distributed based on the mill levies corresponding to that delinquent year. Therefore, the funds of the various school districts and towns received improper amounts of tax revenues. The differences, however, were not material. Recommendation Delinquent taxes collected by the County Treasurer should be distributed to the school districts and towns based on the mill levies which were applicable to the year the taxes were levied. Jefferson Valley Rural Fire District The Commissioners of Jefferson County invested in registered warrants of the Jefferson Valley Rural Fire District in 1981 , and have held the warrants as an investment, although the Fire District has sufficient money available to redeem these warrants. In effect, the County has loaned the Fire District money. State law does not authorize counties to invest in the registered warrants of a special district. Section 7-6-2701 , MCA, restricts the investment in registered warrants to warrants issued by the same county. In addition, Section 7-6-2605, MCA, states, "When there is sufficient money to pay the warrants drawing interest , the treasurer. . .(is) to pay such warrants. " The County Commissioners also transferred $6,642.06 of County monies to the Fire District without provisions for repayment. We know of no law which permits the transfer of County monies to a special district. Section 7-7-2103 , MCA, prohibits counties from making donations to individuals, associations, or corporations. Recommendation The County should require the Jefferson Valley Rural Fire District to redeem the registered warrants they hold as an investment. In the future, the County should only invest in registered warrants of the County itself. The Fire District should be consulted to determine a method of repayment of the transfer made to it by the County Commissioners. Fmeraencv Budgets The County Commissioners did not follow the detailed procedures concerning the passage of emergency budgets as outlined in Section 7-6-2342, MCA. For example, budget resolutions did not always state the facts constituting the emergency or the amount required to meet the emergency. One emergency budget hearing was held prior to the date allowed by law. S Recommendation In the future, the procedures established by State law concerning the passage of emergency budgets should be followed. The minutes of the meetings of the County Commissioners should detail the steps that the Commissioners followed, the reasons for the emergency budget, and all other pertinent information. -63- JEFFERSON COUNTY AUDITOR'S COMMPNTS - cont. REPORT ON COMPLIANCE MATTERS - cont. The minutes of the meetings and the files maintained by the County, which should substantiate decisions made by the Commissioners to accept or reject individual bids, were incomplete. Recommendation The following information should be included in a bidding file or in the minutes of the meetings of the County Commissioners: 1 . Bid specifications 2. The date the bid is to be let, opened and the newspapers that will carry the advertisements 3. A copy of the newspaper advertisements 4. The bids received and other correspondence 5. The bid accepted 6. The reasons for rejection of the low bid 7. If the purchase or construction price allows the Commissioners to solicit bids from interested parties (Section 7-5-2302, MCA) , the information listed above, except No. 2 and No. 3 , should be maintained on file or contained in the minutes Redemption Fund The Redemption Fund books maintained by the Clerk and Recorder and the Treasurer were not current, so a reconcilement to the fund money could not be prepared. Section 15-18-106 , MCA, requires the Treasurer to reconcile the Redemption Fund and report the persons entitled to the money and the amounts in the Fund to the County Commissioners. Also, Section 15-18-107, MCA, requires the Clerk and Recorder to maintain a redemption book on a current basis. Several cases in the Redemption Fund are at least seven years old, and State law requires the County to remit unclaimed property to the State after seven years (Title 70, Chapter 9, Parts 1 , 2 and 3, MCA) . Recommendation Both the Clerk and Recorder and the Treasurer should maintain Redemption Fund records on a current basis, and the Treasurer should prepare a reconcilement for presentation to the County Commissioners. The County Treasurer should remit to the State the money in the Redemption Fund for cases which are at least seven years old. Ratable ni,11ribution Time, savings and demand deposits were not distributed ratably to banks and savings and loans in the County as required by Section 7-6-205 and 7-6-206 , MCA. Recommendation In the future, the Treasurer should distribute demand deposits among the banks in the County substantially in proportion to the paid-in capital and surplus of each bank. Investments should be distributed among all the banks and savings and loans in the County substantially in proportion to the total property taxes paid during the preceding year in the County and the corporation license taxes paid by each bank or savings and loan association. In lieu of the ratable distribution of investments, the County can solicit bids from banks and savings and loan associations in the County. -64- • JEFFERSON COUNTY AUDITOR'S COMMENTS - cont. REPORT ON COMPLIANCE MATTERS - cont 40 Annual Reports Annual reports were not prepared by the Clerk and Recorder for the fiscal years ended June 30, 1981 and 1982, and therefore, were not presented to the Board of County Commissioners within the statutory time limit. These reports were prepared in January, 1983 by the staff of the Local 41 Government Services Division of the Department of Commerce. Section 7-6-2203, MCA, states: "Within 40 days after the close of each fiscal year, the county clerk shall make out and present to the board of county commissioners and the department of commerce a complete statement of the financial condition of the county. " Recommendation The Clerk and Recorder should present the annual report of the County' s financial condition to the Board of County Commissioners and the Department of Commerce within 40 days after June 30. 