annual financial report jackson county, tennessee

ANNUAL FINANCIAL REPORT

JACKSON COUNTY, TENNESSEE

FOR THE YEAR ENDED JUNE 30, 2008

This page is left blank intentionally.

2

3

ANNUAL FINANCIAL REPORT


FOR THE YEAR ENDED JUNE 30, 2008

DEPARTMENT OF AUDIT JUSTIN P. WILSON

Comptroller of the Treasury

DIVISION OF COUNTY AUDIT RICHARD V. NORMENT

Assistant to the Comptroller

JAMES R. ARNETTE Director

CARL LOWE, CGFM Audit Manager GARY D. RAMSEY, CPA CHRISTY N. TENNANT, CPA, CGFM STEVE REEDER, CPA, CGFM, CFE KELLEY J. McNEAL, CPA, CGFM Auditor 4 State Auditors

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


4

5


TABLE OF CONTENTS

Exhibit Page(s) Audit Highlights 9-10 INTRODUCTORY SECTION 11 Jackson County Officials 13 FINANCIAL SECTION 15 Independent Auditor’s Report 17-19 BASIC FINANCIAL STATEMENTS: 21 Government-wide Financial Statements: Statement of Net Assets A 23 Statement of Activities B 24-25 Fund Financial Statements: Governmental Funds: Balance Sheet C-1 26-27 Reconciliation of the Balance Sheet of Governmental Funds

to the Statement of Net Assets

C-2 28 Statement of Revenues, Expenditures, and Changes in Fund Balances

C-3 29-30

Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities

C-4 31 Fiduciary Funds: Statement of Fiduciary Assets and Liabilities D 32 Notes to the Financial Statements 33-67 REQUIRED SUPPLEMENTARY INFORMATION: 69 Schedules of Revenues, Expenditures, and Changes in Fund Balances – Actual and Budget:

General Fund E-1 71-72 Solid Waste/Sanitation Fund E-2 73 Highway/Public Works Fund E-3 74 Schedule of Funding Progress – Pension Plan E-4 75 Schedule of Funding Progress – Other Postemployment Benefits Plan – Discretely Presented Jackson County School Department

E-5 76 Notes to the Required Supplementary Information 77

6

Exhibit Page(s)

COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES:

79

Nonmajor Governmental Funds: 81 Combining Balance Sheet F-1 83 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances

F-2 84

Schedule of Revenues, Expenditures, and Changes in Fund Balance – Actual and Budget:

Drug Control Fund F-3 85 Major Governmental Fund: 87 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Actual and Budget:

General Debt Service Fund G 89 Fiduciary Funds: 91 Combining Statement of Fiduciary Assets and Liabilities H-1 93 Combining Statement of Changes in Assets and Liabilities –

All Agency Funds

H-2 94 Component Unit: Discretely Presented Jackson County School Department: 95 Statement of Activities I-1 97 Balance Sheet – Governmental Funds I-2 98 Reconciliation of the Balance Sheet of Governmental Funds

to the Statement of Net Assets

I-3 99 Statement of Revenues, Expenditures, and Changes in

Fund Balances – Governmental Funds

I-4 100 Reconciliation of the Statement of Revenues, Expenditures,

and Changes in Fund Balances of Governmental Funds to the Statement of Activities

I-5 101 Schedules of Revenues, Expenditures, and Changes in Fund

Balances – Actual (Budgetary Basis) and Budget:

General Purpose School Fund I-6 102-104 School Federal Projects Fund I-7 105 Central Cafeteria Fund I-8 106 Miscellaneous Schedules: 107 Schedule of Changes in Long-term Notes, Other Loans, Capital Leases, and Bonds – Primary Government and Discretely Presented Jackson County School Department

J-1 109-110 Schedule of Long-term Debt Requirements by Year – Primary Government and Discretely Presented Jackson County School Department

J-2 111-112 Schedule of Investments J-3 113 Schedule of Transfers – Primary Government and Discretely Presented Jackson County School Department

J-4 114

Schedule of Salaries and Official Bonds of Principal Officials – Primary Government and Discretely Presented Jackson County School Department

J-5 115

7

Exhibit Page(s) Schedule of Detailed Revenues – All Governmental Fund Types

J-6 116-119

Schedule of Detailed Revenues – All Governmental Fund Types – Discretely Presented Jackson County School Department

J-7 120-121 Schedule of Detailed Expenditures – All Governmental Fund Types

J-8 122-136

Schedule of Detailed Expenditures – All Governmental Fund Types – Discretely Presented Jackson County School Department

J-9 137-149 Schedule of Detailed Receipts, Disbursements, and Changes in Cash Balance – City Agency Fund

J-10 150

SINGLE AUDIT SECTION 151 Auditor’s Report on Compliance and on Internal Control Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards

153-155 Auditor’s Report on Compliance With Requirements Applicable to Each Major Program and Internal Control Over Compliance in Accordance With OMB Circular A-133

157-159 Schedule of Expenditures of Federal Awards and State Grants 161-162 Schedule of Audit Findings Not Corrected 163-164 Schedule of Findings and Questioned Costs 165-174 Auditee Reporting Responsibilities 175


8

9

Audit Highlights Annual Financial Report

Jackson County, Tennessee For the Year Ended June 30, 2008

Scope

We have audited the basic financial statements of Jackson County as of and for the year ended June 30, 2008.

Results

Our report on the aggregate discretely presented component units is qualified because the financial statements did not include one component unit, which had not been audited. Our report on the governmental activities, each major fund, and the aggregate remaining fund information is unqualified. Our audit resulted in 14 findings and recommendations, which we have reviewed with Jackson County management. Detailed findings, recommendations, and management’s responses are included in the Single Audit section of this report.

Findings

The following are summaries of the audit findings:

OFFICE OF COUNTY MAYOR ♦ The General and Solid Waste/Sanitation funds and the capital assets records required

material audit adjustments for proper financial statement presentation. ♦ Expenditures exceeded appropriations approved by the County Commission in several

major appropriation categories (the legal level of control) of the General and Drug Control funds. Expenditures exceeded total appropriations approved by the County Commission in the Solid Waste/Sanitation Fund by $8,333.

♦ The County Mayor’s Office did not have documentation on file to support vacation, sick, or compensatory leave for general government employees.

OFFICE OF DIRECTOR OF SCHOOLS ♦ At June 30, 2008, the School Federal Projects Fund had a cash overdraft of $75,676.

10

OFFICE OF CIRCUIT AND GENERAL SESSIONS COURTS CLERK ♦ The office did not review software audit logs. OFFICE OF CLERK AND MASTER ♦ At June 30, 2008, the execution docket trial balance did not reconcile with general

ledger accounts by $11,044. ♦ Bank statements were not accurately reconciled with the general ledger. ♦ The clerk and master did not post short-term account activity to the accounting records. ♦ The office did not review software audit logs.

OFFICE OF SHERIFF ♦ The office had deficiencies in maintaining the records of the commissary. ♦ The office did not deposit some funds to the bank account within three days of collection

as required by state statute. OTHER FINDINGS ♦ County officials had not adopted a central system of accounting, budgeting, and

purchasing. ♦ Duties were not segregated adequately in the Offices of County Mayor, Road

Superintendent, Director of Schools, Trustee, County Clerk, Circuit and General Sessions Courts Clerk, Clerk and Master, Register, and Sheriff.

♦ The Industrial Development Board of the County of Jackson, Tennessee, a component unit of Jackson County, was not audited as required by state statute.

11

INTRODUCTORY SECTION


12

13

Jackson County Officials June 30, 2008 Officials Charlie Hix, County Mayor Edward Anderson, Road Superintendent Joe Barlow, Director of Schools Vernon Ragland, Trustee Kim Hammock, Assessor of Property Belinda Ward, County Clerk Aaron Thomas, Circuit and General Sessions Courts Clerk Sherrie Osborne, Clerk and Master Kim Barham, Register Kenneth Bean, Sheriff Board of County Commissioners Charlie Hix, County Mayor, Chairman Scott Allen Charles Hopkins John Cason Michael Loftis Kenneth Craighead Willard Mayberry Danny Davis Billy Myers Joey Denson Johnny Pippin James Evins Jeff Smallwood Pat Forkum Jack Smith Bruce Hawkins Wayne Wiley Richard Head Kimberly Young Board of Education Mark Brown, Chairman Tim Bowman James Robert Childress Jeff Lynn Dewey Mabery Sandra Ragland


14

15

FINANCIAL SECTION


16

17

STATE OF TENNESSEE COMPTROLLER OF THE TREASURY

DEPARTMENT OF AUDIT DIVISION OF COUNTY AUDIT

SUITE 1500 JAMES K. POLK STATE OFFICE BUILDING

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

INDEPENDENT AUDITOR’S REPORT

March 30, 2009

Jackson County Mayor and Board of County Commissioners Jackson County, Tennessee To the County Mayor and Board of County Commissioners: We have audited the accompanying financial statements of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Jackson County, Tennessee, as of and for the year ended June 30, 2008, which collectively comprise Jackson County’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of Jackson County’s management. Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the Jackson County Emergency Communications District, which represent 1.6 percent and 2.4 percent, respectively, of the assets and revenues of the aggregate discretely presented component units. These financial statements were audited by other auditors whose report thereon has been furnished to us, and our opinion, insofar as it relates to the amounts included for the Jackson County Emergency Communications District is based on the report of other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the auditing standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit and the report of other auditors provide a reasonable basis for our opinions.

18

The financial statements of the Industrial Development Board of the County of Jackson, Tennessee, a component unit requiring discrete presentation, had not been audited as of the date of this report. Accordingly, the aggregate discretely presented component units financial statements referred to above do not include amounts for the Industrial Development Board of the County of Jackson, Tennessee, which should be included to conform with accounting principles generally accepted in the United States of America. The effects on the financial statements of the aggregate discretely presented component units are not reasonably determinable. In our opinion, based on our audit and the report of other auditors, except for the effects of not including the financial statements of the Industrial Development Board of the County of Jackson, Tennessee, as discussed in the preceding paragraph, the financial statements referred to above present fairly, in all material respects, the financial position of the aggregate discretely presented component units of Jackson County, Tennessee, as of June 30, 2008, and the results of operations of the aggregate discretely presented component units, for the year ended, in conformity with accounting principles generally accepted in the United States of America. Additionally, in our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of Jackson County, Tennessee, as of June 30, 2008, and the respective changes in financial position thereof for the year then ended, in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated March 30, 2009, on our consideration of Jackson County’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. As described in Note V.B., Jackson County has implemented the provisions of Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments. For the first time, the financial statements include the government-wide financial statements. Also, Jackson County has implemented the provisions of Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions; Statement No. 48, Sales and Pledges of Receivables and Future Revenues and Intra-Entity Transfers of Assets and Future Revenues; and Statement No. 50, Pension Disclosures. The management of Jackson County did not prepare a management’s discussion and analysis. The management’s discussion and analysis section is not a required part of the basic financial statements but is supplementary information required by accounting principles generally accepted in the United States of America.

19

The budgetary comparison, pension, and postemployment benefits information on pages 71 through 77 are not required parts of the basic financial statements but they do provide supplementary information required by accounting principles generally accepted in the United States of America. We applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise Jackson County’s basic financial statements. The introductory section, combining and individual nonmajor fund financial statements, budgetary comparison schedules of nonmajor governmental funds and the General Debt Service Fund, combining and individual fund financial statements of the Jackson County School Department (a discretely presented component unit), and miscellaneous schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements, budgetary comparison schedules of nonmajor governmental funds and the General Debt Service Fund, combining and individual fund financial statements of the Jackson County School Department (a discretely presented component unit), and the miscellaneous schedules have been subjected to the auditing procedures applied by us in the audit of the basic financial statements and, in our opinion, based on our audit, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory section has not been subjected to the auditing procedures applied by us in the audit of the basic financial statements, and accordingly, we express no opinion on it. Very truly yours,

Justin P. Wilson Comptroller of the Treasury JPW/sb


20

21

BASIC FINANCIAL STATEMENTS


22

Exhibit A

Jackson County, TennesseeStatement of Net AssetsJune 30, 2008

JacksonPrimary Jackson County

Government County EmergencyGovernmental School Communications

Activities Department District

ASSETS

Cash $ 11,472 $ 0 $ 32,852Equity in Pooled Cash and Investments 2,346,816 4,736,446 0Inventories 0 30,467 0Accounts Receivable 155,286 484 120Allowance for Uncollectibles (47,412) 0 0Due from Other Governments 366,705 273,235 10,401Prepaid Items 0 0 10,781Property Taxes Receivable 2,676,072 1,583,288 0Allowance for Uncollectible Property Taxes (69,909) (95,060) 0Capital Assets:

Assets Not Depreciated:Land 382,336 173,658 2,500

Assets Net of Accumulated Depreciation:Buildings and Improvements 6,053,972 9,607,359 130,023Other Capital Assets 917,775 519,963 86,510Infrastructure 13,837,778 0 0

Total Assets $ 26,630,891 $ 16,829,840 $ 273,187

LIABILITIES

Accounts Payable $ 21,990 $ 6,721 $ 19,489Acrued Payroll 0 0 5,511Payroll Deductions Payable 10,427 0 4,277Cash Overdraft 0 75,676 0Retainage Payable 5,000 0 0Accrued Interest Payable 27,438 0 0Deferred Revenue - Current Property Taxes 2,514,358 1,488,228 0Noncurrent Liabilities:

Due Within One Year 523,195 156,000 44,693Due in More Than One Year 6,900,950 5,467,395 125,728

Total Liabilities $ 10,003,358 $ 7,194,020 $ 199,698

NET ASSETS

Invested in Capital Assets, Net of Related Debt $ 16,192,716 $ 4,721,980 $ 48,612Restricted for:

Debt Service 1,477,990 0 0Solid Waste/Sanitation 37,850 0 0Drug Control 28,796 0 0Highway/Public Works 540,792 0 0Capital Projects 82,018 0 0School Federal Projects 0 57,530 0Central Cafeteria 0 296,825 0Other Purposes 62,265 2,966,520 0

Unrestricted (1,794,894) 1,592,965 24,877

Total Net Assets $ 16,627,533 $ 9,635,820 $ 73,489

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

Component Units

23

Exh

ibit

B

Jack

son

Cou

nty,

Ten

ness

ee

Stat

emen

t of A

ctiv

ities

For

the

Year

End

ed J

une

30, 2

008

Pro

gram

Rev

enue

sPr

imar

y

Jack

son

Ope

ratin

gC

apita

lG

over

nmen

tJa

ckso

nC

ount

yC

harg

esG

rant

sG

rant

sTo

tal

Cou

nty

Em

erge

ncy

for

and

and

Gov

ernm

enta

lSc

hool

Com

mun

icat

ions

Func

tions

/Pro

gram

sE

xpen

ses

Serv

ices

Con

trib

utio

nsC

ontr

ibut

ions

Act

iviti

esD

epar

tmen

tD

istr

ict

Prim

ary

Gov

ernm

ent:

Gov

ernm

enta

l Act

iviti

es:

Gen

eral

Gov

ernm

ent

$61

8,77

0$

77,9

71$

69,4

64$

0$

(471

,335

)$

0$

0 F

inan

ce26

1,11

820

6,18

929

,074

0(2

5,85

5)0

0 A

dmin

istr

atio

n of

Jus

tice

421,

342

209,

625

9,30

00

(202

,417

)0

0 P

ublic

Saf

ety

1,81

1,40

256

7,70

334

,455

0(1

,209

,244

)0

0 P

ublic

Hea

lth a

nd W

elfa

re1,

095,

172

554,

397

12,0

410

(528

,734

)0

0 S

ocia

l, C

ultu

ral,

and

Rec

reat

iona

l Ser

vice

s85

,202

015

,957

0(6

9,24

5)0

0 A

gric

ultu

re a

nd N

atur

al R

esou

rces

76,4

860

00

(76,

486)

00

Oth

er O

pera

tions

227,

984

11,2

200

612,

814

396,

050

00

Hig

hway

s/Pu

blic

Wor

ks1,

617,

330

102,

187

1,44

5,07

516

1,82

391

,755

00

Int

eres

t on

Long

-ter

m D

ebt

287,

898

00

0(2

87,8

98)

00

Oth

er D

ebt S

ervi

ce22

,640

7,77

235

8,95

10

344,

083

00

Tota

l Gov

ernm

enta

l Act

iviti

es$

6,52

5,34

4$

1,73

7,06

4$

1,97

4,31

7$

774,

637

$(2

,039

,326

)$

0$

0

Tota

l Pri

mar

y G

over

nmen

t$

6,52

5,34

4$

1,73

7,06

4$

1,97

4,31

7$

774,

637

$(2

,039

,326

)$

0$

0

Com

pone

nt U

nits

: J

acks

on C

ount

y Sc

hool

Dep

artm

ent

$13

,843

,439

$28

7,67

6$

2,41

7,78

2$

0$

0$

(11,

137,

981)

$0

Em

erge

ncy

Com

mun

icat

ions

Dis

tric

t34

7,18

297

,674

97,8

170

00

(151

,691

)

Tota

l Com

pone

nt U

nits

$14

,190

,621

$38

5,35

0$

2,51

5,59

9$

0$

0$

(11,

137,

981)

$(1

51,6

91)

(Con

tinue

d)

Net

(Exp

ense

) Rev

enue

and

Cha

nges

in N

et A

sset

sC

ompo

nent

Uni

ts

24

Exh

ibit

B

Jack

son

Cou

nty,

Ten

ness

ee

Stat

emen

t of A

ctiv

ities

(Con

t.)

Pro

gram

Rev

enue

sPr

imar

y

Jack

son

Ope

ratin

gC

apita

lG

over

nmen

tJa

ckso

nC

ount

yC

harg

esG

rant

sG

rant

sTo

tal

Cou

nty

Em

erge

ncy

for

and

and

Gov

ernm

enta

lSc

hool

Com

mun

icat

ions

Func

tions

/Pro

gram

sE

xpen

ses

Serv

ices

Con

trib

utio

nsC

ontr

ibut

ions

Act

iviti

esD

epar

tmen

tD

istr

ict

Gen

eral

Rev

enue

s: T

axes

:

Prop

erty

Tax

es L

evie

d fo

r G

ener

al P

urpo

ses

$1,

975,

715

$1,

282,

569

$0

Pr

oper

ty T

axes

Lev

ied

for

Deb

t Ser

vice

118,

637

00

Lo

cal O

ptio

n Sa

les

Taxe

s12

6,42

554

0,96

40

W

heel

Tax

017

2,34

90

B

usin

ess

Tax

25,6

500

0

Min

eral

Sev

eran

ce T

ax29

,309

00

W

hole

sale

Bee

r Ta

x68

,848

00

Li

tigat

ion

Tax

- Gen

eral

26,0

300

0

Oth

er L

ocal

Tax

es11

,484

1,90

00

Gra

nts

and

Con

trib

utio

ns N

ot R

estr

icte

d to

Spe

cific

Pro

gram

s36

8,67

99,

126,

287

121,

278

Unr

estr

icte

d In

vest

men

t Ear

ning

s29

0,37

41,

313

370

Mis

cella

neou

s23

,114

39,4

5110

,487

Tota

l Gen

eral

Rev

enue

s$

3,06

4,26

5$

11,1

64,8

33$

132,

135

Insu

ranc

e R

ecov

ery

$10

0$

2,54

5$

14,1

22

Cha

nge

in N

et A

sset

s$

1,02

5,03

9$

29,3

97$

(5,4

34)

Net

Ass

ets,

Jul

y 1,

200

715

,602

,494

9,60

6,42

378

,923

Net

Ass

ets,

Jun

e 30

, 200

8$

16,6

27,5

33$

9,63

5,82

0$

73,4

89

The

note

s to

the

finan

cial

sta

tem

ents

are

an

inte

gral

par

t of t

his

stat

emen

t.

Net

(Exp

ense

) Rev

enue

and

Cha

nges

in N

et A

sset

sC

ompo

nent

Uni

ts

25

Exh

ibit

C-1

Jack

son

Cou

nty,

Ten

ness

eeB

alan

ce S

heet

Gov

ernm

enta

l Fun

dsJu

ne 3

0, 2

008

Oth

erTo

tal

Solid

Hig

hway

/G

ener

alG

over

n-G

over

n-W

aste

/Pu

blic

Deb

tm

enta

lm

enta

lG

ener

alSa

nita

tion

Wor

ksSe

rvic

eFu

nds

Fund

s

ASS

ETS

Cas

h$

0$

0$

0$

0$

11,4

72$

11,4

72E

quity

in P

oole

d C

ash

and

Inve

stm

ents

704,

892

44,9

6527

4,95

31,

211,

072

110,

934

2,34

6,81

6A

ccou

nts

Rec

eiva

ble

148,

161

06,

764

301

6015

5,28

6A

llow

ance

for

Unc

olle

ctib

les

(47,

412)

00

00

(47,

412)

Due

from

Oth

er G

over

nmen

ts11

2,32

81,

646

252,

731

00

366,

705

Due

from

Oth

er F

unds

11,5

320

028

8,85

60

300,

388

Prop

erty

Tax

es R

ecei

vabl

e2,

076,

454

406,

383

186,

245

6,99

00

2,67

6,07

2A

llow

ance

for

Unc

olle

ctib

le P

rope

rty

Taxe

s(5

2,67

6)(1

0,59

1)(4

,851

)(1

,791

)0

(69,

909)

Tota

l Ass

ets

$2,

953,

279

$44

2,40

3$

715,

842

$1,

505,

428

$12

2,46

6$

5,73

9,41

8

LIA

BIL

ITIE

S A

ND

FU

ND

BA

LAN

CE

S

Liab

ilitie

sA

ccou

nts

Paya

ble

$0

$21

,990

$0

$0

$0

$21

,990

Payr

oll D

educ

tions

Pay

able

9,67

263

50

012

010

,427

Ret

aina

ge P

ayab

le5,

000

00

00

5,00

0D

ue to

Oth

er F

unds

288,

856

00

011

,532

300,

388

Def

erre

d R

even

ue -

Cur

rent

Pro

pert

y Ta

xes

1,95

7,38

038

1,92

817

5,05

00

02,

514,

358

Def

erre

d R

even

ue -

Del

inqu

ent P

rope

rty

Taxe

s62

,041

12,9

545,

928

4,85

80

85,7

81O

ther

Def

erre

d R

even

ues

111,

749

011

9,07

80

023

0,82

7To

tal L

iabi

litie

s$

2,43

4,69

8$

417,

507

$30

0,05

6$

4,85

8$

11,6

52$

3,16

8,77

1

Fund

Bal

ance

sR

eser

ved

for

Litig

atio

n Ta

x - J

ail,

Wor

khou

se, o

r C

ourt

hous

e$

10,8

09$

0$

0$

0$

0$

10,8

09R

eser

ved

for

Sexu

al O

ffend

er R

egis

trat

ion

1,41

30

00

01,

413

Res

erve

d fo

r C

ourt

room

Sec

urity

598

00

00

598

Res

erve

d fo

r C

ourt

hous

e an

d Ja

il M

aint

enan

ce6,

308

00

00

6,30

8R

eser

ved

for

Com

pute

r Sy

stem

- R

egis

ter

8,64

10

00

08,

641

Res

erve

d fo

r A

utom

atio

n Pu

rpos

es -

Sher

iff34

,496

00

00

34,4

96

(Con

tinue

d)

Maj

or F

unds

Non

maj

or

Fund

s

26

Exh

ibit

C-1

Jack

son

Cou

nty,

Ten

ness

eeB

alan

ce S

heet

Gov

ernm

enta

l Fun

ds (C

ont.)

Oth

erTo

tal

Solid

Hig

hway

/G

ener

alG

over

n-G

over

n-W

aste

/Pu

blic

Deb

tm

enta

lm

enta

lG

ener

alSa

nita

tion

Wor

ksSe

rvic

eFu

nds

Fund

s

LIA

BIL

ITIE

S A

ND

FU

ND

BA

LAN

CE

S (C

ont.)

Fund

Bal

ance

s (C

ont.)

Unr

eser

ved,

Rep

orte

d In

:G

ener

al F

und

$45

6,31

6$

0$

0$

0$

0$

456,

316

Spec

ial R

even

ue F

unds

024

,896

415,

786

028

,796

469,

478

Deb

t Ser

vice

Fun

ds0

00

1,50

0,57

00

1,50

0,57

0C

apita

l Pro

ject

s Fu

nds

00

00

82,0

1882

,018

Tota

l Fun

d B

alan

ces

$51

8,58

1$

24,8

96$

415,

786

$1,

500,

570

$11

0,81

4$

2,57

0,64

7

Tota

l Lia

bilit

ies

and

Fund

Bal

ance

s$

2,95

3,27

9$

442,

403

$71

5,84

2$

1,50

5,42

8$

122,

466

$5,

739,

418

The

note

s to

the

finan

cial

sta

tem

ents

are

an

inte

gral

par

t of t

his

stat

emen

t.

