A F R S C, T: Nnual Inancial Eport Equatchie Ounty Ennessee

ANNUAL FINANCIAL REPORT
SEQUATCHIE COUNTY, TENNESSEE

FOR THE YEAR ENDED JUNE 30, 2016
DIVISION OF LOCAL GOVERNMENT AUDIT

ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2016
COMPTROLLER OF THE TREASURY

JUSTIN P. WILSON

JAMES R. ARNETTE
Director
AMY HEWITT, CPA, CFE

STEVE REEDER, CPA, CGFM, CFE BRANDON MARKS
Audit Manager DEVAN MCDOWELL, CFE
TYLER MUSIC
MELODIE C. HODGES, CFE JENI PALADENI, CISA
Auditor 4 State Auditors
This financial report is available at www.comptroller.tn.gov
2
TABLE OF CONTENTS
Exhibit Page(s)
Summary of Audit Findings 6-7
INTRODUCTORY SECTION 8
Sequatchie County Officials 9
FINANCIAL SECTION 10
Independent Auditor's Report 11-14

BASIC FINANCIAL STATEMENTS: 15
Government-wide Financial Statements:
Statement of Net Position A 16-17
Statement of Activities B 18-19
Fund Financial Statements:
Governmental Funds:
Balance Sheet C-1 20-21
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Position C-2 22
Statement of Revenues, Expenditures, and Changes in
Fund Balances C-3 23-24
Reconciliation of the Statement of Revenues, Expenditures,
and Changes in Fund Balances of Governmental Funds
to the Statement of Activities C-4 25
Statements of Revenues, Expenditures, and Changes in Fund
Balances Actual and Budget:
General Fund C-5 26-27
Highway/Public Works Fund C-6 28
Fiduciary Funds:
Statement of Fiduciary Assets and Liabilities D 29
Index and Notes to the Financial Statements 30-76
REQUIRED SUPPLEMENTARY INFORMATION: 77
Schedule of Changes in Net Pension Liability (Asset) and Related Ratios
Based on Participation in the Public Employee Pension Plan
of TCRS Primary Government E-1 78
Schedule of Contributions Based on Participation in the Public Employee
Pension Plan of TCRS Primary Government E-2 79
Schedule of Contributions Based on Participation in the Teacher
Retirement Plan of TCRS Discretely Presented Sequatchie
County School Department E-3 80
Legacy Pension Plan of TCRS Discretely Presented Sequatchie
3
Exhibit Page(s)
Schedule of Proportionate Share of the Net Pension Asset in the

Teacher Retirement Pension Plan of TCRS Discretely Presented
Sequatchie County School Department E-5 82
Schedule of Proportionate Share of the Net Pension Asset in the
Teacher Legacy Pension Plan of TCRS Discretely Presented
Sequatchie County School Department E-6 83
Schedule of Funding Progress Other Postemployment Benefits
Plans Primary Government and Discretely Presented Sequatchie
Notes to the Required Supplementary Information 85
COMBINING AND INDIVIDUAL FUND FINANCIAL
STATEMENTS AND SCHEDULES: 86
Nonmajor Governmental Funds: 87
Combining Balance Sheet F-1 88-89
Combining Statement of Revenues, Expenditures, and Changes
in Fund Balances F-2 90
Schedules of Revenues, Expenditures, and Changes in Fund
Solid Waste/Sanitation Fund F-3 91
Drug Control Fund F-4 92
Major Governmental Fund: 93
Schedule of Revenues, Expenditures, and Changes in Fund
Balance Actual and Budget:
General Debt Service Fund G 94
Fiduciary Funds: 95
Combining Statement of Fiduciary Assets and Liabilities H-1 96
Combining Statement of Changes in Assets and Liabilities
All Agency Funds H-2 97
Component Unit:
Discretely Presented Sequatchie County School Department: 98
Statement of Activities I-1 99
Balance Sheet Governmental Funds I-2 100-101
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Position I-3 102
Statement of Revenues, Expenditures, and Changes in Fund
Balances Governmental Funds I-4 103
Reconciliation of the Statement of Revenues, Expenditures,
and Changes in Fund Balances of Governmental Funds
to the Statement of Activities I-5 104
Combining Balance Sheet Nonmajor Governmental Funds I-6 105
Combining Statement of Revenues, Expenditures, and Changes
in Fund Balances Nonmajor Governmental Funds I-7 106
Schedules of Revenues, Expenditures, and Changes in Fund
General Purpose School Fund I-8 107-108
School Federal Projects Fund I-9 109
Central Cafeteria Fund I-10 110
4
Exhibit Page(s)
Miscellaneous Schedules: 111

Schedule of Changes in Long-term Notes and Other Loans J-1 112
Schedule of Long-term Debt Requirements by Year J-2 113
Schedule of Transfers Discretely Presented Sequatchie County
School Department J-3 114
Schedule of Salaries and Official Bonds of Principal Officials
Primary Government and Discretely Presented Sequatchie
County School Department J-4 115
Schedule of Detailed Revenues All Governmental Fund Types J-5 116-127
Schedule of Detailed Revenues All Governmental Fund Types
Discretely Presented Sequatchie County School Department J-6 128-130
Schedule of Detailed Expenditures All Governmental Fund Types J-7 131-145
Schedule of Detailed Expenditures All Governmental Fund Types
Discretely Presented Sequatchie County School Department J-8 146-156
Schedule of Detailed Receipts, Disbursements, and Changes in
Cash Balance City Agency Fund J-9 157
SINGLE AUDIT SECTION 158
Auditor's Report on Internal Control Over Financial Reporting and on

Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance With Government
Auditing Standards 159-160
Auditor's Report on Compliance for Each Major Federal Program;
Report on Internal Control Over Compliance; and Report on the
Schedule of Expenditures of Federal Awards Required by
Uniform Guidance 161-163
Schedule of Expenditures of Federal Awards and State Grants 164-165
Summary Schedule of Prior-year Findings 166
Schedule of Findings and Questioned Costs 167-176
Management's Corrective Action Plan 177-181
Best Practice 182
5
Summary of Audit Findings
Annual Financial Report
Sequatchie County, Tennessee
For the Year Ended June 30, 2016
Scope
We have audited the financial statements of Sequatchie County as of and for the year
ended June 30, 2016.
Results
Our report on Sequatchie Countys financial statements is unmodified.
Our audit resulted in ten findings and recommendations, which we have reviewed with
Sequatchie County management. Detailed findings, recommendations, and managements
responses are included in the Single Audit section of this report.
Findings
The following are summaries of the audit findings:
OFFICE OF COUNTY EXECUTIVE
The office had deficiencies in the use of county credit cards.

The office had deficiencies related to travel reimbursements.
The office had deficiencies in purchasing procedures.
The office did not implement adequate controls to protect its information resources.
OFFICE OF HIGHWAY SUPERVISOR
Payroll liability accounts were not reconciled with subsidiary payroll records in the
Highway/Public Works Fund.
Retirement wages and withholdings were not reported and remitted to the Tennessee
Consolidated Retirement System.
Duties were not segregated adequately.
OFFICE OF COUNTY CLERK
The office did not review all software audit logs.
6
OFFICE OF SHERIFF
The office did not prepare an annual financial report.

The office had deficiencies in the maintenance of accounting records.
7
INTRODUCTORY SECTION
8
Sequatchie County Officials
June 30, 2016
Officials
Keith Cartwright, County Executive

Tommy Sims, Highway Supervisor
Michael Swafford, Director of Schools
Larry Lockhart, Trustee
James Condra, Assessor of Property
Charlotte Cagle, County Clerk
Karen Millsaps, Circuit and General Sessions Courts Clerk
Thomas Goins, Clerk and Master
Kendra Boyd, Register of Deeds
Ronnie Hitchcock, Sheriff
Board of County Commissioners
Keith Cartwright, County Executive, Chairman

Jeff Barger Ray Hobbs
James Breland Clint Huth
David Cartwright Brenda Lambert
Wayne Clemons Ronnie Land
Terry Dishman Jeff Mackey
Connie Faircloth Ed Nunley
Steve Gains Paul Powell
Bill Hatfield Bobby Sherman
Richard Harvey Tom Vennero
Board of Education
Charles Rollins, Chairman

Gregory Dawson
Shelli Dodson
Steve Harmon
Sam Hudson
Gregory Johnson
W.O. Johnson
Jo Ann Shepherd
Christy Vandergriff
Audit Committee
Kurt Wissehr, Chairman

Denise Kell
Tom Vennero
9
FINANCIAL SECTION
10
STATE OF TENNESSEE
DEPARTMENT OF AUDIT
SUITE 1500
JAMES K. FRANKLIN STATE OFFICE BUILDING
NASHVILLE, TENNESSEE 37243-1402
PHONE (615) 401-7841
Independent Auditor's Report
Sequatchie County Executive and

To the County Executive and Board of County Commissioners:
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the
aggregate discretely presented component units, each major fund, and the aggregate
remaining fund information of Sequatchie County, Tennessee, as of and for the year ended
June 30, 2016, and the related notes to the financial statements, which collectively
comprise the countys basic financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial
statements in accordance with accounting principles generally accepted in the United
States of America; this includes the design, implementation, and maintenance of internal
control relevant to the preparation and fair presentation of financial statements that are
free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the
United States of America and the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States.
Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free from material misstatement.
11
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor's
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity's preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entity's internal control. Accordingly, we express no such opinion. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material
respects, the respective financial position of the governmental activities, the aggregate
discretely presented component units, each major fund, and the aggregate remaining fund
information of Sequatchie County, Tennessee, as of June 30, 2016, and the respective
changes in financial position and the respective budgetary comparison for the General and
Highway/Public Works funds for the year then ended in accordance with accounting
principles generally accepted in the United States of America.
Change in Accounting Principle
As described in Note V.B., Sequatchie County has adopted the provisions of Governmental
Accounting Standards Board (GASB) Statement No. 72, Fair Value Measurement and
Application; GASB Statement No. 76, The Hierarchy of Generally Accepted Accounting
Principles for State and Local Governments; GASB Statement No. 73, Accounting and
Financial Reporting for Pensions and Related Assets that are not within the Scope of GASB
Statement No. 68, and Amendments to Certain Provisions of GASB Statements No. 67 and
No. 68; and GASB Statement No. 79, Certain External Investment Pools and Pool
Participants. Our opinion is not modified with respect to these matters.
Other Matters
Required Supplementary Information
Management has omitted the managements discussion and analysis that accounting
principles generally accepted in the United States of America require to be presented to
supplement the basic financial statements. Such missing information, although not a part
of the basic financial statements, is required by the Governmental Accounting Standards
Board, who considers it to be an essential part of financial reporting for placing the basic
financial statements in an appropriate operational, economic, or historical context. Our
opinion on the basic financial statements is not affected by this missing information.
12
Accounting principles generally accepted in the United States of America require that the
schedule of changes in the countys net pension liability and related ratios, schedule of
county contributions, schedule of schools proportionate share of the net pension liability,
and schedule of funding progress - other postemployment benefits plans on pages 78-85 be
presented to supplement the basic financial statements. Such information, although not a
part of the basic financial statements, is required by the Governmental Accounting
Standards Board who considers it to be an essential part of financial reporting for placing
the basic financial statements in an appropriate operational, economic, or historical
context. We have applied certain limited procedures to the required supplementary
information in accordance with auditing standards generally accepted in the United States
of America, which consisted of inquiries of management about the methods of preparing the
information and comparing the information for consistency with management's responses
to our inquiries, the basic financial statements, and other knowledge we obtained during
our audit of the basic financial statements. We do not express an opinion or provide any
assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Supplementary and Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements
that collectively comprise Sequatchie Countys 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 Sequatchie 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 Sequatchie School Department (a discretely
presented component unit), and miscellaneous schedules are the responsibility of
management and were derived from and relate directly to the underlying accounting and
other records used to prepare the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial statements
and certain additional procedures, including comparing and reconciling such information
directly to the underlying accounting and other records used to prepare the basic financial
statements or to the basic financial statements themselves, and other additional procedures
in accordance with auditing standards generally accepted in the United States of America.
In our opinion, based on our audit and the additional procedures described above, 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 Sequatchie County School Department (a
discretely presented component unit), and miscellaneous schedules are fairly stated, in all
material respects, in relation to the basic financial statements as a whole.
The introductory section has not been subjected to the auditing procedures applied in the
audit of the basic financial statements, and accordingly, we do not express an opinion or
provide any assurance on it.
13
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
February 21, 2017, on our consideration of Sequatchie Countys internal control over
financial reporting and on our tests of its compliance with certain provisions of laws,
regulations, contracts, and grant agreements and other matters. The purpose of that report
is 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 internal control
over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering Sequatchie
Countys internal control over financial reporting and compliance.
Very truly yours,
Justin P. Wilson
Comptroller of the Treasury
Nashville, Tennessee
February 21, 2017
JPW/sb
14
BASIC FINANCIAL STATEMENTS
15
Exhibit A
Statement of Net Position
June 30, 2016
Component Unit
Sequatchie
Primary Government County
Governmental School
Activities Department
ASSETS
Cash $ 2,331 $ 2,298

Equity in Pooled Cash and Investments 3,043,031 12,701,277
Accounts Receivable 141,787 1,205
Allowance for Uncollectibles (120,327) 0
Due from Other Governments 492,309 470,410
Property Taxes Receivable 4,583,424 3,163,133
Allowance for Uncollectible Property Taxes (151,328) (162,329)
Net Pension Asset - Agent Plan 405,514 275,450
Net Pension Asset - Teacher Retirement Plan 0 13,545
Capital Assets:
Assets Not Depreciated:
Land 631,739 1,256,649
Construction in Progress 0 820,470
Assets Net of Accumulated Depreciation:
Buildings and Improvements 7,087,910 20,189,635
Infrastructure 2,224,407 963,519
Other Capital Assets 692,737 742,246
Total Assets $ 19,033,534 $ 40,437,508
DEFERRED OUTFLOWS OF RESOURCES
Pension Changes in Experience $ 0 $ 65,461

Pension Other Deferrals 0 12,867
Pension Changes in Contributions after Measurement Date 290,438 881,208
Total Deferred Outflows of Resources $ 290,438 $ 959,536
LIABILITIES
Accounts Payable $ 14,563 $ 6,000

Accrued Interest Payable 14,845 0
Payroll Deductions Payable 310 568,909
Noncurrent Liabilities:
Due Within One Year 488,268 0
Due in More Than One Year 4,486,019 424,458
Total Liabilities $ 5,004,005 $ 999,367
(Continued)
16
Exhibit A
Statement of Net Position (Cont.)
Component Unit
Sequatchie
Primary Government County
Governmental School
Activities Department
DEFERRED INFLOWS OF RESOURCES
Deferred Current Property Taxes $ 4,241,756 $ 2,873,229

Pension Changes in Experience 314,918 1,487,922
Pension Changes in Investment Earnings 111,206 601,063
Pension Changes in Other Deferrals 0 57,708
Total Deferred Inflows of Resources $ 4,667,880 $ 5,019,922
NET POSITION
Net Investment in Capital Assets $ 5,758,157 $ 23,972,519

Restricted for:
General Government 61,186 0
Finance 37,206 0
Administration of Justice 72,522 0
Public Safety 47,877 0
Public Health and Welfare 97,807 0
Highway/Public Works 853,836 0
Education 0 2,013,436
Debt Service 887,434 0
Capital Projects 7,040 0
Other Purposes 405,514 0
Unrestricted 1,423,508 9,391,800
Total Net Position $ 9,652,087 $ 35,377,755
The notes to the financial statements are an integral part of this statement.
17
Exhibit B

Statement of Activities
Net (Expense) Revenue and Changes in Net Position

Program Revenues Primary Component Unit
Operating Capital Government Sequatchie
Charges Grants Grants Total County
for and and Governmental School
Functions/Programs Expenses Services Contributions Contributions Activities Department
Primary Government:
Governmental Activities:
General Government $ 1,454,202 $ 131,789 $ 18,239 $ 0 $ (1,304,174) $ 0
Finance 618,287 427,307 0 0 (190,980) 0
Administration of Justice 556,776 239,568 18,180 0 (299,028) 0
Public Safety 2,879,399 980,185 31,999 0 (1,867,215) 0
Public Health and Welfare 857,019 10,905 152,850 0 (693,264) 0
Social, Cultural, and Recreational Services 222,393 3,490 9,887 0 (209,016) 0
Agriculture and Natural Resources 68,872 0 1,500,669 0 1,431,797 0
Highways/Public Works 2,029,382 0 0 663,780 (1,365,602) 0
Interest on Long-term Debt 28,184 0 0 0 (28,184) 0
Total Primary Government $ 8,714,514 $ 1,793,244 $ 1,731,824 $ 663,780 $ (4,525,666) $ 0
Component Unit:
Sequatchie County School Department $ 17,294,102 $ 93,529 $ 3,506,970 $ 0 $ 0 $ (13,693,603)
Total Component Unit $ 17,294,102 $ 93,529 $ 3,506,970 $ 0 $ 0 $ (13,693,603)
(Continued)
18
Exhibit B

Statement of Activities (Cont.)
Net (Expense) Revenue and Changes in Net Position

Program Revenues Primary Component Unit
Operating Capital Government Sequatchie
Charges Grants Grants Total County
for and and Governmental School
Functions/Programs Expenses Services Contributions Contributions Activities Department
General Revenues:
Taxes:
Property Taxes Levied for General Purposes $ 4,137,952 $ 3,003,364
Property Taxes Levied for Debt Service 387,678 0
Local Option Sales Taxes 456,615 1,317,047
Hotel/Motel Tax 15,344 0
Litigation Tax - General 28,514 0
Litigation Tax - Special Purpose 9,248 0
Litigation Tax - Jail, Workhouse, or Courthouse 7,803 0
Business Tax 98,274 0
Wholesale Beer Tax 61,671 0
Other Local Taxes 894 7,643
Grants and Contributions Not Restricted to Specific Programs 388,217 12,232,429
Unrestricted Investment Earnings 32,258 29,467
Miscellaneous 24,813 88,054
Total General Revenues $ 5,649,281 $ 16,678,004
Insurance Recovery $ 2,173 $ 710
Change in Net Position $ 1,125,788 $ 2,985,111

Net Position, July 1, 2015 8,526,299 32,392,644
Net Position, June 30, 2016 $ 9,652,087 $ 35,377,755
19
Exhibit C-1

Balance Sheet
Governmental Funds
June 30, 2016
Nonmajor
Major Funds Funds
Other
Highway / General Govern- Total
Public Debt mental Governmental
General Works Service Funds Funds
ASSETS
Cash $ 0 $ 0 $ 0 $ 2,331 $ 2,331

Equity in Pooled Cash and Investments 1,556,146 582,444 786,072 118,369 3,043,031
Accounts Receivable 136,794 2,341 0 2,652 141,787
Allowance for Uncollectibles (120,327) 0 0 0 (120,327)
Due from Other Governments 216,518 269,361 0 6,430 492,309
Due from Other Funds 2,493 0 100,000 0 102,493
Property Taxes Receivable 3,911,182 0 315,218 357,024 4,583,424
Allowance for Uncollectible Property Taxes (112,579) 0 (18,230) (20,519) (151,328)
Total Assets $ 5,590,227 $ 854,146 $ 1,183,060 $ 466,287 $ 8,093,720
LIABILITIES
Accounts Payable $ 13,230 $ 0 $ 0 $ 1,333 $ 14,563

Payroll Deductions Payable 0 310 0 0 310
Due to Other Funds 100,000 0 0 2,493 102,493
Total Liabilities $ 113,230 $ 310 $ 0 $ 3,826 $ 117,366
Deferred Current Property Taxes $ 3,640,858 $ 0 $ 280,781 $ 320,117 $ 4,241,756

Deferred Delinquent Property Taxes 157,745 0 14,687 15,388 187,820
Other Deferred/Unavailable Revenue 45,961 138,889 0 0 184,850
Total Deferred Inflows of Resources $ 3,844,564 $ 138,889 $ 295,468 $ 335,505 $ 4,614,426
(Continued)
20
Exhibit C-1

Balance Sheet
Governmental Funds (Cont.)
Nonmajor
Major Funds Funds
Other
FUND BALANCES
Restricted:
Restricted for General Government $ 61,186 $ 0 $ 0 $ 0 $ 61,186
Restricted for Finance 37,206 0 0 0 37,206
Restricted for Administration of Justice 72,522 0 0 0 72,522
Restricted for Public Safety 2,754 0 0 45,123 47,877
Restricted for Public Health and Welfare 7,626 0 0 74,793 82,419
Restricted for Highways/Public Works 0 714,947 0 0 714,947
Restricted for Capital Outlay 0 0 0 7,040 7,040
Restricted for Debt Service 0 0 887,592 0 887,592
Unassigned 1,451,139 0 0 0 1,451,139
Total Fund Balances $ 1,632,433 $ 714,947 $ 887,592 $ 126,956 $ 3,361,928
Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 5,590,227 $ 854,146 $ 1,183,060 $ 466,287 $ 8,093,720
21
Exhibit C-2

Reconciliation of the Balance Sheet of Governmental
Funds to the Statement of Net Position
June 30, 2016
Amounts reported for governmental activities in the statement

of net position (Exhibit A) are different because:
Total fund balances - balance sheet - governmental funds (Exhibit C-1) $ 3,361,928
(1) Capital assets used in governmental activities are not

financial resources and therefore are not reported in
the governmental funds.
Add: land $ 631,739
Add: buildings and improvements net of accumulated depreciation 7,087,910
Add: infrastructure net of accumulated depreciation 2,224,407
Add: other capital assets net of accumulated depreciation 692,737 10,636,793
(2) Long-term liabilities are not due and payable in the current
period and therefore are not reported in the governmental funds.
Less: notes payable $ (423,636)
Less: other loans payable (4,455,000)
Less: accrued interest on notes (3,707)
Less: accrued interest on other loans (11,138)
Less: other postemployment benefits liability (95,651) (4,989,132)
(3) Amounts reported as deferred outflows of resources and deferred

inflows of resources related to pensions will be amortized and
recognized as components of pensions expense in future years:
Add: deferred outflows of resources related to pensions $ 290,438
Less: deferred inflows of resources related to pensions (426,124) (135,686)
(4) Net pension assets of the agent plan are not current financial resources
and therefore are not reported in the governmental funds. 405,514
(5) Other long-term assets are not available to pay for

current-period expenditures and therefore are deferred
in the governmental funds. 372,670
Net position of governmental activities (Exhibit A) $ 9,652,087
22
Exhibit C-3

Statement of Revenues, Expenditures,
and Changes in Fund Balances
Governmental Funds
Nonmajor
Major Funds Funds
Other
Revenues
Local Taxes $ 4,409,725 $ 0 $ 398,316 $ 442,936 $ 5,250,977
Licenses and Permits 43,834 0 0 0 43,834
Fines, Forfeitures, and Penalties 61,768 0 0 30,198 91,966
Charges for Current Services 93,708 0 0 14,254 107,962
Other Local Revenues 47,851 10,999 7,304 19,778 85,932
Fees Received From County Officials 654,739 0 0 0 654,739
State of Tennessee 1,238,985 2,140,970 19,026 32,125 3,431,106
Federal Government 33,372 10,562 0 0 43,934
Other Governments and Citizens Groups 106,918 0 19,503 0 126,421
Total Revenues $ 6,690,900 $ 2,162,531 $ 444,149 $ 539,291 $ 9,836,871
Expenditures
Current:
General Government $ 1,133,952 $ 0 $ 0 $ 0 $ 1,133,952
Finance 644,296 0 0 7,119 651,415
Administration of Justice 567,652 0 0 0 567,652
Public Safety 2,750,822 0 0 26,284 2,777,106
Public Health and Welfare 296,950 0 0 465,851 762,801
Social, Cultural, and Recreational Services 185,813 0 0 0 185,813
Agriculture and Natural Resources 65,122 0 0 0 65,122
Other Operations 345,988 0 0 8,808 354,796
Highways 0 1,980,122 0 0 1,980,122
Debt Service:
Principal on Debt 0 23,335 246,902 0 270,237
Interest on Debt 0 620 16,955 0 17,575
Other Debt Service 0 0 39,865 0 39,865
(Continued)
23
Exhibit C-3

Governmental Funds (Cont.)
Nonmajor
Major Funds Funds
Other
Expenditures (Cont.)
Capital Projects $ 0 $ 0 $ 0 $ 22,031 $ 22,031
Total Expenditures $ 5,990,595 $ 2,004,077 $ 303,722 $ 530,093 $ 8,828,487
Excess (Deficiency) of Revenues

Over Expenditures $ 700,305 $ 158,454 $ 140,427 $ 9,198 $ 1,008,384
Other Financing Sources (Uses)

Notes Issued $ 235,000 $ 0 $ 0 $ 0 $ 235,000
Insurance Recovery 2,173 0 0 0 2,173
Total Other Financing Sources (Uses) $ 237,173 $ 0 $ 0 $ 0 $ 237,173
Net Change in Fund Balances $ 937,478 $ 158,454 $ 140,427 $ 9,198 $ 1,245,557

Fund Balance, July 1, 2015 694,955 556,493 747,165 117,758 2,116,371
Fund Balance, June 30, 2016 $ 1,632,433 $ 714,947 $ 887,592 $ 126,956 $ 3,361,928
24
Exhibit C-4

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

of activities (Exhibit B) are different because:
Net change in fund balances - total governmental funds (Exhibit C-3) $ 1,245,557
(1) Governmental funds report capital outlays as expenditures. However,

in the statement of activities, the cost of these assets is allocated
over their useful lives and reported as depreciation expense. The
difference between capital outlays and depreciation is itemized as
follows:
Add: capital assets purchased in the current period $ 305,481
Less: current-year depreciation expense (1,080,461) (774,980)
(2) The net effect of various miscellaneous transactions involving capital

assets (sales, trade-ins, and donations) is to increase net position.
Add: book value of capital assets disposed 365,566
(3) Revenues in the statement of activities that do not provide current

financial resources are not reported in the funds.
Add: deferred delinquent property taxes and other deferred June 30, 2016 $ 372,670
Less: deferred delinquent property taxes and other deferred June 30, 2015 (371,412) 1,258
(4) The issuance of long-term debt (e.g., bonds, notes, other loans, leases) provides
current financial resources to governmental funds, while the repayment
of the principal of long-term debt consumes the current financial
resources of governmental funds. Neither transaction, however, has
any effect on net position. Also, governmental funds report the effect
of premiums, discounts, and similar items when debt is
first issued, whereas these amounts are deferred and amortized in the
statement of activities. This amount is the net effect of these differences
in the treatment of long-term debt and related items:
Less: note proceeds $ (235,000)
Add: principal payments on notes 55,237
Add: principal payments on other loans 215,000 35,237
(5) Some expenses reported in the statement of activities do not require

the use of current financial resources and therefore are not reported
as expenditures in the governmental funds.
Change in accrued interest payable $ (10,609)
Change in other postemployment benefits liability 8,926
Change in net pension asset - agent plan 121,231
Change in deferred outflows related to pensions 12,423
Change in deferred inflows related to pensions 121,179 253,150
Change in net position of governmental activities (Exhibit B) $ 1,125,788
25
Exhibit C-5