40 Federal Revenue Sharing Funds In the audit of" Federal Revenue Sharing funds for the fiscal years ended June 30, 1981 and 1982, we noted the following: 1 . The RS-9 forms submitted to the Bureau of Census contained understated property tax and intergovernmental revenue figures. In the 1980-81 fiscal year, these amounts were understated by 6% of the actual revenue figures and in the 1981-82 fiscal year by 2% of the revenue figures. 2. Use Reports (Forms RS-9C) contained amounts which did not agree with corresponding amounts in the County's Annual Financial Report. 3. A separate trust fund or separate accounting was not maintained for Revenue Sharing funds in the 1981-82 and 1982-83 fiscal years. These funds were commingled with the General Fund to be used for law enforcement. Section 51 . 101 of the Revenue Sharing Regulations requires that a separate trust fund should be established and that accounts be maintained in a manner that permits the tracing of entitlement funds to a level of expenditure adequate to establish that such funds have not been used in violation of the restrictions and prohibitations of the Act and regulations. 4. Section 51 .12 of the Revenue Sharing Regulations requires that a notice be published, advising the public that the Use Report is avail- able for public inspection. The County failed to publish this notice. 5. Section 51 .70 of the Revenue Sharing Regulations requires that records shall be kept of any property purchased with Revenue Sharing moneys having a value in excess of $1 ,000.00. The County failed to maintain such records. RP ommenda ion 1 . The County should refile with the Bureau of Census the RS-9 form for the 1980-81 fiscal year, submitting the correct figures. 2. In the future, more care should be taken when submitting the Use Report to the Office of Revenue Sharing. -65- JEFFERSON COUNTY AUDITOR'S COMMENTS ----cont. REPORT ON COMPLIANCE MATTERS _ cont Federal Revenue Sharing Funds - cont. Recommendations - cont. 3. A separate Revenue Sharing Fund should be established within the Special Revenue Fund type. To ensure adequate S accountability, we recommend that all Revenue Sharing funds be expended directly from the Revenue Sharing Fund. If funds are transferred to other funds and spent , a memorandum record must be kept of the claim and/or warrant numbers and amounts of expenditures made from the funds to which the transfers were made which are financed with Revenue Sharing funds. 4. A notice should be published each year advising the public that the Use Report is available for public inspection. 5. Records should be kept of any property purchased with Revenue Sharing moneys which has a value in excess of $1 ,000.00. • Delincuent Taxes The County has delinquent taxes owing on real property which have been delinquent more than four years, however, the County has not initiated the proper procedures to collect the taxes or sell the property. Title 15, Chapters 17 and 18, MCA, sets forth the procedures and requirements for tax sales, redemptions and tax deeds, while Title 7, Chapter 8, Part 23, MCA, sets forth the procedures and requirements for the sale of tax deed land. Recommendation The County Commissioners, County Treasurer and County Clerk and Recorder should review the above statutes and take the appropriate action to collect delinquent taxes. The County Commissioners should review the aged delinquent tax lists from time to time to ensure that the tax collection procedures are being initiated in a timely fashion. Mill Levies The levy for the Noxious Weed Fund was set at 2.88 mills in the 198_0-81 fiscal year. Section 7-22-2142, MCA, sets the maximum levy for the Noxious Weed Fund at 2 mills. The levy for the Bridge Fund was set at 6 _ mills in the 1981-82 fiscal year. Section 7-14-2502(1 ) (2) (a) , MCA, limits the Bridge Fund levy to 4 mills, except 1 additional mill may be levied "In any county where the total linear feet of bridge or bridge construction is more than 4 ,000 and the taxable value of property in that county is $20 million or less, . . . " Also, the maximum levy of__5 mills was fi set for the Mosquito Control Fund in the 1980-81 and 1982-83 scal years, although the tax revenue requirements compute to 3.77 and 4.09_ mills, respectively. Section 7-6-2321( 1) , MCA, states that "Each tax levy shall be at a rate no higher than required. . . " Recommendation In the future, all tax levies set should be limited to the maximum amounts set out by statute. No tax levy should exceed the amount necessary to provide the tax revenue required for the approved budget. -66- JEFFERSON COUNTY AUDITOR'S COMMENTS - cont. REPORT ON COMPLIANCE MATTERS - cont. a„deet Preparation and-19=¢& • Preliminary