KEWAUNEE COUNTY, WISCONSIN ANNUAL FINANCIAL REPORT DECEMBER 31, 2015

Transcription

1 ANNUAL FINANCIAL REPORT DECEMBER 31, 2015

2 December 31, 2015 Table of Contents Page No. INDEPENDENT AUDITORS' REPORT BASIC FINANCIAL STATEMENTS Government-wide Financial Statements Statement of Net Position Statement of Activities Fund Financial Statements Balance Sheet - Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund Statement of Net Position - Proprietary Funds Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds Statement of Cash Flows - Proprietary Funds Notes to Basic Financial Statements REQUIRED SUPPLEMENTARY INFORMATION Schedule of Proportionate Share of the Net Pension Asset - Wisconsin Retirement System Schedule of Contributions - Wisconsin Retirement System Notes to Required Supplementary Information SUPPLEMENTARY INFORMATION Detailed Comparison of Budgeted and Actual Revenues - General Fund Detailed Comparison of Budgeted and Actual Expenditures - General Fund Combining Balance Sheet- Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds Combining Statement of Net Position - Internal Service Funds Combining Statement of Revenues, Expenses and Changes in Net Position - Internal Service Funds Combining Statement of Cash Flows - Internal Service Funds

3 December 31, 2015 Table of Contents ADDITIONAL INDEPENDENT AUDITORS' REPORT FOR BASIC FINANCIAL STATEMENTS 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 FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE Independent Auditors' Report on Compliance for Each Major Federal and State Program and on Internal Control Over Compliance Required by the Uniform Guidance and the State Single Audit Guidelines Schedule of Expenditures of Federal Awards Schedule of State Financial Assistance Notes to the Schedule of Expenditures of Federal Awards on the Schedule of State Financial Assistance Schedule of Findings and Questioned Costs Schedule of Prior Year Audit Findings and Corrective Action Plan Page No

4 Schenck ADVISORY TAX ASSURAllCE INDEPENDENT AUDITORS' REPORT To the County Board Kewaunee County, Wisconsin Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities. each major fund, and the aggregate remaining fund information of the Kewaunee County, Wisconsin ("the County") as of and for the year ended December 31, 2015, and the related notes to the financial statements. which collectively comprise the County's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors' 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 of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' 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 auditors consider internal control relevant lo the County'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 County'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 business-type activities, each major fund, and the aggregate remaining fund information of the County as of December 31, 2015, and the respective changes in financial position and, where applicable, cash flows thereof and the respective budgetary comparison for the General Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. schencksc.com 1

5 Emphasis of Matter As discussed in Note D.7, the County implemented GASB Statement No. 68, Accounting and Financial Reporting for Pensions - An Amendment of GASB Statement No. 27 and Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date - An Amendment of GASB Statement No. 68. Our opinions are not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the schedules relating to pensions on pages 40 and 41 be presented to supplement the basic financial statements. Such information, although not 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. Management has omitted the management's discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinions on the basic financial statements are not affected by this missing information. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the County's basic financial statements. The financial information listed in the table of contents as supplementary information is presented for purposes of additional analysis and is not a required part of the basic financial statements. The schedule of expenditures of federal awards and schedule of state financial assistance are presented for purposes of additional analysis, as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and the State Single Audit Guidelines issued by the Wisconsin Department of Administration, are also not a required part of the basic financial statements. The supplementary information and the schedules of expenditures of federal awards and state financial assistance 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, the supplementary information, the schedules of expenditures of federal awards and the schedule of state financial assistance are fairly stated, in all material respects, in relation to the basic financial statements as a whole. Report on Summarized Financial Information We have previously audited the County's 2014 financial statements, and our report dated August 25, 2015, expressed unmodified opinions on those respective financial statements of the governmental activities, the business-type activities, and each major fund. In our opinion, the summarized comparative information presented herein as of and for the year ended December 31, 2014, is consistent, in all material respects, with the audited financial statements from which it has been derived. 2

6 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated August 17, 2016, on our consideration of the County's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the County's internal control over financial reporting and compliance. Certified Public Accountants Green Bay, Wisconsin August 17,

7 BASIC FINANCIAL STATEMENTS

8 Statement of Net Position December 31, 2015 (With Summarized Financial Information as of December 31, 2014) Governmental Business-type Total Activities Activities ASSETS Cash and investments $ 10,469,682 $ 352,807 $ 10,822,489 $ 8,597,791 Receivables Taxes 11,558, ,994 11,741,415 11,586,787 Accounts 1,355, ,734 1,845,508 1,774,249 Development loans 658, , ,759 Interest 2,777 2,777 4,237 Internal balances 1,524,652 (1,524,652) Inventories 13, , ,360 1,044,816 Prepaid items 21,719 21, ,087 Restricted cash 58,724 58,724 58,663 Net pension asset 1,326, ,643 1,631,046 Capital assets Land 853, ,618 1,370,297 1,370,297 Buildings 15,413,487 2,744,891 18,158,378 18,158,378 Improvements other than buildings 62,997 5,048,832 5, 111,829 5,095,989 Machinery and equipment 7,360,297 11,557,990 18,918,287 14,299,469 Infrastructure 30,278,384 30,278,384 28,937,598 Construction in progress 4,230,197 Less: Accumulated depreciation (181448,855} (141268,600} {32, } {30, } TOTAL ASSETS , , ,629,327 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to pension 11326, ,029 1,660,449 LIABILITIES Vouchers payable 816, ,051 1, 161,355 1,566,933 Accrued liabilities 1,043, ,043, ,443 Accrued interest 94,264 7, , ,297 Due to other governments 1,461, ,462,090 38,269 Unearned revenues 14, , ,631 95,064 Special deposits 266, , ,040 Noncurrent liabilities Due within one year 840, , , ,000 Due in more than one year , TOTAL LIABILITIES , , DEFERRED INFLOWS OF RESOURCES Property taxes NET POSITION Net investment in capital assets 22,139,989 4,499,731 26,639,720 29,560,938 Restricted for Subsequent years' expenditures 459, , ,869 Debt service 228, , ,901 Capital projects 199,015 Revolving loans 1,804, 161 1,804, 161 1,787,981 Pension benefits 2,652, ,672 3,291,495 Unrestricted (deficit) { } 6, ,245 TOTAL NET POSITION $ 34,000,096 i ~.ZOl,148 ~ 38,701,244 ~ 34,317,9~9 The notes to the basic financial statements are an integral part of this statement. 4

9 Statement of Activities For the Year Ended December 31, 2015 (With Summarized Financial Information for the Year Ended December 31, 2014) Functions/Proarams Governmental Activities General government Public safety Public works Health and human services Culture and recreation Conservation and development Interest on debt Total Governmental Activities Business-type Activities Solid waste Highway Total Business-type Activities Total Proaram Revenues Operating Capital Charges for Grants and Grants and Exoenses Services Contributions Contributions $ 3,527,923 $ 257,788 $ 182,824 $ 3,956, ,540 77,624 55,136 2,462, ,106 7,664,676 1,578,413 4,466,906 1,253,272 52,486 81,469 6, , , , ,614 20,369,161 2,428,311 6,065,604 61,991 1,595,444 1,204,985 6,001, ,565 2,455 7, ,167,550 2,455 $ $ $ 6.068,059 $ General revenues Property taxes, levied for general purposes Property taxes, levied for debt service Other taxes State and federal aids not restricted to specific functions Interest and investment earnings Miscellaneous Gain on sale of capital assets Transfers Total general revenues and transfers Change in net position Net position - January 1, as originally reported Cumulative effect of change in accounting principle Net position - January 1, restated Net position - December 31 The notes to the basic financial statements are an integral part of this statement. 5

10 Net (Expense) Revenue and Changes in Net Position Total Governmental Business-type Activities Activities I $ (3,087,311) $ $ (3,087,311) $ (3,037,453) (3,401,210) (3,401,210) (3,583,902) (1,696,959) (1,696,959) (4,750,972) (1,619,357) (1,619,357) (532,013) (1, 112,462) (1,112,462) (945,928) (322,342) (322,342) (288,807) {573,614} {573,614} {580,424} {11,813,255} {11,813,255} {13,719,499} (390,459) (390,459) (118, 156) {36,205} {36,205} 153,537 {426,664} {426,664) 35,381 {11,813,255} {426,664} p 2,239,919} {13,684,118} 9,534, ,347 9,728,021 9,651,690 1,299,262 1,299,262 1,399, , , ,053 1,643,141 1,643, 141 1,644, , , , ,924 21, , ,747 10,898 10,898 {1,911} 1,911 13,062, ,571 13,279,205 14,059,181 1,249,379 {210,093} 1,039, ,063 30,124,073 4,193,876 34,317,949 33,942,886 2,626, ,365 3,344,009 32,750,717 4,911,241 37,661,958 33,942,886 34,000,096 4,701,148 38,701,244 34,317,949 6

11 Balance Sheet Governmental Funds December 31, 2015 {With Summarized Financial Information as of December 31, 2014) ASSETS Cash and investments Receivables Taxes Delinquent taxes Accounts Development loans Interest Due from other funds Prepaid items Inventory Restricted cash Advance due from enterprise fund TOTAL ASSETS LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities Vouchers payable and accrued payroll Other current liabilities Due to other funds Due to other governments Special deposits Unearned revenues Total Liabilities Deferred Inflows of Resources Property taxes Loans Total Deferred Inflows of Resources Fund Balances Nonspendable Prepaid items and inventory Delinquent taxes Cash advances to other funds Restricted Subsequent years' projects Debt service Capital projects Revolving loans Committed Subsequent years' projects Assigned Auto physical damage Counteract Fairgrounds Parks Contingency Unassigned General fund Special revenue funds Total Fund Balances TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES (Continued) General $ 3,770,259 $ 6,257, , ,181 2, ,660 21,719 13, i :l2.5oa Jf22 i $ 255,597 $ 150,360 12, , ,760 6,260,700 6,260,700 35, ,381 1,524,652 61, ,284 1,364 33,431 33, ,114 3,001,889 5,609,902 al 12 fiqs Jf22 i County Roads Human Services 3,787,240 $ 801,008 2,105, , ,386 58,724 5 Ba2.ZBf2 i :l.f2aa.bf2b $ 465, ,449,469 47, ,105, , , ,750 3,787,240 11,481 ( } ( } f2 aa2.zae i l.f2ss.bf2b 7

12 Other Total Governmental Funds $ 1,867,272 $ 10,225,779 $ 8,057,980 1,939,955 10,991,432 10,824, , , , , , , ,750 2, ,759 4, ,660 1, 192,496 21, ,762 13,596 19,217 58,724 58, i ~.5aa.9~ i 2~.ea!2.96Q :5 2J.2Z2.Bl:! I $ 95,091 $ 816,304 $ 1,223, , ,871 54,008 54,008 6,551 1,461,996 38, , , ,939,955 10,994,951 10,833, , , , ,580 1,524,652 1,785, , , , , , , ,015 1, 145,411 1,145,411 1,245,222 8,265 3,856,559 3,022, , ,834 1,364 1,364 33,431 25,502 33,418 31, , ,613 3,001,889 2,195,485 ( } { } ( } i ~.5aa.9~~ i 2~.6B!2.96Q ~ 2J.2Z2 Bl l 8

13 Balance Sheet (Continued) Governmental Funds December 31, 2015 (With Summarized Financial Information as of December 31, 2014) Reconciliation to the Statement of Net Position Total Fund Balances as shown on previous page $ ,267,925 $ 10,302,385 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds. Other long-term assets are not available to pay for current period expenditures and, therefore are deferred in the funds. The details of this difference are as follows: Loans receivable Internal service funds are used by management to charge the cost of insurance programs to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net position. The County's proportionate share of the Wisconsin Retirement System pension plan is not an available financial resource; therefore, it is not reported in the fund financial statements: Net pension asset Deferred outflows of resources Long-term liabilities, including bonds and notes payable, are not due and payable in the current period and, therefore, are not reported in the funds. Bonds and notes payable Compensated absences Accrued interest on long-term obligations Net Position of Governmental Activities as Reported on the Statement of Net Position (see page 4) $ 35,519,989 35,304, , , , ,147 1,326,403 1,326,420 (14,075,000) (14,895,000) (1,070,264) (1,397,955) (941264} (971553} J~.ooo oa :& JQ.l2~.QZJ The notes to the basic financial statements are an integral part of this statement. 9

14 Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended December 31, 2015 (With Summarized Financial Information for the Year Ended December 31, 2014) Revenues Taxes Intergovernmental Licenses and permits Fines and forfeits Public charges for services Interest Other Total Revenues $ General 5,733,758 2,448,157 86,591 46, ,392 71, County Roads $ 2,811, , ,960 Human Services $ 712,495 3,618,120 11,680 1,992, Expenditures Current General government Public safety Public works Health and human services Culture and recreation Conservation and development Capital outlay Public safety Debt service Principal Interest and fiscal charges Total Expenditures 2,887,340 3,924, ,883 1,088, ,518 8,949,413 2,742,968 2,742,968 7,023, ,407 Excess of Revenues Over (Under) Expenditures ,992 ( ) Other Financing Sources (Uses) Sale of capital assets Transfers in Transfers out Total Other Financing Sources (Uses) 87,275 {191424} ,347 11,347 13,928 13,928 Net Change in Fund Balances 257, ,339 (660,021) Fund Balances (Deficit) - January 1 5, ,901 {291,711) Fund Balances (Deficit) - December 31 i 5,609,902 i 3,787,240 i (951,732) (Continued) 10

15 Other Total Governmental Funds $ 1,786,030 $ 11,044, 137 $ 11,121, ,136 7,342,519 11,370,845 40, , ,484 58,577 47,076 72,784 2,652,306 3,113,390 2,122 74, , , , I 298,187 3,185,527 3,105,069 35,130 3,959,780 3,946,335 7,431 2,750,399 4,855, ,942 7,880,232 10,711,789 14,637 1,102,659 1,244, ,153 1,153,671 1,065, , , , , , , , , , (393,608) (43,896) (505,553) 11,347 88, ,752 2,421,703 { } { } {2, } {831690} (477,298) (34,460) (505,553) 2, , , s 1,822,515 I 10,267,925 I 10,302,385 11