Statement of Revenues, Expenditures, and Changes
in Fund Balance - Actual and Budget
General Fund
Variance
with Final
Budget -
Budgeted Amounts Positive
Actual Original Final (Negative)
Revenues
Local Taxes $ 4,409,725 $ 4,272,542 $ 4,272,542 $ 137,183
Licenses and Permits 43,834 36,000 36,000 7,834
Fines, Forfeitures, and Penalties 61,768 64,650 64,650 (2,882)
Charges for Current Services 93,708 95,750 95,750 (2,042)
Other Local Revenues 47,851 51,500 51,500 (3,649)
Fees Received From County Officials 654,739 615,000 615,000 39,739
State of Tennessee 1,238,985 1,073,000 1,064,126 174,859
Federal Government 33,372 80,000 91,949 (58,577)
Other Governments and Citizens Groups 106,918 109,888 109,888 (2,970)
Total Revenues $ 6,690,900 $ 6,398,330 $ 6,401,405 $ 289,495
Expenditures
General Government
County Commission $ 179,756 $ 186,800 $ 186,800 $ 7,044
Board of Equalization 3,661 7,375 7,375 3,714
Beer Board 600 1,000 1,000 400
County Mayor/Executive 256,894 262,418 262,419 5,525
County Attorney 7,800 7,800 7,800 0
Election Commission 147,719 155,594 155,925 8,206
Register of Deeds 143,713 145,398 146,351 2,638
County Buildings 390,734 389,680 392,200 1,466
Other General Administration 3,075 0 3,075 0
Finance
Property Assessor's Office 232,090 241,450 241,450 9,360
Reappraisal Program 580 6,000 6,000 5,420
County Trustee's Office 172,978 178,888 178,888 5,910
County Clerk's Office 238,648 234,630 245,448 6,800
Administration of Justice
Circuit Court 194,769 208,733 218,367 23,598
General Sessions Court 101,876 103,012 103,012 1,136
Drug Court 58,905 0 58,905 0
Chancery Court 109,141 116,713 118,332 9,191
Juvenile Court 77,755 89,609 89,609 11,854
Judicial Commissioners 25,206 25,572 25,572 366
Public Safety
Sheriff's Department 1,130,594 1,253,613 1,265,829 135,235
Jail 1,238,214 1,399,682 1,380,486 142,272
Fire Prevention and Control 79,000 79,000 79,000 0
Rescue Squad 10,000 10,000 10,000 0
Other Emergency Management 277,103 57,120 292,121 15,018
County Coroner/Medical Examiner 15,911 25,000 25,000 9,089
Public Health and Welfare
Local Health Center 37,467 39,232 39,232 1,765
Ambulance/Emergency Medical Services 125,667 133,000 133,000 7,333
Alcohol and Drug Programs 13,864 19,360 19,360 5,496
Crippled Children Services 1,026 1,026 1,026 0
Other Local Health Services 118,926 129,480 129,480 10,554
(Continued)
26
Exhibit C-5

General Fund (Cont.)
Variance
with Final
Budget -
Expenditures (Cont.)
Social, Cultural, and Recreational Services
Senior Citizens Assistance $ 6,750 $ 6,750 $ 6,750 $ 0
Libraries 126,795 129,836 129,836 3,041
Parks and Fair Boards 48,268 60,100 60,100 11,832
Other Social, Cultural, and Recreational 4,000 4,000 4,000 0
Agriculture and Natural Resources
Agricultural Extension Service 46,456 54,913 54,913 8,457
Soil Conservation 17,835 17,835 17,835 0
Flood Control 831 14,250 14,250 13,419
Other Operations
Tourism 25,637 25,750 25,750 113
Industrial Development 692 700 700 8
Other Economic and Community Development 144,572 220,900 220,900 76,328
Veterans' Services 13,956 15,396 15,396 1,440
Other Charges 161,131 142,582 161,131 0
Total Expenditures $ 5,990,595 $ 6,200,197 $ 6,534,623 $ 544,028

Over Expenditures $ 700,305 $ 198,133 $ (133,218) $ 833,523

Notes Issued $ 235,000 $ 0 $ 235,000 $ 0
Insurance Recovery 2,173 0 0 2,173
Total Other Financing Sources $ 237,173 $ 0 $ 235,000 $ 2,173
Net Change in Fund Balance $ 937,478 $ 198,133 $ 101,782 $ 835,696

Fund Balance, July 1, 2015 694,955 694,955 695,955 (1,000)
Fund Balance, June 30, 2016 $ 1,632,433 $ 893,088 $ 797,737 $ 834,696
27
Exhibit C-6

Highway/Public Works Fund
Variance
with Final
Budget -
Revenues
Other Local Revenues $ 10,999 $ 6,500 $ 6,500 $ 4,499
State of Tennessee 2,140,970 2,509,390 2,509,390 (368,420)
Federal Government 10,562 0 0 10,562
Other Governments and Citizens Groups 0 1,000 1,000 (1,000)
Total Revenues $ 2,162,531 $ 2,516,890 $ 2,516,890 $ (354,359)
Expenditures
Highways
Administration $ 173,061 $ 178,533 $ 179,433 $ 6,372
Highway and Bridge Maintenance 703,734 882,125 972,025 268,291
Operation and Maintenance of Equipment 222,258 304,643 310,643 88,385
Other Charges 45,724 53,500 53,625 7,901
Employee Benefits 202,717 237,225 237,225 34,508
Capital Outlay 632,628 913,150 816,225 183,597
Principal on Debt
Highways and Streets 23,335 23,334 23,335 0
Interest on Debt
Highways and Streets 620 745 745 125

Over Expenditures $ 158,454 $ (76,365) $ (76,366) $ 234,820
Net Change in Fund Balance $ 158,454 $ (76,365) $ (76,366) $ 234,820

Fund Balance, July 1, 2015 556,493 473,373 473,373 83,120
Fund Balance, June 30, 2016 $ 714,947 $ 397,008 $ 397,007 $ 317,940
28
Exhibit D
Statement of Fiduciary Assets and Liabilities
Fiduciary Funds
June 30, 2016
Agency
Funds
ASSETS
Cash $ 335,405
Due from Other Governments 149,571
Total Assets $ 484,976
LIABILITIES
Due to Other Taxing Units $ 149,571

Due to Litigants, Heirs, and Others 335,405
Total Liabilities $ 484,976
29
Index of Notes to the Financial Statements
Note Page(s)
I. Summary of Significant Accounting Policies

A. Reporting Entity 31
B. Government-wide and Fund Financial Statements 32
C. Measurement Focus, Basis of Accounting, and Financial
Statement Presentation 33
D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and
Net Position/Fund Balance
1. Deposits and Investments 35
2. Receivables and Payables 36
3. Capital Assets 36
4. Deferred Outflows/Inflows of Resources 37
5. Compensated Absences 38
6. Long-term Obligations 38
7. Net Position and Fund Balance 39
8. Minimum Fund Balance Policy 40
E. Pension Plans 41
II. Reconciliation of Government-wide and Fund Financial Statements
A. Explanation of Certain Differences Between the Governmental Fund
Balance Sheet and the Government-wide Statement of Net Position 42
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 42
III. Stewardship, Compliance, and Accountability
Budgetary Information 42
IV. Detailed Notes on All Funds
A. Deposits and Investments 43
B. Capital Assets 44
C. Interfund Receivables, Payables, and Transfers 47
D. Long-term Obligations 48
E. On-Behalf Payments 51
F. Short-term Debt 52
V. Other Information
A. Risk Management 52
B. Accounting Changes 53
C. Contingent Liabilities 54
D. Joint Ventures 54
E. Retirement Commitments 55
F. Other Postemployment Benefits (OPEB) 72
G. Purchasing Laws 75
30
NOTES TO THE FINANCIAL STATEMENTS
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Sequatchie Countys 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 Sequatchie County:
A. Reporting Entity
Sequatchie County is a public municipal corporation governed by an elected

18-member board. As required by GAAP, these financial statements present
Sequatchie County (the primary government) and its component units. The
financial statements of the Sequatchie County Emergency Communications
District, a component unit requiring discrete presentation, were excluded
from this report due to materiality calculations; therefore, the effect of their
omission did not affect our opinion thereon. The component units discussed
below are included in the county's reporting entity because of the significance
of their operational or financial relationships with the county.
Discretely Presented Component Units The following entities meet the

criteria for discretely presented component units of the county. They are
reported in separate columns in the government-wide financial statements to
emphasize that they are legally separate from the county.
The Sequatchie County School Department operates the public school system
in the county, and the voters of Sequatchie County elect its board. The School
Department is fiscally dependent on the county because it may not issue
debt, and its budget and property tax levy are subject to the County
Commissions approval. The School Departments taxes are levied under the
taxing authority of the county and are included as part of the countys total
tax levy.
The Sequatchie County Emergency Communications District provides a

simplified means of securing emergency services through a uniform
emergency number for the residents of Sequatchie County, and the
Sequatchie 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 Commissions approval. The financial statements of the Sequatchie
County Emergency Communications District were not material to the
component units opinion unit and therefore have been omitted from this
report.
31
The Sequatchie County School Department does not issue separate financial
statements from those of the county. Therefore, basic financial statements of
the School Department are included in this report as listed in the table of
contents. Complete financial statements of the Sequatchie County
Emergency Communications District can be obtained from its administrative
office at the following address:
Administrative Office:
Sequatchie County Emergency

Communications District
426 Cedar Street
Dunlap, TN 37327
B. Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement of Net

Position and the Statement of Activities) report information on all of the
nonfiduciary activities of the primary government and its component units.
For the most part, the effect of interfund activity has been removed from
these statements. However, when applicable, interfund services provided
and used between functions are not eliminated in the process of consolidation
in the Statement of Activities. Governmental activities are normally
supported by taxes and intergovernmental revenues. Business-type activities,
which rely to a significant extent on fees and charges, are required to be
reported separately from governmental activities in government-wide
financial statements. However, the primary government of Sequatchie
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 Sequatchie County School Department component unit only
reports governmental activities in the government-wide financial statements.
The Statement of Activities demonstrates the degree to which the direct

expenses of a given function are offset by program revenues. Direct expenses
are those that are clearly identifiable with a specific function. Program
revenues include (1) charges to customers or applicants who purchase, use, or
directly benefit from goods, services, or privileges provided by a given
function and (2) grants and contributions that are restricted to meeting the
operational or capital requirements of a particular function. Taxes and other
items not properly included among program revenues are reported instead as
general revenues.
Sequatchie County issues all debt for the discretely presented Sequatchie
County School Department. There were no debt issues contributed by the
county to the School Department during the year ended June 30, 2016.
Separate financial statements are provided for governmental funds and

fiduciary funds. The fiduciary funds are excluded from the government-wide
32
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 Sequatchie County are organized into funds,

each of which is considered to be a separate accounting entity. Each fund is
accounted for by providing a separate set of self-balancing accounts that
constitute its assets, deferred outflow or resources, liabilities, deferred inflow
of resources, fund equity, revenues, and expenditures/expenses. Funds are
organized into three major categories: governmental, proprietary, and
fiduciary. An emphasis is placed on major funds within the governmental
category. Sequatchie County has no proprietary funds to report.
Separate financial statements are provided for governmental funds and

fiduciary funds. Major individual governmental funds are reported as
separate columns in the fund financial statements. All other governmental
funds are aggregated into a single column on the fund financial statements.
The fiduciary funds in total are reported in a single column.
Governmental fund financial statements are reported using the current

financial resources measurement focus and the modified accrual basis of
accounting. Revenues are recognized as soon as they become both measurable
and available. Revenues are considered to be available when they are
collectible within the current period or soon enough thereafter to pay
liabilities of the current period. For this purpose, the county considers
revenues other than grants to be available if they are collected within 30 days
after year-end. Grants and similar items are recognized as revenue as soon as
all eligibility requirements imposed by the provider have been met and the
revenues are available. Sequatchie 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
33
accrual and have been recognized as revenues of the current period.
Applicable business taxes, litigation taxes, state-shared excise taxes, fines,
forfeitures, and penalties are not susceptible to accrual since they are not
measurable (reasonably estimable). All other revenue items are considered to
be measurable and available only when the county receives cash.
Fiduciary fund financial statements are reported using the economic

resources measurement focus, except for agency funds, which have no
measurement focus, and the accrual basis of accounting. Revenues are
recognized when earned, and expenses are recorded when a liability is
incurred, regardless of the timing of related cash flows.
Sequatchie County reports the following major governmental funds:
General Fund This is the countys primary operating fund. It

accounts for all financial resources of the general government, except
those required to be accounted for in another fund.
Highway/Public Works Fund This special revenue fund accounts

for transactions of the countys Highway Department. Local and state
gasoline/fuel taxes are the foundational revenues of this fund.
General Debt Service Fund This fund accounts for the resources
accumulated and payments made for principal and interest on long-
term general obligation debt of governmental funds.
Additionally, Sequatchie County reports the following fund types:
Capital Projects Fund The General Capital Projects Fund is used

to account for various capital projects within 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
Sequatchie County. Agency funds are custodial in nature (assets
equal liabilities) and do not involve measurement of results of
operations. They do, however, use the accrual basis of accounting to
recognize receivables and payables.
The discretely presented Sequatchie County School Department reports the

following major governmental funds:
General Purpose School Fund This is the primary operating fund

for the School Department. It is used to account for general operations
of the School Department.
Education Capital Projects Fund The Education Capital Projects

Fund is used to account for construction projects of the School
Department.
34
Additionally, the Sequatchie County School Department reports the following
fund type:
Special Revenue Funds These funds account for and report the
proceeds of specific revenue sources that are restricted or committed
to expenditure for specified purposes other than debt service or capital
projects.
Amounts reported as program revenues include (1) charges to customers or

applicants for goods, services, or privileges provided; (2) operating grants and
contributions; and (3) capital grants and contributions. Internally dedicated
resources are reported as general revenues rather than as program revenues.
Likewise, general revenues include all taxes.
D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net

Position/Fund Balance
1. Deposits and Investments
State statutes authorize the government to make direct investments

in bonds, notes, or treasury bills of the U.S. government and
obligations guaranteed by the U.S. government or any of its agencies;
deposit accounts at state and federal chartered banks and savings and
loan associations; repurchase agreements; the State Treasurers
Investment Pool; bonds of any state or political subdivision rated A or
higher by any nationally recognized rating service; nonconvertible
debt securities of certain federal government sponsored enterprises;
and the countys own legally issued bonds or notes.
The county trustee maintains a cash and internal investment pool

that is used by all funds and the discretely presented Sequatchie
County School Department. Each funds portion of this pool is
displayed on the balance sheets or statements of net position as
Equity in Pooled Cash and Investments. Most income from these
pooled investments is assigned to the General, General Debt Service,
and General Purpose School funds. Sequatchie County and the School
Department have adopted a policy of reporting U.S. Treasury
obligations, U.S. agency obligations, and repurchase agreements with
maturities of one year or less when purchased on the balance sheet at
amortized cost. Certificates of deposit are reported at cost with the
exception of negotiable certificates of deposits, which are reported at
fair value. Investments in the State Treasurers Investment Pool are
reported at amortized cost using a Stable Net Asset Value. State
statutes require the state treasurer to administer the pool under the
same terms and conditions, including collateral requirements, as
prescribed for other funds invested by the state treasurer. All other
investments are reported at fair value. No investments required to be
reported at fair value were held at the balance sheet date.
35
2. Receivables and Payables
Activity between funds for unremitted current collections outstanding

at the end of the fiscal year is referred to as due to/from other funds.
All ambulance and property taxes receivables are shown with an

allowance for uncollectibles. Ambulance receivables allowance for
uncollectibles is based on historical collection data. The allowance for
uncollectible property taxes is equal to 2.76 percent of total taxes
levied.
Property taxes receivable are recognized as of the date an enforceable

legal claim to the taxable property arises. This date is January 1 and
is referred to as the lien date. However, revenues from property taxes
are recognized in the period for which the taxes are levied, which is
the ensuing fiscal year. Since the receivable is recognized before the
period of revenue recognition, the entire amount of the receivable, less
an estimated allowance for uncollectible taxes, is reported as a
deferred inflow of resources as of June 30.
Property taxes receivable are also reported as of June 30 for the taxes
that are levied, collected, and reported as revenue during the current
fiscal year. These property taxes receivable are presented on the
balance sheet as a deferred inflow of resources to reflect amounts not
available as of June 30. Property taxes collected within 30 days of
year-end are considered available and accrued. The allowance for
uncollectible taxes represents the estimated amount of the receivable
that will be filed in court for collection. Delinquent taxes filed in court
for collection are not included in taxes receivable since they are
neither measurable nor available.
Property taxes are levied as of the first Monday in October. Taxes

become delinquent and begin accumulating interest and penalty the
following March 1. Suit must be filed in Chancery Court between the
following February 1 to April 1, for any remaining unpaid taxes.
Additional costs attach to delinquent taxes after a court suit has been
filed.
Most payables are disaggregated on the face of the financial

statements.
3. Capital Assets
Governmental funds do not capitalize the cost of capital outlays; these

funds report capital outlays as expenditures upon acquisition.
Capital assets, which include property, plant, equipment, and

infrastructure assets (e.g., roads, bridges, and similar items), are
reported in the governmental column in the government-wide
36
financial statements. Capital assets are defined by the government as
assets with an initial, individual cost of $5,000 ($10,000 for the
discretely presented Sequatchie County School Department) or more
and an estimated useful life of more than three years. Such assets are
recorded at historical cost or estimated historical cost if purchased or
constructed. Donated capital assets are recorded at estimated fair
market value at the date of donation.
The costs of normal maintenance and repairs that do not add to the
value of the asset or materially extend assets lives are not capitalized.
Major outlays for capital assets and improvements are capitalized as

projects are constructed.
Property, plant, equipment, and infrastructure of the primary

government and the discretely presented School Department are
depreciated using the straight-line method over the following
estimated useful lives:
Assets Years
Primary Government:
Buildings and Improvements 7 - 40
Other Capital Assets 5 - 20
Infrastructure:
Roads 20 - 50
Bridges 30 - 50
Discretely Presented
School Department:
Buildings and Improvements 20 - 50
Other Capital Assets 10 - 20
Infrastructure 10 - 20
4. Deferred Outflows/Inflows of Resources
In addition to assets, the Statement of Net Position will sometimes

report a separate section for deferred outflows of resources. This
separate financial statement element, deferred outflows of resources,
represents a consumption of net position that applies to a future
period(s) and so will not be recognized as an outflow of resources
(expense/expenditure) until then. The government has items that
qualify for reporting in this category. Accordingly, the items are
reported in the government-wide Statement of Net Position and the
governmental funds balance sheet. These items are for pension
changes in experience, changes in proportionate share of
contributions, and employer contributions made to the pension plan
after the measurement date.
37
In addition to liabilities, the Statement of Net Position will sometimes
report a separate section for deferred inflows of resources. This
separate financial statement element, deferred inflows of resources
represents an acquisition of net position that applies to a future
period(s) and so will not be recognized as an inflow of resources
(revenue) until that time. The government has items that qualify for
reporting in this category. Accordingly, the items are reported in the
government-wide Statement of Net Position and the governmental
funds balance sheet. These items are from the following sources:
current and delinquent property taxes, pension changes in experience,
pension changes in investment earnings, changes in proportionate
share of contributions, and various receivables for revenues, which do
not meet the availability criteria in governmental funds. These
amounts are deferred and recognized as an inflow of resources in the
period that the amounts become available.
5. Compensated Absences
Primary Government
The general policy of Sequatchie County does not allow for the
accumulation of unused vacation and sick leave days beyond year end.
Discretely Presented Sequatchie County School Department
The general policy of the School Department does not allow for the
accumulation of vacation days beyond year end. Employees of the
School Department are allowed to accumulate sick leave days. 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 Position. Debt premiums
and discounts are deferred and amortized over the life of the new debt
using the straight-line method. Debt issuance costs are expensed in
the period incurred. In refunding transactions, the difference between
the reacquisition price and the net carrying amount of the old debt is
reported as a deferred outflow of resources or a deferred inflow of
resources and recognized as a component of interest expense in a
systematic and rational manner over the remaining life of the
refunded debt or the life of the new debt issued, whichever is shorter.
In the fund financial statements, governmental funds recognize debt

premiums and discounts, as well as debt issuance costs, during the
current period. The face amount of debt issued is reported as other
financing sources. Premiums received on debt issuances are reported
38
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 notes payable and other loans
payable, is recognized as a liability and expenditure in the
governmental fund financial statements. Liabilities and expenditures
for other long-term obligations, including other postemployment
benefits, are recognized to the extent that the liabilities have matured
(come due for payment) each period.
7. Net Position and Fund Balance
In the government-wide financial statements equity is classified as net

position and displayed in three components:
a. Net investment in capital assets Consists of capital assets,

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

placed on the use either by (1) external groups such as creditors,
grantors, contributors, or laws or regulations of other governments
or (2) law through constitutional provisions or enabling legislation.
c. Unrestricted net position All other net position that does not
meet the definition of restricted or net investment in capital
assets.
It is the countys policy that restricted amounts would be reduced first

followed by unrestricted amounts when expenditures are incurred for
purposes for which both restricted and unrestricted fund balance is
available. Also, it is the countys policy that committed amounts
would be reduced first, followed by assigned amounts, and then
unassigned amounts when expenditures are incurred for purposes for
which amounts in any of these unrestricted fund balance
classifications could be used.
In the fund financial statements, governmental funds report fund

balance in classifications that comprise a hierarchy based primarily on
the extent to which the government is bound to honor constraints on
the specific purposes for which amounts in these funds can be spent.
These classifications may consist of the following:
39
Nonspendable Fund Balance includes amounts that cannot
be spent because they are either (a) not in spendable form or
(b) legally or contractually required to be maintained intact.
Restricted Fund Balance includes amounts that have

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

used for specific purposes pursuant to constraints imposed by
formal resolutions of the County Commission, the countys
highest level of decision-making authority and the Board of
Education, the School Departments highest level of
decision-making authority, and shall remain binding unless
removed in the same manner.
Assigned Fund Balance includes amounts that are

constrained by the countys intent to be used for specific
purposes, but are neither restricted nor committed (excluding
stabilization arrangements). The County Commission has by
resolution has authorized the countys Budget/Finance
Committee to make assignments for the general government.
The Board of Education makes assignments for the School
Department.
Unassigned Fund Balance the residual classification of the

General and General Purpose School funds. This classification
represents fund balance that has not been assigned to other
funds and that has not been restricted, committed, or assigned
to specific purposes within the General and General Purpose
School funds.
8. Minimum Fund Balance Policy
To provide management with appropriate guidelines and direction to

assist in making sound decisions related to managing the fund
balance of certain governmental funds, the following minimum fund
balance policy exists for unassigned fund balance:
General Fund five percent of current-year appropriations.
Solid Waste/Sanitation Fund five percent of current-year

appropriations.
Debt Service Fund five percent of current-year appropriations.
40
E. Pension Plans
Primary Government
For purposes of measuring the net pension liability, deferred outflows of

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

resources and deferred inflows of resources related to pensions, and pension
expense, information about the fiduciary net position of the Teacher
Retirement Plan and the Teacher Legacy Pension Plan in the Tennessee
Consolidated Retirement System, and additions to/deductions from fiduciary
net position have been determined on the same basis as they are reported by
the TCRS. For this purpose, benefits (including refunds of employee
contributions) are recognized when due and payable in accordance with the
benefit terms of the Teacher Retirement Plan and the Teacher Legacy
Pension Plan. Investments are reported at fair value.
41
II. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL
STATEMENTS
A. Explanation of certain differences between the governmental fund

balance sheet and the government-wide Statement of Net Position
Primary Government
Exhibit C-2 includes explanations of the nature of individual elements of

items required to reconcile the balance sheet of governmental funds with the
government-wide Statement of Net Position.
Exhibit I-3 includes explanations of the nature of individual elements of

items required to reconcile the balance sheet of governmental funds with the
government-wide Statement of Net Position.
B. Explanation of certain differences between the governmental fund

Statement of Revenues, Expenditures, and Changes in Fund Balances
and the government-wide Statement of Activities
Primary Government
Exhibit C-4 includes explanations of the nature of individual elements of