budget documents on file for the three years audited did not contain the detailed itemization of proposed salary and wage, capital outlay and miscellaneous expenditures required by Section 7-6-2314, MCA. The official minutes of the Board did not include the resolutions approving the final budgets or a listing of the approved budgets as required by Section 7-6-2320, MCA. • Recommendation The budget preparation and adoption procedures prescribed by Title 7, Chapter 6, Part 23, MCA, should be followed in future years. Budget Transfers Budget transfers were made between the general expenditure classifications of "maintenance and operation" and "interest and debt redemption" in the District Court and Noxious Weed Funds during the 1980-81 fiscal year. This is contrary to Section 7-6-2325(2) (a) , MCA, which prohibits transfers between the general expenditure classifications. Recommendation Budget transfers should only be made within the general classes of salaries and wages and maintenance and support. Transfers may not be made between the general classes, except within the i Road and Bridge Funds. Payroll Salaries of elected County officials, as noted in the minutes of the Board of County Commissioners, were incorrectly established in some cases. The County Superintendent of Schools received $28.00 in the 1980-81 fiscal year and $600.00 in the 1981-82 fi*D5a-year in excess of the compensation • allowed by Sections 4-250 and 7-4-2564 MCA. In addition, the Clerk and Recorder and the Depu Clerk an Recorder received an additional $2,000 .00 and $1 ,800.00 respectively each year for election work. Attorney General' s Opinion No. 7, Volume 39 , states that additional compensation may not be provided to a Clerk and Recorder who acts as an election administrator. • In addition, the personnel policies established by the Commissioners in the 1980-81 fiscal year salary resolution were not adhered to in subsequent years' decisions concerning employee advancement and compensation. As a result, several County employees received less compensation than they would have, had the policies been followed. Currently, County employees have no established guidelines concerning duties, advancement, compensation, performance evaluation or benefits. Recommendation In the future, County officials should be compensated according to the salaries established by law. The County Attorney should be consulted concerning the overpayments for the Superintendent of Schools, Clerk and Recorder and Deputy Clerk and Recorder, and the possible underpayments of other County employees. A personnal policy should be developed and communicated to all County employees, and should include information regarding duties, compensation, advancement, benefits and performance • evaluations. -67- • JEFFERSON COUNTY AUDITOR' S COMMENTS - Cont. • REPORT ON COMPLIANCE MATTERS - cont Land Use Planning-Fuld The County established a Land Use Planning Fund in the 1978-79+fiscal year, and has received and deposited $27 ,804.59 of coal severance tax monies to the fund through June 30, 1983• No expenditures were made in the 1978-79, • 1979-80, 1980-81 , or 1981-82 fiscal years. The County did expend $6,300.60 between April 1 , 1983 and June 30, 1983 , however, only _t75- 0 of the expenditures appeared to be for land planning purposes. Expenditures of $5,550.60 were made for the payment of an administrative consultant's salary and travel expenses. The consultant's primary function was to assist the County Commissioners with the budget preparation process. • Section 90-1-108(2), MCA, states "Counties, cities, or joint planning boards receiving funds under this section shall use such funds for land planning purposes." Section 90-1-108(3) , MCA, further states "At the end of each fiscal year, every local governing body and planning agency receiving funds under this section shall provide an accounting of how the money was spent, in a form acceptable to the department of commerce. Any • surplus funds shall revert to the education trust fund account. " The Department of Commerce stated that no expenditure report had been filed for the 1980-81 or 1981-82 fiscal years, despite repeated requests for the information. The County Commissioners adopted a resolution in January, 1980 to expend the funds for a "county-wide solid waste feasibility study", however, no monies were expended from the Land Use Planning Fund • for this purpose. Recommendation Since the County received $27 ,804.59 and expended only $750.00 for land planning purposes, we recommend that the County Attorney contact the Department of Commerce, Division of • Community Development, to determine whether the moneys not expended for land planning purposes must be returned to the State. • • • -68- • JEFFERSON COUNTY AUDITOR'S COMMENTS - cont. REPORT ON OTHER FINANCIAL MATTERS � Cash Transfer/Loan The County Commissioners, by resolution, authorized a transfer of $66 ,993.03 from the Road Fund to the Solid Waste Fund in November, 1980. The money transferred to the Solid Waste Fund was Payment in Lieu of Taxes (PILT) money which had been originally allocated to the Road Fund in the 1980-81 fiscal year. The resolution authorizing the transfer stipulated that the money was to be repaid within two years. The money had not been repaid as of June 30, 1983• Recommendation The County Commissioners should review the above situation and either make definite provisions to repay the loan or