BERKELEY COUNTY, AUDIT REPORT OF RFP # FOR THE FISCAL YEAR ENDED JUNE 30, r--"-- I I I J I J. J i 1_J ---., Lisa K.

Transcription

1 1 AUDT REPORT OF BERKElEY COUNTY RFP # BERKELEY COUNTY, \VEST VRGNA 1, FOR THE FSCAL YEAR ENDED JUNE 30, 2007 ", _ r--"--,,,,,,j, J J,, f ) :,, ~, ) J J.J f, -, 1_J , Lsa K. Thornburg, CPA J

2 FNANCAL STATEMENTS OF BERKELEY COUNTY, WEST VRGNA FOR THE FSCAL YEAR ENDED JUNE 30, 2007

3 1 1 f J BERKELEY COUNTY, WEST VRGNA TABLE OF CONTENTS For the Fscal Year Ended June 30, 2007 ntroductory Secton Page, -j Schedule of Funds ncluded n Report County Offcals 1 2 Fnancal Secton ndependent Audtor's Report 3-4 Basc Fnancal Statements: Government-wde Fnancal Statements Statement of Net Assets Statement of Actvtes Fund Fnancal Statements Balance Sheet - Governmental Funds 8 Reconclaton of the Balance Sheet - Governmental Funds to the Statement of Net Assets 9 Statement of Revenues, Expendtures and Changes n Fund Balances - Governmental Funds Reconclaton of the Statement of Revenues, Expendtures and Changes n Fund Balances - Governmental Funds to the Statement of Actvtes 12 Statement of Revenues, Expendtures and Changes n Fund Balance - Budget and Actual - General Fund Statement of Revenues, Expendtures and Changes n Fund Balance - Budget and Actual - Coal Severance Tax Fund 15 Statement of Fducary Net Assets - Fducary Funds 16 Notes to the Fnancal Statements SUPPLEMENTARY NFORMATON Budgetary Comparson Schedule - Assessor's Valuaton Fund 48 ACCOMPANYNG NFORMATON Report on nternal Control Over Fnancal Reportng and on Complance and Other Matters Based on an Audt of Fnancal Statements Performed n Accordance wth Government Audtng Standards Schedule of Fndngs and Responses 51-55

4 J l, NTRODUCTORY SECTON, \,, :,

5 ~ BERKELEY COUNTY, WEST VRGNA SCHEDULE OF FUNDS NCLUDED N REPORT For the Fscal Year Ended June 30, 2007 GOVERNMENTAL FUND TYPES Major Funds General County Coal Severance Tax E-911 Fees Nonmajor Funds Specal Revenue Funds Dog and Kennel Worthless Check Federal Grant #09 Wreless Communcaton Rany Day Fund Enforcement Forfeture Unversal Hrng Grant COPS Unversal Hrng Engneerng Specal Fees Emergency Shelter 2004 Homeland Securty OES Emergency Shelter 2005 Dupont Soccer Grant Lambert Park General School Emergency Communcaton 911 Magstrate Court Home Confnement Communty Partnershp Grant Fducary Enhanced 911 3% Concealed Weapons Assessor's Valuaton Voter's Regstraton Prosecutng Attorney Forfeture Enforcement Block Grant Task Force Rembursement Homeland Securty - Ctzen's Corp FEMA Hazard Mtgaton County Health nsurance Homeland Securty - Law Enforcement Homeland Securty Planner Judcal Center LEDA Grant South Berkeley Lttle League Humane Socety Musselman Mddle School Ezekel's Place DOT Round House Grant Fre nvestgaton Eastern Panhandle ADS Grant Courthouse Securty Grant FDUCARY FUND TYPES Agency Funds State School County Offces Other Agency --" BLENDED COMPONENT UNT Buldng Commsson 1

6 ~ BERKELEY COUNTY, WEST VRGNA COUNTY OFFCALS For the Fscal Year Ended June 30, 2007 J OFFCE NAME TERM Elected County Commsson: Howard L. Strauss Steven C. Teufel Ronald K. Collns Wllam L. Stubblefeld / / / / Clerk of the County Commsson: John W. Small, Jr / Clerk of the Crcut Court: Vrgna Sne / Sherff: Randy W. Smth / Prosecutng Attorney: Pamela Games-Neely / Assessor: Preston Gooden / Apponted Admnstrator Deborah E. Hammond 2

7 .~ FNANCAL SECTON

8 j Lsa K. Thornburg, CPA 2514 Bedford Chapel Road Mlton, WV (304) NDEPENDENT AUDTOR'S REPORT Honorable Members of the Berkeley County Commsson Martnsburg, West Vrgna We have audted the accompanyng fnancal statements of the governmental actvtes, each major fund, the blended component unt, and the aggregate remanng fund nformaton of Berkeley County, West Vrgna (the County), as of and for the year ended June 30, 2007, whch collectvely comprse the basc fnancal statements of the County's prmary government as lsted n the table of contents. These fnancal statements are the responsblty of the County's management. Our responsblty s to express opnons on these fnancal statements based on our audt. Except as dscussed n the followng paragraphs, we conducted our audt n accordance wth audtng standards generally accepted n the Unted States of Amerca and the standards applcable to fnancal audts contaned n Government Audtng Standards, ssued by the Comptroller General of the Unted States. Those standards requre that we plan and perform the audt to obtan reasonable assurance about whether the fnancal statements are free of materal msstatement. An audt ncludes examnng, on a test bass, evdence supportng the amounts and dsclosures n the fnancal statements. An audt also ncludes assessng the accountng prncples used and the sgnfcant estmates made by management, as well as evaluatng the overall fnancal statement presentaton. We beleve that our audt provdes a reasonable bass for our opnons. The fnancal statements do not nclude fnancal data for all of the County's legally separate component unts. These fnancal statements do nclude the Berkeley County Buldng Commsson as a blended component unt, but other component unts are not ncluded. The fnancal statements of the Berkeley County Buldng Commsson have not been audted, and we were not engaged to audt ther fnancal statements as part of our audt of the County's basc fnancal statements. Accountng prncples generally accepted n the Unted States of Amerca requre the fnancal data for all component unts to be reported wth the fnancal data of the County's prmary government unless the County also ssues fnancal statements for the fnancal reportng entty that nclude the fnancal data for those component unts. The County has not ssued such reportng entty fnancal statements. Because of ths departure from accountng prncples generally accepted n the Unted States of Amerca, t s not known how the assets, labltes, net assets, revenues and expenses of the aggregate dscretely presented component unts would have been presented. n our opnon, because of the omsson of the dscretely presented component unts as dscussed above, the fnancal statements referred to above do not present farly, n conformty wth accountng prncples generally accepted n the Unted States of Amerca, the fnancal poston of the dscretely presented component unts of Berkeley County, West Vrgna as of June 30,2007, or the changes n fnancal poston thereof for the year then ended. 3

