TN Comptroller's FY2017 Audit of Grundy County

ANNUAL FINANCIAL REPORT
GRUNDY COUNTY, TENNESSEE

FOR THE YEAR ENDED JUNE 30, 2017
DIVISION OF LOCAL GOVERNMENT AUDIT

ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2017
COMPTROLLER OF THE TREASURY

JUSTIN P. WILSON
DIVISION OF LOCAL GOVERNMENT AUDIT

JAMES R. ARNETTE
Director
STEVE REEDER, CPA, CGFM, CFE

Audit Manager
DEVAN McDOWELL, CFE
MICHAEL FORD, CPA, CGFM JENI PALADENI, CISA
Auditor 4 State Auditors
This financial report is available at www.comptroller.tn.gov
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TABLE OF CONTENTS
Exhibit Page(s)
Summary of Audit Findings 6-7
INTRODUCTORY SECTION 8
Grundy County Officials 9
FINANCIAL SECTION 10
Independent Auditor's Report 11-15

BASIC FINANCIAL STATEMENTS: 16
Government-wide Financial Statements:
Statement of Net Position A 17-18
Statement of Activities B 19-20
Fund Financial Statements:
Governmental Funds:
Balance Sheet C-1 21-22
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Position C-2 23
Statement of Revenues, Expenditures, and Changes in
Fund Balances C-3 24-25
Reconciliation of the Statement of Revenues, Expenditures,
and Changes in Fund Balances of Governmental Funds
to the Statement of Activities C-4 26
Statements of Revenues, Expenditures, and Changes in Fund
Balances – Actual (Budgetary Basis) and Budget:
General Fund C-5 27-28
Solid Waste/Sanitation Fund C-6 29
Highway/Public Works Fund C-7 30-31
Proprietary Fund:
Statement of Net Position D-1 32
Statement of Revenues, Expenses, and Changes in Net Position D-2 33
Statement of Cash Flows D-3 34
Fiduciary Funds:
Statement of Fiduciary Assets and Liabilities E 35
Index and Notes to the Financial Statements 36-87
REQUIRED SUPPLEMENTARY INFORMATION: 88
Schedule of Changes in Net Pension Liability (Asset) and Related Ratios
Based on Participation in the Public Employee Pension Plan
of TCRS – Primary Government F-1 89
Schedule of Contributions Based on Participation in the Public Employee
Pension Plan of TCRS – Primary Government F-2 90
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Exhibit Page(s)
Schedule of Contributions Based on Participation in the Teacher

Pension Plan of TCRS – Discretely Presented Grundy
County School Department F-3 91
Legacy Pension Plan of TCRS – Discretely Presented Grundy
Schedule of Proportionate Share of the Net Pension Asset in the
Teacher Pension Plan of TCRS – Discretely Presented
Grundy County School Department F-5 93
Schedule of Proportionate Share of the Net Pension Asset in the
Teacher Legacy Pension Plan of TCRS – Discretely Presented
Grundy County School Department F-6 94
Schedule of Funding Progress – Other Postemployment Benefits
Plans – Primary Government and Discretely Presented Grundy
Notes to the Required Supplementary Information 96
COMBINING AND INDIVIDUAL FUND FINANCIAL
STATEMENTS AND SCHEDULES: 97
Nonmajor Governmental Funds: 98-99
Combining Balance Sheet G-1 100-101
Combining Statement of Revenues, Expenditures, and Changes
in Fund Balances G-2 102-105
Schedules of Revenues, Expenditures, and Changes in Fund
Balances – Actual and Budget:
Courthouse and Jail Maintenance Fund G-3 106
Industrial/Economic Development Fund G-4 107
Drug Control Fund G-5 108
Major Governmental Fund: 109
Schedule of Revenues, Expenditures, and Changes in Fund
Balance – Actual and Budget:
General Debt Service Fund H 110
Fiduciary Funds: 111
Combining Statement of Fiduciary Assets and Liabilities I-1 112
Combining Statement of Changes in Assets and Liabilities –
All Agency Funds I-2 113
Component Unit:
Discretely Presented Grundy County School Department: 114
Statement of Activities J-1 115
Balance Sheet – Governmental Funds J-2 116-117
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Position J-3 118
Statement of Revenues, Expenditures, and Changes in Fund
Balances – Governmental Funds J-4 119-120
Reconciliation of the Statement of Revenues, Expenditures,
and Changes in Fund Balances of Governmental Funds
to the Statement of Activities J-5 121
4
Exhibit Page(s)
Schedules of Revenues, Expenditures, and Changes in Fund

Balances – Actual (Budgetary Basis) and Budget:
General Purpose School Fund J-6 122-124
School Federal Projects Fund J-7 125
Central Cafeteria Fund J-8 126
Statement of Fiduciary Net Position J-9 127
Statement of Changes in Fiduciary Net Position J-10 128
Miscellaneous Schedules: 129
Schedule of Changes in Long-term Other Loans, Bonds,
and Notes K-1 130-131
Schedule of Long-term Debt Requirements by Year K-2 132-133
Schedule of Transfers - Primary Government and
Discretely Presented Grundy County School Department K-3 134
Schedule of Salaries and Official Bonds of Principal Officials –
Primary Government and Discretely Presented Grundy
County School Department K-4 135
Schedule of Detailed Revenues – All Governmental Fund Types K-5 136-147
Schedule of Detailed Revenues – All Governmental Fund Types –
Discretely Presented Grundy County School Department K-6 148-151
Schedule of Detailed Expenditures – All Governmental Fund Types K-7 152-165
Schedule of Detailed Expenditures – All Governmental Fund Types –
Discretely Presented Grundy County School Department K-8 166-177
Schedule of Detailed Receipts, Disbursements, and Changes in
Cash Balance – City Agency Fund K-9 178
SINGLE AUDIT SECTION 179
Independent Auditor's Report on Internal Control Over Financial Reporting and

on Compliance and Other Matters Based on an Audit of Financial Statements
Performed in Accordance With Government Auditing Standards 180-181
Independent Auditor's Report on Compliance for Each Major Program and on
Internal Control Over Compliance and on the Schedule of Expenditures of
Federal Awards Required by the Uniform Guidance
Expenditures of Federal Awards Required by Uniform Guidance 182-184
Schedule of Expenditures of Federal Awards and State Grants 185-186
Summary Schedule of Prior-year Findings 187
Schedule of Findings and Questioned Costs 188-196
Management's Corrective Action Plan 197-207
Best Practice 208
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Summary of Audit Findings
Annual Financial Report
Grundy County, Tennessee
For the Year Ended June 30, 2017
Scope
We have audited the basic financial statements of Grundy County as of and for the year
ended June 30, 2017.
Results
Our report on the governmental activities and the aggregate discretely presented component
units is qualified because the financial statements do not include all liabilities for the
Tennessee Consolidated Retirement System. Our report on the business-type activities, each
major fund, and the aggregate remaining fund information is unmodified.
Our audit resulted in ten findings and recommendations, which we have reviewed with
Grundy County management. Detailed findings, recommendations, and management’s
responses are included in the Single Audit section of this report.
Findings
The following are summaries of the audit findings:
OFFICE OF COUNTY MAYOR
♦ All eligible employees do not participate in the Tennessee Consolidated Retirement

System.
♦ Expenditures exceeded appropriations.
OFFICE OF HIGHWAY SUPERINTENDENT
♦ The Highway Department was not properly reimbursed for work performed for other
governmental entities.
OFFICE OF DIRECTOR OF SCHOOLS
♦ The School Federal Projects Fund had a cash overdraft of $196,953 at June 30, 2017.
♦ The Little Jackets Daycare did not properly account for cash maintained in its bank
account.
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♦ The School Department had budget deficiencies.
OFFICE OF TRUSTEE
♦ The checking system has not been implemented properly.

♦ The trustee paid checks issued by the School Federal Projects Fund that exceeded
available funds.
♦ Commissions were not paid to the county monthly.
♦ Monthly reports of taxes collected were not made on or before the tenth of the following
month.
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INTRODUCTORY SECTION
8
Grundy County Officials
June 30, 2017
Officials
Michael Brady, County Mayor

Hubert Hargis, Highway Superintendent
Jessie Kinsey, Director of Schools
Tyler McCullough, Trustee
Joanne Childers, Assessor of Property
Tammy Sholey, County Clerk
Melody Oliver, Circuit and General Sessions Courts Clerk
Phyllis Dent, Clerk and Master
Gayle VanHooser, Register of Deeds
Clint Shrum, Sheriff
Board of County Commissioners
Daniel Crabtree, Chairman

Gary Brewer
Mike Cordell
David Griswold
John Hargis II
Dennis Jones
David Lockhart
Danny Lusk
Charles Rollins
Board of Education
Robert Foster Jr, Chairman

Kasey Anderson
Paul Gallagher
Chris Grooms
Janie Layne
Gary Melton
Reuben Newsome
Chris Snyder
Vacant
Audit Committee
Brenda Andy, Chairman

Danny Lusk
Rusty Payne
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FINANCIAL SECTION
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Independent Auditor's Report
Grundy County Mayor and

To the County Mayor and Board of County Commissioners:
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the
business-type activities, the aggregate discretely presented component units, each major
fund, and the aggregate remaining fund information of Grundy County, Tennessee, as of
and for the year ended June 30, 2017, 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.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the
United States of America and the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States.
Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free from material misstatement.
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An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor's
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity's preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entity's internal control. Accordingly, we express no such opinion. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our audit opinions.
Summary of Opinions
Opinion Unit Type of Opinion
Governmental Activities Qualified
Aggregate Discretely Presented Component Units Qualified
Business-type Activities Unmodified
General Fund Unmodified
Solid Waste/Sanitation Fund Unmodified
Highway/Public Works Fund Unmodified
General Debt Service Fund Unmodified
Aggregate Remaining Fund Information Unmodified
Basis for Qualified Opinions on Governmental Activities and the Aggregated

Discretely Presented Component Units
As discussed in Note III.D. to the financial statements, Grundy County did not comply with
mandatory membership requirements of the Tennessee Consolidated Retirement System,
which are established by state statute. Consequently, the net pension liability (asset)
established by the actuary and recorded in the financial statements for the agent pension
plan administered by the Tennessee Consolidated Retirement System does not include a
liability for the current and former employees who have been illegally excluded from the
pension system. The agent plan includes employees of the primary government as well as
non-certified employees of the discretely presented Grundy County School Department.
The amount by which this departure would affect the assets, deferred outflows, liabilities,
deferred inflows, net position, and expenses of the governmental activities has not been
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determined. Because non-certified employees of the discretely presented School Department
are included in the agent plan, any adjustment necessary to reported plan amounts due to
noncompliance by the primary government may also affect the allocation of reported plan
amounts between the primary government and the discretely presented School
Department. The amount of such adjustment, if any, that would have been required to
assets, deferred outflows, liabilities, deferred inflows, net position, and expenses of the
aggregate discretely presented component units, had the primary government complied
with the statutory membership requirements of the Tennessee Consolidated Retirement
System, has not been determined.
Qualified Opinions
In our opinion, except for the matter described in the “Basis for Qualified Opinions on
Governmental Activities and the Aggregate Discretely Presented Component Units”
paragraph above, the financial statements referred to above present fairly, in all material
respects, the respective financial position of the governmental activities and the aggregate
discretely presented component units of Grundy County, Tennessee, as of June 30, 2017,
and the respective changes in financial position thereof for the year then ended in
accordance with accounting principles generally accepted in the United States of America.
Unmodified Opinions
In our opinion, the financial statements referred to above present fairly, in all material
respects, the respective financial position of the business-type actities, each major fund, and
the aggregate remaining fund information of Grundy County, Tennessee, as of June 30,
2017, and the respective changes in financial position for the year then ended, and the
respective budgetary comparisons for the General, Solid Waste/Sanitation, and
Highway/Public Works funds for the year then ended in accordance with accounting
principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
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
opinion on the basic financial statements is not affected by this missing information.
Accounting principles generally accepted in the United States of America require that the
schedule of changes in the county’s net pension liability and related ratios, schedules of
county and school contributions, schedule of school’s proportionate share of the net pension
liability, and schedule of funding progress - other postemployment benefit plans on pages 89-
96 be presented to supplement the basic financial statements. Such information, although not
a part of the basic financial statements, is required by the Governmental Accounting
Standards Board who considers it to be an essential part of financial reporting for placing the
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basic financial statements in an appropriate operational, economic, or historical context. We
have applied certain limited procedures to the required supplementary information in
accordance with auditing standards generally accepted in the United States of America,
which consisted of inquiries of management about the methods of preparing the information
and comparing the information for consistency with management's responses to our inquiries,
the basic financial statements, and other knowledge we obtained during our audit of the basic
financial statements. We do not express an opinion or provide any assurance on the
information because the limited procedures do not provide us with sufficient evidence to
express an opinion or provide any assurance.
Supplementary and Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements
that collectively comprise Grundy County’s basic financial statements. The introductory
section, combining and individual nonmajor fund financial statements, budgetary
comparison schedules of nonmajor governmental funds and the General Debt Service Fund,
combining and individual fund financial statements of the Grundy County School
Department (a discretely presented component unit), and miscellaneous schedules are
presented for purposes of additional analysis and are not a required part of the basic
financial statements. The schedule of expenditures of federal awards is presented for
purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations Part
200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Awards, and is also not a required part of the basic financial statements.
The combining and individual nonmajor fund financial statements, budgetary comparison
schedules of nonmajor governmental funds and the General Debt Service Fund, combining
and individual fund financial statements of the Grundy County School Department (a
discretely presented component unit), miscellaneous schedules, and schedule of
expenditures of federal awards 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 combining
and individual nonmajor fund financial statements, budgetary comparison schedules of
nonmajor governmental funds and the General Debt Service Fund, combining and
individual fund financial statements of the Grundy County School Department (a discretely
presented component unit), miscellaneous schedules, and schedule of expenditures of
federal awards are fairly stated, in all material respects, in relation to the basic financial
statements as a whole.
The introductory section has not been subjected to the auditing procedures applied in the
audit of the basic financial statements, and accordingly, we do not express an opinion or
provide any assurance on them.
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Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
December 18, 2017, on our consideration of Grundy 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 solely 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 effectiveness of Grundy
County’s 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 Grundy County’s internal control over financial reporting and compliance.
Very truly yours,
Justin P. Wilson
Comptroller of the Treasury
Nashville, Tennessee
December 18, 2017
JPW/yu
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BASIC FINANCIAL STATEMENTS
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Exhibit A

Statement of Net Position
June 30, 2017
Component Unit
Grundy
Primary Government County
Governmental Business-type School
Activities Activities Total Department
ASSETS
Cash $ 602 $ 0 $ 602 $ 0

Equity in Pooled Cash and Investments 8,892,618 31,659 8,924,277 3,908,719
Accounts Receivable 24,796 3,690 28,486 0
Due from Other Governments 563,466 0 563,466 769,418
Due from Other Funds 10,000 0 10,000 0
Due from Primary Government 0 0 0 3,373
Due from Component Units 1,048,433 0 1,048,433 0
Property Taxes Receivable 4,190,081 0 4,190,081 1,642,164
Allowance for Uncollectible Property Taxes (168,608) 0 (168,608) (66,081)
Net Pension Asset - Teacher Retirement Plan 0 0 0 12,258
Capital Assets:
Assets Not Depreciated:
Land 374,790 30,000 404,790 262,199
Assets Net of Accumulated Depreciation:
Buildings and Improvements 9,468,196 744,180 10,212,376 11,031,851
Infrastructure 1,975,532 373,064 2,348,596 0
Other Capital Assets 716,871 0 716,871 895,850
Total Assets $ 27,096,777 $ 1,182,593 $ 28,279,370 $ 18,459,751
DEFERRED OUTFLOWS OF RESOURCES
Pension Changes in Experience $ 25,892 $ 0 $ 25,892 $ 93,933

Pension Changes in Investment Earnings 245,151 0 245,151 1,914,274
Pension Other Deferrals 0 0 0 45,013
Pension Contributions After Measurement Date 155,210 0 155,210 935,276
Total Deferred Outflows of Resources $ 426,253 $ 0 $ 426,253 $ 2,988,496
LIABILITIES
Accounts Payable $ 0 $ 0 $ 0 $ 41,422

Accrued Payroll 0 0 0 23,661
Payroll Deductions Payable 313 0 313 326,117
Cash Overdraft 0 0 0 196,953
Due to Other Funds 0 10,000 10,000 0
Due to Primary Government 0 0 0 1,048,433
Due to Litigants, Heirs, and Others 2,229 0 2,229 0
Accrued Interest Payable 135,454 0 135,454 0
Noncurrent Liabilities:
Due Within One Year 1,545,387 0 1,545,387 0
Due in More Than One Year 12,502,764 0 12,502,764 2,041,157
Total Liabilities $ 14,186,147 $ 10,000 $ 14,196,147 $ 3,677,743
DEFERRED INFLOWS OF RESOURCES
Deferred Current Property Taxes $ 3,835,308 $ 0 $ 3,835,308 $ 1,503,123

Pension Changes in Experience 82,483 0 82,483 1,847,388
Pension Other Deferrals 0 0 0 47,716
Total Deferred Inflows of Resources $ 3,917,791 $ 0 $ 3,917,791 $ 3,398,227
(Continued)
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Exhibit A

Statement of Net Position (Cont.)
Component Unit
Grundy
Primary Government County
Governmental Business-type School
Activities Activities Total Department
NET POSITION
Net Investment in Capital Assets $ 4,900,043 $ 1,147,244 $ 6,047,287 $ 12,189,900

Restricted for:
General Government 548,856 0 548,856 0
Finance 4,165 0 4,165 0
Administration of Justice 142,574 0 142,574 0
Public Safety 333,445 0 333,445 0
Public Health and Welfare 735,731 0 735,731 0
Highways 1,160,804 0 1,160,804 0
Debt Service 4,162,586 0 4,162,586 0
Capital Outlay 432,052 0 432,052 0
Education 0 0 0 1,050,305
Pensions 0 0 0 12,258
Unrestricted (3,001,164) 25,349 (2,975,815) 1,119,814
Total Net Position $ 9,419,092 $ 1,172,593 $ 10,591,685 $ 14,372,277
The notes to the financial statements are an integral part of this statement.
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Exhibit B

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

Component Unit
Program Revenues
Operating Capital Grundy
Charges Grants Grants Primary Government County
for and and Governmental Business-type School
Functions/Programs Expenses Services Contributions Contributions Activities Activities Total Department
Primary Government:
Governmental Activities:
General Government $ 1,073,519 $ 122,007 $ 113,150 $ 166,994 $ (671,368) $ 0 $ (671,368) $ 0
Finance 510,178 321,573 0 0 (188,605) 0 (188,605) 0
Administration of Justice 552,459 239,432 9,000 0 (304,027) 0 (304,027) 0
Public Safety 2,196,676 449,599 58,733 0 (1,688,344) 0 (1,688,344) 0
Public Health and Welfare 1,049,797 2,850 101,018 0 (945,929) 0 (945,929) 0
Social, Cultural, and Recreational Services 92,672 0 7,000 0 (85,672) 0 (85,672) 0
Agriculture and Natural Resources 111,266 0 0 0 (111,266) 0 (111,266) 0
Highways/Public Works 1,718,874 83,528 1,661,660 314,633 340,947 0 340,947 0
Education 26,794 0 0 757,124 730,330 0 730,330 0
Interest on Long-term Debt 492,348 0 0 0 (492,348) 0 (492,348) 0
Total Governmental Activities $ 7,824,583 $ 1,218,989 $ 1,950,561 $ 1,238,751 $ (3,416,282) $ 0 $ (3,416,282) $ 0
Business-type Activities:
Waste Water $ 113,140 $ 52,474 $ 0 $ 0 $ 0 $ (60,666) (60,666) $ 0
Total Business-type Activities $ 113,140 $ 52,474 $ 0 $ 0 $ 0 $ (60,666) $ (60,666) $ 0
Total Primary Government $ 7,937,723 $ 1,271,463 $ 1,950,561 $ 1,238,751 $ (3,416,282) $ (60,666) $ (3,476,948) $ 0
Component Unit:
Grundy County School Department $ 19,912,992 $ 156,145 $ 3,590,924 $ 0 $ 0 $ 0 $ 0 $ (16,165,923)
Total Component Unit $ 19,912,992 $ 156,145 $ 3,590,924 $ 0 $ 0 $ 0 $ 0 $ (16,165,923)
(Continued)
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Exhibit B

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

Component Unit
Program Revenues
Operating Capital Grundy
Charges Grants Grants Primary Government County
for and and Governmental Business-type School
Functions/Programs Expenses Services Contributions Contributions Activities Activities Total Department
General Revenues:
Taxes:
Property Taxes Levied for General Purposes $ 3,731,394 $ 0 $ 3,731,394 $ 1,576,547
Property Taxes Levied for Debt Service 286,418 0 286,418 0
Local Option Sales Taxes 486,180 0 486,180 461,542
Litigation Tax - General 18,735 0 18,735 0
Litigation Tax - Special Purpose 32,413 0 32,413 0
Litigation Tax - Jail, Workhouse, or Courthouse 12,822 0 12,822 0
Hotel/Motel Tax 84,817 0 84,817 0
Business Tax 25,324 0 25,324 21,964
Other Local Taxes 631 0 631 1,114
Grants and Contributions Not Restricted to Specific Programs 168,968 0 168,968 14,909,123
Unrestricted Investment Earnings 127,047 26 127,073 0
Sale of Equipment 83,606 0 83,606 766
Miscellaneous 31,229 0 31,229 58,015
Total General Revenues $ 5,089,584 $ 26 $ 5,089,610 $ 17,029,071
Change in Net Position $ 1,673,302 $ (60,640) $ 1,612,662 $ 863,148

Net Position, July 1, 2016 7,745,790 1,233,233 8,979,023 13,509,129
Net Position, June 30, 2017 $ 9,419,092 $ 1,172,593 $ 10,591,685 $ 14,372,277
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Exhibit C-1

Balance Sheet
Governmental Funds
June 30, 2017
Nonmajor
Major Funds Funds
Other
Solid Highway / General Govern- Total
Waste / Public Debt mental Governmental
General Sanitation Works Service Funds Funds
ASSETS
Cash $ 0 $ 0 $ 0 $ 0 $ 602 $ 602

Equity in Pooled Cash and Investments 2,309,256 689,901 845,375 4,204,960 841,197 8,890,689
Accounts Receivable 170 0 14,152 0 10,474 24,796
Due from Other Governments 115,998 8,319 363,149 76,000 0 563,466
Due from Other Funds 10,743 0 1,929 0 0 12,672
Property Taxes Receivable 3,413,326 606,991 0 169,764 0 4,190,081
Allowance for Uncollectible Property Taxes (138,572) (20,764) 0 (9,272) 0 (168,608)
Total Assets $ 5,710,921 $ 1,284,447 $ 1,224,605 $ 4,441,452 $ 852,273 $ 13,513,698
LIABILITIES
Payroll Deductions Payable $ 81 $ 0 $ 232 $ 0 $ 0 $ 313

Due to Other Funds 0 0 0 0 743 743
Due to Litigants, Heirs, and Others 0 0 0 0 2,229 2,229
Total Liabilities $ 81 $ 0 $ 232 $ 0 $ 2,972 $ 3,285
Deferred Current Property Taxes $ 3,120,236 $ 567,851 $ 0 $ 147,221 $ 0 $ 3,835,308

Deferred Delinquent Property Taxes 147,269 17,514 0 12,649 0 177,432
Other Deferred/Unavailable Revenue 0 0 227,858 38,000 0 265,858
Total Deferred Inflows of Resources $ 3,267,505 $ 585,365 $ 227,858 $ 197,870 $ 0 $ 4,278,598
(Continued)
21
Exhibit C-1

Balance Sheet
Governmental Funds (Cont.)
Nonmajor
Major Funds Funds
Other
FUND BALANCES
Restricted:
Restricted for General Government $ 9,903 $ 0 $ 0 $ 0 $ 538,953 $ 548,856
Restricted for Finance 4,165 0 0 0 0 4,165
Restricted for Administration of Justice 142,574 0 0 0 0 142,574
Restricted for Public Safety 23,097 0 0 0 310,348 333,445
Restricted for Public Health and Welfare 19,135 699,082 0 0 0 718,217
Restricted for Highways/Public Works 0 0 996,515 0 0 996,515
Restricted for Capital Outlay 432,052 0 0 0 0 432,052
Restricted for Debt Service 0 0 0 4,243,582 0 4,243,582
Unassigned 1,812,409 0 0 0 0 1,812,409
Total Fund Balances $ 2,443,335 $ 699,082 $ 996,515 $ 4,243,582 $ 849,301 $ 9,231,815
Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 5,710,921 $ 1,284,447 $ 1,224,605 $ 4,441,452 $ 852,273 $ 13,513,698
22
Exhibit C-2

Reconciliation of the Balance Sheet of Governmental
Funds to the Statement of Net Position
June 30, 2017
Amounts reported for governmental activities in the statement

of net position (Exhibit A) are different because:
Total fund balances - balance sheet - governmental funds (Exhibit C-1) $ 9,231,815
(1) Capital assets used in governmental activities are not

financial resources and therefore are not reported in
the governmental funds.
Add: land $ 374,790
Add: buildings and improvements net of accumulated depreciation 9,468,196
Add: infrastructure net of accumulated depreciation 1,975,532
Add: other capital assets net of accumulated depreciation 716,871 12,535,389
(2) Long-term liabilities are not due and payable in the current period
and therefore are not reported in the governmental funds.
Less: bonds payable $ (10,122,618)
Less: notes payable (962,836)
Less: other loans payable (2,499,326)
Add: debt to be contributed by the School Department 1,048,433
Less: net pension liability - agent plan (33,833)
Less: compensated absences payable (21,728)
Less: other postemployment benefits liability (41,841)
Less: landfill closure/postclosure care costs (365,969)
Less: accrued interest on bonds and notes (135,454) (13,135,172)
(3) Amounts reported as deferred outflows of resources and deferred

inflows of resources related to pensions will be amortized and
recognized as components of pension expense in future years:
Add: deferred outflows of resources related to pensions $ 426,253
Less: deferred inflows of resources related to pensions (82,483) 343,770
(4) Other long-term assets are not available to pay for

current-period expenditures and therefore are deferred
in the governmental funds. 443,290
Net position of governmental activities (Exhibit A) $ 9,419,092
23
Exhibit C-3