Maj

or F

unds

Non

maj

or

Fund

s

27

Exhibit C-2

Jackson County, TennesseeReconciliation of the Balance Sheet of Governmental Funds to the Statement of Net AssetsJune 30, 2008

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

Total fund balances - balance sheet - governmental funds (Exhibit C-1) $ 2,570,647

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

Add: land $ 382,336Add: infrastructure net of accumulated depreciation 13,837,778Add: buildings and improvements net of accumulated depreciation 6,053,972Add: other capital assets net of accumulated depreciation 917,775 21,191,861

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

Less: bonds payable $ (2,492,400)Less: notes payable (573,745)Less: other loans payable (4,358,000)Less: accrued interest on bonds, notes, other loans, and capital leases (27,438) (7,451,583)

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

Add: other deferred revenues $ 230,827Add: deferred revenues - delinquent property taxes 85,781 316,608

Net assets of governmental activities (Exhibit A) $ 16,627,533


28

Exh

ibit

C-3

Jack

son

Cou

nty,

Ten

ness

eeSt

atem

ent o

f Rev

enue

s, E

xpen

ditu

res,

and

Cha

nges

in F

und

Bal

ance

sG

over

nmen

tal F

unds

For

the

Year

End

ed J

une

30, 2

008

Oth

er S

olid

Hig

hway

/ G

ener

alG

over

n-To

tal

Was

te /

Pub

lic D

ebt

men

tal

Gov

ernm

enta

l G

ener

al S

anita

tion

Wor

ks S

ervi

ceFu

nds

Fund

s

Rev

enue

sLo

cal T

axes

$1,

801,

448

$31

5,48

6$

173,

617

$11

8,40

5$

0$

2,40

8,95

6Li

cens

es a

nd P

erm

its2,

328

00

00

2,32

8Fi

nes,

For

feitu

res,

and

Pen

altie

s37

,942

00

036

,757

74,6

99C

harg

es fo

r C

urre

nt S

ervi

ces

610,

932

00

021

561

1,14

7O

ther

Loc

al R

even

ues

351,

747

17,1

7910

4,87

27,

772

11,2

2049

2,79

0Fe

es R

ecei

ved

from

Cou

nty

Offi

cial

s38

3,84

00

00

038

3,84

0St

ate

of T

enne

ssee

676,

550

6,27

81,

621,

284

288,

856

02,

592,

968

Fede

ral G

over

nmen

t65

4,42

90

00

065

4,42

9O

ther

Gov

ernm

ents

and

Citi

zens

Gro

ups

60,2

260

029

8,72

50

358,

951

Tota

l Rev

enue

s$

4,57

9,44

2$

338,

943

$1,

899,

773

$71

3,75

8$

48,1

92$

7,58

0,10

8

Exp

endi

ture

sC

urre

nt:

Gen

eral

Gov

ernm

ent

$47

6,44

2$

0$

0$

0$

0$

476,

442

Fina

nce

260,

970

00

014

826

1,11

8A

dmin

istr

atio

n of

Jus

tice

421,

275

00

067

421,

342

Publ

ic S

afet

y1,

597,

952

00

052

,912

1,65

0,86

4Pu

blic

Hea

lth a

nd W

elfa

re62

0,15

038

2,63

70

06,

238

1,00

9,02

5So

cial

, Cul

tura

l, an

d R

ecre

atio

nal S

ervi

ces

84,4

870

00

084

,487

Agr

icul

ture

and

Nat

ural

Res

ourc

es76

,486

00

00

76,4

86O

ther

Ope

ratio

ns1,

164,

702

6,43

10

2,35

88,

979

1,18

2,47

0H

ighw

ays

29,1

910

1,86

3,67

10

01,

892,

862

Deb

t Ser

vice

:Pr

inci

pal o

n D

ebt

00

50,0

0043

1,40

80

481,

408

Inte

rest

on

Deb

t0

06,

609

279,

689

028

6,29

8O

ther

Deb

t Ser

vice

00

022

,640

022

,640

Tota

l Exp

endi

ture

s$

4,73

1,65

5$

389,

068

$1,

920,

280

$73

6,09

5$

68,3

44$

7,84

5,44

2

Exc

ess

(Def

icie

ncy)

of R

even

ues

Ove

r E

xpen

ditu

res

$(1

52,2

13)$

(50,

125)

$(2

0,50

7)$

(22,

337)

$(2

0,15

2)$

(265

,334

)

(Con

tinue

d)

Non

maj

or

Fund

sM

ajor

Fun

ds

29

Exh

ibit

C-3

Jack

son

Cou

nty,

Ten

ness

eeSt

atem

ent o

f Rev

enue

s, E

xpen

ditu

res,

and

Cha

nges

in F

und

Bal

ance

sG

over

nmen

tal F

unds

(Con

t.)

Oth

er S

olid

Hig

hway

/ G

ener

alG

over

n-To

tal

Was

te /

Pub

lic D

ebt

men

tal

Gov

ernm

enta

l G

ener

al S

anita

tion

Wor

ks S

ervi

ceFu

nds

Fund

s

Oth

er F

inan

cing

Sou

rces

(Use

s)N

otes

Issu

ed$

0$

0$

85,6

88$

0$

0$

85,6

88In

sura

nce

Rec

over

y0

010

00

010

0To

tal O

ther

Fin

anci

ng S

ourc

es (U

ses)

$0

$0

$85

,788

$0

$0

$85

,788

Net

Cha

nge

in F

und

Bal

ance

s$

(152

,213

)$(5

0,12

5)$

65,2

81$

(22,

337)

$(2

0,15

2)$

(179

,546

)Fu

nd B

alan

ce, J

uly

1, 2

007

670,

794

75,0

2135

0,50

51,

522,

907

130,

966

2,75

0,19

3

Fund

Bal

ance

, Jun

e 30

, 200

8$

518,

581

$24

,896

$41

5,78

6$

1,50

0,57

0$

110,

814

$2,

570,

647

The

note

s to

the

finan

cial

sta

tem

ents

are

an

inte

gral

par

t of t

his

stat

emen

t.

Maj

or F

unds

Non

maj

or

Fund

s

30

Exhibit C-4

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

of Governmental Funds to the Statement of ActivitiesFor the Year Ended June 30, 2008

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

Net change in fund balances - total governmental funds (Exhibit C-3) $ (179,546)

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

Add: capital assets purchased in the current period $ 1,236,948Less: current year depreciation expense (396,658) 840,290

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

Add: deferred delinquent property taxes and other deferred June 30, 2008 $ 316,608Less: deferred delinquent property taxes and other deferred June 30, 2007 (346,433) (29,825)

(3) The issuance of long-term debt (e.g., bonds, notes, other loans, leases) providescurrent financial resources to governmental funds, while the repaymentof the principal of long-term debt consumes the current financialresources of governmental funds. Neither transaction, however, has any effect on net assets. Also, governmental funds report the effectof issuance costs, premiums, discounts, and similar items when debt isfirst issued, whereas these amounts are deferred and amortized in thestatement of activities. This amount is the net effect of these differencesin the treatment of long-term debt and related items:

Less: note proceeds $ (85,688)Add: principal payments on capital leases 2,101Add: principal payments on notes 154,907Add: principal payments on bonds 189,400Add: principal payments on other loans 135,000 395,720

(4) Some expenses reported in the statement of activities do not requirethe use of current financial resources and therefore are not reportedas expenditures in governmental funds. Change in accrued interest on bonds $ 1,363 Change in accrued interest on notes (2,963) (1,600)

Change in net assets of governmental activities (Exhibit B) $ 1,025,039


31

Exhibit DJackson County, TennesseeStatement of Fiduciary Assets and LiabilitiesFiduciary FundsJune 30, 2008

ASSETS

Cash $ 853,550 Investments 20,451 Accounts Receivable 310 Due from Other Governments 54,814 Cash Shortage 1,866

Total Assets $ 930,991

LIABILITIES

Due to Other Taxing Units $ 54,814 Due to Litigants, Heirs, and Others 876,177

Total Liabilities $ 930,991


AgencyFunds

32

33

JACKSON COUNTY, TENNESSEE NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended June 30, 2008

I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Jackson County’s financial statements are presented in accordance with generally accepted accounting principles (GAAP). The Governmental Accounting Standards Board (GASB) is responsible for establishing GAAP for state and local governments. The following are the more significant accounting policies of Jackson County:

A. Reporting Entity

Jackson County is a public municipal corporation governed by an elected 18-member board. As required by GAAP, these financial statements present Jackson County (the primary government) and its component units. The component units discussed below are included in the county's reporting entity because of the significance of their operational or financial relationships with the county.

Blended Component Units – There are no legally separate component units of Jackson County that meet the criteria for being reported as part of the primary government by the blending method.

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

The Jackson County School Department operates the public school system in the county, and the voters of Jackson County elect its board. The School Department is fiscally dependent on the county because it may not issue debt without county approval, and its budget and property tax levy are subject to the County Commission’s approval. The School Department’s taxes are levied under the taxing authority of the county and are included as part of the county’s total tax levy.

The Jackson County Emergency Communications District provides a simplified means of securing emergency services through a uniform emergency number for the residents of Jackson County, and the Jackson County Commission appoints its governing body. The district is funded primarily through a service charge levied on telephone services. Before the issuance of most debt instruments, the district must obtain the County Commission’s approval. The Industrial Development Board of the County of Jackson, Tennessee, promotes industrial development in the county to provide employment for its

34

citizens. The County Commission appoints all seven members of the board. The county also services debt on behalf of the board. The primary funding for the board is lease payments for industrial buildings. An annual audit has not been performed on the board for the year ended June 30, 2008. The Jackson County School Department does not issue separate financial statements from those of the county. Therefore, basic financial statements of the School Department are included in this report as listed in the table of contents. The Industrial Development Board of the County of Jackson, Tennessee, has not published audited financial statements for the year. The Jackson County Emergency Communications District’s financial statements are published as a separate report. Complete financial statements of the Jackson County Emergency Communications District and the Industrial Development Board of the County of Jackson, Tennessee, can be obtained from their administrative office at the following addresses:

Administrative Offices:

Jackson County Emergency Communications District P.O. Box 313 305 North Murry Gainesboro, TN 38562 Industrial Development Board of the County of Jackson, Tennessee P.O. Box 617 Gainesboro, TN 38562

B. Government-wide and Fund Financial Statements

The government-wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. However, when applicable, interfund services provided and used between functions are not eliminated in the process of consolidation in the statement of activities. Governmental activities are normally supported by taxes and intergovernmental revenues. Business-type activities, which rely to a significant extent on fees and charges, are required to be reported separately from governmental activities in government-wide financial statements. However, the primary government of Jackson County does not have any business-type activities to report. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The Jackson County School Department component unit only reports governmental activities in the government-wide financial statements. The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. Program

35

revenues include (1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. Taxes and other items not properly included among program revenues are reported instead as general revenues. Jackson County issues all debt for the discretely presented Jackson County School Department. Separate financial statements are provided for governmental funds and fiduciary funds. The fiduciary funds are excluded from the government-wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements.

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

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

36

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

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

General Fund – This is the county’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. Solid Waste/Sanitation Fund – This fund accounts for transactions relating to the disposal of Jackson County’s solid waste. Highway/Public Works Fund – This fund accounts for transactions of the county’s Highway Department. General Debt Service Fund – This fund accounts for the resources accumulated and payments made for principal and interest on long-term general obligation debt of governmental funds.

Additionally, Jackson County reports the following fund types:

Capital Projects Fund – The Community Development/Industrial Park Fund is used to account for revenues and expenditures related to industrial buildings owned by the county. Agency Funds – These funds account for amounts collected in an agency capacity by the constitutional officers and local sales taxes received by the state to be forwarded to the various cities in Jackson County. Agency funds are custodial in nature (assets equal liabilities)

37

and do not involve measurement of results of operations. They do, however, use the accrual basis of accounting to recognize receivables and payables.

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

General Purpose School Fund – This fund is the primary operating fund for the School Department. It is used to account for general operations of the School Department. School Federal Projects Fund – This fund is used to account for restricted federal revenues, which must be expended on specific education programs.

Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in the government-wide financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Amounts reported as program revenues include (1) charges to customers or applicants for goods, services, or privileges provided; (2) operating grants and contributions; and (3) capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. When both restricted and unrestricted resources are available for use, it is the government’s policy to use restricted revenues first, then unrestricted resources as they are needed.

D. Assets, Liabilities, and Net Assets or Equity

1. Deposits and Investments

State statutes authorize the government to make direct investments in bonds, notes, or treasury bills of the U.S. government and obligations guaranteed by the U.S. government or any of its agencies; bonds of any state or political subdivision rated A or higher by any nationally recognized rating service; the county’s own legally issued bonds or notes; the State Treasurer’s Investment Pool; and repurchase agreements. The county trustee maintains a cash and internal investment pool that is used by all funds and the discretely presented Jackson County School Department. Each fund’s portion of this pool is displayed on the balance sheets or statements of net assets as Equity in Pooled Cash and Investments. Most income from these pooled investments is assigned to the General Fund. In addition, investments are held separately by several of the county’s funds. Jackson County and the

38

School Department have adopted a policy of reporting U.S. Treasury obligations, U.S. agency obligations, and repurchase agreements with maturities of one year or less when purchased on the balance sheet at amortized cost. Certificates of deposit and investments in the State Treasurer’s Investment Pool are reported at cost. The State Treasurer’s Investment Pool is not registered with the Securities and Exchange Commission (SEC) as an investment company, but nevertheless has a policy that it will, and does, operate in a manner consistent with the SEC’s Rule 2a7 of the Investment Company Act of 1940. Rule 2a7 allows SEC-registered mutual funds to use amortized cost rather than fair value to report net assets to compute share prices if certain conditions are met. State statutes require the state treasurer to administer the pool under the same terms and conditions, including collateral requirements, as prescribed for other funds invested by the state treasurer. All other investments are reported at fair value.

2. Receivables and Payables

Activity between funds for unremitted current collections outstanding at the end of the fiscal year is referred to as due to/from other funds. All ambulance and property taxes receivable are shown with an allowance for uncollectibles. Ambulance receivables allowance for uncollectibles is based on historical collection data. The allowance for uncollectible property taxes is equal to 1.5 percent of total taxes levied. Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned.

Property taxes receivable are recognized as of the date an enforceable legal claim to the taxable property arises. This date is January 1 and is referred to as the lien date. However, revenues from property taxes are recognized in the period for which the taxes are levied, which is the ensuing fiscal year. Since the receivable is recognized before the period of revenue recognition, the entire amount of the receivable, less an estimated allowance for uncollectible taxes, is reported as deferred revenue as of June 30.

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

that are levied, collected, and reported as revenue during the current fiscal year. These property taxes receivable are presented on the balance sheet with offsetting deferred revenue to reflect amounts not available as of June 30. Property taxes collected within 30 days of year-end are considered available and accrued. The allowance for

39

uncollectible taxes represents the estimated amount of the receivable that will be filed in court for collection. Delinquent taxes filed in court for collection are not included in taxes receivable since they are neither measurable nor available.

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

Retainage payable in the General Fund represents amounts withheld from payments made on construction contracts pending completion of the projects. These amounts are held by the county trustee as Equity in Pooled Cash and Investments in the General Fund.

3. Inventories

Inventories of the School Department are recorded at cost, determined on the first-in, first-out method. Inventories of governmental funds are recorded as expenditures when consumed rather than when purchased.

4. Capital Assets

Governmental funds do not capitalize the cost of capital outlays; these funds report capital outlays as expenditures upon acquisition. Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, and similar items), are reported in the governmental column in the government-wide financial statements. Capital assets are defined by the government as assets with an estimated useful life extending beyond the current fiscal year and values as defined in the counties capital assets policy. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Property, plant, equipment, and infrastructure of the primary government and the discretely presented School Department are depreciated using the straight-line method over the following estimated useful lives:

40

Assets Years

Buildings and Improvements 20 - 40Other Capital Assets 5 - 20Infrastructure 25 - 75

5. Compensated Absences

It is the county’s policy (excluding the Highway Department) to permit employees to accumulate earned but unused vacation benefits, which will be paid to employees upon separation of service. The cost of vacation benefits is recognized when payments are made to employees. All vacation pay should be accrued by the county when incurred and presented in the government-wide financial statements; however, Jackson County does not maintain proper leave records and does not include accrued leave in the government-wide financial statements. A liability for these amounts is reported in the governmental funds only if they have matured, for example, as a result of employee resignations and retirements. However, we believe that these amounts would not be material to the financial statements of the county. The county’s policy does allow employees to accumulate an unlimited amount of unused sick leave; however, the granting of sick leave has no guaranteed payment attached, and therefore, is not required to be accrued or recorded. The general policy of the Highway Department does not allow for the accumulation of unused vacation and sick days. The School Department’s general policy does not allow employees to accumulate earned but unused vacation leave benefits beyond year-end. The School Department does allow employees to accumulate an unlimited amount of unused sick leave; however, the granting of sick leave has no guaranteed payment attached, and therefore, is not required to be accrued or recorded.

6. Long-term Obligations

In the government-wide financial statements long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities statement of net assets. Debt premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the debt using the straight-line method. Debt issuance costs are reported as deferred charges and amortized over the term of the related debt. In refunding transactions, the difference between the reacquisition price and the net carrying amount of the old debt is netted against the new debt and amortized over the remaining life of the refunded debt or the life of the new debt issued, whichever is shorter.

41

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

7. Net Assets and Fund Equity In the government-wide financial statements equity is classified as net assets and displayed in three components:

a. Invested in capital assets, net of related debt – Consists of capital

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

b. Restricted net assets – Consists of net assets with constraints

placed on the use either by (1) external groups such as creditors, grantors, contributors, or laws or regulations of other governments or (2) law through constitutional provisions or enabling legislation.

c. Unrestricted net assets – All other net assets that do not meet the

definition of restricted or invested in capital assets, net of related debt.

On the government-wide statement of net assets (Exhibit A), the account Restricted for Other Purposes for the primary government consists of various restrictions totaling $62,265, with the primary restriction being for automation purposes in the Sheriff’s Office ($34,496). For the discretely presented School Department, the account balance in Restricted for Other Purposes totals $2,966,520 and consists primarily of a restriction for the Basic Education Program ($2,311,967). As of June 30, 2008, Jackson County had $2,425,000 in outstanding debt for capital purposes for the discretely presented Jackson County School Department. This debt is a liability of Jackson County, but the

42

capital assets acquired are reported in the financial statements of the School Department. Therefore, Jackson County has incurred a liability significantly decreasing its unrestricted net assets with no corresponding increase in the county’s capital assets. In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose.

II. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS A. Explanation of certain differences between the governmental fund

balance sheet and the government-wide statement of net assets

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

B. Explanation of certain differences between the governmental fund statement of revenues, expenditures, and changes in fund balances and the government-wide statement of activities

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

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

43

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

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

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

The county's budgetary basis of accounting is consistent with GAAP, except instances in which encumbrances are treated as budgeted expenditures. The difference between the budgetary basis and GAAP basis is presented on the face of each budgetary schedule.

B. Prior-year Cash Shortage

The Sheriff’s Department had a cash shortage of $1,866 at June 30, 2008. This cash shortage resulted from not properly accounting for funds received from the county’s Drug Control Fund for undercover drug operations during the period July 1, 2006, through June 30, 2007. No payments were made toward liquidating the cash shortage during the current audit period.

C. Cash Overdraft

The discretely presented School Federal Projects Fund had a cash overdraft of $75,676 at June 30, 2008. This cash overdraft resulted from the issuance of warrants exceeding cash on deposit with the county trustee. The cash overdraft was liquidated subsequent to June 30, 2008.

44

D. Expenditures Exceeded Appropriations

Expenditures exceeded appropriations approved by the County Commission in the following funds’ major appropriation categories (the legal level of control):

Amount

Fund/Major Category Overspent

General: Jail $ 19,469 Other Charges 10,508 Miscellaneous 5,070 Drug Control: Alcohol and Drug Programs 2,238 Also, expenditures exceeded total appropriations approved by the County Commission in the Solid Waste/Sanitation Fund by $8,333. Such overexpenditures are a violation of state statutes. These overexpenditures were funded by greater than anticipated revenues and available fund balances.

IV. DETAILED NOTES ON ALL FUNDS

A. Deposits and Investments Jackson County and the Jackson County School Department participate in an internal cash and investment pool through the Office of Trustee. The county trustee is the treasurer of the county and in this capacity is responsible for receiving, disbursing, and investing most county funds. Each fund’s portion of this pool is displayed on the balance sheets or statements of net assets as Equity in Pooled Cash and Investments. Cash and investments reflected on the balance sheets or statements of net assets represent nonpooled amounts held separately by individual funds. Deposits Legal Provisions. All deposits with financial institutions must be secured by one of two methods. One method involves financial institutions that participate in the bank collateral pool administered by the state treasurer. Participating banks determine the aggregate balance of their public fund accounts for the State of Tennessee and its political subdivisions. The amount of collateral required to secure these public deposits must equal at least 105 percent of the average daily balance of public deposits held. Collateral securities required to be pledged by the participating banks to protect their public fund accounts are pledged to the state treasurer on behalf of the bank collateral pool. The securities pledged to protect these accounts

45

are pledged in the aggregate rather than against each account. The members of the pool may be required by agreement to pay an assessment to cover any deficiency. Under this additional assessment agreement, public fund accounts covered by the pool are considered to be insured for purposes of credit risk disclosure. For deposits with financial institutions that do not participate in the bank collateral pool, state statutes require that all deposits be collateralized with collateral whose market value is equal to 105 percent of the uninsured amount of the deposits. The collateral must be placed by the depository bank in an escrow account in a second bank for the benefit of the county. Investments Legal Provisions. Counties are authorized to make direct investments in bonds, notes, or treasury bills of the U.S. government and obligations guaranteed by the U.S. government or any of its agencies; bonds of any state or political subdivision rated A or higher by any nationally recognized rating service; and the county’s own legally issued bonds or notes. These investments may not have a maturity greater than two years. The county may make investments with longer maturities if various restrictions set out in state law are followed. Counties are also authorized to make investments in the State Treasurer’s Investment Pool and in repurchase agreements. Repurchase agreements must be approved by the state director of Local Finance and executed in accordance with procedures established by the State Funding Board. Securities purchased under a repurchase agreement must be obligations of the U.S. government or obligations guaranteed by the U.S. government or any of its agencies. When repurchase agreements are executed, the purchase of the securities must be priced at least two percent below the market value of the securities on the day of purchase. Investment Balances. As of June 30, 2008, Jackson County had the following investments carried at fair value. This nonpooled investment was made on behalf of a litigant at the direction of a court order and is held in the Clerk and Master’s Office. Investment Maturities Fair Value

Ameriprise Mutual Funds On Demand $ 20,451

Interest Rate Risk. Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. State statutes limit the maturities of certain investments as previously disclosed. Jackson County does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates.

46

Credit Risk. Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. State statutes limit the ratings of certain investments as previously explained. Jackson County has no investment policy that would further limit its investment choices. As of June 30, 2008, Jackson County’s investment in Ameriprise Mutual Funds is not rated. Custodial Credit Risk. Custodial credit risk for investments is the risk that, in the event of a failure of the counterparty to a transaction, the county will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. Jackson County does not have a formal policy that limits custodial credit risk for investments. The underlying securities for the $20,451 were uninsured and held by the investment’s counterparty, not in the name of the county. However, it should be noted that these amounts are invested on behalf of litigants at the order of the court, and the county has no custodial credit risk for these investments.

B. Capital Assets

Capital assets activity for the year ended June 30, 2008, was as follows:

Primary Government Governmental Activities:

Balance Balance7-1-07 Increases 6-30-08

Capital Assets Not Depreciated:Land $ 374,336 $ 8,000 $ 382,336Total Capital Assets Not Depreciated $ 374,336 $ 8,000 $ 382,336

Capital Assets Depreciated:Buildings and Improvements $ 6,267,137 $ 681,552 $ 6,948,689Infrastructure 15,379,405 466,352 15,845,757Other Capital Assets 2,037,712 81,044 2,118,756Total Capital Assets Depreciated $ 23,684,254 $ 1,228,948 $ 24,913,202

47

Governmental Activities: (Cont.)


Less Accumulated Depreciation For:Buildings and Improvements $ 787,663 $ 107,054 $ 894,717Infrastructure 1,868,360 139,619 2,007,979Other Capital Assets 1,050,996 149,985 1,200,981

Total Accumulated Depreciation $ 3,707,019 $ 396,658 $ 4,103,677

Total Capital Assets Depreciated, Net $ 19,977,235 $ 832,290 $ 20,809,525

Governmental Activities Capital Assets, Net $ 20,351,571 $ 840,290 $ 21,191,861

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

Governmental Activities:

General Government $ 34,260Public Safety 107,892Public Health and Welfare 27,836Social, Cultural, and Recreational Services 715Other Operations 6,785Highways/Public Works 219,170

Total Depreciation Expense - Governmental Activities $ 396,658

48

Discretely Presented Jackson County School Department Governmental Activities:

Balance Balance7-1-07 Increases Decreases 6-30-08

Capital Assets Not Depreciated:Land $ 173,658 $ 0 $ 0 $ 173,658Total Capital Assets Not Depreciated $ 173,658 $ 0 $ 0 $ 173,658

Capital Assets Depreciated:Buildings and Improvements $ 12,473,905 $ 0 $ 0 $ 12,473,905Other Capital Assets 853,667 127,360 (70,269) 910,758Total Capital Assets Depreciated $ 13,327,572 $ 127,360 $ (70,269) $ 13,384,663

Less Accumulated Depreciated For:Buildings and Improvements $ 2,608,712 $ 257,834 $ 0 $ 2,866,546Other Capital Assets 386,452 56,082 (51,739) 390,795Total Accumulated Depreciation $ 2,995,164 $ 313,916 $ (51,739) $ 3,257,341

Total Capital Assets Depreciated, Net $ 10,332,408 $ (186,556) $ (18,530) $ 10,127,322

Governmental Activities Capital Assets, Net $ 10,506,066 $ (186,556) $ (18,530) $ 10,300,980

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

Governmental Activities:

Instruction $ 244,159Support Services 69,757

Total Depreciation Expense - Governmental Activities $ 313,916

49

C. Interfund Receivables, Payables, and Transfers The composition of interfund balances as of June 30, 2008, is as follows:

Due to/from Other Funds:

Receivable Fund Payable Fund Amount

Primary Government: General Nonmajor governmental $ 11,532 General Debt Service General 288,856

These balances resulted from the time lag between the dates that interfund goods and services are provided or reimbursable expenditures occur and payments between funds are made.

Interfund Transfers:

Interfund transfers for the year ended June 30, 2008, consisted of the

following amounts:

Discretely Presented Jackson County School Department

TransfersIn

GeneralPurposeSchool

Transfers Out Fund

School Federal Projects Fund $ 28,916Nonmajor governmental fund 60,000

Total $ 88,916

Transfers are used to move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them.