9 Honorable Members of the Berkeley County Commsson Page 2, ---j -1 n addton, n our opnon, the fnancal statements referred to above present farly, n all materal respects, the fnancal poston of the major funds of Berkeley County, West Vrgna, as of June 30, 2007, and the changes n fnancal poston thereof, for the year then ended n conformty wth accountng prncples generally accepted n the Unted States of Amerca. Further, n our opnon, the fnancal statements referred to above present farly, n all materal respects, the respectve fnancal poston of the governmental actvtes, and the aggregate remanng fund nformaton of Berkeley County, West Vrgna, as of June 30, 2007, and the respectve changes n fnancal poston thereof, and the respectve budgetary comparsons for the General Fund and Coal Severance Tax Fund for the year then ended n conformty wth accountng prncples generally accepted n the Unted States of Amerca. n accordance wth Government Audtng Standards, we have also ssued our report dated December 30, 2009 on our consderaton of the County's nternal control over fnancal reportng and on our tests of ts complance wth certan provsons of laws, regulatons, contracts, and grant agreements and other matters. The purpose of that report s to descrbe the scope of our testng of nternal control over fnancal reportng and complance and the results of that testng and not to provde an opnon on the nternal control over fnancal reportng on complance. That report s an ntegral part of an audt performed n accordance wth Government Audtng Standards and should be consdered n assessng the results of our audt. The County has not presented the management's dscusson and analyss that s not a requred part of the basc fnancal statements but s supplementary nformaton requred by accountng prncples generally accepted n the Unted States of Amerca. Our audt was conducted for the purpose of formng opnons on the fnancal statements that collectvely comprse the County's basc fnancal statements. The ntroductory secton and the Budgetary Comparson Schedule for the Assessor's Valuaton Fund are presented for purposes of addtonal analyss and are not requred parts of the basc fnancal statements of the County. The Budgetary Comparson Schedule for the Assessor's Valuaton Fund has been subjected to the audtng procedures appled n the audt of the basc fnancal statements and, n our opnon, s farly stated n all materal respects n relaton to the basc fnancal statements taken as a whole. The ntroductory secton has not been subjected to the audtng procedures appled n the audt of the basc fnancal statements and, accordngly, we express no opnon on t. ~S1.tt~ Lsa K. Thornburg, CPA December 30,

10 t BERKELEY COUNTY, WEST VRGNA STATEMENT OF NET ASSETS June 30, [ ) Prmary Government Governmental Busness-type Actvtes Actvtes Buldng Comm Total ASSETS Current assets: Cash and cash equvalents $ 4,512,740 $ 429,269 $ 4,942,009 nvestments - restrcted 0 4,560,517 4,560,517 Recevables, net Taxes 478, ,421 Due from: Other funds 2,548, ,548,229 Captal assets: Land 942,627 2,255,127 3,197,754 Buldng and equpment, net of deprecaton 3,492,205 34,182,549 37,674,754 Buldng mprovements, net of deprecaton 1,445, ,445,910 Machnery and equpment 6,287, ,287,326 Constructon n progress 0 760, ,796 Unamortzed bond ssue costs, net of amortzaton 0 1,055,332 1,055,332 Total assets $ 19,707,458 $ 43,243,590 $ 62,951,048 LABLTES Current labltes payable from current assets: Accounts payable $ 549,309 $ 0$ 549,309 Other accrued expenses 238, ,691 Leases payable 752, ,774 Due to Other funds 2,548, ,548,229 Other governments 11, ,220 Current labltes payable from restrcted assets: Accounts payable - constructon 0 10,402 10,402 Prepad lease ncome 0 143, ,721 nterest payable 0 119, ,216 Current porton of long-term debt 0 3,946,923 3,946,923 Total current labltes 4,100,223 4,220,262 8,320,485 5

11 j -, 1, BERKELEY COUNTY, WEST VRGNA STATEMENT OF NET ASSETS June 30, 2007 Prmary Government Busness-type Governmental Actvtes Actvtes Buldng Comm Total Noncurrent labltes: Long term debt $ 0$ 32,685,925 $ 32,685,925 Long term debt premum 0 10,725 10,725 Long term debt dscount 0 (143,641) (143,641) Leases payable 2,547, ,547,221 Compensated absences payable 2,112, ,112,751,,, Total noncurrent labltes 4,659,972 32,553,009 37,212,981 Total Labltes 8,760,195 36,773,271 45,533,466 NET ASSETS nvested n captal assets, net of related debt 9,620,847 1,753,872 11,374,719 Restrcted for: captal outlay 0 4,560,517 4,560,517 Unrestrcted 1,326, ,930 1,482,346 Total net assets 10,947,263 6,470,319 17,417,582 Total labltes and net assets $ 19,707,458 $ 43,243,590 $ 62,951,048 : The notes to the fnancal statement are an ntegral part of these statements 6,~