Statement of Revenues, Expenditures,
and Changes in Fund Balances
Governmental Funds
Nonmajor
Major Funds Funds
Other
Revenues
Local Taxes $ 3,507,441 $ 395,841 $ 0 $ 778,671 $ 32,413 $ 4,714,366
Licenses and Permits 30,289 0 0 0 0 30,289
Fines, Forfeitures, and Penalties 64,841 0 0 0 25,582 90,423
Charges for Current Services 35,547 7 82,993 5 161 118,713
Other Local Revenues 89,508 12,752 65,499 127,047 67,126 361,932
Fees Received From County Officials 544,731 0 0 0 0 544,731
State of Tennessee 597,780 33,564 1,941,191 0 61,265 2,633,800
Federal Government 196,273 0 0 0 0 196,273
Other Governments and Citizens Groups 19,800 0 13,743 996,725 0 1,030,268
Total Revenues $ 5,086,210 $ 442,164 $ 2,103,426 $ 1,902,448 $ 186,547 $ 9,720,795
Expenditures
Current:
General Government $ 876,380 $ 0 $ 0 $ 0 $ 55,992 $ 932,372
Finance 459,549 0 0 0 161 459,710
Administration of Justice 517,475 0 0 0 0 517,475
Public Safety 2,029,916 0 0 0 22,564 2,052,480
Public Health and Welfare 229,485 587,810 0 0 0 817,295
Social, Cultural, and Recreational Services 47,608 0 0 0 0 47,608
Agriculture and Natural Resources 125,936 0 0 0 0 125,936
Other Operations 634,565 7,959 0 0 69,386 711,910
Highways 0 0 1,819,716 0 0 1,819,716
Operation of Non-Instructional Services 26,794 0 0 0 0 26,794
Debt Service:
Principal on Debt 0 0 0 1,430,409 0 1,430,409
Interest on Debt 0 0 0 375,254 0 375,254
(Continued)
24
Exhibit C-3

Governmental Funds (Cont.)
Nonmajor
Major Funds Funds
Other
Expenditures (Cont.)
Debt Service (Cont.)
Other Debt Service $ 0 $ 0 $ 0 $ 16,205 $ 0 $ 16,205
Capital Projects 0 0 0 0 637,915 637,915
Capital Projects - Donated 0 0 0 0 87,973 87,973
Total Expenditures $ 4,947,708 $ 595,769 $ 1,819,716 $ 1,821,868 $ 873,991 $ 10,059,052
Excess (Deficiency) of Revenues

Over Expenditures $ 138,502 $ (153,605) $ 283,710 $ 80,580 $ (687,444) $ (338,257)
Other Financing Sources (Uses)

Notes Issued $ 100,000 $ 0 $ 0 $ 0 $ 687,973 $ 787,973
Proceeds from Sale of Capital Assets 0 0 9,240 0 0 9,240
Insurance Recovery 20,968 0 0 0 0 20,968
Transfers In 0 0 0 85,284 0 85,284
Transfers Out 0 0 (85,284) 0 0 (85,284)
Total Other Financing Sources (Uses) $ 120,968 $ 0 $ (76,044) $ 85,284 $ 687,973 $ 818,181
Net Change in Fund Balances $ 259,470 $ (153,605) $ 207,666 $ 165,864 $ 529 $ 479,924
Fund Balance, July 1, 2016 2,183,865 852,687 788,849 4,077,718 848,772 8,751,891
Fund Balance, June 30, 2017 $ 2,443,335 $ 699,082 $ 996,515 $ 4,243,582 $ 849,301 $ 9,231,815
25
Exhibit C-4

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

of activities (Exhibit B) are different because:
Net change in fund balances - total governmental funds (Exhibit C-3) $ 479,924
(1) Governmental funds report capital outlays as expenditures. However in the,

statement of activities, the cost of these assets is allocated over their useful
lives and reported as depreciation expense. The difference between capital outlays
and depreciation is itemized as follows:
Add: capital assets purchased in the current period $ 1,271,603
Less: current-year depreciation expense (555,088) 716,515
(2) The net effect of various miscellaneous transactions involving capital

assets (sales, trade-ins, and donations) is to decrease net position.
Less: book value of capital assets disposed (17,465)
(3) Revenues in the statement of activities that do not provide current

financial resources are not reported in the funds.
Add: deferred delinquent property taxes and other deferred June 30, 2017 $ 443,290
Less: deferred delinquent property taxes and other deferred June 30, 2016 (426,599) 16,691
(4) The issuance of long-term debt (e.g., bonds, notes, other loans, leases) provides
current financial resources to governmental funds, while the repayment
of the principal of long-term debt consumes the current financial
resources of governmental funds. Neither transaction, however, has
any effect on net position. Also, governmental funds report the effect
of premiums, discounts, and similar items when debt is
first issued, whereas these amounts are deferred and amortized in the
statement of activities. This amount is the net effect of these differences
in the treatment of long-term debt and related items:
Less: note proceeds $ (787,973)
Add: principal payments on bonds 815,021
Add: principal payments on notes 197,012
Add: principal payments on other loans 418,376
Add: contributions to the School Department of note proceeds 87,973
Less: contributions from the School Department for notes and other loans (239,601) 490,808
(5) Some expenses reported in the statement of activities do not require

the use of current financial resources and therefore are not reported
as expenditures in the governmental funds.
Change in accrued interest payable $ (117,094)
Change in compensated absences payable (7,044)
Change in net pension liability/asset (204,018)
Change in deferred outflows related to pensions 248,009
Change in deferred inflows related to pensions 64,167
Change in other postemployment benefits liability (3,564)
Change in landfill closure/postclosure care costs 6,373 (13,171)
Change in net position of governmental activities (Exhibit B) $ 1,673,302
26
Exhibit C-5

Statement of Revenues, Expenditures, and Changes
in Fund Balance - Actual and Budget
General Fund
Variance
with Final
Budget -
Budgeted Amounts Positive
Actual Original Final (Negative)
Revenues
Local Taxes $ 3,507,441 $ 3,447,093 $ 3,447,093 $ 60,348
Licenses and Permits 30,289 49,650 49,650 (19,361)
Fines, Forfeitures, and Penalties 64,841 53,500 53,500 11,341
Charges for Current Services 35,547 32,450 32,450 3,097
Other Local Revenues 89,508 35,200 56,100 33,408
Fees Received From County Officials 544,731 510,500 510,500 34,231
State of Tennessee 597,780 342,900 369,780 228,000
Federal Government 196,273 0 546,653 (350,380)
Other Governments and Citizens Groups 19,800 4,500 14,500 5,300
Total Revenues $ 5,086,210 $ 4,475,793 $ 5,080,226 $ 5,984
Expenditures
General Government
County Commission $ 28,066 $ 28,524 $ 28,524 $ 458
Board of Equalization 2,000 2,000 2,000 0
Beer Board 198 400 400 202
Other Boards and Committees 0 1,000 1,000 1,000
County Mayor/Executive 184,817 162,690 187,983 3,166
County Attorney 21,045 14,000 20,000 (1,045)
Election Commission 170,132 187,054 188,024 17,892
Register of Deeds 103,526 105,206 105,853 2,327
County Buildings 366,596 204,878 383,047 16,451
Finance
Property Assessor's Office 161,074 166,155 167,770 6,696
County Trustee's Office 128,474 125,735 129,831 1,357
County Clerk's Office 170,001 169,680 171,943 1,942
Administration of Justice
Circuit Court 229,308 230,551 241,425 12,117
General Sessions Judge 143,892 143,952 145,399 1,507
Chancery Court 111,949 114,442 115,412 3,463
Juvenile Court 32,326 33,237 33,884 1,558
Public Safety
Sheriff's Department 866,255 926,026 959,260 93,005
Administration of the Sexual Offender Registry 350 1,800 1,800 1,450
Jail 1,072,544 1,162,602 1,210,502 137,958
Fire Prevention and Control 7,420 9,000 9,000 1,580
Rescue Squad 3,000 3,000 3,000 0
Other Emergency Management 43,643 44,744 44,744 1,101
County Coroner/Medical Examiner 7,500 9,000 9,000 1,500
Public Safety Grants Program 2,042 10,000 10,000 7,958
Other Public Safety 27,162 2,000 33,653 6,491
Public Health and Welfare
Local Health Center 64,680 51,537 73,741 9,061
Ambulance/Emergency Medical Services 125,000 125,000 125,000 0
Other Local Health Services 19,985 57,900 57,900 37,915
Regional Mental Health Center 0 2,000 2,000 2,000
General Welfare Assistance 643 0 10,000 9,357
Other Local Welfare Services 9,772 10,000 10,000 228
(Continued)
27
Exhibit C-5

General Fund (Cont.)
Variance
with Final
Budget -
Public Health and Welfare (Cont.)
Other Public Health and Welfare $ 9,405 $ 19,657 $ 24,657 $ 15,252
Social, Cultural, and Recreational Services
Libraries 47,608 46,084 48,023 415
Agriculture and Natural Resources
Agricultural Extension Service 90,850 77,050 95,349 4,499
Soil Conservation 35,086 45,986 46,956 11,870
Other Agriculture and Natural Resources 0 1,000 1,000 1,000
Other Operations
Tourism 3,934 2,000 4,000 66
Other Economic and Community Development 181,003 0 515,000 333,997
Veterans' Services 12,381 15,322 15,322 2,941
Other Charges 165,394 164,840 172,369 6,975
Contributions to Other Agencies 39,900 37,700 40,700 800
Employee Benefits 202,586 222,700 221,600 19,014
Miscellaneous 29,367 24,750 31,750 2,383
Operation of Non-Instructional Services
Early Childhood Education 26,794 27,820 27,820 1,026
Total Expenditures $ 4,947,708 $ 4,789,022 $ 5,726,641 $ 778,933

Over Expenditures $ 138,502 $ (313,229) $ (646,415) $ 784,917

Notes Issued $ 100,000 $ 0 $ 100,000 $ 0
Insurance Recovery 20,968 0 20,961 7
Total Other Financing Sources $ 120,968 $ 0 $ 120,961 $ 7
Net Change in Fund Balance $ 259,470 $ (313,229) $ (525,454) $ 784,924

Fund Balance, July 1, 2016 2,183,865 2,063,098 2,063,098 120,767
Fund Balance, June 30, 2017 $ 2,443,335 $ 1,749,869 $ 1,537,644 $ 905,691
28
Exhibit C-6

Solid Waste/Sanitation Fund
Variance
with Final
Budget -
Revenues
Local Taxes $ 395,841 $ 428,435 $ 428,435 $ (32,594)
Charges for Current Services 7 15 15 (8)
State of Tennessee 33,564 33,700 33,700 (136)
Total Revenues $ 442,164 $ 473,750 $ 473,750 $ (31,586)
Expenditures
Waste Pickup $ 33,462 $ 33,700 $ 33,700 $ 238
Convenience Centers 542,278 516,500 539,194 (3,084)
Landfill Operation and Maintenance 12,070 16,000 13,000 930
Other Operations
Other Charges 7,959 10,500 10,500 2,541
Total Expenditures $ 595,769 $ 576,700 $ 596,394 $ 625

Over Expenditures $ (153,605) $ (102,950) $ (122,644) $ (30,961)
Net Change in Fund Balance $ (153,605) $ (102,950) $ (122,644) $ (30,961)

Fund Balance, July 1, 2016 852,687 863,812 863,812 (11,125)
Fund Balance, June 30, 2017 $ 699,082 $ 760,862 $ 741,168 $ (42,086)
29
Exhibit C-7

in Fund Balance - Actual (Budgetary Basis) and Budget
Highway/Public Works Fund
Actual Variance
Revenues/ with Final
Actual Less: Expenditures Budget -
(GAAP Encumbrances (Budgetary Budgeted Amounts Positive
Basis) 7/1/2016 Basis) Original Final (Negative)
Revenues
Charges for Current Services $ 82,993 $ 0 $ 82,993 $ 50,000 $ 50,000 $ 32,993
Other Local Revenues 65,499 0 65,499 28,000 28,000 37,499
State of Tennessee 1,941,191 0 1,941,191 2,413,877 2,413,877 (472,686)
Other Governments and Citizens Groups 13,743 0 13,743 0 0 13,743
Total Revenues $ 2,103,426 $ 0 $ 2,103,426 $ 2,491,877 $ 2,491,877 $ (388,451)
Expenditures
Highways
Administration $ 132,543 $ 0 $ 132,543 $ 137,063 $ 139,563 $ 7,020
Highway and Bridge Maintenance 744,374 0 744,374 867,726 868,826 124,452
Operation and Maintenance of Equipment 190,541 0 190,541 234,500 245,000 54,459
Other Charges 111,386 0 111,386 119,324 114,824 3,438
Employee Benefits 252,765 0 252,765 253,000 274,962 22,197
Capital Outlay 388,107 (349,932) 38,175 551,000 541,400 503,225
Other Debt Service
Highways and Streets 0 0 0 86,000 0 0
Total Expenditures $ 1,819,716 $ (349,932) $ 1,469,784 $ 2,248,613 $ 2,184,575 $ 714,791

Over Expenditures $ 283,710 $ 349,932 $ 633,642 $ 243,264 $ 307,302 $ 326,340

Proceeds from Sale of Capital Assets $ 9,240 $ 0 $ 9,240 $ 0 $ 0 $ 9,240
Transfers Out (85,284) 0 (85,284) 0 (86,000) 716
Total Other Financing Sources $ (76,044) $ 0 $ (76,044) $ 0 $ (86,000) $ 9,956
(Continued)
30
Exhibit C-7

Highway/Public Works Fund (Cont.)
Actual Variance
Actual Less: Expenditures Budget -
Net Change in Fund Balance $ 207,666 $ 349,932 $ 557,598 $ 243,264 $ 221,302 $ 336,296
Fund Balance, July 1, 2016 788,849 (349,932) 438,917 398,528 398,528 40,389
Fund Balance, June 30, 2017 $ 996,515 $ 0 $ 996,515 $ 641,792 $ 619,830 $ 376,685
31
Exhibit D-1

Statement of Net Position
Proprietary Fund
June 30, 2017
Business-type
Activities -
Major
Enterprise
Fund
Waste
Water Fund
ASSETS
Current Assets:
Equity in Pooled Cash and Investments $ 31,659
Accounts Receivable 3,690
Total Current Assets $ 35,349
Noncurrent Assets:
Capital Assets:
Assets Not Depreciated:
Land $ 30,000
Assets Net of Accumulated Depreciation:
Buildings and Improvements 744,180
Infrastructure 373,064
Total Noncurrent Assets $ 1,147,244
Total Assets $ 1,182,593
LIABILITIES
Current Liabilities:
Due to Other Funds $ 10,000
Total Current Liabilities $ 10,000
Total Liabilities $ 10,000
NET POSITION
Net Investment in Capital Assets $ 1,147,244

Unrestricted 25,349
Total Net Position $ 1,172,593
32
Exhibit D-2

Statement of Revenues, Expenses, and Changes in Net Position
Proprietary Fund
Business-type
Activities -
Major
Enterprise
Fund
Waste
Water Fund
Operating Revenues
User Fees/Vending $ 52,474
Total Operating Revenues $ 52,474
Operating Expenses
Communication $ 1,317
Postal Charges 279
Other Contracted Services 22,257
Electricity 9,931
Water and Sewer 1,121
Testing 2,474
Other Supplies and Materials 6,380
Depreciation 68,845
Other Charges 536
Total Operating Expenses $ 113,140
Operating Loss $ (60,666)
Nonoperating Revenue/(Expenses)
Interest Income $ 26
Total Nonoperating Revenue/(Expenses) 26
Change in Net Position $ (60,640)

Net Position, July 1, 2016 1,233,233
Net Position, June 30, 2017 $ 1,172,593
33
Exhibit D-3

Statement of Cash Flows
Proprietary Fund
Business-type
Activities -
Major
Enterprise
Fund
Waste
Water Fund
Cash Flows from Operating Activities

Receipts from Customers $ 53,573
Payments to Vendors (33,759)
Other Payments (536)
Net Cash Provided By (Used In) Operating Activities $ 19,278
Cash Flows from Noncapital Financing Activities

Contributions to General Fund $ (27,029)
Net Cash Provided by (Used In) Noncapital Financing Activities $ (27,029)
Cash Flows from Investing Activities

Interest Earned $ 26
Net Cash Provided by (Used In) Investing Activities $ 26
Net Increase (Decrease) in Cash $ (7,725)

Cash, July 1, 2016 39,384
Cash, June 30, 2017 $ 31,659
Reconciliation of Net Operating Income (Loss)

to Net Cash Provided By (Used In) Operating Activities
Operating Income (Loss) $ (60,666)
Adjustments to Reconcile Net Operating Income (Loss)
to Net Cash Provided By (Used In) Operating Activities:
Depreciation 68,845
Changes in Assets and Liabilities:
(Increase) Decrease in Accounts Receivable 1,099
Increase (Decrease) in Due to Other Funds 10,000
Net Cash Provided By (Used In) Operating Activities $ 19,278
34
Exhibit E
Statement of Fiduciary Assets and Liabilities
Fiduciary Funds
June 30, 2017
Agency
Funds
ASSETS
Cash $ 1,185,989
Due from Other Governments 103,448
Total Assets $ 1,289,437
LIABILITIES
Due to Other Taxing Units $ 103,448

Due to Litigants, Heirs, and Others 1,185,989
Total Liabilities $ 1,289,437
35
Index of Notes to the Financial Statements
Note Page(s)
I. Summary of Significant Accounting Policies

A. Reporting Entity 37
B. Government-wide and Fund Financial Statements 38
C. Measurement Focus, Basis of Accounting, and Financial
Statement Presentation 39
D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and
Net Position/Fund Balance
1. Deposits and Investments 41
2. Receivables and Payables 42
3. Capital Assets 43
4. Deferred Outflows/Inflows of Resources 44
5. Compensated Absences 44
6. Long-term Obligations 45
7. Net Position and Fund Balance 46
E. Pension Plans 47
II. Reconciliation of Government-wide and Fund Financial Statements
A. Explanation of Certain Differences Between the Governmental Fund
Balance Sheet and the Government-wide Statement of Net Position 48
B. Explanation of Certain Differences Between the Governmental Fund
Statement of Revenues, Expenditures, and Changes in Fund Balances
and the Government-wide Statement of Activities 48
III. Stewardship, Compliance, and Accountability
A. Budgetary Information 49
B. Cash Overdraft 49
C. Expenditures Exceeded Appropriations 50
D. Noncompliance with Membership Requirements of the Tennessee
Consolidated Retirement System 50
IV. Detailed Notes on All Funds
A. Deposits and Investments 50
B. Capital Assets 52
C. Construction Commitments 55
D. Interfund Receivables, Payables, and Transfers 55
E. Long-term Obligations 57
F. On-Behalf Payments 62
V. Other Information
A. Risk Management 63
B. Accounting Changes 64
C. Contingent Liabilities 65
D. Landfill Closure/Postclosure Care Costs 65
E. Joint Venture 65
F. Retirement Commitments 66
G. Other Postemployment Benefits (OPEB) 83
H. Purchasing Laws 86
I. Subsequent Events 87
36
NOTES TO THE FINANCIAL STATEMENTS
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Grundy County’s financial statements are presented in accordance with generally

accepted accounting principles (GAAP). The Governmental Accounting Standards
Board (GASB) is responsible for establishing GAAP for state and local governments.
The following are the more significant accounting policies of Grundy County:
A. Reporting Entity
Grundy County is a public municipal corporation governed by an elected

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

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

simplified means of securing emergency services through a uniform
emergency number for the residents of Grundy County, and its governing
body is appointed by the Grundy County Commission. The district is funded
primarily through a service charge levied on telephone services. Before the
issuance of most debt instruments, the district must obtain the county
commission’s approval. The financial statements of the Grundy County
Emergency Communications District were not material to the component
units’ opinion unit and therefore have been omitted from this report.
37
The Grundy County School Department does not issue separate financial
statements from those of the county. Therefore, basic financial statements of
the School Department are included in this report as listed in the table of
contents. Complete financial statements of the Grundy County Emergency
Communications District can be obtained from its administrative office at the
following address:
Administrative Office:
Grundy County Emergency Communications District

P.O. Box 433
Altamont, TN 37301
B. Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement of Net

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

expenses of a given function are offset by program revenues. Direct expenses
are those that are clearly identifiable with a specific function. Program
revenues include (1) charges to customers or applicants who purchase, use, or
directly benefit from goods, services, or privileges provided by a given
function and (2) grants and contributions that are restricted to meeting the
operational or capital requirements of a particular function. Taxes and other
items not properly included among program revenues are reported instead as
general revenues.
Grundy County issues all debt for the discretely presented Grundy County
School Department. Net debt issues totaling $87,973 were contributed by the
county to the School Department during the year ended June 30, 2017.
Separate financial statements are provided for governmental funds,

proprietary funds, and fiduciary funds. Fiduciary funds are excluded from the
government-wide financial statements. Major individual governmental funds
38
and the major enterprise fund are reported as separate columns in the fund
financial statements.
C. Measurement Focus, Basis of Accounting, and Financial Statement

Presentation
The government-wide financial statements are reported using the economic

resources measurement focus and the accrual basis of accounting, as are the
proprietary fund and fiduciary funds financial statements, except for agency
funds, which have no measurement focus. Revenues are recorded when
earned, and expenses are recorded when a liability is incurred, regardless of
the timing of related cash flows. Property taxes are recognized as revenues
in the year for which they are levied. Grants and similar items are
recognized as revenue as soon as all eligibility requirements imposed by the
provider have been met.
Fund financial statements of Grundy County are organized into funds, each
of which is considered to be a separate accounting entity. Each fund is
accounted for by providing a separate set of self-balancing accounts that
constitute its assets, deferred outflow of resources, liabilities, deferred inflow
of resources, fund equity, revenues, and expenditures/expenses. Funds are
organized into three major categories: governmental, proprietary, and
fiduciary. An emphasis is placed on major funds within the governmental and
proprietary categories. Grundy County only reports one enterprise fund.
Separate financial statements are provided for governmental funds,

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

financial resources measurement focus and the modified accrual basis of
accounting. Revenues are recognized as soon as they become both measurable
and available. Revenues are considered to be available when they are
collectible within the current period or soon enough thereafter to pay
liabilities of the current period. For this purpose, the county considers
revenues other than grants to be available if they are collected within 30 days
after year-end. Grants and similar items are recognized as revenue as soon as
all eligibility requirements imposed by the provider have been met and the
revenues are available. Grundy County considers grants and similar
revenues to be available if they are collected within 60 days after year-end.
Expenditures are generally recognized under the modified accrual basis of
accounting when the related fund liability is incurred. Principal and interest
on long-term debt are recognized as fund liabilities when due or when
amounts have been accumulated in the General Debt Service Fund for
payments to be made early in the following year.
39
Property taxes for the period levied, in-lieu-of tax payments, sales taxes,
interest, and miscellaneous taxes are all considered to be susceptible to
accrual and have been recognized as revenues of the current period.
Applicable business taxes, litigation taxes, state-shared excise taxes, fines,
forfeitures, and penalties are not susceptible to accrual since they are not
measurable (reasonably estimable). All other revenue items are considered to
be measurable and available only when the county receives cash.
Proprietary and fiduciary funds financial statements are reported using the
economic resources measurement focus, except for agency funds, which have
no measurement focus, and the accrual basis of accounting. Revenues are
recognized when earned, and expenses are recorded when a liability is
incurred, regardless of the timing of related cash flows. Grants and similar
items are recognized as revenue as soon as all eligibility requirements
imposed by the provider have been met.
Grundy County reports the following major governmental funds:
General Fund – This is the county’s primary operating fund. It

accounts for all financial resources of the general government, except
those required to be accounted for in another fund.
Solid Waste/Sanitation Fund – This special revenue fund accounts

for transactions relating to the disposal of Grundy County’s solid
waste. Local taxes are the foundational revenues of this fund.
Highway/Public Works Fund – This special revenue fund accounts

for transactions of the county’s Highway Department. Local and state
gasoline/fuel taxes are the foundational revenues of this fund.
General Debt Service Fund – This fund accounts for the resources
accumulated and payments made for principal and interest on long-
term general obligation debt of governmental funds.
Grundy County reports the following major proprietary fund:
Waste Water Fund – This fund accounts for a waste water system,
which treats waste water for various industries and businesses in the
county.
Additionally, Grundy County reports the following fund types:
Capital Projects Funds – These funds are used to account for

various capital projects within the county.
Agency Funds – These funds account for amounts collected in an

agency capacity by the constitutional officers and local sales taxes
received from the state to be forwarded to the various cities in the
county. Agency funds are custodial in nature (assets equal liabilities)
40
and do not involve measurement of results of operations. They do,
however, use the accrual basis of accounting to recognize receivables
and payables.
The discretely presented Grundy County School Department reports the