16 Statement of Revenues, Expenditures and Changes in Fund Balances {Continued) Governmental Funds For the Year Ended December 31, 2015 {With Summarized Financial Information for the Year Ended December 31, 2014) Reconciliation to the Statement of Net Position 2015 Net Change in Fund Balances as shown on previous page $ {34,460) $ 2014 (505,553) Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which depreciation expense exceeded capital outlays in the current period. Capital outlay reported in governmental fund statements $ 1,829,431 Depreciation expense reported in the statement of activities { } Amount by which capital outlays are greater (less) than depreciation 222,254 {624,114) In governmental funds the entire proceeds, if any, from the disposal of capital assets is reported as an other financing source. In the statement of activities only the gain (or loss) on the disposal is reported. Proceeds from the disposition of capital assets as reported on the governmental funds operating statement $ (17,453) Gain (loss) on sale of capital assets Book value of capital assets disposed of (6,555) Certain employee benefits are reported in the governmental funds when amounts are paid. The statement of activities reports the value of benefits earned during the year. This year the accrual of these benefits decreased (increased) by: 327,691 (7,318) 11,524 Change in the net pension asset and related deferred inflows and outflows of resources as a result of employer contributions, changes in assumptions and proportionate share and the difference between the expected and actual experience of the pension plan 26,179 Governmental funds do not present revenues that are not available to pay current obligations. In contrast, such revenues are reported in the statement of activities resources are not reported as revenues in the funds. 115,991 Repayment of principal on long-term debt is reported in the governmental funds as an expenditure, but is reported as a reduction in long-term debt in the statement of net position and does not affect the statement of activities. The amount of long-term debt principal payments is: 820,000 Interest payments on outstanding debt are reported in the governmental funds as an expenditure when paid, in the statement of activities interest is reported as it accrues. 3,289 Internal service funds are used by management to charge the costs of insurance programs to individual funds. The net revenue of certain activities of internal service funds is reported with governmental activities. { } Change in Net Position of Governmental Activities as Reported in the Statement of Activities (see pages 5-6) s 1.6~UtJ7~ s (60,283) 800,000 15,990 { } ( Zl.~75) The notes to the basic financial statements are an integral part of this statement. 12

17 Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual General Fund For the Year Ended December 31, 2015 Revenues Taxes Intergovernmental Licenses and permits Fines and forfeits Public charges for services Interest Other Total Revenues $ Budgeted Amounts Oriainal I Final 5,742,057 $ 5,742,057 2,098,537 2,310,833 93,200 93,200 52,200 52, , , , , ,000 8,751,912 8,964,208 Actual Amounts $ 5,733,758 2,448,157 86,591 46, ,392 71, ,296 9,139,082 Variance with Final Budget - Positive <Neaative) $ (8,299) 137,324 (6,609) (5,303) 13,474 (38,009) 82, ,874 Expenditures Current General government Public safety Health and human services Culture and recreation Conservation and development Total Expenditures 2,875,314 2,959,099 3,894,029 3,922, , ,181 1,108,151 1,112, ,770,512 9,100,810 2,887,340 3,924, ,883 1,088, ,949,413 71,759 (2,563) 46,298 24,949 10, ,397 Excess of Revenues Over (Under) Expenditures (18,600) (136,602) 189, ,271 Other Financing Sources (Uses) Transfers in Transfers out Other Financing Sources (Uses) (19.424} {19,424} 87,275 {19,424} 67,851 87,275 87,275 Net Change in Fund Balance (18,600) (156,026) 257, ,546 Fund Balance - January 1 5,352,382 5,352,382 5,352,382 Fund Balance - December 31 m 5,333,782 m 5,196,356 m 5,609,902 m 413,546 The notes to the basic financial statements are an integral part of this statement. 13

18 Statement of Net Position Proprietary Funds December31, 2015 (With Summarized Financial Information as of December 31, 2014) ASSETS Current Assets Cash and investments Taxes receivable Accounts receivable Prepaid items Inventories Total Current Assets $ Solid Waste 182, , $ Hiohwav 352, , , $ , , , , Total $ , ,000 1, ,356 Governmental Activities - Internal Service Funds $ 243, , Noncurrent Assets Net pension asset Capital Assets Land Buildings Improvements other than buildings Machinery and equipment Less accumulated depreciation Total Capital Assets 504, ,031 4,190,350 1,030,632 { } ,908 2,396, ,482 10,527,358 { } ,618 2,744,891 5,048,832 11,557,990 { } ,618 2,744,891 5,032,992 11,531,555 { } TOTAL ASSETS 2, DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to pension LIABILITIES Current Liabilities Vouchers payable and accrued payroll Accrued liabilities Due to other governments Due to other funds Unearned revenue Total Current Liabilities 229,486 7, , , , ,051 7, , ,689 15, ,185, , Noncurrent Liabilities Compensated absences Notes payable Due within one year Due in more than one year Advance payable to general fund Due in more than one year Total Noncurrent Liabilities 49, , , , , , , , ,000 1,100, , TOT AL LIABILITIES , DEFERRED INFLOWS OF RESOURCES Property taxes NET POSITION Net investment in capital assets Restricted for pension benefits Unrestricted (deficit) 878,284 60,681 {1, } 3,621, ,991 1,218,446 4,499, ,672 { } 5,068,648 ( } TOT AL NET POSITION $ (716,736) $ 5.417,884 $ $ $ The notes to the basic financial statements are an integral part of this statement. 14

19 Statement of Revenues, Expenses and Changes in Net Position Proprietary Funds For the Year Ended December 31, 2015 (With Summarized Financial Information for the Year Ended December 31, 2014) Operating Revenues User fees Tipping fees Maintenance and construction Insurance charges Other Total Operating Revenues Solid Waste $ 1,202,173 $ Hiahwav 5,962,565 2,812 1,204,985 5,962,565 Total $ 1,202,173 $ 1,495,422 5,962,565 8,990, ,167,550 10,486,360 Governmental Activities - Internal Service Funds $ 4,847,729 4,847,729 Operating Expenses Salaries and fringes Administration Maintenance and construction Hotmix plant Gravel pits Supplies and utilities Contracted services Licensing fees Payment of claims Depreciation Total Operating Expenses 238,799 3, , ,773 4,531, ,930 22,526 13, , , i , , , ,760 4,669,307 6,659, ,930 1,574,569 22, ,212 13,092 18, , , , , ,530 4,366, i739 Operating Income (Loss) (177i753) (381660) ( ) 238,491 (225' 10) Nonoperating Revenues (Expenses) General property taxes Rent Reimbursement of closure costs Local road improvement program Long-term care and closure Interest expense Total Nonoperating Revenues (Expenses) 193,347 21,313 2,455 (164,208) {481498} , ,177 21,313 29, ,000 2,455 4,955 (164,208) (153,026) {481498} {551039} Gain (Loss) Before Transfers (175,799) (36,205) (212,004) 946,538 (225,010) Transfers Transfers in 1,911 1,911 Change in Net Position { } {361205} { } { } Net Position (Deficit) - January 1, as originally reported (604,988) 4,798,864 4,193,876 3,247, ,147 Cumulative Effect of Change in Accounting Principle Net Position - January 1, restated { } Net Position (Deficit)- December 31 Si (ZHi.ZJ } Si 5.~lZ.88~ Si 4,ZQ1.H8 Si ~.19J.8Z Si HQ,lJZ The notes to the basic financial statements are an integral part of this statement. 15

20 Statement of Cash Flows Proprietary Funds For the Year Ended December 31, 2015 (With Summarized Financial Information for the Year Ended December 31, 2014) Cash Flows from Operating Activities Cash received from user charges Cash received from interfund services provided Cash paid to employees Cash payments to suppliers Net Cash Provided (Used) by Operating Activities $ Solid Waste Hiahwav 1,160,230 $ 5,877,586 $ (170,908) (1,338,575) { } {41120,132) 146, ,879 Total ,037,816 $ 10,715,111 (1,509,483) (1,670,582) {4,963,054} {9,323,412} (278,883) Governmental Activities - Internal Service Funds $ 4,485,481 {4,781,304) (295,823) Cash Flows from Capital and Related Financing Activities Acquisition of capital assets Principal payments on long-term debt Interest paid on long-term debt Net Cash Used by Capital and Related Financing Activities (19,066) (68,537) (130,000) {49,772} {198,838} (68,537} (87,603) (304,782) (130,000) (125,000) {49,772} {55,039} (267,375} {484,821} Cash Flows from Noncapital Financing Activities Property taxes Rental income Reimbursement of closure costs Local road improvement program Transfer from general fund Long-term care and closure deposits Net Cash Provided by Noncapital Financing Activities 193,347 21,313 1,911 {164,208) 2, , , ,177 21,313 29, ,000 2,455 4,955 1,911 {164,208) { ) 54, ,086 Net Increase (Decrease) in Cash and Cash Equivalents (75) 352, ,722 (618) (295,823) Cash and Cash Equivalents - January Cash and Cash Equivalents - December 31 $ $ $ $ 85 $ Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation Changes in pension related assets and deferred outflows Changes in assets and liabilities Accounts receivable Inventories and prepaid items Vouchers payable Accrued liabilities Due to other govemments Due to other funds Uneamed revenue Compensated absences Net Cash Provided (Used) by Operating Activities $ $ (177,753) $ (38,660) $ 460, ,897 1,459 77,234 (44,755) (84,979) 258, ,534 (109,172) (1,191) (6,591) 36 (211,377) (49,916) 45, $ $ (216,413) $ 238, , ,688 78,693 (129,734) 228, ,160 83,719 1,362 (311,195) (7,782) (1,237) 36 (205) (261,293) (1,332,423) 45,870 (10,035) $ (225,010) (362,248) 291, $ ( ) $ ( ) The notes to the basic financial statements are an integral part of this statement. 16

21 Notes to Basic Financial Statements December 31, 2015 NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The basic financial statements of Kewaunee County, Wisconsin, ("the County") have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standardsetting body for establishing governmental accounting and financial reporting principles. The significant accounting principles and policies utilized by the County are described below: 1. Reporting Entity Kewaunee County is a municipal corporation governed by an elected 19-member board. In accordance with GAAP, the basic financial statements are required to include the County (the primary government) and any separate component units that have a significant operational or financial relationship with the County. The County has not identified any component units that are required to be included in the basic financial statements in accordance with standards established by GASB Statement No 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 County. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which are primarily supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for services. 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 or segment. 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 or segment 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. Separate financial statements are provided for governmental funds and proprietary funds. Governmental funds include general, special revenue, debt service and capital projects funds. Proprietary funds include enterprise and internal service funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. The County reports the following major governmental funds: GENERAL FUND This is the County's main operating fund. It accounts for all financial resources of the general government, except those accounted for in another fund. COUNTY ROADS SPECIAL REVENUE FUND This fund accounts for the maintenance and construction of county roads. general property taxes and federal and state grants. Significant revenues are 17

22 Notes to Basic Financial Statements December 31, 2015 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) HUMAN SERVICES SPECIAL REVENUE FUND This fund accounts for the operation of the County's Human Services Department. Significant revenues are general property taxes, user charges, and federal and state grants. The County reports the following major enterprise funds: SouoWASTE This fund accounts for the operation of the County-wide sanitary landfill. HIGHWAY This fund accounts for the operation of the County Highway Department. charges to County departments and other governments. Financing is provided by Additionally, the government reports the following fund type: Internal senice funds account for health and dental self-insurance services provided to other departments or agencies of the County, or to retirees, on a cost reimbursement basis. 3. Measurement Focus and Basis of Accounting The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. 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 revenues as soon as all eligibility requirements imposed by the provider have been met. 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 are 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 to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Revenues susceptible to accrual include intergovernmental grants, intergovernmental charges for services, public charges for services and interest. Other revenues such as licenses and permits, fines and forfeits and miscellaneous revenues are recognized when received in cash or when measurable and available. 18

23 Notes to Basic Financial Statements December 31, 2015 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are charges between the County's highway and solid waste functions and various other functions of the County. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, and fees and fines, 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. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the County's enterprise funds are charges to customers for services. Operating expenses for enterprise funds include the cost of services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the County's policy to use restricted resources first, then unrestricted resources, as they are needed. 4. Assets. Liabilities. Deferred Outflows/Inflows of Resources and Net Position or Fund Balance a. Cash and Investments Cash and investments are combined in the financial statements. Cash deposits consist of demand and time deposits with financial institutions and are carried at cost. Investments are stated at fair value. Fair value is the amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. For purposes of the statement of cash flows, all cash deposits and highly liquid investments (including restricted assets) with a maturity of three months or less are considered to be cash equivalents. b. Accounts Receivable Accounts receivable are recorded at gross amount with uncollectible amounts recognized under the direct write-off method. No allowance for uncollectible accounts has been provided since it is believed that the amount of such allowance would not be material to the basic financial statements. c. lnterfund Receivables and Payables During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. These receivables and payables are classified as "due from other funds" and "due to other funds" in the financial statements. Noncurrent portions of the interfund receivables for the governmental funds are reported as "advances to other funds" and are offset by nonspendable fund balance since they do not constitute expendable available financial resources and therefore are not available for appropriation. The amount reported on the statement of net position for internal balances represents the residual balance outstanding between the governmental and business-type activities. 19

24 Notes to Basic Financial Statements December 31, 2015 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) d. Inventories Inventories are recorded at cost, which approximates market, using the first-in, first-out method. Inventories consist of expendable supplies held for consumption. The cost is recorded as an expenditure at the time individual inventory items are consumed rather than when purchased. Inventories of governmental funds in the fund financial statements are offset by nonspendable fund balance to indicate that they do not represent spendable available financial resources. e. Prepaid Items Payments made to vendors that will benefit periods beyond the end of the current fiscal year are recorded as prepaid items. Prepaid items of governmental funds in the fund financial statements are offset by nonspendable fund balance to indicate that they do not represent spendable available financial resources. f. Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the County as assets with an initial, individual cost of $5,000 or higher and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair 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 asset lives are not capitalized. Capital assets of the County are depreciated using the straight-line method over the following estimated useful lives: Assets Buildings Improvements other than buildings Machinery and equipment Infrastructure Governmental I Business-type Acti~ties Acti~ties Years g. Compensated Absences It is the County's policy to permit employees to accumulate earned but unused vacation and sick leave benefits in accordance with various agreements. All vacation and sick leave is accrued when incurred in the government-wide and proprietary fund financial statements. A liability for these amounts is reported in the governmental funds in the fund financial statements only if they have matured, for example, as a result of employee resignations and retirements. 20