12 BERKELEY COUNTY, WEST VRGNA STATEMENT OF ACTVTES For the Fscal Year Ended June 30, 2007 Program Revenues Net (Expense) Revenues and Changes n Net Assets Expenses Charges for Servces Prmary Government Captal Busness-type Grants and Governmental Actvtes Contrbutons Actvtes Buldng Comm Total Functons Prmary / Programs government: Governmental actvtes: General government $ 18,698,449 $ 6,518,652 $ 402,810 $ (11,776,987) $ - $ (11,776,987) Publc safety 11,061, (11,061,587) - (11,061,587) Health and santaton 326, (326,777) - (326,777) Culture and recreaton 953, (953,043) - (953,043) Socal servces 117,097 - (117,097) (117,097) Total governmental actvtes 31,156,953 6,518, ,810 (24,235,491 ) - (24,235,491 ) Busness type actvtes: Buldng Commsson 816, (816,908) (816,908) Total prmary government $ 31,973,861 $ 6,518,652 $ 402,810 (24,235,491) (816,908) (25,052,399) General revenues: Ad valorem property taxes 10,842,286-10,842,286 Other taxes 2,209,685-2,209,685 Coal Severance 483, ,783 Lcenses and permts 65,331-65,331 ntergovernmental: Local 3,132-3,132 Lease ncome - 1,972,124 1,972,124 Rents - 150, ,000 Fnes and forfetures 734, ,329 Unrestrcted nvestment earnngs 419,330 16, ,634 Rembursement 2,321,773-2,321,773 Mscellaneous 3,302, ,966 3,451,811 Total general revenues 20,382,494 2,287,394 22,669,888 Change n net assets (3,852,997) 1,470,486 (2,382,511 ) Net assets at begnnng of year 14,870,936 4,999,833 19,870,769 Pror perod adjustment: Correcton to Captal Asset Values (271) - (271) Health nsurance fund moved to Agency Funds (70,405) - (70,405) Net assets at begnnng of year as restated 14,800,260 4,999,833 19,800,093 Net assets - endng $ 10,947,263 $ 6,470,319 $ 17,417,582 The notes to the fnancal statement are an ntegral part of these statements 7

13 , BERKELEY COUNTY, WEST VRGNA BALANCESHEET-GOVERNMENTALFUNDS June 30, 2007 ~ Major Funds Other Nonmajor Total Coal E-911 Fee Governmental Governmental General Severance Tax Fund Funds Funds ASSETS Current: Cash and cash equvalents $ 2,760,762 $ 90,890 $ 106,377 $ 1,554,711 $ 4,512,740 Recevables: Taxes 478, ,421 Due from: Other funds 76,612-2,471,617-2,548,229 Total assets $ 3,315,795 $ 90,890 $ 2,577,994 $ 1,554,711 $ 7,539,390 LABLTES Labltes: AND FUND BALANCES Accounts payable $ 492,830 $ 16,585 $ 5,349 $ 34,545 $ 549,309 Accrued expenses 238, ,691 Due to: Other governments 11, ,220, Other funds 2,471, ,612 2,548,229 Deferred revenues: Tax revenue 320, ,542 Total labltes 3,534,900 16,585 5, ,157 3,667,991 : Fund balances: Reserved for: Encumbrances 71, ,199 78,112 Enhanced E-911 Equpment ,325 88,325 Federal Grants , ,837 E-911 Operatng Cost - - 2,572,645-2,572,645 Unreserved Major Funds (291,018) 74, (216,713) Specal revenue funds ,134,193 1,134,193 Total fund balances (219,105) 74,305 2,572,645 1,443,554 3,871,399 Total labltes and fund balances $ 3,315,795 $ 90,890 $ 2,577,994 $ 1,554,711 $ 7,539,390 The notes to the fnancal statement are an ntegral part of ths statement. 8

14 BERKELEY COUNTY, WEST VRGNA RECONCLA non OF THE BALANCE SHEET - GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS June 30, l Total fund balances on the governmental fund's balance sheet $ 3,871,399 Amounts reported for governmental actvtes m the statement of net assets are dfferent because: Captal assets used n governmental actvtes are not fnancal resources and, therefore not reported n the funds. Land Buldngs and equpment 942,627 11,225,168 Certan revenues are not avalable to fund current year expendtures and therefore are deferred n the funds. Deferred taxes 320,542 Compensated absences and captal leases, are not due and payable n the current perod. Compensated absences (2,112,751) Leases payable Net assets of governmental actvtes (3,299,995) $ 10,946,990 ========== The notes to the fnancal statement are an ntegral part of ths statement. 9

15 BERKELEY COUNTY, WEST VRGNA STATEMENT OF REVENUES, EXPENDTURES AND CHANGES N FUND BALANCES - GOVERNMENTAL FUNDS FOR THE FSCAL YEAR ENDED JUNE 30, Major Funds Coal Other Nonmajor Total - Severance Governmental Governmental General Tax E-911 Fee Funds Funds REVENUES Taxes: Ad valorem property taxes $ 10,838,058 $ - $ - $ - $ 10,838,058 Other taxes 2,209, ,209,685 Coal severance tax - 483, ,783 Lcenses and permts ,331 65,331 ntergovernmental: -. Federal 17, , ,052 State , ,758 Local ,132 3,132 Charges for servces 3,467,056-2,159, ,374 6,518,652 Fnes and forfets 82, , ,329 nterest and nvestment earnngs 265,309 10, , ,330 Mscellaneous 2,593, ,596 3,302,572 Rembursement transfers 2,321, ,321,773 Total revenues 21,796, ,350 2,159,222 2,849,282 27,299,455 EXPENDTURES Current: General government 14,425, ,258-2,723,008 17,770,258 Publc safety 8,035,055-1,349,837 1,110,225 10,495,117 Health and santaton 232, , ,354 Culture and recreaton 950, ,850 Socal servces 94, ,125 Captal outlay 1,295,114-2,947, ,718 4,555,636 Total expendtures 25,034, ,258 4,297,641 4,234,351 34,187,340 (Defct) of revenues over expendtures (3,237,489) (126,908) (2,138,419) (1,385,069) (6,887,885) 10

16 BERKELEY COUNTY, WEST VRGNA STATEMENT OF REVENUES, EXPENDTURES AND CHANGES N FUND BALANCES - GOVERNMENTAL FUNDS FOR THE FSCAL YEAR ENDED JUNE 30, Major Funds General Coal Severance Tax E-911 Fee Other Nonmajor Governmental Funds Total Governmental Funds OTHER FNANCNG SOURCES (USES) Transfers n $ - $ - $ - $ 70,878 $ 70,878 Transfers (out) (70,878) (70,878) Captal leases 262,417-2,947,804-3,210,221 Total other fnancng sources (uses) 262,417-2,947,804-3,210,221 Excess (defct) of revenues and other fmancng sources over expendtures and other uses (2,975,072) (126,908) 809,385 (1,385,069) (3,677,664) Fund balances - begnnng of year 4,470, ,213-2,899,031 7,570,677 nsurance fund moved to agency funds (70,408) (70,408) Compensated Absences Expensed n pror year 48, ,794 Current adjustment; E-911 Fees, see note (1,763,260) - 1,763, Fund balances - begnnng of year as restated 2,755, ,213 1,763,260 2,828,623 7,549,063 Fund balances - endng $ (219,105) $ 74,305 $ 2,572,645 $ 1,443,554 $ 3,871,399 The notes to the fnancal statement are an ntegral part of ths statement. 11