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

items required to reconcile the net change in fund balances total
governmental funds with the change in net position of governmental
activities reported in the government-wide Statement of Activities.
III. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
Budgetary Information
Annual budgets are adopted on a basis consistent with generally accepted

accounting principles (GAAP) for all governmental funds except the Constitutional
Officers - Fees Fund (special revenue fund), which is not budgeted, and the capital
projects funds, which adopt project length budgets. All annual appropriations lapse
at fiscal year-end.
The county is required by state statute to adopt annual budgets. Annual budgets are
prepared on the basis in which current available funds must be sufficient to meet
current expenditures. Expenditures and encumbrances may not legally exceed
42
appropriations authorized by the County Commission and any authorized revisions.
Unencumbered appropriations lapse at the end of each fiscal year.
The budgetary level of control is at the major category level established by the
County Uniform Chart of Accounts, as prescribed by the Comptroller of the Treasury
of the State of Tennessee. Major categories are at the department level (examples of
General Fund major categories: County Commission, Board of Equalization, County
Mayor/Executive, 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.
IV. DETAILED NOTES ON ALL FUNDS
A. Deposits and Investments
Sequatchie County and the Sequatchie 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 funds portion of this pool is displayed on the balance sheets or
statements of net position as Equity in Pooled Cash and Investments. Cash
reflected on the balance sheets or statements of net position represents
nonpooled amounts held separately by individual funds.
Deposits
Legal Provisions. All deposits with financial institutions must be secured

by one of two methods. One method involves financial institutions that
participate in the bank collateral pool administered by the state treasurer.
Participating banks determine the aggregate balance of their public fund
accounts for the State of Tennessee and its political subdivisions. The amount
of collateral required to secure these public deposits must equal at least
105 percent of the average daily balance of public deposits held. Collateral
securities required to be pledged by the participating banks to protect their
public fund accounts are pledged to the state treasurer on behalf of the bank
collateral pool. The securities pledged to protect these accounts are pledged
in the aggregate rather than against each account. The members of the pool
may be required by agreement to pay an assessment to cover any deficiency.
Under this additional assessment agreement, public fund accounts covered by
the pool are considered to be insured for purposes of credit risk disclosure.
43
For deposits with financial institutions that do not participate in the bank
collateral pool, state statutes require that all deposits be collateralized with
collateral whose market value is equal to 105 percent of the uninsured
amount of the deposits. The collateral must be placed by the depository bank
in an escrow account in a second bank for the benefit of the county.
Investments
Legal Provisions. Counties are authorized to make direct investments in

bonds, notes, or treasury bills of the U.S. government and obligations
guaranteed by the U.S. government or any of its agencies; deposits at state
and federal chartered banks and savings and loan associations; bonds of any
state or political subdivision rated A or higher by any nationally recognized
rating service; nonconvertible debt securities of certain federal government
sponsored enterprises; and the countys 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 Treasurers Investment Pool and in repurchase
agreements. Repurchase agreements must be approved by the state
Comptrollers Office and executed in accordance with procedures established
by the State Funding Board. Securities purchased under a repurchase
agreement must be obligations of the U.S. government or obligations
guaranteed by the U.S. government or any of its agencies. When repurchase
agreements are executed, the purchase of the securities must be priced at
least two percent below the fair value of the securities on the day of purchase.
The county had no pooled or nonpooled investments as of June 30, 2016.
B. Capital Assets
Capital assets activity for the year ended June 30, 2016, was as follows:
44
Primary Government
Balance Balance
7-1-15 Increases Decreases 6-30-16
Capital Assets
Not Depreciated:
Land $ 631,739 $ 0 $ 0 $ 631,739
Total Capital Assets
Not Depreciated $ 631,739 $ 0 $ 0 $ 631,739
Capital Assets
Depreciated:
Buildings and
Improvements $ 11,306,105 $ 0 $ (2,200) $ 11,303,905
Infrastructure 14,815,355 0 (35,241) 14,780,114
Other Capital Assets 2,457,263 305,481 (19,625) 2,743,119
Depreciated $ 28,578,723 $ 305,481 $ (57,066) $ 28,827,138
Less Accumulated
Depreciation For:
Buildings and
Improvements $ 3,739,926 $ 502,556 $ (26,487) $ 4,215,995
Infrastructure 12,532,036 392,530 (368,859) 12,555,707
Total Accumulated
Depreciation $ 18,164,255 $ 1,080,461 $ (422,632) $ 18,822,084

Depreciated, Net $ 10,414,468 $ (774,980) $ 365,566 $ 10,005,054
Governmental Activities
Capital Assets, Net $ 11,046,207 $ (774,980) $ 365,566 $ 10,636,793
Depreciation expense was charged to functions of the primary government as

follows:
45
General Administration $ 208,952

Public Safety 304,848
Public Health and Welfare 67,341
Social, Cultural, and Recreational Services 13,100
Agriculture and Natural Resources 3,750
Highways/Public Works 482,470
Total Depreciation Expense -
Governmental Activities $ 1,080,461
Balance Balance
7-1-15 Increases Decreases 6-30-16
Capital Assets
Not Depreciated:
Land $ 1,256,649 $ 0 $ 0 $ 1,256,649
Construction in Progress 1,122,894 1,658,378 (1,960,802) 820,470
Not Depreciated $ 2,379,543 $ 1,658,378 $ (1,960,802) $ 2,077,119
Capital Assets
Depreciated:
Buildings and
Improvements $ 29,161,383 $ 2,286,787 $ 0 $ 31,448,170
Infrastructure 1,644,770 19,615 0 1,664,385
Depreciated $ 34,026,865 $ 2,554,742 $ (62,000) $ 36,519,607
Less Accumulated
Depreciation For:
Buildings and
Improvements $ 10,644,590 $ 613,945 $ 0 $ 11,258,535
Infrastructure 631,154 69,712 0 700,866
Total Accumulated
Depreciation $ 13,862,907 $ 820,200 $ (58,900) $ 14,624,207

Depreciated, Net $ 20,163,958 $ 1,734,542 $ (3,100) $ 21,895,400
Governmental Activities
Capital Assets, Net $ 22,543,501 $ 3,392,920 $ (1,963,902) $ 23,972,519
46
Depreciation expense was charged to functions of the discretely presented
Sequatchie County School Department as follows:
Instruction $ 575,662
Support Services 197,015
Operation of Non-instructional Services 47,523
Total Depreciation Expense -

Governmental Activities $ 820,200
C. Interfund Receivables, Payables, and Transfers
The composition of interfund balances as of June 30, 2016, was as follows:
Due to/from Other Funds:
Receivable Fund Payable Fund Amount
Primary Government:
General Nonmajor governmental $ 2,493
General Debt Service General 100,000
Discretely Presented School

Department:
General Purpose School Nonmajor governmental 855
These balances resulted from the time lag between the dates that interfund
goods and services are provided or reimbursable expenditures occur and
payments between funds are made.
The receivable in the General Purpose School Fund totaling $855 was in
transit from the School Federal Projects Fund at June 30, 2016.
Interfund Transfers:
Interfund transfers for the year ended June 30, 2016, consisted of the
following amounts:
47
Transfers In
General Education
Purpose Capital
School Projects
Transfers Out Fund Fund
General Purpose School Fund $ 0 $ 104,000

Nonmajor governmental funds 83,542 0
Total $ 83,542 $ 104,000
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.
The School Department made a one-time transfer of $104,000 from the

General Purpose School Fund to the Education Capital Projects Fund for
school construction projects.
D. Long-term Obligations
Primary Government
Notes and Other Loans
Sequatchie County issues other loans to provide funds for the acquisition and
construction of major capital facilities for the primary government and the
discretely presented School Department. Capital outlay notes are also issued
to fund capital facilities and other capital outlay purchases, such as
equipment.
Capital outlay notes and other loans are direct obligations and pledge the full
faith and credit of the government. Capital outlay notes and other loans
outstanding were issued for original terms of up to 12 years for notes and up
to 28 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 notes and other loans included in long-term
debt as of June 30, 2016, will be retired from the General Debt Service fund.
Capital outlay notes and other loans outstanding as of June 30, 2016, for
governmental activities are as follows:
48
Original
Interest Final Amount Balance
Type Rate Maturity of Issue 6-30-16
Capital Outlay Notes 1.49 to 2.47 % 7-27-24 $ 485,000 $ 423,636

Other Loans Variable 5-25-32 6,500,000 4,455,000
In prior years, Sequatchie County entered into a loan agreement with the
Montgomery County Public Building Authority. Under this loan agreement,
the authority loaned $6,500,000 to Sequatchie County for construction of a
justice center. 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 county pays various other fees
(trustee, letter of credit, and debt remarketing) in connection with this loan. At
June 30, 2016, the variable interest rate was .58 percent, and other fees totaled
approximately .57 percent (letter of credit) and .08 percent (remarketing) of the
outstanding loan principal plus $1,020 (trustee) annually.
The annual requirements to amortize all notes and other loans outstanding
as of June 30, 2016, including interest payments and other loan fees, are
presented in the following tables:
Year Ending Notes

June 30 Principal Interest Total
2017 $ 267,267 $ 5,493 $ 272,760

2018 32,669 3,760 36,429
2019 16,403 3,101 19,504
2020 16,814 2,690 19,504
2021 17,228 2,275 19,503
2022-2025 73,255 4,643 77,898
Total $ 423,636 $ 21,962 $ 445,598
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Year Ending Other Loans
June 30 Principal Interest Other Fees Total
2017 $ 221,000 $ 25,839 $ 29,978 $ 276,817

2018 228,000 24,557 28,541 281,098
2019 234,000 23,235 27,059 284,294
2020 242,000 21,878 25,538 289,416
2021 249,000 20,474 23,965 293,439
2022-2026 1,360,000 79,837 94,575 1,534,412
2027-2031 1,577,000 37,954 47,637 1,662,591
2032 344,000 1,995 3,256 349,251
Total $ 4,455,000 $ 235,769 $ 280,549 $ 4,971,318
There is $887,592 available in the General Debt Service Fund to service

long-term debt. Debt per capita, including notes and the other loan totaled
$346, based on the 2010 federal census.
Changes in Long-term Obligations
Long-term obligations activity for the year ended June 30, 2016, was as
follows:
Governmental Activities: Other

Other Postemployent
Notes Loans Benefits
Balance, July 1, 2015 $ 243,873 $ 4,670,000 $ 104,577

Additions 235,000 0 10,985
Reductions (55,237) (215,000) (19,911)
Balance, June 30, 2016 $ 423,636 $ 4,455,000 $ 95,651
Balance Due Within One Year $ 267,268 $ 221,000 $ 0
Analysis of Noncurrent Liabilities Presented on Exhibit A:
Total Noncurrent Liabilities, June 30, 2016 $ 4,974,287

Less: Balance Due Within One Year (488,268)
Noncurrent Liabilities - Due in More

Than One Year - Exhibit A $ 4,486,019
Other postemployment benefits will be paid from the employing funds,

primarily the General and Highway/Public Works funds.
50
Changes in Long-term Obligations
Long-term obligations activity for the discretely presented Sequatchie County

School Department for the year ended June 30, 2016, was as follows:
Net Pension
Governmental Activities: Other Liability -
Postemployment Teacher Legacy
Benefits Plan*
Balance, July 1, 2015 $ 331,105 $ (32,161)

Additions 135,882 856,639
Reductions (124,096) (742,911)
Balance, June 30, 2016 $ 342,891 $ 81,567
Balance Due Within One Year $ 0 $ 0
*At July 1, 2015, the teacher legacy plan had a net pension asset.
Analysis of Noncurrent Liabilities Presented on Exhibit A:
Total Noncurrent Liabilities, June 30, 2016 $ 424,458
Noncurrent Liabilities - Due in More

Than One Year - Exhibit A $ 424,458
Other postemployment benefits will be paid from the employing funds,

primarily the General Purpose School and School Federal Projects funds.
E. On-Behalf Payments Primary Government and Discretely

Presented Sequatchie County School Department
Primary Government
The State of Tennessee pays health insurance premiums for retired

employees on-behalf of Sequatchie County. These payments are made by the
state to the Medicare Supplement Plan. This plan is administered by the
State of Tennessee and reported in the states Comprehensive Annual
Financial Report. Payments by the state to the Medicare Supplement Plan
for the year ended June 30, 2016, were $3,075. The county has recognized
these on-behalf payments as revenues and expenditures in the General Fund.
51
The State of Tennessee pays health insurance premiums for retired teachers
on-behalf of the Sequatchie 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 states 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, 2016, were $21,412 and $12,400, respectively. The School Department has
recognized these on-behalf payments as revenues and expenditures in the
General Purpose School Fund.
F. Short-term Debt
Sequatchie 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 payments
coming due before current tax collections. Short-term debt activity for the
year ended June 30, 2016, was as follows:
Balance Balance
7-1-15 Issued Paid 6-30-16
Tax Anticipation Notes $ 0$ 300,000 $ (300,000) $ 0
V. OTHER INFORMATION
A. Risk Management
Primary Government
The Sequatchie County general governments (excluding the Highway

Department) risk of loss relating to general liability, property, casualty, and
workers compensation is covered by 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. The Sequatchie County general government
pays annual premiums to the TN-RMT for its general liability, property,
casualty, and workers compensation insurance coverage. The creation of the
TN-RMT provides for it to be self-sustaining through member premiums.
The Sequatchie County Highway Departments risk of loss relating to general

liability, property, casualty, and workers compensation is covered by
participation in the Local Government Property and Casualty Fund (LGPCF)
and the Local Government Workers Compensation Fund (LGWCF), which
are public entity risk pools established by the Tennessee County Services
Association, an association of member counties. The Highway Department
52
pays annual premiums to the LGPCF and LGWCF for its general liability,
property, casualty, and workers compensation insurance coverage. The
creation of these pools provides for them to be self-sustaining through
member premiums. The LGPCF and LGWCF reinsures through commercial
insurance companies for claims of more than $100,000 for each insured event.
Sequatchie County participates in the Local Government Group Insurance

Fund (LGGIF), a public entity risk pool established to provide a program of
health insurance coverage for employees of local governments and quasi-
governmental entities that was established for the primary purpose of
providing services for or on behalf of state and local governments. In
accordance with Section 8-27-207, Tennessee Code Annotated (TCA), all local
governments and quasi-governmental entities described above are eligible to
participate. The LGGIF is included in the Comprehensive Annual Financial
Report of the State of Tennessee, but the state does not retain any risk for
losses by this fund. The state statute provides for the LGGIF to be self-
sustaining through member premiums.
It is the policy of the School Department to purchase commercial insurance

for the risks of losses to which it is exposed. These risks include general
liability, property, casualty, workers compensation, and environmental.
Settled claims did not exceed this commercial coverage in any of the past
three fiscal years.
The School Department participates in the Local Education Group Insurance

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

No. 72, Fair Value Measurement and Application; Statement No. 73,
Accounting and Financial Reporting for Pensions and Related Assets that are
not within the Scope of GASB Statements No. 68, and Amendments to Certain
Provisions of GASB Statements No. 67 and No. 68; Statement No. 76, The
Hierarchy of Generally Accepted Accounting Principles for State and Local
Governments; Statement No. 79, Certain External Investment Pools and Pool
Participants became effective for the year ended June 30, 2016.
GASB Statement No. 72, established general principles for measuring fair
value and standards of accounting and financial reporting for assets and
liabilities measured at fair value. This standard supersedes previous
53
statements as they relate to measuring fair value of certain assets and
liabilities.
GASB Statement No. 73, establishes accounting and reporting requirements

for pensions that are not administered through a trust account and also
addresses changes made to Statements No. 67 and No. 68. The changes to
Statements No. 67 and No. 68 require new RSI disclosures concerning plan
investments and address specific payables to defined benefit plans.
GASB Statement No. 76, addresses changes made to the hierarchy of

generally accepted accounting principles. This standard supersedes
Statement No. 55 and reduces the hierarchy from four to two categories.
GASB Statement No. 79, addresses issues related to certain external

investment pools and pool participants because of changes in Security and
Exchange rules relative to money market funds. This standard establishes
criteria for an external investment pool to qualify for making the election to
measure all of its investments at amortized cost rather than fair value for
financial reporting purposes standards.
C. Contingent Liabilities
The county is involved in several pending lawsuits. The county attorney

estimates that the potential claims against the county not covered by
insurance resulting from such litigation would not materially affect the
countys financial statements.
D. Joint Ventures
The Sequatchie/Bledsoe Landfill Board is responsible for a closed regional

sanitary landfill, which is owned by Bledsoe County, Sequatchie County, the
City of Dunlap, and the City of Pikeville. The landfill is governed by a
ten-member board, including the county mayor/executive and two members
appointed by the County Commission. The remaining seven members are
appointed by the other joint owners. Sequatchie County has control over
budgeting and financing the joint venture only to the extent of representation
by the three board members and is responsible for funding approximately
28.5 percent of any postclosure care costs. Sequatchie County made no
contributions to the operation of the board during the year examined.
Complete financial statements for the Sequatchie/Bledsoe Landfill Board can
be obtained from the boards administrative office at the following address:
Sequatchie/Bledsoe Landfill
P.O. Box 149
Pikeville, TN 37367
The Twelfth Judicial District Drug Task Force (DTF) is a joint venture
formed by an interlocal agreement between the district attorney general of
54
the Twelfth Judicial District and the municipalities within the district. The
district is composed of Rhea, Bledsoe, Franklin, Grundy, Marion, and
Sequatchie counties and various cities within these counties. The purpose of
the DTF is to provide multi-jurisdictional law enforcement to promote the
investigation and prosecution of drug-related activities. Funds for the
operations of the DTF come primarily from federal grants, drug fines, and the
forfeiture of drug-related assets to the DTF. The DTF is overseen by the
district attorney general and is governed by a board of directors including the
district attorney general, sheriffs, and police chiefs of the participating law
enforcement agencies within the judicial district. Sequatchie County made no
contributions to the DTF for the year ended June 30, 2016, and does not have
any equity interest in this joint venture. Complete financial statements for
the DTF can be obtained from its administrative office at the following
address:
District Attorney General

Twelfth Judicial District
375 Church Street, Suite 300
Dayton, TN 37321
E. Retirement Commitments
1. Tennessee Consolidated Retirement System (TCRS)
Primary Government
General Information About the Pension Plan
Plan Description. Employees of Sequatchie County and non-certified

employees of the discretely presented Sequatchie County School
Department are provided a defined benefit pension plan through the
Public Employee Retirement Plan, an agent multiple-employer
pension plan administered by the TCRS. The primary government
employees comprised 59.55 percent and the non-certified employees of
the discretely presented School Department comprised 40.45 percent
of the plan based on contribution data. The TCRS was created by
state statute under Tennessee Code Annotated (TCA), Title 8,
Chapters 34-37. The TCRS Board of Trustees is responsible for the
proper operation and administration of the TCRS. The Tennessee
Treasury Department, an agency in the legislative branch of state
government, administers the plans of the TCRS. The TCRS issues a
publicly available financial report that can be obtained at
www.treasury.tn.gov/tcrs.
Benefits Provided. TCA, Title 8, Chapters 34-37 establish the benefit

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

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

June 30, 2015, the following employees were covered by the benefit
terms:
Inactive Employees or Beneficiaries Currently

Receiving Benefits 116
Inactive Employees Entitled to But Not Yet Receiving
Benefits 265
Active Employees 236
Total 617
Contributions. Contributions for employees are established in the

statutes governing the TCRS and may only be changed by the
Tennessee General Assembly. Employees contribute five percent of
their salary. Sequatchie County makes employer contributions at the
rate set by the Board of Trustees as determined by an actuarial
valuation. For the year ended June 30, 2015, the Actuarial
Determined Contribution (ADC) for Sequatchie County was $466,092
based on a rate of 8.54 percent of covered payroll. By law, employer
contributions are required to be paid. The TCRS may intercept
Sequatchie Countys state shared taxes if required employer
contributions are not remitted. The employers ADC and member
56
contributions are expected to finance the costs of benefits earned by
members during the year, the cost of administration, as well as an
amortized portion of any unfunded liability.
Net Pension Liability (Asset)
Sequatchie Countys net pension liability (asset) was measured as of

June 30, 2015, and the total pension liability (asset) used to calculate
net pension liability (asset) was determined by an actuarial valuation
as of that date.
Actuarial Assumptions. The total pension liability as of the June 30,

2015, actuarial valuation was determined using the following
actuarial assumptions, applied to all periods included in the
measurement:
Inflation 3%
Salary Increases Graded Salary Ranges from 8.97%
to 3.71% Based on Age, Including
Inflation, Averaging 4.25%
Investment Rate of Return 7.5%, Net of Pension Plan
Investment Expenses, Including
Inflation
Cost of Living Adjustment 2.5%
Mortality rates were based on actual experience from the June 30,
2012, actuarial experience study, adjusted for some of the expected
future improvement in life expectancy.
The actuarial assumptions used in the June 30, 2015, actuarial

valuation were based on the results of an actuarial experience study
performed for the period July 1, 2008, through June 30, 2012. The
demographic assumptions were adjusted to more closely reflect actual
and expected future experience.
The long-term expected rate of return on pension plan investments

was established by the TCRS Board of Trustees in conjunction with
the June 30, 2012, actuarial experience study by considering the
following three techniques: (1) the 25-year historical return of the
TCRS at June 30, 2012, (2) the historical market returns of asset
classes from 1926 to 2012 using the TCRS investment policy asset
allocation, and (3) capital market projections that were utilized as a
building-block method in which best-estimate ranges of expected
future real rate of return (expected returns, net of pension plan
investment expense and inflation) are developed for each major asset
class. Four sources of capital market projections were blended and
utilized in the third technique. The blended capital market projection
established the long-term expected rate of return by weighting the
57
expected future real rate of return by the target asset allocation
percentage and by adding inflation of three percent. The target
allocation and best estimate of arithmetic real rates of return for each
major asset class are summarized in the following table:
Percentage
Long-term
Expected Percentage
Real Rate Target
Asset Class of Return Allocations
U.S. Equity 6.46 % 33 %

Developed Market
International Equity 6.26 17
Emerging Market
Private Equity and
Strategic Lending 4.61 8
U.S. Fixed Income 0.98 29
Real Estate 4.73 7
Short-term Securities 0.00 1
Total 100 %

was established by the TCRS Board of Trustees as 7.5 percent based
on a blending of the three factors described above.
Discount Rate. The discount rate used to measure the total pension
liability was 7.5 percent. The projection of cash flows used to
determine the discount rate assumes that employee contributions will
be made at the current rate and that contributions from Sequatchie
County will be made at the actuarially determined contribution rate
pursuant to an actuarial valuation in accordance with the funding
policy of the TCRS Board of Trustees and as required to be paid by
state statute. Based on those assumptions, the pension plans
fiduciary net position was projected to be available to make projected
future benefit payments of current active and inactive members.
Therefore, the long-term expected rate of return on pension plan
investments was applied to all periods of projected benefit payments
to determine the total pension liability.
58
Changes in the Net Pension Liability (Asset)
Increase (Decrease)
Total Plan Net
Pension Fiduciary Pension
Liability Net Position Liability
(a) (b) (a)-(b)
Balance, July 1, 2014 $ 15,568,708 $ 16,203,268 $ (634,560)
Changes for the Year:

Service Cost $ 470,062 $ 0 $ 470,062
Interest 1,174,815 0 1,174,815
Differences Between Expected
and Actual Experience (463,243) 0 (463,243)
Contributions-Employer 0 466,092 (466,092)
Contributions-Employees 0 273,567 (273,567)
Net Investment Income 0 500,357 (500,357)
Benefit Payments, Including
Refunds of Employee
Contributions (749,150) (749,150) 0
Administrative Expense 0 (11,978) 11,978
Other Changes 0 0 0
Net Changes $ 432,484 $ 478,888 $ (46,404)
Balance, June 30, 2015 $ 16,001,192 $ 16,682,156 $ (680,964)
Allocation of Agent Plan Changes in the Net Pension Liability (Asset)
Plan Net
Total Fiduciary Pension
Pension Net Liability
Liability Position (Asset)
Primary Government 59.55% $ 9,528,710 $ 9,934,224 $ (405,514)
School Department 40.45% 6,472,482 6,747,932 (275,450)
Total $ 16,001,192 $ 16,682,156 $ (680,964)
Sensitivity of the Net Pension Liability (Asset) to Changes in the

Discount Rate. The following presents the net pension liability (asset)
of Sequatchie County calculated using the discount rate of 7.5 percent,
as well as what the net pension liability (asset) would be if it was
calculated using a discount rate that is one percentage point lower
(6.5%) or one percentage point higher (8.5%) than the current rate:
59
Current
1% Discount 1%
Decrease Rate Increase
Sequatchie County 6.5% 7.5% 8.5%
Net Pension Liability $ 1,366,736 $ (680,964) $ (2,385,459)
Negative Pension Expense (Income) and Deferred Outflows

of Resources and Deferred Inflows of Resources Related to
Pensions
Negative Pension Expense. For the year ended June 30, 2016,
Sequatchie County recognized negative pension expense of $86,398.
Deferred Outflows of Resources and Deferred Inflows of Resources.