25 Notes to Basic Financial Statements December 31, 2015 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) h. 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 County has one item that qualifies for reporting in this category in the government-wide statement of net position. The item is related to the County's proportionate share of the Wisconsin Retirement System pension plan and is deferred and amortized over the expected remaining service lives of the pension plan participants. 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, represent an acquisition of net position that applies to a future period and so will not be recognized as an inflow of resources (revenue) until that time. The County has one type of item that qualifies for reporting in this category, property taxes. This amount will be recognized as an inflow of resources in the subsequent year for which it was levied. The County also has an additional type of item, which arises only under a modified accrual basis of accounting, that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from one source, loans receivable. These amounts are deferred and recognized as an inflow of resources in the period the amounts become available. i. Long-term Obligations In the government-wide financial statements, and proprietary funds in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund statement of net position. Debt issuance costs are expensed in the current period. In the fund financial statements, governmental funds recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. j. Pensions For purposes of measuring the net pension asset, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Wisconsin Retirement System (WRS) and additions to/deductions from WRS' fiduciary net position have been determined on the same basis as they are reported by WRS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. 21

26 Notes to Basic Financial Statements December 31, 2015 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) k. Fund Equity GOVERNMENTAL FUND FINANCIAL STATEMENTS Fund balance of governmental funds is reported in various categories based on the nature of any limitations requiring the use of resources for specific purposes. The following classifications describe the relative strength of the spending constraints placed on the purposes for which resources can be used: Nonspendable fund balance - Amounts that are not in spendable form (such as inventory, prepaid items, or long-term receivables) or are legally or contractually required to remain intact. Restricted fund balance - Amounts that are constrained for specific purposes by external parties (such as granter or bondholders), through constitutional provisions, or by enabling legislation. Committed fund balance - Amounts that are constrained for specific purposes by action of the County Board. These constraints can only be removed or changed by the County Board using the same action that was used to create them. Assigned fund balance - Amounts that are constrained for specific purposes by action of County management. Residual amounts in any governmental fund, other than the General Fund, are also reported as assigned. Unassigned fund balance - Amounts that are available for any purpose. Positive unassigned amounts are only reported in the General Fund. The County has not adopted a fund balance spend-down policy regarding the order in which fund balance will be utilized. When a policy does not specify the spend-down policy, GASB Statement No. 54 indicates that restricted funds would be spent first, followed by committed funds, and then assigned funds. Unassigned funds would be spent last. GOVERNMENT-WIDE AND PROPRIETARY FUND STATEMENTS Equity is classified as net position and displayed in three components: Net investment in capital assets - Amount of capital assets, net of accumulated depreciation, and capital related deferred outflows of resources less outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets and any capital related deferred inflows of resources. Restricted net position - Amount of net position that is subject to restrictions that are imposed by 1) external groups, such as creditors, granters, contributors or laws or regulations of other governments or 2) law through constitutional provisions or enabling legislation. Unrestricted net position - Net position that is neither classified as restricted nor as net investment in capital assets. 22

27 Notes to Basic Financial Statements December 31, 2015 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 5. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. 6. Summarized Comparative Information The basic financial statements include certain prior-year summarized comparative information in total, but not at the level of detail required for a presentation in conformity with generally accepted accounting principles. Accordingly, such information should be read in conjunction with the government's financial statements for the year ended December 31, 2014, from which the summarized information was derived. NOTE B - STEWARDSHIP AND COMPLIANCE 1. Budgets and Budgetary Accounting The County follows these procedures in establishing the budgetary data reflected in the basic financial statements: a. Prior to October 15, County management submits to the County Board a proposed operating budget for the calendar year commencing the following January 1. The operating budget includes proposed expenditures and the means of financing them. After submission to the governing body, public hearings are held to obtain taxpayer comments. Following the public hearings, the proposed budget. including authorized additions and deletions, is legally enacted by County Board action. b. Budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America for the general fund, certain special revenue funds, and the debt service fund. Budget is defined as the originally approved budget plus or minus approved amendments. Individual amendments throughout the year were not material in relation to the original budget. Budget appropriations not expended during the year are closed to fund balance unless authorized by the governing body to be forwarded into the succeeding year's budget. c. During the year, formal budgetary integration is employed as a management control device for the general fund, certain special revenue funds, and the debt service fund. d. Expenditures may not exceed appropriations provided in detailed budget accounts maintained for each activity or department of the County. Amendments to the budget during the year require initial approval by management and are subsequently authorized by the County Board. e. Encumbrance accounting is not used by the County to record commitments related to unperformed contracts for goods or services. The County did not have any material violation of legal or contractual provisions for the fiscal year ended December 31,

28 Notes to Basic Financial Statements December 31, 2015 NOTE B - STEWARDSHIP AND COMPLIANCE (Continued) 2. Deficit Fund Equity The following funds had deficit fund equity as of December 31, 2015: Funds Special Revenue Funds Winter Park Prevention Program Maternal Child Health Tobacco Grants Human Services Jail Canteen Solid Waste Enterprise Fund Health Self-Insurance Internal Service Fund $ Deficit Fund Equity , , ,736 86,843 The County anticipates funding the above deficit from transfers from the general fund or future revenues of the fund. NOTE C - DETAILED NOTES ON ALL FUNDS 1. Cash and Investments The County maintains various cash and investment accounts, including pooled funds that are available for use by all funds. Each fund's portion of these accounts is displayed in the financial statements as "Cash and investments." Invested cash consists of deposits and investments that are restricted by Wisconsin Statutes to the following: Time deposits; repurchase agreements; securities issued by federal, state and local governmental entities; statutorily authorized commercial paper and corporate securities; and the Wisconsin local government investment pool. The carrying amount of the County's cash and investments totaled $10,881,213 on December 31, 2015 as summarized below: Petty cash funds $ 985 Deposits with financial institutions 8,134,557 Investments Government securities 1,318,298 Money market mutual fund 13,196 Corporate bonds 1,326,347 Wisconsin local government investment pool 87,830 $ 10,881,213 Government-wide Statement of Net Position Cash and investments $ 10,822,489 Restricted cash and investments 58,724 $ 10,881,213 24

29 Notes to Basic Financial Statements December 31, 2015 NOTE C-DETAILED NOTES ON ALL FUNDS (Continued) Deposits and investments of the County are subject to various risks. Presented below is a discussion of the specific risks and the County's policy related to the risk. Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. Wisconsin statutes require repurchase agreements to be fully collateralized by bonds or securities issued or guaranteed by the federal government or its instrumentalities. The County does not have an additional custodial credit risk policy. Deposits with financial institutions within the State of Wisconsin are insured by the Federal Deposit Insurance Corporation (FDIC) in the amount of $250,000 for the combined amount of all time and savings deposits and $250,000 for interest-bearing and noninterest-bearing demand deposits per official custodian per insured depository institution. Deposits with financial institutions located outside the State of Wisconsin are insured by the FDIC in the amount of $250,000 for the combined amount of all deposit accounts per official custodian per depository institution. Also, the State of Wisconsin has a State Guarantee Fund which provides a maximum of $400,000 per public depository above the amount provided by an agency of the U.S. Government. However, due to the relatively small size of the State Guarantee Fund in relation to the Fund's total coverage, total recovery of insured losses may not be available. On December 31, 2015, $5,262,186 of the County's deposits with financial institutions were in excess of federal and state depository insurance limits and uncollateralized. Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Wisconsin statutes limit investments in securities to the top two ratings assigned by nationally recognized statistical rating organizations. The County does not have an additional credit risk policy. Presented below is the actual rating as of year-end for each investment type. Not Investment Type Amount AAA AA A Rated Sctmab Money Market Fund $ 13,196 $ $ $ $ 13,196 Federal Home Loan Bank 1,318,298 1,318,298 Corporate notes 1,326, , ,874 Wisconsin Local Government Investment Pool 87,830 87,830 Totals $ 2,745,671 $ 1,318,298 $ 595,473 $ 730,874 $ 101,026 25

30 Notes to Basic Financial Statements December 31, 2015 NOTE C - DETAILED NOTES ON ALL FUNDS (Continued) Concentration of Credit Risk The investment policy of the County contains no limitations on the amount that can be invested in any one issu_er. Investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that represent 5% or more of total County investments are as follows: Issuer Federal Home Loan Bank Bank of New York Mellon Apple Investment Tvoe Bond Notes Notes Reported Amount $ 1,318, , ,874 Percent of Total Investments 48% 22% 27% Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The County does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. Remaining Maturity (in Months) 12 M>nths I 13 to 24 I 25to60 More Than Investment Type Amount or Less Months Months I 60 Months Schwab Money Market Fund $ 13,196 $ 13,196 $ $ $ Federal Home Loan Bank 1,318,298 1,318,298 Corporate notes 1,326, , ,473 Wisconsin Local Government Investment Pool 87,830 87,830 Totals $ 2,745,671 $ 101,026 $ 730,874 $ 1,913,771 $ Information about the sensitivity of the fair values of the County's investments to market interest rate fluctuations is provided by the following table that shows the distribution of the County's investments by maturity: Hi hi Sensitive Investments Mortgage backed securities. These securities are subject to early payment in a period of declining interest rates. The resultant reduction in e>epected total cash flovvs affects the fair value of these securities and makes the fair value of these securities highly sensitive to changes in interest rates. Fair Value at Year End $ 1,318,298 Investment in Wisconsin Local Government Investment Pool The County has investments in the Wisconsin local government investment pool of $87,830 at year-end. The Wisconsin local government investment pool (LGIP) is part of the State Investment Fund (SIF), and is managed by the State of Wisconsin Investment Board. The SIF is not registered with the Securities and Exchange Commission, but operates under the statutory authority of Wisconsin Chapter 25. The SIF reports the fair value of its underlying assets annually. Participants in the LGIP have the right to withdraw their funds in total on one day's notice. At December 31, 2015, the fair value of the County's share of the LGIP's assets was substantially equal to the carrying value. 26

31 Notes to Basic Financial Statements December 31, 2015 NOTE C - DETAILED NOTES ON ALL FUNDS (Continued) 2. Property Tax Apportionments Property taxes are apportioned annually in November to local taxing units within the County for financing state charges and the subsequent year's operations of the County. Since the November apportionment is not due from local taxing districts until February of the subsequent year, the County's apportionment is recorded as a deferred inflow of resources at year-end. Property tax payments from individual property owners are due in two installments by January 31 and July 31. During the month of February, each local taxing district settles with the County for both collected and unpaid property taxes. At the February settlement, the County becomes responsible for the collection of unpaid property taxes, including unpaid property taxes returned by local taxing districts for financing their individual operations. Property taxes subsequently not paid by property owners by September 1 of the same year are considered delinquent. The delinquent taxes are then acquired by the County's general fund in accordance with state statutes in order to provide the County with a statutory lien. The County apportionment of $11, 177,945 is for financing 2016 operations and will be transferred in 2016 from deferred inflows of resources to current revenues of the County's governmental and proprietary funds. 3. Delinquent Property Taxes - General Fund Delinquent property taxes of the general fund represent unpaid property taxes on real estate, including state and local government equities therein. Under state statutes, the County annually reimburses the state and local governments for their equities in property taxes not collected from the property owner. Unless redeemed by the property owner, the County will eventually obtain tax deed ownership of the properties comprising delinquent taxes. In the past, the County has generally been able to recover its investment in delinquent taxes by sale of the tax deeded properties. On December 31, 2015, the County's general fund showed an investment of $566,989 in delinquent taxes as follows: Tax certificates Tax deeds Special assessments Total $ 510,363 53,846 2,780 $ 566,989 An aging of the total delinquent taxes of $566,989 on December 31, 2015 follows: Year Tax Tax Special Ac uired Total Certificates Deeds Assessments Prior to 2011 $ 576 $ 53 $ 523 $ ,596 13, ,490 72,788 1, , , , ,272 33,753 2, , $ 566,989 $ 510,363 $ 53,846 $ 2,780 Of the total of $510,363 for delinquent certificates, $55,828 was collected by the County within 60 days after December 31, The remaining unpaid balance of $454,535 is recorded as nonspendable fund balance for the general fund, as well as the $53,846 in tax deeds, totaling $508,

32 Notes to Basic Financial Statements December 31, 2015 NOTE C-DETAILED NOTES ON ALL FUNDS (Continued) 4. Restricted Cash Restricted cash on December 31, 2015 totaled $58,724 and consisted of cash restricted for the following purposes: Special Revenue Fund Human Services Department of Transportation Aging Trust $ 11,481 COP reserve 47,243 Total Restricted Assets $ 58, Capital Assets Capital asset activity for the year ended December 31, 2015 was as follows: Beginning Ending Balance Increases Decreases Balance Governmental activities: Capital assets, not being depreciated: Land $ 853,679 $ $ $ 853,679 Construction in progress 4,230, ,114 4,569,311 Total capital assets, not being depreciated 5,083, ,114 4,569, ,679 Capital assets, being depreciated: Land Improvements 62,997 62,997 Buildings 15,413,487 15,413,487 Machinery and equipment 2,767,914 4,718, ,459 7,360,297 Infrastructure 28,937,598 1,340,786 30,278,384 Subtotals 47,181,996 6,059, ,459 53,115,165 Less accumulated depreciation for: Land Improvements 16,321 4,278 20,599 Buildings 2,234, ,531 2,597,492 Machinery and equipment 2,352, , ,904 2,470,497 Infrastructure 12,357,583 1,002,684 13,360,267 Subtotals 16,961,582 1,607, ,904 18,448,855 Total capital assets, being depreciated, net 30,220,414 4,452,451 6,555 34,666,310 Governmental activities capital assets, net $ 35,304,290 $ 4,791,565 $ 4,575,866 35,519,989 Capital related debt (13,380,000) Net investment in capital assets $ 22,139,989 28

33 Notes to Basic Financial Statements December 31, 2015 NOTE C-DETAILED NOTES ON ALL FUNDS (Continued) Beginning Balance Business-type activities: Capital assets, not being depreciated: Land $ 516,618 $ Increases $ Decreases Ending Balance $ 516,618 Capital assets, being depreciated: Buildings 2,744,891 Improvements other than buildings 5,032,992 15,840 Machinery and equipment 11,531,555 77,125 Subtotals 19,309,438 92,965 Less accumulated depreciation for: Buildings 1,797,233 72,679 Improvements other than buildings 3,101, ,292 Machinery and equipment 8,628, ,823 Subtotals 13,527, ,794 Total capital assets, being depreciated, net 5,782,030 (694,829) Business-type activities capital assets, net $ 6,298,648 $ (694,829) $ Less related long-term debt outstanding Net investment in capital assets 2,744,891 5,048,832 50,690 11,557,990 50,690 19,351,713 1,869,912 3,532,734 46,602 8,865,954 46,602 14,268,600 4,088 5,083,113 4,088 5,599,731 (1,100,000) $ 4,499,731 Depreciation expense was charged to functions of the County as follows: Gowrnmental activities General gowrnment Public safety Public works Health and human services Culture and recreation Conservation and dewlopment Total depreciation expense - gowrnmental activities Business-type activities Highway Solid waste Total depreciation expense - business-type activities $ 154, ,453 1,002,684 62, ,440 14,229 $ 1,607,177 $ 326, ,897 $ 787,794 29