17 - BERKELEY COUNTY, WEST VRGNA RECONCLATON OF THE STATEMENT OF REVENUES, EXPENDTURES AND CHANGES N FUND BALANCES - GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTVTES For the Fscal Year Ended June 30, 2007 Net change n fund balances - total governmental funds $ (3,677,664) Captal asset purchases are expensed n fund level fnancal statement; however, captal assets are captalzed and deprecated over the useful lfe of the asset n the government wde fnancals. Current expendtures for captal outlay captalzed 1,345,415 Governmental funds report captal outlay as expendtures. However, n the statement of actvtes, the cost of those assets are allocated over ther estmated useful lves and reported as deprecaton expense. Deprecaton expense (1,227,197) Captal lease proceeds are reported as fnancng sources n governmental funds and thus contrbuted to the change n fund balance. Repayment of prncpal on captal leases s an expendture n the governmental funds, but t reduces the lablty n the statement of net assets. Current lease payments recorded as expendtures 411,505 Current addtons to compensated absences expense s not reported n the governmental funds but s reported n the government-wde level of actvtes. Current addtons to compensated absences expense (709,557) Certan revenues are not avalable to fund current year expendtures and therefore are deferred n the funds. Ths s the amount deferred taxes ncreased for the current year. Deferred tax revenues 4,228 Change n net assets of governmental actvtes $ (3,853,270) The notes to the fnancal statements are an ntegral part of these statements 12

18 BERKELEY COUNTY, WEST VRGNA STATEMENT OF REVENUES, EXPENDTURES AND CHANGES N FUND BALANCE - BUDGET AND ACTUAL - GENERAL FUND -, For the Fscal Year Ended June 30, REVENUES Taxes: Actual Varance wt Budgeted Amounts Actual Adjustments Amounts Fnal Budge Modfed Budget Budget Postve Orgnal Fnal Accrual Bass Bass Bass (Negatve} Ad valorem property $ 10,083,927 $ 10,197,639 $ 10,838,057 $ (34,866) $ 10,803,191 $ 605,552 Other taxes 2,665,483 3,138,721 2,209,685-2,209,685 (929,036 Lcenses and permts 1,259,683 1,377, (1,377,545 ntergovernmental: Federal 54,580 54,580 17,980-17,980 (36,600 Charges for servces 3,473,748 4,467,037 3,467, ,857 4,312,913 (154,124 Fnes and forfets 110, ,685 82,764-82,764 (27,921 nterest 167, , , ,309 (38,152 Mscellaneous 585, ,334 2,593, ,808 3,117,784 2,482,450 Transfers 547, ,296 2,321,773 (487,920) 1,833,853 1,013,557 Total revenues 18,948,445 21,105,298 21,796, ,879 22,643,479 1,538,181 EXPENDTURES General government 10,702,296 13,835,688 14,413,486 (346,002) 14,067,484 (231,796 Publc safety 7,158,641 7,111,027 8,035,055 (339,215) 7,695,840 (584,813 Health and santaton 182, , , ,954 6,421 Culture and recreaton 743, , , ,850 (48,973 Socal servces 72,000 91,500 94,125-94,125 (2,625 Captal projects 924, ,816 1,345, ,816 1,656,231 (1,009,415 Total expendtures 19,783,959 22,826,283 25,071,885 (374,401) 24,697,484 (1,871,201 (Defcency) of revenues over expendtures (835,514) (1,720,985) (3,275,285) 1,221,280 (2,054,005) 3,409,382 OTHER FNANCNG SOURCES (USES) Captal leases , , ,417 Total other fnancng sources (uses) , , ,417 (Defcency) of revenues and other fmancng sources over expendtures and other uses (835,514) (1,720,985) (3,012,868) 1,221,280 (1,791,588) 3,671,799 13

19 l Fund balances: Reserve for encumbrances Fund balance as prevously stated Pror perod adjustments: P\Y reserve for E-911 Fees Compensated absence accrued P\ Y BERKELEY COUNTY, WEST VRGNA STATEMENT OF REVENUES, EXPENDTURES AND CHANGES N FUND BALANCE - BUDGET AND ACTUAL - GENERAL FUND For the Fscal Year Ended June 30, 2007 Actual Varance wt Budgeted Amounts Actual Adjustments Amounts Fnal Budge Modfed Budget Budget Postve Orgnal Fnal Accrual Bass Bass Bass (Negatve) , ,000 4,814,766 4,470,434-4,814, (1,763,260) , Fund balances - begnnng of year as restated 800,000 4,814,766 2,755,968 4,814,766 Fund balances - endng $ (35,514) $ 3,093,781 $ (256,900) $ 1,221,280 $ 3,023,178 $ 3,671,799 The notes to the fnancal statement are an ntegral part of ths statement. 14

20 ,, ~, BERKELEY COUNTY, WEST VRGNA STATEMENT OF REVENUES, EXPENDTURES AND CHANGES N FUND BALANCE - BUDGET AND ACTUAL - COAL SEVERANCE TAX FUND For the Fscal Year Ended June 30, 2007 Budgeted Amounts Actual Varance wth Actual Adjustments Amounts Fnal Budget Modfed Budget Budget Postve Orgnal Fnal Accrual Bass Bass Bass (Negatve) REVENUES Taxes: Coal severance tax $ 101,455 $ 101,455 $ 483,783 $ - $ 483,783 $ 382,328 nterest ncome 2,044 2,044 10,567-10,567 8,523 Total revenues 103, , , , ,851 EXPENDTURES General government 301, , , ,258 (320,045) Contngency 3,499 3, ,499 Total expendtures 304, , , ,258 (316,546), Excess (defcency) of revenues over (under) expendtures (201,213) (201,213) (126,908) - (126,908) 74,305 Fund balances - begnnng 201, , , ,213 - Fund balances - endng $ - $ - $ 74,305 $ - $ 74,305 $ 74,305 The notes to the fnancal statement are an ntegral part of ths statement. 15