For the year ended June 30, 2016, Sequatchie County reported
deferred outflows of resources and deferred inflows of resources
related to pensions from the following sources:
Deferred Deferred
Outflows Inflows
of of
Resources Resources
Difference Between Expected and

Actual Experience $ 0 $ 528,829
Net Difference Between Projected and
Actual Earnings on Pension Plan
Investments 571,266 758,009
Contributions Subsequent to the
Measurement Date of June 30, 2015 (1) 483,969 N/A
Total $ 1,055,235 $ 1,286,838
(1) The amount shown above for Contributions Subsequent to the

Measurement Date of June 30, 2015, will be recognized as a
reduction (increase) to net pension liability (asset) in the
following measurement period.
60
Allocation of Agent Plan Deferred Outflows of Resources and
Deferred Inflows of Resources
Deferred Deferred
Outflows of Inflows of
Resources Resources
Primary Government $ 630,627 $ 766,312
School Department 424,608 520,526
Total $ 1,055,235 $ 1,286,838
Amounts reported as deferred outflows of resources, with the

exception of contributions subsequent to the measurement date, and
deferred inflows of resources related to pensions will be recognized in
pension expense as follows:
Year Ending
June 30 Amount
2017 $ (255,246)
2018 (255,246)
2019 (255,246)
2020 50,168
2021 0
Thereafter 0
In the table shown above, positive amounts will increase pension

expense while negative amounts will decrease pension expense.
Non-certified Employees
Plan Description. As noted above under the primary government,

employees of Sequatchie County and non-certified employees of the
discretely presented Sequatchie County School Department are
provided a defined benefit pension plan through the Public Employee
Retirement Plan, an agent multiple-employer pension plan
administered by the TCRS. The primary government employees
comprise 59.55 percent and the non-certified employees of the
discretely presented School Department comprise 40.45 percent of the
plan based on contribution data.
61
Certified Employees
Teacher Retirement Plan
Plan Description. Teachers of the Sequatchie County School

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

Members are eligible to retire with an unreduced benefit at age 65
with five years of service credit or pursuant to the rule of 90 in which
the members age and service credit total 90. Benefits are determined
by a formula using the members highest five consecutive year average
compensation and the members years of service credit. A reduced
early retirement benefit is available to vested members at age 60 or
pursuant to the rule of 80. Members are vested with five years of
service credit. Service related disability benefits are provided
regardless of length of service. Five years of service is required for
non-service related disability eligibility. The service related and non-
service related disability benefits are determined in the same manner
as a service retirement benefit but are reduced ten percent and
include projected service credits. A variety of death benefits is
available under various eligibility criteria. Member and beneficiary
annuitants are entitled to an automatic cost of living adjustment
(COLA) after retirement. A COLA is granted each July for annuitants
retired prior to the second of July of the previous year. The COLA is
based on the change in the consumer price index (CPI) during the
prior calendar year, capped at three percent, and applied to the
current benefit. No COLA is granted if the change in the CPI is less
than one-half percent. A one percent COLA is granted if the CPI
change is between one-half percent and one percent. Members who
leave employment may withdraw their employee contributions, plus
any accumulated interest. Under the Teacher Retirement Plan,
62
benefit terms and conditions, including COLA, can be adjusted on a
prospective basis. Moreover, there are defined cost controls and
unfunded liability controls that provide for the adjustment of benefit
terms and conditions on an automatic basis.
Contributions. Contributions for teachers are established in the

Tennessee General Assembly or by automatic cost controls set out in
law. Teachers are required to contribute five percent of their salary to
the plan. The Local Education Agencies (LEAs) make employer
contributions at the rate set by the Board of Trustees as determined
by an actuarial valuation. Per the statutory provisions governing
TCRS, the employer contribution rate cannot be less than four
percent, except in years when the maximum funded level, approved by
the TCRS Board of Trustees, is reached. By law, employer
contributions for the Teacher Retirement Plan are required to be paid.
The TCRS may intercept the state shared taxes of the sponsoring
governmental entity of the LEA if the required employer contributions
are not remitted. Employer contributions for the year ended June 30,
2016, to the Teacher Retirement Plan were $45,630, which is four
percent of covered payroll. The employer rate, when combined with
member contributions, is expected to finance the costs of benefits
earned by members during the year, the cost of administration, as
well as an amortized portion of any unfunded liability.
Pension Liabilities (Assets), Pension Expense, and Deferred

Outflows of Resources and Deferred Inflows of Resources
Related to Pensions
Pension Liabilities (Assets). At June 30, 2016, the Sequatchie County

School Department reported an asset of $13,546 for its proportionate
share of the net pension asset. The net pension asset was measured
as of June 30, 2015, and the total pension liability used to calculate
the net pension asset was determined by an actuarial valuation as of
that date. The Sequatchie County School Departments proportion of
the net pension asset was based on the Sequatchie County School
Departments share of contributions to the pension plan relative to the
contributions of all participating LEAs. At the measurement date of
June 30, 2015, the Sequatchie County School Departments proportion
was .336705 percent.
Pension Expense. For the year ended June 30, 2016, the Sequatchie
County School Department recognized pension expense of $17,752.
Deferred Outflows of Resources and Deferred Inflows of Resources. For

the year ended June 30, 2016, the Sequatchie County School
Department reported deferred outflows of resources related to
pensions from the following sources:
63
Deferred Deferred
Outflows Inflows
of of
Resources Resources

Actual Experience $ 0 $ 4,409
Net Difference Between Projected
and Actual Earnings on Pension
Plan Investments 1,095 0
LEA's Contributions Subsequent to the
Measurement Date of June 30, 2015 45,630 N/A
Total $ 46,725 $ 4,409
The Sequatchie County School Departments employer contributions

of $45,630, reported as pension related deferred outflows of resources
subsequent to the measurement date, will be recognized as an
increase of net pension liability (asset) in the year ending June 30,
2017. Other amounts reported as deferred outflows of resources and
deferred inflows of resources related to pensions will be recognized in
pension expense as follows:
Year Ending
June 30 Amount
2017 $ (94)
2018 (94)
2019 (94)
2020 (94)
2021 (367)
Thereafter (2,572)
In the table above, positive amounts will increase pension expense,

while negative amounts will decrease pension expense.
Actuarial Assumptions. The total pension liability in the June 30,

measurement:
64
Inflation 3%
Inflation
Mortality rates are customized based on the June 30, 2012, actuarial
experience study and some included adjustment for expected future
improvement in life expectancy.


allocation and best estimates of arithmetic real rates of return for
each major asset class are summarized in the following table:
65
Percentage
Long-term
Expected Percentage
Real Rate Target
U.S. Equity 6.46 % 33 %

Developed Market
Emerging Market
Private Equity and
Real Estate 4.73 7
Total 100 %

be made at the current rate and that contributions from all the LEAs
will be made at the actuarially determined contribution rate pursuant
to an actuarial valuation in accordance with the funding policy of the
TCRS Board of Trustees and as required to be paid by state statute.
Based on those assumptions, the pension plans fiduciary net position
was projected to be available to make projected future benefit
payments of current active and inactive members. Therefore, the long-
term expected rate of return on pension plan investments was applied
to all periods of projected benefit payments to determine the total
pension liability.
Sensitivity of the Proportionate Share of Net Pension Liability (Asset)

to Changes in the Discount Rate. The following presents the
Sequatchie County School Departments proportionate share of the net
pension liability (asset) calculated using the discount rate of
7.5 percent, as well as what the Sequatchie County School
Departments proportionate share of the net pension liability (asset)
would be if it was calculated using a discount rate that is one
percentage point lower (6.5%) or one percentage point higher (8.5%)
than the current rate:
66
School Department's Current
Proportionate Share of 1% Discount 1%
the Net Pension Decrease Rate Increase
Liability (Asset) 6.5% 7.5% 8.5%
Net Pension Liability $ 2,402 $ (13,546) $ (25,242)
Pension Plan Fiduciary Net Position. Detailed information about the

pension plans fiduciary net position is available in a separately issued
TCRS financial report.
Teacher Legacy Pension Plan
Plan Description. Teachers of the Sequatchie County School

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

Members of the Teacher Legacy Pension Plan are eligible to retire
with an unreduced benefit at age 60 with five years of service credit or
after 30 years of service credit regardless of age. Benefits are
determined by a formula using the members highest five consecutive
year average compensation and the members years of service credit.
A reduced early retirement benefit is available to vested members at
age 55. Members are vested with five years of service credit. Service
related disability benefits are provided regardless of length of service.
Five years of service is required for non-service related disability
eligibility. The service related and non-service related disability
benefits are determined in the same manner as a service retirement
benefit but are reduced ten percent and include projected service
credits. A variety of death benefits is available under various
67
eligibility criteria. Member and beneficiary annuitants are entitled to
an automatic cost of living adjustment (COLA) after retirement. A
COLA is granted each July for annuitants retired prior to the second
of July of the previous year. The COLA is based on the change in the
consumer price index (CPI) during the prior calendar year, capped at
three percent, and applied to the current benefit. No COLA is granted
if the change in the CPI is less than one-half percent. A one percent
COLA is granted if the CPI change is between one-half and one
percent. A member who leaves employment may withdraw their
employee contributions, plus any accumulated interest. Under the
Teacher Legacy Pension Plan, benefit terms and conditions, including
COLAs can be adjusted on a prospective basis. Moreover, there are
defined cost controls and unfunded liability controls that provide for
the adjustment of benefit terms and conditions on an automatic basis.
Contributions. Contributions for teachers are established in the

Tennessee General Assembly. Teachers are required to contribute five
percent of their salaries. The Local Education Agencies (LEAs) make
employer contributions at the rate set by the Board of Trustees as
determined by an actuarial valuation. By law, employer contributions
for the Teacher Legacy Pension Plan are required to be paid. The
TCRS may intercept the state shared taxes of the sponsoring
governmental entity of the LEA if the required employer contributions
are not remitted. Employer contributions by the Sequatchie County
School Department for the year ended June 30, 2016, to the Teacher
Legacy Pension Plan were $642,047, which is 9.04 percent of covered
payroll. The employer rate, when combined with member
contributions, is expected to finance the costs of benefits earned by
members during the year, the cost of administration, as well as an
amortized portion of any unfunded liability.
Pension Liabilities (Assets), Pension Expense, and Deferred

Outflows of Resources and Deferred Inflows of Resources
Related to Pensions
Pension Liability (Assets). At June 30, 2016, the Sequatchie County

School Department reported a liability of $81,567 for its proportionate
share of the net pension liability (asset). The net pension liability
(asset) was measured as of June 30, 2015, and the total pension
liability used to calculate the net pension liability (asset) was
determined by an actuarial valuation as of that date. The Sequatchie
County School Departments proportion of the net pension liability
(asset) was based on the Sequatchie County School Departments long-
term share of contributions to the pension plan relative to the
contributions of all participating LEAs. At the measurement date of
June 30, 2015, the Sequatchie County School Departments proportion
was .199121 percent. The proportion measured at June 30, 2014, was
.197918 percent.
68
Negative Pension Expense. For the year ended June 30, 2016, the
Sequatchie County School Department recognized negative pension
expense of $77,831.
Deferred Outflows of Resources and Deferred Inflows of Resources. For

the year ended June 30, 2016, the Sequatchie County School
Department reported deferred outflows of resources and deferred
inflows of resources related to pensions from the following sources:
Deferred Deferred
Outflows Inflows
of of
Resources Resources

Actual Experience $ 65,461 $ 1,269,602
Net Difference Between Projected and
Actual Earnings on Pension Plan
Investments 1,472,844 1,999,466
Changes in Proportion of Net Pension
Liability (Asset) 12,867 57,708
LEA's Contributions Subsequent to the
Measurement Date of June 30, 2015 642,047 N/A
Total $ 2,193,219 $ 3,326,776
The Sequatchie County School Departments employer contributions

of $642,047 reported as pension related deferred outflows of resources
subsequent to the measurement date, will be recognized as an
increase in net pension asset in the year ending June 30, 2017. Other
amounts reported as deferred outflows of resources and deferred
inflows of resources related to pensions will be recognized in pension
expense as follows:
Year Ending
June 30 Amount
2017 $ (548,074)
2018 (548,074)
2019 (548,074)
2020 118,415
2021 (248,796)
Thereafter 0
In the table above, positive amounts will increase pension expense,

while negative amounts will decrease pension expense.
69
Actuarial Assumptions. The total pension liability in the June 30,
measurement:
Inflation 3%
Inflation
Mortality rates are customized based on the June 30, 2012, actuarial
experience study and some included adjustments for expected future
improvement in life expectancy.


allocation and best estimates of arithmetic real rates of return for
each major asset class are summarized in the following table:
70
Percentage
Long-term
Expected Percentage
Real Rate Target
U.S. Equity 6.46 % 33 %

Developed Market
Emerging Market
Private Equity and
Real Estate 4.73 7
Total 100 %

be made at the current rate and that contributions from all the LEAs
will be made at the actuarially determined contribution rate pursuant
to an actuarial valuation in accordance with the funding policy of the
TCRS Board of Trustees and as required to be paid by state statute.
Based on those assumptions, the pension plans fiduciary net position
was projected to be available to make projected future benefit
payments of current active and inactive members. Therefore, the long-
term expected rate of return on pension plan investments was applied
to all periods of projected benefit payments to determine the total
pension liability.
Sensitivity of the Proportionate Share of Net Pension Liability (Asset)

to Changes in the Discount Rate. The following presents the
Sequatchie County School Departments proportionate share of the net
pension liability (asset) calculated using the discount rate of
7.5 percent, as well as what the Sequatchie County School
Departments proportionate share of the net pension liability (asset)
would be if it was calculated using a discount rate that is one
percentage point lower (6.5%) or one percentage point higher (8.5%)
than the current rate:
71
School Department's Current
Proportionate Share of 1% Discount 1%
the Net Pension Decrease Rate Increase
Liability (Asset) 6.5% 7.5% 8.5%
Net Pension Liability $ 5,560,960 $ 81,567 $ (4,454,725)
Pension Plan Fiduciary Net Position. Detailed information about the

pension plans fiduciary net position is available in a separately issued
TCRS financial report.
2. Deferred Compensation School Department
The School Department offers its employees a deferred compensation

plan established pursuant to IRC Section 403(b). All costs of
administering and funding the program are the responsibility of plan
participants. The 403(b) plan assets remain the property of the
contributing employees and are not presented in the accompanying
financial statements. IRC Section 403(b) establishes participation,
contribution, and withdrawal provisions for the plan.
Teachers hired after July 1, 2014, by the discretely presented

Sequatchie County School Department are required to participate in a
hybrid pension plan (Teacher Retirement Plan) administered by the
Tennessee Consolidated Retirement System. The Teacher Retirement
Plan requires that these teachers contribute five percent of their
salaries into a deferred compensation plan managed by the hybrid
plan pursuant to IRC Section 401(k). As part of their employment
package, the Sequatchie County School Department has assumed all
costs of funding this program on-behalf of the plan participants. The
Section 401(k) plan assets remain the property of the participating
teachers and are not presented in the accompanying financial
statements. IRC Section 401(k), establishes participation,
contribution, and withdrawal provisions for the plans. During the
year, the Sequatchie County School Department contributed $57,037
to the 401(k) portion of the plan on-behalf of the plan participants.
F. Other Postemployment Benefits (OPEB)
Plan Description
Sequatchie County and the Sequatchie County School Department

participate in the state-administered Local Government Group Insurance
Plan and the Local Education Group Insurance Plan, respectively, for
healthcare benefits. For accounting purposes, these plans are agent multiple-
employer defined benefit OPEB plans. Benefits are established and amended
by an insurance committee created by Section 8-27-207, Tennessee Code
Annotated (TCA), for local governments and Section 8-27-302, TCA, for local
72
education employees. Prior to reaching the age of 65, all members have the
option of choosing between the standard or partnership preferred provider
organization plan for healthcare benefits. Prior to reaching the age of 65, all
members have the option of choosing between the standard or partnership
preferred provider organization (PPO) plan for health care benefits.
Subsequent to age 65, members who are also in the states 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 states website at http://tn.gov/finance/article/fa-accfin-cafr.
Funding Policy
The premium requirements of plan members are established and may be

amended by the insurance committee. The plans are 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
employers in each plan develop a contribution policy in terms of subsidizing
active employees or retired employees premiums since the committee is not
prescriptive on that issue. The state does not provide a subsidy for local
government participants; however the state does provide a partial subsidy to
Local Education Agency pre-65 teachers and a full subsidy based on years of
service for post-65 teachers in the Medicare Supplement Plan. The School
Department retirees contributions vary depending on the insurance options
they select, ranging from $115 to $1,104 per month for their insurance. The
county and highway department retirees contributions vary depending in the
insurance options they select, ranging from $202 to $2,030 per month for
their insurance. During the year ended June 30, 2016, the county and the
School Department contributed $19,911 and $124,096, respectively, for
postemployment benefits.
73
Annual OPEB Cost and Net OPEB Obligation
Local Local
Government Education
Group Group
Plan Plan
ARC $ 11,000 $ 111,000

Interest on the NOPEBO 3,922 12,416
Adjustment to the ARC (3,937) 12,466
Annual OPEB cost $ 10,985 $ 135,882
Amount of contribution (19,911) (124,096)
Increase/decrease in NOPEBO $ (8,926) $ 11,786
Net OPEB obligation, 7-1-15 104,577 331,105
Net OPEB obligation, 6-30-16 $ 95,651 $ 342,891
Percentage
Fiscal Annual of Annual Net OPEB
Year OPEB OPEB Cost Obligation
Ended Plans Cost Contributed at Year End
6-30-14 Local Government Group $ 8,096 12 % $ 100,050

6-30-15 " 8,103 44 104,577
6-30-16 " 10,985 181 95,651
6-30-14 Local Education Group 87,376 143 328,144
6-30-15 " 116,914 97 331,105
6-30-16 " 135,882 91 342,891
Funded Status and Funding Progress
The funded status of the plan as of July 1, 2015, was as follows:
Local Local
Government Education
Group Group
Plan Plan
Actuarial valuation date 7-1-15 7-1-15

Actuarial accrued liability (AAL) $ 82,000 $ 929,000
Actuarial value of plan assets $ 0 $ 0
Unfunded actuarial accrued liability (UAAL) $ 82,000 $ 929,000
Actuarial value of assets as a % of the AAL 0% 0%
Covered payroll (active plan members) $ 1,892,466 $ 7,426,162
UAAL as a % of covered payroll 4% 13%
74
Actuarial valuations involve estimates of the value of reported amounts and
assumptions about the probability of events far into the future, and
actuarially determined amounts are subject to continual revision as actual
results are compared to past expectations and new estimates are made about
the future. The Schedule of Funding Progress, presented as required
supplementary information following the notes to the financial statements,
presents multi-year trend information about whether the actuarial value of
plan assets is increasing or decreasing over time relative to the actuarial
accrued liability for benefits.
Actuarial Methods and Assumptions
Calculations are based on the types of benefits provided under the terms of
the substantive plan at the time of each valuation and on the pattern of
sharing of costs between the employer and plan members to that point.
Actuarial calculations reflect a long-term perspective. Consistent with that
perspective, actuarial methods and assumptions used include techniques that
are designed to reduce short-term volatility in actuarial accrued liabilities
and the actuarial value of assets.
In the July 1, 2015, actuarial valuation for the Local Government Plan and
the Local Education Plan, the projected unit credit actuarial cost method was
used. The actuarial assumptions included a 3.75 percent investment rate of
return (net of administrative expenses) and an annual health care cost trend
rate of 6.5 percent initially. The trend rate will decrease to six percent in
2016, and then be reduced by decrements to an ultimate rate of 4.7 percent
by fiscal year 2050. Both rates include a 2.5 percent inflation assumption.
The unfunded actuarial accrued liability is being amortized as a level
percentage of payroll on a closed basis over a 30-year period beginning with
July 1, 2007. Payroll is assumed to grow at a rate of three percent.
G. Purchasing Laws
Office of County Executive
Purchasing procedures for the Office of County Executive are governed by the
County Purchasing Law of 1983, Sections 5-14-201 through 5-14-206,
Tennessee Code Annotated (TCA). This act provides for all purchases
exceeding $10,000 (excluding emergency purchases) to be based on
competitive bids solicited through newspaper advertisement.
Office of Highway Supervisor
Purchasing procedures for this office are governed by Chapter 575, Private
Acts of 1953, as amended, and provisions of the Uniform Road Law, Section
54-7-113, TCA. These statutes require all purchases exceeding $10,000 to be
made after public advertisement and solicitation of competitive bids.
75
Office of Director of Schools
Purchasing procedures for the discretely presented Sequatchie County 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.
76
REQUIRED SUPPLEMENTARY
INFORMATION
77
Exhibit E-1

Schedule of Changes in Net Pension Liability (Asset) and Related Ratios Based on
Participation in the Public Employee Pension Plan of TCRS
Primary Government
For the Fiscal Year Ended June 30
2014 2015
Total Pension Liability (Asset)

Service Cost $ 509,663 $ 470,062
Interest 1,130,481 1,174,815
Differences Between Actual and Expected Experience (263,725) (463,243)
Benefit Payments, Including Refunds of Employee Contributions (742,243) (749,150)
Net Change in Total Pension Liability (Asset) $ 634,176 $ 432,484
Total Pension Liability (Asset), Beginning 14,934,532 15,568,708
Total Pension Liability (Asset), Ending (a) $ 15,568,708 $ 16,001,192
Plan Fiduciary Net Position

Contributions - Employer $ 483,083 $ 466,092
Contributions - Employee 292,779 273,567
Net Investment Income 2,304,821 500,357
Benefit Payments, Including Refunds of Employee Contributions (742,243) (749,150)
Administrative Expense (9,355) (11,978)
Net Change in Plan Fiduciary Net Position $ 2,329,085 $ 478,888
Plan Fiduciary Net Position, Beginning 13,874,183 16,203,268
Plan Fiduciary Net Position, Ending (b) $ 16,203,268 $ 16,682,156
Net Pension Liability (Asset), Ending (a - b) $ (634,560) $ (680,964)
Plan Fiduciary Net Position as a Percentage of Total Pension Liability 104.08% 104.26%
Covered Payroll $ 5,855,543 $ 5,457,539
Net Pension Liability (Asset) as a Percentage of Covered Payroll (10.84)% (12.48)%
Note: ten years of data will be presented when available.
Note: data presented includes primary government and non-certified

employees of the discretely presented School Department.
78
Exhibit E-2

Schedule of Contributions Based on Participation in the Public
Employee Pension Plan of TCRS
Primary Government
2014 2015 2016
Actuarially Determined Contribution $ 483,083 $ 466,092 $ 483,969

Less Contributions in Relation to the
Actuarially Determined Contribution (483,083) (466,092) (483,969)
Contribution Deficiency (Excess) $ 0 $ 0 $ 0
Covered Payroll $ 5,855,543 $ 5,457,539 $ 5,758,068
Contributions as a Percentage of
Covered Payroll 8.25% 8.54% 8.41%
Note: data presented includes primary government and non-certified

employees of the discretely presented School Department.
79
Exhibit E-3
Retirement Plan of TCRS
2015 2016
Contractually Required Contribution $ 17,490 $ 28,519

Contractually Required Contribution (27,983) (45,630)
Contribution Deficiency (Excess) $ (10,493) $ (17,111)
Covered Payroll $ 699,581 $ 1,140,743
Contributions as a Percentage of Covered Payroll 4.00% 4.00%
80
Exhibit E-4

Legacy Pension Plan of TCRS
2014 2015 2016
Contractually Required Contribution $ 689,822 $ 673,852 $ 642,047

Contractually Required Contribution (689,822) (673,852) (642,047)
Contribution Deficiency (Excess) $ 0 $ 0 $ 0
Covered Payroll $ 7,768,270 $ 7,454,118 $ 7,102,286
Contributions as a Percentage of Covered Payroll 8.88% 9.04% 9.04%
81
Exhibit E-5
Schedule of Proportionate Share of the Net Pension Asset
in the Teacher Retirement Pension Plan of TCRS
For the Fiscal Year Ended June 30 *
2016
School Department's Proportion of the Net Pension Asset 0.336705%
School Department's Proportionate Share of the Net

Pension Liability (Asset) $ (13,546)
Covered Payroll $ 699,581
School Department's Proportionate Share of the Net Pension

Liability (Asset) as a Percentage of its Covered Payroll (1.94)%
Plan Fiduciary Net Position as a Percentage of the Total

Pension Liability 127.46%
* The amounts presented were determined as of June 30 of the prior fiscal year.
82
Exhibit E-6

Schedule of Proportionate Share of the Net Pension Asset
in the Teacher Legacy Pension Plan of TCRS
For the Fiscal Year Ended June 30 *
2015 2016
School Department's Proportion of the Net Pension Liability .197918% .199121%
School Department's Proportionate Share of the Net

Pension Liability (Asset) $ (32,161) $ 81,567
Covered Payroll $ 7,768,270 $ 7,454,118
School Department's Proportionate Share of the Net Pension

Liability (Asset) as a Percentage of its Covered Payroll (.414002)% 1.094254%
Plan Fiduciary Net Position as a Percentage of the Total

Pension Liability 100.08% 99.81%
* The amounts presented were determined as of June 30 of the prior fiscal year.
83
Exhibit E-7

Schedule of Funding Progress Other Postemployment Benefits Plans
Primary Government and Discretely Presented Sequatchie County School Department
June 30, 2016
(Dollar amounts in thousands)
Actuarial
Accrued
Liability
(AAL) UAAL as a
Actuarial Projected Unfunded Percentage
Actuarial Value of Unit AAL Funded Covered of Covered
Valuation Assets Credit (UAAL) Ratio Payroll Payroll
Plans Date (a) (b) (b)-(a) (a/b) (c) ((b-a)/c)
PRIMARY GOVERNMENT
Local Government Group 7-1-13 $ 0 $ 61 $ 61 0% $ 3,243 2 %

" 7-1-14 0 61 61 0 3,285 2
" 7-1-15 0 82 82 0 1,892 4
DISCRETELY PRESENTED SEQUATCHIE

COUNTY SCHOOL DEPARTMENT
Local Education Group 7-1-13 0 731 731 0 6,522 11

" 7-1-14 0 731 731 0 7,260 10
" 7-1-15 0 929 929 0 7,426 13
84
NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
TENNESSEE CONSOLIDATED RETIREMENT SYSTEM
Valuation Date: Actuarially determined contribution rates for 2016 were calculated based
on the July 1, 2013, actuarial valuation.
Methods and assumptions used to determine contribution rates:
Actuarial Cost Method Frozen Initial Liability

Amortization Method Level Dollar, Closed (Not to Exceed 20 Years)
Remaining Amortization
Period 2 Years
Asset Valuation 10-Year Smoothed Within a 20%
Corridor to Market Value
Inflation 3%
Salary Increases Graded Salary Ranges from 8.97% to
3.71% Based on Age, Including Inflation,
averaging 4.25%
Investment Rate of Return 7.5%, Net of Investment Expense,
Including Inflation
Retirement Age Pattern of Retirement Determined by
Experience Study
Mortality Customized Table Based on Actual
Experience Including an Adjustment for
Some Anticipated Improvement
85
COMBINING AND INDIVIDUAL FUND
FINANCIAL STATEMENTS AND SCHEDULES
86
Nonmajor Governmental Funds
Special Revenue Funds
_______________________________
Special Revenue Funds are used to account for and report the proceeds
of specific revenue sources that are restricted or committed to
expenditure for specific purposes other than debt service or capital
projects.
_______________________________
Solid Waste/Sanitation Fund The Solid Waste/Sanitation Fund is used to account

for transactions involving solid waste collection.
Drug Control Fund The Drug Control Fund is used to account for revenues
received from drug-related fines, forfeitures, and seizures.
Constitutional Officers - Fees Fund The Constitutional Officers - Fees Fund is

used to account for operating expenses paid directly from the fee and commission
accounts of the trustee, clerks, register of deeds, and sheriff.
Capital Projects Fund

________________________________
Capital Projects Funds are used to account for and report financial
resources that are restricted, committed, or assigned to expenditure for
capital outlays, including the acquisition or construction of capital
facilities and other capital assets.
________________________________
General Capital Projects Fund The General Capital Projects Fund is used to
account for general capital expenditures of the county.
87
Exhibit F-1

Combining Balance Sheet
June 30, 2016
Capital
Special Revenue Funds Projects Fund
Constitu- Total
Solid tional General Nonmajor
Waste / Drug Officers - Capital Governmental
Sanitation Control Fees Total Projects Funds
ASSETS
Cash $ 0 $ 0 $ 2,331 $ 2,331 $ 0 $ 2,331