D. Long-term Debt

Primary Government General Obligation Bonds, Notes, and Other Loans The county issues general obligation bonds and other loans to provide funds for the acquisition and construction of major capital facilities. Capital outlay

50

notes are also issued to fund capital facilities and other capital outlay purchases, such as equipment. General obligation bonds, capital outlay notes, and other loans are direct obligations and pledge the full faith and credit of the government. General obligation bonds, capital outlay notes, and other loans outstanding were issued for original terms of up to 40 years for bonds, up to nine years for notes, and up to 25 years for other loans. Repayment terms are generally structured with increasing amounts of principal maturing as interest requirements decrease over the term of the debt. All bonds, notes, and other loans included in long-term debt as of June 30, 2008, will be retired from the General Debt Service and Highway/Public Works funds. General obligation bonds, capital outlay notes, and other loans outstanding as of June 30, 2008, are as follows:

Original

Interest Amount BalanceType Rate of Issue 6-30-08

General Obligation Bonds 3.342 to 5.683 % $ 3,920,000 $ 2,492,400Capital Outlay Notes 3.5 to 5.4 1,145,832 573,745Other Loans variable 4,700,000 4,358,000

In prior years, Jackson County entered into two separate loan agreements with the Montgomery County Public Building Authority. Under these loan agreements, the authority loaned Jackson County $3,500,000 and $1,200,000, respectively, for jail construction. These loans are repayable at interest rates that are tax-exempt variable rates determined by the remarketing agent daily or weekly, depending on the particular program. In addition, the county pays various other fees (trustee, letter of credit, and debt remarketing) in connection with these loans. At June 30, 2008, the variable interest rate for these loans was 2.5 percent and other fees totaled approximately .2 percent (letter of credit), .08 percent (remarketing), and a trustee fee of $85 per month. The annual requirements to amortize all general obligation bonds, notes, and other loans outstanding as of June 30, 2008, including interest payments and other loan fees, are presented in the following tables:

51

Year EndingJune 30 Interest Total

2009 $ 187,495 $ 29,716 $ 217,2112010 356,237 18,949 375,1862011 30,013 1,546 31,559

Total $ 573,745 $ 50,211 $ 623,956

NotesPrincipal

Year EndingJune 30 Principal Interest Other Fees Total

2009 $ 139,000 $ 108,950 $ 14,242 $ 262,1922010 144,000 105,475 13,853 263,3282011 149,000 101,875 13,450 264,3252012 154,000 98,150 13,033 265,1832013 159,000 94,300 12,602 265,9022014-2018 885,000 408,875 55,994 1,349,8692019-2023 1,046,000 290,500 42,736 1,379,2362024-2028 1,244,000 150,225 27,025 1,421,2502029-2031 438,000 17,075 5,992 461,067

Total $ 4,358,000 $ 1,375,425 $ 198,927 $ 5,932,352

Other Loans


2009 $ 196,700 $ 119,262 $ 315,9622010 201,900 109,588 311,4882011 212,100 100,594 312,6942012 216,400 90,937 307,3372013 221,700 80,838 302,5382014-2018 1,273,600 232,060 1,505,6602019 170,000 8,415 178,415

Total $ 2,492,400 $ 741,694 $ 3,234,094

BondsPrincipal

There is $1,500,570 available in the General Debt Service Fund to service long-term debt. Bonded debt per capita totaled $227, based on the 2000 federal census. Debt per capita, including bonds, notes, and other loans totaled $676, based on the 2000 federal census. Changes in Long-term Liabilities Long-term liability activity for the year ended June 30, 2008, was as follows:

52

Governmental Activities: OtherBonds Notes Loans

Balance, July 1, 2007 $ 2,681,800 $ 642,964 $ 4,493,000Additions 0 85,688 0Deductions (189,400) (154,907) (135,000)

Balance, June 30, 2008 $ 2,492,400 $ 573,745 $ 4,358,000

Balance Due Within One Year $ 196,700 $ 187,495 $ 139,000

CapitalLeases

Balance, July 1, 2007 $ 2,101Deductions (2,101)

Balance, June 30, 2008 $ 0

Analysis of Noncurrent Liabilities Presented on Exhibit A:

Total Noncurrent Liabilities, June 30, 2008 $ 7,424,145Less: Balance Due Within One Year (523,195)

Noncurrent Liabilities - Due in More Than One Year - Exhibit A $ 6,900,950

Discretely Presented Jackson County School Department Other Loans The county issues other loans on behalf of the School Department to provide funds for the acquisition and construction of major capital facilities. Other loans are direct obligations and pledge the full faith and credit of the government. The other loan outstanding was issued for an original term of 28 years. Repayment terms are generally structured with increasing amounts of principal maturing as interest requirements decrease over the term of the debt. The other loan included in long-term debt as of June 30, 2008, will be retired from the General Purpose School Fund. The other loan outstanding as of June 30, 2008, is as follows:

Original

Interest Amount BalanceType Rate of Issue 6-30-08

Other Loan variable $ 6,300,000 $ 5,579,000

53

In a prior year, Jackson County entered into a loan agreement with the Montgomery County Public Building Authority. Under this loan agreement, the authority loaned $6,300,000 to the School Department for construction of a middle school. This loan is repayable at an interest rate that is a tax-exempt variable rate determined by the remarketing agent daily or weekly, depending on the particular program. In addition, the School Department pays various other fees (trustee, debt remarketing, etc.) in connection with this loan. At June 30, 2008, the variable interest rate was 1.29 percent, and other fees totaled approximately .2 percent (letter of credit) and .08 percent (remarketing) of the outstanding loan principal, and a trustee fee of $85 per month. The annual requirements to amortize the other loan outstanding as of June 30, 2008, including interest payments and other loan fees, are presented in the following table: Year EndingJune 30 Principal Interest Other Fees Total

2009 $ 156,000 $ 71,969 $ 16,641 $ 244,6102010 164,000 69,956 16,204 250,1602011 172,000 67,841 15,745 255,5862012 181,000 65,623 15,264 261,8872013 190,000 63,287 14,757 268,0442014-2018 1,101,000 277,169 65,261 1,443,4302019-2023 1,406,000 198,673 48,223 1,652,8962024-2028 1,795,000 98,427 26,464 1,919,8912029 414,000 5,341 2,179 421,520

Total $ 5,579,000 $ 918,286 $ 220,738 $ 6,718,024

Other Loan

Debt per capita totaled $508, based on the 2000 federal census.

Changes in Long-term Liabilities Long-term liability activity for the discretely presented Jackson County School Department for the year ended June 30, 2008, was as follows:

54

Governmental Activities:Other

PostemploymentOther BenefitsLoans Obligation

Balance, July 1, 2007 $ 5,728,000 $ 0Additions 0 84,489Deductions (149,000) (40,094)

Balance, June 30, 2008 $ 5,579,000 $ 44,395

Balance Due Within One Year $ 156,000 $ 0

Analysis of Noncurrent Liabilities Presented on Exhibit A:

Total Noncurrent Liabilities, June 30, 2008 $ 5,623,395Less: Balance Due Within One Year (156,000)

Noncurrent Liabilities - Due in More Than One Year - Exhibit A $ 5,467,395

E. On-Behalf Payments – Discretely Presented Jackson County School Department

The State of Tennessee pays health insurance premiums for retired teachers on-behalf of the Jackson County School Department. These payments are made by the state to the Local Education Group Insurance Plan and the Medicare Supplement Plan. Both of these plans are administered by the State of Tennessee and reported in the state’s Comprehensive Annual Financial Report. Payments by the state to the Local Education Group Insurance Plan and the Medicare Supplement Plan for the year ended June 30, 2008, were $33,506 and $7,050, respectively. The School Department has recognized these on-behalf payments as revenues and expenditures in the General Purpose School Fund.

F. Short-term Debt

Jackson County issued tax anticipation notes in advance of property tax collections and deposited the proceeds in the General Fund. These notes were necessary because funds were not available to meet operating expenditures coming due before current tax collections. Short-term debt activity for the year ended June 30, 2008, was as follows:

55

Balance Balance7-1-07 Issued Paid 6-30-08

Tax Anticipation Notes 0$ $ 400,000 $ (400,000) 0$

V. OTHER INFORMATION

A. Risk Management

Primary Government

Jackson County’s risks of loss relating to general liability, property, casualty, and workers’ compensation (with the exception of the general government’s workers’ compensation coverage) are covered by participation in the Local Government Property and Casualty Fund (LGPCF), which is a public entity risk pool established by the Tennessee County Services Association. The county pays annual premiums to the pool for the risk coverage noted above. The creation of the pool provides for them to be self-sustaining through member premiums. The LGPCF reinsures through commercial insurance companies for claims exceeding $100,000 for each insured event. Jackson County (with the exception of the Highway Department) joined the Tennessee Risk Management Trust (TN-RMT), which is a public entity risk pool created under the auspices of the Tennessee Governmental Tort Liability Act to provide governmental insurance coverage. The county pays annual premiums to the TN-RMT for its workers’ compensation insurance coverage. The creation of the TN-RMT provides for it to be self-sustaining through member premiums. Jackson County does not provide health insurance for its employees. Discretely Presented Jackson County School Department The School Department’s risks of loss relating to general liability, property, casualty, and workers’ compensation are covered by their participation in the Tennessee Risk Management Trust (TN-RMT), which is a public entity risk pool created under the auspices of the Tennessee Governmental Tort Liability Act to provide governmental insurance coverage. Annual premiums are paid to the pool for the risk coverage noted above. The creation of the TN-RMT provides for it to be self-sustaining through member premiums.

The School Department participates in the Local Education Group Insurance Fund (LEGIF), a public entity risk pool established to provide a program of health insurance coverage for employees of local education agencies. In accordance with Section 8-27-301, Tennessee Code Annotated (TCA), all local education agencies are eligible to participate. The LEGIF is included in the

56

Comprehensive Annual Financial Report of the State of Tennessee, but the state does not retain any risk for losses by this fund. Section 8-27-303, TCA, provides for the LEGIF to be self-sustaining through member premiums.

B. Accounting Changes At the beginning of the year, Jackson County implemented the provisions of Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments. In the prior year, Jackson County had elected only to implement the provisions of Statement No. 34 that related to the fund financial statements. Provisions of GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions; Statement No. 48, Sales and Pledges of Receivables and Future Revenues and Intra-Entity Transfers of Assets and Future Revenues; and Statement No. 50, Pension Disclosures became effective for the year ended June 30, 2008. GASB Statement No. 45 establishes reporting requirements for Other Postemployment Benefits (OPEB). OPEB includes postemployment healthcare, as well as other forms of postemployment benefits (for example, life insurance) when provided separately from a pension plan. This statement establishes standards for the measurement, recognition, and display of OPEB expenses/expenditures and related liabilities (assets), note disclosures, and, if applicable, required supplementary information in the county’s financial statements. In previous years, the Jackson County School Department had recognized only the current year cost (expense) of these benefits. GASB Statement No. 45 was implemented prospectively with a zero net OPEB obligation at transition. GASB Statement No. 48 establishes criteria to ascertain whether certain transactions are sales or collateralized borrowings and provides guidance on how to account for sales or pledges of receivables or future revenues. This statement provides additional guidance for sales of receivables and future revenues within the same reporting entity. This statement also requires governments to disclose in the notes to the financial statements the nature of any receivables or future revenues that have been pledged or sold. Tennessee state statutes do not currently allow counties to sell or pledge receivables or sell future revenue streams. Therefore, those provisions of GASB Statement No. 48 that pertain to the sale or pledge receivables or sale of future revenue will not apply to Jackson County. GASB Statement No. 48 had no effect on the financial statements of Jackson County for the year ended June 30, 2008, since the county has not pledged any of its future revenues. However, it is reasonably expected that Jackson County may pledge a future revenue stream toward the payment of debt in subsequent years.

57

GASB Statement No. 50 amends previous guidance concerning pension information. This statement closely aligns the financial reporting requirements for pensions with those for other postemployment benefits and enhances the information disclosed in the notes to the financial statements or presented as required supplementary information for pension plans. This statement requires Jackson County to provide additional and more detailed pension plan note disclosures than in previous years.

C. Subsequent Events On September 3, 2008, Kenneth Bean left the Office of Sheriff and Chief Deputy Charles Collier assumed the office. On November 6, 2008, the Jackson County Commission formally appointed Charles Collier to fulfill Mr. Bean’s unexpired term. On September 9, 2008, the county’s General Debt Service Fund issued a $400,000 tax anticipation note to the General ($350,000) and the Solid Waste/Sanitation ($50,000) funds for temporary operating funds.

D. Contingent Liabilities

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

E. Joint Venture The Tri-County Vocational School Board operates the Cooperative Vocational School, which is jointly owned by Clay, Jackson, and Macon counties. The board comprises 17 members, 11 of whom are the three directors of schools, three county mayors, and five high school principals from Clay, Jackson, and Macon counties. The remaining six members are each appointed by the three county school boards and county commissions. Clay, Jackson, and Macon counties have control over budgeting and financing the joint venture only to the extent of representation by the six board members appointed. The counties are responsible for funding operations and any deficits from operations based on their participation in the joint venture, which is 24 percent (Clay), 30 percent (Jackson), and 46 percent (Macon); however, the counties do not retain an equity interest in the joint venture. Jackson County contributed $59,327 to the operations of the board during the year. Complete financial statements for the Tri-County Vocational School can be obtained from its administrative office:

Administrative Office:

Tri-County Vocational School P.O. Box 214, Highway 151 Red Boiling Springs, TN 37150

58

F. Jointly Governed Organization The Gainesboro Port Authority was created by the county in conjunction with the City of Gainesboro. The authority’s board comprises two members appointed by the County Commission, two members appointed by the City of Gainesboro, and the remaining member appointed by the other four members. Jackson County does not provide funding for the authority and retains no ongoing financial responsibility for the authority.

G. Retirement Commitments

Employees Plan Description Employees of Jackson County are members of the Political Subdivision Pension Plan (PSPP), an agent multiple-employer defined benefit pension plan administered by the Tennessee Consolidated Retirement System (TCRS). TCRS provides retirement benefits as well as death and disability benefits. Benefits are determined by a formula using the member’s high five-year average salary and years of service. Members become eligible to retire at the age of 60 with five years of service or at any age with 30 years of service. A reduced retirement benefit is available to vested members at the age of 55. Disability benefits are available to active members with five years of service who become disabled and cannot engage in gainful employment. There is no service requirement for disability that is the result of an accident or injury occurring while the member was in the performance of duty. Members joining the system after July 1, 1979, become vested after five years of service, and members joining prior to July 1, 1979, were vested after four years of service. Benefit provisions are established in state statute found in Title 8, Chapters 34-37 of Tennessee Code Annotated. State statutes are amended by the Tennessee General Assembly. Political subdivisions such as Jackson County participate in the TCRS as individual entities and are liable for all costs associated with the operation and administration of their plan. Benefit improvements are not applicable to a political subdivision unless approved by the chief governing body. The TCRS issues a publicly available financial report that includes financial statements and required supplementary information for the PSPP. That report may be obtained by writing to the Tennessee Treasury Department, Consolidated Retirement System, 10th Floor, Andrew Jackson Building, Nashville, TN 37243-0230 or can be accessed at http://www.tn.gov/treasury/tcrs. Funding Policy Jackson County requires employees to contribute five percent of earnable compensation. The county is required to contribute at an actuarially determined rate; the rate for the fiscal year ended June 30, 2008, was

59

7.1 percent of annual covered payroll. The contribution requirement of plan members is set by state statute. The contribution requirement for Jackson County is established and may be amended by the TCRS Board of Trustees. Annual Pension Cost For the year ended June 30, 2008, Jackson County’s annual pension cost of $242,222 to TCRS was equal to the county’s required and actual contributions. The required contribution was determined as part of the July 1, 2005, actuarial valuation using the frozen entry age actuarial cost method. Significant actuarial assumptions used in the valuation include (a) rate of return on investment of present and future assets of 7.5 percent a year compounded annually, (b) projected salary increases of 4.75 percent (graded) annual rate (no explicit assumption is made regarding the portion attributable to the effects of inflation on salaries), (c) projected 3.5 percent annual increase in the Social Security wage base, and (d) projected postretirement increases of three percent annually. The actuarial value of assets was determined using techniques that smooth the effect of short-term volatility in the market value of total investments over a five-year period. Jackson County’s unfunded actuarial accrued liability is being amortized as a level dollar amount on a closed basis. The remaining amortization period at July 1, 2005, was 19 years. An actuarial valuation was performed as of July 1, 2007, which established contribution rates effective July 1, 2008.

Trend Information

Fiscal Year

Ended

Annual Pension

Cost (APC)

Percentage of APC

Contributed

Net Pension

Obligation

6-30-08 $242,222 100% $0 6-30-07 206,209 100 0 6-30-06 172,280 100 0

Funded Status and Funding Progress As of July 1, 2007, the most recent actuarial valuation date, the plan was 92.75 percent funded. The actuarial accrued liability for benefits was $4.95 million, and the actuarial value of assets was $4.59 million, resulting in an unfunded actuarial accrued liability (UAAL) of $.36 million. The covered payroll (annual payroll of active employees covered by the plan) was $2.59 million, and the ratio of the UAAL to the covered payroll was 13.81 percent. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information about whether the actuarial values of plan

60

assets are increasing or decreasing over time relative to the actuarial accrued liability for benefits. The annual required contribution was calculated using the aggregate actuarial cost method. Since the aggregate actuarial cost method does not identify or separately amortize unfunded actuarial liabilities, information about funded status and funding progress has been prepared using the entry age actuarial cost method for that purpose, and this information is intended to serve as a surrogate for the funded status and funding progress of the plan. School Teachers Plan Description The Jackson County School Department contributes to the State Employees, Teachers, and Higher Education Employees Pension Plan (SETHEEPP), a cost-sharing multiple employer defined benefit pension plan administered by the Tennessee Consolidated Retirement System (TCRS). TCRS provides retirement benefits as well as death and disability benefits to plan members and their beneficiaries. Benefits are determined by a formula using the member’s high five-year average salary and years of service. Members become eligible to retire at the age of 60 with five years of service or at any age with 30 years of service. A reduced retirement benefit is available to vested members who are at least 55 years of age or have 25 years of service. Disability benefits are available to active members with five years of service who become disabled and cannot engage in gainful employment. There is no service requirement for disability that is the result of an accident or injury occurring while the member was in the performance of duty. Members joining the plan on or after July 1, 1979, are vested after five years of service. Members joining prior to July 1, 1979, are vested after four years of service. Benefit provisions are established in state statute found in Title 8, Chapters 34-37 of Tennessee Code Annotated. State statutes are amended by the Tennessee General Assembly. A cost of living adjustment (COLA) is provided to retirees each July based on the percentage change in the Consumer Price Index (CPI) during the previous calendar year. No COLA is granted if the CPI increases less than one-half percent. The annual COLA is capped at three percent. The TCRS issues a publicly available financial report that includes financial statements and required supplementary information for the SETHEEPP. That report may be obtained by writing to the Tennessee Treasury Department, Consolidated Retirement System, 10th Floor, Andrew Jackson Building, Nashville, TN 37243-0230 or can be accessed at http://www.tn.gov/treasury/tcrs.

61

Funding Policy Most teachers are required by state statute to contribute five percent of their salaries to the plan. The employer contribution rate for the School Department is established at an actuarially determined rate. The employer rate for the fiscal year ended June 30, 2008, was 6.24 percent of annual covered payroll. The employer contribution requirement for the School Department is established and may be amended by the TCRS Board of Trustees. The employer’s contributions to TCRS for the years ended June 30, 2008, 2007, and 2006, were $388,377, $355,584, and $311,972, respectively, equal to the required contributions for each year.

H. Other Postemployment Benefits (OPEB)

Plan Description The School Department participates in the state-administered Local Education Group Insurance Plan for healthcare benefits. For accounting purposes, the plan is an agent multiple-employer defined benefit OPEB plan. Benefits are established and amended by an insurance committee created by Section 8-27-302, Tennessee Code Annotated (TCA), for teachers. Prior to reaching the age of 65, all members have the option of choosing a preferred provider organization (PPO), point of service (POS), or health maintenance organization (HMO) plan for healthcare benefits. Subsequent to age 65, members who are also in the state’s retirement system may participate in a state-administered Medicare Supplement Plan that does not include pharmacy. The plans are reported in the State of Tennessee Comprehensive Annual Financial Report (CAFR). The CAFR is available on the state’s website at http://tennessee.gov/finance/act/cafr.html. Funding Policy The premium requirements of plan members are established and may be amended by the insurance committee. The plan is self-insured and financed on a pay-as-you-go basis with the risk shared equally among the participants. Claims liabilities of the plan are periodically computed using actuarial and statistical techniques to establish premium rates. The employer in the plan develops its own contribution policy in terms of subsidizing active employees or retired employees’ premiums since the committee is not prescriptive on that issue. The state provides a partial subsidy to Local Education Agency pre-65 teachers and a full subsidy based on years of service for post-65 teachers in the Medicare Supplement Plan. The required contribution rate for retirees ranges from 55 to 75 percent based on the years of service. During the year ended June 30, 2008, the discretely presented Jackson County School Department contributed $40,094 for postemployment benefits.

63

results are compared to past expectations and new estimates are made about the future. The Schedule of Funding Progress, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. Actuarial Methods and Assumptions Calculations are based on the types of benefits provided under the terms of the substantive plan at the time of each valuation and on the pattern of sharing of costs between the employer and plan members to that point. Actuarial calculations reflect a long-term perspective. Consistent with that perspective, actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets. In the June 30, 2007, actuarial valuation, the projected unit actuarial cost method was used. The actuarial assumptions included a 4.5 percent investment rate of return (net of administrative expenses) and an annual healthcare cost trend rate of 11 percent initially, reduced by decrements to an ultimate rate of six percent after ten years. Both rates include a three percent inflation assumption. The unfunded actuarial accrued liability is being amortized as a level percentage of payroll on a closed basis over a 30-year period beginning with June 30, 2008.

I. Purchasing Laws

Office of County Mayor Purchasing procedures for the Office of County Mayor are governed by the County Purchasing Law of 1983, Sections 5-14-201 through 5-14-206, Tennessee Code Annotated (TCA), which provide for all purchases exceeding $10,000 to be made after public advertisement and solicitation of competitive bids. Office of Road Superintendent Chapter 111, Private Acts of 1951, as amended, and Section 54-7-113, TCA (Uniform Road Law), govern purchasing procedures for the Road Department. Chapter 111, Private Acts of 1951, directs the road superintendent to make necessary purchases and to file a report with the County Commission for all purchases exceeding $1,000. Provisions of the Uniform Road Law require all purchases exceeding $10,000 to be made on the basis of publicly advertised competitive bids.

64

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

VI. OTHER NOTES – DISCRETELY PRESENTED JACKSON COUNTY

EMERGENCY COMMUNICATIONS DISTRICT

A. Organization

The Jackson County E-911 Emergency Communications District was established on October 1, 1990, to provide an enhanced level of 911 services for Jackson County citizens. By acquiring certain types of equipment with faster transmittal of critical information and improved reliability of addresses and information, emergency service providers can respond more rapidly and effectively. The district is a component unit of Jackson County. A board of directors appointed by the commissioners governs the district. The district must file a budget with Jackson County each year. Any bond issued by the district is subject to approval by Jackson County.

B. Summary of Significant Accounting Policies

The district presents its financial statements on the accrual basis and according to Governmental Accounting Standards Board (GASB) Statement No. 20, follows pronouncements of the Financial Accounting Standards (FASB) issued before November 30, 1989, unless they conflict with or contradict GASB guidance. After November 30, 1989, the district follows GASB guidance only and does not follow any FASB guidance issued after that date.

Capital assets are depreciated over their useful lives using the straight-line method. All assets purchased under $5,000 are expensed unless otherwise stated by management. Depreciation begins when the capital assets are placed in service. Depreciation is summarized as follows:

65

EstimatedUseful Life Depreciation

Years Expense

Buildings and Improvements 40 $ 3,824Other Capital Assets 5-12 29,753

$ 33,577

Assets

The budget is compiled and brought before the board for approval. The board approves any amendments. Major Source of Revenue

The major source of operating revenue is emergency telephone and wireless surcharges and revenue from the State Emergency Communications Board Operational Funding Program. Nonoperating revenue consists of grants and reimbursements from the State Emergency Communications Board and contributions from primary and other governments. Budgeting, Budgetary Control, and Budgetary Reporting

An annual budget using the modified accrual basis of accounting is prepared and adopted each year. The budget for the year ended June 30, 2008, was approved by the board before the fiscal year began. Certain changes in expenditure allocations of the budget were addressed and approved by the board. Revenues are considered to be available for unrestricted use unless specifically restricted by the donor or grantor, thus the board may reapply budgeted resources from one use to another without special approval for unrestricted funds.

C. Cash and Investments

Tennessee Code Annotated (TCA), requires Tennessee banks and savings and loan associations to secure a governmental entity’s deposits by pledging government securities as collateral. The market value of pledged securities must equal 105 percent of the entity’s deposits. The entity may waive collateral requirements for deposits that are fully insured up to $100,000 by the Federal Deposit Insurance Corporation (FDIC) or Savings Association Insurance Fund (SAIF). The following is a schedule of cash accounts at June 30, 2008: Checking $ 3,824Payroll Checking 29,753

Total Cash $ 33,577

66

At June 30, 2008, the carrying amount of the district’s cash deposits was $32,852. The district’s deposit accounts are covered up to $100,000 by the FDIC. The district is authorized to deposit and invest funds according to the provisions of Section 5-8-301, TCA.

D. Insurance Risk

The district has bonds covering the chairman, vice-chairman, secretary, and treasurer totaling $50,000 at June 30, 2008. The district also holds a workers’ compensation policy and a liability policy covering; property theft, damage, and public liability. There have been no claims that exceeded coverage as of June 30, 2008.

E. Capital Assets

The following is a schedule of capital assets at June 30, 2008:


Capital Assets Not Depreciated:Land $ 2,500 $ 0 $ 2,500Total Capital Assets Not Depreciated $ 2,500 $ 0 $ 2,500

Capital Assets Depreciated:Buildings and Improvements $ 152,968 $ 0 $ 152,968Other Capital Assets 716,349 56,661 773,010Total Capital Assets Depreciated $ 869,317 $ 56,661 $ 925,978

Less Accumulated Depreciation For:Buildings and Improvements $ 19,121 $ 3,824 $ 22,945Other Capital Assets 656,748 29,753 686,501

Total Accumulated Depreciation $ 675,869 $ 33,577 $ 709,446

Total Capital Assets Depreciatied, Net $ 193,448 $ 23,084 $ 216,532

Governmental Activities Capital Assets, Net $ 195,948 $ 23,084 $ 219,032

F. Cash and Cash Equivalents

Cash and cash equivalents consist of demand deposits with original maturities of three months or less with local financial institutions.