21 BERKELEY COUNTY, WEST VRGNA STATEMENT OF FDUCARY NET ASSETS FDUCARY FUNDS June 30, , Agency Funds ASSETS Cash and cash equvalents $ ===2,=36=8=,3=54= LABLTES Due to other governments Other payables Total Labltes $ 1,087,129 1,281,225 $ ==2=,=36=8=,3=54= The notes to the fnancal statement are an ntegral part of ths statement. 16

22 - BERKELEY COUNTY, WEST VRGNA NOTES TO THE FNANCAL STATEMENTS For the Fscal Year Ended June 30, SUMMARY OF SGNFCANT ACCOUNTNG POLCES Except as noted, the accountng polces of the Berkeley County, West Vrgna, conform to generally accepted accountng prncples as applcable to governmental unts. The followng s a summary of sgnfcant accountng polces: A. Reportng Entty Berkeley County s one of ffty-fve countes establshed under the Consttuton and the Laws of the State of West Vrgna. There are sx offces elected county-wde, whch are: County Commsson, County Clerk, Crcut Clerk, Assessor, Sherff, and Prosecutng Attorney. The County Commsson s the legslatve body for the government, and as such budgets and provdes all the fundng used by the separate Consttutonal Offces except for the offces of the Assessor and the Sherff, whch also have addtonal revenue sources. The County Clerk's offce mantans the accountng system for the county's operatons. The operatons of the County as a whole, however, ncludng all the Consttutonal offces have been combned n these fnancal statements. The servces provded by the government and accounted for wthn these fnancal statements nclude law enforcement for unncorporated areas of the county, health and socal servces, cultural and recreatonal programs, and other governmental servces. The accompanyng fnancal statements present the government and ts component unt as requred by generally accepted accountng prncples. n determnng whether to nclude a governmental department, agency, commsson or organzaton as a component unt, the government must evaluate each entty as to whether they are legally separate and fnancally accountable based on the crtera set forth by the Governmental Accountng Standards Board (GASB). Legal separateness s evaluated on the bass of (1) ts corporate name, (2) the rght to sue and be sued and (3) the rght to buy, sell or lease and mortgage property. Fnancal accountablty s based on (1)the appontment of the governng authorty and (2) the ablty to mpose wll or (3) the provdng of specfc fnancal beneft or mposton of specfc fnancal burden. Another factor to consder n ths evaluaton s whether an entty s fscally dependent on the County. Blended Component Unt The entty below s legally separate from the County and meets generally accepted accountng prncples crtera for component unts. Ths entty s blended wth the prmary government because they provde servces entrely or almost entrely to the County. The Berkeley County Buldng Commsson serves the ctzens of Berkeley County, and s governed by a board comprsed of fve board members apponted by the County Commsson for a term of fve years each. The Buldng Commsson acqures property and debt on behalf of the County. The Buldng Commsson s reported as an enterprse fund. Complete fnancal statements of the Berkeley County Buldng Commsson can be obtaned at the County's admnstratve offces. Dscretely presented Component Unts Although requred by generally accepted accountng prncples, the County has elected not to nclude any other component unts n these fnancal statements and the effects of ths excluson cannot be determned. \, E [ 17 t r

23 \ BERKELEY COUNTY, WEST VRGNA NOTES TO THE FNANCAL STATEMENTS For the Fscal Year Ended June 30, 2007 l Related Organzatons 1 J The County's offcals are also responsble for appontng the members of boards of other organzatons, but the County's accountablty for these organzatons does not extend beyond makng the appontments. The County apponts board members to the followng organzatons and contrbuted operatng grants as stated: 1 Name of Organzaton Operatng Grant Berkeley County Landmark Commsson Berkeley County Hstorcal Socety Eastern WV Regonal Arport Berkeley County Health Dept. Berkeley County Sold Waste Authorty Martnsburg-Berkeley County Parks and Recreaton Martnsburg-Berkeley County Conventon and Vstor's Center Berkeley County Publc Lbrary Berkeley County Senor Servces Eastern Panhandle Transt Authorty Berkeley County Development Authorty $ 10,085 4,500 11,250 60, , , , ,949 52,125 42, ,000 Total grants contrbuted $ 1,640,653, " B. Government-Wde and Fund Fnancal Statements The government-wde fnancal statements (.e., the statement of net assets and the statement of changes n net assets) report nformaton on all of the nonfducary actvtes of the prmary government and certan component unts. For the most part, the effect of nterfund actvty has been removed from these statements. Governmental actvtes, whch normally are supported by taxes and ntergovernmental revenues, are reported separately from busness-type actvtes, whch rely to a sgnfcant extent on fees and charges for support. Lkewse, the prmary government s reported separately from certan legally separate component unts for whch the prmary government s fnancally accountable. The statement of actvtes demonstrates the degree to whch the drect expenses of a gven functon are offset by program revenues. Drect expenses are those that are clearly dentfable wth a specfc functon. Program revenues nclude 1) charges to customers or applcants who purchase, use, or drectly beneft from goods, servces, or prvleges provded by a gven functon and 2) grants and contrbutons that are restrcted to meetng the operatonal or captal requrements of a partcular functon. Taxes and other tems not properly ncluded among program revenues are reported nstead as general revenues. Separate fnancal statements are provded for governmental funds, propretary funds, and fducary funds, even though the latter are excluded from the government-wde fnancal statements. Major ndvdual governmental funds and major ndvdual enterprse funds are reported as separate columns n the fund fnancal statements. 18