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

operating fund for the School Department. It is used to account for
general operations of the School Department.
School Federal Projects Fund – This special revenue fund is used

to account for restricted federal revenues, which must be expended on
specific education programs.
Central Cafeteria Fund – This special revenue fund is used to

account for the cafeteria operations in each of the schools. USDA
School Lunch and Breakfast Programs and payments received from
the sale of meals are the foundational revenues of this fund.
Additionally, the School Department reports the following fund type:
Private Purpose Trust Fund – The Other Trust Fund is used to

account for savings bond awards given to Grundy County students
who win an essay contest and a spelling bee. Money for this fund was
provided by a citizen.
Amounts reported as program revenues include (1) charges to customers or

applicants for goods, services, or privileges provided; (2) operating grants and
contributions; and (3) capital grants and contributions. Internally dedicated
resources are reported as general revenues rather than as program revenues.
Likewise, general revenues include all taxes.
Proprietary funds distinguish operating revenues and expenses from

nonoperating items. The county has one enterprise fund used to account for
waste water treatment. Operating revenues and expenses generally result
from providing services in connection with the fund’s principal ongoing
operations.
D. Assets, Liabilities, Deferred Outflows/Inflows of Resources and Net

Position/Fund Balance
1. Deposits and Investments
For purposes of the Statement of Cash Flows, cash includes cash on

deposit with the county trustee.
State statutes authorize the government to make direct investments

in bonds, notes, or treasury bills of the U.S. government and
41
obligations guaranteed by the U.S. government or any of its agencies;
deposit accounts at state and federal chartered banks and savings and
loan associations; repurchase agreements; the State Treasurer’s
Investment Pool; bonds of any state or political subdivision rated A or
higher by any nationally recognized rating service; nonconvertible
debt securities of certain federal government sponsored enterprises;
and the county’s own legally issued bonds or notes.
The county trustee maintains a cash and internal investment pool

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

at the end of the fiscal year is referred to as due to/from other funds.
Property taxes receivable are shown with an allowance for

uncollectibles. The allowance for uncollectible property taxes is equal
to 2.13 percent of total taxes levied.
Property taxes receivable are recognized as of the date an enforceable

legal claim to the taxable property arises. This date is January 1 and
is referred to as the lien date. However, revenues from property taxes
are recognized in the period for which the taxes are levied, which is
the ensuing fiscal year. Since the receivable is recognized before the
period of revenue recognition, the entire amount of the receivable, less
an estimated allowance for uncollectible taxes, is reported as a
deferred inflow of resources as of June 30.
Property taxes receivable are also reported as of June 30 for the taxes
that are levied, collected, and reported as revenue during the current
fiscal year. These property taxes receivable are presented on the
balance sheet as a deferred inflow of resources to reflect amounts not
available as of June 30. Property taxes collected within 30 days of
42
year-end are considered available and accrued. The allowance for
uncollectible taxes represents the estimated amount of the receivable
that will be filed in court for collection. Delinquent taxes filed in court
for collection are not included in taxes receivable since they are
neither measurable nor available.
Property taxes are levied as of the first Monday in October. Taxes

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

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

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

infrastructure assets (e.g., roads, bridges, and similar items), are
reported in the governmental and business-type columns in the
government-wide financial statements. Capital assets are defined by
the government as assets with an initial, individual cost of $10,000
($15,000 for roads and bridges) or more and an estimated useful life of
more than three years. Such assets are recorded at historical cost or
estimated historical cost if purchased or constructed. Donated capital
assets are recorded at acquisition value at the date of donation.
The costs of normal maintenance and repairs that do not add to the
value of the asset or materially extend assets’ lives are not capitalized.
Major outlays for capital assets and improvements are capitalized as

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

government and the discretely presented School Department are
depreciated using the straight-line method over the following
estimated useful lives with salvage values of five percent:
43
Assets Years
Buildings and Improvements 20 - 40

Other Capital Assets 5 - 20
Infrastructure:
Roads 20 - 40
Bridges 40
4. Deferred Outflows/Inflows of Resources
In addition to assets, the Statement of Net Position will sometimes

report a separate section for deferred outflows of resources. This
separate financial statement element, deferred outflows of resources,
represents a consumption of net position that applies to a future
period(s) and so will not be recognized as an outflow of resources
(expense/expenditure) until then. The government has items that
qualify for reporting in this category. Accordingly, the items are
reported in the government-wide Statement of Net Position and the
governmental funds balance sheet. These items are for pension
changes in experience, pension changes in investment earnings,
pension changes in proportionate share of contributions, and employer
contributions made to the pension plan after the measurement date.
In addition to liabilities, the Statement of Net Position will sometimes

report a separate section for deferred inflows of resources. This
separate financial statement element, deferred inflows of resources,
represents an acquisition of net position that applies to a future
period(s) and so will not be recognized as an inflow of resources
(revenue) until that time. The government has items that qualify for
reporting in this category. Accordingly, the items are reported in the
government-wide Statement of Net Position and the governmental
funds balance sheet. These items are from the following sources:
current and delinquent property taxes, pension changes in experience,
pension changes in proportionate share of contributions, and various
receivables for revenues, which do not meet the availability criteria in
governmental funds. These amounts are deferred and recognized as an
inflow of resources in the period that the amounts become available.
5. Compensated Absences
Primary Government
The general policy of Grundy County does not allow for the
accumulation of vacation and sick days beyond the fiscal year-end,
except for the Highway Department, which permits the accumulation
of vacation and sick leave exceeding a normal year’s accumulation.
44
There is no liability for unpaid accumulated sick leave since the
Highway Department does not have a policy to pay any amounts when
employees separate from service with the department. All vacation
pay is accrued when incurred in the government-wide financial
statements for the county. A liability for vacation pay is reported in
governmental funds only if amounts have matured, for example, as a
result of employee resignations and retirements.
Discretely Presented Grundy County School Department
The general policy of the Grundy County School Department does not
allow for the accumulation of personal days beyond the fiscal year-end.
Professional personnel earn two days of personal leave a year and any
unused personal leave is converted to sick leave. Support personnel
receive one sick day for each month the employee works. Support
personnel may request and receive compensation for unused sick
leave, accumulated during the current school year, at the end of the
fiscal school year. A liability for sick leave is reported in governmental
funds only if amounts have matured, for example, as a result of
employee resignations and retirements.
6. Long-term Obligations
In the government-wide financial statements and the proprietary fund

type in the fund financial statements, long-term debt and other long-
term obligations are reported as liabilities in the applicable
governmental activities or proprietary fund type Statement of Net
Position. Debt premiums and discounts are deferred and amortized
over the life of the new debt using the straight-line method. Debt
issuance costs are expensed in the period incurred. In refunding
transactions, the difference between the reacquisition price and the
net carrying amount of the old debt is reported as a deferred outflow of
resources or a deferred inflow of resources and recognized as a
component of interest expense in a systematic and rational manner
over the remaining life of the refunded debt or the life of the new debt
issued, whichever is shorter.
In the fund financial statements, governmental funds recognize debt

premiums and discounts, as well as debt issuance costs, during the
current period. The face amount of debt issued is reported as other
financing sources. Premiums received on debt issuances are reported
as other financing sources, while discounts on debt issuances are
reported as other financing uses. Issuance costs, whether or not
withheld from the actual debt proceeds received, are reported as debt
service expenditures.
Only the matured portion (the portion that has come due for payment) of
long-term indebtedness, including bonds payable, is recognized as a
liability and expenditure in the governmental fund financial statements.
45
Liabilities and expenditures for other long-term obligations, including
compensated absences and landfill closure/postclosure care costs, are
recognized to the extent that the liabilities have matured (come due for
payment) each period.
7. Net Position and Fund Balance
In the government-wide financial statements and the proprietary fund

in the fund financial statements, equity is classified as net position
and displayed in three components:
a. Net investment in capital assets – Consists of capital assets,

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

placed on the use either by (1) external groups such as creditors,
grantors, contributors, or laws or regulations of other governments
or (2) law through constitutional provisions or enabling legislation.
c. Unrestricted net position – All other net position that does not
meet the definition of restricted or net investment in capital
assets.
As of June 30, 2017, Grundy County had $5,949,434 in outstanding

debt for capital purposes for the discretely presented Grundy County
School Department. This debt is a liability of Grundy County, but the
capital assets acquired are reported in the financial statements of the
School Department. Therefore, Grundy County has incurred a liability
significantly decreasing its unrestricted net position with no
corresponding increase in the county’s capital assets.
It is the county’s policy that restricted amounts would be reduced first

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

balance in classifications that comprise a hierarchy based primarily on
the extent to which the government is bound to honor constraints on
the specific purposes for which amounts in these funds can be spent.
These classifications may consist of the following:
46
Nonspendable Fund Balance – includes amounts that cannot
be spent because they are either (a) not in spendable form or
(b) legally or contractually required to be maintained intact.
Restricted Fund Balance – includes amounts that have

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

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

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

General and General Purpose School funds. This classification
represents fund balance that has not been assigned to other
funds and that has not been restricted, committed, or assigned
to specific purposes within the General and General Purpose
School funds.
E. Pension Plans
Primary Government
For purposes of measuring the net pension liability, deferred outflows of

resources and deferred inflows of resources related to pensions, and pension
expense, information about the fiduciary net position of Grundy County’s
participation in the Public Employee Retirement Plan of the Tennessee
Consolidated Retirement System (TCRS), and additions to/deductions from
Grundy County’s fiduciary net position have been determined on the same
basis as they are reported by the TCRS for the Public Employee Retirement
Plan. For this purpose, benefits (including refunds of employee contributions)
are recognized when due and payable in accordance with the benefit terms of
the Public Employee Retirement Plan of TCRS. Investments are reported at
fair value.
47
For purposes of measuring the net pension liability, deferred outflows of

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

STATEMENTS
A. Explanation of certain differences between the governmental fund

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

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

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

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

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

items required to reconcile the net change in fund balances – total
governmental funds with the change in net position of governmental
activities reported in the government-wide Statement of Activities.
48
III. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
A. Budgetary Information
Annual budgets are adopted on a basis consistent with generally accepted

accounting principles (GAAP) for all governmental funds except the
Constitutional Officers - Fees Fund (special revenue fund), which was not
budgeted, and the capital project funds, which adopt project length budgets.
All annual appropriations lapse at fiscal year-end.
The county is required by state statute to adopt annual budgets. Annual

budgets are prepared on the basis in which current available funds must be
sufficient to meet current expenditures. Expenditures and encumbrances
may not legally exceed appropriations authorized by the county commission
and any authorized revisions. Unencumbered appropriations lapse at the end
of each fiscal year.
The budgetary level of control is at the major category level established by

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

instances in which encumbrances are treated as budgeted expenditures. The
difference between the budgetary basis and GAAP basis is presented on the
face of each budgetary schedule.
At June 30, 2017, the Grundy County School Department reported the
following significant encumbrances:
Fund Description Amount
School Department:
Major Fund:
General Purpose School Textbooks $ 20,788
" Floor Refinish 52,748
" Custodial Supplies 13,531
" Roof Replacement 89,000
B. Cash Overdraft
The discretely presented School Federal Projects Fund had a cash overdraft
of $196,953 at June 30, 2017. This cash overdraft resulted from the issuance
of checks exceeding cash on deposit with the county trustee. The cash
overdraft was liquidated subsequent to June 30, 2017.
49
C. Expenditures Exceeded Appropriations
Expenditures exceeded appropriations approved by the county commission in

certain major appropriation categories (the legal level of control) of the
following funds:
Amount
Fund/Major Appropriation Category Overspent
Primary Government:
General:
County Attorney $ 1,045
Solid Waste/Sanitation:
Convenience Centers 3,084
Discretely Presented School Department:

General Purpose School:
Principal on Debt 4,041
Interest on Debt 1,353
Expenditures that exceed appropriations are a violation of state statutes.

These expenditures in excess of appropriations were funded by available fund
balance and greater than anticipated revenues.
D. Noncompliance with Membership Requirements of the Tennessee

Consolidated Retirement System
Grundy County did not comply with mandatory membership requirements of

the defined benefit retirement system in which the county participates.
Auditors determined that seven full-time employees of Grundy County were
eligible for participation but were not participating in the Tennessee
Consolidated Retirement System (TCRS). Title 8, Chapters 34-37 of
Tennessee Code Annotated, establish and govern the TCRS. These statutes
require mandatory participation in the TCRS for all employees of
participating employers after a probationary period. This deficiency is
discussed further in the Schedule of Findings and Questioned Costs in the
Single Audit Section of this report. This violation has caused the independent
auditor to issue a qualified opinion on the financial statements of the
governmental activities and the aggregate discretely presented component
units.
IV. DETAILED NOTES ON ALL FUNDS
A. Deposits and Investments
Grundy County and the Grundy County School Department participate in an

internal cash and investment pool through the Office of Trustee. The county
trustee is the treasurer of the county and in this capacity is responsible for
50
receiving, disbursing, and investing most county funds. Each fund’s portion
of this pool is displayed on the balance sheets or statements of net position as
Equity in Pooled Cash and Investments. Cash reflected on the balance sheets
or statements of net position represents nonpooled amounts held separately
by individual funds.
Deposits
Legal Provisions. All deposits with financial institutions must be secured

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

bonds, notes, or treasury bills of the U.S. government and obligations
guaranteed by the U.S. government or any of its agencies; deposits at state
and federal chartered banks and savings and loan associations; bonds of any
state or political subdivision rated A or higher by any nationally recognized
rating service; nonconvertible debt securities of certain federal government
sponsored enterprises; and the county’s own legally issued bonds or notes.
These investments may not have a maturity greater than two years. The
county may make investments with longer maturities if various restrictions
set out in state law are followed. Counties are also authorized to make
investments in the State Treasurer’s Investment Pool and in repurchase
agreements. Repurchase agreements must be approved by the state
Comptroller’s Office and executed in accordance with procedures established
by the State Funding Board. Securities purchased under a repurchase
agreement must be obligations of the U.S. government or obligations
guaranteed by the U.S. government or any of its agencies. When repurchase
agreements are executed, the purchase of the securities must be priced at
least two percent below the fair value of the securities on the day of purchase.
51
The county had no pooled or nonpooled investments as of June 30, 2017.
B. Capital Assets
Capital assets activity for the year ended June 30, 2017, was as follows:
Primary Government
Balance Balance
7-1-16 Increases Decreases 6-30-17
Capital Assets Not

Depreciated:
Land $ 235,273 $ 139,517 $ 0 $ 374,790
Construction in Progress 6,491,437 0 (6,491,437) 0
Total Capital Assets
Not Depreciated $ 6,726,710 $ 139,517 $ (6,491,437) $ 374,790
Capital Assets Depreciated:

Buildings and
Improvements $ 4,163,859 $ 7,109,727 $ 0 $ 11,273,586
Infrastructure 7,566,118 347,572 0 7,913,690
Other Capital Assets 2,732,943 166,224 (70,000) 2,829,167
Depreciated $ 14,462,920 $ 7,623,523 $ (70,000) $ 22,016,443
Less Accumulated
Depreciation For:
Buildings and
Improvements $ 1,625,372 $ 180,018 $ 0 $ 1,805,390
Infrastructure 5,728,251 209,907 0 5,938,158
Total Accumulated
Depreciation $ 9,353,291 $ 555,088 $ (52,535) $ 9,855,844

Depreciated, Net $ 5,109,629 $ 7,068,435 $ (17,465) $ 12,160,599
Governmental Activities
Capital Assets, Net $ 11,836,339 $ 7,207,952 $ (6,508,902) $ 12,535,389
Depreciation expense was charged to functions of the primary government as

follows:
52
General Government $ 64,389

Public Safety 151,854
Public Health and Welfare 29,167
Agriculture and Natural Resources 491
Highways/Public Works 309,187
Total Depreciation Expense -

Governmental Activities $ 555,088
Waste Water Fund (enterprise fund)
Balance Balance
7-1-16 Increases 6-30-17
Capital Assets Not

Depreciated:
Land $ 30,000 $ 0 $ 30,000
Not Depreciated $ 30,000 $ 0 $ 30,000

Buildings and
Improvements $ 1,654,496 $ 0 $ 1,654,496
Infrastructure 777,647 0 777,647
Depreciated $ 2,432,143 $ 0 $ 2,432,143
Less Accumulated
Depreciation For:
Buildings and
Improvements $ 871,022 $ 39,294 $ 910,316
Infrastructure 375,032 29,551 404,583
Total Accumulated
Depreciation $ 1,246,054 $ 68,845 $ 1,314,899

Depreciated, Net $ 1,186,089 $ (68,845) $ 1,117,244
Business-type Activities
Capital Assets, Net $ 1,216,089 $ (68,845) $ 1,147,244
There were no decreases in capital assets to report during the year ended
June 30, 2017.
53
Depreciation expense was charged to functions of the enterprise fund as
follows:
Public Health and Welfare $ 68,845

Business-type Activities $ 68,845
Balance Balance
7-1-16 Increases Decreases 6-30-17
Capital Assets Not

Depreciated:
Land $ 262,199 $ 0 $ 0 $ 262,199
Construction in Progress 34,340 0 (34,340) 0
Not Depreciated $ 296,539 $ 0 $ (34,340) $ 262,199

Buildings and
Improvements $ 22,343,803 $ 607,797 $ 0 $ 22,951,600
Depreciated $ 25,382,444 $ 811,953 $ (48,520) $ 26,145,877
Less Accumulated
Depreciation For:
Buildings and
Improvements $ 11,315,674 $ 604,075 $ 0 $ 11,919,749
Total Accumulated
Depreciation $ 13,462,954 $ 774,678 $ (19,456) $ 14,218,176

Depreciated, Net $ 11,919,490 $ 37,275 $ (29,064) $ 11,927,701
Governmental Activities
Capital Assets, Net $ 12,216,029 $ 37,275 $ (63,404) $ 12,189,900
Depreciation expense was charged to functions of the discretely presented

Grundy County School Department as follows:
54
Instruction $ 420,819
Support Services 334,042
Operation of Non-instructional Services 19,817

Governmental Activities $ 774,678
C. Construction Commitments
Primary Government
At June 30, 2017, Grundy County had uncompleted construction contracts of

approximately $227,016 for the parking lot addition at the courthouse/jail.
Funding has been received for these future expenditures.
At June 30, 2017, the Grundy County School Department had uncompleted
construction contracts of approximately $89,000 for a roof replacement at the
Palmer Elementary School. Funding has been received for these future
expenditures.
D. Interfund Receivables, Payables, and Transfers
The composition of interfund balances as of June 30, 2017, was as follows:
Due to/from Other Funds:
Receivable Fund Payable Fund Amount
Primary Government:
General Nonmajor governmental $ 743
" Waste Water 10,000
Highway Solid Waste/Sanitation 1,929
Discretely Presented School

Department:
General Purpose School School Federal Projects 40,957
School Federal Projects General Purpose School 2,150
These balances resulted from the time lag between the dates that interfund
goods and services are provided or reimbursable expenditures occur and
payments between funds are made.
The receivable in the Highway/Public Works Fund totaling $1,929 was in

transit from the Solid/Waste Sanitation fund at June 30, 2017.
55
Receivables in the School Federal Projects Fund totaling $1,210 was in
transit from the General Purpose School fund at June 30, 2017.
A receivable in the General Purpose School Fund totaling $13,910 was in

transit from the School Federal Projects Fund at June 30, 2017.
Due to/from Primary Government and Component Unit:
Receivable Payable Amount
Component Unit:
Primary Government: School Department:
Governmental Activities Governmental Activities $ 1,048,433
Component Unit:
School Department: Primary Government:
General Purpose School General 3,373
The Due to Primary Government – Governmental Activities consists of the

balance of notes ($230,108) and other loans ($818,325) issued by the county
for the School Department. The School Department has agreed to contribute
the funds annually to retire this debt. These long-term debt obligations are
reflected in the governmental activities on the Statement of Net Position.
The balance of the amount reflected as Due from Primary Government

($3,373) consists of a payable amount owed from primary government’s
General Fund to the discretely presented School Department’s General
Purpose School Fund at year-end. This amount was in transit from the
primary government’s General Fund at June 30, 2017.
Interfund Transfers:
Interfund transfers for the year ended June 30, 2017, consisted of the
following amounts:
Primary Government
Transfers In
General
Debt
Service
Transfers Out Fund Purpose
Highway/Public Works Fund $ 85,284 Debt Retirement
56
Transfer In
General
Purpose
School
Transfer Out Fund Purpose
School Federal Projects Fund $ 18,650 Indirect Costs
Transfers are used to move revenues from the fund that statute or budget
requires to collect them to the fund that statute or budget requires to expend
them.
E. Long-term Obligations
Primary Government
General Obligation Bonds, Notes, and Other Loans
Grundy County issues general obligation bonds and other loans to provide
funds for the acquisition and construction of major capital facilities for the
primary government and the discretely presented School Department. In
addition, general obligation bonds have been issued to refund other general
obligation bonds. Capital outlay notes are also issued to fund capital facilities
and other capital outlay purchases, such as equipment.
General obligation bonds, capital outlay notes, and other loans are direct
obligations and pledge the full faith and credit of the government. General
obligation bonds, capital outlay notes, and other loans outstanding were
issued for original terms of up to 38 years for bonds, up to five years for notes,
and up to 11 years for other loans. Repayment terms are generally structured
with increasing amounts of principal maturing as interest requirements
decrease over the term of the debt. As of June 30, 2017, all bonds, capital
outlay notes, and other loans included in long-term debt will be retired from
the General Debt Service Fund.
General obligation bonds, capital outlay notes, and other loans outstanding
as of June 30, 2017, for governmental activities are as follows:
57
Original
Interest Final Amount Balance
Type Rate Maturity of Issue 6-30-17
General Obligation Bonds 3.5% 5-11-54 $ 7,000,000 $ 6,902,618

General Obligation Bonds -
School Refunding 2.07 5-1-21 3,945,000 3,220,000
Capital Outlay Notes 0 to 3.5 9-1-21 1,206,533 962,836
Other Loans 0 9-11-22 1,583,809 818,325
Other Loans Variable 6-1-23 2,690,000 1,681,001
On December 7, 2012, Grundy County entered into a loan agreement with the
City of Clarksville, Tennessee, Public Building Authority. This loan
agreement provided for the authority to loan $2,690,000 to Grundy County on
an as-needed basis for various school renovation and construction projects.
The loan is repayable at an interest rate that is a tax-exempt variable rate
determined by the remarketing agent daily or weekly, depending on the
particular program. In addition, the county pays various other fees in
connection with this loan. At June 30, 2017, the variable interest rate was
1.85 percent, and other fees totaled approximately .123 percent of the
outstanding loan principal plus $125 a month.
The annual requirements to amortize all general obligation bonds, capital

outlay notes, and other loans outstanding as of June 30, 2017, including
interest payments and other loan fees, are presented in the following tables:
Year Ending Bonds

June 30 Principal Interest Total
2018 $ 848,223 $ 306,911 $ 1,155,134

2019 886,539 287,967 1,174,506
2020 919,972 268,181 1,188,153
2021 958,528 247,650 1,206,178
2022 107,210 226,270 333,480
2023-2027 596,033 1,071,367 1,667,400
2028-2032 709,841 957,559 1,667,400
2033-2037 845,381 822,019 1,667,400
2038-2042 1,006,802 660,598 1,667,400
2043-2047 1,199,044 468,356 1,667,400
2048-2052 1,427,991 239,409 1,667,400
2053-2054 617,054 22,116 639,170
Total $ 10,122,618 $ 5,578,403 $ 15,701,021
58
Year Ending Notes
2018 $ 239,990 $ 23,741 $ 263,731

2019 198,307 17,324 215,631
2020 203,742 12,192 215,934
2021 189,797 6,893
2022 131,000 1,998 132,998
Total $ 962,836 $ 62,148 $ 1,024,984
Year Ending Other Loans

June 30 Principal Interest Fees Total
2018 $ 424,376 $ 31,098 $ 4,068 $ 459,542

2019 429,376 26,177 3,741 459,294
2020 435,376 21,164 3,407 459,947
2021 441,376 16,040 3,066 460,482
2022 447,376 10,804 2,718 460,898
2023 321,446 5,457 2,363 329,266
Total $ 2,499,326 $ 110,740 $ 19,363 $ 2,629,429
There is $4,243,582 available in the General Debt Service Fund to service

long-term debt. Bonded debt per capita totaled $739, based on the 2010
federal census. Total debt per capita, including bonds, notes, and other loans
totaled $991, based on the 2010 federal census.
The School Department is currently contributing funds to service some of the

debt issued on its behalf by the primary government as noted in the table
below. This debt is reflected in the government-wide financial statements as
Due to the Primary Government in the financial statements of the School
Department and as Due from Component Units in the financial statements of
the primary government.
59
Outstanding
Description of Indebtedness 6-30-17
Notes Payable
Contributions from the General Purpose School Fund
School Bus $ 29,362
School Bus 55,078
School Bus 74,935
School Bus 70,733
Other Loans
Contributions from the General Purpose School Fund
Energy Efficiency Improvements 818,325
Total $ 1,048,433
Changes in Long-term Obligations
Long-term obligations activity for the year ended June 30, 2017, was as
follows:
Other
Bonds Notes Loans
Balance July 1, 2016 $ 10,937,639 $ 371,875 $ 2,917,702

Additions 0 787,973 0
Reductions (815,021) (197,012) (418,376)
Balance June 30, 2017 $ 10,122,618 $ 962,836 $ 2,499,326
Balance Due Within One Year $ 848,223 $ 239,990 $ 424,376
60
Other Landfill
Postemployment Postclosure Compensated
Benefits Care Costs Absences
Balance July 1, 2016 $ 38,277 $ 372,342 $ 14,684

Additions 4,994 0 29,223
Reductions (1,430) (6,373) (22,179)
Balance June 30, 2017 $ 41,841 $ 365,969 $ 21,728
Balance Due Within One Year $ 0 $ 11,070 $ 21,728
Net Pension
Liability -
Agent
Plan*
Balance, July 1, 2016 $ (170,185)