treat the transaction as a disbursement for solid waste purposes and eliminate the due to and due from accounts in the applicable funds. Tax Receivable Tax Roll Reco❑ ii m n The delinquent real and personal property taxes listed on the Clerk and Recorder's tax roll reconcilement journals were not reconciled to the general ledger taxes receivable account balances, which resulted in the taxes receivable being misstated at June 30, 1981 and 1982. Recommendation The real and personal property tax roll balances should periodically be reconciled to the Treasurer's record of unpaid taxes, and to the general ledger taxes receivable account balances. General Long-Term Debt Account Group Upon the installation of the Budgetary, Accounting and Reporting System for Montana Cities and Counties (BARS) , the Clerk and Recorder recorded the amount due on a contract for the purchase of a copy machine in the General Long-Term Debt Account Group. The County's financial statements reflected a balance of $2,169.49 on both June 30, 1981 and 1982, even though payments were being made. This resulted in overstating contracts payable by $376.29 and $1 ,452.21 on June 30, 1981 and 1982. The contract 4P was paid off in the 1982-83 fiscal year and the liability was removed from the books. Recommendation In the future, the Clerk and Recorder should reduce the long- term liabilities in the General Long Term Debt Account Group each year by the amount of the principal payments on the debt. Protested Taxes Receivable The County does not reflect any protested taxes receivable in the general ledger as required by generally accepted accounting principles and the Budgetary, Accounting and Reporting System for Montana Cities and -Counties. Monies received when taxes were paid under protest were deposited to the Protested Tax Fund, however, no entries were made to establish protested taxes receivable and to reduce taxes receivable in the various taxing funds. This resulted in an overstatement of taxes receivable and an understatement of protested taxes receivable. -69- 0 .JEFFERSON COUNTY AUDITOR'S COMMENTS - cent- nRT ON OTHER ETNANCTAJ MATTERS - cont • Protested Taxes Receivable - cont. Recommendation The County should establish protested taxes receivable in the appropriate taxing funds by adjusting the various taxes 0 receivable accounts. The total amount shown in the general ledger for protested taxes receivable should equal the payable amount in the Protested Tax Fund at all times, after considering interest earned in the Protested Tax Fund. Journal Vouchers Both the Clerk and Recorder's office and the Treasurer' s office generated a separate series of journal vouchers. The offices did not consistently receive a copy of the vouchers prepared by the other office. As a result, tracing of these adjustments between offices was difficult to follow. Recommendation A single series of journal vouchers should be utilized by the two offices. Copies of the journal vouchers generated in one office should be forwarded to the other office and a single numbering system should be utilized. Clerk and Recorder's Petty Cash - Travel Advances The Clerk's Petty Cash Fund was used to advance travel money to County employees required to travel on County business. The petty cash voucher, signed when the money was advanced, was adjusted to the net amount expended when the surplus was returned. The petty cash vouchers were not attached to or itemized on the claim submitted to reimburse the Petty Cash Fund. Therefore, accountability over the Petty Cash Fund was weakened. Also, we noted several inconsistencies in meal and lodging rates allowed. Recommendation Petty cash vouchers should not be altered once written. A travel expense report should be filed accounting for all advances received, expenses incurred and cash returned, if applicable. The claim submitted to reimburse the Petty Cash Fund should have vouchers and expense reports attached to support the claim. The Commissioners should establish procedures for travel advances and reimbursements and a policy on the allowable meal and lodging rates. The procedures and policy should be recorded in the minutes of the Board and made available to all employees. 0 Budaet Accounting and Reporting Errors were made in transferring the anticipated non-tax revenues, tax revenues and appropriations from the adopted budget to the general ledger account cards, and subsequently to the 1980-81 and 1981-82 fiscal years' Annual Reports. This resulted in the variance column of the Annual Report 0 being misstated on some of the revenue and expenditure line items and in total. For example, the total appropriations listed in the budget column of the Annual Report were overstated in the General Fund by $617.41 and were understated in the Special Revenue Fund by $23,779.93 in the 1980-81 fiscal year, and were understated in the Special Revenue Fund by $87,762.62 in the 1981-82 fiscal year. -70- JEFFERSON COUNTY • AUDITOR'S COMMENTS - cont. REPORT ON OTHER FINANCIAL MATTERS - cont. • Budget n t+n¢ and Reporting - cont. Recommendation More care should be exercised in transferring the figures from the adopted budget to the revenue and expenditure account cards and ultimately to the Annual Report. In each fund, the total • anticipated revenues reported in the budget column of the Annual Report should equal the sum of the non-tax revenue and property tax revenue from that fund ' s final