24 BERKELEY COUNTY, WEST VRGNA NOTES TO THE FNANCAL STATEMENTS For the Fscal Year Ended June 30, 2007 j C. Measurement focus, bass of accountng, and fnancal statement presentaton The government-wde fnancal statements are reported usng the economc resources measurement focus and the accrual bass of accountng, as are the propretary fund and fducary fund fnancal statements. Revenues are recorded when earned and expenses are recorded when a lablty s ncurred, regardless of the tmng of related cash flows. Property taxes are recognzed as revenues n the year for whch they are leved and collectable. Grants and smlar tems are recognzed as revenue as soon as all elgblty requrements mposed by the provder have been met. Governmental fund fnancal statements are reported usng the current fnancal resources measurement focus and the modfed accrual bass of accountng. Revenues are recognzed as soon as they are both measurable and avalable. Revenues are consdered avalable when they are collectble wthn the current perod or soon enough thereafter to pay labltes of the current perod. For ths purpose, the government consders revenues to be avalable f they are collected wthn 60 days of the end of the current fscal perod. Expendtures generally are recorded when a lablty s ncurred, as under accrual accountng. However, debt servce expendtures, as well as expendtures related to compensated absences and clams and judgments, are recorded only when payment s due. Property taxes, franchse taxes, nterest and specal assessments are susceptble to accrual. Other recepts and taxes become measurable and avalable when cash s receved by the government and are recognzed as revenue at that tme. Enttlements and shared revenues are recorded at the tme of recept or earler f the accrual crtera s met. Expendturedrven grants are recognzed as revenue when the qualfyng expendtures have been ncurred and all other grant requrements have been met. The government reports the followng major governmental funds: The General fund s the government's prmary operatng fund. t accounts for all fnancal sources of the general government, except those requred to be accounted for n another fund. The Coal Severance Tax fund, a specal revenue fund, accounts for revenues and expendtures from a severance tax placed on coal that s dstrbuted to West Vrgna countes. The State Audtor's Offce requres an annual budget be submtted for approval for ths fund. The E-911 fund, a specal revenue fund, s used to account for the revenues and expendtures of the county's 911 emergency center. The government reports the followng blended component unt: The Buldng Commsson fund conssts of tems and amounts that provde facltes to the publc. The legally separate entty leases these facltes to the prmary government n accordance wth lease agreements whch mrror the securng debt requrements. The ntergovernmental lease agreements between the County and the Buldng Commsson were elmnated n these fnancal statements. The board promulgates rules and regulatons governng the usage and mantenance of the facltes. Addtonally, the government reports the followng fund types: The agency funds are custodal n nature (assets equal labltes) and do not present results of operatons or have a measurement focus. Agency funds are accounted for usng the full accrual bass of accountng. These funds are used to account for assets that Berkeley County, West Vrgna holds for others n an agency capacty. 19

25 BERKELEY COUNTY, WEST VRGNA NOTES TO THE FNANCAL STATEMENTS For the Fscal Year Ended June 30,2007 l Berkeley County, West Vrgna follows GASB gudance as applcable to propretary funds and FASB Statements and nterpretatons, Accountng Prncples Board Opnons and Accountng Research Bulletns ssued on or before November 30, 1989 that do not contlct wth GASB Pronouncements n both the government-wde and propretary fund fnancal statements. As a general rule the effect of nterfund actvty has been elmnated from the government-wde fnancal statements. Amounts reported as program revenues nclude 1) charges to customers or applcants for goods, servces, or prvleges provded, 2) operatng grants and contrbutons, and 3) captal grants and contrbutons, ncludng specal assessments. ntemally dedcated resources are reported as general revenues rather than program revenues. Lkewse, general revenues nclude all taxes. Propretary funds dstngush operatng revenues and expenses from nonoperatng tems. Operatng revenues and expenses generally result from provdng servces n connecton wth a propretary fund's prncpal ongong operatons. The prncpal operatng revenue of the Berkeley County Buldng Commsson, a blended component unt, s charges to customers for servces. Operatng expenses for the enterprse fund nclude the cost of servces, admnstratve expenses, and deprecaton of captal assets. All revenues and expenses not meetng ths defnton are reported as nonoperatng revenues and expenses. D. Assets, Labltes, and Net Assets or Equty 1. Deposts and nvestments Berkeley County, West Vrgna's cash and cash equvalents are consdered to be cash on hand, demand deposts and short term nvestments wth orgnal maturtes of less than three months from the date of acquston. n accordance wth GASB Statement No. 31, "Accountng and Fnancal Reportngfor Certan nvestments and for External nvestment Pools", the County reports ts nvestments at far value, except for non-partcpatng nvestment contracts (certfcates of depost and repurchase agreements) whch are reported at cost, whch approxmates far value. All nvestment ncome, ncludng changes n far value of nvestments, are recognzed as revenue n the operatng statement. Far value s determned by quoted market prces. Short-term nvestments are reported at cost, whch approxmates far value. Securtes traded on a natonal or ntematonal exchange are valued at the last reported sales prce at current exchange rates. Managed funds related to the retrement systems not lsted on an establshed market are reported at estmated far value as determned by the respectve fund managers based on quoted sales prces of underlyng securtes. Cash deposts are reported at carryng amount whch reasonably estmates far value. The composton of nvestments and far values are presented n Note V.A. State statutes authorze the government to nvest n the State nvestment Pool or the Muncpal Bond Commsson or to nvest such funds n the followng classes of securtes: Oblgatons of the Unted States or any agency thereof, certfcates of depost (whch mature n less than one year), general and drect oblgatons of the state of West Vrgna; oblgatons of the federal mortgage assocaton; ndebtedness secured by frst len deed of trusts for property stuated wthn ths state f the payment s substantally nsured or guaranteed by the federal government; pooled mortgage trusts (subject to lmtatons); ndebtedness of any prvate corporaton that s properly graded as n the top two or three hghest ratng grades; nterest earnng deposts whch are fully nsured or collateralzed; and mutual funds regstered wth S.E.C. whch have fund assets over three hundred mllon dollars. 20 r l