67

G. Long-term Liabilities

Lease payable at June 30, 2008, is a capital lease with Marlin Financial & Leasing Corporation. Terms of the lease agreement are 54 payments of $5,529.53 beginning July 18, 2003. The interest rate is 5.85 percent. The last payment should have been January 18, 2008; however, the district renegotiated the lease agreement for lower payments of $4,455.81 over a longer period of time. The annual requirement for long-term debt outstanding at June 30, 2008, is as follows:


2009 $ 44,693 $ 8,777 $ 53,4702010 47,372 6,098 53,4702011 50,218 3,252 53,4702012 28,138 514 28,652

Total $ 170,421 $ 18,641 $ 189,062

LeasePrincipal

Changes in Long-term Liabilities Long-term liability activity for the year ended June 30, 2008, was as follows:

Capital Lease

Balance, July 1, 2007 $ 211,177Deductions (40,756)

Balance, June 30, 2008 $ 170,421

H. Compensated Absences

There were no compensated absences payable at June 30, 2008. I. Calculation of Invested in Capital Assets

Net Book Value $ 219,033Less: Current and Noncurrent Debt (170,421)

Invested in Net Assets, Net of Related Debt $ 48,612


68

69

REQUIRED SUPPLEMENTARY INFORMATION


70

Exhibit E-1

Jackson County, TennesseeSchedule of Revenues, Expenditures, and Changes

in Fund Balance - Actual and BudgetGeneral FundFor the Year Ended June 30, 2008

Variancewith FinalBudget -Positive

Actual Original Final (Negative)

RevenuesLocal Taxes $ 1,801,448 $ 1,822,251 $ 1,822,251 $ (20,803)Licenses and Permits 2,328 2,000 2,000 328Fines, Forfeitures, and Penalties 37,942 45,400 45,400 (7,458)Charges for Current Services 610,932 568,500 568,890 42,042Other Local Revenues 351,747 268,500 299,948 51,799Fees Received from County Officials 383,840 386,000 386,000 (2,160)State of Tennessee 676,550 561,123 573,096 103,454Federal Government 654,429 39,000 680,055 (25,626)Other Governments and Citizens Groups 60,226 60,000 60,206 20

Total Revenues $ 4,579,442 $ 3,752,774 $ 4,437,846 $ 141,596

ExpendituresGeneral Government

County Commission $ 37,711 $ 45,804 $ 45,804 $ 8,093Board of Equalization 750 808 808 58Beer Board 68 200 68 0Budget and Finance Committee 0 646 0 0Other Boards and Committees 215 431 216 1County Mayor/Executive 132,994 133,136 133,136 142County Attorney 5,290 5,790 5,790 500Election Commission 103,872 110,448 112,221 8,349Register of Deeds 83,780 89,293 89,293 5,513County Buildings 111,762 128,920 111,844 82

FinanceProperty Assessor's Office 87,503 87,625 87,625 122Reappraisal Program 3,963 7,796 7,796 3,833County Trustee's Office 76,006 95,865 95,865 19,859County Clerk's Office 93,498 92,618 93,519 21

Administration of JusticeCircuit Court 153,651 153,050 153,721 70General Sessions Court 0 110,804 0 0General Sessions Judge 109,993 0 110,804 811Chancery Court 83,023 84,375 84,375 1,352Juvenile Court 34,826 28,695 35,507 681Judicial Commissioners 36,527 36,835 36,835 308Other Administration of Justice 3,255 4,854 4,854 1,599

Public SafetySheriff's Department 697,082 619,441 710,408 13,326Administration of the Sexual Offender Registry 700 500 700 0Jail 828,467 778,717 808,998 (19,469)Fire Prevention and Control 16,500 16,500 16,500 0Other Emergency Management 50,243 52,250 52,250 2,007Other Public Safety 4,960 5,000 5,000 40

(Continued)

Budgeted Amounts

71

Exhibit E-1


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

Variancewith FinalBudget -

Budgeted Amounts PositiveActual Original Final (Negative)

Expenditures (Cont.)Public Health and Welfare

Local Health Center $ 23,713 $ 34,263 $ 34,263 $ 10,550Ambulance/Emergency Medical Services 575,588 597,333 601,072 25,484Crippled Children Services 900 900 900 0Regional Mental Health Center 4,758 4,648 4,758 0Appropriation to State 15,191 15,300 15,191 0

Social, Cultural, and Recreational ServicesAdult Activities 17,721 17,072 17,725 4Senior Citizens Assistance 20,146 17,072 20,148 2Libraries 46,620 48,340 53,565 6,945

Agriculture and Natural ResourcesAgriculture Extension Service 43,384 43,392 43,392 8Soil Conservation 33,102 33,104 33,104 2

Other OperationsIndustrial Development 4,364 7,500 4,615 251Other Economic and Community Development 0 500 0 0Airport 629,250 11,123 644,432 15,182Other Charges 265,240 276,900 254,732 (10,508)Contributions to Other Agencies 21,565 21,665 23,065 1,500Employee Benefits 106,607 145,000 114,326 7,719Miscellaneous 137,676 126,327 132,606 (5,070)

HighwaysLitter and Trash Collection 29,191 29,237 29,237 46

Total Expenditures $ 4,731,655 $ 4,120,077 $ 4,831,068 $ 99,413

Excess (Deficiency) of RevenuesOver Expenditures $ (152,213) $ (367,303) $ (393,222) $ 241,009

Net Change in Fund Balance $ (152,213) $ (367,303) $ (393,222) $ 241,009Fund Balance, July 1, 2007 670,794 790,636 790,636 (119,842)

Fund Balance, June 30, 2008 $ 518,581 $ 423,333 $ 397,414 $ 121,167

72

Exhibit E-2


in Fund Balance - Actual and BudgetSolid Waste/Sanitation FundFor the Year Ended June 30, 2008



RevenuesLocal Taxes $ 315,486 $ 322,300 $ 322,300 $ (6,814)Other Local Revenues 17,179 3,000 3,000 14,179State of Tennessee 6,278 6,000 6,000 278

Total Revenues $ 338,943 $ 331,300 $ 331,300 $ 7,643

ExpendituresPublic Health and Welfare

Waste Pickup $ 214,931 $ 222,051 $ 195,336 $ (19,595)Convenience Centers 167,706 139,684 177,399 9,693

Other OperationsOther Charges 6,431 8,000 8,000 1,569

Total Expenditures $ 389,068 $ 369,735 $ 380,735 $ (8,333)

Excess (Deficiency) of RevenuesOver Expenditures $ (50,125) $ (38,435) $ (49,435) $ (690)

Net Change in Fund Balance $ (50,125) $ (38,435) $ (49,435) $ (690)Fund Balance, July 1, 2007 75,021 138,693 138,693 (63,672)

Fund Balance, June 30, 2008 $ 24,896 $ 100,258 $ 89,258 $ (64,362)

Budgeted Amounts

73

Exhibit E-3


in Fund Balance - Actual and BudgetHighway/Public Works FundFor the Year Ended June 30, 2008



RevenuesLocal Taxes $ 173,617 $ 168,500 $ 168,500 $ 5,117Other Local Revenues 104,872 68,100 96,411 8,461State of Tennessee 1,621,284 1,378,836 1,540,658 80,626

Total Revenues $ 1,899,773 $ 1,615,436 $ 1,805,569 $ 94,204

ExpendituresHighways

Administration $ 121,981 $ 131,192 $ 132,192 $ 10,211Highway and Bridge Maintenance 1,100,308 954,700 1,155,000 54,692Operation and Maintenance of Equipment 425,032 436,000 452,000 26,968Other Charges 52,997 59,500 67,000 14,003Employee Benefits 89,583 108,000 108,000 18,417Capital Outlay 73,770 21,500 85,600 11,830

Principal on DebtHighways and Streets 50,000 56,650 50,000 0

Interest on DebtHighways and Streets 6,609 0 6,650 41

Total Expenditures $ 1,920,280 $ 1,767,542 $ 2,056,442 $ 136,162

Excess (Deficiency) of RevenuesOver Expenditures $ (20,507) $ (152,106) $ (250,873) $ 230,366

Other Financing Sources (Uses)Notes Issued $ 85,688 $ 0 $ 85,688 $ 0Insurance Recovery 100 0 13,079 (12,979)

Total Other Financing Sources (Uses) $ 85,788 $ 0 $ 98,767 $ (12,979)

Net Change in Fund Balance $ 65,281 $ (152,106) $ (152,106) $ 217,387Fund Balance, July 1, 2007 350,505 218,684 218,684 131,821

Fund Balance, June 30, 2008 $ 415,786 $ 66,578 $ 66,578 $ 349,208

Budgeted Amounts

74

Exhibit E-4

Jackson County, TennesseeSchedule of Funding Progress – Pension PlanJune 30, 2008

(Dollar amounts in thousands)

ActuarialActuarial Accrued

Actuarial Value of Liability Unfunded Valuation Plan (AAL) AAL Covered

Date Assets Entry Age (UAAL) Payroll(a) (b) (b)-(a) (c)

6-30-07 $ 4,591 $ 4,950 $ 359 92.75 % $ 2,599 13.81 %

UAAL as a Percentage

The Governmental Accounting Standards Board requires the plan to prepare the Schedule ofFunding Progress using the entry age actuarial cost method. The requirement to present theSchedule of Funding Progress using the entry age actuarial cost method was a change madeduring the year; therefore, only the most current year is presented.

((b-a)/c)(a/b)

FundedRatio

of CoveredPayroll

75

Exh

ibit

E-5

Jack

son

Cou

nty,

Ten

ness

eeSc

hedu

le o

f Fun

ding

Pro

gres

s –

Oth

er P

oste

mpl

oym

ent B

enef

its P

lan

Dis

cret

ely

Pres

ente

d Ja

ckso

n C

ount

y Sc

hool

Dep

artm

ent

June

30,

200

8

(Dol

lar

amou

nts

in th

ousa

nds)

Act

uari

alA

ctua

rial

Act

uari

alA

ccru

ed

Unf

unde

d V

alua

tion

Val

ue o

f Li

abili

tyA

AL

Cov

ered

D

ate*

Ass

ets

(AA

L)(U

AA

L)Pa

yrol

l(a

)(b

)(b

)-(a)

(c)

Loca

l Edu

catio

n G

roup

Pla

n6-

30-0

7$

0 $

922

$92

2 0

%$

3,44

5 27

%

* D

ata

not a

vaila

ble

for

two

prec

edin

g ye

ars.

UA

AL

as a

Rat

io

Perc

enta

ge

(a/b

)((b

-a)/c

)

of C

over

edPa

yrol

lFu

nded

76

77

JACKSON COUNTY, TENNESSEE NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION


A. BUDGETARY INFORMATION

The county is required by state statute to adopt annual budgets. Annual budgets are prepared on the basis in which current available funds must be sufficient to meet current expenditures. Expenditures and encumbrances may not legally exceed appropriations authorized by the Jackson County Commission and any authorized revisions. Unencumbered appropriations lapse at the end of each fiscal year. The budgetary level of control is at the major category level established by the State Uniform Chart of Accounts, as prescribed by the Comptroller of the Treasury of the State of Tennessee. Major categories are at the department level (examples of General Fund major categories: County Commission, Board of Equalization, County Mayor, County Attorney, etc.). Management may make revisions within major categories, but only the Jackson County Commission may transfer appropriations between major categories. During the year, several supplementary appropriations were necessary.

The county's budgetary basis of accounting is consistent with generally accepted accounting principles (GAAP), except instances in which encumbrances are treated as budgeted expenditures. The difference between the budgetary basis and the GAAP basis is presented on the face of each budgetary schedule.

B. EXPENDITURES EXCEEDED APPROPRIATIONS

Expenditures exceeded appropriations approved by the County Commission in the Jail ($19,469), Other Charges ($10,508), and Miscellaneous ($5,070) major appropriation categories (the legal level of control) of the General Fund. Also, expenditures exceeded total appropriations approved by the County Commission in the Solid Waste/Sanitation Fund by $8,333. Such overexpenditures are a violation of state statutes. These overexpenditures were funded by greater than anticipated revenues and available fund balances.


78

79

COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES


80

81

Nonmajor Governmental Funds

Special Revenue Funds _______________________________________

Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than major capital projects) that are legally restricted to expenditures for specific purposes.

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

Capital Projects Fund

_______________________________________

Capital Projects Funds are used to account for financial resources to be used for the acquisition or construction of major capital projects.

_______________________________________

Community Development/Industrial Park Fund – The Community Development/ Industrial Park Fund is used to account for revenues and expenditures related to industrial buildings owned by the county.


82

Exh

ibit

F-1

Jack

son

Cou

nty,

Ten

ness

eeC

ombi

ning

Bal

ance

She

etN

onm

ajor

Gov

ernm

enta

l Fun

dsJu

ne 3

0, 2

008

Con

stitu

-C

omm

unity

Tota

ltio

nal

Dev

elop

men

t/N

onm

ajor

Dru

gO

ffice

rs -

Indu

stri

alG

over

nmen

tal

Con

trol

Fees

Tota

lPa

rkFu

nds

ASS

ETS

Cas

h$

0$

11,4

72$

11,4

72$

0$

11,4

72E

quity

in P

oole

d C

ash

and

Inve

stm

ents

28,9

160

28,9

1682

,018

110,

934

Acc

ount

s R

ecei

vabl

e0

6060

060

Tota

l Ass

ets

$28

,916

$11

,532

$40

,448

$82

,018

$12

2,46

6

LIA

BIL

ITIE

S A

ND

FU

ND

BA

LAN

CE

S

Liab

ilitie

sPa

yrol

l Ded

uctio

ns P

ayab

le$

120

$0

$12

0$

0$

120

Due

to O

ther

Fun

ds0

11,5

3211

,532

011

,532

Tota

l Lia

bilit

ies

$12

0$

11,5

32$

11,6

52$

0$

11,6

52

Fund

Bal

ance

sU

nres

erve

d$

28,7

96$

0$

28,7

96$

82,0

18$

110,

814

Tota

l Fun

d B

alan

ces

$28

,796

$0

$28

,796

$82

,018

$11

0,81

4

Tota

l Lia

bilit

ies

and

Fund

Bal

ance

s$

28,9

16$

11,5

32$

40,4

48$

82,0

18$

122,

466

Spec

ial R

even

ue F

unds

Cap

ital

Proj

ects

Fu

nd

83

Exh

ibit

F-2

Jack

son

Cou

nty,

Ten

ness

eeC

ombi

ning

Sta

tem

ent o

f Rev

enue

s, E

xpen

ditu

res,

and

Cha

nges

in F

und

Bal

ance

sN

onm

ajor

Gov

ernm

enta

l Fun

dsFo

r th

e Ye

ar E

nded

Jun

e 30

, 200

8

Con

stitu

- C

omm

unity

Tota

l t

iona

lD

evel

opm

ent/

Non

maj

or D

rug

Offi

cers

- I

ndus

tria

lG

over

nmen

tal

Con

trol

Fee

sTo

tal

Par

kFu

nds

Rev

enue

sFi

nes,

For

feitu

res,

and

Pen

altie

s$

36,7

57$

0$

36,7

57$

0$

36,7

57C

harg

es fo

r C

urre

nt S

ervi

ces

021

521

50

215

Oth

er L

ocal

Rev

enue

s0

00

11,2

2011

,220

Tota

l Rev

enue

s$

36,7

57$

215

$36

,972

$11

,220

$48

,192

Exp

endi

ture

sC

urre

nt:

Fina

nce

$0

$14

8$

148

$0

$14

8A

dmin

istr

atio

n of

Jus

tice

067

670

67Pu

blic

Saf

ety

52,9

120

52,9

120

52,9

12Pu

blic

Hea

lth a

nd W

elfa

re6,

238

06,

238

06,

238

Oth

er O

pera

tions

00

08,

979

8,97

9To

tal E

xpen

ditu

res

$59

,150

$21

5$

59,3

65$

8,97

9$

68,3

44

Exc

ess

(Def

icie

ncy)

of R

even

ues

Ove

r E

xpen

ditu

res

$(2

2,39

3)$

0$

(22,

393)

$2,

241

$(2

0,15

2)

Net

Cha

nge

in F

und

Bal

ance

s$

(22,

393)

$0

$(2

2,39

3)$

2,24

1$

(20,

152)

Fund

Bal

ance

, Jul

y 1,

200

751

,189

051

,189

79,7

7713

0,96

6

Fund

Bal

ance

, Jun

e 30

, 200

8$

28,7

96$

0$

28,7

96$

82,0

18$

110,

814

Spec

ial R

even

ue F

unds

Cap

ital

Proj

ects

Fu

nd

84

Exhibit F-3


in Fund Balance - Actual and BudgetDrug Control FundFor the Year Ended June 30, 2008

Variancewith FinalBudget -

Budgeted Amounts PositiveActual Original Final (Negative)

RevenuesFines, Forfeitures, and Penalties $ 36,757 $ 33,500 $ 45,789 $ (9,032)Federal Government 0 2,500 2,500 (2,500)Other Governments and Citizens Groups 0 2,500 2,500 (2,500)

Total Revenues $ 36,757 $ 38,500 $ 50,789 $ (14,032)

ExpendituresPublic Safety

Drug Enforcement $ 52,912 $ 43,221 $ 56,210 $ 3,298Public Health and Welfare

Alcohol and Drug Programs 6,238 2,500 4,000 (2,238)Total Expenditures $ 59,150 $ 45,721 $ 60,210 $ 1,060

Excess (Deficiency) of RevenuesOver Expenditures $ (22,393) $ (7,221) $ (9,421) $ (12,972)

Net Change in Fund Balance $ (22,393) $ (7,221) $ (9,421) $ (12,972)Fund Balance, July 1, 2007 51,189 49,149 49,149 2,040

Fund Balance, June 30, 2008 $ 28,796 $ 41,928 $ 39,728 $ (10,932)

85


86

87

Major Governmental Fund

General Debt Service Fund ____________________________

The General Debt Service Fund is used to account for the accumulation of resources for, and the payment of, long-term debt principal, interest, and related costs.

____________________________


88

Exhibit G


in Fund Balance - Actual and BudgetGeneral Debt Service FundFor the Year Ended June 30, 2008



RevenuesLocal Taxes $ 118,405 $ 120,700 $ 120,700 $ (2,295)Other Local Revenues 7,772 7,500 7,500 272State of Tennessee 288,856 343,594 343,594 (54,738)Other Governments and Citizens Groups 298,725 298,725 298,725 0

Total Revenues $ 713,758 $ 770,519 $ 770,519 $ (56,761)

ExpendituresOther Operations

Other Charges $ 2,358 $ 4,500 $ 4,500 $ 2,142Principal on Debt

General Government 256,408 261,564 261,564 5,156Education 175,000 175,000 175,000 0

Interest on DebtGeneral Government 155,964 186,778 164,778 8,814Education 123,725 123,725 123,725 0

Other Debt ServiceGeneral Government 22,131 500 22,500 369Education 509 510 510 1

Total Expenditures $ 736,095 $ 752,577 $ 752,577 $ 16,482

Excess (Deficiency) of RevenuesOver Expenditures $ (22,337) $ 17,942 $ 17,942 $ (40,279)

Net Change in Fund Balance $ (22,337) $ 17,942 $ 17,942 $ (40,279)Fund Balance, July 1, 2007 1,522,907 1,519,854 1,519,854 3,053

Fund Balance, June 30, 2008 $ 1,500,570 $ 1,537,796 $ 1,537,796 $ (37,226)

Budgeted Amounts

89


90

91

Fiduciary Funds ____________________________

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

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


92

Exhibit H-1Jackson County, TennesseeCombining Statement of Fiduciary Assets and LiabilitiesFiduciary FundsJune 30, 2008

Constitu-Cities - tionalSales Officers -Tax Agency Total

ASSETS

Cash $ 0 $ 853,550 $ 853,550 Investments 0 20,451 20,451 Accounts Receivable 0 310 310 Due from Other Governments 54,814 0 54,814 Cash Shortage 0 1,866 1,866

Total Assets $ 54,814 $ 876,177 $ 930,991

LIABILITIES

Due to Other Taxing Units $ 54,814 $ 0 $ 54,814 Due to Litigants, Heirs, and Others 0 876,177 876,177

Total Liabilities $ 54,814 $ 876,177 $ 930,991

Agency Funds

93

Exhibit H-2

Jackson County, TennesseeCombining Statement of Changes in Assets and Liabilities - All Agency FundsFor the Year Ended June 30, 2008

Beginning EndingBalance Additions Deductions Balance

Cities - Sales Tax FundAssets

Equity in Pooled Cash and Investments $ 0 $ 298,586 $ 298,586 $ 0Due from Other Governments 48,103 54,814 48,103 54,814

Total Assets $ 48,103 $ 353,400 $ 346,689 $ 54,814

LiabilitiesDue to Other Taxing Units $ 48,103 $ 353,400 $ 346,689 $ 54,814

Total Liabilities $ 48,103 $ 353,400 $ 346,689 $ 54,814

Constitutional Officers - Agency FundAssets

Cash $ 756,884 $ 3,290,029 $ 3,193,363 $ 853,550Investments 180,873 20,451 180,873 20,451Accounts Receivable 501 310 501 310Cash Shortage 1,866 0 0 1,866

Total Assets $ 940,124 $ 3,310,790 $ 3,374,737 $ 876,177

LiabilitiesDue to Litigants, Heirs, and Others $ 940,124 $ 3,310,790 $ 3,374,737 $ 876,177

Total Liabilities $ 940,124 $ 3,310,790 $ 3,374,737 $ 876,177

Totals - All Agency FundsAssets

Equity in Pooled Cash and Investments $ 0 $ 298,586 $ 298,586 $ 0Cash 756,884 3,290,029 3,193,363 853,550Investments 180,873 20,451 180,873 20,451Accounts Receivable 501 310 501 310Due from Other Governments 48,103 54,814 48,103 54,814Cash Shortage 1,866 0 0 1,866

Total Assets $ 988,227 $ 3,664,190 $ 3,721,426 $ 930,991

LiabilitiesDue to Other Taxing Units $ 48,103 $ 353,400 $ 346,689 $ 54,814Due to Litigants, Heirs, and Others 940,124 3,310,790 3,374,737 876,177

Total Liabilities $ 988,227 $ 3,664,190 $ 3,721,426 $ 930,991

94

95

Jackson County School Department ____________________________

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

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


96

Exh

ibit

I-1

Jack

son

Cou

nty,

Ten

ness

eeSt

atem

ent o

f Act

iviti

esD

iscr

etel

y Pr

esen

ted

Jack

son

Cou

nty

Scho

ol D

epar

tmen

tFo

r th

e Ye

ar E

nded

Jun

e 30

, 200

8

Net

(Exp

ense

)R

even

ue a

ndC

hang

es in

Ope

ratin

gN

et A

sset

sC

harg

esG

rant

sTo

tal

for

and

Gov

ernm

enta

lFu

nctio

ns/P

rogr

ams

Exp

ense

sSe

rvic

esC

ontr

ibut

ions

Act

iviti

es

Com

pone

nt U

nit:

Gov

ernm

enta

l Act

iviti

es:

Inst

ruct

ion

$7,

720,

541

$31

,983

$1,

526,

051

$(6

,162

,507

)Su

ppor

t Ser

vice

s4,

399,

066

255,

693

227,

026

(3,9

16,3

47)

Ope

ratio

n of

Non

-Ins

truc

tiona

l Ser

vice

s1,

231,

652

066

4,70

5(5

66,9

47)

Oth

er D

ebt S

ervi

ce49

2,18

00

0(4

92,1

80)

Tota

l Gov

ernm

enta

l Act

iviti

es$

13,8

43,4

39$

287,

676

$2,

417,

782

$(1

1,13

7,98

1)

Gen

eral

Rev

enue

s:Ta

xes:

Prop

erty

Tax

es L

evie

d fo

r G

ener

al P

urpo

ses

$1,

282,

569

Loca

l Opt

ion

Sale

s Ta

xes

540,

964

Whe

el T

ax17

2,34

9O

ther

Loc

al T

axes

1,90

0 G

rant

s an

d C

ontr

ibut

ions

Not

Res

tric

ted

to S

peci

fic P

rogr

ams

9,12

6,28

7 In

tere

st In

com

e1,

313

Mis

cella

neou

s39

,451

Tota

l Gen

eral

Rev

enue

s$

11,1

64,8

33

Insu

ranc

e R

ecov

ery

$2,

545

Cha

nge

in N

et A

sset

s$

29,3

97N

et A

sset

s, J

uly

1, 2

007

9,60

6,42

3

Net

Ass

ets,

Jun

e 30

, 200

8$

9,63

5,82

0

Prog

ram

Rev

enue

s

97

Exhibit I-2

Jackson County, TennesseeBalance Sheet - Governmental FundsDiscretely Presented Jackson County School DepartmentJune 30, 2008

TotalGeneral School Central Govern-Purpose Federal Cafeteria mentalSchool Projects Fund Funds

ASSETS

Equity in Pooled Cash and Investments $ 4,463,367 $ 0 $ 273,079 $ 4,736,446Inventories 0 0 30,467 30,467Accounts Receivable 484 0 0 484Due from Other Governments 140,029 133,206 0 273,235Property Taxes Receivable 1,583,288 0 0 1,583,288Allowance for Uncollectible Property Taxes (95,060) 0 0 (95,060)

Total Assets $ 6,092,108 $ 133,206 $ 303,546 $ 6,528,860

LIABILITIES AND FUND BALANCES

LiabilitiesAccounts Payable $ 0 $ 0 $ 6,721 $ 6,721Cash Overdraft 0 75,676 0 75,676Deferred Revenue - Current Property Taxes 1,488,228 0 0 1,488,228Other Deferred Revenues 55,831 0 0 55,831

Total Liabilities $ 1,544,059 $ 75,676 $ 6,721 $ 1,626,456

Fund BalancesReserved for Encumbrances $ 397,664 $ 30,481 $ 0 $ 428,145Reserved for Inventory 0 0 30,467 30,467Other Local Education Reserves 625,714 0 0 625,714Reserved for Career Ladder - Extended Contract 19,070 0 0 19,070Reserved for Career Ladder Program 9,769 0 0 9,769Reserved for Basic Education Program 2,311,967 0 0 2,311,967Reserved for Title I Grants to Local Education Agencies 0 10,395 0 10,395Reserved for Innovative Education Program Strategies 0 5,390 0 5,390Reserved for Special Education - Grants to States 0 8,858 0 8,858Other Federal Reserves 0 2,406 0 2,406Unreserved, Reported In:

General Fund 1,183,865 0 0 1,183,865Special Revenue Funds 0 0 266,358 266,358

Total Fund Balances $ 4,548,049 $ 57,530 $ 296,825 $ 4,902,404

Total Liabilities and Fund Balances $ 6,092,108 $ 133,206 $ 303,546 $ 6,528,860

Major FundsNonmajor

Fund

98

Exhibit I-3

Jackson County, TennesseeReconciliation of the Balance Sheet of Governmental Funds to the Statement of Net AssetsDiscretely Presented Jackson County School DepartmentJune 30, 2008

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

Total fund balances - balance sheet - governmental funds (Exhibit I-2) $ 4,902,404

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

Add: land $ 173,658Add: buildings and improvements net of accumulated depreciation 9,607,359Add: other capital assets net of accumulated depreciation 519,963 10,300,980

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

Less: other loans payable $ (5,579,000)Less: other postemployment benefits obligations (44,395) (5,623,395)

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

Add: other deferred revenues 55,831

Net assets of governmental activities (Exhibit A) $ 9,635,820

99

Exhibit I-4

Jackson County, TennesseeStatement of Revenues, Expenditures,

and Changes in Fund Balances -Governmental Funds

Discretely Presented Jackson County School DepartmentFor the Year Ended June 30, 2008

General School Central Total Purpose Federal Cafeteria Governmental School Projects Fund Funds

RevenuesLocal Taxes $ 2,051,226 $ 0 $ 0 $ 2,051,226Licenses and Permits 728 0 0 728Charges for Current Services 28,983 0 255,693 284,676Other Local Revenues 48,546 360 1,313 50,219State of Tennessee 9,010,331 0 0 9,010,331Federal Government 495,482 1,392,878 603,127 2,491,487

Total Revenues $ 11,635,296 $ 1,393,238 $ 860,133 $ 13,888,667

ExpendituresCurrent:

Instruction $ 6,236,037 $ 1,018,230 $ 0 $ 7,254,267Support Services 3,941,721 408,924 0 4,350,645Operation of Non-Instructional Services 390,070 0 811,484 1,201,554Capital Outlay 265,914 0 0 265,914

Debt Service:Principal on Debt 149,000 0 0 149,000Interest on Debt 173,335 0 0 173,335Other Debt Service 318,845 0 0 318,845

Total Expenditures $ 11,474,922 $ 1,427,154 $ 811,484 $ 13,713,560

Excess (Deficiency) of RevenuesOver Expenditures $ 160,374 $ (33,916) $ 48,649 $ 175,107

Other Financing Sources (Uses)Insurance Recovery $ 2,545 $ 0 $ 0 $ 2,545Transfers In 88,916 0 0 88,916Transfers Out 0 (28,916) (60,000) (88,916)

Total Other Financing Sources (Uses) $ 91,461 $ (28,916) $ (60,000) $ 2,545

Net Change in Fund Balances $ 251,835 $ (62,832) $ (11,351) $ 177,652Fund Balance, July 1, 2007 4,296,214 120,362 308,176 4,724,752

Fund Balance, June 30, 2008 $ 4,548,049 $ 57,530 $ 296,825 $ 4,902,404

Major FundsNonmajor

Fund

100

Exhibit I-5

Jackson County, TennesseeReconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of ActivitiesDiscretely Presented Jackson County School DepartmentFor the Year Ended June 30, 2008

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

Net change in fund balances - total governmental funds (Exhibit I-4) $ 177,652

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

Add: capital assets purchased in the current period $ 127,360Less: current year depreciation expense (313,916) (186,556)

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

Less: loss on disposal of capital assets $ (17,830)Less: decrease in revenue for the sale of disposed assets (700) (18,530)

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

Add: deferred delinquent property taxes and other deferred June 30, 2008 $ 55,831Less: deferred delinquent property taxes and other deferred June 30, 2007 (103,605) (47,774)

(4) The issuance of long-term debt (e.g., bonds, notes, other loans, leases) providescurrent financial resources to governmental funds, while the repaymentof the principal of long-term debt consumes the current financialresources of governmental funds. Neither transaction, however, has any effect on net assets. Also, governmental funds report the effectof issuance costs, premiums, discounts, and similar items when debt isfirst issued, whereas these amounts are deferred and amortized in thestatement of activities. This amount is the net effect of these differencesin the treatment of long-term debt and related items:

Add: principal payments on bonds 149,000

(5) Some expenses reported in the statement of activities do not require the use ofcurrent financial resources and, therefore, are not reported as expenditures ingovernmental funds.