Additions 551,386
Reductions (347,368)
Balance, June 30, 2017 $ 33,833
Balance Due Within One Year $ 0
*At July 1, 2016, the agent plan had a net pension asset.
Analysis of Noncurrent Liabilities Presented on Exhibit A:
Total Noncurrent Liabilities, June 30, 2017 $ 14,048,151

Less: Due Within One Year (1,545,387)
Noncurrent Liabilities - Due in

More Than One Year - Exhibit A $ 12,502,764
Compensated absences and other postemployment benefits will be paid from

the employing funds, primarily the General and Highway/Public Works
funds. Landfill closure/postclosure care costs will be paid from the Solid
Waste/Sanitation Fund.
During February 2004, Grundy County entered into a revocable contract with
a private firm to provide postclosure care for the county’s closed landfill.
Terms of this agreement require the county to pay an annual fee of $9,920 for
postclosure care costs. The county is required to provide postclosure care for
this closed landfill for the next 14 years.
61
Changes in Long-term Obligations
Long-term obligations activity for the discretely presented Grundy County

School Department for the year ended June 30, 2017, was as follows:
Governmental Activities: Net Pension Net Pension

Other Liability- Liability -
Postemployment Agent Cost-sharing
Benefits Plan* Plan
Balance July 1, 2016 $ 564,409 $ (232,429) $ 92,009

Additions 139,915 693,812 2,100,213
Reductions (145,355) (419,392) (752,025)
Balance June 30, 2017 $ 558,969 $ 41,991 $ 1,440,197
Balance Due Within One Year $ 0 $ 0 $ 0
*At July 1, 2016, the agent plan had a net pension asset.
Analysis of Noncurrent Liabilities Presented on Exhibit A:
Total Noncurrent Liabilities, June 30, 2017 $ 2,041,157

Less: Due Within One Year 0
Noncurrent Liabilities - Due in

More Than One Year - Exhibit A $ 2,041,157
Other postemployment benefits will be paid from the employing funds,

primarily the General Purpose School and School Federal Projects funds.
F. On-Behalf Payments
The State of Tennessee pays health insurance premiums for retired teachers
on-behalf of the Grundy County School Department. These payments are
made by the state to the Local Education Group Insurance Plan and the
Medicare Supplement Plan. Both of these plans are administered by the
State of Tennessee and reported in the state’s Comprehensive Annual
Financial Report. Payments by the state to the Local Education Group
Insurance Plan and the Medicare Supplement Plan for the year ended June
30, 2017, were $65,032 and $25,275, respectively. The School Department has
recognized these on-behalf payments as revenues and expenditures in the
General Purpose School Fund.
62
V. OTHER INFORMATION
A. Risk Management
Primary Government
Grundy County is exposed to various risks related to general liability,

property, casualty, and workers’ compensation. Grundy County is a member
of the Local Government Property and Casualty Fund (LGPCF) and the Local
Government Workers’ Compensation Fund, which are public entity risk pools
established by the Tennessee County Services Association, an association of
member counties. The county pays annual premiums to the pools for general
liability, property, casualty losses, and workers’ compensation insurance
coverage. The creation of these pools provides for them to be self-sustaining
through member premiums. The LGPCF reinsures through commercial
insurance companies for claims of more than $100,000 for each insured event.
On January 1, 2016, Grundy County began providing commercial health

insurance coverage to its employees. Retirees are not allowed to participate
in the commercial insurance plan. Settled claims have not exceeded this
commercial coverage for the period January 1, 2016, through June 30, 2017.
The Grundy County Highway Department participates in the Local

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

various risks related to general liability, property, casualty, and workers’
compensation. The School Department is a member of the Local Government
Property and Casualty Fund (LGPCF) and the Local Government Workers’
Compensation Fund, which are public entity risk pools established by the
Tennessee County Services Association, an association of member counties.
The School Department pays annual premiums to these pools for general
liability, property, casualty losses, and workers’ compensation insurance
coverage. The creation of these pools provides for them to be self-sustaining
through member premiums. The LGPCF reinsures through commercial
insurance companies for claims exceeding $100,000 for each insured event.
63
The School Department participates in the Local Education Group Insurance
Fund (LEGIF), a public entity risk pool established to provide a program of
health insurance coverage for employees of local education agencies. In
accordance with Section 8-27-301, Tennessee Code Annotated (TCA), all local
education agencies are eligible to participate. The LEGIF is included in the
Comprehensive Annual Financial Report of the State of Tennessee, but the
state does not retain any risk for losses by this fund. Section 8-27-303, TCA,
provides for the LEGIF to be self-sustaining through member premiums.
B. Accounting Changes
Provisions of Governmental Accounting Standards Board (GASB) Statement

No. 74, Financial Reporting for Postemployment Benefit Plans Other Than
Pension Plans; Statement No. 77, Tax Abatement Disclosures; Statement No.
78, Pensions Provided through Certain Multiple-Employer Defined Benefit
Pension Plans; Statement No. 80, Blending Requirements for Certain
Component Units; and Statement No. 82, Pension Issues an amendment of
GASB Statements No. 67, No. 68, and No. 73, became effective for the year
ended June 30, 2017.
GASB Statement No. 74, establishes accounting and reporting requirements

for postemployment benefits other than pensions (other postemployment
benefits or OPEB), which are included in the general purpose external
financial reports of state and local governmental OPEB plans. This statement
replaces GASB Statements No. 43 and No. 57. It also includes requirements
for defined contribution OPEB plans that replace the requirements in
Statements No. 25, No. 43, and No. 50. The scope of this statement includes
OPEB plans, both defined benefit and defined contribution, administered
through trusts meeting the necessary criteria as well as reporting assets
accumulated through OPEB plans that are not administered through trusts
that meet the specified criteria.
GASB Statement No. 77, establishes reporting requirements for tax

abatements. This standard requires the disclosure of information about the
nature and magnitude of tax abatement agreements entered into by state
and local governments that reduce the government’s tax revenues.
GASB Statement No. 78, amends Statement No. 68 to exclude certain

pensions provided to employees of state or local governments through a cost-
sharing multiple-employer pension plans that are not state or local plans and
meet specific other criteria. This statement establishes recognition,
measurement, and reporting criteria for these plans.
GASB Statement No. 80, amends the blending requirements of paragraph 53

of Statement No. 14. This standard adds additional blending criterion, which
requires blending of a component unit incorporated as a not-for-profit
corporation in which the primary government is the sole corporate member.
64
GASB Statement No. 82 amends Statements No. 67, No. 68, and No. 73.
This standard establishes covered payroll as the payroll on which
contributions to a pension plan are based in the Required Supplementary
Information. In addition, this standard clarifies that employer paid member
contributions should be considered plan member contributions for purposes of
applying Statement No. 67, and employee contributions for the purposes of
applying Statement No. 68. This standard further states that an employer’s
expense and expenditures for employer paid member contributions should be
recognized in the period for which the contribution is assessed and classified
in the same manner that the employer classifies similar compensation other
than pensions (for example, as salaries and wages or as fringe benefits).
C. Contingent Liabilities
The county is involved in several pending lawsuits. Attorneys for the county
estimate that the potential claims not covered by insurance resulting from
such litigation would not materially affect the county’s financial statements.
D. Landfill Postclosure Care Costs
Grundy County has an active permit on file with the state Department of
Environment and Conservation for a sanitary landfill. The county has
provided financial assurances for estimated postclosure liabilities as required
by the State of Tennessee. These financial assurances are on file with the
Department of Environment and Conservation.
State and federal laws and regulations require the county to place a final cover
on its landfill site when it stops accepting waste and to perform certain
maintenance and monitoring functions at the site for 30 years after closure.
These closure and postclosure care costs generally are paid near or after the
date that the landfill stops accepting waste. Although the Grundy County
landfill closed in 2001, the county has contracted with a private company for
its waste disposal. The Solid Waste/Sanitation Fund (special revenue fund)
reports postclosure care costs as expenditures in each period in which they are
incurred. The $365,969 reported as landfill postclosure care cost liability at
June 30, 2017, represents the net amount reported to date based on 100
percent use of the estimated capacity of the landfill. The county maintains a
revocable contract with a private firm for postclosure care costs on the closed
landfill. The county is required to monitor the closed landfill for the next 14
years. Actual costs may be higher due to inflation, changes in technology, or
changes in regulations.
E. Joint Venture
The Twelfth Judicial District Drug Task Force (DTF) is a joint venture
formed by an interlocal agreement between the district attorney general of
the Twelfth Judicial District and the municipalities within the district. The
district includes Grundy, Franklin, Marion, Rhea, and Sequatchie counties,
and various cities within these counties. The purpose of the DTF is to
65
provide multi-jurisdictional law enforcement to promote the investigation
and prosecution of drug-related activities. Funds for the operations of the
DTF come primarily from federal grants, drug fines, and the forfeiture of
drug-related assets to the DTF. The DTF is overseen by the district attorney
general and is governed by a Board of Directors including the district
attorney general and the sheriffs and police chiefs of the participating law
enforcement agencies within the judicial district. Grundy County made no
contributions to the DTF for the year ended June 30, 2017, and does not have
any equity interest in this joint venture. Complete financial statements for
the DTF can be obtained from its administrative office at the following
address:
Administrative Office:
District Attorney General

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

employees of the discretely presented Grundy County School
Department are provided a defined benefit pension plan through the
Public Employee Retirement Plan, an agent multiple-employer
pension plan administered by the TCRS. The primary government
employees comprised 44.62 percent, the non-certified employees of the
discretely presented School Department comprised 55.38 percent of
the plan based on contribution data. The TCRS was created by state
statute under Tennessee Code Annotated (TCA), Title 8, Chapters 34-
37. The TCRS Board of Trustees is responsible for the proper
operation and administration of the TCRS. The Tennessee Treasury
Department, an agency in the legislative branch of state government,
administers the plans of the TCRS. The TCRS issues a publicly
available financial report that can be obtained at
www.treasury.tn.gov/tcrs.
Benefits Provided. TCA, Title 8, Chapters 34-37 establish the benefit

terms and can be amended only by the Tennessee General Assembly.
The chief legislative body may adopt the benefit terms permitted by
statute. Members are eligible to retire with an unreduced benefit at
age 60 with five years of service credit or after 30 years of service
credit regardless of age. Benefits are determined by a formula using
66
the member’s highest five consecutive year average compensation and
the member’s years of service credit. Reduced benefits for early
retirement are available to vested members at age 55. Members vest
with five years of service credit. Service related disability benefits are
provided regardless of length of service. Five years of service is
required for non-service related disability eligibility. The service
related and non-service related disability benefits are determined in
the same manner as a service retirement benefit but are reduced ten
percent and include projected service credits. A variety of death
benefits is available under various eligibility criteria.
Member and beneficiary annuitants are entitled to an automatic cost

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

June 30, 2016, the following employees were covered by the benefit
terms:
Inactive Employees or Beneficiaries Currently

Receiving Benefits 133
Inactive Employees Entitled to But Not Yet Receiving
Benefits 141
Active Employees 172
Total 446
Contributions. Contributions for employees are established in the

statutes governing the TCRS and may only be changed by the
Tennessee General Assembly. Employees contribute five percent of
salary. Grundy County makes employer contributions at the rate set
by the Board of Trustees as determined by an actuarial valuation. For
the year ended June 30, 2017, the employer contribution for Grundy
County was $335,348 based on a rate of 8.79 percent of covered
payroll. By law, employer contributions are required to be paid. The
TCRS may intercept Grundy County’s state shared taxes if required
employer contributions are not remitted. The employer’s actuarially
determined contributions (ADC) and member contributions are
expected to finance the costs of benefits earned by members during the
year, the cost of administration, as well as an amortized portion of any
unfunded liability.
67
Net Pension Liability (Asset)
Grundy County’s net pension liability (asset) was measured as of

June 30, 2016, and the total pension liability (asset) used to calculate
net pension liability (asset) was determined by an actuarial valuation
as of that date.
Actuarial Assumptions. The total pension liability as of the June 30,

2016, actuarial valuation was determined using the following
actuarial assumptions, applied to all periods included in the
measurement:
Inflation 3%
Salary Increases Graded Salary Ranges from 8.97%
to 3.71% Based on Age, Including
Inflation, Averaging 4.25%
Investment Rate of Return 7.5%, Net of Pension Plan
Investment Expenses, Including
Inflation
Cost of Living Adjustment 2.5%
Mortality rates were based on actual experience from the June 30,
2012, actuarial experience study, adjusted for some of the expected
future improvement in life expectancy.
The actuarial assumptions used in the June 30, 2016, actuarial

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

was established by the TCRS Board of Trustees in conjunction with
the June 30, 2012, actuarial experience study by considering the
following three techniques: (1) the 25-year historical return of the
TCRS at June 30, 2012, (2) the historical market returns of asset
classes from 1926 to 2012 using the TCRS investment policy asset
allocation, and (3) capital market projections that were utilized as a
building-block method in which best-estimate ranges of expected
future real rate of return (expected returns, net of pension plan
investment expense and inflation) are developed for each major asset
class. Four sources of capital market projections were blended and
utilized in the third technique. The blended capital market projection
established the long-term expected rate of return by weighting the
expected future real rate of return by the target asset allocation
percentage and by adding inflation of three percent. The target
68
allocation and best estimate of arithmetic real rates of return for each
major asset class are summarized in the following table:
Percentage
Long-term
Expected Percentage
Real Rate Target
Asset Class of Return Allocations
U.S. Equity 6.46 % 33 %

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

was established by the TCRS Board of Trustees as 7.5 percent based
on a blending of the three factors described above.
Discount Rate. The discount rate used to measure the total pension
liability was 7.5 percent. The projection of cash flows used to
determine the discount rate assumes that employee contributions will
be made at the current rate and that contributions from Grundy
County will be made at the actuarially determined contribution rate
pursuant to an actuarial valuation in accordance with the funding
policy of the TCRS Board of Trustees and as required to be paid by
state statute. Based on those assumptions, the pension plan’s
fiduciary net position was projected to be available to make projected
future benefit payments of current active and inactive members.
Therefore, the long-term expected rate of return on pension plan
investments was applied to all periods of projected benefit payments
to determine the total pension liability.
69
Changes in the Net Pension Liability (Asset)
Increase (Decrease)
Total Plan Net
Pension Fiduciary Pension
Liability Net Position Liability
(a) (b) (a)-(b)
Balance, July 1, 2015 $ 16,042,715 $ 16,445,329 $ (402,614)
Changes for the year:

Service Cost $ 329,090 $ 0 $ 329,090
Interest 1,196,624 0 1,196,624
Differences Between Expected
and Actual Experience (110,982) 0 (110,982)
Contributions-Employer 0 326,496 (326,496)
Contributions-Employees 0 190,920 (190,920)
Net Investment Income 0 431,616 (431,616)
Benefit Payments, Including
Refunds of Employee
Contributions (833,633) (833,633) 0
Administrative Expense 0 (12,738) 12,738
Other Changes 0 0 0
Net Changes $ 581,099 $ 102,661 $ 478,438
Balance, June 30, 2016 $ 16,623,814 $ 16,547,990 $ 75,824
Allocation of Agent Plan Changes in the Net Pension Liability (Asset)
Plan Net
Total Fiduciary Pension
Pension Net Liability
Liability Position (Asset)
Primary Government 44.62% $ 7,417,546 $ 7,383,713 $ 33,833
School Department 55.38% 9,206,268 9,164,277 41,991
Total $ 16,623,814 $ 16,547,990 $ 75,824
Sensitivity of the Net Pension Liability (Asset) to Changes in the

Discount Rate. The following presents the net pension liability (asset)
of Grundy County calculated using the discount rate of 7.5 percent, as
well as what the net pension liability (asset) would be if it was
calculated using a discount rate that is one percentage point lower
(6.5%) or one percentage point higher (8.5%) than the current rate:
70
Current
1% Discount 1%
Decrease Rate Increase
Grundy County 6.5% 7.5% 8.5%
Net Pension Liability $ 2,011,954 $ 75,824 $ (1,549,988)
Pension Expense (Income) and Deferred Outflows of

Resources and Deferred Inflows of Resources to Pensions
Pension Expense. For the year ended June 30, 2017, Grundy County
recognized pension expense of $112,779.
Deferred Outflows of Resources and Deferred Inflows of Resources. For

the year ended June 30, 2017, Grundy County reported deferred
outflows of resources and deferred inflows of resources related to
pensions from the following sources:
Deferred Deferred
Outflows Inflows
of of
Resources Resources
Difference Between Expected and
Actual Experience $ 58,028 $ 184,856
Net Difference Between Projected and
Actual Earnings on Pension Plan
Investments 549,418 0
Contributions Subsequent to the
Measurement Date of June 30, 2016 (1) 335,348 N/A
Total $ 942,794 $ 184,856
(1) The amount shown above for “Contributions Subsequent to the

Measurement Date of June 30, 2016,” will be recognized as a
reduction (increase) to net pension liability (asset) in the
following measurement period.
71
Allocation of Agent Plan Deferred Outflows of Resources and
Deferred Inflows of Resources
Deferred Deferred
Outflows of Inflows of
Resources Resources
Primary Government $ 426,253 $ 82,483
School Department 516,541 102,373
Total $ 942,794 $ 184,856
Amounts reported as deferred outflows of resources, with the

exception of contributions subsequent to the measurement date, and
deferred inflows of resources related to pensions will be recognized in
pension expense as follows:
Year Ending
June 30 Amount
2018 $ (13,689)
2019 (13,689)
2020 292,074
2021 157,890
2022 0
Thereafter 0
In the table shown above, positive amounts will increase pension

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

employees of Grundy County and non-certified employees of the
discretely presented Grundy County School Department are provided
a defined benefit pension plan through the Public Employee
Retirement Plan, an agent multiple-employer pension plan
administered by the TCRS. The primary government employees
comprise 44.62 percent and the non-certified employees of the
discretely presented School Department comprise 55.38 percent of the
plan based on contribution data.
72
Certified Employees
Teacher Retirement Plan
Plan Description. Teachers of the Grundy County School Department

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

Members are eligible to retire with an unreduced benefit at age 65
with five years of service credit or pursuant to the rule of 90 in which
the member’s age and service credit total 90. Benefits are determined
by a formula using the member’s highest five consecutive year average
compensation and the member’s years of service credit. A reduced
early retirement benefit is available to vested members at age 60 or
pursuant to the rule of 80. Members are vested with five years of
service credit. Service related disability benefits are provided
regardless of length of service. Five years of service is required for
non-service related disability eligibility. The service related and non-
service related disability benefits are determined in the same manner
as a service retirement benefit but are reduced ten percent and
include projected service credits. A variety of death benefits is
available under various eligibility criteria. Member and beneficiary
annuitants are entitled to an automatic cost of living adjustment
(COLA) after retirement. A COLA is granted each July for annuitants
retired prior to the second of July of the previous year. The COLA is
based on the change in the consumer price index (CPI) during the
prior calendar year, capped at three percent, and applied to the
current benefit. No COLA is granted if the change in the CPI is less
than one-half percent. A one percent COLA is granted if the CPI
change is between one-half percent and one percent. Members who
leave employment may withdraw their employee contributions, plus
73
any accumulated interest. Under the Teacher Retirement Plan,
benefit terms and conditions, including COLA, can be adjusted on a
prospective basis. Moreover, there are defined cost controls and
unfunded liability controls that provide for the adjustment of benefit
terms and conditions on an automatic basis.
Contributions. Contributions for teachers are established in the

Tennessee General Assembly or by automatic cost controls set out in
law. Teachers are required to contribute five percent of their salary to
the plan. The Local Education Agencies (LEAs) make employer
contributions at the rate set by the Board of Trustees as determined
by an actuarial valuation. Per the statutory provisions governing
TCRS, the employer contribution rate cannot be less than four
percent, except in years when the maximum funded level, approved by
the TCRS Board of Trustees, is reached. By law, employer
contributions for the Teacher Retirement Plan are required to be paid.
The TCRS may intercept the state shared taxes of the sponsoring
governmental entity of the LEA if the required employer contributions
are not remitted. Employer contributions for the year ended June 30,
2017, to the Teacher Retirement Plan were $33,630, which is four
percent of covered payroll. The employer rate, when combined with
member contributions, is expected to finance the costs of benefits
earned by members during the year, the cost of administration, as
well as an amortized portion of any unfunded liability.
Pension Liabilities (Assets), Pension Expense, and Deferred

Outflows of Resources and Deferred Inflows of Resources
Related to Pensions
Pension Liabilities (Assets). At June 30, 2017, the Grundy County

School Department reported an asset of $12,258 for its proportionate
share of the net pension asset. The net pension asset was measured
as of June 30, 2016, and the total pension liability used to calculate
the net pension asset was determined by an actuarial valuation as of
that date. The Grundy County School Department’s proportion of the
net pension asset was based on the Grundy County School
Department’s share of contributions to the pension plan relative to the
contributions of all participating LEAs. At the measurement date of
June 30, 2016, the Grundy County School Department’s proportion
was .117748 percent. The revised proportion measured at June 30,
2015, was .143189 percent.
Pension Expense. For the year ended June 30, 2017, the Grundy
County School Department recognized pension expense of $10,322.

the year ended June 30, 2017, the Grundy County School Department
74
reported deferred outflows of resources related to pensions from the
following sources:
Deferred Deferred
Outflows Inflows
of of
Resources Resources

Actual Experience $ 1,188 $ 1,413
Net Difference Between Projected
and Actual Earnings on Pension
Plan Investments 2,007 0
Changes in Proportion of Net Pension
Liability (Asset) 714 0
LEA's Contributions Subsequent to the
Measurement Date of June 30, 2016 33,630 0
Total $ 37,539 $ 1,413
The Grundy County School Department’s employer contributions of

$33,630, reported as pension related deferred outflows of resources
subsequent to the measurement date, will be recognized as an
increase of net pension liability (asset) in the year ending June 30,
2018. Other amounts reported as deferred outflows of resources and
deferred inflows of resources related to pensions will be recognized in
pension expense as follows:
Year Ending
June 30 Amount
2018 $ 556
2019 556
2020 556
2021 460
2022 30
Thereafter 338
Actuarial Assumptions. The total pension liability in the

June 30, 2016, actuarial valuation was determined using the following
measurement:
75
Inflation 3%
Inflation
Mortality rates are customized based on the June 30, 2012, actuarial
experience study and some included adjustment for expected future
improvement in life expectancy.


allocation and best estimates of arithmetic real rates of return for
each major asset class are summarized in the following table:
76
Percentage
Long-term
Expected Percentage
Real Rate Target
U.S. Equity 6.46 % 33 %

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

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

to Changes in the Discount Rate. The following presents the Grundy
County School Department’s proportionate share of the net pension
liability (asset) calculated using the discount rate of 7.5 percent, as
well as what the Grundy County School Department’s proportionate
share of the net pension liability (asset) would be if it was calculated
using a discount rate that is one percentage point lower (6.5%) or one
percentage point higher (8.5%) than the current rate:
77
School Department's Current
Proportionate Share of 1% Discount 1%
the Net Pension Decrease Rate Increase
Liability (Asset) 6.5% 7.5% 8.5%
Net Pension Liability $ 5,788 $ (12,258) $ (25,554)
Pension Plan Fiduciary Net Position. Detailed information about the

pension plan’s fiduciary net position is available in a separately issued
TCRS financial report.
Teacher Legacy Pension Plan
Plan Description. Teachers of the Grundy County School Department

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

Members of the Teacher Legacy Pension Plan are eligible to retire
with an unreduced benefit at age 60 with five years of service credit or
after 30 years of service credit regardless of age. Benefits are
determined by a formula using the member’s highest five consecutive
year average compensation and the member’s years of service credit.
A reduced early retirement benefit is available to vested members at
age 55. Members are vested with five years of service credit. Service
related disability benefits are provided regardless of length of service.
Five years of service is required for non-service related disability
eligibility. The service related and non-service related disability
benefits are determined in the same manner as a service retirement
benefit but are reduced ten percent and include projected service
credits. A variety of death benefits is available under various
eligibility criteria. Member and beneficiary annuitants are entitled to
78
an automatic cost of living adjustment (COLA) after retirement. A
COLA is granted each July for annuitants retired prior to the second
of July of the previous year. The COLA is based on the change in the
consumer price index (CPI) during the prior calendar year, capped at
three percent, and applied to the current benefit. No COLA is granted
if the change in the CPI is less than one-half percent. A one percent
COLA is granted if the CPI change is between one-half and one
percent. A member who leaves employment may withdraw their
employee contributions, plus any accumulated interest. Under the
Teacher Legacy Pension Plan, benefit terms and conditions, including
COLAs can be adjusted on a prospective basis. Moreover, there are
defined cost controls and unfunded liability controls that provide for
the adjustment of benefit terms and conditions on an automatic basis.
Contributions. Contributions for teachers are established in the

Tennessee General Assembly. Teachers are required to contribute five
percent of their salaries. The Local Education Agencies (LEAs) make
employer contributions at the rate set by the Board of Trustees as
determined by an actuarial valuation. By law, employer contributions
for the Teacher Legacy Pension Plan are required to be paid. The
TCRS may intercept the state shared taxes of the sponsoring
governmental entity of the LEA if the required employer contributions
are not remitted. Employer contributions by the Grundy County
School Department for the year ended June 30, 2017, to the Teacher
Legacy Pension Plan were $721,508, which is 9.04 percent of covered
payroll. The employer rate, when combined with member
contributions, is expected to finance the costs of benefits earned by
members during the year, the cost of administration, as well as an
amortized portion of any unfunded liability.
Pension Liabilities (Assets), Pension Expense, and Deferred

Outflows of Resources and Deferred Inflows of Resources
Related to Pensions
Pension Liability (Assets). At June 30, 2017, the Grundy County