budget. Also, the anticipated expenditures reported in the budget column of the Annual Report should equal the appropriation listed on the final adopted budget for that fund. • Accrued Interest Not Receipted Interest that was earned through June 30, 1981 , 1982, and 1983, was not recorded on the books as earned until the following fiscal year. Therefore, total cash was understated on the Annual Reports by $11 ,584.48 in the 1980-81 fiscal year, $9,671 .45 in the 1981-82 fiscal year, and • $413.67 in the 1982-83 fiscal year. Revenue was also affected, but by immaterial amounts. Generally accepted accounting principles require that revenues be recognized in the accounting period in which they become available and measurable. Recommendation 3C • In the future, the interest that is earned through June 30 of each fiscal year should be recorded in that fiscal year. • • • • -71- • JEFFERSON COUNTY AUDITOR'S COMMENTS - cont. REPORT ON PRIOR AUDIT REPORT RECOMMENDATIONS The following is a summary of the prior audit report recommendations and the actions taken on them by the County. Recommendations— Actions Taken All interest earned should be receipted into the records Not Implemented and credited to the proper fund in the fiscal year in fC which it was earned. The County Treasurer should segregate those motor Not Implemented vehicle license fees paid by persons residing outside the incorporated towns. The Treasurer should then distribute 50% of those fees paid by persons residing within the incorporated town limits to the "city road fund. " Moneys remaining after this distribution shoul be credited to the County Road Fund. Wine tax moneys received by the County should be credited Implemented to the County General Fund. During the course of the audit, the County General Fund revenue account cards were adjusted and requests for refunds were made to the towns. The Clerk and Recorder should remit the unclaimed money Not Implemented in the Redemption Fund from all accounts over 7 years old, along with the report required by Section 70-9- 301 , MCA, to the Department of Revenue. The Treasurer should also transfer $ .53 from the Redemption Fund to the County General Fund. The Clerk and Recorder should review Sections 15-10-306 Not Implemented and 307, MCA, and any other related laws regarding taxation and comply with them in the future. The Clerk should also determine the actual amount of taxes that should have been charged for the 1979-80 fiscal year, including any additions, deletions, and rollback taxes and adjust the various receivable accounts accordingly. The general ledger should be reconciled to the delinquent taxes for each year's receivables and any differences should be investigated. The Clerk and Recorder should receipt for all excess Implemented money in the fee book checking account and remit it to the Treasurer to the credit of the County General Fund. The checking account should be reconciled to the fee book on a timely basis and any discrepancies noted should be investigated. Moneys received from photocopies should be segregated in the cash box from other fees and receipted for at least weekly, and preferably daily. Disbursements from the account should be limited strictly to the remittance of fees to the Treasurer and for refunds of fees paid in error. No personal moneys should be deposited to or expended from this account. -72- • JEFFERSON COUNTY AUDITOR' S COMMENTS - cont. REPORT ON PRIOR AUDIT REPORT RECOMMENDATIONS - cont. Recommendations Actions Taken The existing transfer vouchers should be prenumbered. Not Implemented Either the Clerk and Recorder or the Treasurer may originate transfers; however, both offices should have a copy of all transfers made. Each voucher should 0 show the reason for the transfers, the funds affected, the amounts, and the approval of the County Commissioners. The Clerk and Recorder should determine the amount of Implemented taxes due for Lands Acquired by Tax Deed and set up a Trust and Agency Fund on the accounting records by 0 making the following entry: Dr. Lands Acquired by Tax Deed Cr. Fund Balance The final budget as adopted, with amendments for budget Not Implemented transfers, should agree with the accounting records. 0 Budget overdrafts should not be allowed to occur in the future. The Clerk and Recorder should use prenumbered transfer Implemented vouchers so that each office is aware of and can record appropriate transactions at the same time. 0 The assets and investment in the fixed assets of the Not Implemented general fixed asset accounts in the general ledger should be adjusted to reflect the correct fixed asset amounts. The total of the general fixed assets inventory card file should always be in agreement with • the general ledger accounts. Fixed assets acquired or disposed of should be posted to the general ledger accounts when the transaction(s) occur. In addition, to facilitate better control, one employee should be designated to keep the fixed asset records current. A journal voucher was prepared during the course of the • audit to increase the general fixed asset general ledger amounts by $130,268.32• The Board of County Commissioners should take whatever Partially Implemented action is necessary to insure that the Weed Board records are properly maintained and presented for • audit when requested. The cashing of personal checks not related to County Implemented collections should be prohibited. -73-