Change in other postemployment obligations (44,395)

Change in net assets of governmental activities (Exhibit B) $ 29,397

101

Exh

ibit

I-6

Jack

son

Cou

nty,

Ten

ness

eeSc

hedu

le o

f Rev

enue

s, E

xpen

ditu

res,

and

Cha

nges

in F

und

Bal

ance

- A

ctua

l (B

udge

tary

Bas

is) a

nd B

udge

tD

iscr

etel

y Pr

esen

ted

Jack

son

Cou

nty

Scho

ol D

epar

tmen

tG

ener

al P

urpo

se S

choo

l Fun

dFo

r th

e Ye

ar E

nded

Jun

e 30

, 200

8

Act

ual

Var

ianc

eR

even

ues/

with

Fin

alA

ctua

lLe

ss:

Add

:E

xpen

ditu

res

Bud

get -

(GA

AP

Enc

umbr

ance

sE

ncum

bran

ces

(Bud

geta

ryPo

sitiv

eB

asis

)7/

1/20

076/

30/2

008

Bas

is)

Ori

gina

lFi

nal

(Neg

ativ

e)

Rev

enue

sLo

cal T

axes

$2,

051,

226

$0

$0

$2,

051,

226

$2,

073,

368

$2,

073,

368

$(2

2,14

2)Li

cens

es a

nd P

erm

its72

80

072

81,

500

1,50

0(7

72)

Cha

rges

for

Cur

rent

Ser

vice

s28

,983

00

28,9

8330

,000

30,0

00(1

,017

)O

ther

Loc

al R

even

ues

48,5

460

048

,546

38,5

0038

,500

10,0

46St

ate

of T

enne

ssee

9,01

0,33

10

09,

010,

331

8,92

6,59

08,

996,

485

13,8

46Fe

dera

l Gov

ernm

ent

495,

482

00

495,

482

477,

437

488,

168

7,31

4To

tal R

even

ues

$11

,635

,296

$0

$0

$11

,635

,296

$11

,547

,395

$11

,628

,021

$7,

275

Exp

endi

ture

sIn

stru

ctio

nR

egul

ar In

stru

ctio

n Pr

ogra

m$

4,96

6,88

8$

(138

,927

)$21

8,03

9$

5,04

6,00

0$

5,30

9,76

9$

5,30

9,76

9$

263,

769

Alte

rnat

ive

Inst

ruct

ion

Prog

ram

40,0

780

040

,078

53,1

7853

,178

13,1

00Sp

ecia

l Edu

catio

n Pr

ogra

m69

9,83

40

069

9,83

475

8,99

275

8,99

259

,158

Voc

atio

nal E

duca

tion

Prog

ram

475,

826

00

475,

826

526,

718

526,

718

50,8

92A

dult

Edu

catio

n Pr

ogra

m53

,411

(1,1

65)

383

52,6

2944

,186

54,9

172,

288

Supp

ort S

ervi

ces

Att

enda

nce

88,3

87(2

25)

088

,162

96,0

8496

,084

7,92

2H

ealth

Ser

vice

s16

7,50

60

18,3

2418

5,83

020

2,43

423

1,77

345

,943

Oth

er S

tude

nt S

uppo

rt18

7,14

4(3

77)

5,23

619

2,00

320

5,02

320

5,02

313

,020

Reg

ular

Inst

ruct

ion

Prog

ram

487,

179

(5,1

75)

487

482,

491

567,

204

567,

204

84,7

13Sp

ecia

l Edu

catio

n Pr

ogra

m12

6,29

90

012

6,29

914

1,49

914

1,49

915

,200

Voc

atio

nal E

duca

tion

Prog

ram

8,61

50

08,

615

15,1

7815

,178

6,56

3A

dult

Prog

ram

s34

,896

00

34,8

9636

,690

36,6

901,

794

Oth

er P

rogr

ams

40,5

560

040

,556

040

,556

0

(Con

tinue

d)

Bud

gete

d A

mou

nts

102

Exh

ibit

I-6

Jack

son

Cou

nty,

Ten

ness

eeSc

hedu

le o

f Rev

enue

s, E

xpen

ditu

res,

and

Cha

nges

in F

und

Bal

ance

- A

ctua

l (B

udge

tary

Bas

is) a

nd B

udge

tD

iscr

etel

y Pr

esen

ted

Jack

son

Cou

nty

Scho

ol D

epar

tmen

tG

ener

al P

urpo

se S

choo

l Fun

d (C

ont.)

Act

ual

Var

ianc

eR

even

ues/

with

Fin

alA

ctua

lLe

ss:

Add

:E

xpen

ditu

res

Bud

get -

(GA

AP

Enc

umbr

ance

sE

ncum

bran

ces

(Bud

geta

ryPo

sitiv

eB

asis

)7/

1/20

076/

30/2

008

Bas

is)

Ori

gina

lFi

nal

(Neg

ativ

e)

Exp

endi

ture

s (C

ont.)

Supp

ort S

ervi

ces

(Con

t.)B

oard

of E

duca

tion

$29

0,65

5$

0$

2,50

0$

293,

155

$24

9,88

5$

309,

885

$16

,730

Dir

ecto

r of

Sch

ools

102,

876

(290

)14

210

2,72

811

0,79

911

0,79

98,

071

Offi

ce o

f the

Pri

ncip

al55

1,72

50

055

1,72

558

0,60

658

0,60

628

,881

Fisc

al S

ervi

ces

194,

591

(2,2

03)

019

2,38

821

7,46

821

7,46

825

,080

Ope

ratio

n of

Pla

nt74

1,90

0(7

00)

12,2

2175

3,42

179

3,48

079

3,48

040

,059

Mai

nten

ance

of P

lant

176,

668

(7,2

18)

6,60

017

6,05

018

6,51

018

6,51

010

,460

Tran

spor

tatio

n74

2,72

4(4

3,04

1)65

,910

765,

593

805,

713

805,

713

40,1

20O

pera

tion

of N

on-I

nstr

uctio

nal S

ervi

ces

Food

Ser

vice

69,5

140

069

,514

70,7

0770

,707

1,19

3C

omm

unity

Ser

vice

s50

,825

00

50,8

2557

,556

57,5

566,

731

Ear

ly C

hild

hood

Edu

catio

n26

9,73

1(4

,100

)19

,480

285,

111

288,

975

288,

975

3,86

4C

apita

l Out

lay

Reg

ular

Cap

ital O

utla

y26

5,91

4(8

6,13

0)48

,342

228,

126

400,

000

400,

000

171,

874

Prin

cipa

l on

Deb

tE

duca

tion

149,

000

00

149,

000

149,

000

149,

000

0In

tere

st o

n D

ebt

Edu

catio

n17

3,33

50

017

3,33

528

6,40

028

6,40

011

3,06

5O

ther

Deb

t Ser

vice

Edu

catio

n31

8,84

50

031

8,84

532

3,72

532

3,72

54,

880

Tota

l Exp

endi

ture

s$

11,4

74,9

22$

(289

,551

)$39

7,66

4$

11,5

83,0

35$

12,4

77,7

79$

12,6

18,4

05$

1,03

5,37

0

Exc

ess

(Def

icie

ncy)

of R

even

ues

Ove

r E

xpen

ditu

res

$16

0,37

4$

289,

551

$(3

97,6

64)$

52,2

61$

(930

,384

)$(9

90,3

84)$

1,04

2,64

5

(Con

tinue

d)

Bud

gete

d A

mou

nts

103

Exh

ibit

I-6

Jack

son

Cou

nty,

Ten

ness

eeSc

hedu

le o

f Rev

enue

s, E

xpen

ditu

res,

and

Cha

nges

in F

und

Bal

ance

- A

ctua

l (B

udge

tary

Bas

is) a

nd B

udge

tD

iscr

etel

y Pr

esen

ted

Jack

son

Cou

nty

Scho

ol D

epar

tmen

tG

ener

al P

urpo

se S

choo

l Fun

d (C

ont.)

Act

ual

Var

ianc

eR

even

ues/

with

Fin

alA

ctua

lLe

ss:

Add

:E

xpen

ditu

res

Bud

get -

(GA

AP

Enc

umbr

ance

sE

ncum

bran

ces

(Bud

geta

ryPo

sitiv

eB

asis

)7/

1/20

076/

30/2

008

Bas

is)

Ori

gina

lFi

nal

(Neg

ativ

e)

Oth

er F

inan

cing

Sou

rces

(Use

s)In

sura

nce

Rec

over

y$

2,54

5$

0$

0$

2,54

5$

0$

0$

2,54

5Tr

ansf

ers

In88

,916

00

88,9

1610

5,15

210

5,15

2(1

6,23

6)Tr

ansf

ers

Out

00

00

(68,

409)

(8,4

09)

8,40

9To

tal O

ther

Fin

anci

ng S

ourc

es (U

ses)

$91

,461

$0

$0

$91

,461

$36

,743

$96

,743

$(5

,282

)

Net

Cha

nge

in F

und

Bal

ance

$25

1,83

5$

289,

551

$(3

97,6

64)$

143,

722

$(8

93,6

41)$

(893

,641

)$1,

037,

363

Fund

Bal

ance

, Jul

y 1,

200

74,

296,

214

(289

,551

)0

4,00

6,66

33,

201,

625

3,20

1,62

580

5,03

8

Fund

Bal

ance

, Jun

e 30

, 200

8$

4,54

8,04

9$

0$

(397

,664

)$4,

150,

385

$2,

307,

984

$2,

307,

984

$1,

842,

401

Bud

gete

d A

mou

nts

104

Exh

ibit

I-7

Jack

son

Cou

nty,

Ten

ness

eeSc

hedu

le o

f Rev

enue

s, E

xpen

ditu

res,

and

Cha

nges

in F

und

Bal

ance

- A

ctua

l (B

udge

tary

Bas

is) a

nd B

udge

tD

iscr

etel

y Pr

esen

ted

Jack

son

Cou

nty

Scho

ol D

epar

tmen

tSc

hool

Fed

eral

Pro

ject

s Fu

ndFo

r th

e Ye

ar E

nded

Jun

e 30

, 200

8

Act

ual

Var

ianc

eR

even

ues/

with

Fin

alA

ctua

lLe

ss:

Add

:E

xpen

ditu

res

Bud

get -

(GA

AP

Enc

umbr

ance

sE

ncum

bran

ces

(Bud

geta

ryPo

sitiv

eB

asis

)7/

1/20

076/

30/2

008

Bas

is)

Ori

gina

lFi

nal

(Neg

ativ

e)

Rev

enue

sO

ther

Loc

al R

even

ues

$36

0$

0$

0$

360

$0

$0

$36

0Fe

dera

l Gov

ernm

ent

1,39

2,87

80

01,

392,

878

1,94

4,81

41,

975,

333

(582

,455

)To

tal R

even

ues

$1,

393,

238

$0

$0

$1,

393,

238

$1,

944,

814

$1,

975,

333

$(5

82,0

95)

Exp

endi

ture

sIn

stru

ctio

nR

egul

ar In

stru

ctio

n Pr

ogra

m$

586,

881

$(5

30)$

1,94

6$

588,

297

$59

9,68

8$

633,

062

$44

,765

Spec

ial E

duca

tion

Prog

ram

328,

230

050

132

8,73

157

8,09

356

5,08

023

6,34

9V

ocat

iona

l Edu

catio

n Pr

ogra

m10

3,11

9(1

11)

25,1

9512

8,20

311

0,69

813

0,46

82,

265

Supp

ort S

ervi

ces

Hea

lth S

ervi

ces

135,

543

(2,2

37)

225

133,

531

134,

282

134,

320

789

Oth

er S

tude

nt S

uppo

rt11

,088

00

11,0

8810

,000

11,0

31(5

7)R

egul

ar In

stru

ctio

n Pr

ogra

m16

4,25

8(5

51)

840

164,

547

282,

275

277,

371

112,

824

Spec

ial E

duca

tion

Prog

ram

90,4

810

8090

,561

98,1

7311

1,22

320

,662

Voc

atio

nal E

duca

tion

Prog

ram

7,55

40

1,69

49,

248

28,0

009,

248

0To

tal E

xpen

ditu

res

$1,

427,

154

$(3

,429

)$30

,481

$1,

454,

206

$1,

841,

209

$1,

871,

803

$41

7,59

7

Exc

ess

(Def

icie

ncy)

of R

even

ues

Ove

r E

xpen

ditu

res

$(3

3,91

6)$

3,42

9$

(30,

481)

$(6

0,96

8)$

103,

605

$10

3,53

0$

(164

,498

)

Oth

er F

inan

cing

Sou

rces

(Use

s)Tr

ansf

ers

In$

0$

0$

0$

0$

2,00

0$

0$

0Tr

ansf

ers

Out

(28,

916)

00

(28,

916)

(105

,605

)(3

4,93

0)6,

014

Tota

l Oth

er F

inan

cing

Sou

rces

(Use

s)$

(28,

916)

$0

$0

$(2

8,91

6)$

(103

,605

)$(3

4,93

0)$

6,01

4

Net

Cha

nge

in F

und

Bal

ance

$(6

2,83

2)$

3,42

9$

(30,

481)

$(8

9,88

4)$

0$

68,6

00$

(158

,484

)Fu

nd B

alan

ce, J

uly

1, 2

007

120,

362

(3,4

29)

011

6,93

30

011

6,93

3

Fund

Bal

ance

, Jun

e 30

, 200

8$

57,5

30$

0$

(30,

481)

$27

,049

$0

$68

,600

$(4

1,55

1)

Bud

gete

d A

mou

nts

105

Exhibit I-8


in Fund Balance - Actual and BudgetDiscretely Presented Jackson County School DepartmentCentral Cafeteria FundFor the Year Ended June 30, 2008



RevenuesCharges for Current Services $ 255,693 $ 345,000 $ 345,000 $ (89,307)Other Local Revenues 1,313 2,000 2,000 (687)Federal Government 603,127 595,000 595,000 8,127

Total Revenues $ 860,133 $ 942,000 $ 942,000 $ (81,867)

ExpendituresOperation of Non-Instructional Services

Food Service $ 811,484 $ 935,957 $ 935,957 $ 124,473Total Expenditures $ 811,484 $ 935,957 $ 935,957 $ 124,473

Excess (Deficiency) of RevenuesOver Expenditures $ 48,649 $ 6,043 $ 6,043 $ 42,606

Other Financing Sources (Uses)Transfers Out $ (60,000) $ (60,000) $ (60,000) $ 0

Total Other Financing Sources (Uses) $ (60,000) $ (60,000) $ (60,000) $ 0

Net Change in Fund Balance $ (11,351) $ (53,957) $ (53,957) $ 42,606Fund Balance, July 1, 2007 308,176 53,957 53,957 254,219

Fund Balance, June 30, 2008 $ 296,825 $ 0 $ 0 $ 296,825

Budgeted Amounts

106

107

MISCELLANEOUS SCHEDULES


108

Exh

ibit

J-1

Jack

son

Cou

nty,

Ten

ness

eeSc

hedu

le o

f Cha

nges

in L

ong-

term

Not

es, O

ther

Loa

ns, C

apita

l Lea

ses,

and

Bon

dsPr

imar

y G

over

nmen

t and

Dis

cret

ely

Pres

ente

d Ja

ckso

n C

ount

y Sc

hool

Dep

artm

ent

For

the

Year

End

ed J

une

30, 2

008

Pai

d an

d/or

Ori

gina

lD

ate

Las

t Is

sued

Mat

ured

Am

ount

Inte

rest

ofM

atur

ity O

utst

andi

ng D

urin

g D

urin

gO

utst

andi

ngD

escr

iptio

n of

Inde

bted

ness

of Is

sue

Rat

eIs

sue

Dat

e7-

1-07

Per

iod

Per

iod

6-30

-08

PRIM

AR

Y G

OV

ER

NM

EN

T

NO

TES

PAYA

BLE

Paya

ble

thro

ugh

Gen

eral

Deb

t Ser

vice

Fun

dC

ourt

hous

e R

enov

atio

n$

340,

000

3.5

%4-

9-01

4-9-

10$

114,

854

$0

$36

,239

$78

,615

Gar

bage

Tru

ck a

nd D

umps

ters

170,

144

46-

18-0

46-

17-0

972

,110

035

,335

36,7

75Ja

il C

onst

ruct

ion

300,

000

5.4

3-1-

073-

1-10

300,

000

033

,333

266,

667

Bri

dge

Rep

air

85,6

885.

159-

6-07

9-6-

100

85,6

880

85,6

88To

tal P

ayab

le th

roug

h G

ener

al D

ebt S

ervi

ce F

und

$48

6,96

4$

85,6

88$

104,

907

$46

7,74

5

Paya

ble

thro

ugh

Hig

hway

/Pub

lic W

orks

Fun

dSt

reet

and

Roa

d Im

prov

emen

ts25

0,00

04.

245-

26-0

55-

1-10

$15

6,00

0$

0$

50,0

00$

106,

000

Tota

l Not

es P

ayab

le$

642,

964

$85

,688

$15

4,90

7$

573,

745

OTH

ER

LO

AN

S PA

YAB

LEPa

yabl

e th

roug

h G

ener

al D

ebt S

ervi

ce F

und

Jail

Con

stru

ctio

n3,

500,

000

Var

iabl

e8-

9-04

5-25

-29

$3,

293,

000

$0

$10

8,00

0$

3,18

5,00

0Ja

il C

onst

ruct

ion

1,20

0,00

0V

aria

ble

10-2

3-06

5-25

-31

1,20

0,00

00

27,0

001,

173,

000

Tota

l Oth

er L

oans

Pay

able

$4,

493,

000

$0

$13

5,00

0$

4,35

8,00

0

CA

PITA

L LE

ASE

PA

YAB

LEPa

yabl

e th

roug

h G

ener

al D

ebt S

ervi

ce F

und

Def

ibri

llato

r/M

onito

rs63

,023

9.9

6-25

-02

9-30

-07

$2,

101

$0

$2,

101

$0

(Con

tinue

d)

109

Exh

ibit

J-1

Jack

son

Cou

nty,

Ten

ness

eeSc

hedu

le o

f Cha

nges

in L

ong-

term

Not

es, O

ther

Loa

ns, C

apita

l Lea

ses,

and

Bon

dsPr

imar

y G

over

nmen

t and

Dis

cret

ely

Pres

ente

d Ja

ckso

n C

ount

y Sc

hool

Dep

artm

ent (

Con

t.)

Paid

and

/or

Ori

gina

l D

ate

Last

Is

sued

Mat

ured

Am

ount

In

tere

st

ofM

atur

ityO

utst

andi

ng D

urin

gD

urin

g O

utst

andi

ngD

escr

iptio

n of

Inde

bted

ness

of Is

sue

Rat

eIs

sue

Dat

e7-

1-07

Per

iod

Peri

od6-

30-0

8

PRIM

AR

Y G

OV

ER

NM

EN

T (C

ON

T.)

BO

ND

S PA

YAB

LEPa

yabl

e th

roug

h G

ener

al D

ebt S

ervi

ce F

und

Indu

stri

al P

ark

(F.H

.A.)

$11

0,00

05

%8-

29-1

975

1-1-

15$

42,3

00$

0$

4,40

0$

37,9

00So

lid W

aste

(F.H

.A.)

44,0

005.

683

3-3-

1978

1-1-

083,

000

03,

000

0Pu

blic

Wor

ks (F

.H.A

.)26

,000

54-

28-1

978

1-1-

1812

,500

01,

000

11,5

00R

ecre

atio

nal F

acili

ty (F

.H.A

.)11

5,00

03.

342

8-21

-198

11-

1-11

24,0

000

6,00

018

,000

Scho

ol1,

200,

000

4.2

to 5

3-12

-199

86-

1-18

920,

000

065

,000

855,

000

Scho

ol2,

425,

000

3.6

to 4

.95-

1-19

994-

1-19

1,68

0,00

00

110,

000

1,57

0,00

0

Tota

l Bon

ds P

ayab

le$

2,68

1,80

0$

0$

189,

400

$2,

492,

400

DIS

CR

ETE

LY P

RE

SEN

TED

JA

CK

SON

CO

UN

TY S

CH

OO

L D

EPA

RTM

EN

T

OTH

ER

LO

AN

S PA

YAB

LEPa

yabl

e th

roug

h G

ener

al P

urpo

se S

choo

l Fun

dSc

hool

Con

stru

ctio

n6,

300,

000

Var

iabl

e3-

5-01

5-25

-29

$5,

728,

000

$0

$14

9,00

0$

5,57

9,00

0

110

Exhibit J-2

Jackson County, TennesseeSchedule of Long-term Debt Requirements by YearPrimary Government and Discretely Presented Jackson County School Department

PRIMARY GOVERNMENT

Year TotalEnding Note Note NoteJune 30 Principal Interest Requirements

2009 $ 187,495 $ 29,716 $ 217,2112010 356,237 18,949 375,1862011 30,013 1,546 31,559

Total $ 573,745 $ 50,211 $ 623,956

TotalYear Other Other Other OtherEnding Loan Loan Loan LoanJune 30 Principal Interest Fees Requirements

2009 $ 139,000 $ 108,950 $ 14,242 $ 262,1922010 144,000 105,475 13,853 263,3282011 149,000 101,875 13,450 264,3252012 154,000 98,150 13,033 265,1832013 159,000 94,300 12,602 265,9022014 165,000 90,325 12,156 267,4812015 171,000 86,200 11,694 268,8942016 177,000 81,925 11,216 270,1412017 183,000 77,500 10,720 271,2202018 189,000 72,925 10,208 272,1332019 195,000 68,200 9,678 272,8782020 202,000 63,325 9,132 274,4572021 209,000 58,275 8,567 275,8422022 216,000 53,050 7,982 277,0322023 224,000 47,650 7,377 279,0272024 232,000 42,050 6,750 280,8002025 240,000 36,250 6,100 282,3502026 248,000 30,250 5,428 283,6782027 257,000 24,050 4,734 285,7842028 267,000 17,625 4,014 288,6392029 276,000 10,950 3,266 290,2162030 79,000 4,050 1,474 84,5242031 83,000 2,075 1,252 86,327

Total $ 4,358,000 $ 1,375,425 $ 198,928 $ 5,932,353

(Continued)

111

Exhibit J-2

Jackson County, TennesseeSchedule of Long-term Debt Requirements by YearPrimary Government and Discretely Presented Jackson County School Department (Cont.)

PRIMARY GOVERNMENT (CONT.)