Equity in Pooled Cash and Investments 67,706 43,623 0 111,329 7,040 118,369
Accounts Receivable 990 1,500 162 2,652 0 2,652
Due from Other Governments 6,430 0 0 6,430 0 6,430
Property Taxes Receivable 357,024 0 0 357,024 0 357,024
Allowance for Uncollectible Property Taxes (20,519) 0 0 (20,519) 0 (20,519)
Total Assets $ 411,631 $ 45,123 $ 2,493 $ 459,247 $ 7,040 $ 466,287
LIABILITIES
Accounts Payable $ 1,333 $ 0 $ 0 $ 1,333 $ 0 $ 1,333

Due to Other Funds 0 0 2,493 2,493 0 2,493
Total Liabilities $ 1,333 $ 0 $ 2,493 $ 3,826 $ 0 $ 3,826
Deferred Current Property Taxes $ 320,117 $ 0 $ 0 $ 320,117 $ 0 $ 320,117

Deferred Delinquent Property Taxes 15,388 0 0 15,388 0 15,388
Total Deferred Inflows of Resources $ 335,505 $ 0 $ 0 $ 335,505 $ 0 $ 335,505
FUND BALANCES
Restricted:
Restricted for Public Safety $ 0 $ 45,123 $ 0 $ 45,123 $ 0 $ 45,123
(Continued)
88
Exhibit F-1

Combining Balance Sheet
Nonmajor Governmental Funds (Cont.)
Capital
Constitu- Total
FUND BALANCES (CONT.)
Restricted (Cont.):
Restricted for Public Health and Welfare $ 74,793 $ 0 $ 0 $ 74,793 $ 0 $ 74,793
Restricted for Capital Outlay 0 0 0 0 7,040 7,040
Total Fund Balances $ 74,793 $ 45,123 $ 0 $ 119,916 $ 7,040 $ 126,956
Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 411,631 $ 45,123 $ 2,493 $ 459,247 $ 7,040 $ 466,287
89
Exhibit F-2

Combining Statement of Revenues, Expenditures,
Capital
Constitu- Total
Revenues
Local Taxes $ 442,936 $ 0 $ 0 $ 442,936 $ 0 $ 442,936
Fines, Forfeitures, and Penalties 0 30,198 0 30,198 0 30,198
Charges for Current Services 7,135 0 7,119 14,254 0 14,254
Other Local Revenues 16,278 3,500 0 19,778 0 19,778
State of Tennessee 32,125 0 0 32,125 0 32,125
Total Revenues $ 498,474 $ 33,698 $ 7,119 $ 539,291 $ 0 $ 539,291
Expenditures
Current:
Finance $ 0 $ 0 $ 7,119 $ 7,119 $ 0 $ 7,119
Public Safety 0 26,284 0 26,284 0 26,284
Public Health and Welfare 465,851 0 0 465,851 0 465,851
Other Operations 8,808 0 0 8,808 0 8,808
Capital Projects 0 0 0 0 22,031 22,031
Total Expenditures $ 474,659 $ 26,284 $ 7,119 $ 508,062 $ 22,031 $ 530,093

Over Expenditures $ 23,815 $ 7,414 $ 0 $ 31,229 $ (22,031) $ 9,198
Net Change in Fund Balances $ 23,815 $ 7,414 $ 0 $ 31,229 $ (22,031) $ 9,198

Fund Balance, July 1, 2015 50,978 37,709 0 88,687 29,071 117,758
Fund Balance, June 30, 2016 $ 74,793 $ 45,123 $ 0 $ 119,916 $ 7,040 $ 126,956
90
Exhibit F-3

Schedule of Revenues, Expenditures, and Changes
Solid Waste/Sanitation Fund
Variance
with Final
Budget -
Revenues
Local Taxes $ 442,936 $ 429,698 $ 429,698 $ 13,238
Charges for Current Services 7,135 3,000 10,135 (3,000)
Other Local Revenues 16,278 15,000 15,000 1,278
State of Tennessee 32,125 41,700 34,565 (2,440)
Total Revenues $ 498,474 $ 489,398 $ 489,398 $ 9,076
Expenditures
Sanitation Education/Information $ 32,455 $ 33,700 $ 33,700 $ 1,245
Waste Pickup 101,731 109,970 114,970 13,239
Convenience Centers 181,579 171,465 185,665 4,086
Other Waste Collection 150,086 142,000 150,617 531
Landfill Operation and Maintenance 0 10,701 10,701 10,701
Other Operations
Other Charges 8,808 8,000 9,000 192
Total Expenditures $ 474,659 $ 475,836 $ 504,653 $ 29,994

Over Expenditures $ 23,815 $ 13,562 $ (15,255) $ 39,070
Net Change in Fund Balance $ 23,815 $ 13,562 $ (15,255) $ 39,070

91
Exhibit F-4

Drug Control Fund
Variance
with Final
Budget -
Revenues
Fines, Forfeitures, and Penalties $ 30,198 $ 34,000 $ 34,000 $ (3,802)
Other Local Revenues 3,500 0 0 3,500
State of Tennessee 0 150 150 (150)
Total Revenues $ 33,698 $ 34,150 $ 34,150 $ (452)
Expenditures
Public Safety
Drug Enforcement $ 26,284 $ 23,000 $ 33,000 $ 6,716

Over Expenditures $ 7,414 $ 11,150 $ 1,150 $ 6,264
Net Change in Fund Balance $ 7,414 $ 11,150 $ 1,150 $ 6,264

Fund Balance, July 1, 2015 37,709 37,709 37,709 0
92
Major Governmental Fund
General Debt Service Fund
____________________________
The General Debt Service Fund is used to account for and report
financial resources that are restricted, committed, or assigned to
expenditure for principal and interest.
____________________________
93
Exhibit G

Variance
with Final
Budget -
Revenues
Local Taxes $ 398,316 $ 388,464 $ 388,464 $ 9,852
State of Tennessee 19,026 25,000 25,000 (5,974)
Other Governments and Citizens Groups 19,503 0 19,503 0
Total Revenues $ 444,149 $ 419,464 $ 438,967 $ 5,182
Expenditures
Principal on Debt
General Government $ 246,902 $ 247,170 $ 247,170 $ 268
Interest on Debt
General Government 16,955 60,080 25,080 8,125
Other Debt Service
General Government 39,865 12,000 47,000 7,135


Transfers In $ 0 $ 50,000 $ 50,000 $ (50,000)
City General Fund Transfer 0 19,503 0 0
Total Other Financing Sources $ 0 $ 69,503 $ 50,000 $ (50,000)
Net Change in Fund Balance $ 140,427 $ 169,717 $ 169,717 $ (29,290)

Fund Balance, June 30, 2016 $ 887,592 $ 980,160 $ 980,160 $ (92,568)
94
Fiduciary Funds
____________________________
Agency Funds are used to account for assets held by the county in a
trustee capacity or as an agent for individuals, private organizations,
other governments, and/or other funds. Agency funds are custodial in
nature (assets equal liabilities) and do not involve measurement of
results of operations.
____________________________
Cities - Sales Tax Fund The Cities - Sales Tax Fund is used to account for the
second half of the sales tax revenues collected inside incorporated cities of the
county. These revenues are received by the county from the State of Tennessee and
forwarded to the various cities on a monthly basis.
Constitutional Officers - Agency Fund The Constitutional Officers - Agency Fund

is used to account for amounts collected in an agency capacity by the county clerk,
circuit and general sessions courts clerk, clerk and master, register of deeds, and
sheriff. Such collections include amounts due the state, cities, other county funds,
litigants, heirs, and others.
95
Exhibit H-1
Combining Statement of Fiduciary Assets and Liabilities
Fiduciary Funds
June 30, 2016
Agency Funds
Constitu-
Cities - tional
Sales Officers -
Tax Agency Total
ASSETS
Cash $ 0 $ 335,405 $ 335,405

Due from Other Governments 149,571 0 149,571
Total Assets $ 149,571 $ 335,405 $ 484,976
LIABILITIES
Due to Other Taxing Units $ 149,571 $ 0 $ 149,571

Due to Litigants, Heirs, and Others 0 335,405 335,405
Total Liabilities $ 149,571 $ 335,405 $ 484,976
96
Exhibit H-2

Combining Statement of Changes in Assets and Liabilities - All Agency Funds
Beginning Ending
Balance Additions Deductions Balance
Cities - Sales Tax Fund

Assets
Equity in Pooled Cash and Investments $ 0 $ 863,087 $ 863,087 $ 0
Due from Other Governments 148,682 149,571 148,682 149,571
Total Assets $ 148,682 $ 1,012,658 $ 1,011,769 $ 149,571
Liabilities
Due to Other Taxing Units $ 148,682 $ 1,012,658 $ 1,011,769 $ 149,571
Total Liabilities $ 148,682 $ 1,012,658 $ 1,011,769 $ 149,571
Constitutional Officers - Agency Fund

Assets
Cash $ 903,643 $ 3,401,897 $ 3,970,135 $ 335,405
Total Assets $ 903,643 $ 3,401,897 $ 3,970,135 $ 335,405
Liabilities
Due to Litigants, Heirs, and Others $ 903,643 $ 3,401,897 $ 3,970,135 $ 335,405
Total Liabilities $ 903,643 $ 3,401,897 $ 3,970,135 $ 335,405
Totals - All Agency Funds

Assets
Cash $ 903,643 $ 3,401,897 $ 3,970,135 $ 335,405
Equity in Pooled Cash and Investments 0 863,087 863,087 0
Due from Other Governments 148,682 149,571 148,682 149,571
Total Assets $ 1,052,325 $ 4,414,555 $ 4,981,904 $ 484,976
Liabilities
Due to Other Taxing Units $ 148,682 $ 1,012,658 $ 1,011,769 $ 149,571
Due to Litigants, Heirs, and Others 903,643 3,401,897 3,970,135 335,405
Total Liabilities $ 1,052,325 $ 4,414,555 $ 4,981,904 $ 484,976
97
Sequatchie County School Department
____________________________
This section presents combining and individual fund financial

statements for the Sequatchie County School Department, a discretely
presented component unit. The School Department uses a General
Fund, two Special Revenue Funds, and a Capital Projects Fund.
____________________________
General Purpose School Fund The General Purpose School Fund is used to
account for general operations of the School Department.
School Federal Projects Fund The School Federal Projects Fund is used to account
for restricted federal revenues, which must be expended on specific education
programs.
Central Cafeteria Fund The Central Cafeteria Fund is used to account for the
cafeteria operations in each of the schools.
Education Capital Projects Fund The Education Capital Projects Fund is used to
account for construction projects of the School Department.
98
Exhibit I-1

Statement of Activities
Net (Expense)
Revenue and
Program Revenues Changes in
Operating Net Position
Charges Grants Total
for and Governmental
Functions/Programs Expenses Services Contributions Activities
Instruction $ 10,118,399 $ 32,857 $ 1,370,306 $ (8,715,236)
Support Services 5,603,765 0 496,378 (5,107,387)
Operation of Non-instructional Services 1,571,938 60,672 1,640,286 129,020
Total Governmental Activities $ 17,294,102 $ 93,529 $ 3,506,970 $ (13,693,603)
General Revenues:
Taxes:
Property Taxes Levied for General Purposes $ 3,003,364
Local Option Sales Taxes 1,317,047
Other Local Taxes 7,643
Grants and Contributions Not Restricted to Specific Programs 12,232,429
Unrestricted Investment Earnings 29,467
Miscellaneous 88,054
Total General Revenues $ 16,678,004
Insurance Recovery $ 710
Change in Net Position $ 2,985,111

Net Position, July 1, 2015 32,392,644
Net Position, June 30, 2016 $ 35,377,755
99
Exhibit I-2

Balance Sheet - Governmental Funds
June 30, 2016
Nonmajor
Funds
Major Funds Other
General Education Govern- Total
Purpose Capital mental Governmental
School Projects Funds Funds
ASSETS
Cash $ 0 $ 0 $ 1,443 $ 1,443

Equity in Pooled Cash and Investments 11,836,636 88,757 775,884 12,701,277
Accounts Receivable 1,205 0 0 1,205
Due from Other Governments 384,629 0 85,781 470,410
Due from Other Funds 855 0 0 855
Property Taxes Receivable 3,163,133 0 0 3,163,133
Allowance for Uncollectible Property Taxes (162,329) 0 0 (162,329)
Total Assets $ 15,224,129 $ 88,757 $ 863,108 $ 16,175,994
LIABILITIES
Accounts Payable $ 6,000 $ 0 $ 0 $ 6,000

Payroll Deductions Payable 568,909 0 0 568,909
Total Liabilities $ 574,909 $ 0 $ 0 $ 574,909
Deferred Current Property Taxes $ 2,873,229 $ 0 $ 0 $ 2,873,229

Deferred Delinquent Property Taxes 115,614 0 0 115,614
Other Deferred/Unavailable Revenue 117,481 0 5,132 122,613
Total Deferred Inflows of Resources $ 3,106,324 $ 0 $ 5,132 $ 3,111,456
FUND BALANCES
Restricted:
Restricted for Instruction $ 193 $ 0 $ 0 $ 193
(Continued)
100
Exhibit I-2

Balance Sheet - Governmental Funds
Discretely Presented Sequatchie County School Department (Cont.)
Nonmajor
Funds
Major Funds Other
FUND BALANCES (CONT.)
Restricted (Cont.):
Restricted for Operation of Non-instructional Services $ 0 $ 0 $ 557,976 $ 557,976
Restricted for Capital Outlay 1,161,140 0 0 1,161,140
Committed:
Committed for Capital Outlay 0 88,757 0 88,757
Assigned:
Assigned for Instruction 248,114 0 300,000 548,114
Unassigned 10,133,449 0 0 10,133,449
Total Fund Balances $ 11,542,896 $ 88,757 $ 857,976 $ 12,489,629
Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 15,224,129 $ 88,757 $ 863,108 $ 16,175,994
101
Exhibit I-3

Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position
June 30, 2016

of net position (Exhibit A) are different because:
Total fund balances - balance sheet - governmental funds (Exhibit I-2) $ 12,489,629
(1) Capital assets used in governmental activities are not

financial resources and therefore are not reported in
the governmental funds.
Add: land $ 1,256,649
Add: construction in progress 820,470
Add: buildings and improvements net of accumulated depreciation 20,189,635
Add: infrastructure net of accumulated depreciation 963,519
Add: other capital assets net of accumulated depreciation 742,246 23,972,519
(2) Long-term liabilities are not due and payable in the current period and
therefore are not reported in the governmental funds.
Less: other postemployment benefits liability $ (342,891)
Less: net pension liability - teacher legacy plan (81,567)
(424,458)
(3) Amounts reported as deferred outflows of resources and deferred
inflows of resources related to pensions will be amortized and
recognized as components of pension expense in future years:
Add: deferred outflows of resources related to pensions $ 959,536
Less: deferred inflows of resources related to pensions (2,146,693) (1,187,157)
(4) Net pension assets are not current financial resources and
therefore are not reported in the governmental funds.
Add: net pension assets - agent plan $ 275,450
Add: net pension assets - teacher retirement plan 13,545 288,995
(5) Other long-term assets are not available to pay for

current-period expenditures and therefore are deferred
in the governmental funds. 238,227
Net position of governmental activities (Exhibit A) $ 35,377,755
102
Exhibit I-4

and Changes in Fund Balances -
Governmental Funds
Nonmajor
Funds
Major Funds Other
Revenues
Local Taxes $ 4,383,503 $ 0 $ 0 $ 4,383,503
Licenses and Permits 1,406 0 0 1,406
Charges for Current Services 27,959 0 62,504 90,463
Other Local Revenues 126,116 0 2,195 128,311
State of Tennessee 12,514,562 0 13,179 12,527,741
Federal Government 256,311 0 2,934,299 3,190,610
Total Revenues $ 17,309,857 $ 0 $ 3,012,177 $ 20,322,034
Expenditures
Current:
Instruction $ 9,508,195 $ 0 $ 1,068,217 $ 10,576,412
Support Services 4,773,014 0 339,776 5,112,790
Operation of Non-instructional Services 130,010 0 1,394,405 1,524,415
Capital Outlay 967,241 0 0 967,241
Capital Projects 0 1,640,518 0 1,640,518
Total Expenditures $ 15,378,460 $ 1,640,518 $ 2,802,398 $ 19,821,376

Over Expenditures $ 1,931,397 $ (1,640,518) $ 209,779 $ 500,658

Proceeds from Sale of Capital Assets $ 1,500 $ 0 $ 0 $ 1,500
Insurance Recovery 710 0 0 710
Transfers In 83,542 104,000 0 187,542
Transfers Out (104,000) 0 (83,542) (187,542)
Total Other Financing Sources (Uses) $ (18,248) $ 104,000 $ (83,542) $ 2,210
Net Change in Fund Balances $ 1,913,149 $ (1,536,518) $ 126,237 $ 502,868

Fund Balance, July 1, 2015 9,629,747 1,625,275 731,739 11,986,761
Fund Balance, June 30, 2016 $ 11,542,896 $ 88,757 $ 857,976 $ 12,489,629
103
Exhibit I-5

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

of activities (Exhibit B) are different because:
Net change in fund balances - total governmental funds (Exhibit I-4) $ 502,868
(1) Governmental funds report capital outlays as expenditures. However,

in the statement of activities, the cost of these assets is allocated
over their useful lives and reported as depreciation expense. The
difference between capital outlays and depreciation is itemized as
follows:
Add: capital assets purchased in the current period $ 2,252,318
Less: current-year depreciation expense (820,200) 1,432,118
(2) The net effect of various miscellaneous transactions involving capital

assets (sales, trade-ins, and donations) is to decrease net position.
Less: book value of capital assets disposed (3,100)
(3) Revenues in the statement of activities that do not provide current

financial resources are not reported as revenues in the funds.
Add: deferred delinquent property taxes and other deferred June 30, 2016 $ 238,227
Less: deferred delinquent property taxes and other deferred June 30, 2015 (281,758) (43,531)
(4) Some expenses reported in the statement of activities do not require

the use of current financial resources and therefore are not reported
as expenditures in the governmental funds.
Change in other postemployment benefits liability $ (11,786)
Change in net pension asset - agent plan (74,827)
Change in net pension asset - teacher retirement plan 13,545
Change in net pension asset - teacher legacy plan (113,728)
Change in deferred outflows related to pensions 36,797
Change in deferred inflows related to pensions 1,246,755 1,096,756
Change in net position of governmental activities (Exhibit B) $ 2,985,111
104
Exhibit I-6

Combining Balance Sheet - Nonmajor Governmental Funds
June 30, 2016

Total
School Nonmajor
Federal Central Governmental
Projects Cafeteria Funds
ASSETS
Cash $ 0 $ 1,443 $ 1,443

Equity in Pooled Cash and Investments 233,179 542,705 775,884
Due from Other Governments 66,821 18,960 85,781
Total Assets $ 300,000 $ 563,108 $ 863,108
Other Deferred/Unavailable Revenue $ 0 $ 5,132 $ 5,132

Total Deferred Inflows of Resources $ 0 $ 5,132 $ 5,132
FUND BALANCES
Restricted:
Restricted for Operation of Non-instructional Services $ 0 $ 557,976 $ 557,976
Assigned:
Assigned for Instruction 300,000 0 300,000
Total Fund Balances $ 300,000 $ 557,976 $ 857,976
Total Deferred Inflows of Resources and Fund Balances $ 300,000 $ 563,108 $ 863,108
105
Exhibit I-7
Combining Statement of Revenues, Expenditures,
and Changes in Fund Balances -

Total
School Nonmajor
Federal Central Governmental
Projects Cafeteria Funds
Revenues
Charges for Current Services $ 0 $ 62,504 $ 62,504
Other Local Revenues 0 2,195 2,195
State of Tennessee 0 13,179 13,179
Federal Government 1,616,692 1,317,607 2,934,299
Total Revenues $ 1,616,692 $ 1,395,485 $ 3,012,177
Expenditures
Current:
Instruction $ 1,068,217 $ 0 $ 1,068,217
Support Services 339,776 0 339,776
Operation of Non-instructional Services 178,063 1,216,342 1,394,405
Total Expenditures $ 1,586,056 $ 1,216,342 $ 2,802,398

Over Expenditures $ 30,636 $ 179,143 $ 209,779

Transfers Out $ (30,636) $ (52,906) $ (83,542)
Total Other Financing Sources (Uses) $ (30,636) $ (52,906) $ (83,542)
Net Change in Fund Balances $ 0 $ 126,237 $ 126,237

Fund Balance, July 1, 2015 300,000 431,739 731,739
Fund Balance, June 30, 2016 $ 300,000 $ 557,976 $ 857,976
106
Exhibit I-8

General Purpose School Fund
Variance
with Final
Budget -
Revenues
Local Taxes $ 4,383,503 $ 4,408,710 $ 4,415,710 $ (32,207)
Licenses and Permits 1,406 1,200 1,200 206
Charges for Current Services 27,959 19,000 19,000 8,959
State of Tennessee 12,514,562 12,413,150 12,439,962 74,600
Federal Government 256,311 231,029 247,860 8,451
Total Revenues $ 17,309,857 $ 17,110,089 $ 17,199,732 $ 110,125
Expenditures
Instruction
Regular Instruction Program $ 7,429,718 $ 7,831,426 $ 7,772,776 $ 343,058
Alternative Instruction Program 81,024 90,534 90,534 9,510
Special Education Program 1,651,141 1,724,930 1,783,563 132,422
Vocational Education Program 217,155 361,646 361,646 144,491
Student Body Education Program 15,849 17,111 17,111 1,262
Adult Education Program 113,308 123,974 117,672 4,364
Support Services
Attendance 103,951 117,775 117,775 13,824
Health Services 168,540 185,053 185,553 17,013
Other Student Support 344,694 334,066 363,566 18,872
Regular Instruction Program 688,657 693,283 693,533 4,876
Special Education Program 195,506 211,672 211,672 16,166
Adult Programs 101,154 111,843 111,343 10,189
Other Programs 33,812 0 33,812 0
Board of Education 254,750 270,969 270,969 16,219
Director of Schools 178,760 177,905 187,305 8,545
Office of the Principal 639,383 630,196 649,196 9,813
Fiscal Services 184,731 188,256 188,256 3,525
Operation of Plant 1,049,571 1,162,614 1,162,614 113,043
Maintenance of Plant 235,169 243,171 243,171 8,002
Transportation 594,336 680,157 680,157 85,821
Operation of Non-instructional Services
Community Services 29,362 26,725 30,725 1,363
Early Childhood Education 100,648 101,150 101,150 502
Capital Outlay
Regular Capital Outlay 967,241 1,912,758 1,912,758 945,517
Total Expenditures $ 15,378,460 $ 17,197,214 $ 17,286,857 $ 1,908,397

Over Expenditures $ 1,931,397 $ (87,125) $ (87,125) $ 2,018,522
(Continued)
107
Exhibit I-8

General Purpose School Fund (Cont.)
Variance
with Final
Budget -

Proceeds from Sale of Capital Assets $ 1,500 $ 0 $ 0 $ 1,500
Insurance Recovery 710 0 0 710
Transfers In 83,542 87,125 387,125 (303,583)
Transfers Out (104,000) 0 (300,000) 196,000
Total Other Financing Sources $ (18,248) $ 87,125 $ 87,125 $ (105,373)
Net Change in Fund Balance $ 1,913,149 $ 0 $ 0 $ 1,913,149

Fund Balance, July 1, 2015 9,629,747 9,250,248 9,250,248 379,499
Fund Balance, June 30, 2016 $ 11,542,896 $ 9,250,248 $ 9,250,248 $ 2,292,648
108
Exhibit I-9

School Federal Projects Fund
Variance
with Final
Budget -
Revenues
Federal Government $ 1,616,692 $ 1,583,267 $ 1,799,839 $ (183,147)
Total Revenues $ 1,616,692 $ 1,583,267 $ 1,799,839 $ (183,147)
Expenditures
Instruction
Regular Instruction Program $ 621,652 $ 596,782 $ 655,343 $ 33,691
Vocational Education Program 21,513 22,328 21,746 233
Support Services
Other Student Support 18,312 21,579 51,634 33,322
Regular Instruction Program 138,952 129,807 176,638 37,686
Vocational Education Program 1,909 1,909 1,909 0
Transportation 95,338 106,244 108,181 12,843
Community Services 178,063 180,534 180,534 2,471

Over Expenditures $ 30,636 $ 30,350 $ 33,923 $ (3,287)

Transfers Out $ (30,636) $ (30,349) $ (33,923) $ 3,287
Total Other Financing Sources $ (30,636) $ (30,349) $ (33,923) $ 3,287
Net Change in Fund Balance $ 0 $ 1 $ 0 $ 0

Fund Balance, July 1, 2015 300,000 300,000 300,000 0
Fund Balance, June 30, 2016 $ 300,000 $ 300,001 $ 300,000 $ 0
109
Exhibit I-10

Central Cafeteria Fund
Variance
with Final
Budget -
Revenues
Charges for Current Services $ 62,504 $ 76,500 $ 76,500 $ (13,996)
Other Local Revenues 2,195 3,500 3,500 (1,305)
State of Tennessee 13,179 62,179 14,000 (821)
Federal Government 1,317,607 1,192,752 1,309,905 7,702
Total Revenues $ 1,395,485 $ 1,334,931 $ 1,403,905 $ (8,420)
Expenditures
Food Service $ 1,216,342 $ 1,282,026 $ 1,351,000 $ 134,658


Transfers Out $ (52,906) $ (52,905) $ (52,906) $ 0
Total Other Financing Sources $ (52,906) $ (52,905) $ (52,906) $ 0
Net Change in Fund Balance $ 126,237 $ 0 $ (1) $ 126,238

110
MISCELLANEOUS SCHEDULES
111
Exhibit J-1

Schedule of Changes in Long-term Notes and Other Loans
Paid and/or
Original Date Last Issued Matured
Amount Interest of Maturity Outstanding During During Outstanding
Description of Indebtedness of Issue Rate Issue Date 7-1-15 Period Period 6-30-16
NOTES PAYABLE
Payable through General Debt Service Fund

Land (Valley Fest) $ 200,000 2.47 % 7-27-12 7-27-24 $ 170,538 $ 0 $ 15,235 $ 155,303
Jail Upgrades 50,000 1.55 4-10-15 4-10-18 50,000 0 16,667 33,333
Repeater System 235,000 1.49 3-24-16 3-24-19 0 235,000 0 235,000
Total Payable through General Debt Service Fund $ 220,538 $ 235,000 $ 31,902 $ 423,636
Payable through Highway/Public Works Fund

Highway Department Garage and Office 140,000 3.19 7-29-09 7-29-15 $ 23,335 $ 0 $ 23,335 $ 0
Total Notes Payable $ 243,873 $ 235,000 $ 55,237 $ 423,636
OTHER LOANS PAYABLE
Payable through General Debt Service Fund

Justice Center 6,500,000 Variable 11-1-04 5-25-32 $ 4,670,000 $ 0 $ 215,000 $ 4,455,000
112
Exhibit J-2

Schedule of Long-term Debt Requirements by Year
Year
Ending Notes
June 30 Principal Interest Total
2017 $ 267,268 $ 5,493 $ 272,761

2018 32,669 3,760 36,429
2019 16,403 3,101 19,504
2020 16,814 2,690 19,504
2021 17,228 2,275 19,503
2022 17,666 1,837 19,503
2023 18,108 1,395 19,503
2024 18,562 942 19,504
2025 18,918 469 19,387
Total $ 423,636 $ 21,962 $ 445,598
Year
Ending Other Loans
June 30 Principal Interest Other Fees Total
2017 $ 221,000 $ 25,839 $ 29,978 $ 276,817

2018 228,000 24,557 28,541 281,098
2019 234,000 23,235 27,059 284,294
2020 242,000 21,878 25,538 289,416
2021 249,000 20,474 23,965 293,439
2022 256,000 19,030 22,347 297,377
2023 264,000 17,545 20,683 302,228
2024 272,000 16,014 18,967 306,981
2025 280,000 14,436 17,199 311,635
2026 288,000 12,812 15,379 316,191
2027 297,000 11,142 13,507 321,649
2028 306,000 9,419 11,576 326,995
2029 315,000 7,644 9,587 332,231
2030 325,000 5,817 7,540 338,357
2031 334,000 3,932 5,427 343,359
2032 344,000 1,995 3,256 349,251
Total $ 4,455,000 $ 235,769 $ 280,549 $ 4,971,318
113
Exhibit J-3
Schedule of Transfers
From Fund To Fund Purpose Amount
School Federal Projects General Purpose School Indirect costs $ 30,636

Central Cafeteria " Direct costs 52,906
General Purpose School Education Capital Projects Construction costs 104,000
Total Transfers Discretely Presented

Sequatchie County School Department $ 187,542
114
Exhibit J-4

Schedule of Salaries and Official Bonds of Principal Officials
Primary Government and Discretely Presented Sequatchie County School Department
Salary
Paid
During
Official Authorization for Salary Period Bond Surety
County Executive Section 8-24-102, TCA $ 73,738 $ 100,000 RLI Insurance Company
Highway Supervisor Section 8-24-102, TCA 70,228 100,000 "
Director of Schools State Board of Education and 89,000 (1) 100,000 Auto-Owners (Mutual) Insurance Company
Sequatchie County Board of
Education
Trustee Section 8-24-102, TCA 63,843 760,000 RLI Insurance Company
Assessor of Property Section 8-24-102, TCA 63,843 50,000 Western Surety Company
County Clerk Section 8-24-102, TCA 63,843 50,000 RLI Insurance Company
Circuit and General Sessions Courts Clerk Section 8-24-102, TCA 63,843 50,000 "
Clerk and Master Section 8-24-102, TCA 63,843 25,000 State Farm Fire and Casualty Company
Register of Deeds Section 8-24-102, TCA 63,843 50,000 RLI Insurance Company
Sheriff Section 8-24-102, TCA 70,228 (2) 100,000 "
Employee Dishonesty Bond Coverage:

General County Employees 150,000 Tennessee Risk Management Trust
Highway Department Employees 150,000 Local Government Insurance Pool
School Department Employees 150,000 Southern States Insurance Group, Inc.
(1) Includes a chief executive officer training supplement of $1,000.