School Department reported a liability of $1,440,197 for its
proportionate share of the net pension liability (asset). The net
pension liability (asset) was measured as of June 30, 2016, and the
total pension liability used to calculate the net pension liability (asset)
was determined by an actuarial valuation as of that date. The Grundy
County School Department’s proportion of the net pension liability
(asset) was based on the Grundy County School Department’s long-
term share of contributions to the pension plan relative to the
contributions of all participating LEAs. At the measurement date of
June 30, 2016, the Grundy County School Department’s proportion
was .230452 percent. The proportion measured at June 30, 2015, was
.224611 percent.
79
Pension Expense. For the year ended June 30, 2017, the Grundy
County School Department recognized pension expense of $166,657.

the year ended June 30, 2017, the Grundy County School Department
reported deferred outflows of resources and deferred inflows of
resources related to pensions from the following sources:
Deferred Deferred
Outflows Inflows
of of
Resources Resources

Actual Experience $ 60,609 $ 1,743,602
Net Difference Between Projected and
Actual Earnings on Pension Plan
Investments 1,608,000 0
Changes in Proportion of Net Pension
Laibility (Asset) 44,299 47,716
LEA's Contributions Subsequent to the
Measurement Date of June 30, 2016 721,508 N/A
Total $ 2,434,416 $ 1,791,318
The Grundy County School Department’s employer contributions of

$721,508 reported as pension related deferred outflows of resources
subsequent to the measurement date, will be recognized as an
increase in net pension asset in the year ending June 30, 2018. Other
amounts reported as deferred outflows of resources and deferred
inflows of resources related to pensions will be recognized in pension
expense as follows:
Year Ending
June 30 Amount
2018 $ (272,554)
2019 (272,554)
2020 498,803
2021 72,656
2022 (104,762)
Thereafter 0
In the table above, positive amounts will increase pension expense,

while negative amounts will decrease pension expense.
80
Actuarial Assumptions. The total pension liability in the June 30,
2016, actuarial valuation was determined using the following
measurement:
Inflation 3%
Inflation
Mortality rates are customized based on the June 30, 2012, actuarial
experience study and some included adjustments for expected future
improvement in life expectancy.


allocation and best estimates of arithmetic real rates of return for
each major asset class are summarized in the following table:
81
Percentage
Long-term
Expected Percentage
Real Rate Target
U.S. Equity 6.46 % 33 %

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

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

to Changes in the Discount Rate. The following presents the Grundy
County School Department’s proportionate share of the net pension
liability (asset) calculated using the discount rate of 7.5 percent, as
well as what the Grundy County School Department’s proportionate
share of the net pension liability (asset) would be if it was calculated
using a discount rate that is one percentage point lower (6.5%) or one
percentage point higher (8.5%) than the current rate:
82
School Department's Current
Proportionate Share of 1% Discount 1%
the Net Pension Decrease Rate Increase
Liability (Asset) 6.5% 7.5% 8.5%
Net Pension Liability $ 7,908,371 $ 1,440,197 $ (3,917,746)
Pension Plan Fiduciary Net Position. Detailed information about the

pension plan’s fiduciary net position is available in a separately issued
TCRS financial report.
2. Deferred Compensation
Teachers hired after July 1, 2014, by the discretely presented Grundy

County School Department are required to participate in a hybrid
pension plan administered by the Tennessee Consolidated Retirement
System. This hybrid pension plan requires that these teachers
contribute five percent of their salaries into a deferred compensation
plan managed by the hybrid plan pursuant to IRC Section 401(k). As
part of their employment package, the Grundy County School
Department has assumed all costs of funding this program on-behalf
of the plan participants. The Section 401(k) plan assets remain the
property of the participating teachers and are not presented in the
accompanying financial statements. IRC Section 401(k), establishes
participation, contribution, and withdrawal provisions for the plans.
During the year, the Grundy County School Department contributed
$42,037 to the 401(k) portion of the hybrid pension plan on-behalf of
the plan participants.
The Grundy County School Department offers its employees a

deferred compensation plan established pursuant to IRC Section
403(b). All costs of administering and funding this program are the
responsibility of plan participants. Section 403(b) plan assets remain
the property of the contributing employees and are not presented in
the accompanying financial statements. IRC Section 403(b) establishes
participation, contribution, and withdrawal provisions for the plan.
G. Other Postemployment Benefits (OPEB)
Plan Description
Grundy County and the School Department participate in the state-

administered Local Education Group Insurance Plan and Local Government
Group Insurance Plan for healthcare benefits. For accounting purposes, the
plans are agent multiple-employer defined benefit OPEB plans. Benefits are
established and amended by an insurance committee created by Section 8-27-
302, Tennessee Code Annotated (TCA), for local education employees, Section
83
8-27-207, TCA for local governments, and Section 8-27-701, TCA, for the
Medicare Supplement. Prior to reaching the age of 65, all members have the
option of choosing between the standard or partnership preferred provider
organization (PPO) plan for health care benefits. Subsequent to age 65,
members who are also in the state’s retirement system may participate in a
state-administered Medicare Supplement Plan that does not include
pharmacy. The plans are reported in the State of Tennessee Comprehensive
Annual Financial Report (CAFR). The CAFR is available on the state’s
website at http://tn.gov/finance/article/fa-accfin-cafr.
Funding Policy
The premium requirements of plan members are established and may be

amended by the insurance committee. The plans are self-insured and
financed on a pay-as-you-go basis with the risk shared equally among the
participants. Claims liabilities of the plan are periodically computed using
actuarial and statistical techniques to establish premium rates. The
employers in each plan develop a contribution policy in terms of subsidizing
active employees or retired employees’ premiums since the committee is not
prescriptive on that issue. The state does not provide a subsidy for local
government participants; however, the state does provide a partial subsidy to
Local Education Agency pre-65 teachers and a full subsidy based on years of
service for post-65 teachers in the Medicare Supplement Plan. Grundy
County Highway Department retirees’ contributions would vary depending on
the insurance options they select, currently there are no Grundy County
Highway Department retirees on the state insurance plan. School Department
retirees’ contributions vary depending on the insurance options they select,
ranging from $0 to $663 per month. Grundy County Highway Department and
the School Department recognized expenditures of $1,430 and $145,355,
respectively, for postemployment health care during the year ended June 30,
2017.
84
Annual OPEB Cost and Net OPEB Obligation
Local Local
Education Government
Group Group
Plan Plan
ARC $ 140,000 $ 5,000

Interest on the NOPEBO 21,165 1,435
Adjustment to the ARC (21,250) (1,441)
Annual OPEB cost $ 139,915 $ 4,994
Amount of contribution (145,355) (1,430)
Increase/decrease in NOPEBO $ (5,440) $ 3,564
Net OPEB obligation, 7-1-16 564,409 38,277
Net OPEB obligation, 6-30-17 $ 558,969 $ 41,841
Percentage Net
Fiscal Annual of Annual Adjusted
Year OPEB OPEB Cost Obligation
Ended Plans Cost Contributed at Year End
6-30-15 Local Education Group $ 108,537 89 % $ 533,645

6-30-16 " 135,920 77 564,409
6-30-17 " 139,915 104 558,969
6-30-15 Local Government Group 6,089 43 90,094
6-30-16 " 4,995 19 38,277
6-30-17 " 4,994 29 41,841
Funded Status and Funding Progress
The funded status of the plan as of July 1, 2015, was as follows:
Local Local
Education Government
Group Group
Plan Plan
Actuarial valuation date 7-1-15 7-1-15

Actuarial accrued liability (AAL) $ 1,389,000 $ 42,000
Actuarial value of plan assets $ 0 $ 0
Unfunded actuarial accrued liability (UAAL) $ 1,389,000 $ 42,000
Actuarial value of assets as a % of the AAL 0% 0%
Covered payroll (active plan members) $ 6,896,823 $ 483,081
UAAL as a % of covered payroll 20% 9%
Actuarial valuations involve estimates of the value of reported amounts and

assumptions about the probability of events far into the future, and
85
actuarially determined amounts are subject to continual revision as actual
results are compared to past expectations and new estimates are made about
the future. The Schedule of Funding Progress, presented as required
supplementary information following the notes to the financial statements,
presents multi-year trend information about whether the actuarial value of
plan assets is increasing or decreasing over time relative to the actuarial
accrued liability for benefits.
Actuarial Methods and Assumptions
Calculations are based on the types of benefits provided under the terms of
the substantive plan at the time of each valuation and on the pattern of
sharing of costs between the employer and plan members to that point.
Actuarial calculations reflect a long-term perspective. Consistent with that
perspective, actuarial methods and assumptions used include techniques that
are designed to reduce short-term volatility in actuarial accrued liabilities
and the actuarial value of assets.
In the July 1, 2015, actuarial valuation for the Local Government Plan and
the Local Education Plan, the projected unit credit actuarial cost method was
used. The actuarial assumptions included a 3.75 percent investment rate of
return (net of administrative expenses) and an annual health care cost trend
rate of six percent in fiscal year 2017, and then be reduced by decrements to
an ultimate rate of 4.645 percent by fiscal year 2050. Both rates include a 2.5
percent inflation assumption. The unfunded actuarial accrued liability is
being amortized as a level percentage of payroll on a closed basis over a 35-
year period beginning with July 1, 2007. Payroll is assumed to grow at a rate
of three percent.
H. Purchasing Laws
Office of County Mayor
Purchasing procedures for the Office of County Mayor are governed by the
County Purchasing Law of 1983, Sections 5-14-201 through 5-14-206,
Tennessee Code Annotated (TCA), which provide for purchases exceeding
$10,000 to be made after public advertisement and solicitation of competitive
bids.
Office of Highway Superintendent
Purchasing procedures for the Highway Department are governed by

provisions of Chapter 435, Private Acts of 1939, and the Uniform Road Law,
Section 54-7-113, TCA, which provide for purchases exceeding $10,000 to be
made after public advertisement and solicitation of competitive bids.
86
Office of Director of Schools
Purchasing procedures for the School Department are governed by

purchasing laws applicable to the schools as set forth in Section 49-2-203,
TCA, which provides for the county Board of Education, through its executive
committee (director of schools and the chairman of the Board of Education),
to make all purchases. This statute also requires competitive bids to be
solicited through newspaper advertisement on all purchases exceeding
$10,000.
I. Subsequent Events
Melody Oliver resigned from the Office of Circuit and General Sessions
Courts Clerk on July 13, 2017, and was succeeded by Crystal Stiefel effective
July 17, 2017.
On October 18, 2017, Grundy County issued capital outlay notes totaling
$95,934 for three trucks for the Sheriff’s Department.
87
REQUIRED SUPPLEMENTARY
INFORMATION
88
Exhibit F-1

Schedule of Changes in Net Pension Liability (Asset) and Related Ratios Based on
Participation in the Public Employee Pension Plan of TCRS
Primary Government
For the Fiscal Year Ended June 30
2014 2015 2016
Total Pension Liability

Service Cost $ 323,260 $ 334,316 $ 329,090
Interest 1,109,654 1,141,657 1,196,624
Differences Between Actual and Expected Experience (254,053) 96,714 (110,982)
Benefit Payments, Including Refunds of Employee Contributions (690,937) (835,488) (833,633)
Net Change in Total Pension Liability $ 487,924 $ 737,199 $ 581,099
Total Pension Liability, Beginning 14,817,592 15,305,516 16,042,715
Total Pension Liability, Ending (a) $ 15,305,516 $ 16,042,715 $ 16,623,814
Plan Fiduciary Net Position

Contributions - Employer $ 380,039 $ 314,675 $ 326,496
Contributions - Employee 181,333 181,758 190,920
Net Investment Income 2,327,596 496,295 431,616
Benefit Payments, Including Refunds of Employee Contributions (690,937) (835,488) (833,633)
Administrative Expense (7,074) (9,024) (12,738)
Net Change in Plan Fiduciary Net Position $ 2,190,957 $ 148,216 $ 102,661
Plan Fiduciary Net Position, Beginning 14,106,156 16,297,113 16,445,329
Plan Fiduciary Net Position, Ending (b) $ 16,297,113 $ 16,445,329 $ 16,547,990
Net Pension Liability (Asset), Ending (a - b) $ (991,597) $ (402,614) $ 75,824
Plan Fiduciary Net Position as a Percentage of Total Pension Liability 106.48% 102.51% 99.54%
Covered Payroll $ 3,622,870 $ 3,555,651 $ 3,685,774
Net Pension Liability (Asset) as a Percentage of Covered Payroll (27.37)% (11.32)% 2.06%
Note: ten years of data will be presented when available.
Note: data presented includes primary government and non-certified

employees of the discretely presented School Department.
89
Exhibit F-2
Schedule of Contributions Based on Participation in the Public
Employee Pension Plan of TCRS
Primary Government
2014 2015 2016 2017
Actuarially Determined Contribution $ 380,039 $ 314,675 $ 326,496 $ 335,348

Less Contributions in Relation to the
Actuarially Determined Contribution (380,039) (314,675) (326,496) (335,348)
Contribution Deficiency (Excess) $ 0 $ 0 $ 0 $ 0
Covered Payroll $ 3,622,870 $ 3,555,651 $ 3,685,774 $ 3,813,290
Contributions as a Percentage of Covered Payroll 10.49% 8.85% 8.86% 8.79%
Note: data presented includes primary government and non-certified

employees of the discretely presented School Department.
90
Exhibit F-3

Pension Plan of TCRS
2015 2016 2017
Contractually Required Contribution $ 12,151 $ 20,724 $ 33,630

Contractually Required Contribution (12,151) (20,724) (33,630)
Contribution Deficiency (Excess) $ 0 $ 0 $ 0
Covered Payroll $ 303,782 $ 518,094 $ 840,749
Contributions as a Percentage of Covered Payroll 4.00% 4.00% 4.00%
91
Exhibit F-4
Legacy Pension Plan of TCRS
2014 2015 2016 2017
Contractually Required Contribution $ 793,730 $ 760,113 $ 752,024 $ 721,508

Contractually Required Contribution (793,730) (760,113) (752,024) (721,508)
Contribution Deficiency (Excess) $ 0 $ 0 $ 0 $ 0
Covered Payroll $ 8,938,401 $ 8,408,339 $ 8,318,882 $ 7,981,280
Contributions as a Percentage of Covered Payroll 8.88% 9.04% 9.04% 9.04%
92
Exhibit F-5
Schedule of Proportionate Share of the Net Pension Asset
in the Teacher Pension Plan of TCRS
For the Fiscal Year Ended June 30 *
2016 2017
School Department's Proportion of the Net Pension Liability/Asset 0.143189% 0.117748%
School Department's Proportionate Share of the Net

Pension Liability (Asset) $ (5,882) $ (12,258)
Covered Payroll $ 303,782 $ 518,094
School Department's Proportionate Share of the Net Pension

Liability (Asset) as a Percentage of its Covered Payroll (1.94)% (2.37)%
Plan Fiduciary Net Position as a Percentage of the Total

Pension Liability 127.46% 121.88%
* The amounts presented were determined as of June 30 of the prior fiscal year.
93
Exhibit F-6
Schedule of Proportionate Share of the Net Pension Asset
in the Teacher Legacy Pension Plan of TCRS
For the Fiscal Year Ended June 30 *
2015 2016 2017
School Department's Proportion of the Net Pension Liability/Asset 0.227730% 0.224611% 0.230452%
School Department's Proportionate Share of the Net

Pension Liability (Asset) $ (37,005) $ 92,009 $ 1,440,197
Covered Payroll $ 8,938,401 $ 8,408,339 $ 8,318,882
School Department's Proportionate Share of the Net Pension

Liability (Asset) as a Percentage of its Covered Payroll (0.41)% 1.09% 17.31%
Plan Fiduciary Net Position as a Percentage of the Total

Pension Liability 100.08% 99.81% 97.14%
* The amounts presented were determined as of June 30 of the prior fiscal year.
94
Exhibit F-7

Schedule of Funding Progress – Other Postemployment Benefits Plans
Primary Government and Discretely Presented Grundy County School Department
June 30, 2017
(Dollar amounts in thousands)
Actuarial
Accrued
Liability
(AAL) UAAL as a
Actuarial Projected Unfunded Percentage
Actuarial Value of Unit AAL Funded Covered of Covered
Valuation Assets Credit (UAAL) Ratio Payroll Payroll
Plans Date (a) (b) (b)-(a) (a/b) (c) ((b-a)/c)
PRIMARY GOVERNMENT
Local Government Group 7-1-11 $ 0 $ 172 $ 172 0 % $ 864 20 %

" 7-1-13 0 48 48 0 909 5
" 7-1-15 0 42 42 0 483 9
DISCRETELY PRESENTED GRUNDY

COUNTY SCHOOL DEPARTMENT
Local Education Group 7-1-11 0 2,178 2,178 0 6,611 33

" 7-1-13 0 1,116 1,116 0 6,436 17
" 7-1-15 0 1,389 1,389 0 6,897 20
95
NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
TENNESSEE CONSOLIDATED RETIREMENT SYSTEM
Valuation Date: Actuarially determined contribution rates for 2017 were calculated based
on the July 1, 2015, actuarial valuation.
Methods and assumptions used to determine contribution rates:
Actuarial Cost Method Frozen Initial Liability

Amortization Method Level Dollar, Closed (Not to Exceed 20 Years)
Remaining Amortization
Period Varies by Year
Asset Valuation 10-Year Smoothed Within a 20%
Corridor to Market Value
Inflation 3%
Salary Increases Graded Salary Ranges from 8.97% to
3.71% Based on Age, Including Inflation,
Averaging 4.25%
Investment Rate of Return 7.5%, Net of Investment Expense,
Including Inflation
Retirement Age Pattern of Retirement Determined by
Experience Study
Mortality Customized Table Based on Actual
Experience Including an Adjustment for
Some Anticipated Improvement
96
COMBINING AND INDIVIDUAL FUND
FINANCIAL STATEMENTS AND SCHEDULES
97
Nonmajor Governmental Funds
Special Revenue Funds
____________________________
Special Revenue Funds are used to account for and report the proceeds
of specific revenue sources that are restricted or committed to
expenditure for specified purposes other than debt service or capital
projects.
____________________________
Courthouse and Jail Maintenance Fund – The Courthouse and Jail Maintenance
Fund is used to account for a special tax levied by private act on litigation. The
proceeds of the tax must be used to pay for improvements or maintenance on the
courthouse and jail.
Industrial/Economic Development Fund – The Industrial/Economic Development

Fund is used to account for lease/rental revenues on county industrial buildings and
state/federal grants related to industrial/economic development.
Drug Control Fund – The Drug Control Fund is used to account for revenues received
from drug-related fines, forfeitures, and seizures.
Constitutional Officers - Fees Fund – The Constitutional Officers - Fees Fund is used
to account for operating expenses paid directly from the fee and commission accounts
of the trustee, clerks, register of deeds, and sheriff.
98
Capital Projects Funds
____________________________
Capital Projects Funds are used to account for and report financial resources that are
restricted, committed, or assigned to expenditure for capital outlays, including the
acquisition or construction of capital facilities and other capital assets.
____________________________
General Capital Projects Fund – The General Capital Projects Fund is used to account
for general capital expenditures of the county.
Education Capital Projects Fund – The Education Capital Projects Fund is used to
account for debt issued by Grundy County that is subsequently contributed to the
discretely presented Grundy County School Department for construction and
renovation projects.
99
Exhibit G-1

Combining Balance Sheet
June 30, 2017

Constitu -
Courthouse Industrial / tional
and Jail Economic Drug Officers -
Maintenance Development Control Fees Total
ASSETS
Cash $ 0 $ 0 $ 0 $ 602 $ 602

Equity in Pooled Cash and Investments 102,489 426,131 94,105 0 622,725
Accounts Receivable 0 10,333 0 141 10,474
Total Assets $ 102,489 $ 436,464 $ 94,105 $ 743 $ 633,801
LIABILITIES
Due to Other Funds $ 0 $ 0 $ 0 $ 743 $ 743

Due to Litigants, Heirs, and Others 0 0 2,229 0 2,229
Total Liabilities $ 0 $ 0 $ 2,229 $ 743 $ 2,972
FUND BALANCES
Restricted:
Restricted for General Government $ 102,489 $ 436,464 $ 0 $ 0 $ 538,953
Restricted for Public Safety 0 0 91,876 0 91,876
Total Fund Balances $ 102,489 $ 436,464 $ 91,876 $ 0 $ 630,829
Total Liabilities and Fund Balances $ 102,489 $ 436,464 $ 94,105 $ 743 $ 633,801
(Continued)
100
Exhibit G-1

Combining Balance Sheet
Nonmajor Governmental Funds (Cont.)
Capital
Projects Fund Total
General Nonmajor
Capital Governmental
Projects Funds
ASSETS
Cash $ 0 $ 602
Equity in Pooled Cash and Investments 218,472 841,197
Accounts Receivable 0 10,474
Total Assets $ 218,472 $ 852,273
LIABILITIES
Due to Other Funds $ 0 $ 743

Due to Litigants, Heirs, and Others 0 2,229
Total Liabilities $ 0 $ 2,972
FUND BALANCES
Restricted:
Restricted for General Government $ 0 $ 538,953
Restricted for Public Safety 218,472 310,348
Total Fund Balances $ 218,472 $ 849,301
Total Liabilities and Fund Balances $ 218,472 $ 852,273
101
Exhibit G-2

Combining Statement of Revenues, Expenditures,
Capital
Projects
Special Revenue Funds Funds
Constitu -
Courthouse Industrial / tional General
and Jail Economic Drug Officers - Capital
Maintenance Development Control Fees Total Projects
Revenues
Local Taxes $ 32,413 $ 0 $ 0 $ 0 $ 32,413 $ 0
Fines, Forfeitures, and Penalties 0 0 25,582 0 25,582 0
Charges for Current Services 0 0 0 161 161 0
Other Local Revenues 0 34,001 28,951 0 62,952 4,174
State of Tennessee 0 61,265 0 0 61,265 0
Total Revenues $ 32,413 $ 95,266 $ 54,533 $ 161 $ 182,373 $ 4,174
Expenditures
Current:
General Government $ 55,992 $ 0 $ 0 $ 0 $ 55,992 $ 0
Finance 0 0 0 161 161 0
Public Safety 0 0 22,564 0 22,564 0
Other Operations 324 69,062 0 0 69,386 0
Capital Projects 0 0 0 0 0 637,915
Capital Projects - Donated 0 0 0 0 0 0
Total Expenditures $ 56,316 $ 69,062 $ 22,564 $ 161 $ 148,103 $ 637,915

Over Expenditures $ (23,903) $ 26,204 $ 31,969 $ 0 $ 34,270 $ (633,741)

Notes Issued $ 0 $ 0 $ 0 $ 0 $ 0 $ 600,000
Total Other Financing Sources (Uses) $ 0 $ 0 $ 0 $ 0 $ 0 $ 600,000
(Continued)
102
Exhibit G-2

Capital
Projects
Special Revenue Funds Funds
Constitu -
Courthouse Industrial / tional General
and Jail Economic Drug Officers - Capital
Maintenance Development Control Fees Total Projects
Net Change in Fund Balances $ (23,903) $ 26,204 $ 31,969 $ 0 $ 34,270 $ (33,741)

Fund Balance, July 1, 2016 126,392 410,260 59,907 0 596,559 252,213
Fund Balance, June 30, 2017 $ 102,489 $ 436,464 $ 91,876 $ 0 $ 630,829 $ 218,472
(Continued)
103
Exhibit G-2

Capital Projects Funds (Cont.) Total

Education Nonmajor
Projects Total Funds
Revenues
Local Taxes $ 0 $ 0 $ 32,413
Fines, Forfeitures, and Penalties 0 0 25,582
Charges for Current Services 0 0 161
Other Local Revenues 0 4,174 67,126
State of Tennessee 0 0 61,265
Total Revenues $ 0 $ 4,174 $ 186,547
Expenditures
Current:
General Government $ 0 $ 0 $ 55,992
Finance 0 0 161
Public Safety 0 0 22,564
Other Operations 0 0 69,386
Capital Projects 0 637,915 637,915
Capital Projects - Donated 87,973 87,973 87,973
Total Expenditures $ 87,973 $ 725,888 $ 873,991

Over Expenditures $ (87,973) $ (721,714) $ (687,444)

Notes Issued $ 87,973 $ 687,973 $ 687,973
Total Other Financing Sources (Uses) $ 87,973 $ 687,973 $ 687,973
(Continued)
104
Exhibit G-2

Capital Projects Funds (Cont.) Total

Education Nonmajor
Projects Total Funds
Net Change in Fund Balances $ 0 $ (33,741) $ 529

Fund Balance, July 1, 2016 0 252,213 848,772
Fund Balance, June 30, 2017 $ 0 $ 218,472 $ 849,301
105
Exhibit G-3
Schedule of Revenues, Expenditures, and Changes
Courthouse and Jail Maintenance Fund
Variance
with Final
Budget -
Revenues
Local Taxes $ 32,413 $ 29,000 $ 29,000 $ 3,413
Total Revenues $ 32,413 $ 29,000 $ 29,000 $ 3,413
Expenditures
General Government
County Buildings $ 55,992 $ 33,000 $ 59,400 $ 3,408
Other Operations
Other Charges 324 550 550 226
Total Expenditures $ 56,316 $ 33,550 $ 59,950 $ 3,634

Over Expenditures $ (23,903) $ (4,550) $ (30,950) $ 7,047

Insurance Recovery $ 0 $ 0 $ 11,019 $ (11,019)
Total Other Financing Sources $ 0 $ 0 $ 11,019 $ (11,019)
Net Change in Fund Balance $ (23,903) $ (4,550) $ (19,931) $ (3,972)

Fund Balance, July 1, 2016 126,392 125,792 125,792 600
Fund Balance, June 30, 2017 $ 102,489 $ 121,242 $ 105,861 $ (3,372)
106
Exhibit G-4