34 Notes to Basic Financial Statements December 31, 2015 NOTE C- DETAILED NOTES ON ALL FUNDS (Continued) 6. lnterfund Receivable. Payables. and Transfers lnterfund receivables and payables between individual funds of the County, as reported in the fund financial statements, as of December 31, 2015 are detailed below: lnterfund lnterfund Receivables Pa ables Temporary Cash Advances to Finance Operating Cash Deficits of Other Funds General Fund $ 978,660 $ Special Rewnue Funds Maternal child health 8,246 Prewntion program 481 Tobacco Consolidated Grants 2,370 Winter Park 265 Jail Canteen 3,578 Capital Projects Funds Capital lmprowment Fund 39,068 Enterprise Funds Solid Waste 924,652 Totals $ 978,660 $ 978,660 Transfers from: General Fund Special Rewnue Funds Revolving Loan Family Services Fees Debt Service Fund Total Transfers to: Other General Human Gowrnmental Solid Fund Services Funds Waste Totals $ $ 13,928 $ 3,585 $ 2,491 84,784 84,964 $ 87,275 $ 13,928 $ 88,549 $ 1,911 $ 19,424 2,491 84,784 84,964 1,911 $ 191,663 Transfers are used to move revenues from the fund that is required to collect them to the fund that is allowed to expend them. Advance Advance Due from Due to Other Funds Other Funds Long-term Advance to Other Funds General Fund $ 600,000 $ Enterprise Fund Solid waste 600,000 Totals $ 600,000 $ 600,000 An advance of $1, 125, 000 from the County's general fund was authorized in 2005, payable over 15 years at an interest rate equal to the County's average interest earnings rate for each year, which for 2015 was.25%. Advance repayments of $75,000 per year began in The current balance on this advance as of December 31, 2015 is $600,000. Due to the cash position of the fund, no payment has been made on the advance since

35 Notes to Basic Financial Statements December 31, 2015 NOTE C - DETAILED NOTES ON ALL FUNDS (Continued) 7. Long-term Obligations The following is a summary of changes in long-term obligations of the County for the year ended December 31, 2015: Governmental activities: General Obligation Debt Bonds Compensated absences Governmental activities Long-term obligations Outstanding 1/1/15 $ 14,895,000 $ 1,397,955 $ 16,292,955 $ Issued Retired Outstanding 12131/15 $ 820,000 $ 14,075,000 $ 327,691 1,070,264 $ 1, 147,691 $ 15, 145,264 $ Due Within One Year 840, ,000 Business-type activities: General Obligation Debt Bonds Notes Total General Obligation Debt Compensated absences Business-type activities Long-term obligations $ $ 1,040,000 $ 190,000 1,230,000 41,094 1,271,094 $ 8,586 $ 40,000 $ 90, ,000 1,000,000 $ 100, ,000 49,680 8,586 $ 130,000 $ 1,149,680 $ 40, , , ,000 Total interest paid during the year on long-term debt totaled $626,675. General Obligation Debt General obligation debt currently outstanding is detailed as follows: $695,000 notes issued 2007; $100,000 due in 2016; interest 5.45% $5,965,000 bonds issued 2007; $250,000 to $440,000 due annually through 2027; interest 4.00% to 4.25% $4,670,000 bonds issued 12/07/10 under the Build America and Recowry Zone Economic Development Bond programs; $95,000 to $435,000 due annually through 2030; interest 3.70% to 6.75% $4,500,000 bonds issued 12/20/12; $100,000 to $315,000 due annually through 2032; interest 2.00% to 3.00% $945,000 bonds issued 12/10/13; $355,000 due in 2016 and $340,000 due in 2017; interest 1.25% to 1.60% $1,305,000 bonds issued 12/10/13; $25,000 to $400,000 due annually 2017 through 2021; interest 2.00% to 3.00% Total Outstanding General Obligation Debt $ 100,000 4,815,000 4,375,000 3,885, ,000 1,305,000 $15.175,000 31

36 Notes to Basic Financial Statements December 31, 2015 NOTE C-DETAllED NOTES ON All FUNDS (Continued) Annual principal and interest maturities of the outstanding general obligation debt of $15, 175,000 on December 31, 2015 are detailed below: Year Ended Governmental Activities Business- Activities Totals December 31 Princi al Interest Princi al Interest Princi al Interest 2016 $ 840,000 $ 554,684 $ 140,000 $ 42,994 $ 980,000 $ 597, , , ,000 36,569 1,005, , , , ,000 30,669 1,025, , , , ,000 24,569 1,060, , , , ,000 18,066 1,105, , ,925,000 1,644, ,000 14,769 5,270,000 1,659, ,110, , 150 4, 110, , ,000 18, ,000 18,749! 14,075,000 ~ 4,714,605 ~ 1,100,000 ~ 167,636 ~ 15, 175,000 ~ 4,882,241 For governmental activities, the other long-term liabilities are generally funded by the general fund. Build America Bond The general obligation debt issued on December 7, 2010 qualifies as Build America Bonds, as described in Section 54AA of the Internal Revenue Code. The interest on the debt is taxable as set forth in the regulations. The County is eligible to receive a 35% subsidy of the annual interest payment from the Federal government. In order to receive this subsidy it is necessary for the County to file a claim form annually. Recovery Zone Economic Development Bonds The general obligation debt issued on December 7, 2010 qualifies as Recovery Zone Economic Development Bonds, as described in Section 54AA of the Internal Revenue Code. The interest on the debt is taxable as set forth in the regulations. The County is eligible to receive a 45% subsidy of the annual interest payment from the Federal government. In order to receive this subsidy it is necessary for the County to file a claim form annually. Legal Margin for New Debt The County's legal margin for creation of additional general obligation debt on December 31, 2015 was $82,648,284 as follows: Equalized valuation of the County Statutory limitation percentage General obligation debt limitation, per Section of the Wisconsin Statutes Total outstanding general obligation debt applicable to debt limitation Less: Amounts available for financing general obligation debt Debt service fund Net outstanding general obligation debt applicable to debt limitation Legal Margin for New Debt $ 15, 175,000 (228,574) $1,951,894,200 {X) 5% 97,594,710 14,946,426 $ 82,648,284 32

37 Notes to Basic Financial Statements December 31, 2015 NOTE D - OTHER INFORMATION 1. Pension Plan a. Plan Description The WRS is a cost-sharing multiple-employer defined benefit pension plan. WRS benefits and other plan provisions are established by Chapter 40 of the Wisconsin Statutes. Benefit terms may only be modified by the legislature. The retirement system is administered by the Wisconsin Department of Employee Trust Funds (ETF). The system provides coverage to all eligible State of Wisconsin, local government and other public employees. All employees, initially employed by a participating WRS employer on or after July 1, 2011, and expected to work at least 1200 hours a year (880 hours for teachers and school district educational support employees) and expected to be employed for at least one year from employee's date of hire are eligible to participate in the WRS. For employees beginning participation on or after January 1, 1990, and no longer actively employed on or after April 24, 1998, creditable service in each of five years is required for eligibility for a retirement annuity. Participants employed prior to 1990 and on or after April 24, 1998, and prior to July 1, 2011, are immediately vested. Participants who initially became WRS eligible on or after July 1, 2011, must have five years of creditable service to be vested. Employees who retire at or after age 65 (54 for protective occupation employees, 62 for elected officials and State executive participants) are entitled to receive an unreduced retirement benefit. The factors influencing the benefit are: (1) final average earnings, (2) years of creditable service, and (3) a formula factor. Final average earnings is the average of the participanfs three highest years' earnings. Creditable service is the creditable current and prior service expressed in years or decimal equivalents of partial years for which a participant receives earnings and makes contributions as required. The formula factor is a standard percentage based on employment category. Employees may retire at age 55 (50 for protective occupation employees) and receive reduced benefits. Employees terminating covered employment before becoming eligible for a retirement benefit may withdraw their contributions and forfeit all rights to any subsequent benefits. The WRS also provides death and disability benefits for employees. 33

38 Notes to Basic Financial Statements December 31, 2015 NOTE 0-0THER INFORMATION (Continued) b. Post-Retirement Adjustments The Employee Trust Funds Board may periodically adjust annuity payments from the retirement system based on annual investment performance in accordance withs , Wis. Stat. An increase (or decrease) in annuity payments may result when investment gains (losses), together with other actuarial experience factors, create a surplus (shortfall) in the reserves, as determined by the system's consulting actuary. Annuity increases are not based on cost of living or other similar factors. For Core annuities, decreases may be applied only to previously granted increases. By law, Core annuities cannot be reduced to an amount below the original, guaranteed amount (the "floor") set at retirement. The Core and Variable annuity adjustments granted during recent years are as follows: Variable Fund Year Core Fund Ad"ustment Ad"ustment % 7% % 3% % 10% % 0% 2009 (2.1)% (42)% 2010 (1.3)% 22% 2011 (1.2)% 11% 2012 (7.0)% (7)% 2013 (9.6)% 9% % 25% c. Contributions Required contributions are determined by an annual actuarial valuation in accordance with Chapter 40 of the Wisconsin Statutes. The employee required contribution is one-half of the actuarially determined contribution rate for general category employees, and Executives and Elected Officials. Required contributions for protective employees are the same rate as general employees. Employers are required to contribute the remainder of the actuarially determined contribution rate. The employer may not pay the employee required contribution unless provided for by an existing collective bargaining agreement. During the reporting period, the WRS recognized $604,692 in contributions from the County. Contribution rates as of December 31, 2015 are: I Employee Category General Executives & Elected Officials Protective with Social Security Protective without Social Security I Employee 6.8% 7.7% 6.8% 6.8% I Employer 6.8% 7.7% 9.5% 13.1% 34

39 Notes to Basic Financial Statements December 31, 2015 NOTED - OTHER INFORMATION (Continued) d. Pension Liabilities, Pension Expense, and Deferred Outflows of Resources Related to Pensions At December 31, 2015, the County reported an asset of $1,631,046 for its proportionate share of the net pension asset. The net pension asset was measured as of December 31, 2014, and the total pension liability used to calculate the net pension asset was determined by an actuarial valuation as of December 31, 2013 rolled forward to December 31, No material changes in assumptions or benefit terms occurred between the actuarial valuation date and the measurement date. The County's proportion of the net pension asset was based on the County's share of contributions to the pension plan relative to the contributions of all participating employers. At December 31, 2014, the County's proportion was %, which was a decrease of % from its proportion measured as of December 31, For the year ended December 31, 2015, the County recognized pension expense of $658,222. At December 31, 2015, the County reported deferred outflows of resources related to pensions from the following sources: Differences between expected and actual experience Net differences between projected and actual earnings on pension plan investments Changes in proportion and differences between employer contributions and proportionate share of contributions Employer contributions subsequent to the measurement date Total Deferred Outflows of Resources $ 236, ,831 79, ,486 $ 1,660,449 The $554,486 reported as deferred outflows related to pension resulting from the County's contributions subsequent to the measurement date will be recognized as a reduction of the net pension asset in the year ended December 31, Other amounts reported as deferred outflows of resources related to pension will be recognized in pension expense as follows: Year ended December Deferred Outflows of Resources $ 252, , , ,146 97,379 35

40 Notes to Basic Financial Statements December 31, 2015 NOTED - OTHER INFORMATION (Continued) e. Actuarial Assumption The total pension liability in the December 31, 2014, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Actuarial Valuation Date: Measurement Date of Net Pension Asset: Actuarial Cost Method: Asset Valuation Method: Long-Term Expected Rate of Return: Discount Rate: Salary Increases: Inflation Seniority/Merit Mortality: Post-retirement Adjustments* December 31, 2013 December 31, 2014 Entry Age Fair Market Value 7.2% 7.2% 3.2% 0.2%-5.8% Wisconsin 2012 Mortality Table 2.1% * No post-retirement adjustment is guaranteed. Actual adjustments are based on recognized investment return, actuarial experience and other factors. 2.1% is the assumed annual adjustment based on the investment return assumption and the post-retirement discount rate. Actuarial assumptions are based upon an experience study conducted in 2012 using experience from The total pension liability for December 31, 2014 is based upon a roll-forward of the liability calculated from the December 31, 2013 actuarial valuation. Long-term Expected Return on Plan Assets. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the longterm expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: Long-Term Real Rate of Asset Class Return Target Allocation US Equities 5.3% 21% International Equities 5.7% 23% Fixed Income 1.7% 36% Inflation Sensitive Assets 2.3% 20% Real Estate 4.2% 7% Private Equity/Debt 6.9% 7% Multi-Asset 3.9% 6% Cash 0.9% -20% 36

41 Notes to Basic Financial Statements December 31, 2015 NOTED-OTHER INFORMATION (Continued) Single Discount Rate. A single discount rate of 7.20% was used to measure the total pension liability. This single discount rate was based on the expected rate of return on pension plan investments of 7.20% and a long term bond rate of 3.56%. Because of the unique structure of WRS, the 7.20% expected rate of return implies that a dividend of approximately 2.1 % will always be paid. For purposes of the single discount rate, it was assumed that the dividend would always be paid. The projection of cash flows used to determine this single discount rate assumed that plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on these assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments (including expected dividends) of current plan 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 County's proportionate share of the net pension asset to changes in the discount rate. The following presents the County's proportionate share of the net pension asset calculated using the discount rate of 7.20 percent, as well as what the County's proportionate share of the net pension asset would be if it were calculated using a discount rate that is 1-percentage-point lower (6.20 percent) or 1-percentage-point higher (8.20 percent) than the current rate: 1% Decrease to Current 1% Increase to Discount Rate Discount Rate Discount Rate 6.2% 7.2% 8.2% County's proportionate share of the net pension asset (liability) $ (4,601,462) $ 1,631,046 $ 6,553,228 Pension plan fiduciary net position. Detailed information about the pension plan's fiduciary net position is available in separately issued financial statements available at and reference report number f. Payable to the WRS At December 31, 2015 the County reported a payable of $121, 906 for the outstanding amount of contributions to the pension plan for the year ended December 31, Risk Management The County is exposed to various risks of loss related to torts; theft, damage or destruction of assets; errors or omissions; injuries to employees; or acts of God. To reduce the County's exposure to these risks, the County became a member of the Wisconsin County Mutual Insurance Company (WCMIC). WCMIC was created by several governmental units within the State of Wisconsin to provide liability insurance services to its members. The County pays premiums to WCMIC for its liability insurance coverage. The actuary for WCMIC determines charges to its members for the expected losses and loss adjustment expenses on which premiums are based. Premium charges for WCMIC are recorded as expenditures or expenses in various funds of the County. The County also purchases commercial insurance policies for various property and other liability risks. Payments of premiums for these policies are also recorded as expenditures or expenses in various funds of the County. 37