Year TotalEnding Bond Bond BondJune 30 Principal Interest Requirements

2009 $ 196,700 $ 119,262 $ 315,9622010 201,900 109,588 311,4882011 212,100 100,594 312,6942012 216,400 90,937 307,3372013 221,700 80,838 302,5382014 241,900 70,385 312,2852015 247,200 58,815 306,0152016 256,500 46,875 303,3752017 261,500 34,410 295,9102018 266,500 21,575 288,0752019 170,000 8,415 178,415

Total $ 2,492,400 $ 741,694 $ 3,234,094

DISCRETELY PRESENTED JACKSON COUNTY SCHOOL DEPARTMENT

TotalYear Other Other Other OtherEnding Loan Loan Loan LoanJune 30 Principal Interest Fees Requirements

2009 $ 156,000 $ 71,969 $ 16,083 $ 244,0522010 164,000 69,956 15,662 249,6182011 172,000 67,841 15,219 255,0602012 181,000 65,622 14,755 261,3772013 190,000 63,287 14,266 267,5532014 199,000 60,836 13,753 273,5892015 209,000 58,269 13,216 280,4852016 220,000 55,573 12,652 288,2252017 231,000 52,735 12,058 295,7932018 242,000 49,755 11,434 303,1892019 254,000 46,634 10,781 311,4152020 267,000 43,357 10,095 320,4522021 281,000 39,913 9,374 330,2872022 295,000 36,288 8,615 339,9032023 309,000 32,482 7,819 349,3012024 325,000 28,496 6,984 360,4802025 341,000 24,304 6,107 371,4112026 358,000 19,905 5,186 383,0912027 376,000 15,287 4,219 395,5062028 395,000 10,436 3,204 408,6402029 414,000 5,341 2,138 421,479

Total $ 5,579,000 $ 918,286 $ 213,620 $ 6,710,906

112

Exhibit J-3Jackson County, TennesseeSchedule of InvestmentsJune 30, 2008

Date Dateof of Interest

Fund and Type Purchase Maturity Rates Amount

Constitutional Officers - Agency Fund Clerk and Master Ameriprise Mutual Funds various none varies $ 20,451

Total Investments $ 20,451

113

Exh

ibit

J-4

Jack

son

Cou

nty,

Ten

ness

eeSc

hedu

le o

f Tra

nsfe

rsD

iscr

etel

y Pr

esen

ted

Jack

son

Cou

nty

Scho

ol D

epar

tmen

tFo

r th

e Ye

ar E

nded

Jun

e 30

, 200

8

From

Fun

dTo

Fun

dPu

rpos

eA

mou

nt

Scho

ol F

eder

al P

roje

cts

Gen

eral

Pur

pose

Sch

ool

Indi

rect

cos

ts$

28,9

16C

entr

al C

afet

eria

Gen

eral

Pur

pose

Sch

ool

Supe

rvis

or's

sala

ry60

,000

Tota

l Tra

nsfe

rs D

iscr

etel

y Pr

esen

ted

Jack

son

Cou

nty

Scho

ol D

epar

tmen

t$

88,9

16

114

Exh

ibit

J-5

Jack

son

Cou

nty,

Ten

ness

eeSc

hedu

le o

f Sal

arie

s an

d O

ffici

al B

onds

of P

rinc

ipal

Offi

cial

sPr

imar

y G

over

nmen

t and

Dis

cret

ely

Pres

ente

d Ja

ckso

n C

ount

y Sc

hool

Dep

artm

ent

For

the

Year

End

ed J

une

30, 2

008

Sala

ryPa

idD

urin

gO

ffici

alA

utho

riza

tion

for

Sala

ryPe

riod

Bon

dSu

rety

Cou

nty

May

orSe

ctio

n 8-

24-1

02, T

CA

$57

,025

$25

,000

Wes

tern

Sur

ety

Com

pany

Roa

d Su

peri

nten

dent

Sect

ion

8-24

-102

, TC

A58

,092

(1)

100,

000

"D

irec

tor

of S

choo

lsSt

ate

Boa

rd o

f Edu

catio

n an

d 73

,501

(2)

50,0

00"

Jack

son

Cou

nty

Boa

rdof

Edu

catio

nTr

uste

eSe

ctio

n 8-

24-1

02, T

CA

49,3

72

37

5,40

0"

Ass

esso

r of

Pro

pert

ySe

ctio

n 8-

24-1

02, T

CA

49,3

72

10

,000

"C

ount

y C

lerk

Sect

ion

8-24

-102

, TC

A49

,372

25,0

00"

Cir

cuit

Cou

rt C

lerk

Sect

ion

8-24

-102

, TC

A49

,372

25,0

00"

Cle

rk a

nd M

aste

rSe

ctio

n 8-

24-1

02, T

CA

, and

49

,372

(3)

25,0

00"

Cha

ncer

y C

ourt

Jud

geR

egis

ter

Sect

ion

8-24

-102

, TC

A49

,372

15,0

00"

Sher

iffSe

ctio

n 8-

24-1

02, T

CA

54,3

10

25

,000

"

Em

ploy

ee B

lank

et B

onds

:Pu

blic

Em

ploy

ee D

isho

nest

y - C

ount

y D

epar

tmen

ts15

0,00

0Lo

cal G

over

nmen

t Ins

uran

ce P

ool

Publ

ic E

mpl

oyee

Dis

hone

sty

- Sch

ool D

epar

tmen

t15

0,00

0Te

nnes

see

Ris

k M

anag

emen

t Tru

st

(1)

Incl

udes

an

addi

tiona

l app

ropr

iatio

n of

$3,

782.

(2)

Incl

udes

car

eer

ladd

er s

uppl

emen

t of $

1,00

0.(3

) D

oes

not i

nclu

de s

peci

al c

omm

issi

oner

fees

of $

19,5

49.

115

Exh

ibit

J-6

Jack

son

Cou

nty,

Ten

ness

eeSc

hedu

le o

f Det

aile

d R

even

ues

-A

ll G

over

nmen

tal F

und

Type

sFo

r th

e Ye

ar E

nded

Jun

e 30

, 200

8

Con

stitu

- C

omm

unity

Sol

id t

iona

l H

ighw

ay /

Gen

eral

Dev

elop

men

t/ W

aste

/ D

rug

Offi

cers

- P

ublic

Deb

t I

ndus

tria

l G

ener

al S

anita

tion

Con

trol

Fee

s W

orks

Ser

vice

Par

kTo

tal

Loca

l Tax

esC

ount

y Pr

oper

ty T

axes

Cur

rent

Pro

pert

y Ta

x$

1,40

0,79

0$

292,

494

$0

$0

$13

3,84

8$

109,

685

$0

$1,

936,

817

Trus

tee's

Col

lect

ions

- Pr

ior

Year

61,7

0212

,884

00

5,80

74,

831

085

,224

Cir

cuit/

Cle

rk &

Mas

ter

Col

lect

ions

- Pr

ior

Year

s30

,628

6,13

30

02,

920

2,39

80

42,0

79In

tere

st a

nd P

enal

ty11

,330

2,36

60

099

788

80

15,5

81C

ount

y Lo

cal O

ptio

n Ta

xes

Loca

l Opt

ion

Sale

s Ta

x13

3,54

00

00

00

013

3,54

0Li

tigat

ion

Tax

- Gen

eral

26,0

300

00

00

026

,030

Litig

atio

n Ta

x - J

ail,

Wor

khou

se, o

r C

ourt

hous

e10

,284

00

00

00

10,2

84B

usin

ess

Tax

25,6

500

00

00

025

,650

Min

eral

Sev

eran

ce T

ax0

00

029

,309

00

29,3

09O

ther

Cou

nty

Loca

l Opt

ion

Taxe

s23

,637

00

00

00

23,6

37St

atut

ory

Loca

l Tax

esB

ank

Exc

ise

Tax

7,70

71,

609

00

736

603

010

,655

Who

lesa

le B

eer

Tax

68,8

480

00

00

068

,848

Inte

rsta

te T

elec

omm

unic

atio

ns T

ax1,

302

00

00

00

1,30

2To

tal L

ocal

Tax

es$

1,80

1,44

8$

315,

486

$0

$0

$17

3,61

7$

118,

405

$0

$2,

408,

956

Lice

nses

and

Per

mits

Perm

itsB

eer

Perm

its$

2,32

8$

0$

0$

0$

0$

0$

0$

2,32

8To

tal L

icen

ses

and

Perm

its$

2,32

8$

0$

0$

0$

0$

0$

0$

2,32

8

Fine

s, F

orfe

iture

s, a

nd P

enal

ties

Cir

cuit

Cou

rtFi

nes

$4,

018

$0

$0

$0

$0

$0

$0

$4,

018

Offi

cers

Cos

ts12

20

00

00

012

2D

ata

Ent

ry F

ee -

Cir

cuit

Cou

rt12

20

00

00

012

2G

ener

al S

essi

ons

Cou

rtFi

nes

23,7

410

00

00

023

,741

Offi

cers

Cos

ts1,

716

00

00

00

1,71

6

(Con

tinue

d)

Deb

t Se

rvic

e Fu

nd

Cap

ital

Proj

ects

Fu

ndSp

ecia

l Rev

enue

Fun

ds

116

Exh

ibit

J-6

Jack

son

Cou

nty,

Ten

ness

eeSc

hedu

le o

f Det

aile

d R

even

ues

-A

ll G

over

nmen

tal F

und

Type

s (C

ont.)

Con

stitu

- C

omm

unity

Sol

id t

iona

l H

ighw

ay /

Gen

eral

Dev

elop

men

t/ W

aste

/ D

rug

Offi

cers

- P

ublic

Deb

t I

ndus

tria

l G

ener

al S

anita

tion

Con

trol

Fee

s W

orks

Ser

vice

Par

kTo

tal

Fine

s, F

orfe

iture

s, a

nd P

enal

ties

(Con

t.)G

ener

al S

essi

ons

Cou

rt (C

ont.)

Gam

e an

d Fi

sh F

ines

$35

5$

0$

0$

0$

0$

0$

0$

355

Dru

g C

ontr

ol F

ines

00

23,0

880

00

023

,088

DU

I Tre

atm

ent F

ines

2,62

50

00

00

02,

625

Dat

a E

ntry

Fee

- G

ener

al S

essi

ons

Cou

rt2,

471

00

00

00

2,47

1C

ourt

room

Sec

urity

Fee

267

00

00

00

267

Cha

ncer

y C

ourt

Offi

cers

Cos

ts1,

177

00

00

00

1,17

7D

ata

Ent

ry F

ee -

Cha

ncer

y C

ourt

496

00

00

00

496

Judi

cial

Dis

tric

t Dru

g Pr

ogra

mC

ourt

room

Sec

urity

Fee

152

00

00

00

152

Oth

er F

ines

, For

feitu

res,

and

Pen

altie

sPr

ocee

ds fr

om C

onfis

cate

d Pr

oper

ty68

00

13,6

690

00

014

,349

Tota

l Fin

es, F

orfe

iture

s, a

nd P

enal

ties

$37

,942

$0

$36

,757

$0

$0

$0

$0

$74

,699

Cha

rges

for

Cur

rent

Ser

vice

sG

ener

al S

ervi

ce C

harg

esPa

tient

Cha

rges

$54

6,13

6$

0$

0$

0$

0$

0$

0$

546,

136

Fees Cop

y Fe

es3,

110

00

00

00

3,11

0Te

leph

one

Com

mis

sion

s5,

987

00

00

00

5,98

7C

onst

itutio

nal O

ffice

rs' F

ees

and

Com

mis

sion

s0

00

215

00

021

5D

ata

Proc

essi

ng F

ee -

Reg

iste

r5,

348

00

00

00

5,34

8D

ata

Proc

essi

ng F

ee -

Sher

iff19

,175

00

00

00

19,1

75Se

xual

Offe

nder

Reg

istr

atio

n Fe

es -

Sher

iff70

00

00

00

070

0E

duca

tion

Cha

rges

Tuiti

on -

Oth

er30

,476

00

00

00

30,4

76To

tal C

harg

es fo

r C

urre

nt S

ervi

ces

$61

0,93

2$

0$

0$

215

$0

$0

$0

$61

1,14

7

(Con

tinue

d)

Spec

ial R

even

ue F

unds

Deb

t Se

rvic

e Fu

nd

Cap

ital

Proj

ects

Fu

nd

117

Exh

ibit

J-6

Jack

son

Cou

nty,

Ten

ness

eeSc

hedu

le o

f Det

aile

d R

even

ues

-A

ll G

over

nmen

tal F

und

Type

s (C

ont.)

Con

stitu

- C

omm

unity

Sol

id t

iona

l H

ighw

ay /

Gen

eral

Dev

elop

men

t/ W

aste

/ D

rug

Offi

cers

- P

ublic

Deb

t I

ndus

tria

l G

ener

al S

anita

tion

Con

trol

Fee

s W

orks

Ser

vice

Par

kTo

tal

Oth

er L

ocal

Rev

enue

sR

ecur

ring

Item

sIn

vest

men

t Inc

ome

$29

0,37

4$

0$

0$

0$

0$

0$

0$

290,

374

Leas

e/R

enta

ls12

,620

00

00

7,77

211

,220

31,6

12Sa

le o

f Mat

eria

ls a

nd S

uppl

ies

390

1,58

10

03,

280

00

5,25

1C

omm

issa

ry S

ales

13,4

070

00

00

013

,407

Sale

of G

asol

ine

750

00

98,9

070

098

,982

Mis

cella

neou

s R

efun

ds18

,321

2,10

80

02,

685

00

23,1

14O

ther

Loc

al R

even

ues

Oth

er L

ocal

Rev

enue

s16

,560

13,4

900

00

00

30,0

50To

tal O

ther

Loc

al R

even

ues

$35

1,74

7$

17,1

79$

0$

0$

104,

872

$7,

772

$11

,220

$49

2,79

0

Fees

Rec

eive

d fr

om C

ount

y O

ffici

als

Fees

in-L

ieu-

of S

alar

yC

ount

y C

lerk

$66

,162

$0

$0

$0

$0

$0

$0

$66

,162

Cir

cuit

Cou

rt C

lerk

22,3

610

00

00

022

,361

Gen

eral

Ses

sion

s C

ourt

Cle

rk64

,861

00

00

00

64,8

61C

lerk

and

Mas

ter

31,5

100

00

00

031

,510

Reg

iste

r54

,100

00

00

00

54,1

00Sh

eriff

4,96

70

00

00

04,

967

Trus

tee

139,

879

00

00

00

139,

879

Tota

l Fee

s R

ecei

ved

from

Cou

nty

Offi

cial

s$

383,

840

$0

$0

$0

$0

$0

$0

$38

3,84

0

Stat

e of

Ten

ness

eeG

ener

al G

over

nmen

t Gra

nts

Juve

nile

Ser

vice

s Pr

ogra

m$

9,30

0$

0$

0$

0$

0$

0$

0$

9,30

0A

ging

Pro

gram

s12

,957

00

00

00

12,9

57So

lid W

aste

Gra

nts

06,

278

00

00

06,

278

Publ

ic S

afet

y G

rant

sLa

w E

nfor

cem

ent T

rain

ing

Prog

ram

s7,

200

00

00

00

7,20

0H

ealth

and

Wel

fare

Gra

nts

Hea

lth D

epar

tmen

t Pro

gram

s2,

635

00

00

00

2,63

5

(Con

tinue

d)

Deb

t Se

rvic

e Fu

nd

Cap

ital

Proj

ects

Fu

ndSp

ecia

l Rev

enue

Fun

ds

118

Exh

ibit

J-6

Jack

son

Cou

nty,

Ten

ness

eeSc

hedu

le o

f Det

aile

d R

even

ues

-A

ll G

over

nmen

tal F

und

Type

s (C

ont.)

Con

stitu

- C

omm

unity

Sol

id t

iona

l H

ighw

ay /

Gen

eral

Dev

elop

men

t/ W

aste

/ D

rug

Offi

cers

- P

ublic

Deb

t I

ndus

tria

l G

ener

al S

anita

tion

Con

trol

Fee

s W

orks

Ser

vice

Par

kTo

tal

Stat

e of

Ten

ness

ee (C

ont.)

Hea

lth a

nd W

elfa

re G

rant

s (C

ont.)

Oth

er H

ealth

and

Wel

fare

Gra

nts

$1,

128

$0

$0

$0

$0

$0

$0

$1,

128

Publ

ic W

orks

Gra

nts

Stat

e A

id P

rogr

am0

00

016

1,82

30

016

1,82

3Li

tter

Pro

gram

28,1

420

00

00

028

,142

Oth

er S

tate

Rev

enue

sFl

ood

Con

trol

2,49

50

00

00

02,

495

Inco

me

Tax

21,8

920

00

00

021

,892

Bee

r Ta

x19

,312

00

00

00

19,3

12A

lcoh

olic

Bev

erag

e Ta

x23

,586

00

00

00

23,5

86St

ate

Rev

enue

Sha

ring

- T.

V.A

.29

3,23

40

00

00

029

3,23

4C

ontr

acte

d Pr

ison

er B

oard

ing

203,

906

00

00

288,

856

049

2,76

2G

asol

ine

and

Mot

or F

uel T

ax0

00

01,

450,

640

00

1,45

0,64

0Pe

trol

eum

Spe

cial

Tax

00

00

8,82

10

08,

821

Rea

ppra

isal

Pro

gram

Rei

mbu

rsem

ent

5,43

70

00

00

05,

437

Reg

istr

ar's

Sala

ry S

uppl

emen

t16

,380

00

00

00

16,3

80O

ther

Sta

te R

even

ues

28,9

460

00

00

028

,946

Tota

l Sta

te o

f Ten

ness

ee$

676,

550

$6,

278

$0

$0

$1,

621,

284

$28

8,85

6$

0$

2,59

2,96

8

Fede

ral G

over

nmen

tFe

dera

l Thr

ough

Sta

teO

ther

Fed

eral

thro

ugh

Stat

e$

614,

235

$0

$0

$0

$0

$0

$0

$61

4,23

5D

irec

t Fed

eral

Rev

enue

Polic

e Se

rvic

e (L

ake

Are

a)12

,501

00

00

00

12,5

01M

edic

are

2,00

00

00

00

02,

000

Oth

er D

irec

t Fed

eral

Rev

enue

25,6

930

00

00

025

,693

Tota

l Fed

eral

Gov

ernm

ent

$65

4,42

9$

0$

0$

0$

0$

0$

0$

654,

429

Oth

er G

over

nmen

ts a

nd C

itize

ns G

roup

sO

ther

Gov

ernm

ents

Con

trib

utio

ns$

60,2

26$

0$

0$

0$

0$

298,

725

$0

$35

8,95

1To

tal O

ther

Gov

ernm

ents

and

Citi

zens

Gro

ups

$60

,226

$0

$0

$0

$0

$29

8,72

5$

0$

358,

951

Tota

l$

4,57

9,44

2$

338,

943

$36

,757

$21

5$

1,89

9,77

3$

713,

758

$11

,220

$7,

580,

108

Spec

ial R

even

ue F

unds

Deb

t Se

rvic

e Fu

nd

Cap

ital

Proj

ects

Fu

nd

119

Exhibit J-7

Jackson County, TennesseeSchedule of Detailed Revenues -

All Governmental Fund TypesDiscretely Presented Jackson County School DepartmentFor the Year Ended June 30, 2008

General School Purpose Federal Central School Projects Cafeteria Total

Local TaxesCounty Property Taxes

Current Property Tax $ 1,242,462 $ 0 $ 0 $ 1,242,462Trustee's Collections - Prior Year 54,020 0 0 54,020Circuit/Clerk & Master Collections - Prior Years 25,427 0 0 25,427Interest and Penalty 6,949 0 0 6,949

County Local Option TaxesLocal Option Sales Tax 541,303 0 0 541,303Wheel Tax 172,349 0 0 172,349Other County Local Option Taxes 465 0 0 465

Statutory Local TaxesBank Excise Tax 6,836 0 0 6,836Interstate Telecommunications Tax 1,415 0 0 1,415

Total Local Taxes $ 2,051,226 $ 0 $ 0 $ 2,051,226

Licenses and PermitsLicenses

Marriage Licenses $ 728 $ 0 $ 0 $ 728Total Licenses and Permits $ 728 $ 0 $ 0 $ 728

Charges for Current ServicesEducation Charges

Lunch Payments - Children $ 0 $ 0 $ 132,525 $ 132,525Lunch Payments - Adults 0 0 24,922 24,922Income from Breakfast 0 0 66,419 66,419A la carte Sales 0 0 31,827 31,827Receipts from Individual Schools 28,983 0 0 28,983

Total Charges for Current Services $ 28,983 $ 0 $ 255,693 $ 284,676

Other Local RevenuesRecurring Items

Investment Income $ 0 $ 0 $ 1,313 $ 1,313Lease/Rentals 3,000 0 0 3,000Refund of Telecommunication and Internet Fees (E-Rate) 18,077 0 0 18,077Miscellaneous Refunds 18,020 0 0 18,020Expenditure Credits 0 360 0 360

Nonrecurring ItemsSale of Equipment 3,175 0 0 3,175Sale of Property 100 0 0 100Damages Recovered from Individuals 419 0 0 419Contributions and Gifts 755 0 0 755

Other Local RevenuesOther Local Revenues 5,000 0 0 5,000

Total Other Local Revenues $ 48,546 $ 360 $ 1,313 $ 50,219

State of TennesseeGeneral Government Grants

On-Behalf Contributions for OPEB $ 40,556 $ 0 $ 0 $ 40,556State Education Funds

Basic Education Program 8,363,665 0 0 8,363,665

(Continued)

120

Exhibit J-7

Jackson County, TennesseeSchedule of Detailed Revenues -

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

General School Purpose Federal Central School Projects Cafeteria Total

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

Early Childhood Education $ 288,969 $ 0 $ 0 $ 288,969School Food Service 9,851 0 0 9,851Other State Education Funds 11,800 0 0 11,800Career Ladder Program 96,098 0 0 96,098Career Ladder - Extended Contract 24,331 0 0 24,331

Other State RevenuesOther State Grants 157,641 0 0 157,641Other State Revenues 17,420 0 0 17,420

Total State of Tennessee $ 9,010,331 $ 0 $ 0 $ 9,010,331

Federal GovernmentFederal Through State

USDA School Lunch Program $ 0 $ 0 $ 397,471 $ 397,471Breakfast 0 0 196,305 196,305USDA - Other 0 0 9,351 9,351Adult Education State Grant Program 82,855 0 0 82,855Vocational Education - Basic Grants to States 0 125,372 0 125,372Title I Grants to Local Education Agencies 0 458,765 0 458,765Innovative Education Program Strategies 0 2,735 0 2,735Special Education - Grants to States 12,627 319,233 0 331,860Special Education Preschool Grants 0 7,860 0 7,860Safe and Drug-Free Schools - State Grants 0 7,791 0 7,791Rural Education 0 18,939 0 18,939Eisenhower Professional Development State Grants 0 56,649 0 56,649Job Training Partnership Act 0 20,000 0 20,000Other Federal through State 400,000 233,970 0 633,970

Direct Federal RevenueOther Direct Federal Revenue 0 141,564 0 141,564

Total Federal Government $ 495,482 $ 1,392,878 $ 603,127 $ 2,491,487

Total $ 11,635,296 $ 1,393,238 $ 860,133 $ 13,888,667

121

Exhibit J-8Jackson County, TennesseeSchedule of Detailed Expenditures -

All Governmental Fund TypesFor the Year Ended June 30, 2008

General FundGeneral Government

County CommissionOther Per Diem and Fees $ 21,965 Social Security 1,677 Audit Services 8,307 Dues and Memberships 2,525 Travel 31 Other Contracted Services 3,206

Total County Commission $ 37,711

Board of EqualizationBoard and Committee Members Fees $ 750

Total Board of Equalization 750

Beer BoardLegal Notices, Recording, and Court Costs $ 68

Total Beer Board 68

Other Boards and CommitteesBoard and Committee Members Fees $ 200 Social Security 15

Total Other Boards and Committees 215

County Mayor/ExecutiveCounty Official/Administrative Officer $ 57,025 Accountants/Bookkeepers 33,771 Clerical Personnel 19,688 Social Security 8,452 Communication 3,066 Dues and Memberships 1,000 Maintenance and Repair Services - Office Equipment 75 Travel 2,000 Office Supplies 2,822 Data Processing Equipment 5,095

Total County Mayor/Executive 132,994

County AttorneyCounty Official/Administrative Officer $ 4,914 Social Security 376

Total County Attorney 5,290

(Continued)

122


All Governmental Fund Types (Cont.)

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

Election CommissionCounty Official/Administrative Officer $ 44,435 Election Commission 22,343 Election Workers 12,706 In-Service Training 225 Social Security 5,109 Communication 892 Legal Notices, Recording, and Court Costs 765 Printing, Stationery, and Forms 2,548 Travel 1,055 Other Contracted Services 8,500 Office Supplies 1,515 Data Processing Equipment 3,779

Total Election Commission $ 103,872

Register of DeedsCounty Official/Administrative Officer $ 49,372 Clerical Personnel 19,688 Social Security 5,283 Communication 1,507 Data Processing Services 4,715 Dues and Memberships 427 Maintenance and Repair Services - Office Equipment 597 Travel 254 Office Supplies 1,200 Data Processing Equipment 737

Total Register of Deeds 83,780

County BuildingsCustodial Personnel $ 18,206 Other Salaries and Wages 21,918 Social Security 3,069 Communication 416 Maintenance and Repair Services - Buildings 14,203 Pest Control 1,255 Custodial Supplies 1,996 Electricity 40,195 Natural Gas 10,347 Other Supplies and Materials 157

Total County Buildings 111,762

(Continued)

123



General Fund (Cont.)Finance

Property Assessor's OfficeCounty Official/Administrative Officer $ 49,372 Clerical Personnel 19,688 Social Security 5,538 Audit Services 1,415 Communication 840 Data Processing Services 7,877 Dues and Memberships 824 Travel 760 Office Supplies 1,189

Total Property Assessor's Office $ 87,503

Reappraisal ProgramClerical Personnel $ 1,155 In-Service Training 354 Social Security 18 Communication 181 Data Processing Services 1,742 Travel 339 Office Supplies 174

Total Reappraisal Program 3,963

County Trustee's OfficeCounty Official/Administrative Officer $ 49,372 Deputy(ies) 19,688 Social Security 5,283 Communication 433 Dues and Memberships 427 Travel 72 Office Supplies 731

Total County Trustee's Office 76,006

County Clerk's OfficeCounty Official/Administrative Officer $ 49,372 Deputy(ies) 20,256 Social Security 5,327 Communication 1,064 Data Processing Services 1,000 Maintenance and Repair Services - Office Equipment 150 Printing, Stationery, and Forms 2,098 Travel 743

(Continued)

124



General Fund (Cont.)Finance (Cont.)