Industrial/Economic Development Fund
Variance
with Final
Budget -
Revenues
Other Local Revenues $ 34,001 $ 13,000 $ 13,000 $ 21,001
State of Tennessee 61,265 97,467 97,467 (36,202)
Other Governments and Citizens Groups 0 0 13,743 (13,743)
Total Revenues $ 95,266 $ 110,467 $ 124,210 $ (28,944)
Expenditures
Other Operations
Industrial Development $ 69,062 $ 98,967 $ 122,810 $ 53,748

Over Expenditures $ 26,204 $ 11,500 $ 1,400 $ 24,804
Net Change in Fund Balance $ 26,204 $ 11,500 $ 1,400 $ 24,804

Fund Balance, July 1, 2016 410,260 410,260 410,260 0
Fund Balance, June 30, 2017 $ 436,464 $ 421,760 $ 411,660 $ 24,804
107
Exhibit G-5
Drug Control Fund
Variance
with Final
Budget -
Revenues
Fines, Forfeitures, and Penalties $ 25,582 $ 7,000 $ 7,000 $ 18,582
Other Local Revenues 28,951 0 0 28,951
Total Revenues $ 54,533 $ 7,000 $ 7,000 $ 47,533
Expenditures
Public Safety
Drug Enforcement $ 22,564 $ 8,100 $ 29,550 $ 6,986

Over Expenditures $ 31,969 $ (1,100) $ (22,550) $ 54,519
Net Change in Fund Balance $ 31,969 $ (1,100) $ (22,550) $ 54,519

Fund Balance, July 1, 2016 59,907 53,383 53,383 6,524
Fund Balance, June 30, 2017 $ 91,876 $ 52,283 $ 30,833 $ 61,043
108
Major Governmental Fund
General Debt Service Fund
____________________________
The General Debt Service Fund is used to account for and report financial
resources that are restricted, committed, or assigned to expenditure for
principal and interest.
____________________________
109
Exhibit H
Variance
with Final
Budget -
Revenues
Local Taxes $ 778,671 $ 734,767 $ 734,767 $ 43,904
Charges for Current Services 5 0 0 5
Other Governments and Citizens Groups 996,725 820,000 1,066,725 (70,000)
Total Revenues $ 1,902,448 $ 1,654,767 $ 1,901,492 $ 956
Expenditures
Principal on Debt
General Government $ 121,892 $ 121,895 $ 146,895 $ 25,003
Highways and Streets 83,916 85,000 85,000 1,084
Education 1,224,601 725,000 1,224,601 0
Interest on Debt
General Government 251,550 245,199 251,599 49
Highways and Streets 1,649 4,150 4,150 2,501
Education 122,055 82,116 161,380 39,325
Other Debt Service
General Government 11,925 13,000 13,000 1,075
Education 4,280 337,640 5,500 1,220
Total Expenditures $ 1,821,868 $ 1,614,000 $ 1,892,125 $ 70,257

Over Expenditures $ 80,580 $ 40,767 $ 9,367 $ 71,213

Transfers In $ 85,284 $ 0 $ 0 $ 85,284
Total Other Financing Sources $ 85,284 $ 0 $ 0 $ 85,284
Net Change in Fund Balance $ 165,864 $ 40,767 $ 9,367 $ 156,497

Fund Balance, July 1, 2016 4,077,718 3,995,403 3,995,403 82,315
Fund Balance, June 30, 2017 $ 4,243,582 $ 4,036,170 $ 4,004,770 $ 238,812
110
Fiduciary Funds
____________________________
Agency Funds are used to account for assets held by the county as an
agent for individuals, private organizations, other governments, and/or
other funds. Agency funds are custodial in nature (assets equal
liabilities) and do not involve measurement of results of operations.
____________________________
Cities - Sales Tax Fund – The Cities - Sales Tax Fund is used to account for the second
half of the sales tax revenues collected inside incorporated cities of the county. These
revenues are received by the county from the State of Tennessee and forwarded to
the various cities on a monthly basis.
Constitutional Officers - Agency Fund – The Constitutional Officers - Agency Fund is

used to account for amounts collected in an agency capacity by the county clerk,
circuit and general sessions courts clerk, clerk and master, register of deeds, and
sheriff. Such collections include amounts due the state, cities, other county funds,
litigants, heirs, and others.
111
Exhibit I-1
Combining Statement of Fiduciary Assets and Liabilities
Fiduciary Funds
June 30, 2017
Agency Funds
Constitu-
Cities - tional
Sales Officers -
Tax Agency Total
ASSETS
Cash $ 0 $ 1,185,989 $ 1,185,989

Due from Other Governments 103,448 0 103,448
Total Assets $ 103,448 $ 1,185,989 $ 1,289,437
LIABILITIES
Due to Other Taxing Units $ 103,448 $ 0 $ 103,448

Due to Litigants, Heirs, and Others 0 1,185,989 1,185,989
Total Liabilities $ 103,448 $ 1,185,989 $ 1,289,437
112
Exhibit I-2
Combining Statement of Changes in Assets and
Liabilities - All Agency Funds
Beginning Ending
Balance Additions Deductions Balance
Cities - Sales Tax Fund

Assets
Equity in Pooled Cash and Investments $ 0 $ 600,862 $ 600,862 $ 0
Due from Other Governments 108,046 103,448 108,046 103,448
Total Assets $ 108,046 $ 704,310 $ 708,908 $ 103,448
Liabilities
Due to Other Taxing Units $ 108,046 $ 704,310 $ 708,908 $ 103,448
Total Liabilities $ 108,046 $ 704,310 $ 708,908 $ 103,448
Constitutional Officers - Agency Fund

Assets
Cash $ 1,309,276 $ 2,770,179 $ 2,893,466 $ 1,185,989
Total Assets $ 1,309,276 $ 2,770,179 $ 2,893,466 $ 1,185,989
Liabilities
Due to Litigants, Heirs, and Others $ 1,309,276 $ 2,770,179 $ 2,893,466 $ 1,185,989
Total Liabilities $ 1,309,276 $ 2,770,179 $ 2,893,466 $ 1,185,989
Totals - All Agency Funds

Assets
Cash $ 1,309,276 $ 2,770,179 $ 2,893,466 $ 1,185,989
Equity in Pooled Cash and Investments 0 600,862 600,862 0
Total Assets $ 1,417,322 $ 3,474,489 $ 3,602,374 $ 1,289,437
Liabilities
Due to Other Taxing Units $ 108,046 $ 704,310 $ 708,908 $ 103,448
Due to Litigants, Heirs, and Others 1,309,276 2,770,179 2,893,466 1,185,989
Total Liabilities $ 1,417,322 $ 3,474,489 $ 3,602,374 $ 1,289,437
113
Grundy County School Department
____________________________
This section presents fund financial statements for the Grundy County
School Department, a discretely presented component unit. The Grundy
County School Department uses a General Fund, two Special Revenue
Funds, and a Private Purpose Trust Fund.
____________________________
General Purpose School Fund – The General Purpose School Fund is used to account
for general operations of the School Department.
School Federal Projects Fund – The School Federal Projects Fund is used to account
for restricted federal revenues, which must be expended on specific education
programs.
Central Cafeteria Fund – The Central Cafeteria Fund is used to account for the
cafeteria operations in each of the schools.
Private Purpose Trust Fund – The Private Purpose Trust Fund is used to account for
savings bond awards given to Grundy County students who win an essay contest and
a spelling bee. Money for this fund was provided by a citizen.
114
Exhibit J-1
Statement of Activities
Net (Expense)
Revenue and
Program Revenues Changes in
Operating Net Position
Charges Grants Total
for and Governmental
Functions/Programs Expenses Services Contributions Activities
Instruction $ 11,249,398 $ 25,326 $ 1,162,950 $ (10,061,122)
Support Services 6,528,312 13,910 260,436 (6,253,966)
Operation of Non-instructional Services 2,128,158 116,909 2,167,538 156,289
Interest on Long-term Debt 7,124 0 0 (7,124)
Total Governmental Activities $ 19,912,992 $ 156,145 $ 3,590,924 $ (16,165,923)
General Revenues:
Taxes:
Property Taxes Levied for General Purposes $ 1,576,547
Local Option Sales Taxes 461,542
Business Tax 21,964
Other Local Taxes 1,114
Grants and Contributions Not Restricted to Specific Programs 14,909,123
Sale of Equipment 766
Miscellaneous 58,015
Total General Revenues $ 17,029,071
Change in Net Position $ 863,148

Net Position, July 1, 2016 13,509,129
Net Position, June 30, 2017 $ 14,372,277
115
Exhibit J-2

Balance Sheet - Governmental Funds
June 30, 2017
Major Funds
General School Total
Purpose Federal Central Governmental
School Projects Cafeteria Funds
ASSETS
Equity in Pooled Cash and Investments $ 2,913,717 $ 0 $ 979,882 $ 3,893,599

Due from Other Funds 40,957 2,150 0 43,107
Due from Primary Government 3,373 0 0 3,373
Property Taxes Receivable 1,642,164 0 0 1,642,164
Allowance for Uncollectible Property Taxes (66,081) 0 0 (66,081)
Total Assets $ 4,777,093 $ 518,985 $ 989,502 $ 6,285,580
LIABILITIES
Accounts Payable $ 38,125 $ 3,297 $ 0 $ 41,422

Accrued Payroll 986 22,675 0 23,661
Payroll Deductions Payable 287,486 25,230 13,401 326,117
Cash Overdraft 0 196,953 0 196,953
Due to Other Funds 940 27,047 0 27,987
Total Liabilities $ 327,537 $ 275,202 $ 13,401 $ 616,140
Deferred Current Property Taxes $ 1,503,123 $ 0 $ 0 $ 1,503,123

Deferred Delinquent Property Taxes 69,538 0 0 69,538
Other Deferred/Unavailable Revenue 41,934 0 0 41,934
Total Deferred Inflows of Resources $ 1,614,595 $ 0 $ 0 $ 1,614,595
(Continued)
116
Exhibit J-2

Balance Sheet - Governmental Funds
Discretely Presented Grundy County School Department (Cont.)
Major Funds
FUND BALANCES
Restricted:
Restricted for Education $ 32,970 $ 43,783 $ 973,552 $ 1,050,305
Committed:
Committed for Education 0 200,000 0 200,000
Assigned:
Assigned for Education 363,548 0 2,549 366,097
Unassigned 2,438,443 0 0 2,438,443
Total Fund Balances $ 2,834,961 $ 243,783 $ 976,101 $ 4,054,845
Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 4,777,093 $ 518,985 $ 989,502 $ 6,285,580
117
Exhibit J-3

Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position
June 30, 2017

of net position (Exhibit A) are different because:
Total fund balances - balance sheet - governmental funds (Exhibit J-2) $ 4,054,845
(1) Capital assets used in governmental activities are not

financial resources and therefore are not reported in
the governmental funds.
Add: land $ 262,199
Add: buildings and improvements net of accumulated depreciation 11,031,851
Add: other capital assets net of accumulated depreciation 895,850 12,189,900
(2) Long-term liabilities are not due and payable in the current period and
therefore are not reported in the governmental funds.
Less: contributions due on primary government debt for notes $ (230,108)
Less: contributions due on primary government debt for other loans (818,325)
Less: net pension liability - agent plan (41,991)
Less: net pension liability - teacher legacy pension plan (1,440,197)
Less: other postemployment benefits liability (558,969) (3,089,590)
(3) Amounts reported as deferred outflows of resources and deferred

inflows of resources related to pensions will be amortized and
recognized as components of pension expense in future years:
Add: deferred outflows of resources related to pensions $ 2,988,496
Less: deferred inflows of resources related to pensions (1,895,104) 1,093,392
(4) Net pension assets are not current financial

resources and therefore are not reported in the governmental funds.
Add: net pension assets - teacher retirement plan 12,258
(5) Other long-term assets are not available to pay for

current-period expenditures and therefore are deferred
in the governmental funds. 111,472
Net position of governmental activities (Exhibit A) $ 14,372,277
118
Exhibit J-4

and Changes in Fund Balances -
Governmental Funds
Major Funds
Revenues
Local Taxes $ 2,047,210 $ 0 $ 0 $ 2,047,210
Licenses and Permits 461 0 0 461
Charges for Current Services 24,936 0 116,890 141,826
State of Tennessee 14,454,497 0 13,330 14,467,827
Federal Government 322,556 2,000,362 1,625,369 3,948,287
Other Governments and Citizens Groups 103,973 0 0 103,973
Total Revenues $ 17,092,931 $ 2,000,362 $ 1,755,623 $ 20,848,916
Expenditures
Current:
Instruction $ 9,506,960 $ 1,151,635 $ 0 $ 10,658,595
Support Services 5,587,307 794,588 0 6,381,895
Operation of Non-Instructional Services 670,852 0 1,539,672 2,210,524
Capital Outlay 576,957 0 0 576,957
Debt Service:
Principal on Debt 239,601 0 0 239,601
Interest on Debt 7,124 0 0 7,124
Other Debt Service 750,000 0 0 750,000
Total Expenditures $ 17,338,801 $ 1,946,223 $ 1,539,672 $ 20,824,696

Over Expenditures $ (245,870) $ 54,139 $ 215,951 $ 24,220
(Continued)
119
Exhibit J-4

and Changes in Fund Balances -
Governmental Funds
Major Funds

Transfers In $ 18,650 $ 0 $ 0 $ 18,650
Transfers Out 0 (18,650) 0 (18,650)
Total Other Financing Sources (Uses) $ 18,650 $ (18,650) $ 0 $ 0
Net Change in Fund Balances $ (227,220) $ 35,489 $ 215,951 $ 24,220

Fund Balance, July 1, 2016 3,062,181 208,294 760,150 4,030,625
Fund Balance, June 30, 2017 $ 2,834,961 $ 243,783 $ 976,101 $ 4,054,845
120
Exhibit J-5

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

of activities (Exhibit B) are different because:
Net change in fund balances - total governmental funds (Exhibit J-4) $ 24,220
(1) Governmental funds report capital outlays as expenditures. However,

in the statement of activities, the cost of these assets is allocated
over their useful lives and reported as depreciation expense. The
difference between capital outlays and depreciation is itemized as
follows:
Add: capital assets purchased in the current-period $ 763,613
Less: current-year depreciation expense (774,678) (11,065)
(2) The net effect of various miscellaneous transactions involving capital

assets (sales, trade-ins, and donations) is to decrease net position.
Add: assets donated and capitalized $ 14,000
Less: book value on capital assets disposed (29,064) (15,064)
(3) Revenues in the statement of activities that do not provide current

financial resources are not reported in the funds.
Add: deferred delinquent property taxes and other deferred June 30, 2017 $ 111,472
Less: deferred delinquent property taxes and other deferred June 30, 2016 (96,275) 15,197
(4) The contributions of long-term debt (e.g., notes, bonds, leases) by the primary
government provide current financial resources to governmental funds, while the
contributions by the School Department of the principal of long-term debt consume
the current financial resources of governmental funds. Neither transaction,
however, has any effect on net position.
Less: note proceeds contributed by the primary government $ (87,973)
Add: principal contributions on notes to the primary government 81,225
Add: principal contributions on other loans to the primary government 158,376 151,628
(5) Some expenses reported in the statement of activities do not require

the use of current financial resources and therefore are not reported
as expenditures in the governmental funds.
Change in other postemployment benefits liability $ 5,440
Change in net pension liability - agent plan (274,420)
Change in net pension liability - teacher legacy plan (1,348,188)
Change in net pension asset - teacher retirement plan 6,376
Change in deferred outflows related to pensions 1,916,596
Change in deferred inflows related to pensions 392,428 698,232
Change in net position of governmental activities (Exhibit B) $ 863,148
121
Exhibit J-6

General Purpose School Fund
Actual Variance
Actual Less: Add: Expenditures Budget -
(GAAP Encumbrances Encumbrances (Budgetary Budgeted Amounts Positive
Basis) 7/1/2016 6/30/2017 Basis) Original Final (Negative)
Revenues
Local Taxes $ 2,047,210 $ 0 $ 0 $ 2,047,210 $ 1,953,700 $ 1,953,700 $ 93,510
Licenses and Permits 461 0 0 461 400 400 61
Charges for Current Services 24,936 0 0 24,936 42,000 42,000 (17,064)
Other Local Revenues 139,298 0 0 139,298 68,000 130,627 8,671
State of Tennessee 14,454,497 0 0 14,454,497 14,361,275 14,536,751 (82,254)
Federal Government 322,556 0 0 322,556 107,148 294,354 28,202
Other Governments and Citizens Groups 103,973 0 0 103,973 189,999 114,941 (10,968)
Total Revenues $ 17,092,931 $ 0 $ 0 $ 17,092,931 $ 16,722,522 $ 17,072,773 $ 20,158
Expenditures
Instruction
Regular Instruction Program $ 6,854,423 $ (52,655) $ 23,078 $ 6,824,846 $ 7,330,006 $ 7,076,815 $ 251,969
Alternative Instruction Program 49,585 0 595 50,180 72,127 68,627 18,447
Special Education Program 1,949,139 0 14,554 1,963,693 2,159,698 2,119,901 156,208
Career and Technical Education Program 653,813 (1,943) 764 652,634 678,038 680,038 27,404
Support Services
Attendance 136,307 0 3,761 140,068 141,839 142,139 2,071
Health Services 380,530 (200) 2,823 383,153 404,483 404,483 21,330
Other Student Support 354,809 (1,964) 2,162 355,007 347,238 366,310 11,303
Regular Instruction Program 188,456 0 8,445 196,901 203,212 210,213 13,312
Special Education Program 256,228 0 25,007 281,235 217,755 305,326 24,091
Career and Technical Education Program 82,730 0 90 82,820 83,196 83,196 376
Technology 242,914 0 2,002 244,916 195,597 263,343 18,427
Other Programs 90,307 0 0 90,307 0 90,307 0
Board of Education 412,658 (53,695) 1,058 360,021 418,395 389,595 29,574
Director of Schools 211,430 0 0 211,430 212,364 224,794 13,364
Office of the Principal 790,279 0 0 790,279 767,717 794,887 4,608
Fiscal Services 172,053 (787) 103 171,369 175,093 175,093 3,724
Human Services/Personnel 54,073 0 2,059 56,132 59,443 59,443 3,311
(Continued)
122
Exhibit J-6

General Purpose School Fund (Cont.)
Actual Variance
Support Services (Cont.)
Operation of Plant $ 1,026,603 $ (25,925) $ 70,375 $ 1,071,053 $ 1,129,650 $ 1,168,397 $ 97,344
Maintenance of Plant 295,037 (30,374) 48,676 313,339 333,722 353,796 40,457
Transportation 856,218 (32,690) 35,956 859,484 833,576 899,676 40,192
Central and Other 36,675 (1,834) 1,806 36,647 49,648 53,142 16,495
Community Services 247,798 (848) 7,547 254,497 189,999 288,548 34,051
Early Childhood Education 423,054 0 23,687 446,741 454,525 456,731 9,990
Capital Outlay
Regular Capital Outlay 576,957 (565,813) 89,000 100,144 55,000 105,601 5,457
Principal on Debt
Education 239,601 0 0 239,601 235,560 235,560 (4,041)
Interest on Debt
Education 7,124 0 0 7,124 255,771 5,771 (1,353)
Other Debt Service
Education 750,000 0 0 750,000 500,000 750,000 0
Total Expenditures $ 17,338,801 $ (768,728) $ 363,548 $ 16,933,621 $ 17,503,652 $ 17,771,732 $ 838,111

Over Expenditures $ (245,870) $ 768,728 $ (363,548) $ 159,310 $ (781,130) $ (698,959) $ 858,269

Notes Issued $ 0 $ 0 $ 0 $ 0 $ 87,973 $ 0 $ 0
Insurance Recovery 0 0 0 0 0 5,833 (5,833)
Transfers In 18,650 0 0 18,650 20,478 22,289 (3,639)
Transfers Out 0 0 0 0 (1,300) (3,139) 3,139
Total Other Financing Sources $ 18,650 $ 0 $ 0 $ 18,650 $ 107,151 $ 24,983 $ (6,333)
(Continued)
123
Exhibit J-6

Actual Variance
Net Change in Fund Balance $ (227,220) $ 768,728 $ (363,548) $ 177,960 $ (673,979) $ (673,976) $ 851,936
Fund Balance, July 1, 2016 3,062,181 (768,728) 0 2,293,453 2,795,021 2,795,021 (501,568)
Fund Balance, June 30, 2017 $ 2,834,961 $ 0 $ (363,548) $ 2,471,413 $ 2,121,042 $ 2,121,045 $ 350,368
124
Exhibit J-7

School Federal Projects Fund
Actual Variance
Revenues
Federal Government $ 2,000,362 $ 0 $ 0 $ 2,000,362 $ 1,878,718 $ 2,271,877 $ (271,515)
Total Revenues $ 2,000,362 $ 0 $ 0 $ 2,000,362 $ 1,878,718 $ 2,271,877 $ (271,515)
Expenditures
Instruction
Regular Instruction Program $ 529,634 $ (1,515) $ 33,096 $ 561,215 $ 434,999 $ 631,494 $ 70,279
Special Education Program 589,098 0 0 589,098 596,746 637,157 48,059
Career and Technical Education Program 32,903 (187) 1,178 33,894 36,962 34,276 382
Support Services
Other Student Support 94,123 (96) 5,664 99,691 97,751 127,272 27,581
Regular Instruction Program 534,742 0 220 534,962 578,054 575,372 40,410
Special Education Program 115,417 0 0 115,417 68,351 168,450 53,033
Career and Technical Education Program 1,387 0 0 1,387 2,050 2,050 663
Transportation 48,919 0 0 48,919 45,154 77,154 28,235
Total Expenditures $ 1,946,223 $ (1,798) $ 40,158 $ 1,984,583 $ 1,860,067 $ 2,253,225 $ 268,642

Over Expenditures $ 54,139 $ 1,798 $ (40,158) $ 15,779 $ 18,651 $ 18,652 $ (2,873)

Transfers Out $ (18,650) $ 0 $ 0 $ (18,650) $ (18,650) $ (18,650) $ 0
Total Other Financing Sources $ (18,650) $ 0 $ 0 $ (18,650) $ (18,650) $ (18,650) $ 0
Net Change in Fund Balance $ 35,489 $ 1,798 $ (40,158) $ (2,871) $ 1 $ 2 $ (2,873)

Fund Balance, July 1, 2016 208,294 (1,798) 0 206,496 176,370 176,370 30,126
Fund Balance, June 30, 2017 $ 243,783 $ 0 $ (40,158) $ 203,625 $ 176,371 $ 176,372 $ 27,253
125
Exhibit J-8

Central Cafeteria Fund
Actual Variance
Actual Add: Expenditures Budget -
Revenues
Charges for Current Services $ 116,890 $ 0 $ 116,890 $ 169,428 $ 169,428 $ (52,538)
Other Local Revenues 34 0 34 0 0 34
State of Tennessee 13,330 0 13,330 13,637 13,637 (307)
Federal Government 1,625,369 0 1,625,369 1,494,957 1,519,957 105,412
Total Revenues $ 1,755,623 $ 0 $ 1,755,623 $ 1,678,022 $ 1,703,022 $ 52,601
Expenditures
Food Service $ 1,539,672 $ 2,549 $ 1,542,221 $ 1,678,022 $ 1,703,022 $ 160,801
Total Expenditures $ 1,539,672 $ 2,549 $ 1,542,221 $ 1,678,022 $ 1,703,022 $ 160,801

Over Expenditures $ 215,951 $ (2,549) $ 213,402 $ 0 $ 0 $ 213,402
Net Change in Fund Balance $ 215,951 $ (2,549) $ 213,402 $ 0 $ 0 $ 213,402

Fund Balance, July 1, 2016 760,150 0 760,150 585,494 585,494 174,656
Fund Balance, June 30, 2017 $ 976,101 $ (2,549) $ 973,552 $ 585,494 $ 585,494 $ 388,058
126
Exhibit J-9
Statement of Fiduciary Net Position
Fiduciary Fund
June 30, 2017
Private
Purpose
Trust
Fund
Other
Trust
Fund
ASSETS
Current Assets:
Cash with Trustee $ 22,030
Total Assets $ 22,030
NET POSITION
Funds Held in Trust for Scholarships $ 22,030
Total Net Position $ 22,030
127
Exhibit J-10
Statement of Changes in Fiduciary Net Position
Fiduciary Fund
Private
Purpose
Trust
Fund
Other
Trust
Fund
ADDITIONS
Investment Income $ 130

Contributions and Gifts 725
Total Additions $ 855
DEDUCTIONS
Awards $ 675
Miscellaneous 1
Total Deductions $ 676
Change in Net Position $ 179

Net Position, July 1, 2016 21,851
Net Position, June 30, 2017 $ 22,030
128
MISCELLANEOUS SCHEDULES
129
Exhibit K-1

Schedule of Changes in Long-term Other Loans, Bonds, and Notes
Paid and/or
Original Date Last Issued Matured
Amount Interest of Maturity Outstanding During During Outstanding
Description of Indebtedness of Issue Rate Issue Date 7-1-16 Period Period 6-30-17
GOVERNMENTAL ACTIVITIES
OTHER LOANS PAYABLE

Payable through General Debt Service Fund
School Renovations $ 2,690,000 Variable Various 6-1-23 $ 1,941,001 $ 0 $ 260,000 $ 1,681,001
Total Payable through General Debt Service Fund $ 1,941,001 $ 0 $ 260,000 $ 1,681,001
Contributions Due by the School Department from the General Purpose School
Fund to the General Debt Service Fund
Energy Efficient Improvements 1,583,809 0 % 8-22-11 9-11-22 $ 976,701 $ 0 $ 158,376 $ 818,325
Total Contributions Due by the School Department from the General Purpose School
Fund to the General Debt Service Fund $ 976,701 $ 0 $ 158,376 $ 818,325
Total Other Loans Payable $ 2,917,702 $ 0 $ 418,376 $ 2,499,326
BONDS PAYABLE
School Refunding Series 2016 3,945,000 2.07 4-29-16 5-1-21 $ 3,945,000 $ 0 $ 725,000 $ 3,220,000
General Obligation Bond, Series 2014 7,000,000 3.50 5-22-16 5-11-54 6,992,639 0 90,021 6,902,618
Total Bonds Payable $ 10,937,639 $ 0 $ 815,021 $ 10,122,618
NOTES PAYABLE
Patrol Cars 96,000 2.69 5-29-15 4-5-18 $ 64,599 $ 0 $ 31,871 $ 32,728
Dump Trucks 315,000 1.97 8-26-15 4-5-18 83,916 0 83,916 0
Land - Additional Parking 100,000 0 9-26-16 9-30-20 0 100,000 0 100,000
Justice Center Completion 600,000 3.05 10-26-16 9-1-21 0 600,000 0 600,000
Total Payable through General Debt Service Fund $ 148,515 $ 700,000 $ 115,787 $ 732,728
(Continued)
130
Exhibit K-1

Schedule of Changes in Long-term Other Loans, Bonds, and Notes (Cont.)
Paid and/or
Original Date Last Issued Matured
Amount Interest of Maturity Outstanding During During Outstanding
Description of Indebtedness of Issue Rate Issue Date 7-1-16 Period Period 6-30-17
GOVERNMENTAL ACTIVITIES (CONT.)
NOTES PAYABLE (CONT.)