(2) Does not include a law enforcement training supplement of $600.
115
Exhibit J-5

Schedule of Detailed Revenues -
All Governmental Fund Types

Constitu-
Solid tional Highway /
Waste / Drug Officers - Public
General Sanitation Control Fees Works
Local Taxes
County Property Taxes
Current Property Tax $ 3,356,953 $ 397,967 $ 0 $ 0 $ 0
Trustee's Collections - Prior Year 195,719 22,003 0 0 0
Circuit Clerk/Clerk and Master Collections - Prior Years 106,219 14,237 0 0 0
Interest and Penalty 34,262 3,877 0 0 0
Payments in-Lieu-of Taxes - T.V.A. 1,488 176 0 0 0
Payments in-Lieu-of Taxes - Local Utilities 24,648 2,771 0 0 0
Payments in-Lieu-of Taxes - Other 559 66 0 0 0
County Local Option Taxes
Local Option Sales Tax 452,614 0 0 0 0
Hotel/Motel Tax 15,344 0 0 0 0
Litigation Tax - General 28,514 0 0 0 0
Litigation Tax - Special Purpose 9,248 0 0 0 0
Litigation Tax - Jail, Workhouse, or Courthouse 7,803 0 0 0 0
Business Tax 98,274 0 0 0 0
Statutory Local Taxes
Bank Excise Tax 15,515 1,839 0 0 0
Wholesale Beer Tax 61,671 0 0 0 0
Interstate Telecommunications Tax 894 0 0 0 0
Total Local Taxes $ 4,409,725 $ 442,936 $ 0 $ 0 $ 0
Licenses and Permits

Licenses
Cable TV Franchise $ 43,026 $ 0 $ 0 $ 0 $ 0
Permits
Beer Permits 808 0 0 0 0
Total Licenses and Permits $ 43,834 $ 0 $ 0 $ 0 $ 0
(Continued)
116
Exhibit J-5

All Governmental Fund Types (Cont.)

Constitu-
Fines, Forfeitures, and Penalties

Circuit Court
Fines $ 6,707 $ 0 $ 0 $ 0 $ 0
Officers Costs 1,937 0 0 0 0
Drug Control Fines 0 0 335 0 0
Drug Court Fees 499 0 0 0 0
Jail Fees 1,681 0 0 0 0
DUI Treatment Fines 665 0 0 0 0
Data Entry Fee - Circuit Court 3,515 0 0 0 0
Courtroom Security Fee 3,930 0 0 0 0
Criminal Court
Jail Fees 1,046 0 0 0 0
DUI Treatment Fines 570 0 0 0 0
General Sessions Court
Fines 9,695 0 0 0 0
Fines for Littering 5 0 0 0 0
Game and Fish Fines 112 0 0 0 0
Drug Control Fines 2,025 0 9,940 0 0
Drug Court Fees 1,499 0 0 0 0
Jail Fees 1,109 0 0 0 0
DUI Treatment Fines 1,468 0 0 0 0
Data Entry Fee - General Sessions Court 3,012 0 0 0 0
Chancery Court
Officers Costs 53 0 0 0 0
Data Entry Fee - Chancery Court 1,644 0 0 0 0
(Continued)
117
Exhibit J-5


Constitu-
Fines, Forfeitures, and Penalties (Cont.)

Other Courts - In-county
Drug Court Fees $ 1,393 $ 0 $ 0 $ 0 $ 0
Other Fines, Forfeitures, and Penalties
Proceeds from Confiscated Property 0 0 19,923 0 0
Total Fines, Forfeitures, and Penalties $ 61,768 $ 0 $ 30,198 $ 0 $ 0
Charges for Current Services

General Service Charges
Surcharge - Waste Tire Disposal $ 0 $ 7,135 $ 0 $ 0 $ 0
Patient Charges 3,961 0 0 0 0
Work Release Charges for Board 4,305 0 0 0 0
Fees
Copy Fees 406 0 0 0 0
Library Fees 3,084 0 0 0 0
Telephone Commissions 36,409 0 0 0 0
Vending Machine Collections 37,967 0 0 0 0
Constitutional Officers' Fees and Commissions 0 0 0 7,119 0
Data Processing Fee - Register 5,092 0 0 0 0
Data Processing Fee - Sheriff 1,131 0 0 0 0
Data Processing Fee - County Clerk 1,353 0 0 0 0
Total Charges for Current Services $ 93,708 $ 7,135 $ 0 $ 7,119 $ 0
Other Local Revenues

Recurring Items
Investment Income $ 24,954 $ 0 $ 0 $ 0 $ 0
Lease/Rentals 4,920 0 0 0 0
(Continued)
118
Exhibit J-5


Constitu-
Other Local Revenues (Cont.)

Recurring Items (Cont.)
Commissary Sales $ 2,783 $ 0 $ 0 $ 0 $ 0
Sale of Gasoline 0 0 0 0 242
Sale of Maps 138 0 0 0 0
Sale of Recycled Materials 0 16,278 0 0 0
Miscellaneous Refunds 14,056 0 0 0 10,757
Nonrecurring Items
Contributions and Gifts 1,000 0 3,500 0 0
Total Other Local Revenues $ 47,851 $ 16,278 $ 3,500 $ 0 $ 10,999
Fees Received From County Officials

Fees In-Lieu-of Salary
County Clerk $ 193,334 $ 0 $ 0 $ 0 $ 0
Circuit Court Clerk 50,469 0 0 0 0
General Sessions Court Clerk 74,551 0 0 0 0
Clerk and Master 42,367 0 0 0 0
Register 61,670 0 0 0 0
Sheriff 6,847 0 0 0 0
Trustee 225,501 0 0 0 0
Total Fees Received From County Officials $ 654,739 $ 0 $ 0 $ 0 $ 0
State of Tennessee
General Government Grants
Juvenile Services Program $ 18,180 $ 0 $ 0 $ 0 $ 0
On-behalf Contributions for OPEB 3,075 0 0 0 0
(Continued)
119
Exhibit J-5


Constitu-
State of Tennessee (Cont.)

Public Safety Grants
Law Enforcement Training Programs $ 11,400 $ 0 $ 0 $ 0 $ 0
Health and Welfare Grants
Health Department Programs 118,594 0 0 0 0
Public Works Grants
Bridge Program 0 0 0 0 663,780
Litter Program 0 32,125 0 0 0
Other State Revenues
Income Tax 29,053 0 0 0 0
Resort District Sales Tax 2,409 0 0 0 0
Beer Tax 18,488 0 0 0 0
Vehicle Certificate of Title Fees 5,976 0 0 0 0
Alcoholic Beverage Tax 33,587 0 0 0 0
State Revenue Sharing - T.V.A. 207,139 0 0 0 0
Contracted Prisoner Boarding 763,902 0 0 0 0
Gasoline and Motor Fuel Tax 0 0 0 0 1,466,159
Petroleum Special Tax 0 0 0 0 11,031
Registrar's Salary Supplement 15,164 0 0 0 0
Other State Grants 9,887 0 0 0 0
Other State Revenues 2,131 0 0 0 0
Total State of Tennessee $ 1,238,985 $ 32,125 $ 0 $ 0 $ 2,140,970
Federal Government
Federal Through State
Homeland Security Grants $ 0 $ 0 $ 0 $ 0 $ 10,562
Other Federal through State 33,372 0 0 0 0
Total Federal Government $ 33,372 $ 0 $ 0 $ 0 $ 10,562
(Continued)
120
Exhibit J-5


Constitu-
Other Governments and Citizens Groups

Other Governments
Contributions $ 0 $ 0 $ 0 $ 0 $ 0
Contracted Services 106,918 0 0 0 0
Total Other Governments and Citizens Groups $ 106,918 $ 0 $ 0 $ 0 $ 0
Total $ 6,690,900 $ 498,474 $ 33,698 $ 7,119 $ 2,162,531
(Continued)
121
Exhibit J-5

Debt Service
Fund
General
Debt
Service Total
Local Taxes
Current Property Tax $ 344,920 $ 4,099,840
Trustee's Collections - Prior Year 25,145 242,867
Circuit Clerk/Clerk and Master Collections - Prior Years 18,982 139,438
Interest and Penalty 4,295 42,434
Payments in-Lieu-of Taxes - T.V.A. 153 1,817
Payments in-Lieu-of Taxes - Local Utilities 3,167 30,586
Payments in-Lieu-of Taxes - Other 60 685
Local Option Sales Tax 0 452,614
Hotel/Motel Tax 0 15,344
Litigation Tax - General 0 28,514
Litigation Tax - Special Purpose 0 9,248
Litigation Tax - Jail, Workhouse, or Courthouse 0 7,803
Business Tax 0 98,274
Bank Excise Tax 1,594 18,948
Wholesale Beer Tax 0 61,671
Interstate Telecommunications Tax 0 894
Total Local Taxes $ 398,316 $ 5,250,977

Licenses
Cable TV Franchise $ 0 $ 43,026
Permits
Beer Permits 0 808
Total Licenses and Permits $ 0 $ 43,834
(Continued)
122
Exhibit J-5

Debt Service
Fund
General
Debt
Service Total
Fines, Forfeitures, and Penalties

Circuit Court
Fines $ 0 $ 6,707
Officers Costs 0 1,937
Drug Control Fines 0 335
Drug Court Fees 0 499
Jail Fees 0 1,681
DUI Treatment Fines 0 665
Data Entry Fee - Circuit Court 0 3,515
Courtroom Security Fee 0 3,930
Criminal Court
Jail Fees 0 1,046
DUI Treatment Fines 0 570
Fines 0 9,695
Fines for Littering 0 5
Game and Fish Fines 0 112
Drug Control Fines 0 11,965
Drug Court Fees 0 1,499
Jail Fees 0 1,109
DUI Treatment Fines 0 1,468
Data Entry Fee - General Sessions Court 0 3,012
Chancery Court
Officers Costs 0 53
Data Entry Fee - Chancery Court 0 1,644
(Continued)
123
Exhibit J-5

Debt Service
Fund
General
Debt
Service Total
Fines, Forfeitures, and Penalties (Cont.)

Other Courts - In-county
Drug Court Fees $ 0 $ 1,393
Other Fines, Forfeitures, and Penalties
Proceeds from Confiscated Property 0 19,923
Total Fines, Forfeitures, and Penalties $ 0 $ 91,966

General Service Charges
Surcharge - Waste Tire Disposal $ 0 $ 7,135
Patient Charges 0 3,961
Work Release Charges for Board 0 4,305
Fees
Copy Fees 0 406
Library Fees 0 3,084
Telephone Commissions 0 36,409
Vending Machine Collections 0 37,967
Constitutional Officers' Fees and Commissions 0 7,119
Data Processing Fee - Register 0 5,092
Data Processing Fee - Sheriff 0 1,131
Data Processing Fee - County Clerk 0 1,353
Total Charges for Current Services $ 0 $ 107,962

Recurring Items
Investment Income $ 7,304 $ 32,258
Lease/Rentals 0 4,920
(Continued)
124
Exhibit J-5

Debt Service
Fund
General
Debt
Service Total
Other Local Revenues (Cont.)

Recurring Items (Cont.)
Commissary Sales $ 0 $ 2,783
Sale of Gasoline 0 242
Sale of Maps 0 138
Sale of Recycled Materials 0 16,278
Miscellaneous Refunds 0 24,813
Nonrecurring Items
Contributions and Gifts 0 4,500
Total Other Local Revenues $ 7,304 $ 85,932
Fees Received From County Officials

Fees In-Lieu-of Salary
County Clerk $ 0 $ 193,334
Circuit Court Clerk 0 50,469
General Sessions Court Clerk 0 74,551
Clerk and Master 0 42,367
Register 0 61,670
Sheriff 0 6,847
Trustee 0 225,501
Total Fees Received From County Officials $ 0 $ 654,739
State of Tennessee
Juvenile Services Program $ 0 $ 18,180
On-behalf Contributions for OPEB 0 3,075
(Continued)
125
Exhibit J-5

Debt Service
Fund
General
Debt
Service Total

Public Safety Grants
Law Enforcement Training Programs $ 0 $ 11,400
Health and Welfare Grants
Health Department Programs 0 118,594
Public Works Grants
Bridge Program 0 663,780
Litter Program 0 32,125
Income Tax 0 29,053
Resort District Sales Tax 0 2,409
Beer Tax 0 18,488
Vehicle Certificate of Title Fees 0 5,976
Alcoholic Beverage Tax 0 33,587
State Revenue Sharing - T.V.A. 19,026 226,165
Contracted Prisoner Boarding 0 763,902
Gasoline and Motor Fuel Tax 0 1,466,159
Petroleum Special Tax 0 11,031
Registrar's Salary Supplement 0 15,164
Other State Grants 0 9,887
Other State Revenues 0 2,131
Total State of Tennessee $ 19,026 $ 3,431,106
Federal Government
Homeland Security Grants $ 0 $ 10,562
Other Federal through State 0 33,372
Total Federal Government $ 0 $ 43,934
(Continued)
126
Exhibit J-5

Debt Service
Fund
General
Debt
Service Total
Other Governments and Citizens Groups

Other Governments
Contributions $ 19,503 $ 19,503
Contracted Services 0 106,918
Total Other Governments and Citizens Groups $ 19,503 $ 126,421
Total $ 444,149 $ 9,836,871
127
Exhibit J-6

General School
Purpose Federal Central
School Projects Cafeteria Total
Local Taxes
Current Property Tax $ 2,726,865 $ 0 $ 0 $ 2,726,865
Trustee's Collections - Prior Year 160,827 0 0 160,827
Circuit Clerk/Clerk and Master Collections - Prior Years 113,667 0 0 113,667
Interest and Penalty 28,188 0 0 28,188
Payments in-Lieu-of Taxes - T.V.A. 1,203 0 0 1,203
Payments in-Lieu-of Taxes - Local Utilities 20,254 0 0 20,254
Payments in-Lieu-of Taxes - Other 452 0 0 452
Local Option Sales Tax 1,311,857 0 0 1,311,857
Mixed Drink Tax 6,514 0 0 6,514
Bank Excise Tax 12,547 0 0 12,547
Interstate Telecommunications Tax 1,129 0 0 1,129
Total Local Taxes $ 4,383,503 $ 0 $ 0 $ 4,383,503

Licenses
Marriage Licenses $ 1,406 $ 0 $ 0 $ 1,406
Total Licenses and Permits $ 1,406 $ 0 $ 0 $ 1,406

Education Charges
Lunch Payments - Children $ 0 $ 0 $ 567 $ 567
Lunch Payments - Adults 0 0 17,746 17,746
(Continued)
128
Exhibit J-6

General School
Charges for Current Services (Cont.)

Education Charges (Cont.)
A la Carte Sales $ 0 $ 0 $ 44,191 $ 44,191
Receipts from Individual Schools 27,959 0 0 27,959
Total Charges for Current Services $ 27,959 $ 0 $ 62,504 $ 90,463

Recurring Items
Investment Income $ 28,812 $ 0 $ 655 $ 29,467
Lease/Rentals 8,000 0 0 8,000
E-Rate Funding 4,898 0 0 4,898
Miscellaneous Refunds 77,494 0 1,540 79,034
Nonrecurring Items
Sale of Property 650 0 0 650
Damages Recovered from Individuals 370 0 0 370
Contributions and Gifts 5,892 0 0 5,892
Total Other Local Revenues $ 126,116 $ 0 $ 2,195 $ 128,311
State of Tennessee
On-behalf Contributions for OPEB $ 33,812 $ 0 $ 0 $ 33,812
State Education Funds
Basic Education Program 12,061,614 0 0 12,061,614
Early Childhood Education 101,149 0 0 101,149
School Food Service 0 0 13,179 13,179
Driver Education 5,370 0 0 5,370
(Continued)
129
Exhibit J-6

General School

State Education Funds (Cont.)
Other State Education Funds $ 10,518 $ 0 $ 0 $ 10,518
Coordinated School Health 94,996 0 0 94,996
Career Ladder Program 42,656 0 0 42,656
State Revenue Sharing - T.V.A. 149,767 0 0 149,767
Other State Grants 1,200 0 0 1,200
Other State Revenues 13,480 0 0 13,480
Total State of Tennessee $ 12,514,562 $ 0 $ 13,179 $ 12,527,741
Federal Government
USDA School Lunch Program $ 0 $ 0 $ 870,874 $ 870,874
USDA - Commodities 0 0 68,974 68,974
Breakfast 0 0 359,123 359,123
USDA - Other 0 0 17,603 17,603
Adult Education State Grant Program 205,954 0 0 205,954
Vocational Education - Basic Grants to States 0 37,952 0 37,952
Other Vocational 26,724 0 0 26,724
Title I Grants to Local Education Agencies 0 718,572 0 718,572
Special Education - Grants to States 23,633 581,922 0 605,555
Special Education Preschool Grants 0 35,739 0 35,739
Safe and Drug-free Schools - State Grants 0 181,627 0 181,627
Eisenhower Professional Development State Grants 0 60,880 0 60,880
Other Federal through State 0 0 1,033 1,033
Total Federal Government $ 256,311 $ 1,616,692 $ 1,317,607 $ 3,190,610
Total $ 17,309,857 $ 1,616,692 $ 1,395,485 $ 20,322,034
130
Exhibit J-7

Schedule of Detailed Expenditures -
General Fund
General Government
County Commission
Board and Committee Members Fees $ 38,100
Social Security 2,362
Employer Medicare 552
Audit Services 6,963
Dues and Memberships 9,507
Legal Services 5,591
Legal Notices, Recording, and Court Costs 1,879
Travel 3,551
Other Contracted Services 1,959
Liability Insurance 109,292
Total County Commission $ 179,756
Board of Equalization
Travel 161
Total Board of Equalization 3,661
Beer Board
Board and Committee Members Fees $ 600
Total Beer Board 600
County Mayor/Executive
County Official/Administrative Officer $ 73,738
Assistant(s) 52,404
Other Salaries and Wages 7,410
In-service Training 732
Pensions 11,345
Medical Insurance 3,780
Unemployment Compensation 226
Employer Medicare 1,945
Communication 8,122
Data Processing Services 8,631
Postal Charges 2,043
Travel 7,866
Office Supplies 1,933
Premiums on Corporate Surety Bonds 312
Motor Vehicles 31,789
Office Equipment 1,448
Total County Mayor/Executive 256,894
County Attorney
Consultants $ 7,800
Total County Attorney 7,800
(Continued)
131
Exhibit J-7


General Government (Cont.)
Election Commission
Deputy(ies) 23,128
Computer Programmer(s) 1,200
Clerical Personnel 3,707
Election Commission 8,375
Election Workers 5,375
In-service Training 1,660
Pensions 6,882
Communication 1,528
Dues and Memberships 225
Maintenance and Repair Services - Equipment 26
Postal Charges 488
Rentals 350
Travel 3,565
Total Election Commission $ 147,719
Register of Deeds
Deputy(ies) 47,773
Pensions 8,769
Medical Insurance 788
Communication 2,300
Postal Charges 36
Rentals 834
Travel 2,795
Other Contracted Services 175
Total Register of Deeds 143,713
County Buildings
Custodial Personnel $ 24,185
Maintenance Personnel 24,981
(Continued)
132
Exhibit J-7


General Government (Cont.)
County Buildings (Cont.)
Social Security $ 3,010
Pensions 3,947
Communication 719
Maintenance Agreements 23,192
Maintenance and Repair Services - Buildings 100,000
Rentals 2,000
Custodial Supplies 4,995
Duplicating Supplies 1,994
Electricity 124,552
Gasoline 2,326
Natural Gas 26,236
Water and Sewer 38,185
Other Supplies and Materials 7,000
Total County Buildings $ 390,734
Other General Administration

On-behalf Payments to OPEB $ 3,075
Total Other General Administration 3,075
Finance
Property Assessor's Office
Secretary(ies) 98,058
Pensions 13,871
Communication 5,000
Printing, Stationery, and Forms 122
Travel 2,541
Total Property Assessor's Office 232,090
Reappraisal Program
Travel $ 58
Total Reappraisal Program 580
(Continued)
133
Exhibit J-7


Finance (Cont.)
County Trustee's Office
Deputy(ies) 48,838
Part-time Personnel 13,519
Overtime Pay 1,408
Pensions 9,743
Communication 1,738
Legal Notices, Recording, and Court Costs 378
Maintenance and Repair Services - Office Equipment 7,057
Travel 953
Premiums on Corporate Surety Bonds 2,300
Total County Trustee's Office $ 172,978
County Clerk's Office

Deputy(ies) 98,506
Overtime Pay 281
Pensions 13,889
Communication 3,900
Maintenance and Repair Services - Office Equipment 16,986
Travel 749
Total County Clerk's Office 238,648
Administration of Justice
Circuit Court
Deputy(ies) 69,897
Jury and Witness Expense 2,822
Pensions 11,004
(Continued)
134
Exhibit J-7


Administration of Justice (Cont.)
Circuit Court (Cont.)
Unemployment Compensation $ 310
Communication 531
Rentals 6,000
Total Circuit Court $ 194,769

Judge(s) $ 90,972
Travel 500
Total General Sessions Court 101,876
Drug Court
Drug Treatment $ 58,905
Total Drug Court 58,905
Chancery Court
Assistant(s) 25,709
Pensions 7,648
Communication 539
Postal Charges 588
Rentals 898
Travel 200
Office Supplies 730
Total Chancery Court 109,141
Juvenile Court
Youth Service Officer(s) $ 42,494
(Continued)
135
Exhibit J-7


Administration of Justice (Cont.)
Juvenile Court (Cont.)
Pensions $ 3,629
Communication 2,652
Postal Charges 48
Travel 700
Other Equipment 1,100
Total Juvenile Court $ 77,755
Judicial Commissioners
Social Security 932
Pensions 1,588
Total Judicial Commissioners 25,206
Public Safety
Sheriff's Department
Deputy(ies) 333,108
Investigator(s) 135,776
Accountants/Bookkeepers 29,930
Salary Supplements 10,800
Nightwatchmen 49,565
School Resource Officer 88,621
Overtime Pay 35,092
Pensions 59,000
Unemployment Compensation 2,100
Other Fringe Benefits 26,815
Communication 36,482
Maintenance and Repair Services - Equipment 13,963
Maintenance and Repair Services - Vehicles 27,567
Rentals 2,000
Travel 5,793
Drugs and Medical Supplies 437
Gasoline 51,042
(Continued)
136
Exhibit J-7