42 Notes to Basic Financial Statements December 31, 2015 NOTED-OTHER INFORMATION (Continued) In addition to the above, the County has established separate internal service funds for the following risk management programs: Health Self-Insurance Fund County employees, retirees and employee dependents are eligible for medical benefits from a health self-insurance fund. Funding is provided by charges to County departments, employees and retirees. The program is supplemented by stop loss protection, which limits the County's annual liability. Fund expenses consist of payments to a third-party administrator for medical claims, stop loss insurance premiums and administrative fees. On December 31, 2015, the fund had a deficit balance of $86,843. The claims liability of $889,399 reported in the fund at December 31, 2015 is based on the requirements of GASB Statement No. 10, which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Changes in the fund's claims liability amount are as follows: Liability Januarv 1 Current Year Claims and Changes in Estimates Claim Liability Payments December $ 597,186 $ 144,694 3,451,216 $ 3,073,594 3, 159,003 $ 2,621, , ,186 Dental Self-Insurance Fund County employees, retirees and employee dependents are eligible for dental benefits from a dental self-insurance fund. Funding is provided by charges to County departments, employees and retirees. The program is supplemented by stop loss protection, which limits the County's annual liability. Fund expenses consist of payments to a third-party administrator for dental claims, stop loss insurance premiums and administrative fees. On December 31, 2015, the fund had established a reserve of $226,980. The claims liability of $2,607 reported in the fund at December 31, 2015, is based on the requirements of GASB Statement No. 10, which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Changes in the fund's claims liability amount are as follows: Liability January 1 Current Year Claims and Changes in Estimates Claim Liability Payments December $ 3,385 $ 4, ,957 $ 167, ,735 $ 168,686 2,607 3, Solid Waste Long-term Care and Closure Deposits The County has established two investments accounts presently under the control of the Wisconsin Department of Natural Resources (WDNR) for the purposes of having funds available when needed for the long-term care and closure of the County landfill. Funds can only be disbursed with WDNR approval. The balances in these accounts are not included in the financial statements. 38

43 Notes to Basic Financial Statements December 31, 2015 NOTED - OTHER INFORMATION (Continued) 4. Property Tax Lew Limit Wisconsin state statutes provide for a limit on the property tax levies for all Wisconsin cities, villages, towns and counties. For the 2015 and 2016 budget years, the increase in the maximum allowable tax levy is limited to the percentage change in the County's January 1 equalized value as a result of net new construction. The actual limit for the County for the 2015 budget was 1.64%. The actual limit for the County for the 2016 budget was 1.53%. Debt service for debt authorized after July 1, 2005 is exempt from the levy limit. In addition, Wisconsin statutes allow the limit to be adjusted for the increase in debt service authorized prior to July 1, 2005 and in certain other situations. 5. Contingencies a. The County participates in a number of federal and state assisted grant programs. These programs are subject to program compliance audits by the granters or their representatives. An audit under Federal Uniform Guidance has been conducted but final acceptance is still pending. Accordingly, the County's compliance with applicable grant requirements will be established at some future date. The amount, if any, of expenditures which may be disallowed by the granting agencies cannot be determined at this time although the County expects such amounts, if any, to be immaterial. b. From time to time, the County is party to other various pending claims and legal proceedings. Although the outcome of such matters cannot be forecast with certainty, it is the opinion of management and Corporate Counsel that the likelihood is remote that any such claims or proceedings will have a material adverse effect on the County's financial position or results of operations. 6. Subsequent Event On June 1, 2016, the County issued $4,280,000 of general obligation refunding bonds to refund the 2007 general obligation bonds. The bonds are payable through 2026 with principal payments ranging from $80,000 to $435,000 beginning in 2017 at an interest rate of 2.0% for the duration. 7. Cumulative Effect of Change in Accounting Principles The County has adopted GASB Statement No. 68, Accounting and Financial Reporting for Pensions - An Amendment of GASB Statement No. 27 and Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date - An Amendment of GASB Statement No. 68, which revised and established new financial reporting requirements for governments that provide their employees with pension benefits. The new standards recognize pension costs as employment services are provided, rather than when the pensions are funded. The cumulative effect of this change is summarized below: Governmental Business- Solid e Activities Activities Waste Total Total Net Pension Asset $ 2,164,261 $ 51,968 $ 595,650 $ 2,759,911 Deferred Outflows of Resources 462,383 10, , , ,098 Total Cumulative Effect of Change in Accounting Principle! ~ 62,140! ~ 717,365! 31344, Upcoming Accounting Pronouncements In February 2015, the Governmental Accounting Standards Board (GASS) issued Statement No. 72, Fair Value Measurement and Application. Statement No. 72 requires measurement of certain assets and liabilities at fair value using a consistent and more detailed definition of fair value and acceptable valuation techniques. This Statement also requires disclosures about the impact of fair value measurements on a government's financial position. GASB Statement No. 72 is required to be adopted for years beginning after June 15, The County is currently evaluating the impact this standard will have on the financial statements when adopted. 39

44 REQUIRED SUPPLEMENTARY INFORMATION

45 Schedule of Proportionate Share of the Net Pension Asset Wisconsin Retirement System Last 10 Fiscal Years* Proportion of the net pension asset Proportionate share of the net pension asset Covered-employee payroll Plan fiduciary net position as a percentage of the total pension asset 201s % $ 1,631,046 $ 8, % I * The amounts presented for each fiscal year were determined as of the calendar year-end of the prior year. See Notes to Required Supplementary Information. 40

46 Schedule of Contributions Wisconsin Retirement System Last 10 Fiscal Years* Contractually required contributions Contributions in relation to the contractually required contributions Contribution deficiency (excess) Covered-employee payroll Contributions as a percentage of covered-employee payroll I 2015 I $ 604,692 $ 604,692 $ $ 8,021, % The amounts presented for each fiscal year were determined as of the calendar year-end of the prior year. See Notes to Required Supplementary Information. 41

47 Notes to Required Supplementary Information December 31, 2015 NOTE A - GOVERNMENTAL ACCOUNTING STANDARDS BOARD STATEMENT NOS. 68 AND 71 The County implemented GASB Statement No. 68, Accounting and Financial Reporting for Pensions - An Amendment of GASB Statement No. 27 and Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date - An Amendment of GASB Statement No. 68 for the fiscal year ended December 31, Information for prior years is not available. NOTE B - WISCONSIN RETIREMENT SYSTEM There were no changes of benefit terms or assumptions for any participating employer in WRS. 42

48 SUPPLEMENTARY INFORMATION

49 General Fund Detailed Comparison of Budgeted and Actual Revenues For the Year Ended December 31, 2015 (With Comparative Actual Amounts for Year Ended December 31, 2014) Variance with Final Budget- Original Final Positive Budoet Budoet Actual CNeoative) Taxes General property $ 5,523,557 $ 5,523,557 $ 5,523,557 $ DNR payment in lieu of taxes 26,000 26,000 26, Forest crop 2,500 2,500 1,559 (941) Use value penalty 3,000 3,000 2,272 (728) Real estate transfer fees 27,000 27,000 39,473 12,473 Interest on taxes {19.239} Total Taxes 5, {8.299} Intergovernmental Shared taxes 1,534,077 1,534,077 1,621,835 87,758 Exempt computer aid 23,221 23,221 21,306 (1.915) Victim witness program 25,000 25,000 28,202 3,202 Law enforcement 7,600 7,600 7,577 (23) SCAAP grant 7,811 7,811 Emergency government - EMPG 25,500 25,500 44,785 19,285 Emergency government - EPCRA 9,831 11,232 11,232 EPCRA computer grant 1,632 2, Pre-disaster mitigation Incident command system training Child support program 230, , ,418 8,418 Federal health programs ,801 69,781 (20) State health programs 5,823 7,473 5,155 (2,318) Bulletproof vest grant 1,500 1,500 2, School liaison officer 101, , ,470 1,470 WDVA Co transportation grant (115) Veterans service officer 10,000 10,000 15,798 5,798 Clean sweep grants Wisconsin Fund grants 207, ,046 Snowmobile aid 44,075 44,075 44,075 ATV trails 9,000 9,000 5,954 (3,046) Park development 1,077 1,077 Ryan park development 6,855 6,855 Bruemmerville Dam Project Shea's Lake Red River project Koenig bridge project 2,376 2,376 Behrmann bridge project West Alaska Lake project Other Total Intergovernmental ,324 Actual Prior Year $ 5,180,777 26,628 2,971 3,350 32, ,621,619 23,221 26, ,447 25,973 9,831 1,853 11, ,986 72,146 5, , , ,335 84,832 5,623 5,932 18, , ,690 2,580 10, (Continued) 43

50 General Fund Detailed Comparison of Budgeted and Actual Revenues (Continued) For the Year Ended December 31, 2015 (With Comparative Actual Amounts for Year Ended December 31, 2014) Variance with Final Budget- Original Final Positive Budoet Budoet Actual CNeoative) Licenses and Permits Marriage licenses 3,200 3,200 3, Wisconsin fund application 3,500 3,500 3,200 (300) Sanitary permits 50,000 50,000 46,400 (3,600) Septic system surcharge 23,000 23,000 23, Building permits 3,000 3,000 3, Zoning permits 5,000 5,000 1,950 (3,050) Cremation permits 5, {850} Total Licenses and Permits 93, {61609} Fines and Forfeits County ordinance forfeitures 40,000 40,000 38,211 (1,789) County's share of state fines and forfeitures 12,000 12,000 8,686 (3,314) Parking tickets {200} Total Fines and Forfeits 52, {51303} Public Charges for Services County clerk Passport fees 5,000 5,000 5, Treasurer tax search fee Circuit court fees 105, ,000 94,916 (10,084) Circuit court reimbursements 53,275 53,275 60,066 6,791 Guardian ad litem reimbursements 18,000 18,000 27,598 9,598 Register in probate 11,000 11,000 6,374 (4,626) DNA testing DNR fees Register of deeds 100, ,000 94,373 (5,627) Sale of maps and plats 2,700 2,700 2,542 (158) Sheriff fees 80,000 80,000 77,160 (2,840) Death certificates 1,000 1,000 1, Traffic patrol fees 4,000 4,000 10,099 6,099 Board of prisoners 30,000 30,000 37,327 7,327 Juvenile detention fees 1,000 1, (284) Jail fees 20,700 20,700 30,321 9,621 Telephone commission 12,000 12,000 18,778 6,778 Dominion emergency government reimbursements to County 100, ,243 80,704 (19,539) Code Red 2,500 2,500 2,500 Public health 3,000 3,000 4,997 1,997 Winter park recreation 20,000 20,000 22,036 2,036 Parks fees 1,918 1,918 Memorial bricks Off-road registration Extension seminar 3,000 3,000 3,000 Grandstand surcharge 1,650 1,650 Veterans travel reimbursements {676} Total Public Charges for Services (Continued) Actual Prior Year 3,209 3,400 54,150 22,840 51,905 1,314 6, ,578 7, , , ,729 53,820 24,693 12, ,790 2,282 72,280 1,785 9,033 54, ,296 12,502 81,678 2,500 1,171 28,987 3,585 1, , ,183 44

51 General Fund Detailed Comparison of Budgeted and Actual Revenues (Continued) For the Year Ended December 31, 2015 (With Comparative Actual Amounts for Year Ended December 31, 2014) Interest Investment interest Dividends Change in market value Investment fees and charges Total Interest Original Budaet Final Budaet 10,000 10, , , , ,000 Actual Variance with Final Budget- Positive (Neaative) 28,814 18,814 36,822 (63.178) 11,560 11,560 {51205} (51205} (38,009} Actual Prior Year 32,428 60,877 38,969 (6,971} 125,303 Other Rent of fairgrounds Park facility rental Sale of County property Sale of CD/DVD Sale of tax deeds Liability insurance dividend Workers comp dividends County car mileage Donations Miscellaneous Total Other 42,000 42,000 2,000 2,000 2,000 2,000 1,000 1,000 20,000 20, , ,146 (6,854) 2, ,822 15,822 3,045 2,045 52,875 52,875 11,558 11,558 27,265 27,265 9,978 (10,022) 4,517 4,517 (15,000} ,095 1,190 7,674 2,405 24,640 38,160 15,377 1,650 2, Total Revenues ~ 8,751,912 ~ 8,964,208 ~ 9,139,082 ~ 174,874 ~ 9,274,116 45

52 General Fund Detailed Comparison of Budgeted and Actual Expenditures For the Year Ended December 31, 2015 (With Comparative Actual Amounts for Year Ended December 31, 2014) General Government County board County administrator County clerk Elections Information services Special accounting and auditing Finance director County treasurer Register of deeds Courthouse maintenance Administration Center Property and liability insurance Auto physical damage Unemployment compensation Workers compensation Section 125 administration Coroner Family court commissioner Circuit court Clerk of courts Register in probate District attorney Law library Victim witness program Corporation counsel Postage machine Memorial bricks Contingency Total General Government Original Budaet $ 191, , ,932 33, ,598 25, , , , ,655 69, ,000 1,000 5,500 30,247 63,839 63, , ,836 93,812 23,000 50,433 70,954 25, ,314 Final Budaet $ 193, , ,310 33, ,579 25, , , , ,489 69, ,000 1,000 5,500 30,247 64,197 64, , ,961 94,423 23,000 50,776 71, ,959,099 Actual Variance with Final Budget- Positive lneaative) $ 164,934 $ 28, ,755 (8,098) 313,529 (3,219) 8,727 24, ,903 (2,324) 26,420 (520) 100,516 3, ,849 4, ,909 2, ,197 5,292 69,664 (464) 150,644 (644) 3,550 (3,550) 1,807 (807) 36,240 (36,240) 3,036 2,464 25,851 4,396 64, ,185 1, ,148 10, ,414 19,547 87,255 7,168 24,396 (1,396) 50, , (357) 13, ,759 Actual Prior Year $ 255, , ,676 35, ,860 55, , , ,200 77, ,330 1,892 1,050 6,757 4,833 24,076 63,881 62, , ,366 86,035 23,224 50,770 71,348 (8,426) 1,182 2,809,018 (Continued) 46