Contributions Due by the School Department from the General Purpose School
Fund to the General Debt Service Fund
School Bus $ 140,109 2.69 % 11-7-12 8-20-17 $ 57,951 $ 0 $ 28,589 $ 29,362
School Bus 89,451 3.50 9-29-14 10-1-19 72,409 0 17,331 55,078
School Bus 93,000 2.69 11-5-15 8-15-20 93,000 0 18,065 74,935
School Bus 87,973 2.38 8-25-16 5-15-21 0 87,973 17,240 70,733
Total Contributions Due by the School Department from the General Purpose School
Fund to the General Debt Service Fund $ 223,360 $ 87,973 $ 81,225 $ 230,108
Total Notes Payable $ 371,875 $ 787,973 $ 197,012 $ 962,836
131
Exhibit K-2

Schedule of Long-term Debt Requirements by Year
GOVERNMENTAL ACTIVITIES:
Year
Ending Other Loans
June 30 Principal Interest Fees Total
2018 $ 424,376 $ 31,098 $ 4,068 $ 459,542

2019 429,376 26,177 3,741 459,294
2020 435,376 21,164 3,407 459,947
2021 441,376 16,040 3,066 460,482
2022 447,376 10,804 2,718 460,898
2023 321,446 5,457 2,363 329,266
Total $ 2,499,326 $ 110,740 $ 19,363 $ 2,629,429
Year
Ending Bonds
2018 $ 848,223 $ 306,911 $ 1,155,134

2019 886,539 287,967 1,174,506
2020 919,972 268,181 1,188,153
2021 958,528 247,650 1,206,178
2022 107,210 226,270 333,480
2023 111,023 222,457 333,480
2024 114,972 218,508 333,480
2025 119,061 214,419 333,480
2026 123,296 210,184 333,480
2027 127,681 205,799 333,480
2028 132,222 201,258 333,480
2029 136,925 196,555 333,480
2030 141,795 191,685 333,480
2031 146,838 186,642 333,480
2032 152,061 181,419 333,480
2033 157,469 176,011 333,480
2034 163,070 170,410 333,480
2035 168,870 164,610 333,480
2036 174,876 158,604 333,480
2037 181,096 152,384 333,480
2038 187,537 145,943 333,480
2039 194,207 139,273 333,480
2040 201,115 132,365 333,480
2041 208,268 125,212 333,480
2042 215,675 117,805 333,480
2043 223,346 110,134 333,480
2044 231,290 102,190 333,480
2045 239,516 93,964 333,480
2046 248,035 85,445 333,480
2047 256,857 76,623 333,480
2048 265,992 67,488 333,480
2049 275,453 58,027 333,480
2050 285,250 48,230 333,480
2051 295,395 38,085 333,480
2052 305,901 27,579 333,480
2053 316,782 16,698 333,480
2054 300,272 5,418 305,690
Total $ 10,122,618 $ 5,578,403 $ 15,701,021
(Continued)
132
Exhibit K-2

Schedule of Long-term Debt Requirements by Year (Cont.)
Year
Ending Notes
2018 $ 239,990 $ 23,741 $ 263,731

2019 198,307 17,324 215,631
2020 203,742 12,192 215,934
2021 189,797 6,893 196,690
2022 131,000 1,998 132,998
Total $ 962,836 $ 62,148 $ 1,024,984
133
Exhibit K-3
Schedule of Transfers
From Fund To Fund Purpose Amount
PRIMARY GOVERNMENT
Highway/Public Works General Debt Service Debt Retirement $ 85,284
Total Transfers Primary Government $ 85,284
DISCRETELY PRESENTED GRUNDY

COUNTY SCHOOL DEPARTMENT
School Federal Projects General Purpose School Indirect Costs $ 18,650
Total Transfers $ 18,650
134
Exhibit K-4

Schedule of Salaries and Official Bonds of Principal Officials
Salary
Paid
During
Official Authorization for Salary Period Bond Surety
County Mayor Section 8-24-102, TCA $ 75,329 $ 100,000 Travelers Casualty and Surety Company of America
Highway Superintendent Section 8-24-102, TCA 71,743 100,000 "
Director of Schools State Board of Education and 85,000 (1) 100,000 Western Surety Company
Grundy County Board of
Education
Trustee Section 8-24-102, TCA 65,221 663,954 "
Assessor of Property Section 8-24-102, TCA 65,221 50,000 Travelers Casualty and Surety Company of America
County Clerk Section 8-24-102, TCA 65,221 55,000 "
Circuit and General Sessions Courts Clerk Section 8-24-102, TCA 65,221 75,000 "
Clerk and Master Section 8-24-102, TCA 65,221 75,000 "
Register of Deeds Section 8-24-102, TCA 65,221 50,000 "
Sheriff Section 8-24-102, TCA 71,743 (2) 100,000 "
Employee Blanket Bonds

Public Employee Dishonesty - County Departments and School Department 400,000 Local Government Property and Casualty Fund
(1) Does not include a Chief Executive Officer Supplement of $1,900 and an evaluation bonus of $598.
(2) Does not include a law enforcement training supplement of $600.
135
Exhibit K-5

Schedule of Detailed Revenues -
All Governmental Fund Types

Constitu -
Courthouse Solid Industrial / tional
and Jail Waste / Economic Drug Officers -
General Maintenance Sanitation Development Control Fees
Local Taxes
County Property Taxes
Current Property Tax $ 2,752,609 $ 0 $ 327,347 $ 0 $ 0 $ 0
Trustee's Collections - Prior Year 146,983 0 17,480 0 0 0
Circuit Clerk/Clerk and Master Collections - Prior Years 66,542 0 7,914 0 0 0
Interest and Penalty 25,627 0 3,048 0 0 0
Payments in-Lieu-of Taxes - T.V.A. 424 0 312 0 0 0
Payments in-Lieu-of Taxes - Local Utilities 322,099 0 38,305 0 0 0
Payments in-Lieu-of Taxes - Other 12,066 0 1,435 0 0 0
County Local Option Taxes
Local Option Sales Tax 0 0 0 0 0 0
Hotel/Motel Tax 84,817 0 0 0 0 0
Litigation Tax - General 18,735 0 0 0 0 0
Litigation Tax - Special Purpose 0 32,413 0 0 0 0
Litigation Tax - Jail, Workhouse, or Courthouse 12,822 0 0 0 0 0
Business Tax 25,324 0 0 0 0 0
Statutory Local Taxes
Bank Excise Tax 38,762 0 0 0 0 0
Interstate Telecommunications Tax 631 0 0 0 0 0
Total Local Taxes $ 3,507,441 $ 32,413 $ 395,841 $ 0 $ 0 $ 0
Licenses and Permits

Licenses
Marriage Licenses $ 461 $ 0 $ 0 $ 0 $ 0 $ 0
Cable TV Franchise 29,020 0 0 0 0 0
Permits
Beer Permits 808 0 0 0 0 0
Total Licenses and Permits $ 30,289 $ 0 $ 0 $ 0 $ 0 $ 0
(Continued)
136
Exhibit K-5

All Governmental Fund Types (Cont.)

Constitu -
Fines, Forfeitures, and Penalties

Circuit Court
Fines $ 3,658 $ 0 $ 0 $ 0 $ 0 $ 0
Officers Costs 6,152 0 0 0 0 0
Drug Control Fines 0 0 0 0 3,896 0
Drug Court Fees 1,257 0 0 0 0 0
Data Entry Fee - Circuit Court 626 0 0 0 0 0
Criminal Court
DUI Treatment Fines 1,282 0 0 0 0 0
General Sessions Court
Fines 13,327 0 0 0 0 0
Officers Costs 19,111 0 0 0 0 0
Game and Fish Fines 435 0 0 0 0 0
Drug Control Fines 0 0 0 0 7,487 0
Drug Court Fees 2,238 0 0 0 0 0
Jail Fees 2,006 0 0 0 0 0
DUI Treatment Fines 1,474 0 0 0 0 0
Data Entry Fee - General Sessions Court 8,142 0 0 0 0 0
Courtroom Security Fee 296 0 0 0 0 0
Juvenile Court
Fines 166 0 0 0 0 0
Officers Costs 892 0 0 0 0 0
Data Entry Fee - Juvenile Court 279 0 0 0 0 0
Chancery Court
Officers Costs 676 0 0 0 0 0
Data Entry Fee - Chancery Court 1,874 0 0 0 0 0
(Continued)
137
Exhibit K-5


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

Other Fines, Forfeitures, and Penalties
Proceeds from Confiscated Property $ 0 $ 0 $ 0 $ 0 $ 14,199 $ 0
Other Fines, Forfeitures, and Penalties 950 0 0 0 0 0
Total Fines, Forfeitures, and Penalties $ 64,841 $ 0 $ 0 $ 0 $ 25,582 $ 0
Charges for Current Services

General Service Charges
Work Release Charges for Board $ 2,330 $ 0 $ 0 $ 0 $ 0 $ 0
Other General Service Charges 0 0 0 0 0 0
Fees
Archives and Records Management Fee 249 0 0 0 0 0
Greenbelt Late Application Fee 60 0 7 0 0 0
Telephone Commissions 24,307 0 0 0 0 0
Constitutional Officers' Fees and Commissions 0 0 0 0 0 161
Data Processing Fee - Register 3,667 0 0 0 0 0
Data Processing Fee - Sheriff 1,704 0 0 0 0 0
Sexual Offender Registration Fee - Sheriff 2,400 0 0 0 0 0
Data Processing Fee - County Clerk 830 0 0 0 0 0
Total Charges for Current Services $ 35,547 $ 0 $ 7 $ 0 $ 0 $ 161
Other Local Revenues

Recurring Items
Investment Income $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Lease/Rentals 0 0 2,850 34,001 0 0
Sale of Materials and Supplies 2,000 0 0 0 0 0
Commissary Sales 16,191 0 0 0 0 0
(Continued)
138
Exhibit K-5


Constitu -
Other Local Revenues (Cont.)

Recurring Items (Cont.)
Sale of Gasoline $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Miscellaneous Refunds 26,993 0 0 0 0 0
Nonrecurring Items
Sale of Equipment 0 0 0 0 0 0
Sale of Property 12,978 0 0 0 28,951 0
Contributions and Gifts 355 0 0 0 0 0
Other Local Revenues 30,991 0 9,902 0 0 0
Total Other Local Revenues $ 89,508 $ 0 $ 12,752 $ 34,001 $ 28,951 $ 0
Fees Received From County Officials

Excess Fees
Juvenile Court Clerk $ 5,307 $ 0 $ 0 $ 0 $ 0 $ 0
Fees In-Lieu-of Salary
County Clerk 121,498 0 0 0 0 0
Circuit Court Clerk 40,344 0 0 0 0 0
General Sessions Court Clerk 72,939 0 0 0 0 0
Clerk and Master 45,568 0 0 0 0 0
Register 52,511 0 0 0 0 0
Sheriff 14,590 0 0 0 0 0
Trustee 191,974 0 0 0 0 0
Total Fees Received From County Officials $ 544,731 $ 0 $ 0 $ 0 $ 0 $ 0
(Continued)
139
Exhibit K-5


Constitu -
State of Tennessee
General Government Grants
Juvenile Services Program $ 9,000 $ 0 $ 0 $ 0 $ 0 $ 0
Public Safety Grants
Law Enforcement Training Programs 7,800 0 0 0 0 0
Health and Welfare Grants
Health Department Programs 5,000 0 0 0 0 0
Other Health and Welfare Grants 30,060 0 0 0 0 0
Public Works Grants
Bridge Program 0 0 0 0 0 0
Litter Program 0 0 33,564 0 0 0
State Education Funds
Other State Education Funds 26,721 0 0 0 0 0
Other State Revenues
Beer Tax 68,598 0 0 0 0 0
Vehicle Certificate of Title Fees 6,400 0 0 0 0 0
Alcoholic Beverage Tax 41,561 0 0 0 0 0
Contracted Prisoner Boarding 367,928 0 0 0 0 0
Gasoline and Motor Fuel Tax 0 0 0 0 0 0
Petroleum Special Tax 0 0 0 0 0 0
Registrar's Salary Supplement 15,164 0 0 0 0 0
Other State Grants 10,000 0 0 61,265 0 0
Other State Revenues 9,548 0 0 0 0 0
Total State of Tennessee $ 597,780 $ 0 $ 33,564 $ 61,265 $ 0 $ 0
(Continued)
140
Exhibit K-5


Constitu -
Federal Government
Federal Through State
Community Development $ 166,639 $ 0 $ 0 $ 0 $ 0 $ 0
Homeland Security Grants 9,600 0 0 0 0 0
Law Enforcement Grants 10,342 0 0 0 0 0
Other Federal through State 9,692 0 0 0 0 0
Total Federal Government $ 196,273 $ 0 $ 0 $ 0 $ 0 $ 0
Other Governments and Citizens Groups

Other Governments
Contributions $ 9,800 $ 0 $ 0 $ 0 $ 0 $ 0
Other
Other 10,000 0 0 0 0 0
Total Other Governments and Citizens Groups $ 19,800 $ 0 $ 0 $ 0 $ 0 $ 0
Total $ 5,086,210 $ 32,413 $ 442,164 $ 95,266 $ 54,533 $ 161
(Continued)
141
Exhibit K-5

Special
Revenue Debt Service Capital
Fund Fund Projects Fund
Highway / General General
Public Debt Capital
Works Service Projects Total
Local Taxes
Current Property Tax $ 0 $ 236,414 $ 0 $ 3,316,370
Trustee's Collections - Prior Year 0 12,624 0 177,087
Circuit Clerk/Clerk and Master Collections - Prior Years 0 5,715 0 80,171
Interest and Penalty 0 2,201 0 30,876
Payments in-Lieu-of Taxes - T.V.A. 0 226 0 962
Payments in-Lieu-of Taxes - Local Utilities 0 27,664 0 388,068
Payments in-Lieu-of Taxes - Other 0 1,036 0 14,537
Local Option Sales Tax 0 492,791 0 492,791
Hotel/Motel Tax 0 0 0 84,817
Litigation Tax - General 0 0 0 18,735
Litigation Tax - Special Purpose 0 0 0 32,413
Litigation Tax - Jail, Workhouse, or Courthouse 0 0 0 12,822
Business Tax 0 0 0 25,324
Bank Excise Tax 0 0 0 38,762
Interstate Telecommunications Tax 0 0 0 631
Total Local Taxes $ 0 $ 778,671 $ 0 $ 4,714,366

Licenses
Marriage Licenses $ 0 $ 0 $ 0 $ 461
Cable TV Franchise 0 0 0 29,020
Permits
Beer Permits 0 0 0 808
Total Licenses and Permits $ 0 $ 0 $ 0 $ 30,289
(Continued)
142
Exhibit K-5

Special
Public Debt Capital
Fines, Forfeitures, and Penalties

Circuit Court
Fines $ 0 $ 0 $ 0 $ 3,658
Officers Costs 0 0 0 6,152
Drug Control Fines 0 0 0 3,896
Drug Court Fees 0 0 0 1,257
Data Entry Fee - Circuit Court 0 0 0 626
Criminal Court
DUI Treatment Fines 0 0 0 1,282
General Sessions Court
Fines 0 0 0 13,327
Officers Costs 0 0 0 19,111
Game and Fish Fines 0 0 0 435
Drug Control Fines 0 0 0 7,487
Drug Court Fees 0 0 0 2,238
Jail Fees 0 0 0 2,006
DUI Treatment Fines 0 0 0 1,474
Data Entry Fee - General Sessions Court 0 0 0 8,142
Courtroom Security Fee 0 0 0 296
Juvenile Court
Fines 0 0 0 166
Officers Costs 0 0 0 892
Data Entry Fee - Juvenile Court 0 0 0 279
Chancery Court
Officers Costs 0 0 0 676
Data Entry Fee - Chancery Court 0 0 0 1,874
(Continued)
143
Exhibit K-5

Special
Public Debt Capital
Fines, Forfeitures, and Penalties (Cont.)

Other Fines, Forfeitures, and Penalties
Proceeds from Confiscated Property $ 0 $ 0 $ 0 $ 14,199
Other Fines, Forfeitures, and Penalties 0 0 0 950
Total Fines, Forfeitures, and Penalties $ 0 $ 0 $ 0 $ 90,423

General Service Charges
Work Release Charges for Board $ 0 $ 0 $ 0 $ 2,330
Other General Service Charges 82,993 0 0 82,993
Fees
Archives and Records Management Fee 0 0 0 249
Greenbelt Late Application Fee 0 5 0 72
Telephone Commissions 0 0 0 24,307
Constitutional Officers' Fees and Commissions 0 0 0 161
Data Processing Fee - Register 0 0 0 3,667
Data Processing Fee - Sheriff 0 0 0 1,704
Sexual Offender Registration Fee - Sheriff 0 0 0 2,400
Data Processing Fee - County Clerk 0 0 0 830
Total Charges for Current Services $ 82,993 $ 5 $ 0 $ 118,713

Recurring Items
Investment Income $ 0 $ 127,047 $ 0 $ 127,047
Lease/Rentals 0 0 0 36,851
Sale of Materials and Supplies 1,119 0 0 3,119
Commissary Sales 0 0 0 16,191
(Continued)
144
Exhibit K-5

Special
Public Debt Capital
Other Local Revenues (Cont.)

Recurring Items (Cont.)
Sale of Gasoline $ 22,641 $ 0 $ 0 $ 22,641
Miscellaneous Refunds 62 0 4,174 31,229
Nonrecurring Items
Sale of Equipment 41,677 0 0 41,677
Sale of Property 0 0 0 41,929
Contributions and Gifts 0 0 0 355
Other Local Revenues 0 0 0 40,893
Total Other Local Revenues $ 65,499 $ 127,047 $ 4,174 $ 361,932
Fees Received From County Officials

Excess Fees
Juvenile Court Clerk $ 0 $ 0 $ 0 $ 5,307
Fees In-Lieu-of Salary
County Clerk 0 0 0 121,498
Circuit Court Clerk 0 0 0 40,344
General Sessions Court Clerk 0 0 0 72,939
Clerk and Master 0 0 0 45,568
Register 0 0 0 52,511
Sheriff 0 0 0 14,590
Trustee 0 0 0 191,974
Total Fees Received From County Officials $ 0 $ 0 $ 0 $ 544,731
(Continued)
145
Exhibit K-5

Special
Public Debt Capital
State of Tennessee
Juvenile Services Program $ 0 $ 0 $ 0 $ 9,000
Public Safety Grants
Law Enforcement Training Programs 0 0 0 7,800
Health and Welfare Grants
Health Department Programs 0 0 0 5,000
Other Health and Welfare Grants 0 0 0 30,060
Public Works Grants
Bridge Program 314,633 0 0 314,633
Litter Program 0 0 0 33,564
Other State Education Funds 0 0 0 26,721
Beer Tax 0 0 0 68,598
Vehicle Certificate of Title Fees 0 0 0 6,400
Alcoholic Beverage Tax 0 0 0 41,561
Contracted Prisoner Boarding 0 0 0 367,928
Gasoline and Motor Fuel Tax 1,616,671 0 0 1,616,671
Petroleum Special Tax 9,887 0 0 9,887
Registrar's Salary Supplement 0 0 0 15,164
Other State Grants 0 0 0 71,265
Other State Revenues 0 0 0 9,548
Total State of Tennessee $ 1,941,191 $ 0 $ 0 $ 2,633,800
(Continued)
146
Exhibit K-5

Special
Public Debt Capital
Federal Government
Community Development $ 0 $ 0 $ 0 $ 166,639
Homeland Security Grants 0 0 0 9,600
Law Enforcement Grants 0 0 0 10,342
Other Federal through State 0 0 0 9,692
Total Federal Government $ 0 $ 0 $ 0 $ 196,273

Other Governments
Contributions $ 13,743 $ 996,725 $ 0 $ 1,020,268
Other
Other 0 0 0 10,000
Total Other Governments and Citizens Groups $ 13,743 $ 996,725 $ 0 $ 1,030,268
Total $ 2,103,426 $ 1,902,448 $ 4,174 $ 9,720,795
147
Exhibit K-6


General School
Purpose Federal Central
School Projects Cafeteria Total
Local Taxes
Current Property Tax $ 1,299,739 $ 0 $ 0 $ 1,299,739
Trustee's Collections - Prior Year 69,403 0 0 69,403
Circuit Clerk/Clerk and Master Collections - Prior Years 27,653 0 0 27,653
Interest and Penalty 12,101 0 0 12,101
Payments in-Lieu-of Taxes - T.V.A. 1,240 0 0 1,240
Payments in-Lieu-of Taxes - Local Utilities 152,090 0 0 152,090
Payments in-Lieu-of Taxes - Other 5,698 0 0 5,698
Local Option Sales Tax 454,608 0 0 454,608
Business Tax 23,564 0 0 23,564
Interstate Telecommunications Tax 1,114 0 0 1,114
Total Local Taxes $ 2,047,210 $ 0 $ 0 $ 2,047,210

Licenses
Marriage Licenses $ 461 $ 0 $ 0 $ 461
Total Licenses and Permits $ 461 $ 0 $ 0 $ 461

Fees
Greenbelt Late Application Fee $ 28 $ 0 $ 0 $ 28
Education Charges
Tuition - Other 24,856 0 0 24,856
(Continued)
148
Exhibit K-6


General School
Charges for Current Services (Cont.)

Education Charges (Cont.)
Lunch Payments - Adults $ 0 $ 0 $ 21,257 $ 21,257
A la Carte Sales 0 0 95,633 95,633
Other Charges for Services 52 0 0 52
Total Charges for Current Services $ 24,936 $ 0 $ 116,890 $ 141,826

Recurring Items
Investment Income $ 0 $ 0 $ 19 $ 19
Sale of Recycled Materials 418 0 0 418
E-Rate Funding 3,155 0 0 3,155
Miscellaneous Refunds 57,955 0 0 57,955
Nonrecurring Items
Sale of Equipment 766 0 0 766
Damages Recovered from Individuals 60 0 0 60
Contributions and Gifts 59,661 0 15 59,676
Total Other Local Revenues $ 139,298 $ 0 $ 34 $ 139,332
State of Tennessee
On-behalf Contributions for OPEB $ 90,307 $ 0 $ 0 $ 90,307
Basic Education Program 13,384,278 0 0 13,384,278
(Continued)
149
Exhibit K-6


General School
State of Tennessee (Cont.)

State Education Funds (Cont.)
Early Childhood Education $ 305,620 $ 0 $ 0 $ 305,620
School Food Service 0 0 13,330 13,330
Other State Education Funds 4,760 0 0 4,760
Coordinated School Health 99,728 0 0 99,728
Internet Connectivity 5,575 0 0 5,575
Family Resource Centers 29,605 0 0 29,605
Career Ladder Program 55,493 0 0 55,493
State Revenue Sharing - T.V.A. 450,999 0 0 450,999
Other State Grants 14,222 0 0 14,222
Safe Schools 13,910 0 0 13,910
Total State of Tennessee $ 14,454,497 $ 0 $ 13,330 $ 14,467,827
Federal Government
USDA School Lunch Program $ 0 $ 0 $ 939,878 $ 939,878
USDA - Commodities 0 0 102,046 102,046
Breakfast 0 0 541,323 541,323
USDA - Other 0 0 42,122 42,122
Vocational Education - Basic Grants to States 0 44,777 0 44,777
Title I Grants to Local Education Agencies 0 1,004,526 0 1,004,526
Special Education - Grants to States 132,233 726,604 0 858,837
Special Education Preschool Grants 0 30,642 0 30,642
Safe and Drug-free Schools - State Grants 163,392 0 0 163,392
(Continued)
150
Exhibit K-6


General School
Federal Government (Cont.)