Public Safety (Cont.)
Sheriff's Department (Cont.)
Law Enforcement Supplies $ 21,997
Uniforms 9,517
Data Processing Equipment 10,185
Total Sheriff's Department $ 1,130,594
Jail
Supervisor/Director $ 40,250
Deputy(ies) 557,694
Overtime Pay 38,387
Pensions 60,382
Rentals 3,290
Travel 769
Disposal Fees 12,500
Drugs and Medical Supplies 168,874
Food Supplies 142,120
Law Enforcement Supplies 7,648
Uniforms 6,826
Total Jail 1,238,214
Fire Prevention and Control

Contracts with Other Public Agencies $ 1,000
Contributions 78,000
Total Fire Prevention and Control 79,000
Rescue Squad
Contributions $ 10,000
Total Rescue Squad 10,000
Other Emergency Management

Social Security 929
Communication 3,430
(Continued)
137
Exhibit J-7


Public Safety (Cont.)
Other Emergency Management (Cont.)
Maintenance and Repair Services - Vehicles $ 1,764
Travel 252
Gasoline 1,973
Uniforms 193
Communication Equipment 235,000
Law Enforcement Equipment 8,687
Total Other Emergency Management $ 277,103
County Coroner/Medical Examiner

Pauper Burials 14,311
Total County Coroner/Medical Examiner 15,911

Local Health Center
Communication $ 4,524
Contracts with Government Agencies 18,326
Disposal Fees 2,300
Office Supplies 366
Total Local Health Center 37,467
Ambulance/Emergency Medical Services

Contracts with Private Agencies $ 667
Total Ambulance/Emergency Medical Services 125,667
Alcohol and Drug Programs

In-service Training $ 3,339
Printing, Stationery, and Forms 50
Travel 1,170
Instructional Supplies and Materials 3,500
Other Charges 3,360
Total Alcohol and Drug Programs 13,864
Crippled Children Services

Total Crippled Children Services 1,026
Other Local Health Services

Medical Personnel $ 93,201
(Continued)
138
Exhibit J-7


Public Health and Welfare (Cont.)
Other Local Health Services (Cont.)
Pensions 6,777
Travel 7,338
Total Other Local Health Services $ 118,926
Social, Cultural, and Recreational Services

Senior Citizens Assistance
Custodial Supplies 750
Total Senior Citizens Assistance 6,750
Libraries
Pensions 6,905
Communication 2,626
Licenses 1,204
Postal Charges 400
Travel 405
Library Books/Media 7,900
Other Supplies and Materials 962
Total Libraries 126,795
Parks and Fair Boards

Electricity 10,192
Gasoline 142
Total Parks and Fair Boards 48,268
Other Social, Cultural, and Recreational

Total Other Social, Cultural, and Recreational 4,000
(Continued)
139
Exhibit J-7


Agriculture and Natural Resources
Agricultural Extension Service
Salary Supplements $ 31,524
Communication 2,715
Contributions 1,000
Travel 1,997
Office Supplies 538
Total Agricultural Extension Service $ 46,456
Soil Conservation
Total Soil Conservation 17,835
Flood Control
Dues and Memberships $ 25
Travel 146
Total Flood Control 831
Other Operations
Tourism
Contracts with Government Agencies $ 9,887
Contributions 15,750
Total Tourism 25,637
Industrial Development
Dues and Memberships $ 692
Total Industrial Development 692
Other Economic and Community Development

Contracts with Government Agencies $ 50,172
Contracts with Other Public Agencies 94,400
Total Other Economic and Community Development 144,572
Veterans' Services
Clerical Personnel $ 10,223
Social Security 634
Communication 1,447
Data Processing Services 399
Postal Charges 50
Travel 395
Office Supplies 419
Other Equipment 131
Total Veterans' Services 13,956
(Continued)
140
Exhibit J-7


Other Operations (Cont.)
Other Charges
Trustee's Commission $ 86,184
Workers' Compensation Insurance 74,947
Total Other Charges $ 161,131
Total General Fund $ 5,990,595
Solid Waste/Sanitation Fund

Sanitation Education/Information
Truck Drivers $ 15,104
Gasoline 1,803
Total Sanitation Education/Information $ 32,455
Waste Pickup
Equipment Operators $ 55,458
Pensions 4,722
Diesel Fuel 14,013
Gasoline 470
Lubricants 174
Other Equipment 105
Total Waste Pickup 101,731
Convenience Centers
Attendants $ 136,560
Pensions 8,709
Communication 2,267
Electricity 3,411
Total Convenience Centers 181,579
(Continued)
141
Exhibit J-7

Solid Waste/Sanitation Fund (Cont.)

Public Health and Welfare (Cont.)
Other Waste Collection
Contracts with Private Agencies $ 21,469
Contracts for Landfill Facilities 128,617
Total Other Waste Collection $ 150,086
Other Operations
Other Charges
Total Other Charges 8,808
Total Solid Waste/Sanitation Fund $ 474,659
Drug Control Fund

Public Safety
Drug Enforcement
Confidential Drug Enforcement Payments $ 3,500
Veterinary Services 875
Trustee's Commission 359
Total Drug Enforcement $ 26,284
Total Drug Control Fund 26,284
Constitutional Officers - Fees Fund

Finance
County Clerk's Office
Constitutional Officers' Operating Expenses $ 7,119
Total County Clerk's Office $ 7,119
Total Constitutional Officers - Fees Fund 7,119
Highway/Public Works Fund

Highways
Administration
Employee and Dependent Insurance 27,461
Evaluation and Testing 850
Maintenance and Repair Services - Office Equipment 218
Postal Charges 458
Travel 1,360
Data Processing Supplies 622
(Continued)
142
Exhibit J-7

Highway/Public Works Fund (Cont.)

Highways (Cont.)
Administration (Cont.)
Drugs and Medical Supplies $ 55
Office Supplies 803
Furniture and Fixtures 200
Total Administration $ 173,061
Highway and Bridge Maintenance

Foremen $ 36,720
Equipment Operators 88,158
Truck Drivers 91,824
Laborers 180,690
Asphalt - Cold Mix 501
Asphalt - Hot Mix 21,591
Asphalt - Liquid 6,870
Concrete 478
Crushed Stone 38,205
Fertilizer, Lime, and Seed 250
Other Road Materials 151
Pipe 2,671
Pipe - Metal 16,905
Road Signs 6,710
Salt 70,552
Sand 189
Small Tools 781
Wood Products 156
Total Highway and Bridge Maintenance 703,734
Operation and Maintenance of Equipment

Mechanic(s) $ 52,988
Nightwatchmen 61,476
Diesel Fuel 14,506
Equipment and Machinery Parts 30,675
Garage Supplies 5,421
Gasoline 11,208
Lubricants 4,180
Propane Gas 306
Small Tools 1,105
Tires and Tubes 5,527
Total Operation and Maintenance of Equipment 222,258
Other Charges
Communication $ 4,097
Electricity 1,409
(Continued)
143
Exhibit J-7

Highway/Public Works Fund (Cont.)

Highways (Cont.)
Other Charges (Cont.)
Natural Gas $ 345
Water and Sewer 810
Trustee's Commission 14,719
Vehicle and Equipment Insurance 14,147
Total Other Charges $ 45,724
Employee Benefits
Pensions 50,962
Total Employee Benefits 202,717
Capital Outlay
Maintenance and Repair Services - Buildings $ 123
Bridge Construction 622,194
Highway Equipment 9,793
Total Capital Outlay 632,628
Principal on Debt
Highways and Streets
Principal on Notes $ 23,335
Total Highways and Streets 23,335
Interest on Debt
Highways and Streets
Interest on Notes $ 620
Total Highways and Streets 620
Total Highway/Public Works Fund $ 2,004,077

Principal on Debt
General Government
Principal on Notes $ 31,902
Principal on Other Loans 215,000
Total General Government $ 246,902
Interest on Debt
General Government
Interest on Notes $ 5,045
Interest on Other Loans 11,910
Total General Government 16,955
(Continued)
144
Exhibit J-7

General Debt Service Fund (Cont.)

Other Debt Service
General Government
Other Debt Service 31,702
Total General Government $ 39,865
Total General Debt Service Fund $ 303,722
General Capital Projects Fund

Capital Projects
Public Utility Projects
Other Contracted Services $ 22,031
Total Public Utility Projects $ 22,031
Total General Capital Projects Fund 22,031
Total Governmental Funds - Primary Government $ 8,828,487
145
Exhibit J-8

General Purpose School Fund

Instruction
Regular Instruction Program
Teachers $ 5,200,135
Career Ladder Program 19,000
Career Ladder Extended Contracts 10,900
Homebound Teachers 7,206
Educational Assistants 214,130
Certified Substitute Teachers 3,992
Non-certified Substitute Teachers 58,681
Pensions 475,660
Textbooks 228,760
Other Charges 6,929
Regular Instruction Equipment 6,613
Total Regular Instruction Program $ 7,429,718
Alternative Instruction Program

Teachers $ 54,062
Pensions 6,166
Total Alternative Instruction Program 81,024
Special Education Program

Teachers $ 1,001,192
Homebound Teachers 9,148
Certified Substitute Teachers 990
Pensions 96,910
Other Charges 839
Special Education Equipment 3,026
Total Special Education Program 1,651,141
(Continued)
146
Exhibit J-8


Instruction (Cont.)
Vocational Education Program
Teachers $ 165,895
Pensions 14,965
Vocational Instruction Equipment 8,039
Total Vocational Education Program $ 217,155
Student Body Education Program

Other Salaries and Wages $ 13,936
Social Security 844
Pensions 872
Total Student Body Education Program 15,849
Adult Education Program

Teachers $ 67,782
Pensions 5,647
Total Adult Education Program 113,308
Support Services
Attendance
Pensions 6,155
Travel 2,000
Total Attendance 103,951
Health Services
Medical Personnel 62,423
Pensions 11,114
(Continued)
147
Exhibit J-8


Support Services (Cont.)
Health Services (Cont.)
Medical Insurance $ 11,279
Communication 507
Postal Charges 49
Travel 1,351
Total Health Services $ 168,540
Other Student Support

Guidance Personnel $ 188,456
Pensions 17,607
Evaluation and Testing 10,968
Travel 296
Other Charges 313
Total Other Student Support 344,694

Librarians 140,987
Instructional Computer Personnel 35,070
Pensions 34,115
Travel 5,404
Library Books/Media 12,000
In Service/Staff Development 1,927
Other Charges 14,893
Total Regular Instruction Program 688,657

Psychological Personnel 52,767
(Continued)
148
Exhibit J-8


Special Education Program (Cont.)
Pensions 12,804
Communication 2,179
Travel 4,135
In Service/Staff Development 525
Total Special Education Program $ 195,506
Adult Programs
Pensions 6,894
Communication 273
Travel 1,784
Total Adult Programs 101,154
Other Programs
On-behalf Payments to OPEB $ 33,812
Total Other Programs 33,812
Board of Education
Legal Services 20
Travel 19,729
Refund to Applicant for Criminal Investigation 140
Other Charges 2,468
Total Board of Education 254,750
(Continued)
149
Exhibit J-8


Director of Schools
Assistant(s) 3,071
Pensions 10,787
Communication 14,591
Travel 3,310
Other Charges 1,955
Total Director of Schools $ 178,760
Office of the Principal

Principals $ 205,641
Assistant Principals 193,958
Pensions 44,895
Travel 2,219
Other Charges 1,200
Total Office of the Principal 639,383
Fiscal Services
Pensions 11,587
Travel 2,714
Total Fiscal Services 184,731
(Continued)
150
Exhibit J-8


Operation of Plant
Custodial Personnel $ 265,688
Pensions 22,586
Custodial Supplies 37,436
Electricity 411,666
Natural Gas 35,569
Building and Contents Insurance 33,656
Other Charges 108
Plant Operation Equipment 1,549
Total Operation of Plant $ 1,049,571
Maintenance of Plant
Maintenance Personnel 114,825
Pensions 12,964
Maintenance and Repair Services - Vehicles 150
Travel 1,825
Other Charges 83
Maintenance Equipment 546
Total Maintenance of Plant 235,169
Transportation
Mechanic(s) 56,976
Bus Drivers 163,011
Pensions 16,066
Medical and Dental Services 2,390
(Continued)
151
Exhibit J-8


Transportation (Cont.)
Travel $ 1,020
Diesel Fuel 29,026
Gasoline 6,090
Lubricants 3,233
Vehicle Parts 49,481
Vehicle and Equipment Insurance 9,580
Other Charges 5,220
Transportation Equipment 180,204
Total Transportation $ 594,336

Community Services
Pensions 1,964
Other Charges 2,638
Total Community Services 29,362
Early Childhood Education

Teachers $ 51,842
Non-certified Substitute Teachers 522
Pensions 6,245
Travel 735
Total Early Childhood Education 100,648
Capital Outlay
Regular Capital Outlay
Building Improvements $ 809,150
Other Capital Outlay 158,091
Total Regular Capital Outlay 967,241
Total General Purpose School Fund $ 15,378,460
(Continued)
152
Exhibit J-8

School Federal Projects Fund

Instruction
Teachers $ 326,724
Pensions 36,616
Regular Instruction Equipment 29,292
Total Regular Instruction Program $ 621,652

Educational Assistants $ 247,888
Pensions 21,105
Contracts with Private Agencies 38,366
Textbooks 291
Special Education Equipment 13,588
Total Special Education Program 425,052

Other Salaries and Wages 744
Social Security 108
Pensions 153
Vocational Instruction Equipment 13,124
Total Vocational Education Program 21,513
Support Services
Other Student Support
Bus Drivers $ 218
Social Security 60
Pensions 51
Travel 6,768
(Continued)
153
Exhibit J-8

School Federal Projects Fund (Cont.)

Other Student Support (Cont.)
Other Contracted Services $ 651
Other Charges 3,782
Total Other Student Support $ 18,312

Certified Substitute Teachers 165
Pensions 6,774
Other Fringe Benefits 358
Total Regular Instruction Program 138,952

Psychological Personnel $ 51,346
Pensions 5,062
Total Special Education Program 85,265

Travel $ 1,909
Total Vocational Education Program 1,909
Transportation
Bus Drivers $ 43,449
Pensions 4,769
(Continued)
154
Exhibit J-8

School Federal Projects Fund (Cont.)

Transportation (Cont.)
Employer Medicare $ 831
Diesel Fuel 7,154
Lubricants 347
Vehicle Parts 700
Transportation Equipment 2,295
Total Transportation $ 95,338

Community Services
Teachers 90,580
Pensions 10,943
Other Fringe Benefits 606
Travel 1,074
Other Charges 7,917
Total Community Services 178,063
Total School Federal Projects Fund $ 1,586,056
Central Cafeteria Fund

Food Service
Cafeteria Personnel 292,468
Temporary Personnel 15,917
Pensions 27,823
Communication 4,388
(Continued)
155
Exhibit J-8

Central Cafeteria Fund (Cont.)

Operation of Non-instructional Services (Cont.)
Food Service (Cont.)
Maintenance and Repair Services - Equipment $ 6,178
Transportation - Other than Students 2,911
Travel 4,749
Food Preparation Supplies 1,580
Food Supplies 498,536
USDA - Commodities 68,974
Criminal Investigation of Applicants - TBI 380
Other Charges 3,422
Food Service Equipment 29,539
Total Food Service $ 1,216,342
Total Central Cafeteria Fund $ 1,216,342
Education Capital Projects Fund

Capital Projects
Education Capital Projects
Other Capital Outlay $ 1,640,518
Total Education Capital Projects $ 1,640,518
Total Education Capital Projects Fund 1,640,518
Total Governmental Funds - Sequatchie County School Department $ 19,821,376
156
Exhibit J-9
Schedule of Detailed Receipts, Disbursements,
and Changes in Cash Balance - City Agency Fund
Cities -
Sales Tax
Fund
Cash Receipts
Local Option Sales Tax $ 863,087
Total Cash Receipts $ 863,087
Cash Disbursements
Remittance of Revenues Collected $ 854,456
Total Cash Disbursements $ 863,087
Excess of Cash Receipts Over

(Under) Cash Disbursements $ 0
Cash Balance, July 1, 2015 0
Cash Balance, June 30, 2016 $ 0
157
SINGLE AUDIT SECTION
158
STATE OF TENNESSEE
DEPARTMENT OF AUDIT
SUITE 1500
JAMES K. POLK STATE OFFICE BUILDING
PHONE (615) 401-7841
Independent Auditors Report on Internal Control Over Financial Reporting and

on Compliance and Other Matters Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards
Independent Auditor's Report

We have audited, in accordance with the auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards issued by the Comptroller General of the United States, the financial
statements of the governmental activities, the aggregate discretely presented component units,
each major fund, and the aggregate remaining fund information of Sequatchie County,
Tennessee, as of and for the year ended June 30, 2016, and the related notes to the financial
statements, which collectively comprise Sequatchie County's basic financial statements, and
have issued our report thereon dated February 21, 2017.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered Sequatchie
County's internal control over financial reporting (internal control) to determine the audit
procedures that are appropriate in the circumstances for the purpose of expressing our opinions
on the financial statements, but not for the purpose of expressing an opinion on the
effectiveness of Sequatchie County's internal control. Accordingly, we do not express an opinion
on the effectiveness of Sequatchie County's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct, misstatements on a timely basis. A material weakness is a
deficiency, or a combination of deficiencies, in internal control such that there is a reasonable
possibility that a material misstatement of the entity's financial statements will not be
prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or
a combination of deficiencies, in internal control that is less severe than a material weakness,
yet important enough to merit attention by those charged with governance.
159
Our consideration of internal control was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control
that might be material weaknesses or significant deficiencies and therefore, material
weaknesses or significant deficiencies may exist that were not identified. Given these
limitations, during our audit we did not identify any deficiencies in internal control that we
consider to be material weaknesses. We did identify certain deficiencies in internal control,
described in the accompanying Schedule of Findings and Questioned Costs that we consider to
be significant deficiencies: 2016-001(D), 2016-003(A,B,C), 2016-004, 2016-005, 2016-007, 2016-
008, and 2016-010(A).
Compliance and Other Matters
As part of obtaining reasonable assurance about whether Sequatchie County's financial

statements are free from material misstatement, we performed tests of its compliance with
certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with
which could have a direct and material effect on the determination of financial statement
amounts. However, providing an opinion on compliance with those provisions was not an
objective of our audit, and accordingly, we do not express such an opinion. The results of our
tests disclosed instances of noncompliance or other matters that are required to be reported
under Government Auditing Standards and are described in the accompanying Schedule of
Findings and Questioned Costs as items: 2016-001(A,B,C), 2016-002, 2016-003(D), 2016-006,
2016-009, and 2016-010(B).
Sequatchie County's Responses to the Findings
Sequatchie County's responses to the findings identified in our audit are described in the
accompanying Schedule of Findings and Questioned Costs. Sequatchie County's responses were
not subjected to the auditing procedures applied in the audit of the financial statements and,
accordingly, we express no opinion on them.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the result of that testing, and not to provide an opinion on the effectiveness of
the entity's internal control or on compliance. This report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering Sequatchie
Countys internal control and compliance. Accordingly, this communication is not suitable for
any other purpose.
Very truly yours,
Justin P. Wilson
February 21, 2017
JPW/sb
160
STATE OF TENNESSEE
DEPARTMENT OF AUDIT
SUITE 1500
JAMES K. POLK STATE OFFICE BUILDING
PHONE (615) 401-7841
Independent Auditors Report on Compliance for Each Major Federal Program;

Report on Internal Control Over Compliance; and Report on the Schedule of
Expenditures of Federal Awards Required by the Uniform Guidance

Report on Compliance for Each Major Federal Program
We have audited Sequatchie Countys compliance with the types of compliance

requirements described in the OMB Compliance Supplement that could have a direct and
material effect on each of Sequatchie Countys major federal programs for the year ended
June 30, 2016. Sequatchie Countys major federal programs are identified in the summary
of auditor's results section of the accompanying Schedule of Findings and Questioned Costs.
Management's Responsibility
Management is responsible for compliance with the requirements of laws, regulations,

contracts, and grants applicable to its federal programs.
Auditor's Responsibility
Our responsibility is to express an opinion on compliance for each of Sequatchie Countys

major federal programs based on our audit of the types of compliance requirements referred
to above. We conducted our audit of compliance in accordance with auditing standards
generally accepted in the United States of America; the standards applicable to financial
audits contained in Government Auditing Standards, issued by the Comptroller General of
the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations
Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements
for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance
require that we plan and perform the audit to obtain reasonable assurance about whether
noncompliance with the types of compliance requirements referred to above that could have
161
a direct and material effect on a major federal program occurred. An audit includes
examining, on a test basis, evidence about Sequatchie Countys compliance with those
requirements and performing such other procedures as we considered necessary in the
circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for each
major federal program. However, our audit does not provide a legal determination of
Sequatchie Countys compliance.
Opinion on Each Major Federal Program
In our opinion, Sequatchie County complied, in all material respects, with the types of
compliance requirements referred to above that could have a direct and material effect on
each of its major federal programs for the year ended June 30, 2016.
Report on Internal Control Over Compliance
Management of Sequatchie County is responsible for establishing and maintaining effective

internal control over compliance with the types of compliance requirements referred to
above. In planning and performing our audit of compliance, we considered Sequatchie
Countys internal control over compliance with the types of requirements that could have a
direct and material effect on each major federal program to determine the auditing
procedures that are appropriate in the circumstances for the purpose of expressing an
opinion on compliance for each major federal program and to test and report on internal
control over compliance in accordance with the Uniform Guidance, but not for the purpose
of expressing an opinion on the effectiveness of internal control over compliance.
Accordingly, we do not express an opinion on the effectiveness of Sequatchie Countys
internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a
control over compliance does not allow management or employees, in the normal course of
performing their assigned functions, to prevent, or detect and correct, noncompliance with a
type of compliance requirement of a federal program on a timely basis. A material weakness
in internal control over compliance is a deficiency, or combination of deficiencies, in internal
control over compliance, such that there is a reasonable possibility that material
noncompliance with a type of compliance requirement of a federal program will not be
prevented, or detected and corrected, on a timely basis. A significant deficiency in internal
control over compliance is a deficiency, or a combination of deficiencies, in internal control
over compliance with a type of compliance requirement of a federal program that is less
severe than a material weakness in internal control over compliance, yet important enough
to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described
in the first paragraph of this section and was not designed to identify all deficiencies in
internal control over compliance that might be material weaknesses or significant
deficiencies. We did not identify any deficiencies in internal control over compliance that we
consider to be material weaknesses. However, material weaknesses may exist that have not
been identified.
162
The purpose of this report on internal control over compliance is solely to describe the scope
of our testing of internal control over compliance and the results of that testing based on
the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any
other purpose.
Report on Schedule of Expenditures of Federal Awards Required by the Uniform

Guidance
We have audited the financial statements of the governmental activities, the aggregate
discretely presented component units, each major fund, and the aggregate remaining fund
information of Sequatchie County, Tennessee, as of and for the year ended June 30, 2016,
and the related notes to the financial statements, which collectively comprise Sequatchie
Countys basic financial statements. We issued our report thereon dated February 21, 2017,
which contained unmodified opinions on those financial statements. Our audit was
conducted for the purpose of forming opinions on the financial statements that collectively
comprise the basic financial statements. The accompanying Schedule of Expenditures of
Federal Awards is presented for purposes of additional analysis as required by the Uniform
Guidance and is not a required part of the basic financial statements. Such information is
the responsibility of management and was derived from and relates directly to the
underlying accounting and other records used to prepare the basic financial statements.
The information has been subjected to the auditing procedures applied in the audit of the
basic financial statements and certain additional procedures, including comparing and
reconciling such information directly to the underlying accounting and other records used to
prepare the basic financial statements or to the basic financial statements themselves, and
other additional procedures in accordance with auditing standards generally accepted in
the United States of America. In our opinion, the Schedule of Expenditure of Federal
Awards is fairly stated in all material respects in relation to the basic financial statements
as a whole.
Very truly yours,
Justin P. Wilson
February 21, 2017
JPW/sb
163
Schedule of Expenditures of Federal Awards and State Grants (1) (2)
Federal Passed-through
Federal/Pass-through Agency/State CFDA Entity Identifying
Grantor Program Title Number Number Expenditures
U.S. Department of Agriculture:

Passed-through State Department of Agriculture:
National School Lunch Program (Commodities - Noncash Assistance) 10.555 N/A $ 68,974 (4)
Passed-through State Department of Education:
Child Nutrition Cluster:
School Breakfast Program 10.553 N/A 359,123
National School Lunch Program 10.555 N/A 887,127 (4)
State Administrative Expenses for Child Nutrition 10.560 N/A 1,350
Passed-through State Department of Human Services:
Summer Food Service Program for Children 10.559 N/A 1,033
Total U.S. Department of Agriculture $ 1,317,607
U.S. Department of Justice:

Passed-through State Commission on Children and Youth:
Juvenile Justice and Delinquency Prevention - Allocation to States 16.540 N/A $ 180
U.S. Department of Transportation:

Passed-through State Department of Transportation:
Alcohol Open Container Requirements 20.607 (3) $ 17,099
U.S. Department of Education:

Passed-through State Department of Labor and Workforce Development:
Adult Education - Basic Grants to States 84.002 N/A $ 205,954
Passed-through State Department of Human Services:
Rehabilitation Services - Vocational Rehabilitation Grants to States 84.126 Z-16-70615 26,724
Passed-through State Department of Education:
Title I Grants to Local Educational Agencies 84.010 N/A 718,572
Special Education Cluster:
Special Education - Grants to States 84.027 N/A 605,555
Special Education - Preschool Grants 84.173 N/A 35,739
Career and Technical Education - Basic Grants to States 84.048 N/A 37,952
Twenty-first Century Community Learning Centers 84.287 (3) 181,627
Supporting Effective Instruction State Grant 84.367 (3) 60,880
Total U.S. Department of Education $ 1,873,003
U.S. Department of Homeland Security:

Passed-through State Department of Military:
Disaster Grants - Public Assistance (Presidentially Declared Disasters) 97.036 (3) $ 10,562
Total Expenditures of Federal Awards $ 3,218,451
(Continued)
164
Schedule of Expenditures of Federal Awards and State Grants (1) (2) (Cont.)
Federal
Federal/Pass-through Agency/State CFDA Contract
Grantor Program Title Number Number Expenditures
State Grants
Litter Program - State Department of Transportation N/A (3) $ 32,125
Early Childhood Education - State Department of Education N/A (3) 101,149
Three Star Grant Program - State Department of Economic and
Community Development N/A (3) 9,887
Coordinated School Health - State Department of Education N/A (3) 94,996
ConnecTenn - State Department of Education N/A (3) 6,068
Safe Schools - State Department of Education N/A (3) 13,480
Juvenile Services Program - State Commission on Children and Youth N/A (3) 18,000
Rural Local Health Services - State Department of Health N/A (3) 118,594
Art Student Ticket Subsidy - State Art Commission N/A (3) 1,200
Total State Grants $ 395,499
CFDA = Catalog of Federal Domestic Assistance