53 General Fund Detailed Comparison of Budgeted and Actual Expenditures (Continued) For the Year Ended December 31, 2015 (With Comparative Actual Amounts for Year Ended December 31, 2014) Public Safety Sheriff division Jail division Interface system Emergency government - EMPG Emergency government - EPCRA EPCRA computer grant Code Red program Pre-disaster mitigation Incident command systems training Total Public Safety Original Budaet 2,113,475 1,580,887 19, ,986 9,831 5,000 3,894,029 Final Budaet 2,126,970 1,591,592 19, ,811 11,232 1,632 5,000 3,922,087 Actual Variance with Final Budget- Positive lneaative) 2,131,452 (4,482) 1,601,820 (10,228) 10,308 9, ,920 2,891 10, ,000 (368) 5, (341) 3,924,650 (2,563) Actual Prior Year 2,078,513 1,638,148 13, ,325 9,800 1,853 5,000 8,698 3,940,177 Health and Human Services Public health County physician Immunization program WIC program Child with special health care Violence intervention project Child support program Veterans relief Veterans service office Care of veterans graves Total Health and Human Services 182,946 4,000 28,395 71,602 26, ,600 7, ,306 1, , ,095 4,000 28,669 70,476 1,651 26, ,133 7, ,282 1, , ,371 18,724 5,122 (1,122) 23,887 4,782 69, ,651 26, ,085 3,048 7,873 (873) 124,305 20, ,883 46, ,699 4,322 20,312 72,146 1,981 26, ,069 9, ,202 1, ,889 (Continued) 47

54 General Fund Detailed Comparison of Budgeted and Actual Expenditures (Continued) For the Year Ended December (With Comparative Actual Amounts for Year Ended December 31, 2014) Culture and Recreation Library board Jail museum County parks Fairs and exhibits Snowmobile trails Winter Park Recreation Facility Ahnapee trail project ATV trail Red River project Park development Park & trail maintenance Bruemmerville dam project West Alaska Lake project Shea's Lake Bhermann bridge project Koenig bridge project Extension office Dana farm Total Culture and Recreation Original Budaet 284,064 3, , ,989 44,075 32,338 8,000 9, , ,108,151 Final Budaet 284,064 3, , ,014 44,075 32,338 8,000 9,000 2, ,795 1,500 1, 112,971 Actual Variance with Final Budget - Positive lneaative) 283, , ,739 (5, 130) 116,251 16,763 50,777 (6,702) 37,464 (5,126) 5,561 2,439 5,601 3, (438) 2, ,864 17, ,088,022 24,949 Actual Prior Year 279,875 2, , ,993 79,946 38,555 6,908 4,939 33,690 4, ,405 1,780 14,737 10,396 2, ,706 1, Conservation and Development Zoning administrator Wisconsin fund grants Kewaunee Co. Economic Development Industrial development Total Conservation and Development 166,294 40, , , ,046 40, , ,099 7, ,046 36,923 3, ,518 10, , ,335 40, ,230 Total Expenditures 8,770,512 i 9,100,810 i 8,949,413 i 151,397 9,125,849 48

55 NONMAJOR GOVERNMENTAL FUNDS Special Revenue Funds To account for the proceeds of specific revenue sources (other than major capital projects) that are legally restricted to expenditures for specific purposes. The County utilizes Special Revenue Funds to record financial transactions pertaining to the following activities: County Aid Bridges To account for the construction and maintenance of County bridges. Financing is provided by general property taxes. Health Grants To account for activity of the various health grants administered by the County. Land Information To account for the land records improvement program. Financing is provided by general property taxes and public charges for services. Land Conservation To account for the operations and grant programs of the land conservation department. Financing is provided by general property taxes, state grants and public charges for services. Emergency Response, Mobile Command Post, and NOAA Radios To account for various public safety related expenditures. Jail Assessment To account for the collection and disbursement of jail assessment fees. Jail Canteen To account for the operation of the jail canteen. Profits on sales of items are to be used for jail improvements. Family Services Fees To account for the collection and disbursement of family services fees. Redaction Fees To account for the collection and disbursement of redaction fees for services. Dog License Fund To account for the collection and subsequent disbursement of dog license fees. Revolving Loan Fund To account for the activity of the various development loans. UW - Extension Fund To account for the collection and subsequent disbursement of UW - Extension fees. Off-Road Registration, Boat Launch Services, and Winter Park Funds To account for the collection and subsequent disbursement of various recreational fees. Bruemmer Park and Ryan Park To account for donations and grant funds used for improvements to the parks. Aging and Disability Resource Center Fund To account for the County's share of the operating costs of the Aging and Disability Resource Center of Manitowoc County. Capital Improvement Capital Projects Fund This fund accounts for transactions related to capital improvement projects. Debt Service Fund To account for the accumulation of resources for the payment of the annual principal and interest on long-term debt, other than that of the enterprise funds.

56 Combining Balance Sheet Nonmajor Governmental Funds December 31, 2015 (With Summarized Financial Information as of December 31, 2014) ASSETS Cash and investments Receivables Taxes Accounts Development loans Mobile County Childhood Command NOAA Aid Lead Post Radios Bridaes Poisonina $ 1,393 $ 1,110 $ 31,397 $ 2,580 $ 30, Maternal Vaccine Child Prevention Immunization Health Proa ram Proa ram 6,054 1,802 $ $ ,903 TOTAL ASSETS $ $ $ $ $ $ 170 $ LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities Vouchers payable and accrued payroll Accrued liabilities Unearned revenue Due to other funds Total Liabilities $ $ $ $ 247 $ ,246 8,251 $ 71 $ Deferred Inflows of Resources Property taxes Loans Total Deferred Inflows of Resources 30,000 30,000 6,054 6,054 Fund Balances Restricted Debt service Revolving loans Subsequent years' expenditures Committed Subsequent years' expenditures Unassigned Total Fund Balances (Deficit) 1,393 1,110 31,397 2,813 1,393 1,110 31,397 2,813 {6.449} {6.449) {382} {382) TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES i 1,393 i 1,110 i 61,397 i 3,060 i 7,856 i 170 i 2,305 (Continued) 49

57 Combining Balance Sheet Nonmajor Governmental Funds (Continued) December 31, 2015 (With Summarized Financial Information as of December 31, 2014) ASSETS Cash and investments Receivables Taxes Accounts Development loans $ Wisconsin Wellness Tobacco Women's Consolidated Bioterrorism Proa ram Grants Grant 8,609 $ $ 9,563 $ 1,964 5,673 Aging and Disability Resource Center 71,808 $ 87,506 Boat Launch Services 8,265 $ Land Conservation 36,076 $ 268,204 56,076 Land Information Jail Assessment 142,204 $ 21, ,007 2,276 1, 151 TOTAL ASSETS $ $ $ $ 159,314 $ $ $ $ LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities Vouchers payable and accrued payroll Accrued liabilities Unearned revenue Due to other funds Total Liabilities $ 7 $ $ 374 $ 8 3,727 2, ,370 4, $ 21 53,233 $ 7,910 $ 189 9,604 17,703 2,112 $ 2, Deferred Inflows of Resources Property taxes Loans Total Deferred Inflows of Resources 87,506 87, , , , ,007 Fund Balances Restricted Debt service Revolving loans Subsequent years' expenditures Committed Subsequent years' expenditures Unassigned Total Fund Balances (Deficit) 8, ,594 (406) ,575 18,575 8, ,449 74, , ,368 22,224 22,224 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES (Continued) 50

58 Combining Balance Sheet Nonmajor Governmental Funds (Continued) December 31, 2015 (With Summarized Financial Information as of December 31, 2014) ASSETS Cash and investments Receivables Taxes Accounts Development loans TOTAL ASSETS LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES liabilities Vouchers payable and accrued payroll Accrued liabilities Unearned revenue Due to other funds Total Liabilities Deferred Inflows of Resources Property taxes loans Total Deferred Inflows of Resources Fund Balances Restricted Debt service Revolving loans Subsequent years' expenditures Committed Subsequent years' expenditures Unassigned Total Fund Balances (Deficit) TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Family Dog Emergency uw Jail Service Winter license Revolving Response Extension Canteen Fees Park Fund loan Fund Fund $ $ 52,577 $ $ 25,742 $ 1,145,421 $ 34,260 $ 3,382 6, ,750 $ $ $ $ $ $ $ $ 3,383 $ 800 $ $ 24,742 $ 10 $ $ 816 3, , , , ,750 1,145,411 51,927 1,000 34,260 2,566,722},265},722) 51,927,265) 1,000 1,145,411 34,260 2,566 i 6,239 i 52,727 i i 25,742 i 1,804, 171 i 34,260 i 3,382 (Continued) 51

59 Combining Balance Sheet Nonmajor Governmental Funds (Continued) December31, 2015 (With Summarized Financial Information as of December 31, 2014) ASSETS Cash and investments Receivables Taxes Accounts Development loans TOT AL ASSETS LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities Vouchers payable and accrued payroll Accrued liabilities Unearned revenue Due to other funds Total Liabilities Deferred Inflows of Resources Property taxes Loans Total Deferred Inflows of Resources Fund Balances Restricted Debt service Revolving loans Subsequent years' expenditures Committed Subsequent years' expenditures Unassigned Total Fund Balances (Deficit) TOTAL LIABILITIES. DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Off-Road Registration Redaction FIT Bruemmer Ryan Fund Fees Families Park Park $ 6,862 $ 3,300 $ 2,042 $ 2,326 $ 27,987 1,015 i 6,862 i 3,300 i 3,057 i 2,326 i 27,987 $ $ $ 276 $ $ 276 6,862 3,300 2,781 2,326 27,987 6,862 3,300 2, ,987 i 6,862 i 3,300 i 3,057 i 2,326 i 27,987 Debt Capital Service Improvement Fund Fund Total $ 228,574 $ $ 1,867,272 1,397,184 1,939,955 39, , ,750 i 1,625,758 i 39,068 i 4,583,944 $ $ $ 95, ,331 39,068 54,008 39, ,397,184 1,939, ,750 1,397, 184 2,598, , ,574 1,145, ,489 8,265 8, ,574 1,822,515 i 1,625,758 i 39,068 i 4,583,944 52

60 Combining Statement of Revenues. Expenditures and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended December 31, 2015 (With Summarized Financial Information for the Year Ended December ) Revenues General property taxes Intergovernmental Licenses and permits Public charges for services Interest Other Total Revenues Mobile County Childhood Command NOAA Aid Lead Post Radios Bridges Poisoning $ $ $ 23,282 $ ,897 $ Maternal Vaccine Child Prevention Immunization Health Proo ram Proo ram 6,434 $ 8, $ 3, Expenditures General government Public safety Public works Health and human services Culture and recreation Conservation and development Capital outlay Public safety Debt service Principal Interest and fiscal charges Total Expenditures 556 7,431 1, ,897 14,878 14, , Excess of Revenues Over (Under) Expenditures (556) 15, Other Financing Sources (Uses) Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances (556) 15, Fund Balances (Deficit) - January 1 1,949 1,110 15,546 2,813 (6,508) (382) 1,422 Fund Balances (Deficit) - December 31 $ 1,393 $ $ $ (6,449) $ (382) $

61 Combining Statement of Revenues, Expenditures and Changes in Fund Balances (Continued) Nonmajor Governmental Funds For the Year Ended December 31, 2015 (With Summarized Financial Information for the Year Ended December 31, 2014) Revenues General property taxes Intergovernmental Licenses and permits Public charges for services Interest Other Total Revenues Expenditures General government Public safety Public works Health and human services Culture and recreation Conservation and development Capital outlay Public safety Debt service Principal Interest and fiscal charges Total Expenditures Excess of Revenues Over (Under) Expenditures Wisconsin Aging and Wellness Tobacco Disability Boat Women's Consolidated Bioterrorism Resource Launch Proa ram Grants Grant Center Services $ $ $ $ 87,506 $ 4,313 1,964 30,961 5,832 4,313 1,964 30,961 87,506 5,832 4,710 2,370 36, ,750 4,710 2,370 36, ,750 (397) (406) (5,093) (30.244) 5,832 Land Land Jail Conservation Information Assessment $ 207,530 $ 162,016 $ 284,629 74,000 28,247 10,372 29,872 11, , ,888 11, , ,191 34, , ,191 34,574 10, (22,744) Other Financing Sources (Uses) Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances (Deficit) - January 1 Fund Balances (Deficit)- December 31 (397) (406) (5,093) (30,244) 5,832 8,991 16,228 48,819 2,433 ~ 8,594 ~ (406} ~ 11,135 ~ 18,575 ~ 8,265 2,428 1, ,157 12,548 1,854 (22,744) 61, ,514 44,968 ~ 74,449 ~ 142,368 ~ 22,224 54

62 Combining Statement of Revenues, Expenditures and Changes in Fund Balances (Continued) Nonmajor Governmental Funds For the Year Ended December 31, 2015 (With Summarized Financial Information for the Year Ended December 31, 2014) Revenues General property taxes Intergovernmental Licenses and permits Public charges for services Interest Other Total Revenues Expenditures General government Public safety Public works Health and human services Culture and recreation Conservation and development Capital outlay Public safety Debt service Principal Interest and fiscal charges Total Expenditures Family Dog Jail Service Winter License Revolving Canteen Fees Park Fund Loan $ $ $ $ $ 12,292 5,670 1,549 22, ,053 22,116 5,670 12, ,602 28,029 3,440 12, ,922 28,029 3, ,922 uw Emergency Response Extension Fund Fund $ $ 11, ,716 10,716 Excess of Revenues Over (Under) Expenditures (5,913) 2,230 (97,320) 644 Other Financing Sources (Uses) Transfers in Transfers out Total Other Financing Sources (Uses) {84,7841 {84,7841 { {2,4911 Net Change in Fund Balances (5,913) (82,554) (99,811) 644 Fund Balances (Deficit) - January 1 5, ,481 { ,245,222 34,260 1,922 Fund Balances (Deficit) - December 31 i (722} i 51,927 i (265} i 1,000 i 1,145,411 ~ 34,260 i 2,566 55

63 Combining Statement of Revenues. Expenditures and Changes in Fund Balances (Continued) Nonrnajor Governmental Funds For the Year Ended December 31, 2015 (With Summarized Financial lnfonnation for the Year Ended December 31, 2014) Revenues General property taxes Intergovernmental Licenses and pennits Public charges for services Interest Other Total Revenues Expenditures General government Public safety Public works Health and human services Culture and recreation Conservation and development Capital outlay Public safety Debt service Principal Interest and fiscal charges Total Expenditures Excess of Revenues Over (Under) Expenditures Other Financing Sources (Uses) Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances (Deficit) - January 1 Fund Balances (Deficit) - December 31 Off-Road Registration Redaction FIT Bruemmer Ryan Fund Fees Families Park Park $ $ $ $ $ 11,561 27,987 3,680 3,680 11,561 27,987 1,527 11,806 1,589 2,332 1,589 1,527 11,806 2,332 2,091 (1,527) (245) (2.332) ,091 (1,527) (245) (2,332) 27,987 4,771 4,827 3,026 4,658 i 6,862 ~ 3,300 i 2,781 ~ 2,326 ~ 27,987 Debt Capital Service Improvement Fund Fund Total $ 1,299,262 $ $ 1,786,030 55, ,136 40,539 72,784 2,122 89, ,279 1,388,540 55,136 2,658, , ,130 7, ,942 14, , , , , , , ,903 1,396, ,115 3,052,498 (8,363) (283,979) (393,608) 84,964 88,549,84,964) {172,239),84,964) 84,964 {83,690) (93,327) (199,015) (477,298) 321, ,015 2,299,813 i 228,574 i i 1,822,515 56

64 INTERNAL SERVICE FUNDS To account for the financing of goods or services provided by one department to other departments of the County, or to other governmental units, on a cost reimbursement basis. The County utilizes internal service fund accounting for the following: Health Self-Insurance To account for funds held by the County, generated from charges to other County departments, to finance health insurance claims of County employees and retirees. Dental Self-Insurance To account for funds held by the County, generated from charges to other County departments, to finance dental insurance claims of County employees and retirees.