County Clerk's Office (Cont.)Office Supplies $ 4,363 Data Processing Equipment 9,125

Total County Clerk's Office $ 93,498

Administration of JusticeCircuit Court

County Official/Administrative Officer $ 49,372 Deputy(ies) 63,813 Jury and Witness Fees 7,696 Other Per Diem and Fees 327 Social Security 8,659 Communication 3,307 Printing, Stationery, and Forms 3,178 Office Supplies 9,762 Data Processing Equipment 7,537

Total Circuit Court 153,651

General Sessions JudgeJudge(s) $ 79,758 Secretary(ies) 19,544 Social Security 7,597 Communication 505 Travel 368 Office Supplies 2,221

Total General Sessions Judge 109,993

Chancery CourtCounty Official/Administrative Officer $ 49,372 Deputy(ies) 19,442 Social Security 5,264 Communication 1,193 Data Processing Services 5,004 Dues and Memberships 492 Printing, Stationery, and Forms 437 Travel 290 Office Supplies 1,409 Other Equipment 120

Total Chancery Court 83,023

(Continued)

125



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

Juvenile CourtYouth Service Officer(s) $ 19,688 Social Security 1,506 Communication 1,372 Other Contracted Services 11,811 Office Supplies 449

Total Juvenile Court $ 34,826

Judicial CommissionersCounty Official/Administrative Officer $ 32,590 In-Service Training 500 Social Security 2,493 Communication 220 Travel 625 Office Supplies 99

Total Judicial Commissioners 36,527

Other Administration of JusticeCounty Official/Administrative Officer $ 1,800 Clerical Personnel 1,100 Social Security 222 Gasoline 37 Small Tools 65 Tires and Tubes 31

Total Other Administration of Justice 3,255

Public SafetySheriff's Department

County Official/Administrative Officer $ 54,310 Supervisor/Director 30,918 Deputy(ies) 231,833 Guards 26,466 Secretary(ies) 23,094 School Resource Officer 60,578 In-Service Training 6,187 Social Security 43,308 Communication 23,121 Contracts with Government Agencies 6,419 Dues and Memberships 1,200 Maintenance and Repair Services - Equipment 3,000 Maintenance and Repair Services - Vehicles 19,884

(Continued)

126



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

Sheriff's Department (Cont.)Printing, Stationery, and Forms $ 991 Travel 3,577 Equipment Parts - Light 20,118 Gasoline 68,160 Office Supplies 5,720 Tires and Tubes 2,783 Uniforms 5,237 Motor Vehicles 60,178

Total Sheriff's Department $ 697,082

Administration of the Sexual Offender RegistryConstitutional Officers' Operating Expenses $ 700

Total Administration of the Sexual Offender Registry 700

JailSupervisor/Director $ 30,631 Guards 425,978 Cafeteria Personnel 49,002 Social Security 28,430 Medical and Dental Services 111,556 Pest Control 1,250 Custodial Supplies 14,676 Electricity 38,424 Food Preparation Supplies 4,298 Food Supplies 61,759 Prisoners Clothing 4,020 Uniforms 4,376 Water and Sewer 22,886 Other Supplies and Materials 31,181

Total Jail 828,467

Fire Prevention and ControlContracts with Government Agencies $ 1,500 Matching Share 15,000

Total Fire Prevention and Control 16,500

Other Emergency ManagementCommunication $ 533 Contributions 49,000 Office Supplies 425

(Continued)

127



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

Other Emergency Management (Cont.)Other Equipment $ 285

Total Other Emergency Management $ 50,243

Other Public SafetyOther Supplies and Materials $ 4,960

Total Other Public Safety 4,960

Public Health and WelfareLocal Health Center

Custodial Personnel $ 3,600 Other Salaries and Wages 3,464 Social Security 265 Communication 2,363 Maintenance and Repair Services - Buildings 2,809 Travel 556 Custodial Supplies 124 Drugs and Medical Supplies 1,079 Electricity 8,220 Office Supplies 607 Water and Sewer 626

Total Local Health Center 23,713

Ambulance/Emergency Medical ServicesSupervisor/Director $ 39,594 Medical Personnel 360,782 Clerical Personnel 14,068 In-Service Training 5,998 Social Security 31,732 Communication 5,468 Laundry Service 3,742 Licenses 1,015 Maintenance and Repair Services - Equipment 7,298 Maintenance and Repair Services - Vehicles 23,759 Custodial Supplies 2,647 Diesel Fuel 31,927 Drugs and Medical Supplies 24,547 Electricity 9,820 Natural Gas 3,085 Office Supplies 2,025 Uniforms 3,053

(Continued)

128



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

Ambulance/Emergency Medical Services (Cont.)Data Processing Equipment $ 3,300 Other Equipment 1,728

Total Ambulance/Emergency Medical Services $ 575,588

Crippled Children ServicesContracts with Government Agencies $ 900

Total Crippled Children Services 900

Regional Mental Health CenterContributions $ 4,758

Total Regional Mental Health Center 4,758

Appropriation to StateContributions $ 15,191

Total Appropriation to State 15,191

Social, Cultural, and Recreational ServicesAdult Activities

Supervisor/Director $ 10,702 Social Security 819 Communication 369 Maintenance and Repair Services - Buildings 80 Office Supplies 55 Utilities 5,696

Total Adult Activities 17,721

Senior Citizens AssistanceSupervisor/Director $ 10,702 Social Security 819 Communication 532 Maintenance and Repair Services - Buildings 764 Office Supplies 54 Utilities 7,275

Total Senior Citizens Assistance 20,146

LibrariesAssistant(s) $ 8,575 Supervisor/Director 19,688 Data Processing Personnel 3,232 Part-time Personnel 2,970

(Continued)

129



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

Libraries (Cont.)Social Security $ 2,637 Communication 1,410 Maintenance Agreements 350 Travel 304 Custodial Supplies 136 Library Books/Media 6,360 Office Supplies 958

Total Libraries $ 46,620

Agriculture and Natural ResourcesAgriculture Extension Service

Salary Supplements $ 19,694 Secretary(ies) 5,282 Social Security 951 Extension Service Medicare 182 State Retirement 2,525 Communication 1,864 Contracts with Private Agencies 10,177 Travel 909 Data Processing Equipment 1,800

Total Agriculture Extension Service 43,384

Soil ConservationSalary Supplements $ 30,750 Social Security 2,352

Total Soil Conservation 33,102

Other OperationsIndustrial Development

Advertising $ 2,115 Other Supplies and Materials 715 Other Charges 1,534

Total Industrial Development 4,364

AirportMaintenance and Repair Services - Buildings $ 628,870 Electricity 380

Total Airport 629,250

(Continued)

130



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

Other ChargesLiability Insurance $ 147,574 Premiums on Corporate Surety Bonds 6,368 Trustee's Commission 51,508 Workers' Compensation Insurance 59,790

Total Other Charges $ 265,240

Contributions to Other AgenciesContributions $ 21,565

Total Contributions to Other Agencies 21,565

Employee BenefitsState Retirement $ 88,673 Unemployment Compensation 17,934

Total Employee Benefits 106,607

MiscellaneousContributions $ 59,327 Legal Services 16,085 Legal Notices, Recording, and Court Costs 1,166 Postal Charges 18,278 Other Contracted Services 5,500 Other Charges 37,320

Total Miscellaneous 137,676

HighwaysLitter and Trash Collection

Guards $ 13,739 Clerical Personnel 3,177 Social Security 1,006 Maintenance and Repair Services - Vehicles 1,196 Gasoline 1,453 Instructional Supplies and Materials 4,220 Motor Vehicles 4,400

Total Litter and Trash Collection 29,191

Total General Fund $ 4,731,655

(Continued)

131



Solid Waste/Sanitation FundPublic Health and Welfare

Waste PickupTruck Drivers $ 30,948 Social Security 2,368 Maintenance and Repair Services - Equipment 1,024 Maintenance and Repair Services - Vehicles 13,248 Contracts for Landfill Facilities 135,021 Diesel Fuel 23,209 Gasoline 2,159 Tires and Tubes 5,932 Other Supplies and Materials 1,022

Total Waste Pickup $ 214,931

Convenience CentersGuards $ 133,494 Social Security 9,261 State Retirement 1,659 Communication 2,999 Electricity 5,744 Water and Sewer 2,176 Site Development 12,273 Solid Waste Equipment 100

Total Convenience Centers 167,706

Other OperationsOther Charges

Trustee's Commission $ 6,431 Total Other Charges 6,431

Total Solid Waste/Sanitation Fund $ 389,068

Drug Control FundPublic Safety

Drug EnforcementDeputy(ies) $ 25,872 In-Service Training 90 Social Security 1,296 State Retirement 835 Confidential Drug Enforcement Payments 6,000 Maintenance and Repair Services - Vehicles 3,481 Animal Food and Supplies 849 Gasoline 9,882

(Continued)

132



Drug Control Fund (Cont.)Public Safety (Cont.)

Drug Enforcement (Cont.)Utilities $ 4,232 Trustee's Commission 375

Total Drug Enforcement $ 52,912

Public Health and WelfareAlcohol and Drug Programs

Instructional Supplies and Materials $ 2,580 Other Supplies and Materials 3,658

Total Alcohol and Drug Programs 6,238

Total Drug Control Fund $ 59,150

Constitutional Officers - Fees FundFinance

County Clerk's OfficeConstitutional Officers' Operating Expenses $ 148

Total County Clerk's Office $ 148

Administration of JusticeChancery Court

Constitutional Officers' Operating Expenses $ 67 Total Chancery Court 67

Total Constitutional Officers - Fees Fund 215

Highway/Public Works FundHighways

AdministrationCounty Official/Administrative Officer $ 58,092 Accountants/Bookkeepers 40,560 State Retirement 7,004 Dues and Memberships 2,242 Maintenance and Repair Services - Office Equipment 6,185 Postal Charges 457 Printing, Stationery, and Forms 182 Travel 680 Office Supplies 1,925 Other Charges 4,654

Total Administration $ 121,981

(Continued)

133



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

Highway and Bridge MaintenanceForemen $ 43,200 Equipment Operators 126,908 Truck Drivers 14,358 Laborers 158,531 State Retirement 11,734 Other Contracted Services 12,900 Asphalt - Hot Mix 229,456 Asphalt - Liquid 193,161 Concrete 1,853 Crushed Stone 270,211 General Construction Materials 3,134 Other Road Supplies 1,304 Pipe 20,214 Road Signs 9,793 Structural Steel 1,139 Wood Products 1,993 Other Supplies and Materials 419

Total Highway and Bridge Maintenance $ 1,100,308

Operation and Maintenance of EquipmentMechanic(s) $ 97,248 Nightwatchmen 35,966 State Retirement 8,183 Diesel Fuel 100,464 Equipment and Machinery Parts 43,437 Garage Supplies 5,742 Gasoline 111,980 Lubricants 4,255 Small Tools 539 Tires and Tubes 13,597 Uniforms 1,339 Other Supplies and Materials 2,282

Total Operation and Maintenance of Equipment 425,032

Other ChargesCommunication $ 3,630 Electricity 2,960 Natural Gas 5,850 Water and Sewer 234 Building and Contents Insurance 3,350

(Continued)

134



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

Other Charges (Cont.)Liability Insurance $ 5,181 Premiums on Corporate Surety Bonds 350 Trustee's Commission 17,734 Vehicle and Equipment Insurance 13,708


Employee BenefitsSocial Security $ 43,977 Unemployment Compensation 4,916 Workers' Compensation Insurance 40,690

Total Employee Benefits 89,583

Capital OutlayEngineering Services $ 643 Bridge Construction 34,628 Highway Equipment 11,700 Motor Vehicles 26,799

Total Capital Outlay 73,770

Principal on DebtHighways and Streets

Principal on Notes $ 50,000 Total Highways and Streets 50,000

Interest on DebtHighways and Streets

Interest on Notes $ 6,609 Total Highways and Streets 6,609

Total Highway/Public Works Fund $ 1,920,280

General Debt Service FundOther Operations

Other ChargesTrustee's Commission $ 2,358


Principal on DebtGeneral Government

Principal on Bonds $ 14,400

(Continued)

135



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

General Government (Cont.)Principal on Notes $ 104,907 Principal on Capital Leases 2,101 Principal on Other Loans 135,000

Total General Government $ 256,408

EducationPrincipal on Bonds $ 175,000

Total Education 175,000

Interest on DebtGeneral Government

Interest on Bonds $ 3,703 Interest on Notes 23,826 Interest on Capital Leases 983 Interest on Other Loans 127,452

Total General Government 155,964

EducationInterest on Bonds $ 123,725


Other Debt ServiceGeneral Government

Other Debt Service $ 22,131 Total General Government 22,131

EducationOther Debt Service $ 509

Total Education 509

Total General Debt Service Fund $ 736,095

Community Development/Industrial Park FundOther Operations

Industrial DevelopmentMaintenance and Repair Services - Buildings $ 6,198 Utilities 2,669

Total Industrial Development $ 8,867

Other ChargesTrustee's Commission $ 112

Total Other Charges 112

Total Community Development/Industrial Park Fund 8,979

Total Governmental Funds - Primary Government $ 7,845,442

136

Exhibit J-9

Jackson County, TennesseeSchedule of Detailed Expenditures -

All Governmental Fund TypesDiscretely Presented Jackson County School DepartmentFor the Year Ended June 30, 2008

General Purpose School FundInstruction

Regular Instruction ProgramTeachers $ 3,346,300 Career Ladder Program 54,775 Career Ladder Extended Contracts 15,295 Educational Assistants 77,121 Other Salaries and Wages 224,506 Certified Substitute Teachers 5,384 Non-certified Substitute Teachers 66,444 Social Security 221,541 State Retirement 231,770 Medical Insurance 274,116 Unemployment Compensation 5,227 Employer Medicare 51,901 Other Fringe Benefits 8,550 Maintenance and Repair Services - Equipment 473 Other Contracted Services 18,323 Instructional Supplies and Materials 66,288 Textbooks 159,211 Other Supplies and Materials 26,138 Regular Instruction Equipment 113,525

Total Regular Instruction Program $ 4,966,888

Alternative Instruction ProgramTeachers $ 31,380 Social Security 1,822 State Retirement 1,958 Medical Insurance 3,752 Unemployment Compensation 49 Employer Medicare 426 Other Fringe Benefits 100 Instructional Supplies and Materials 591

Total Alternative Instruction Program 40,078

Special Education ProgramTeachers $ 476,577 Career Ladder Program 1,000 Homebound Teachers 4,380 Educational Assistants 77,305 Certified Substitute Teachers 782 Non-certified Substitute Teachers 8,902

(Continued)

137

Exhibit J-9



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

Special Education Program (Cont.)Social Security $ 33,436 State Retirement 35,287 Medical Insurance 29,046 Unemployment Compensation 1,068 Employer Medicare 7,862 Other Fringe Benefits 1,350 Contracts with Other Public Agencies 660 Contracts with Other School Systems 11,835 Contracts with Private Agencies 4,025 Instructional Supplies and Materials 410 Other Supplies and Materials 5,709 Other Charges 200

Total Special Education Program $ 699,834

Vocational Education ProgramTeachers $ 252,722 Career Ladder Program 1,900 Certified Substitute Teachers 60 Non-certified Substitute Teachers 7,862 Social Security 15,576 State Retirement 15,894 Medical Insurance 17,301 Unemployment Compensation 377 Employer Medicare 3,642 Other Fringe Benefits 800 Instructional Supplies and Materials 5,933 Other Supplies and Materials 1,490 Other Charges 152,269

Total Vocational Education Program 475,826

Adult Education ProgramTeachers $ 43,223 Social Security 2,056 State Retirement 2,177 Medical Insurance 3,752 Unemployment Compensation 90 Employer Medicare 602 Other Fringe Benefits 100 Instructional Supplies and Materials 1,411

Total Adult Education Program 53,411

(Continued)

138

Exhibit J-9



General Purpose School Fund (Cont.)Support Services

AttendanceSupervisor/Director $ 48,354 Career Ladder Program 1,000 Clerical Personnel 23,212 Social Security 4,377 State Retirement 4,539 Medical Insurance 3,752 Unemployment Compensation 142 Employer Medicare 1,024 Other Fringe Benefits 100 Travel 1,233 Other Supplies and Materials 194 Attendance Equipment 460

Total Attendance $ 88,387

Health ServicesMedical Personnel $ 81,099 Other Salaries and Wages 26,194 Social Security 6,124 State Retirement 7,022 Unemployment Compensation 218 Employer Medicare 1,554 Other Fringe Benefits 200 Postal Charges 1,000 Travel 3,298 Drugs and Medical Supplies 1,104 Other Supplies and Materials 38,614 In Service/Staff Development 455 Other Charges 624

Total Health Services 167,506

Other Student SupportCareer Ladder Program $ 2,430 Guidance Personnel 148,200 Social Security 8,984 State Retirement 9,399 Medical Insurance 11,051 Unemployment Compensation 163 Employer Medicare 2,101 Other Fringe Benefits 300

(Continued)

139

Exhibit J-9



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

Other Student Support (Cont.)Evaluation and Testing $ 4,139 Other Supplies and Materials 377

Total Other Student Support $ 187,144

Regular Instruction ProgramSupervisor/Director $ 132,832 Career Ladder Program 9,500 Librarians 159,836 Instructional Computer Personnel 48,354 Clerical Personnel 5,600 Other Salaries and Wages 28,349 Certified Substitute Teachers 60 Non-certified Substitute Teachers 2,323 Social Security 23,006 State Retirement 23,663 Medical Insurance 17,222 Unemployment Compensation 429 Employer Medicare 5,382 Other Fringe Benefits 800 Communication 500 Postal Charges 500 Travel 18,798 Library Books/Media 2,760 Other Supplies and Materials 190 In Service/Staff Development 1,827 Other Equipment 5,248

Total Regular Instruction Program 487,179

Special Education ProgramSupervisor/Director $ 58,336 Career Ladder Program 5,000 Psychological Personnel 36,470 Social Security 5,965 State Retirement 6,228 Medical Insurance 7,736 Unemployment Compensation 87 Employer Medicare 1,395 Other Fringe Benefits 300 Travel 3,455

(Continued)

140

Exhibit J-9




Special Education Program (Cont.)Other Supplies and Materials $ 707 In Service/Staff Development 620


Vocational Education ProgramSupervisor/Director $ 6,813 Social Security 700 State Retirement 700 Employer Medicare 165 Travel 237


Adult ProgramsSupervisor/Director $ 6,990 Clerical Personnel 22,434 Social Security 1,803 State Retirement 887 Unemployment Compensation 106 Employer Medicare 422 Communication 1,519 Travel 154 In Service/Staff Development 581

Total Adult Programs 34,896

Other ProgramsOn-Behalf Payments to OPEB $ 40,556

Total Other Programs 40,556

Board of EducationOther Salaries and Wages $ 7,500 Social Security 467 Life Insurance 8,622 Employer Medicare 109 Audit Services 2,500 Contributions 60,000 Dues and Memberships 6,094 Travel 977 Liability Insurance 81,400 Premiums on Corporate Surety Bonds 175

(Continued)

141

Exhibit J-9




Board of Education (Cont.)Trustee's Commission $ 52,573 Workers' Compensation Insurance 69,843 In Service/Staff Development 395

Total Board of Education $ 290,655

Director of SchoolsCounty Official/Administrative Officer $ 72,501 Career Ladder Program 1,000 Social Security 4,453 State Retirement 4,586 Medical Insurance 3,752 Unemployment Compensation 49 Employer Medicare 1,041 Other Fringe Benefits 100 Communication 6,404 Postal Charges 2,198 Travel 3,919 Other Contracted Services 2,150 Office Supplies 513 In Service/Staff Development 210

Total Director of Schools 102,876

Office of the PrincipalPrincipals $ 217,437 Career Ladder Program 6,000 Assistant Principals 83,750 Secretary(ies) 66,170 Clerical Personnel 54,984 Social Security 24,837 State Retirement 26,441 Medical Insurance 25,499 Unemployment Compensation 730 Employer Medicare 5,892 Other Fringe Benefits 600 Communication 29,957 Dues and Memberships 2,100 Travel 4,098 Other Contracted Services 1,858 Office Supplies 1,247

(Continued)

142

Exhibit J-9




Office of the Principal (Cont.)In Service/Staff Development $ 125

Total Office of the Principal $ 551,725

Fiscal ServicesSupervisor/Director $ 32,280 Accountants/Bookkeepers 52,314 Secretary(ies) 23,945 Clerical Personnel 22,162 Other Salaries and Wages 20,954 Social Security 8,844 State Retirement 10,180 Unemployment Compensation 315 Employer Medicare 2,188 Travel 3,675 Other Contracted Services 10,706 Data Processing Supplies 2,419 Office Supplies 798 Administration Equipment 3,811

Total Fiscal Services 194,591

Operation of PlantCustodial Personnel $ 212,377 Social Security 13,117 State Retirement 12,190 Unemployment Compensation 787 Employer Medicare 3,068 Rentals 19,419 Other Contracted Services 1,427 Custodial Supplies 39,040 Electricity 350,062 Fuel Oil 43,883 Natural Gas 15,476 Water and Sewer 26,445 Plant Operation Equipment 4,609

Total Operation of Plant 741,900

Maintenance of PlantSupervisor/Director $ 35,943 Other Salaries and Wages 41,669

(Continued)

143

Exhibit J-9




Maintenance of Plant (Cont.)Social Security $ 4,742 State Retirement 5,510 Unemployment Compensation 144 Employer Medicare 1,109 Maintenance and Repair Services - Buildings 8,731 Maintenance and Repair Services - Equipment 4,609 Travel 662 Other Contracted Services 31,019 Other Supplies and Materials 39,110 Maintenance Equipment 3,420

Total Maintenance of Plant $ 176,668

TransportationMechanic(s) $ 23,433 Bus Drivers 169,096 Other Salaries and Wages 7,918 Social Security 12,485 State Retirement 7,051 Unemployment Compensation 748 Employer Medicare 2,920 Contracts with Vehicle Owners 291,165 Maintenance and Repair Services - Vehicles 2,543 Other Contracted Services 30,608 Gasoline 98,661 Lubricants 108 Tires and Tubes 14,486 Vehicle Parts 12,941 Other Supplies and Materials 5,028 Vehicle and Equipment Insurance 17,772 Other Charges 1,432 Transportation Equipment 44,329

Total Transportation 742,724

Operation of Non-Instructional ServicesFood Service

Supervisor/Director $ 53,850 Career Ladder Program 1,000 Social Security 2,977 State Retirement 3,423

(Continued)

144

Exhibit J-9



General Purpose School Fund (Cont.)Operation of Non-Instructional Services (Cont.)

Food Service (Cont.)Medical Insurance $ 7,419 Unemployment Compensation 49 Employer Medicare 696 Other Fringe Benefits 100

Total Food Service $ 69,514

Community ServicesSupervisor/Director $ 39,135 Other Salaries and Wages 439 Social Security 2,348 State Retirement 2,469 Medical Insurance 3,640 Unemployment Compensation 48 Employer Medicare 549 Other Fringe Benefits 100 Communication 456 Travel 1,123 Other Supplies and Materials 518

Total Community Services 50,825

Early Childhood EducationTeachers $ 102,484 Educational Assistants 36,870 Certified Substitute Teachers 60 Non-certified Substitute Teachers 2,252 Social Security 8,205 State Retirement 8,969 Medical Insurance 14,328 Unemployment Compensation 313 Employer Medicare 1,921 Other Fringe Benefits 300 Communication 1,273 Travel 3,851 Other Supplies and Materials 67,607 In Service/Staff Development 152 Other Equipment 21,146

Total Early Childhood Education 269,731

(Continued)

145

Exhibit J-9



General Purpose School Fund (Cont.)Capital Outlay

Regular Capital OutlayAdministration Equipment $ 2,604 Building Improvements 148,758 Other Equipment 86,130 Other Capital Outlay 28,422

Total Regular Capital Outlay $ 265,914

Principal on DebtEducation

Principal on Other Loans $ 149,000 Total Education 149,000

Interest on DebtEducation

Interest on Other Loans $ 173,335 Total Education 173,335

Other Debt ServiceEducation

Debt Service Contribution to Primary Government $ 298,725 Other Debt Service 20,120


Total General Purpose School Fund $ 11,474,922

School Federal Projects FundInstruction

Regular Instruction ProgramTeachers $ 278,614 Educational Assistants 104,588 Other Salaries and Wages 28,972 Certified Substitute Teachers 902 Non-certified Substitute Teachers 3,854 Social Security 24,588 State Retirement 25,173 Medical Insurance 15,627 Unemployment Compensation 952 Employer Medicare 5,869 Other Fringe Benefits 700 Instructional Supplies and Materials 88,936

(Continued)

146

Exhibit J-9



School Federal Projects Fund (Cont.)Instruction (Cont.)

Regular Instruction Program (Cont.)Regular Instruction Equipment $ 8,106

Total Regular Instruction Program $ 586,881

Special Education ProgramTeachers $ 38,742 Educational Assistants 176,757 Other Salaries and Wages 20,358 Social Security 14,493 State Retirement 13,335 Unemployment Compensation 946 Employer Medicare 3,389 Contracts with Other School Systems 6,360 Contracts with Private Agencies 45,496 Instructional Supplies and Materials 4,731 Other Supplies and Materials 2,074 Special Education Equipment 1,549

Total Special Education Program 328,230

Vocational Education ProgramTeachers $ 17,550 Other Salaries and Wages 6,426 Social Security 1,476 State Retirement 1,506 Unemployment Compensation 30 Employer Medicare 345 Other Contracted Services 5,501 Instructional Supplies and Materials 15,250 Other Supplies and Materials 2,227 Other Charges 1,080 Vocational Instruction Equipment 51,728


Support ServicesHealth Services

Supervisor/Director $ 37,593 Other Salaries and Wages 3,000 Non-certified Substitute Teachers 109 Social Security 2,418 State Retirement 2,533

(Continued)

147

Exhibit J-9



School Federal Projects Fund (Cont.)Support Services (Cont.)

Health Services (Cont.)Medical Insurance $ 3,752 Unemployment Compensation 39 Employer Medicare 566 Other Fringe Benefits 100 Travel 937 Other Supplies and Materials 30,795 Other Equipment 53,701

Total Health Services $ 135,543

Other Student SupportTravel $ 7,500 In Service/Staff Development 3,588

Total Other Student Support 11,088

Regular Instruction ProgramSupervisor/Director $ 93,685 Social Security 5,817 State Retirement 5,829 Medical Insurance 5,000 Unemployment Compensation 90 Employer Medicare 1,359 Postal Charges 200 Travel 18,611 Other Contracted Services 7,250 Library Books/Media 10,741 Other Supplies and Materials 6,497 In Service/Staff Development 7,157 Other Charges 2,022

Total Regular Instruction Program 164,258

Special Education ProgramSupervisor/Director $ 2,473 Psychological Personnel 12,160 Assessment Personnel 54,445 Social Security 4,171 State Retirement 4,310 Medical Insurance 3,519 Unemployment Compensation 60 Employer Medicare 975

(Continued)

148

Exhibit J-9



School Federal Projects Fund (Cont.)Support Services (Cont.)