N/A = Not Applicable
(1) Presented in conformity with generally accepted accounting principles using the modified accrual basis of accounting.
(2) Sequatchie County elected not to use the 10% de minimus cost rate permitted in the Uniform Guidance.
(3) Information not available.
(4) Total for CFDA No. 10.555 is $956,101.
165
Summary Schedule of Prior-year Findings
Government Auditing Standards require auditors to report the status of uncorrected findings from prior audits. In
addition, OMB's Uniform Guidance requires auditees to report the status of all prior-year findings whether
corrected or not. Presented below are financial statement findings along with their current status from the
Annual Financial Report for Sequatchie County, Tennessee, for the year ended June 30, 2016.
Prior-year Financial Statement Findings
Fiscal Page Finding CFDA

Year Number Number Title of Finding Number Current Status
2015 156 2015-001 The General Debt Service Fund N/A Corrected
Required Material Audit Adjustments for
Proper Financial Statement Presentation
2015 156 2015-002 The Office had Deficiencies Related to N/A Not Corrected - See
Credit Card Transactions Explanation on Corrective
Action Plan
2015 158 2015-003 Competitive Bids were not Solicited for N/A Corrected
Four Service Contracts Totaling $134,377
2015 159 2015-004 Duties were not Segregated Adequately N/A Not Corrected - See
Explanation on Corrective
Action Plan
Prior-year Federal Awards Findings

There were no prior-year federal award findings to report.
166
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART I, SUMMARY OF AUDITOR'S RESULTS
Financial Statements:
1. Our report on the financial statements of Sequatchie County is unmodified.
2. Internal Control Over Financial Reporting:
* Material weakness identified? NO
* Significant deficiency identified? YES
3. Noncompliance material to the financial statements noted? NO
Federal Awards:
4. Internal Control Over Major Federal Programs:
* Material weakness identified? NO
* Significant deficiency identified? NONE REPORTED
5. Type of report auditor issued on compliance for major programs: UNMODIFIED
6. Any audit findings disclosed that are required to be reported in

accordance with 2 CFR 200.516(a)? NO
7. Identification of Major Federal Programs:
* CFDA Numbers: 10.553, 10.555, and 10.559 Nutrition Cluster: School Breakfast
Program, National School Lunch
Program, and Summer Food Service
Program for Children
8. Dollar threshold used to distinguish between Type A and Type B Programs: $750,000
9. Auditee qualified as low-risk auditee? NO
167
PART II, FINDINGS RELATING TO THE FINANCIAL STATEMENTS
Findings and recommendations, as a result of our audit, are presented below. We reviewed
these findings and recommendations with management to provide an opportunity for their
response. Written responses are paraphrased and presented following each finding and
recommendation. The county executive, highway supervisor, county clerk, and sheriff
provided corrective action plans, which are paraphrased and presented separately in the
Managements Corrective Action Plan in the Single Audit Section of this report.
Findings relating specifically to the audit of federal awards, if any, are separately presented
under Part III, Findings and Questioned Costs for Federal Awards.
FINDING 2016-001 THE OFFICE HAD DEFICIENCIES IN THE USE OF

COUNTY CREDIT CARDS
(A., B., and C. Noncompliance Under Government Auditing
Standards; D. Internal Control Significant Deficiency Under
Government Auditing Standards)
During our review of the countys use of credit cards, we reviewed a total of 136 credit card
transactions and noted several instances in which purchases violated the countys policy
regarding the use of county credit cards. These deficiencies could result in improper
disbursements and are a result of managements failure to adhere to prescribed policies, and
the failure to correct findings noted in the prior-year audit report.
A. In 22 of the 136 credit card purchases reviewed, the office paid credit card
invoices without adequate documentation to support the charges. Charges for
purchases such as restaurant meals, postage, vehicle maintenance, training,
software, uniforms, and parking charges were paid without detailed invoices
to document the goods and/or services purchased. The countys credit card
policy states, Credit card bills submitted to the County Executives Office for
payment must include supporting documentation, such as receipts and
invoices, which clearly show what goods and services were purchased using the
credit card. Documentation for travel, meals, and entertainment expenses
must show the business purpose for the expenditures and for meals who was
present. Without adequate supporting documentation, we cannot determine
if the disbursements were for the benefit of the county.
B. Charges for lodging were not supported with documentation stating the reason
for the stay as required by the credit card policy in 12 of 17 applicable
instances. The countys credit card policy states, Documentation for travel,
meals and entertainment expenses must show the business purpose for the
expenditures. Without adequate supporting documentation, we cannot
determine if the disbursements were for the benefit of the county.
C. County governments are exempt from paying state sales tax; however, we
noted 40 of the 136 credit card purchases included the payment of sales taxes
totaling $481.
168
D. Expenditures were coded to accounts that did not reflect the true nature of the
expenditures in 29 of the purchases reviewed. Examples include, a tiller,
lodging, and a light bar for a sheriffs patrol vehicle being posted to the other
supplies and materials account; and flags and mounts being posted to the
maintenance agreements account. Sound budgetary principles require
expenditures to be coded to accounts that reflect the true nature of the
expenditures. Misclassifying expenditures diminishes the usefulness of the
accounting records as a management tool.
RECOMMENDATION
All county departments should comply with the countys credit card policy. All purchases
should be supported with appropriate documentation showing the business purpose for the
expenditure of county funds and exclude the payment of sales taxes. Expenditures should be
properly classified.
MANAGEMENTS RESPONSE COUNTY EXECUTIVE
I concur. Sequatchie County is in the process of amending its credit card policy and reviewing
it with all department heads to strengthen oversight in this area.
FINDING 2016-002 THE OFFICE HAD DEFICIENCIES RELATED TO

TRAVEL REIMBURSEMENTS
(Noncompliance Under Government Auditing Standards)
During our review of the countys purchasing procedures, we reviewed a total of 38 payments
made for travel reimbursements. Our review revealed the following deficiencies, which were
the result of the offices failure to adhere to the countys established travel policy:
A. In 13 of 38 travel reimbursement requests reviewed, the employee requested

reimbursement for non-travel related expenditures. Examples of the
expenditures for which reimbursement was requested and paid by the office
included vehicle parts and tires, a vacuum cleaner, auto cleaning/detail work
on a confiscated vehicle, coffee supplies, a seal kit, ceiling tiles, food for
meetings, a tarp, and roofing materials. The county travel policy states, It is
the intent of these regulations that employees not suffer additional cost as a
result of travel incurred to carry out assigned duties. The policy does not
address non-travel related expenses being requested for reimbursement on
travel claims.
B. In two of the 38 expenditures, the office reimbursed an employee without the

proper travel reimbursement claim form to document travel expenses as
required by the countys travel policy. This policy states, County officials
and/or employees shall submit claims for reimbursement for travel expense on
the countys travel reimbursement form. The reimbursement form must have
an original signature of the person for which reimbursement is claimed and
signed by the county official or person who directs the employees travel.
169
Without the required travel reimbursement claim form, we were unable to
verify that the reimbursements were for authorized travel-related expenses.
C. In six of 38 reimbursements, the office reimbursed a total of $2,888 without

requiring the employees to give details of the mileage driven. These claims
included a total number of miles for which the employees were requesting
reimbursement; however, no details of departure or destination locations were
documented on the form. Without this basic information, it could not be
determined if the amount of mileage reimbursed was accurate.
D. In two of 38 reimbursement requests, the office reimbursed employees for

lodging without proper documentation. Payments totaling $472 were made
without hotel receipts to support the reimbursement request. The countys
travel policy states, lodging receipts are required and must itemize room
charges and taxes by date.
RECOMMENDATION
County officials and employees should comply with the countys travel policy when requesting
reimbursements for travel related expenses. Reimbursements should not be made to
employees who do not comply with established policy.
I concur. County management will review the travel and reimbursement policies with all
department heads.
FINDING 2016-003 THE OFFICE HAD DEFICIENCIES IN PURCHASING

PROCEDURES
(A., B., and C. Internal Control Significant Deficiency Under
Government Auditing Standards; D. Noncompliance Under
As part of our audit procedures for determining whether the purchasing process was
operating as designed, we selected a sample of 33 disbursements totaling $344,605 from a
population of 2,038 vendor checks totaling $3,824,865. Our examination revealed the
following deficiencies, which are the result of a lack of management oversight.
A. Our examination revealed that purchase orders were not issued in six of 11
applicable purchases. Purchase orders are necessary to control who has
purchasing authority for the county and to document purchase commitments.
The failure to issue purchase orders increases the risks of unauthorized
purchases.
170
B. In four of 25 applicable instances, proper documentation was not on file to
support the purchase. Sound business practices dictate that proper
documentation should be on file to support all purchases. The absence of
invoices increases the risks of fraud and unauthorized purchases.
C. Invoices were paid without documentation that goods had been received and/or
services had been rendered in nine of 22 applicable purchases. This practice
weakens controls over the purchasing process and increases the risks of paying
for something that was never received.
D. Competitive bids were not solicited in two of five applicable purchases. The
county purchased a repeater system ($235,000) and ammunition ($12,017)
without documentation that competitive bids had been solicited. Sections 5-14-
201 through 5-14-206, Tennessee Code Annotated, require public advertisement
and solicitation of competitive bids on purchases exceeding $10,000. This
deficiency is the result of a lack of management oversight. As a result, the lowest
and best price may not have been obtained for these items.
RECOMMENDATION
To strengthen internal controls over purchasing procedures and to document purchasing

commitments, the office should issue purchase orders for all applicable purchases before
purchases are made. Proper documentation should be on file for all purchases.
Documentation should be maintained that goods have been received or services have been
rendered before invoices are paid. Purchases exceeding $10,000 should be competitively bid
as required by state statutes.
I concur. Sequatchie County management is in the process of amending its purchasing policy
and procedures. All department heads will meet and review this policy after it is adopted.
FINDING 2016-004 THE OFFICE DID NOT IMPLEMENT ADEQUATE

CONTROLS TO PROTECT ITS INFORMATION
RESOURCES
(Internal Control Significant Deficiency Under Government
Auditing Standards)
The office did not implement adequate controls to protect its information resources. This
finding does not identify specific vulnerabilities that could allow someone to exploit the
offices information system or misuse county funds. Disclosing those vulnerabilities could
present a potential security risk by providing the readers with information that might be
confidential pursuant to Section 10-7-504(i), Tennessee Code Annotated. Sound business
practices dictate that proper controls be implemented. Without these controls, unauthorized
system activity could occur. This deficiency is a result of a lack of management oversight.
This deficiency was corrected when brought to managements attention.
171
RECOMMENDATION
The office should ensure that adequate controls over information systems and the resources
associated with those systems remain implemented.
I concur. This finding relates to a former employee still having an active login in the 2015-
2016 fiscal year. This employee was deleted from the Sequatchie County system on March
30, 2016. In the future, all terminated employees with a computer login will be deleted from
the computer system at the time of termination.
FINDING 2016-005 PAYROLL LIABILITY ACCOUNTS WERE NOT

RECONCILED WITH SUBSIDIARY PAYROLL RECORDS
IN THE HIGHWAY/PUBLIC WORKS FUND
Auditing Standards)
General ledger payroll liability accounts were not reconciled with subsidiary payroll records
and payments each month in the Highway/Public Works Fund. As a result, unidentified
balances accumulated in the liability accounts for some payroll deductions. Sound business
practices dictate that payroll liability accounts should be reconciled with billings monthly.
The failure to regularly reconcile payroll liability accounts is a significant deficiency that
increases the risk that errors will not be discovered and corrected in a timely manner. This
deficiency exists due to a lack of management oversight and the failure of management to
correct the finding noted in the prior-year audit report.
RECOMMENDATION
General ledger payroll liability accounts should be reconciled monthly with payroll reports
and payments, and any errors discovered should be corrected promptly.
MANAGEMENTS RESPONSE - HIGHWAY SUPERVISOR
I concur.
172
FINDING 2016-006 RETIREMENT WAGES AND WITHHOLDINGS WERE
NOT REPORTED AND REMITTED TO THE TENNESSEE
CONSOLIDATED RETIREMENT SYSTEM
The Highway Department did not report retirement wages and remit withholdings to the
Tennessee Consolidated Retirement System (TCRS) for department employees as required
by Section 8-37-502(a), Tennessee Code Annotated, for the payroll dated May 28, 2015. This
deficiency was the result of a lack of management oversight and the failure to properly
reconcile payroll liability accounts as noted above. As a result of this deficiency, employees
have not received the proper retirement credit, and the county could face possible penalties
for not remitting deductions timely. We have reported this finding to TCRS.
RECOMMENDATION
The office should report the employees retirement wages and withholdings to TCRS for the
May 28, 2015 payroll. Payroll withholdings should be remitted to the TCRS in a timely
manner as required by state statute.
I concur.
FINDING 2016-007 DUTIES WERE NOT SEGREGATED ADEQUATELY

Auditing Standards)
Duties were not segregated adequately among the official and employees in the Office of
Highway Supervisor. The official and employees responsible for maintaining accounting
records were also involved in receipting, depositing, and/or disbursing funds. Sound business
practices dictate that internal controls should be designed to provide reasonable assurance
of the reliability in financial reporting and of the effectiveness and efficiency of operations.
This lack of segregation of duties is the result of managements decisions based on the
availability of financial resources and is a significant deficiency in internal controls that
increases the risk of unauthorized transactions. Also, this deficiency exists because the
highway supervisor failed to correct the finding noted in the prior-year audit report.
RECOMMENDATION
The highway supervisor should segregate duties to the extent possible using available
resources.
I concur.
173
FINDING 2016-008 THE OFFICE DID NOT REVIEW ALL SOFTWARE AUDIT
LOGS
Auditing Standards)
The software application used by the office generated four audit logs that displayed changes
made by users. Because these logs provided the only audit trail of these changes, they should
be routinely reviewed for inappropriate activity. During the prior audit period, we made
management aware of the importance of these logs. However, management did not review
one of these logs until its importance was again brought to their attention in December 2015.
RECOMMENDATION
Management should continue to review these logs on a routine basis. Any unusual
transactions should be investigated.
MANAGEMENTS RESPONSE COUNTY CLERK
I concur.
OFFICE OF SHERIFF
FINDING 2016-009 THE OFFICE DID NOT PREPARE AN ANNUAL

FINANCIAL REPORT
The office did not prepare an annual financial report. Section 5-8-505, Tennessee Code
Annotated, states, All appointive or elective county public officials, official county boards,
committees and commissions ... having in their charge and custody public funds or moneys
are required to file with the county executive and with the county clerk ... an annual financial
report ... This deficiency is a result of a lack of management oversight.
RECOMMENDATION
The office should prepare and file an annual financial report as required by state statute.
MANAGEMENTS RESPONSE SHERIFF
I concur. In the future, all financial reports will be prepared in compliance with statutes.
174
FINDING 2016-010 THE OFFICE HAD DEFICIENCIES IN THE
MAINTENANCE OF ACCOUNTING RECORDS
(A. Internal Control Significant Deficiency Under
Government Auditing Standards; B. Noncompliance Under
Our examination disclosed the following deficiencies in the maintenance of accounting

records. These deficiencies are considered significant deficiencies that increase the risk of
fraud and abuse and the risk that errors will not be discovered and corrected in a timely
manner. Also, these deficiencies are the result of a lack of management oversight.
A. Bank statements for the official bank account were not reconciled with the
general ledger in eight of 12 months during the year. Sound business practices
dictate that bank statements should be reconciled with the general ledger
monthly to ensure errors are identified and corrected promptly.
B. Fees collected were not remitted to the county trustee in accordance with state
statute. Section 8-24-103, Tennessee Code Annotated (TCA), requires sheriff
fees to be remitted to the county trustee monthly; and Section 67-4-213(d),
TCA, requires officials collecting fees and county revenues to report those
collections to the county within 15 days after the end of the month in which
the funds were collected. We noted that the office remitted collections to the
county trustee within the required 15 days in only two of 12 months. Fees
collected by the sheriff for the period of January through March 2016 were not
remitted to the county until May 2016.
RECOMMENDATION
Bank statements should be reconciled with the general ledger monthly, and any errors
discovered should be corrected promptly. Fees should be remitted to the county trustee
monthly and by the 15th day of the following month as required by state statutes.
MANAGEMENTS RESPONSE SHERIFF
I concur. In the future, all bank statements will be reconciled with proper notations and all
monies collected will be remitted to the trustees office in compliance with requirements.
175
PART III, FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS
There were no findings and questioned costs related to federal awards for the year ended
June 30, 2016.
176
Managements Corrective Action Plan
We reviewed the financial statement and federal award findings and recommendations
with management to provide an opportunity for their response as required by the auditee
requirements within Title 2 U.S. Code of Federal Regulations Part 200, Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
(Uniform Guidance). Managements corrective action plans for all financial statement
findings and federal award findings are presented below:
Corrective Action - Financial Statement Findings
FINDING 2016-001 THE OFFICE HAD DEFICIENCIES IN THE USE OF

COUNTY CREDIT CARDS
Response and Corrective Action Plan Prepared by: Keith Cartwright, County
Executive, Sequatchie
County, Tennessee
Person Responsible for Implementing the Corrective Action: Same
Anticipated Completion Date of Corrective Action: July 1, 2017
Repeat Finding: Yes
Reason Why Corrective Action was Not Taken PY:
Sequatchie County has tried, for the last year, to tighten down on department heads
obtaining purchase orders and turning in receipts with credit card purchases. These
attempts have been met with some resistance, but Sequatchie County will continue to
improve in this area.
Planned Corrective Action:
Sequatchie County is in the process of amending its credit card policy. The plan is to have
the amended policy in place before the start of the next fiscal year, July 1, 2017. At the
time it is implemented, the county executive will review the policy with the elected officials
and department heads to make sure the proper documentation is included with the credit
card purchases and sales tax is not paid. Also, management will make sure purchases are
coded to the correct expenditure account.
________________________________________
177
FINDING 2016-002 THE OFFICE HAD DEFICIENCIES RELATED TO
TRAVEL REIMBURSEMENTS
County, Tennessee
Repeat Finding: No
Reason Why Corrective Action was Not Taken PY: N/A
Sequatchie County management will meet with department heads and elected officials and
review the travel and reimbursement policies.
________________________________________
FINDING 2016-003 THE OFFICE HAD DEFICIENCIES IN PURCHASING

PROCEDURES
County, Tennessee
Repeat Finding: No
Sequatchie County is in the process of amending the purchasing policies and procedures.
Once this policy is in place and adopted, county management will meet and review the new
policy with all department heads and elected officials in order to strengthen controls in
county purchasing.
________________________________________
FINDING 2016-004 THE OFFICE DID NOT IMPLEMENT ADEQUATE

CONTROLS TO PROTECT ITS INFORMATION
RESOURCES
County, Tennessee
Anticipated Completion Date of Corrective Action: March 30, 2016
Repeat Finding: No
178
This finding stems from a former employee who still had an active login during the current
fiscal year. This login was deleted from our system on March 30, 2016. In the future, all
employees who have login capabilities will be deleted from the system upon termination.
________________________________________
FINDING 2016-005 PAYROLL LIABILITY ACCOUNTS WERE NOT

RECONCILED WITH SUBSIDIARY PAYROLL
RECORDS IN THE HIGHWAY/PUBLIC WORKS FUND
Response and Corrective Action Plan Prepared by: Tommy Sims, Highway
Supervisor, Sequatchie
County, Tennessee
Anticipated Completion Date of Corrective Action: February 13, 2017
Repeat Finding: Yes
Reason Why Corrective Action was Not Taken PY: Oversight by bookkeeper.
Office clerk will double check accounts after bookkeeper has processed.
________________________________________
FINDING 2016-006 RETIREMENT WAGES AND WITHHOLDINGS WERE

NOT REPORTED AND REMITTED TO THE
TENNESSEE CONSOLIDATED RETIREMENT SYSTEM
County, Tennessee
Repeat Finding: No
One payroll was not posted correctly before the retirement was calculated for the month,
which caused a shortage on the payment to the retirement system. This will be processed
as soon as the retirement agency sends the notification template for February 2017.
________________________________________
179
FINDING 2016-007 DUTIES WERE NOT SEGREGATED ADEQUATELY
County, Tennessee
Repeat Finding: Yes
Reason Why Corrective Action was Not Taken PY: Changes were made, but
not as effective as planned.
We plan to have the office clerk take more responsibility in following up on what the
bookkeeper has prepared. This will allow us to double check each job performed.
________________________________________
FINDING 2016-008 THE OFFICE DID NOT REVIEW ALL SOFTWARE

AUDIT LOGS
Response and Corrective Action Plan Prepared by: Charlotte Cagle, County
Clerk, Sequatchie County,
Tennessee
Repeat Finding: No
The bookkeeper will prepare a printout of the open and close log at the end of each month.
He and I will review this log for any inappropriate activity. I will then sign off on each
report to verify its review. The bookkeeper will then file in an assigned place for proper
review by the auditor.
________________________________________
OFFICE OF SHERIFF
FINDING 2016-009 THE OFFICE DID NOT PREPARE AN ANNUAL

FINANCIAL REPORT
Response and Corrective Action Plan Prepared by: Ronnie Hitchcock, Sheriff,
Sequatchie County,
Tennessee
Repeat Finding: No
180
The Sequatchie County Sheriffs Office is in the process of correcting this finding before the
next fiscal year. At this time we have received a copy of the audit manual and reviewed the
policies and standards that are set forth. Also, management will ensure that any and all
financial reports are prepared within those guidelines.
________________________________________
FINDING 2016-010 THE OFFICE HAD DEFICIENCIES IN THE

MAINTENANCE OF ACCOUNTING RECORDS
Response and Corrective Action Plan Prepared by: Ronnie Hitchcock, Sheriff,
Sequatchie County,
Tennessee
Repeat Finding: No
The Sequatchie County Sheriffs Office is in the process of correcting this finding before the
next fiscal year. At this time we have received a copy of the audit manual and reviewed the
policies and standards that are set forth. We have thoroughly reviewed the audit findings
and have begun making the necessary changes to correct the bank reconciliations as
directed. Another part of the finding was not remitting fees to the county trustee in
accordance with state statute. Since we were made aware of the statute, all fees have been
remitted within the guidelines set forth. Also, management will ensure that any and all
fees will be remitted according to policy.
181
BEST PRACTICE
Accounting literature describes a best practice as a recommended policy, procedure, or

technique that aids management in improving financial performance. Historically, a best
practice has consistently shown superior results over conventional methods.
The Division of Local Government Audit strongly believes that the item noted below is a
best practice that should be adopted by the governing body as a means of significantly
improving accountability and the quality of services provided to the citizens of Sequatchie
County.
SEQUATCHIE COUNTY SHOULD ADOPT A CENTRAL SYSTEM

OF ACCOUNTING, BUDGETING, AND PURCHASING
Sequatchie County does not have a central system of accounting, budgeting, and
purchasing. Sound business practices dictate that establishing a central system would
significantly improve internal controls over the accounting, budgeting, and purchasing
processes. The absence of a central system of accounting, budgeting, and purchasing has
been a management decision by the county commission resulting in decentralization and
some duplication of effort. We recommend the adoption of the County Financial
Management System of 1981 or a private act, which would provide for a central system of
accounting, budgeting, and purchasing covering all county departments.
182

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ANNUAL FINANCIAL REPORT

SEQUATCHIE COUNTY, TENNESSEE

DIVISION OF LOCAL GOVERNMENT AUDIT

SEQUATCHIE COUNTY, TENNESSEE

FOR THE YEAR ENDED JUNE 30, 2016

COMPTROLLER OF THE TREASURY

DIVISION OF LOCAL GOVERNMENT AUDIT

AMY HEWITT, CPA, CFE

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

Summary of Audit Findings 6-7

Sequatchie County Officials 9

Independent Auditor's Report 11-14

Schedule of Proportionate Share of the Net Pension Asset in the

Miscellaneous Schedules: 111

SINGLE AUDIT SECTION 158

Auditor's Report on Internal Control Over Financial Reporting and on

Our report on Sequatchie Countys financial statements is unmodified.

The following are summaries of the audit findings:

OFFICE OF COUNTY EXECUTIVE

The office had deficiencies in the use of county credit cards.

OFFICE OF HIGHWAY SUPERVISOR

OFFICE OF COUNTY CLERK

The office did not review all software audit logs.

The office did not prepare an annual financial report.

Keith Cartwright, County Executive

Board of County Commissioners

Keith Cartwright, County Executive, Chairman

Charles Rollins, Chairman

Kurt Wissehr, Chairman

Independent Auditor's Report

Sequatchie County Executive and

To the County Executive and Board of County Commissioners:

Report on the Financial Statements

Management's Responsibility for the Financial Statements

Change in Accounting Principle

Required Supplementary Information

Supplementary and Other Information

Very truly yours,

February 21, 2017

Cash $ 2,331 $ 2,298

DEFERRED OUTFLOWS OF RESOURCES

Pension Changes in Experience $ 0 $ 65,461

Accounts Payable $ 14,563 $ 6,000

DEFERRED INFLOWS OF RESOURCES

Deferred Current Property Taxes $ 4,241,756 $ 2,873,229

Net Investment in Capital Assets $ 5,758,157 $ 23,972,519

Total Net Position $ 9,652,087 $ 35,377,755

Sequatchie County, Tennessee

Net (Expense) Revenue and Changes in Net Position

Total Primary Government $ 8,714,514 $ 1,793,244 $ 1,731,824 $ 663,780 $ (4,525,666) $ 0

Total Component Unit $ 17,294,102 $ 93,529 $ 3,506,970 $ 0 $ 0 $ (13,693,603)

Sequatchie County, Tennessee

Net (Expense) Revenue and Changes in Net Position

Insurance Recovery $ 2,173 $ 710

Change in Net Position $ 1,125,788 $ 2,985,111

Net Position, June 30, 2016 $ 9,652,087 $ 35,377,755

Sequatchie County, Tennessee