65 Internal Service Funds Combining Statement of Net Position December 31, 2015 (With Summarized Financial Information as of December 31, 2014) ASSETS Current Assets Cash and investments Accounts receivable Total Current Assets Health Self- Insurance $ 14,316 $ 788, ,556 Dental Self- Insurance 2015 Total I 229,587 $ 243,903 $ 788, ,587 1,032, , , ,718 LIABILITIES Current Liabilities Claims payable 889,399 2, , ,571 NET POSITION Unrestricted $ (86,843) $ $ $

66 Internal Service Funds Combining Statement of Revenues, Expenses and Changes in Net Position For the Year Ended December 31, 2015 (With Summarized Financial Information for the Year Ended December 31, 2014) Operating Revenues Insurance charges to departments $ Health Dental Total Self- Self- Insurance Insurance ,693,895 $ I 153,834 $ 4,847,729 $ ,400,079 Operating Expenses Administration Payment of claims Total Operating Expenses 698,666 4, , , , ,957 4,366, ,821 5,072, ,811 2,814,989 3,601,800 Change in Net Position (226,023) 1,013 (225,010) (201,721) Net Position - January 1 139, , , ,868 Net Position - December 31 m {86,843} m 226, , ,147 58

67 Internal Service Funds Combining Statement of Cash Flows For the Year Ended December 31, 2015 (With Summarized Financial Information for the Year Ended December 31, 2014) Cash Flows from Operating Activities Cash received from interfund services provided Cash paid to suppliers Net Cash Provided (Used) by Operating Activities $ Health Self- Insurance 4,331,647 $ {41627,705} { } Dental Self- Insurance 2015 Total I 153,834 $ 4,485,481 $ {153,599} {41781,304} 235 { } ,974,087 {31150,607} {176,520} Cash and Cash Equivalents - January 1 310, , , ,246 Cash and Cash Equivalents - December 31 i 14, , , ,726 Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities: Operating income (loss) $ (226,023) $ 1,013 $ (225,010) $ (201,721) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Changes in assets and liabilities Accounts receivable (362,248) (362,248) (425,992) Claims payable 292,213 {778} 291, , 193 Net Cash Provided (Used) by Operating Activities =$==='=29=6=.0=5=8=)=$=====23=5===$==(=2=95= =82=3=)==$==(=1=76= =52=0==) 59

68 ADDITIONAL INDEPENDENT AUDITORS' REPORT FOR BASIC FINANCIAL STATEMENTS

69 Schenck ADVISORY TAX ASSURNICC INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATIERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the County Board Kewaunee County, Wisconsin 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 business-type activities, each major fund, and the aggregate remaining fund information of Kewaunee County, Wisconsin, as of and for the year ended December 31, 2015, and the related notes to the financial statements, which collectively comprise Kewaunee County's basic financial statements, and have issued our report thereon which included an emphasis of matter paragraph as indicated on page 2 dated August 17, Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered Kewaunee County, Wisconsin'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 Kewaunee County, Wisconsin's internal control. Accordingly, we do not express an opinion on the effectiveness of Kewaunee County, Wisconsin'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 Kewaunee County's basic 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. 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. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether Kewaunee County, Wisconsin's financial statements are free from material misstatement. we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. schencksc.com 60!>< ' I\(

70 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 Kewaunee County, Wisconsin's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Kewaunee County, Wisconsin's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Certified Public Accountants Green Bay, Wisconsin August 17,

71 FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE

72 Schenck ADVISORY!AX A.SSUANICE INDEPENDENT AUDITORS' REPORT ON COMPLIA NCE FOR EACH MAJOR FEDERAL AND STATE PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE AND THE STATE SINGLE AUDIT GUIDELINES To the County Board Kewaunee County, Wisconsin Report on Compliance for Each Major Federal and State Program We have audited Kewaunee County, Wisconsin's compliance with the types of compliance requirements described in the U. S. Office of Management and Budget (OMB) Compliance Supplement and the State Single Audit Guidelines issued by the Wisconsin Department of Administration that could have a direct and material effect on each of Kewaunee County, Wisconsin's major federal and state programs for the year ended December 31, Kewaunee County, Wisconsin's major federal and state programs are identified in the summary of auditors' results section of the accompanying schedule of findings and questioned costs. Management's Responsibility Management is responsible for compliance with the requirements of federal and state statues, regulations. and the terms and conditions of its federal and state awards applicable to its federal and state programs. Auditors' Responsibility Our responsibility is to express an opinion on compliance for each of Kewaunee County, Wisconsin's major federal and state 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; 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 (U niform Guidance). and the State Single Audit Guidelines issued by the W isconsin Department of Administration. Those standards, Uniform Guidance and the State Single Audit Guidelines require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal or state program occurred. An audit includes examining, on a test basis. evidence about Kewaunee County, Wisconsin's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal and state program. However, our audit does not provide a legal determination of Kewaunee County, Wisconsin's compliance. Opinion on Each Major Federal and State Program In our opinion, Kewaunee County, Wisconsin 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 and state programs for the year ended December 31, schencksc.com 62 I ' (

73 Other Matters The results of our auditing procedures disclosed instances of noncompliance, which are required to be reported in accordance with the Uniform Guidance and the State Single Audit Guidelines and which are described in the accompanying schedule of findings and questioned costs as items and Our opinion on each major federal and state program is not modified with respect to this matter. Kewaunee County, Wisconsin's responses to the noncompliance findings identified in our audit are described in the accompanying schedule of prior year findings and corrective action plan. Kewaunee County, Wisconsin's response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. Report on Internal Control Over Compliance Management of Kewaunee County, Wisconsin 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 Kewaunee County, Wisconsin's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal or state 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 and state program and to test and report on internal control over compliance in accordance with the Uniform Guidance and the State Single Audit Guidelines, 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 Kewaunee County, Wisconsin's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal or state 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 or state 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 or state 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 and therefore, material weaknesses or significant deficiencies may exist that were not identified. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, we identified certain deficiencies in internal control over compliance, as described in the accompanying schedule of findings and questioned costs as items , , , and , that we consider to be significant deficiencies. Kewaunee County Wisconsin's response to the internal control over compliance findings identified in our audit is described in the accompanying schedule of prior year audit findings and corrective action plan. Kewaunee County Wisconsin's response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. 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 and the State Single Audit Guidelines. Accordingly, this report is not suitable for any other purpose. Certified Public Accountants Green Bay, Wisconsin August 17,

74 Schedule of Expenditures of Federal Awards For the Year Ended December 31, 2015 Granter Agency/Federal Proaram Title Pass-Throuah Aaencv Federal CFDA Number U.S. DEPARTMENT OF AGRICULTURE Special Supplemental Nutritional Program for Women, Infants and Children State Administrative Matching Grants for the Supplemental Nutrition Assistance Program Total State Administrative Matching Grants for the Supplemental Nutrition Assistance Program Total U.S. Department of Agriculture WI Department of Health Services WI Department of Health Services Sheboygan County U.S. DEPARTMENT OF THE INTERIOR - NATIONAL PARKS SERVICE Outdoor Recreation, Acquisition. Development & Planning Ahnapee Trail Phase 1-ADLP2-918 Ahnapee Trail Phase Total U.S. Department of the Interior WI Department of Natural Resources WI Department of Natural Resources U.S. DEPARTMENT OF JUSTICE State Criminal Alien Assistance Program Bulletproof Vest Partnership Program Internet Crimes Against Children Task Force Program Total U.S. Department of Justice U.S. DEPARTMENT OF TRANSPORTATION Recreational Trails Program U.S. DEPARTMENT OF EDUCATION Special Education - Grants for Infants and Families (Continued) WI Department of Natural Resources WI Department of Health Services

75 (Accrued) Accrued Deferred Cash (Deferred) Revenue Received Revenue Total Subrecipient 1/1/15 <Refunded) 12131/15 Revenue Exoenditures Payments $ (8,268) $ 75,338 $ 1,984 $ 69,054 $ 69,054 $ (342) 10,888 1,015 11,561 11,561 (15,980) 54,583 15,967 54,570 54,570 (16,322) 65,471 16,982 66,131 66,131 (24,590) 140,809 18, , ,185 (1,043) 1,043 (1,043) 1,043 (2,086) 2,086 7,811 7,811 7,811 2,378 2,378 2,378 1,500 1,500 1,500 9,311 2,378 11,689 11,689 (13,266) 13,266 21,588 21,588 21,588 65

76 Schedule of Expenditures of Federal Awards For the Year Ended December 31, 2015 Grantor Aaencv/Federal Proaram Title Pass-Throuah Aaencv Federal CFDA Number U.S. DEPARTMENT OF HEAL TH AND HUMAN SERVICES Special Programs for the Aging Environmental Public Health and Emergency Response Hospital Preparedness Program (HPP) and Public Health Emergency Preparedness (PHEP) Aligned Cooperative Agreements Immunization Cooperative Agreements Promoting Safe and Stable Families TANF Cluster Temporary Assistance for Needy Families Temporary Assistance for Needy Families Temporary Assistance for Needy Families Total Temporary Assistance for Needy Families Cluster Child Support Enforcement Low-Income Home Energy Assistance Child Care Mandatory and Matching Funds of the Child Care and Development Fund Stephanie Tubbs Jones Child Welfare Services Program Stephanie Tubbs Jones Child Welfare Services Program Total Child Welfare Services Foster Care Title IV-E Foster Care Title IV-E Total Foster Care Title IV-E (Continued) WI Department of Health Services WI Department of Health Services WI Department of Health Services WI Department of Children and Families WI Department of Health Services Sheboygan County WI Department of Children and Families WI Department of Children and Families WI Department of Administration WI Department of Children and Families WI Department of Children and Families WI Department of Corrections WI Department of Children and Families WI Department of Corrections

77 (Accrued) Accrued Deferred Cash (Deferred) Revenue Received Revenue Total Subrecipient 1/1/15 (Refunded) 12/31/15 Revenue Exoenditures Pavments 1,964 1,964 1,964 (7,794) 33,082 5,673 30,961 30,961 (1,480) 6,043 1,903 6,466 6,466 (3,742) 31, ,586 37,979 37,979 40,364 40,364 40,364 (224) 224 (5,661) 57,336 8,584 60,259 60,259 (5,885) 97,924 8, , ,623 (72,021) 285,220 7, , ,306 (7,960) 35,580 4,693 32,313 32,313 32,313 (6, 168) 35,031 7,415 36,278 36,278 12,086 12,086 12,086 (107) ,Q26 1,026 (107) 12, , ,112 (33) 74, ,915 74,915 (150) 1, ,710 1,710 (183) 76, ,625 76,625 67

78 Schedule of Expenditures of Federal Awards For the Year Ended December 31, 2015 Grantor Agency/Federal Proaram Title Pass-Throuah Aaencv Federal CFDA Number U.S. DEPARTMENT OF HEAL TH AND HUMAN SERVICES <Continued) Social Services Block Grant Social Services Block Grant Total Social Services Block Grant Chafee Foster Care Independence Program Preventative Health and Health Services Block Grant funded solely with Prevention and Public Health Funds Children's Health Insurance Program Medical Assistance Program Medical Assistance Program Medical Assistance Program Total Medical Assistance Program Centers for Medicare and Medicaid Services (CMS) Research, Demonstrations and Evaluations Money Follows the Person Rebalancing Demonstration Block Grants for Community Mental Health Services Block Grants for Prevention and Treatment of Substance Abuse Maternal and Child Health Services Block Grant Total U.S. Department of Health and Human Services U.S. DEPARTMENT OF HOMELAND SECURITY Homeland Security Grant Program Emergency Management Performance Grants Total U.S. Department of Homeland Security TOTAL FEDERAL PROGRAMS WI Department of Health Services WI Department of Children and Families WI Department of Children and Families WI Department of Health Services Sheboygan County WI Department of Health Services TPA WI Department of Health Services Sheboygan County WI Department of Health Services WI Department of Health Services WI Department of Health Services WI Department of Health Services WI Department of Health Services WI Department of Administration Office of Justice Assistance WI Department of Military Affairs The notes to the schedule of expenditures of federal awards and schedule of state financial assistance are an integral part of this schedule. 68

79 (Accrued) Accrued Deferred Cash (Deferred) Revenue Received Revenue Total Subrecipient 1/1/15 frefunded) 12131/15 Revenue Expenditures Payments 74,349 74,349 74,349 33,078 33,078 33, , , ,427 (5,113) 17,494 2,966 15,347 15,347 3, ,719 3,719 (2,090) 6,930 1,974 6,814 6,814 (301,804) 1,937,948 (531,768) 1,104,376 1,104, , , ,243 (16,316) 60,322 18,817 62,823 62,823 (318, 120) 2,350,513 (512,951) 1,519,442 1,519,442 (536) 536 (11,871) 25,889 14,018 14,018 13,331 1,593 14,924 14,924 27,688 (1,895) 25,793 25, ,826 1,621 7,651 7,651 (442,866) 3,172,595 (457,967) 2,271,762 2,271,762 32,313 16,409 39,068 55,477 55,477 ~12,987~ 44,778 12,994 44,785 44,785 (12,987) 61,187 52, , ,262 ~ (495,795} ~ 3,418,756 $ (382,475} $ 2,540,486 $ 2,540,486 $ 32,313 69