26 BERKELEY COUNTY, WEST VRGNA NOTES TO THE FNANCAL STATEMENTS For the Fscal Year Ended June 30, Recevables and Payables nterfund Transactons Actvty between funds that are representatve of lendnglborrowng arrangements outstandng at the end of the fscal year are referred to as ether "nterfund recevables or payables" (.e., the current porton of nterfund loans) or "advances to/from other funds" (.e., the non-current porton of nterfund loans). All other outstandng balances between funds are reported as "due to/from other funds" and are consdered current. Any resdual balance outstandng between the governmental actvtes and the busness-type actvtes are reported n the government-wde fnancal statements as "nternal balances". Property Taxes Recevable Property taxes recevable were estmated to be $501,609; ths amount s net of an allowance for uncollectable taxes 0[$126,530 and represent approxmately 80% percent of the property taxes outstandng at June 30,2007. All current taxes assessed on real and personal property may be pad n two nstallments; the frst nstallment s payable on September frst of the year for whch the assessment s made, and becomes delnquent on October frst; the second nstallment s payable on the frst day of the followng March and becomes delnquent on Aprl frst. Taxes pad on or before the date when they are payable, ncludng both frst and second nstallments, are subject to a dscount of two and one-half percent. _f the taxes are not pad on or before the date n whch they become delnquent, ncludng both frst and second nstallments, nterest at the rate of nne percent per annum s added from the date they become delnquent untl the date they are pad. Taxes pad on or before the due date are allowed a two and one half percent dscount. A tax len s ssued for all unpad real estate taxes as of the date of the sherffs sale and these lens are sold between October 14th and November 23rd of each year. Sxty days of estmated property tax collectons are recorded n revenues at the end of each fscal year. All countes wthn the state are authorzed to levy taxes not n excess of the followng maxmum leves per $100 of assessed valuaton: On Class property, fourteen and three-tenths cents (14.30 cents); On Class property, twentyeght and sx-tenths cents (28.60 cents); On Class property, ffty-seven and two-tenths cents (57.20 cents) On Class V property, ffty-seven and two-tenths cents (57.20 cents). n addton, countes may provde for an electon to lay an excess levy, the rates not to exceed statutory lmtatons, provded at least sxty percent of the voters cast ballots n favor of the excess levy. The rates leved by the County per $100 of assessed valuaton for each class of property for the fscal year ended June 30,2007, were as follows: Assessed Current Classof ValuatonFor Expense Property Tax Purposes Per $100 Class $ 6,714, Cents Class $ 2,503,551, Cents Class $ 1,093,573, Cents ClassV $ 361,529, Cents 3. nventores and Prepad tems There are no materal nventores mantaned; therefore they do not appear on the fnancal statements. 21

27 BERKELEY COUNTY, WEST VRGNA NOTES TO THE FNANCAL STATEMENTS For the Fscal Year Ended June 30, Restrcted Assets Certan assets of the Berkeley County Buldng Commsson are classfed as restrcted assets because ther use s restrcted by bond or loan agreements. 5. Captal Assets and Deprecaton Captal assets, whch nclude property, plant and equpment, are reported n the applcable governmental or busnesstype actvtes columns n the government-wde fnancal statements. Captal assets are defned by the government as assets wth an ntal, ndvdual cost of $5,000 or more and estmated to have a useful lfe n excess of one year. Such assets are recorded at hstorcal cost or estmated hstorcal cost f purchased or constructed. Donated captal assets are recorded at estmated far market value at the date of donaton. The costs of normal mantenance and repars that do not add to the value of the assets or materally extend assets lves are not captalzed. Major outlays for captal assets and mprovements are captalzed n propretary funds as projects are constructed. nterest ncurred durng the constructon phase of propretary fund captal assets s reflected n the captalzed value of the asset constructed, net of nterest earned on the nvested proceeds durng the same perod. The County captalzed $1,153,039 of nterest expense, net of $219,857 of nterest ncome, for the year ended June 30, The government deprecates the captal assets usng the straght-lne method. Captal assets deprecaton and captalzaton polces are defned by the government as follows: Straght-lne Captalze/ Asset Years Deprecate Land not applcable Captalze only Land mprovement 20 to 30 years 5,000 Buldng 40 years 5,000 Buldng mprovements 20 to 25 years 5,000 Constructon n progress not applcable Captalze only Equpment 5 to 10 years 5,000 Vehcles 5 to 10 years 5,000 nfrastructure 40 to 50 years 100,

28 BERKELEY COUNTY, WEST VRGNA NOTES TO THE FNANCAL STATEMENTS For the Fscal Year Ended June 30, Compensated Absences t s the government's polcy to permt employees to accumulate earned but unused vacaton and sck pay benefts. All vacaton pay s accrued when ncurred n the government-wde, propretary, and fducary fund fnancal statements n accordance wth GASB Statement No. 16, Accountng for Compensated Absences. Vacaton and sck leave benefts are accrued on a calendar year begnnng January 1, and endng December 31. Sck leave benefts are accrued at the rate of one and one half days per month and an unlmted amount of sck leave benefts can be carred forward to the followng calendar year. Employees earn vacaton benefts based on the years of servce as follows and no more than 30 days of accrued annual leave can be carred forward to the followng calendar year: Years of Vacaton Benefts per Servce Month o to days 5 to days 10 to days 15 and over 2.00 days When a permanent full tme employee termnates employment wth the county or retres, the employee has the opton of recevng payment at current salary rate for any unused accrued vacaton days, but no payment s made for unused sck leave. f the employee s actually retrng, the employee has the opton of applyng accrued vacaton and sck leave days for addtonal servce tme for retrement. f the employee s not retrng and termnates employment wth the county for other reasons and has the opton of re-employment at a later date, any unused sck leave would be renstated f re-employment occurred wthn two year of the employee's termnaton of employment wth the county. 7. Long-Term Oblgatons n the government-wde fnancal statements, and propretary fund types n the fund fnancal statements, long-term debt and other long-term oblgatons are reported as labltes n the applcable governmental actvtes, busness-type actvtes, or propretary fund type statement of net assets. Bond premums and dscounts, as well as ssuance costs, are deferred and amortzed over the lfe of the bonds usng the straght lne method. Bonds payable are reported net of the applcable bond premum or dscount. Bond ssuance costs are reported as deferred charges and amortzed over the term of the related debt. n the fund fnancal statements, governmental fund types recognze bond premums and dscounts, as well as bond ssuance costs, durng the current perod. The face amount of debt ssued s reported as other fnancng sources. Premums receved on debt ssuances are reported as other fnancng sources whle dscounts on debt ssuances are reported as other fnancng uses. ssuance costs, whether or not wthheld from the actual debt proceeds receved, are reported as debt servce expendtures. 8. Fund Equty n the fund fnancal statements, governmental funds report reservatons of fund balance for amounts that are not avalable for appropraton or are legally restrcted by outsde partes for use for a specfc purpose. Desgnatons of fund balance represent tentatve management plans that are subject to change. 23