Special Education Program (Cont.)Travel $ 4,800 Other Supplies and Materials 867 In Service/Staff Development 2,701


Vocational Education ProgramSupervisor/Director $ 4,500 Travel 3,054


Total School Federal Projects Fund $ 1,427,154

Central Cafeteria FundOperation of Non-Instructional Services

Food ServiceCafeteria Personnel $ 303,711 Social Security 18,526 State Retirement 19,509 Unemployment Compensation 1,240 Employer Medicare 4,333 Communication 1,219 Maintenance and Repair Services - Equipment 7,156 Travel 4,157 Other Contracted Services 5,050 Food Supplies 367,622 Other Supplies and Materials 47,880 In Service/Staff Development 1,335 Food Service Equipment 29,746

Total Food Service $ 811,484

Total Central Cafeteria Fund 811,484

Total Governmental Funds - Jackson County School Department $ 13,713,560

149

Exhibit J-10Jackson County, TennesseeSchedule of Detailed Receipts, Disbursements,

and Changes in Cash Balance - City Agency FundFor the Year Ended June 30, 2008

Cities -Sales Tax

Fund

Cash ReceiptsLocal Option Sales Tax $ 298,586

Total Cash Receipts $ 298,586

Cash DisbursementsRemittance of Revenues Collected $ 295,600Trustee's Commission 2,986

Total Cash Disbursements $ 298,586

Excess of Cash Receipts Over(Under) Cash Disbursements $ 0

Cash Balance, July 1, 2007 0

Cash Balance, June 30, 2008 $ 0

150

151

SINGLE AUDIT SECTION


152

153





REPORT ON INTERNAL CONTROL OVER

FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL

STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

March 30, 2009

Jackson County Mayor and Board of County Commissioners Jackson County, Tennessee To the County Mayor and Board of County Commissioners: We have audited the financial statements of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Jackson County, Tennessee, as of and for the year ended June 30, 2008, which collectively comprise Jackson County’s basic financial statements and have issued our report thereon dated March 30, 2009. Our report on the aggregate discretely presented component units financial statements was qualified due to not including the financial statements of the Industrial Development Board of the County of Jackson, Tennessee, a discretely presented component unit, which had not been audited as of the date of this report. Also, our report was modified to include a reference to other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the auditing standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Other auditors audited the financial statements of the Jackson County Emergency Communications District as described in our report on Jackson County’s financial statements. This report does not include the results of the other auditors’ testing of internal control over financial reporting or compliance and other matters that are reported on separately by those auditors.

154

Internal Control Over Financial Reporting In planning and performing our audit, we considered Jackson County’s internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Jackson County’s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of Jackson County’s internal control over financial reporting. Our consideration of internal control over financial reporting was for the limited purpose described in the preceding paragraph and would not necessarily identify all deficiencies in internal control over financial reporting that might be significant deficiencies or material weaknesses. However, as discussed below, we identified certain deficiencies in internal control over financial reporting that we consider to be significant deficiencies. A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the entity’s financial statements that is more than inconsequential will not be prevented or detected by the entity’s internal control. We consider the following deficiencies described in the accompanying Schedule of Findings and Questioned Costs to be significant deficiencies in internal control over financial reporting: 08.01, 08.03, 08.04, 08.05, 08.07, 08.08, 08.09, 08.10, and 08.13. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by Jackson County’s internal control. Our consideration of the internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in the internal control that might be significant deficiencies and, accordingly, would not necessarily disclose all significant deficiencies that are also considered to be material weaknesses. However, of the significant deficiencies described above, we consider item 08.01 to be a material weakness. Compliance and Other Matters As part of obtaining reasonable assurance about whether Jackson County's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed instances of noncompliance or other matters that are required to be reported under Government Auditing Standards and are described in the accompanying Schedule of Findings and Questioned Costs as items 08.02, 08.06, 08.11, and 08.14.

155

We consider item 08.12 described in the accompanying Schedule of Findings and Questioned Costs to be a noteworthy control deficiency over financial operations. We also noted certain matters that we reported to management of Jackson County in separate communications. Jackson County’s responses to the findings identified in our audit are described in the accompanying Schedule of Findings and Questioned Costs. We did not audit Jackson County’s responses and, accordingly, we express no opinion on them. This report is intended solely for the information and use of management, the county mayor, road superintendent, director of schools, County Commission, Board of Education, others within Jackson County, federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Very truly yours,



156

157





REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER

COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133

March 30, 2009 Jackson County Mayor and Board of County Commissioners Jackson County, Tennessee To the County Mayor and Board of County Commissioners: Compliance We have audited the compliance of Jackson County with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended June 30, 2008. Jackson County’s major federal programs are identified in the summary of auditor’s results section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal programs is the responsibility of Jackson County’s management. Our responsibility is to express an opinion on Jackson County’s compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Jackson County’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We

158

believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of Jackson County’s compliance with those requirements. In our opinion, Jackson County complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended June 30, 2008. Internal Control Over Compliance The management of Jackson County is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered Jackson County’s internal control over compliance with the requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of Jackson County’s internal control over compliance. A control deficiency in an entity’s internal control over compliance exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect noncompliance with a type of compliance requirement of a federal program on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity’s ability to administer a federal program such that there is more than a remote likelihood that noncompliance with a type of compliance requirement of a federal program that is more than inconsequential will not be prevented or detected by the entity’s internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that material noncompliance with a type of compliance requirement of a federal program will not be prevented or detected by the entity’s internal control. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. Schedule of Expenditures of Federal Awards We have audited the financial statements of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Jackson County as of and for the year ended June 30, 2008, and have issued our report thereon dated March 30, 2009. Our report on the aggregate discretely presented component units financial statements was qualified due to not including the financial statements of the Industrial Development Board of the County of Jackson, Tennessee, a discretely presented component unit, which had not been audited as of the date of this report. Our audit was performed for the purpose of forming our opinions on the financial

159

statements that collectively comprise Jackson County’s basic financial statements. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by OMB Circular A-133 and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. Jackson County’s responses to the findings identified in our audit are described in the accompanying Schedule of Findings and Questioned Costs. We did not audit Jackson County’s responses and, accordingly, we express no opinion on them. This report is intended solely for the information and use of management, the county mayor, road superintendent, director of schools, County Commission, Board of Education, others within Jackson County, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Yours very truly,



160

Jackson County, TennesseeSchedule of Expenditures of Federal Awards and State Grants (1)For the Year Ended June 30, 2008

Federal Pass-throughCFDA Entity Identifying

Federal/Pass-through Agency/State Grantor Program Title Number Number

U.S. Department of Agriculture:Passed-through State Department of Agriculture:

National School Lunch Program (Commodities - Noncash Assistance) 10.555 N/A $ 30,098 (3)Passed-through State Department of Education:

Child Nutrition Cluster:School Breakfast Program 10.553 N/A 196,305National School Lunch Program 10.555 N/A 406,822 (3)

Total U.S. Department of Agriculture $ 633,225

U.S. Department of JusticePassed-through Appalachia HIDTA:

Appalachia High Intensity Drug Traffic Area Program 16.XXX I5PAPP5012 $ 1,421

U.S. Department of Labor:Passed-through Upper Cumberland Human Resource Agency:

WIA Youth Activities 17.259 (2) $ 23,103

U.S. Department of Transportation:Passed-through State Department of Transportation:

Airport Improvement Program 20.106 Z-07-037556-00 $ 612,814

U.S. Department of Education:Passed-through State Department of Labor and Workforce

Development:Adult Education - State Grant Program 84.002 (2) $ 82,855

Passed-through State Department of Education:Title I Grant to Local Educational Agencies 84.010 N/A 448,391Special Education Cluster:

Special Education - Grants to States 84.027 N/A 426,928Special Education - Preschool Grants 84.173 N/A 10,330

Vocational Education - Basic Grants to States 84.048 N/A 98,658Safe and Drug Free Schools and Communities - State Grants 84.186 (2) 5,770Fund for the Improvement of Education 84.215 N/A 141,339Twenty-First Century Community Learning Centers 84.287 192-08-1-004 400,000State Grants for Innovative Programs 84.298 N/A 2,749Education Technology State Grants 84.318 (2) 53,288Reading First State Grants 84.357 (2) 232,553Rural Education 84.358 N/A 19,580Improving Teacher Quality State Grants 84.367 N/A 6,096

Total U.S. Department of Education $ 1,928,537

Total Expenditures of Federal Awards $ 3,199,100

(Continued)

Expenditures

161

Jackson County, TennesseeSchedule of Expenditures of Federal Awards and State Grants (1) (Cont.)

FederalCFDA Contract

Federal/Pass-through Agency/State Grantor Program Title Number Number

State GrantsAging Program - Upper Cumberland Development District N/A (2) $ 12,957Reappraisal Program - Comptroller of the Treasury N/A (2) 5,437Litter Program - State Department of Transportation N/A (2) 28,142Law Enforcement Training - State Department of Safety N/A (2) 7,200Local Health Services Grant - State Department of Health N/A (2) 3,763State Supplement Grant Program - State Commission

on Children and Youth N/A (2) 9,300Community Enhancement Grants - Tennessee Secretary of State N/A (2) 7,050Family Resource Center - State Department of Education N/A (2) 33,300Safe Schools - State Department of Education N/A (2) 11,800Lottery for Education - PreK - State Department of Education N/A (2) 288,969Coordinated School Health Improvement- State Department

of Education N/A (2) 108,552Tobacco Use Prevention Grant - State Department of Health N/A (2) 15,789Waste Tire Storage and Disposal - State Department of

Environment and Conservation N/A (2) 6,278

Total State Grants $ 538,537

CFDA = Catalog of Federal Domestic AssistanceN/A = Not Applicable

(1) Presented in conformity with generally accepted accounting principles using the modified accrual basis of accounting.(2) Information not available.(3) Total for CFDA No. 10.555 is $436,920.

Expenditures

162

163

Jackson County, Tennessee Schedule of Audit Findings Not Corrected June 30, 2008 Government Auditing Standards require auditors to report the status of uncorrected findings from prior audits. Presented below are findings from the Annual Financial Report of Jackson County, Tennessee, for the year ended June 30, 2007, which have not been corrected. OFFICE OF COUNTY MAYOR Finding Page Number Number Subject 07.03 15 Expenditures exceeded appropriations 07.07 19 Leave records were not on file to support payroll disbursements OFFICE OF CLERK AND MASTER

Finding Page Number Number Subject 07.11 20 The execution docket trial balance did not reconcile with general ledger accounts 07.12 21 The clerk and master did not post short-term account activity to the accounting records and did not reconcile short-term accounts with general ledger balances

OFFICE OF SHERIFF Finding Page Number Number Subject 07.14(A) 22 Commissary funds were not posted to the official cash journal 07.14(D) 22 The office did not deposit funds within three days of collection as required by state statute

164

OTHER FINDINGS Finding Page Number Number Subject 07.16 22 A central system of accounting, budgeting, and

purchasing had not been adopted 07.17 25 Duties were not segregated adequately in the

Offices of County Mayor, Road Superintendent, Director of Schools, Trustee, County Clerk, Circuit and General Sessions Courts Clerk, Clerk and Master, Register, and Sheriff

07.18 26 The Industrial Development Board of the County of Jackson, Tennessee, was not audited

165


SCHEDULE OF FINDINGS AND QUESTIONED COSTS


PART I, SUMMARY OF AUDITOR’S RESULTS

1. Our report on the aggregate discretely presented component units is qualified. Our

report on the governmental activities, each major fund, and the aggregate remaining fund information is unqualified.

2. The audit of the financial statements of Jackson County disclosed significant

deficiencies in internal control. One of these conditions was considered to be a material weakness.

3. The audit did not disclose any instances of noncompliance that are material to the

financial statements of Jackson County. 4. The audit disclosed no significant deficiencies in internal control over major

programs. 5. An unqualified opinion was issued on compliance for major programs. 6. The audit revealed no findings that are required to be reported under Section 510(a)

of OMB Circular A-133. 7. The Airport Improvement Program (CFDA No. 20.106), Title I Grants to Local

Education Agencies (CFDA No. 84.010), the Special Education Cluster: Special Education - Grants to States and the Special Education – Preschool Grants (CFDA Nos. 84.027 and 84.173), and Twenty-first Century Community Learning Centers (CFDA No. 84.287) were determined to be major programs.

8. A $300,000 threshold was used to distinguish between Type A and Type B federal

programs. 9. Jackson County did not qualify as a low-risk auditee.

166

PART II, FINDINGS RELATING TO THE FINANCIAL STATEMENTS

Findings and recommendations, as a result of our examination, are presented below. We reviewed these findings and recommendations with management to provide an opportunity for their response. The written responses of the director of schools are paraphrased in this report. Other officials offered oral responses to certain findings and recommendations; however, these oral responses have not been included in this report. OFFICE OF COUNTY MAYOR FINDING 08.01 THE GENERAL AND SOLID WASTE/SANITATION FUNDS AND

THE CAPITAL ASSETS RECORDS REQUIRED MATERIAL AUDIT ADJUSTMENTS FOR PROPER FINANCIAL STATEMENT PRESENTATION

(Internal Control – Material Weakness Under Government Auditing Standards)

At June 30, 2008, certain general ledger account balances in the General and Solid Waste/Sanitation funds as well as the capital assets records were not materially correct, and audit adjustments were required for the financial statements to be materially correct at year-end. Generally accepted accounting principles require Jackson County to have adequate controls over the maintenance of its accounting records. Material audit adjustments were required because the county’s financial reporting system did not prevent, detect, or correct potential misstatements in the accounting records. It is a strong indicator of a material weakness in internal controls if the county has ineffective controls over the maintenance of its accounting records, which are used to prepare the financial statements, including the related notes to the financial statements. We presented audit adjustments to management that they approved and posted to properly present the financial statements in this report. RECOMMENDATION Jackson County should have appropriate processes in place to ensure that its general ledgers and capital assets records are materially correct.

____________________________ FINDING 08.02 EXPENDITURES EXCEEDED APPROPRIATIONS (Noncompliance Under Government Auditing Standards)

Expenditures exceeded appropriations approved by the County Commission in the following funds’ major appropriation categories (the legal level of control):

167

AmountFund/Major Category Overspent

General: Jail $ 19,469 Other Charges 10,508 Miscellaneous 5,070 Drug Control: Alcohol and Drug Programs 2,238

Also, expenditures exceeded total appropriations approved by the County Commission in the Solid Waste/Sanitation Fund by $8,333. Section 5-9-401, Tennessee Code Annotated, states that “All funds from whatever source derived, including, but not limited to, taxes, county aid funds, federal funds, and fines, that are to be used in the operation and respective programs of the various departments, commissions, institutions, boards, offices and agencies of county governments shall be appropriated to such use by the county legislative bodies.” This deficiency exists because management failed to hold spending within limits authorized by the County Commission and failed to correct the finding noted in the prior-audit report. This deficiency resulted in unauthorized expenditures. RECOMMENDATION

County officials should ensure that expenditures are held within appropriations approved by the County Commission.

____________________________ FINDING 08.03 LEAVE RECORDS WERE NOT ON FILE TO SUPPORT

PAYROLL DISBURSEMENTS (Internal Control – Significant Deficiency Under Government Auditing Standards)

Certain personnel policies adopted by various county officials permit employees to accumulate earned but unused vacation, sick, and compensatory leave. However, the County Mayor’s Office did not have documentation on file to support leave for general government employees and could not provide us with accrued leave balances at June 30, 2008. Payroll disbursements for employees were made with the assumption that leave records are maintained by each department head. Sound business practice dictates that leave records of general government employees be centrally filed, and Governmental Accounting Standards Board Statement No. 34 requires that all leave should be accrued when incurred in the government-wide financial statements. However, the omission of these amounts was not considered to be material to the county’s financial statements. This deficiency exists because management failed to correct the finding noted in the prior-audit report. The failure to maintain adequate documentation of accumulated leave weakens

168

internal controls over the payroll process and increases the risks of improper payments and inaccurate financial statement presentation of accrued leave balances. RECOMMENDATION The County Mayor’s Office should maintain summary accrued leave information by account function for all county offices and departments of the general county government. These records should reflect the dollar value of the leave at the beginning of the year, amount earned, amount used, and the value of the leave at year end.

____________________________ OFFICE OF DIRECTOR OF SCHOOLS FINDING 08.04 THE SCHOOL FEDERAL PROJECTS FUND HAD A CASH

OVERDRAFT (Internal Control – Significant Deficiency Under Government Auditing Standards)

At June 30, 2008, the School Federal Projects Fund had a cash overdraft of $75,676. Sound business practice dictates that expenditures be held within available funds. This overdraft resulted from the issuance of warrants exceeding cash on deposit with the county trustee. This cash overdraft was liquidated in September 2008. RECOMMENDATION The School Department should not issue warrants exceeding cash on deposit with the county trustee. MANAGEMENT’S RESPONSE – DIRECTOR OF SCHOOLS We are monitoring this situation closely with the State Department of Education to see that funds are received more timely.

____________________________ OFFICE OF CIRCUIT AND GENERAL SESSIONS COURTS CLERK FINDING 08.05 THE OFFICE DID NOT REVIEW SOFTWARE AUDIT LOGS

(Internal Control – Significant Deficiency Under Government Auditing Standards)

The software application used by the office generated a daily log that displayed changes made by users. Since this log provided the only audit trail of these changes, it should be reviewed daily for inappropriate activity. Because they were not aware of its importance, management did not review this log during the audit period.

169

RECOMMENDATION Management should review this log on a regular basis, and any unusual transactions should be investigated.

____________________________ OFFICE OF CLERK AND MASTER FINDING 08.06 THE EXECUTION DOCKET TRIAL BALANCE DID NOT

RECONCILE WITH GENERAL LEDGER ACCOUNTS (Noncompliance Under Government Auditing Standards)

At June 30, 2008, the clerk and master prepared a trial balance of execution docket cause balances as required by Section 18-2-104, Tennessee Code Annotated (TCA). However, this trial balance did not reconcile with the general ledger accounts by $11,044. Therefore, we were unable to determine if the clerk had complied with provisions of the Unclaimed Property Act, Section 66-29-101, TCA. This statute provides that any funds held by the court for more than one year and unclaimed by the owner are considered abandoned. Section 66-29-113, TCA, further requires these funds to be reported and paid to the state Treasurer’s Office. This deficiency exists because management failed to correct the finding noted in the prior audit report. RECOMMENDATION The clerk and master should reconcile the trial balance of execution docket cause balances with the general ledger accounts. To comply with state statutes, the clerk and master should report and pay to the state Treasurer’s Office any unclaimed funds held for more than one year.

____________________________ FINDING 08.07 BANK STATEMENTS WERE NOT ACCURATELY

RECONCILED WITH THE GENERAL LEDGER (Internal Control – Significant Deficiency Under Government Auditing Standards)

Bank statements were not accurately reconciled with the general ledger, and the clerk and master had not identified variances between the bank statements and the general ledger balances. These unidentified variances totaled $62,493 at June 30, 2008. Sound business practice dictates that bank statements should be reconciled with the general ledger monthly, and any variances should be identified and corrected promptly. The failure to accurately reconcile bank statements with the general ledger is a strong indicator of weaknesses in internal controls over the maintenance of accounting records, which are used to prepare financial statements. We presented audit adjustments to management that they approved and posted to properly reconcile the bank statements with the general ledger.

170

RECOMMENDATION Bank statements should be reconciled with the general ledger monthly, and any errors discovered should be corrected promptly.

____________________________ FINDING 08.08 THE CLERK AND MASTER DID NOT POST SHORT-TERM

ACCOUNT ACTIVITY TO THE ACCOUNTING RECORDS (Internal Control – Significant Deficiency Under Government Auditing Standards)

During the year examined, the clerk and master did not properly post short-term investment account activity to the general ledger and did not attempt to reconcile the bank statement balances of these short-term investment accounts with general ledger totals. As a result of not properly posting the activity of these accounts, the general ledger short-term investment account reflected on the accounting records was understated by $217,224 at June 30, 2008. Sound business practices dictate that accounting records accurately reflect account and bank statement activity. This deficiency has been reported in previous audit reports and has not been corrected by management. We confirmed the balances of the short-term investment accounts held by the clerk and master and presented adjustments to management for approval and posting. Therefore, the short-term investment accounts have been properly presented in the financial statements of this report. RECOMMENDATION Short-term investment account activity should be properly posted to the accounting records. Also, bank statements for these short-term investment accounts should be reconciled with the general ledger monthly, and any errors discovered should be corrected promptly.

____________________________ FINDING 08.09 THE OFFICE DID NOT REVIEW SOFTWARE AUDIT LOGS

(Internal Control – Significant Deficiency Under Government Auditing Standards)

The software application used by the office generated a daily log that displayed changes made by users. Since this log provided the only audit trail of these changes, it should be reviewed daily for inappropriate activity. Because they were not aware of its importance, management did not review this log during the audit period. RECOMMENDATION Management should review this log on a regular basis. Any unusual transactions should be investigated.

____________________________

171

OFFICE OF SHERIFF FINDING 08.10 THE OFFICE HAD DEFICIENCIES IN MAINTAINING THE

RECORDS OF THE COMMISSARY (Internal Control – Significant Deficiency Under Government Auditing Standards)

The following deficiencies were noted in the maintenance of the commissary records. These deficiencies exist because management failed to correct this finding noted in the prior audit report.

A. Official records of the commissary, except for month-end balance sheets and bank statements, were not made available for audit due to a change in the official and the bookkeepers. The current staff could not locate all of the accounting records.

B. The bookkeeper attempted to reconcile bank statements with the general

ledger monthly; however, these reconciliations contained errors that were not identified and corrected.

C. Commissary transactions were not included in the official cash journal. The

official cash journal is the office’s control record and should reflect all financial activity.

D. The office did not provide auditors with a trial balance of inmates’ accounts.

Therefore, we were unable to determine if the records accurately reflected the commissary operations or if all inmates received payment for the balances remaining in their accounts upon release.

RECOMMENDATION Official records of the commissary should be available for audit inspection. Bank statements should be reconciled with the general ledger monthly, and any errors discovered should be corrected promptly. Commissary transactions should be posted on the official cash journal. The office should generate a trial balance of inmate accounts monthly and reconcile the trial balance with the commissary’s general ledger.

____________________________ FINDING 08.11 COLLECTIONS WERE NOT DEPOSITED WITHIN THREE DAYS

(Noncompliance Under Government Auditing Standards) The office did not deposit some funds to the bank account within three days of collection. Section 5-8-207, Tennessee Code Annotated, requires all public funds to be deposited within three days of collection. During the period under examination, we noted that all funds collected in April 2008 were not deposited to the office bank account until May 12, 2008. This deficiency exists because management failed to correct the finding noted in the prior audit report. The delay in depositing funds weakens internal controls over the collections and increases the risk of fraud and misappropriation.

172

RECOMMENDATION The office should deposit funds within three days of collection as required by state statute.

____________________________ OTHER FINDINGS AND RECOMMENDATIONS FINDING 08.12 A CENTRAL SYSTEM OF ACCOUNTING, BUDGETING, AND

PURCHASING HAD NOT BEEN ADOPTED (Internal Control – Control Deficiency Under Government Auditing Standards)

County officials had not adopted a central system of accounting, budgeting, and purchasing. Sound business practices dictate that establishing a central system would significantly improve internal controls over the accounting, budgeting, and purchasing processes. The absence of a central system of accounting, budgeting, and purchasing has been a management decision by the County Commission resulting in decentralization and some duplication of effort. RECOMMENDATION County officials should consider adopting the County Financial Management System of 1981 or a private act that would provide for a central system of accounting, budgeting, and purchasing covering all county departments.

____________________________ FINDING 08.13 DUTIES WERE NOT SEGREGATED ADEQUATELY IN THE

OFFICES OF COUNTY MAYOR, ROAD SUPERINTENDENT, DIRECTOR OF SCHOOLS, TRUSTEE, COUNTY CLERK, CIRCUIT AND GENERAL SESSIONS COURTS CLERK, CLERK AND MASTER, REGISTER, AND SHERIFF (Internal Control – Significant Deficiency Under Government Auditing Standards)

Duties were not segregated adequately among the officials and employees in the Offices of County Mayor, Road Superintendent, Director of Schools, Trustee, County Clerk, Circuit and General Sessions Courts Clerk, Clerk and Master, Register, and Sheriff. Officials and employees responsible for maintaining accounting records were also involved in receipting, depositing, and/or disbursing funds. Accounting standards provide that internal controls be designed to give reasonable assurance of the reliability of financial reporting and of the effectiveness and efficiency of operations. This lack of segregation of duties is the result of management’s decisions based on the availability of financial resources and is a significant deficiency in internal controls that increases the risk of unauthorized transactions. RECOMMENDATION Officials should segregate duties to the extent possible using available resources.

173

MANAGEMENT’S RESPONSE – DIRECTOR OF SCHOOLS We are aware of the issue and continue to segregate duties to the best of our ability with the limited resources available.

____________________________ FINDING 08.14 THE INDUSTRIAL DEVELOPMENT BOARD OF THE COUNTY

OF JACKSON, TENNESSEE, WAS NOT AUDITED (Noncompliance Under Government Auditing Standards)

An annual audit was not performed on the Industrial Development Board of the County of Jackson, Tennessee, a component unit of Jackson County. Section 9-3-211, Tennessee Code Annotated, requires an annual audit of each entity charged with the care and control of public funds. This deficiency exists because management failed to correct the finding noted in audit reports since 2006. RECOMMENDATION An annual audit of the Industrial Development Board of the County of Jackson, Tennessee, should be performed as required by state statute.

174

PART III, FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS

There were no findings and questioned costs for federal awards.

175

JACKSON COUNTY, TENNESSEE AUDITEE REPORTING RESPONSIBILITIES

For the Year Ended June 30, 2008 There were no audit findings relative to federal awards presented in the prior- or current-years’ Schedules of Findings and Questioned Costs.

annual financial report jackson county, tennessee

Documents