80 Schedule of State Financial Assistance For the Year Ended December 31, 2015 Granter Agency/State Proaram Title Pass Throuah Aaencv State l.d. Number DEPARTMENT OF AGRICULTURE. TRADE AND CONSUMER PROTECTION Soil and Water Resource Management Clean Sweep County Staff and Support Land and Water Resource Management Projects Total Department of Agriculture, Trade and Consumer Protection DEPARTMENT OF SAFETY AND PROFESSIONAL SERVICES Private Sewage System Replacement and Rehabilitation DEPARTMENT OF NATURAL RESOURCES Local Parks Aids Stewardship Ryan Park S-ADLP Stewardship Grant- RBF-1421 MS Koenig Bridge MS14-07 Behrmann Bridge Rehab Wildlife Damage Claims and Abatement Recreational Aids - Snowmobile Trails and Area Aid S Maintenance S-4235 S-4490 Recreation aids -ATV Trails and Area Aid ATV-2265 ATV-3065 ATV-3136 Environmental Aids - Local Assistance Agreements Targeted Runoff Management Lake Protection Program Total Department of Natural Resources DEPARTMENT OF TRANSPORTATION Elderly and Handicapped Transportation Aids DEPARTMENT OF CORRECTIONS Community Intervention Program Community Youth and Family Aids Total Department of Corrections DEPARTMENT OF HEAL TH SERVICES IMAA State Share Affordable Care Act IMAA Federal Share Affordable Care Act IMAA State Share IMAA Federal Share State Food Share Program Federal Food Share Program (Continued) Sheboygan County Sheboygan County Sheboygan County Sheboygan County Sheboygan County Sheboygan County & &

81 (Accrued) Deferred Revenue 1/1/15 $ $ (10,171) (10, 171) (196,673) 3,556 (1.180) (8,870) (11,932) (873) (24,930) (240,902) (464) (10,444) (10,908) (15) (1,769) (11) Cash Received (Refunded) 110,225 $ 128, , , ,528 (1, 180) 1,180 8,870 22,038 11,932 29, ,750 24,930 3, ,071 68,117 2,394 96,678 99,072 12, , , Accrued (Deferred) Revenue 12/31/15 42,624 $ 42,624 13,452 22,038 (29,400) 1,204 (3,750) 3, ,020 25,206 3, , Total Revenue 152,849 $ 118, , ,046 6,855 2,376 13,452 44,076 5,954 72,713 68,117 2, , ,370 15, , Expenditures 152,849 $ 118, , ,046 6,855 2,376 13,452 44,076 5,954 72,713 81,740 2, , ,370 15, , Subrecipient Payments

82 Schedule of State Financial Assistance For the Year Ended December 31, 2015 Granter Aaencv/State Proaram Title DEPARTMENT OF HEAL TH SERVICES (Continued) State Affordable Care Act Federal Affordable Care Act Adult Protective Services COP W Program CIP II Program Community Options Program CIP II Community Relocation Program CIP II Diversion Program Alzheimer's Family Support Family Care Transition CIP 1 B Program CIP IB MFP Program Brain Injury Waiver Program Coordinated Services County Certified Mental Health Program Birth to Three Initiative Basic County Allocation CIP 1 B Program Intoxicated Driver Program Emergency Funds Family Support Program CIP 1A Program State/County Match CST COUNTIES 2015 CST COUNTIES 2016 TPA CLTS OTHER GPR TPA CL TS AUTISM GPR CLTS OTH CWA ADMIN FED CL TS AUTISM CWA ADMIN GPR CL TS PF BCA Matched WIC Farmers Market Grant Birth Defects - Children and Youths and Special Health Care Needs Wisconsin Well Women's Program Wisconsin Well Women's Program Childhood Lead Poisoning Maternal Child Health Services Total Department of Health Services DEPARTMENT OF CHILDREN AND FAMILIES Adam Walsh Foster/Adoptive Parent Fingerprinting Basic County Allocation State/County Match CS State GPR/PR Total Department of Children and Families (Continued) Pass Throuah Aaencv Sheboygan County Sheboygan County State l.d. Number

83 (Accrued) Accrued Deferred Cash (Deferred) Revenue Received Revenue Total Subrecipient 1/1/15 (Refunded) 12131/15 Revenue Exoenditures Pavments 2,797 16,776 19,573 19, ,142 5,141 10,283 10,283 (5,864) 142,086 (52,516) 83,706 83,706 (39,870) 211,106 (61,558) 109, ,678 (118,837) 238,364 (41,847) 77,680 77,680 (9,422) 59, 139 (12,465) 37,252 37,252 20, ,306 (154,862) 130, ,936 (3) 4,956 2,016 6,969 6, ,054 (4,134) 5,405 5,405 (3,270) 6,964 3,694 3,694 1,084 (1,084) 43,047 16,326 59,373 59,373 (14,355) 28,710 14,355 14,355 20,733 20,733 20, , , ,207 38, ,052 (123,601) 94,518 94,518 62,510 77, , , 181 (14, 138) 21,640 (7,222) (6, 183) 139,071 (48,675) 84,213 84,213 57,464 2,892 60, ,712 6,185 5,527 11,712 11,712 3,115 3,115 3, , , , , , ,211 (8,978) 8,978 (5,629) 5, ,650 1,650 1,650 (70) 70 4,313 4,313 4,313 (180) 1, ,897 1, (165,640) 2,272,046 (389,915) 1,716,491 1,776,847 (91) , , ,568 20,799 20,799 41,598 18,092 18,092 18,092 (91) 158, , ,360 73

84 Schedule of State Financial Assistance For the Year Ended December 31, 2015 Grantor Agency/State Program Title Pass Through Agency State l.d. Number DEPARTMENT OF JUSTICE DNA Sample Program Law Enforcement Training fund Victim and Witness Assistance - A Program Cluster Total Department of Justice DEPARTMENT OF MILITARY AFFAIRS EPCRA Emergency Planning Grant EPCRA Computer & Hazmat Equipment Total Department of Military Affairs DEPARTMENT OF ADMINISTRATION Comprehensive Planning Grant Land lnfonnation Board Grants Utility Public Benefits - Low Income Assistance Total Department of Administration TOTAL STATE PROGRAMS The notes to the schedule of expenditures of federal awards and schedule of state financial assistance are an integral part of this schedule. 74

85 (Accrued) Accrued Deferred Cash (Deferred) Revenue Received Revenue Total Subrecipient 1/1/15 (Refunded) 12131/15 Revenue Expenditures Payments ,577 7,577 7,577 (13,762) 26,927 15,037 28,202 28,202 (13,762) 34,904 15,037 36,179 36,179 (4,915) 10,531 5,616 11,232 11,232 1, ,000 2,000 (4,915) ,984 13, ,000 73,000 73,000 1,000 1,000 1,000 ~6,486) 22,493 4,015 20,022 20,022 20,022 (6,486) 96,493 4,015 94,022 94,022 20,022 ~ {452,875} $ 3,497,249 $ {293,466} ~ 2,750,908 $ 2,845,686 $ 20,022 75

86 Notes to the Schedule of Expenditures of Federal Awards on the Schedule of State Financial Assistance For the Year Ended December 31, 2015 NOTE A - BASIS OF PRESENTATION The accompanying Schedule of Expenditures of Federal Awards and State Financial Assistance for Kewaunee County are presented in accordance with the requirements of Federal Uniform Grant Guidance, Audits of States, Local Governments, and Non-Profit Organizations and the State Single Audit Guidelines issued by the Wisconsin Department of Administration. The Schedules of Expenditures of Federal Awards and State Financial Assistance include all federal and state awards of Kewaunee County. NOTE B - SIGNIFICANT ACCOUNTING POLICIES Revenues and expenditures in the schedules are presented in accordance with the modified accrual basis of accounting and are generally in agreement with revenues and expenditures reported in the County's 2015 fund financial statements. Accrued revenue at year-end consists of federal and state program expenditures scheduled for reimbursement to the County in the succeeding year while deferred revenue represents advances for federal and state programs that exceed recorded County expenditures. Because of subsequent program adjustments, these amounts may differ from the prior year's ending balances. Major federal and state financial assistance programs are identified in the Schedule of Findings and Questioned Costs and are determined as follows: Federal Programs: Kewaunee County, Wisconsin does not qualify as a low risk auditee in accordance with Uniform Grant Guidance. Therefore major programs represent those with combined expenditures exceeding 40% of total federal awards that also were deemed major programs based on the auditors' risk assessment. All other federal programs are considered nonmajor programs. State Programs: Kewaunee County, Wisconsin does not qualify as a low risk auditee in accordance with the State Single Audit Guidelines. Therefore, major programs represent those with combined expenditures exceeding 40% of total State financial assistance that also were deemed major programs based on the auditors' risk assessment. In addition, certain state financial assistance programs were designated state major by the state granting agency and therefore considered state major. All other state financial assistance programs are considered nonmajor programs. NOTE C - OVERSIGHT AGENCIES The federal and state oversight agencies for the County are as follows: Federal - U.S. Department of Justice State - Wisconsin Department of Health Services NOTED-TITLE 19 MEDICAL ASSISTANCE PAYMENTS The Schedule of Expenditures of Federal Awards and Schedule of State Financial Assistance does not include recorded revenues of $1,581,268 received by the County for Title 19 Medical Assistance programs. The payments are considered a contract for services between the State and the County and therefore are not reported as federal awards or state financial assistance. 76

87 Notes to the Schedule of Expenditures of Federal Awards on the Schedule of State Financial Assistance (Continued) For the Year Ended December 31, 2015 NOTE E - STATE OF WISCONSIN COMMUNITY AIDS REPORTING SYSTEM The Wisconsin Departments of Health Services (OHS) and Children and Families (DCF) utilize the Community Aids Reporting System (CARS) and the Central Office Reporting System (CORe) for reimbursing the County for various federal and state program expenditures. The expenditures reported on the Schedule of Expenditures of Federal Awards and the Schedule of State Financial Assistance for various OHS & DCF programs agree with the expenditures reported on the May 2016 CARS for the Human Services and Public Health Departments, and the December 2015 CORe for Child Support and Child Care programs. NOTE F - STATE DIRECT PAYMENTS Payments made directly to recipients and venders by the State of Wisconsin under the FoodShare Wisconsin program on behalf of the County are not included in the Schedule of Expenditures of Federal Awards and Schedule of State Financial Assistance. 77

88

89 Schedule of Findings and Questioned Costs (Continued) For the Year Ended December 31, 2015 Section II - Financial Statement Findings Findin No. Financial Statement Findin s There are no findings related to the basic financial statements required to be reported under governmental auditing standards generally accepted in the United States of America for the year ended December 31, Section Ill - Federal Award Findings and Questioned Cost Findin No Compliance Requirement: Criteria: Condition: Cause: Effect: Recommendation: Uniform Guidance and State Sin le Audit Guidelines Findin s Financial Reporting for Federal Awards and State Financial Assistance Federal CFDA - All State IDs - All Reporting Having staff with expertise in federal and state financial reporting prepare the County's single audit report is an internal control intended to prevent, detect and correct a potential misstatement in the schedules of expenditures of federal awards and state financial assistance, or accompanying notes to the schedule. Uniform Guidance and the State Single Audit Guidelines require the County to prepare appropriate financial statements, including the schedules of expenditures of federal awards and state financial assistance. While the current staff of the County maintains financial records supporting amounts reported in the schedules of expenditures of federal awards and state financial assistance, the County contracts with Schenck to compile the data from these records and assist in the preparation of the single audit report for the County. The additional costs associated with hiring staff sufficiently experienced to prepare the County's single audit report, including the additional training time, outweigh the derived benefits. The County could receive federal or state grant awards which are not included in the accompanying Schedules of Expenditures of Federal Awards and State Financial Assistance. We recommend County personnel continue reviewing the County's single audit report. While it may not be cost beneficial to hire additional staff to prepare these items, a thorough review of this information by appropriate staff of the County is necessary to ensure all federal and state financial assistance programs are properly reported in the County's single audit report. 79

90 Schedule of Findings and Questioned Costs (Continued) For the Year Ended December 31, 2015 Section Ill - Federal Award Findings and Questioned Cost (Continued) Findin No. Uniform Guidance and State Sin le Audit Guidelines Findin s Reporting - Reconciliation Process CFDA #: Federal CFDA - Various programs passed through the Wisconsin Departments of Health Services, Administration, Corrections & Children and Families, and Sheboygan County, Wisconsin State IDs - Various programs passed through the Wisconsin Departments of Health Services, Administration, Corrections & Children and Families, and Sheboygan County, Wisconsin Compliance Requirement: Criteria: Condition: Cause: Effect: Questioned Costs: Recommendation: Allowable costs/costs principles, cash management, procurement, reporting. Federal and state compliance regulations require the Human Services Department prepare timely and accurate reconciliations of what it records in its records and what is reported to the state on the state's Human Services Reporting System (HSRS), the Community Aids Reporting System (CARS), the Central Office Reporting (CORe) and invoices. A final year-end reconciliation of the reported expenditures and the county's general ledger which is supported by the audited financial statements is also required. The Department was not able to complete the required reconciliations between the expenditure reports and the general ledger for certain programs or Department-wide. Due to the lack of a Department-wide reconciliation, auditors were not able to accurately determine if certain reported costs were claimed in accordance with state and federal regulations. In addition, auditors were not able to determine the accuracy of certain programs' reported expenditures. Several staff complete expenditure reports using different processes to compile the amounts to be reported. Although reconciliations are performed for some individual programs, no Department-wide reconciliation was completed. It was also noted that the general ledger accounts related to certain grant programs were not being utilized in a way that would allow for a program or Department-wide reconciliation to be completed. Reported expenditures do not reconcile to the county's recorded general ledger expenditures for certain programs. The existence of questioned costs for these programs could not be ascertained. We recommend the Department review its month-end and annual reporting and reconciliation procedures and consider adopting the following additional procedures: Review the general ledger account structure and consider changing it to better support the financial reporting and reconciliation requirements. Develop written procedures for the completion of both monthly and year end expenditure reports and reconciliations. Require supervisory staff to review all expenditure reports prior to their submission and compare them to the related expenditure reconciliations. Restructure the procedures for the allocation of indirect and administrative costs and require a reconciliation of both the monthly and annual allocations. 80