29 BERKELEY COUNTY, WEST VRGNA NOTES TO THE FNANCAL STATEMENTS For the Fscal Year Ended June 30, RECONCLATON OF GOVERNMENT-WDE AND FUND FNANCAL STATEMENTS " A. Explanaton of Certan Dfferences Between the Governmental Fund Balance Sheet and the Government-wde Statement of Net Assets The governmental fund balance sheet ncludes a reconclaton between fund balance total governmental funds and net assets-governmental actvtes as reported n the government-wde statement of net assets. The detals of ths $7,158,323 dfference are as follows: Captal assets Deferred taxes Compensated absences Leases payable $ 13,091, ,542 (2,112,751) (4,141,023) Net adjustment to decrease fund balancetotal governmental funds to arrve at net assets-governmental actvtes $ ==7=,1=5=8,=32=3= B. Explanaton of Certan Dfferences Between the Governmental Fund Statement of Revenues, Expendtures, and Changes n Fund Balance and the Government-wde Statement of Actvtes The governmental fund statement of revenues, expendtures, and changes n fund balances ncludes a reconclaton between net changes n fund balances-total governmental funds and changes n net assets of governmental actvtes as reported n the government-wde statement of actvtes. The detals of the $43,136 dfference are as follows: Captal outlays expendtures $ 1,345,415 Deprecaton expense (1,278,858) Current year lease payments 595,635 Current year addton to compensated absences (709,556) Current year addton to deferred taxes 4,228 Net adjustment to ncrease net change n fund balance-total governmental funds to arrve at changes n net assets of governmental actvtes $ (43,136). STEWARDSHP, COMPLANCE AND ACCOUNTABLTY A. Budgetary nformaton Annual budgets are adopted on a bass consstent wth generally accepted accountng prncples for the General Fund and the Coal Severance Tax Specal Revenue Fund. All annual appropratons lapse at fscal year end. Berkeley County, West Vrgna prepares ts budget on the cash bass of accountng. Therefore, a reconclaton has been performed on the Statement of Revenues, Expendtures and Changes n Fund Balance - Budget and Actual for both the General and Coal Severance Tax Funds. 24

30 BERKELEY COUNTY, WEST VRGNA NOTES TO THE FNANCAL STATEMENTS For the Fscal Year Ended June 30, Pror to March 2nd of each year, the varous elected offcals submt to the county commsson proposed requests for ther respectve offces for the fscal year commencng July 1. Upon revew and approval of these requests, the county commsson prepares proposed budgets on forms prescrbed by the State Audtor and submts them to the State Audtor by March 28 for approval. The county commsson then reconvenes on the thrd Tuesday n Aprl to hear objectons from the publc and to formally lay the levy. The approprated budget s prepared by fund, functon and department. Transfers of appropratons between departments and revenue related revsons to the budget requre approval from the governng councl and then submsson to the State Audtor for approval. Revsons become effectve when approved by the State Audtor and budgeted amounts n the fnancal statements reflect only such approved amounts. The governng body made the followng materal supplementary budgetary appropratons throughout the year. Descrpton Amount ncrease n Ad Valorem Taxes revenue ncrease n other tax revenue ncrease n lcense and permts revenue ncrease n charges for servce revenue ncrease n nterest revenue ncrease n mscellaneous revenues ncrease n rembursements revenue ncrease n general government expendtures ncrease n health and santaton expendtures ncrease n culture and recreaton expendtures Decrease n publc safety expendtures Decrease n captal outlay expendtures $ 113, , , , ,635 50, ,112 3,133,392 56, ,936 (47,614) (277,422) Encumbrance accountng s employed as an extenson of the formal budgetary process. Encumbrances (e.g. purchase orders, contracts) are reported as reservatons of fund balance and do not consttute expendtures or labltes because the commtments wll be re-approprated and honored durng the subsequent year. B. Excess of Expendtures Over Appropratons For the year ended June 30, 2007, expendtures exceeded appropratons n several non major specal revenue funds. These over expendtures were funded by avalable fund balance. 25

31 BERKELEY COUNTY, WEST VRGNA NOTES TO THE FNANCAL STATEMENTS For the Fscal Year Ended June 30,2007 V. DETALED NOTES ON ALL FUNDS A. Deposts and nvestments At year end the government's nvestment balances were as follows: nvestments Maturtes Far Value Prme Oblgatons Fund Daly s 4,560,517 Total nvestments $ 4,560,517 nterest Rate Rsk: nterest rate rsk s the rsk that changes n nterest rates demanded by the market wll adversely affect the value of an nvestment..the government does not have a polcy on nterest rate rsk. Credt Rsk: Credt rsk s the rsk that the ssuer wll not fulfll ts oblgaton to the holder of the nvestment. does not have a polcy for credt rsk n addton to state regulatons. The government Concentraton of Credt Rsk: Concentraton of credt rsk s the rsk of loss attrbuted to the magntude of an entty's nvestment n a sngle ssuer. The government does not have a polcy for concentraton of credt rsk. n accordance wth GASB Statement No. 40, "Deposts and nvestment Rsk Dsclosure" requres dsclosure when the nvestment n anyone ssue equals or exceeds 5% of the total amount of nvestments. At year end, the government had the followng nvestments held wth these ssuers: ssuer Far Value Percent Prme Oblgatons Fund $ 4,560, % Custodal Credt Rsk - Deposts Custodal rsk s the rsk that n the event of a bank falure, the County's deposts may not be returned. The County does not have a depost polcy for custodal credt rsk; however, WV State Code requres the county commsson to request and approve a bond wth good and suffcent suretes payable to the State of West Vrgna, n a sum as the county commsson shall drect, and whch may not be less than the maxmum sum that s deposted n the depostory at anyone tme. As of June 30, 2007, the County reported deposts of $4,512,740; of the bank balance, $100,000 was covered by Federal Depost nsurance Corporaton coverage. The remanng balance of $4,412,740 was collateralzed wth securtes held by the pledgng fnancal nsttuton's trust department or agent but not n the County's name. A reconclaton of cash and nvestments as shown on the Statement of Net Assets of the prmary government s as follows: 26 1f