Federal Through State (Cont.)
Rural Education $ 0 $ 31,107 $ 0 $ 31,107
Eisenhower Professional Development State Grants 0 120,561 0 120,561
Other Federal through State 26,931 42,145 0 69,076
Total Federal Government $ 322,556 $ 2,000,362 $ 1,625,369 $ 3,948,287

Other Governments
Contributions $ 87,973 $ 0 $ 0 $ 87,973
Other
Other 16,000 0 0 16,000
Total Other Governments and Citizens Groups $ 103,973 $ 0 $ 0 $ 103,973
Total $ 17,092,931 $ 2,000,362 $ 1,755,623 $ 20,848,916
151
Exhibit K-7

Schedule of Detailed Expenditures -
General Fund
General Government
County Commission
Board and Committee Members Fees $ 15,050
Social Security 933
Employer Medicare 218
Audit Services 4,933
Dues and Memberships 1,750
Printing, Stationery, and Forms 4,294
Other Charges 888
Total County Commission $ 28,066
Board of Equalization
Total Board of Equalization 2,000
Beer Board
Board and Committee Members Fees $ 198
Total Beer Board 198
County Mayor/Executive
County Official/Administrative Officer $ 75,329
Assistant(s) 27,092
Part-time Personnel 23,006
Bonus Payments 1,200
Social Security 7,851
Unemployment Compensation 234
Employer Medicare 1,836
Communication 10,033
Data Processing Services 12,008
Maintenance and Repair Services - Vehicles 1,984
Postal Charges 1,585
Printing, Stationery, and Forms 259
Travel 2,136
Office Supplies 1,992
Other Charges 304
Motor Vehicles 17,968
Total County Mayor/Executive 184,817
County Attorney
Legal Services $ 21,045
Total County Attorney 21,045
Election Commission
Clerical Personnel 21,436
Bonus Payments 900
Board and Committee Members Fees 10,270
Election Workers 24,646
In-service Training 1,339
(Continued)
152
Exhibit K-7


General Government (Cont.)
Election Commission (Cont.)
Social Security $ 5,551
Communication 5,323
Data Processing Services 386
Dues and Memberships 150
Legal Notices, Recording, and Court Costs 5,261
Maintenance and Repair Services - Equipment 19,230
Postal Charges 522
Rentals 600
Travel 6,468
Office Equipment 1,755
Total Election Commission $ 170,132
Register of Deeds
Deputy(ies) 21,831
Bonus Payments 600
Communication 1,081
Postal Charges 297
Travel 500
Other Contracted Services 950
Office Supplies 510
Total Register of Deeds 103,526
County Buildings
Laborers $ 52,036
Custodial Personnel 23,101
Maintenance and Repair Services - Buildings 46,393
Custodial Supplies 6,130
Duplicating Supplies 7,449
Electricity 38,785
Natural Gas 10,682
(Continued)
153
Exhibit K-7


General Government (Cont.)
County Buildings (Cont.)
Water and Sewer $ 13,492
Land 125,000
Total County Buildings $ 366,596
Finance
Property Assessor's Office
Secretary(ies) 21,461
Audit Services 3,430
Communication 3,835
Postal Charges 780
Travel 7,777
Total Property Assessor's Office 161,074
County Trustee's Office

Deputy(ies) 21,831
Bonus Payments 600
Communication 2,136
Postal Charges 470
Travel 2,264
Total County Trustee's Office 128,474
County Clerk's Office

Deputy(ies) 67,589
(Continued)
154
Exhibit K-7


Finance (Cont.)
County Clerk's Office (Cont.)
Unemployment Compensation $ 426
Communication 3,704
Travel 1,063
Total County Clerk's Office $ 170,001
Administration of Justice
Circuit Court
Deputy(ies) 93,803
Jury and Witness Expense 16,104
Communication 9,079
Travel 336
Duplicating Supplies 236
Other Charges 825
Total Circuit Court 229,308
General Sessions Judge

Judge(s) $ 90,988
Youth Service Officer(s) 31,500
Bonus Payments 600
Communication 1,315
Office Supplies 482
In Service/Staff Development 928
Total General Sessions Judge 143,892
Chancery Court
Deputy(ies) 21,831
(Continued)
155
Exhibit K-7


Administration of Justice (Cont.)
Chancery Court (Cont.)
Part-time Personnel $ 935
Bonus Payments 900
Communication 1,216
Postal Charges 620
Total Chancery Court $ 111,949
Juvenile Court
Part-time Personnel $ 14,168
Bonus Payments 600
Social Security 916
Communication 2,718
Rentals 4,500
Travel 379
Other Charges 3,150
Total Juvenile Court 32,326
Public Safety
Sheriff's Department
Deputy(ies) 369,258
School Resource Officer 25,749
Unemployment Compensation 1,671
Maintenance and Repair Services - Buildings 600
Towing Services 7,525
Travel 1,887
Gasoline 80,328
Law Enforcement Supplies 2,371
(Continued)
156
Exhibit K-7


Public Safety (Cont.)
Sheriff's Department (Cont.)
Office Supplies $ 7,233
Tires and Tubes 8,500
Uniforms 4,922
Liability Insurance 26,345
Vehicle and Equipment Insurance 16,873
Workers' Compensation Insurance 64,314
In Service/Staff Development 6,600
Other Charges 1,925
Other Equipment 5,952
Total Sheriff's Department $ 866,255
Administration of the Sexual Offender Registry

Communication $ 350
Total Administration of the Sexual Offender Registry 350
Jail
Accountants/Bookkeepers $ 33,706
Guards 473,797
Cafeteria Personnel 24,198
Medical and Dental Services 163,994
Electricity 55,283
Equipment and Machinery Parts 4,722
Food Supplies 114,342
Natural Gas 15,608
Uniforms 5,924
Other Supplies and Materials 382
Furniture and Fixtures 18,008
Vocational Instruction Equipment 1,008
Total Jail 1,072,544
Fire Prevention and Control

Contracts with Other Public Agencies $ 4,420
Contributions 3,000
Total Fire Prevention and Control 7,420
(Continued)
157
Exhibit K-7


Public Safety (Cont.)
Rescue Squad
Contributions $ 3,000
Total Rescue Squad $ 3,000
Other Emergency Management

Assistant(s) $ 19,000
Communication 9,396
Gasoline 107
Office Supplies 233
Other Charges 116
Total Other Emergency Management 43,643
County Coroner/Medical Examiner

Pauper Burials 1,500
Total County Coroner/Medical Examiner 7,500
Public Safety Grants Program

Other Equipment $ 2,042
Total Public Safety Grants Program 2,042
Other Public Safety

Deputy(ies) $ 5,650
Social Security 350
Contributions 2,000
Law Enforcement Supplies 15,000
Other Charges 4,080
Total Other Public Safety 27,162

Local Health Center
Custodial Personnel $ 9,030
Bonus Payments 300
Social Security 579
Communication 6,351
Contracts with Government Agencies 9,362
Maintenance and Repair Services - Buildings 4,200
Postal Charges 56
Electricity 5,661
(Continued)
158
Exhibit K-7


Local Health Center (Cont.)
Natural Gas $ 3,058
Office Supplies 546
Total Local Health Center $ 64,680
Ambulance/Emergency Medical Services

Total Ambulance/Emergency Medical Services 125,000
Other Local Health Services

Medical Personnel $ 17,518
Travel 882
Total Other Local Health Services 19,985
General Welfare Assistance

Other Charges $ 643
Total General Welfare Assistance 643
Other Local Welfare Services

Other Charges $ 9,772
Total Other Local Welfare Services 9,772
Other Public Health and Welfare

Total Other Public Health and Welfare 9,405
Social, Cultural, and Recreational Services

Libraries
Librarians $ 41,856
Total Libraries 47,608
Agriculture and Natural Resources

Agricultural Extension Service
Salary Supplements $ 61,525
Communication 3,845
Duplicating Supplies 880
Other Charges 2,000
Total Agricultural Extension Service 90,850
(Continued)
159
Exhibit K-7


Agriculture and Natural Resources (Cont.)
Soil Conservation
Clerical Personnel $ 20,789
Bonus Payments 900
Communication 924
Travel 699
Other Charges 497
Total Soil Conservation $ 35,086
Other Operations
Tourism
Other Supplies and Materials $ 3,934
Total Tourism 3,934
Other Economic and Community Development

Contracts with Government Agencies $ 155,795
Other Charges 10,000
Total Other Economic and Community Development 181,003
Veterans' Services
Supervisor/Director $ 10,394
Social Security 644
Travel 793
Office Supplies 399
Total Veterans' Services 12,381
Other Charges
Building and Contents Insurance $ 19,754
Premiums on Corporate Surety Bonds 5,650
Trustee's Commission 71,375
Total Other Charges 165,394
Contributions to Other Agencies

Total Contributions to Other Agencies 39,900
Employee Benefits
Pensions $ 103,827
(Continued)
160
Exhibit K-7


Other Operations (Cont.)
Employee Benefits (Cont.)
Medical Insurance $ 98,732
Total Employee Benefits $ 202,586
Miscellaneous
Total Miscellaneous 29,367

Early Childhood Education
Total Early Childhood Education 26,794
Total General Fund $ 4,947,708
Courthouse and Jail Maintenance Fund

General Government
County Buildings
Maintenance and Repair Services - Buildings $ 55,992
Total County Buildings $ 55,992
Other Operations
Other Charges
Trustee's Commission $ 324
Total Other Charges 324
Total Courthouse and Jail Maintenance Fund 56,316
Solid Waste/Sanitation Fund

Waste Pickup
Laborers $ 24,783
Instructional Supplies and Materials 4,975
Total Waste Pickup $ 33,462
Convenience Centers
Truck Drivers $ 67,921
Communication 7,200
Disposal Fees 221,264
(Continued)
161
Exhibit K-7

Solid Waste/Sanitation Fund (Cont.)

Convenience Centers (Cont.)
Diesel Fuel $ 35,264
Electricity 9,544
Other Charges 1,398
Solid Waste Equipment 11,066
Total Convenience Centers $ 542,278
Landfill Operation and Maintenance

Contracts with Private Agencies $ 11,070
Other Charges 1,000
Total Landfill Operation and Maintenance 12,070
Other Operations
Other Charges
Trustee's Commission $ 7,959
Total Other Charges 7,959
Total Solid Waste/Sanitation Fund $ 595,769
Industrial/Economic Development Fund

Other Operations
Industrial Development
Other Construction 61,265
Total Industrial Development $ 69,062
Total Industrial/Economic Development Fund 69,062
Drug Control Fund

Public Safety
Drug Enforcement
Confidential Drug Enforcement Payments $ 500
Trustee's Commission 114
Total Drug Enforcement $ 22,564
Total Drug Control Fund 22,564
Constitutional Officers - Fees Fund

Finance
County Clerk's Office
Constitutional Officers' Operating Expenses $ 161
Total County Clerk's Office $ 161
Total Constitutional Officers - Fees Fund 161
(Continued)
162
Exhibit K-7

Highway/Public Works Fund

Highways
Administration
Accountants/Bookkeepers 33,295
Advertising 159
Communication 5,747
Evaluation and Testing 645
Maintenance and Repair Services - Office Equipment 775
Rentals 56
Travel 2,093
Penalties 5
Data Processing Supplies 109
Electricity 3,905
Office Supplies 614
Water and Sewer 420
Other Charges 576
Office Equipment 2,198
Total Administration $ 132,543
Highway and Bridge Maintenance

Equipment Operators - Heavy 83,304
Truck Drivers 135,891
Laborers 123,122
Asphalt - Liquid 146,097
Crushed Stone 188,244
Pipe 16,228
Road Signs 1,290
Small Tools 66
Other Charges 545
Total Highway and Bridge Maintenance 744,374
Operation and Maintenance of Equipment

Mechanic(s) $ 30,680
Diesel Fuel 52,801
Equipment and Machinery Parts 50,131
Garage Supplies 1,037
Gasoline 5,857
Lubricants 3,919
Propane Gas 364
Small Tools 1,237
Other Charges 441
Total Operation and Maintenance of Equipment 190,541
(Continued)
163
Exhibit K-7

Highway/Public Works Fund (Cont.)

Highways (Cont.)
Other Charges
Liability Insurance $ 30,443
Total Other Charges $ 111,386
Employee Benefits
Bonus Payments $ 20,400
Pensions 46,184
Employee and Dependent Insurance 144,418
Total Employee Benefits 252,765
Capital Outlay
Other Contracted Services $ 500
Bridge Construction 349,932
Highway Equipment 7,675
Total Capital Outlay 388,107
Total Highway/Public Works Fund $ 1,819,716

Principal on Debt
General Government
Principal on Bonds $ 90,021
Principal on Notes 31,871
Total General Government $ 121,892
Highways and Streets

Principal on Notes $ 83,916
Total Highways and Streets 83,916
Education
Principal on Bonds $ 725,000
Principal on Notes 81,225
Principal on Other Loans 418,376
Total Education 1,224,601
Interest on Debt
General Government
Interest on Bonds $ 243,459
Interest on Notes 8,091
Total General Government 251,550
Highways and Streets

Interest on Notes $ 1,649
Total Highways and Streets 1,649
(Continued)
164
Exhibit K-7

General Debt Service Fund (Cont.)

Interest on Debt (Cont.)
Education
Interest on Bonds $ 82,115
Interest on Notes 7,124
Interest on Other Loans 32,816
Total Education $ 122,055
Other Debt Service

General Government
Trustee's Commission $ 11,925
Total General Government 11,925
Education
Other Debt Service $ 4,280
Total Education 4,280
Total General Debt Service Fund $ 1,821,868
General Capital Projects Fund

Capital Projects
Public Safety Projects
Building Construction $ 637,915
Total Public Safety Projects $ 637,915
Total General Capital Projects Fund 637,915
Education Capital Projects Fund

Capital Projects - Donated
Capital Projects Donated to School Department
Total Capital Projects Donated to School Department $ 87,973
Total Education Capital Projects Fund 87,973
Total Governmental Funds - Primary Government $ 10,059,052
165
Exhibit K-8

General Purpose School Fund

Instruction
Regular Instruction Program
Teachers $ 4,634,048
Career Ladder Program 26,999
Career Ladder Extended Contracts 8,831
Homebound Teachers 7,597
Educational Assistants 158,339
Other Salaries and Wages 86,399
Non-certified Substitute Teachers 145,371
Pensions 436,222
Life Insurance 452
Medical Insurance 752,364
Travel 1,134
Textbooks - Bound 108,496
Regular Instruction Equipment 8,518
Total Regular Instruction Program $ 6,854,423
Alternative Instruction Program

Teachers $ 26,913
Pensions 3,473
Life Insurance 38
Total Alternative Instruction Program 49,585
Special Education Program

Teachers $ 1,135,368
Homebound Teachers 2,019
Speech Pathologist 122,698
Certified Substitute Teachers 1,500
Pensions 128,672
Life Insurance 579
Contracts with Private Agencies 32,203
Evaluation and Testing 440
(Continued)
166
Exhibit K-8


Instruction (Cont.)
Special Education Program (Cont.)
Other Supplies and Materials $ 1,454
Fee Waivers 138
Special Education Equipment 17,889
Total Special Education Program $ 1,949,139
Career and Technical Education Program

Teachers $ 458,254
Pensions 42,891
Life Insurance 38
Other Charges 907
Total Career and Technical Education Program 653,813
Support Services
Attendance
Pensions 7,397
Life Insurance 64
Travel 5,731
Food Supplies 500
Attendance Equipment 1,225
Total Attendance 136,307
Health Services
Medical Personnel 50,416
Pensions 22,678
Life Insurance 210
Travel 2,845
(Continued)
167
Exhibit K-8


Health Services (Cont.)
Drugs and Medical Supplies $ 5,665
In Service/Staff Development 170
Other Charges 3,384
Other Equipment 288
Total Health Services $ 380,530
Other Student Support

Guidance Personnel $ 176,675
School Resource Officer 1,363
Pensions 17,921
Life Insurance 44
Communication 107
Contracts with Government Agencies 35,631
Evaluation and Testing 6,992
Travel 5,228
Other Equipment 780
Total Other Student Support 354,809

Pensions 12,636
Other Equipment 214
Total Regular Instruction Program 188,456

Psychological Personnel 50,830
Pensions 13,504
(Continued)
168
Exhibit K-8


Communication 5,866
Postal Charges 486
Travel 6,633
Other Charges 541
Total Special Education Program $ 256,228

Pensions 5,712
Travel 941
Technology
Other Salaries and Wages $ 78,583
Pensions 3,881
Communication 2,201
Internet Connectivity 44,826
Travel 4,272
Total Technology 242,914
Other Programs
On-behalf Payments to OPEB $ 90,307
Total Other Programs 90,307
Board of Education
Social Security 486
Pensions 85
(Continued)
169
Exhibit K-8


Board of Education (Cont.)
Audit Services $ 13,500
Legal Services 39,912
Travel 411
Premiums on Corporate Surety Bonds 850
Total Board of Education $ 412,658
Director of Schools
Pensions 13,631
Life Insurance 1,112
Disability Insurance 1,147
Postal Charges 506
Travel 7,485
Other Charges 983
Total Director of Schools 211,430
Office of the Principal

Principals $ 443,369
Assistant Principals 59,261
Pensions 52,148
Life Insurance 267
Total Office of the Principal 790,279
Fiscal Services
Accountants/Bookkeepers 30,834
(Continued)
170
Exhibit K-8


Fiscal Services (Cont.)
Pensions 9,051
Life Insurance 102
Travel 519
Total Fiscal Services $ 172,053
Human Services/Personnel
Pensions 907
Advertising 409
Postal Charges 100
Travel 676
Software 197
Total Human Services/Personnel 54,073
Operation of Plant
Custodial Personnel $ 242,125
Pensions 12,067
Life Insurance 385
Janitorial Services 5,975
Electricity 414,337
Natural Gas 76,636
Boiler Insurance 475
Building and Contents Insurance 57,737
Total Operation of Plant 1,026,603
(Continued)
171
Exhibit K-8


Maintenance of Plant
Maintenance Personnel 102,703
Pensions 11,205
Life Insurance 153
Communication 1,189
Travel 54
Other Charges 299
Total Maintenance of Plant $ 295,037
Transportation
Mechanic(s) 52,779
Bus Drivers 343,766
Pensions 35,495
Life Insurance 764
Communication 3,210
Medical and Dental Services 1,840
Travel 2,345
Diesel Fuel 61,355
Gasoline 23,494
Vehicle Parts 72,669
Other Charges 6,272
Transportation Equipment 96,522
Total Transportation 856,218
Central and Other

Pensions 2,207
(Continued)
172
Exhibit K-8


Central and Other (Cont.)
Communication $ 1,111
Other Charges 612
Total Central and Other $ 36,675

Community Services
Teachers $ 130,067
Pensions 10,571
Life Insurance 38
Travel 11,421
Food Supplies 1,643
Library Books/Media 2,034
Software 2,049
Total Community Services 247,798
Early Childhood Education

Teachers 152,777
Pensions 21,745
Life Insurance 115
Communication 2,824
Travel 21,047
Other Charges 522
Total Early Childhood Education 423,054
(Continued)
173
Exhibit K-8


Capital Outlay
Regular Capital Outlay
Engineering Services $ 10,820
Building Construction 566,137
Total Regular Capital Outlay $ 576,957
Principal on Debt
Education
Debt Service Contribution to Primary Government $ 239,601
Interest on Debt
Education
Other Debt Service

Education
Total General Purpose School Fund $ 17,338,801
School Federal Projects Fund

Instruction
Teachers 136,389
Pensions 18,623
Life Insurance 111
Other Charges 5,063
Regular Instruction Equipment 64,526
Total Regular Instruction Program $ 529,634

Teachers $ 40,709
Pensions 25,505
(Continued)
174
Exhibit K-8

School Federal Projects Fund (Cont.)

Instruction (Cont.)
Fee Waivers 100
Other Charges 1,485
Special Education Equipment 9,295

Instructional Supplies and Materials $ 1,428
Support Services
Other Student Support
Guidance Personnel $ 36,813
Pensions 3,968
Travel 6,343
Other Charges 2,787
Total Other Student Support 94,123

Pensions 26,421
Life Insurance 32
Communication 1,611
Operating Lease Payments 828
Travel 2,240
Other Charges 184
Total Regular Instruction Program 534,742
(Continued)
175
Exhibit K-8

School Federal Projects Fund (Cont.)

In-service Training $ 2,109
Social Security 130
Pensions 143
Travel 1,954
Other Charges 1,170

Travel $ 1,387
Transportation
Pensions 1,118
Contracts with Parents 3,762
Transportation Equipment 20,011
Total Transportation 48,919
Total School Federal Projects Fund $ 1,946,223
Central Cafeteria Fund

Food Service
Cafeteria Personnel 481,792
In-service Training 157
Pensions 40,412
Life Insurance 1,108
Communication 1,739
Postal Charges 8
Transportation - Other than Students 2,480
Travel 442
Food Preparation Supplies 1,842
(Continued)
176
Exhibit K-8

Central Cafeteria Fund (Cont.)

Operation of Non-Instructional Services (Cont.)
Food Service (Cont.)
Food Supplies $ 602,656
Uniforms 673
USDA - Commodities 102,046
Other Charges 777
Food Service Equipment 102,467
Total Food Service $ 1,539,672
Total Central Cafeteria Fund $ 1,539,672
Total Governmental Funds - Grundy County School Department $ 20,824,696
177
Exhibit K-9
Schedule of Detailed Receipts, Disbursements,
and Changes in Cash Balance - City Agency Fund
Cities -
Sales Tax
Fund
Cash Receipts
Local Option Sales Tax $ 600,862
Total Cash Receipts $ 600,862
Cash Disbursements
Remittance of Revenues Collected $ 594,853
Total Cash Disbursements $ 600,862
Excess of Cash Receipts Over

(Under) Cash Disbursements $ 0
Cash Balance, July 1, 2016 0
Cash Balance, June 30, 2017 $ 0
178
SINGLE AUDIT SECTION
179
Independent Auditor’s Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial Statements Performed
in Accordance With Government Auditing Standards

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, the aggregate discretely
presented component units, each major fund, and the aggregate remaining fund information of
Grundy County, Tennessee, as of and for the year ended June 30, 2017, and the related notes to
the financial statements, which collectively comprise Grundy County’s basic financial
statements, and have issued our report thereon dated December 18, 2017. Our report on the
governmental activities and the aggregate discretely presented component units’ financial
statements was qualified due to not including a liability for all Tennessee Consolidated
Retirement System obligations.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered Grundy
County’s internal control over financial reporting (internal control) to determine the audit
procedures that are appropriate in the circumstances for the purpose of expressing our opinions
on the financial statements, but not for the purpose of expressing an opinion on the
effectiveness of Grundy County’s internal control. Accordingly, we do not express an opinion on
the effectiveness of Grundy County’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct, misstatements on a timely basis. A material weakness is a
deficiency, or a combination of deficiencies, in internal control such that there is a reasonable
possibility that a material misstatement of the entity's financial statements will not be
prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or
a combination of deficiencies, in internal control that is less severe than a material weakness,
yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control
that might be material weaknesses or significant deficiencies and therefore, material
180
weaknesses or significant deficiencies may exist that were not identified. Given these
limitations, during our audit we did not identify any deficiencies in internal control that we
consider to be material weaknesses. We did identify certain deficiencies in internal control,
described in the accompanying Schedule of Findings and Questioned Costs that we consider to
be significant deficiencies: 2017-004 and 2017-005.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether Grundy County’s financial statements
are free from material misstatement, we performed tests of its compliance with certain
provisions of laws, regulations, contracts, and grant agreements, noncompliance with which
could have a direct and material effect on the determination of financial statement amounts.
However, providing an opinion on compliance with those provisions was not an objective of our
audit, and accordingly, we do not express such an opinion. The results of our tests disclosed
instances of noncompliance or other matters that are required to be reported under Government
Auditing Standards and are described in the accompanying Schedule of Findings and
Questioned Costs as items: 2017-001, 2017-002, 2017-003, 2017-006, 2017-007, 2017-008, 2017-
009, and 2017-010.
Grundy County’s Responses to the Findings
Grundy County’s responses to the findings identified in our audit are described in the
accompanying Schedule of Findings and Questioned Costs. Grundy County’s responses were not
subjected to the auditing procedures applied in the audit of the financial statements and,
accordingly, we express no opinion on them.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the result of that testing, and not to provide an opinion on the effectiveness of
the entity's internal control or on compliance. This report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering Grundy County’s
internal control and compliance. Accordingly, this communication is not suitable for any other
purpose.
Very truly yours,
Justin P. Wilson
December 18, 2017
JPW/yu
181
Independent Auditor’s Report on Compliance for Each Major Program and on
Internal Control Over Compliance and on the Schedule of Expenditures of
Federal Awards Required by the Uniform Guidance

Report on Compliance for Each Major Federal Program
We have audited Grundy County’s compliance with the types of compliance requirements
described in the OMB Compliance Supplement that could have a direct and material effect
on each of Grundy County’s major federal programs for the year ended June 30, 2017.
Grundy County’s major federal programs are identified in the summary of auditor's results
section of the accompanying Schedule of Findings and Questioned Costs.
Management's Responsibility
Management is responsible for compliance with the requirements of laws, regulations,

contracts, and grants applicable to its federal programs.
Auditor's Responsibility
Our responsibility is to express an opinion on compliance for each of Grundy County’s major
federal programs based on our audit of the types of compliance requirements referred to
above. We conducted our audit of compliance in accordance with auditing standards
generally accepted in the United States of America; the standards applicable to financial
audits contained in Government Auditing Standards, issued by the Comptroller General of
the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations
Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements
for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance
require that we plan and perform the audit to obtain reasonable assurance about whether
noncompliance with the types of compliance requirements referred to above that could have
a direct and material effect on a major federal program occurred. An audit includes
examining, on a test basis, evidence about Grundy County’s compliance with those
requirements and performing such other procedures as we considered necessary in the
circumstances.
182
We believe that our audit provides a reasonable basis for our opinion on compliance for each
major federal program. However, our audit does not provide a legal determination of
Grundy County’s compliance.
Opinion on Each Major Federal Program
In our opinion, Grundy County complied, in all material respects, with the types of
compliance requirements referred to above that could have a direct and material effect on
each of its major federal programs for the year ended June 30, 2017.
Report on Internal Control Over Compliance
Management of Grundy County is responsible for establishing and maintaining effective

internal control over compliance with the types of compliance requirements referred to
above. In planning and performing our audit of compliance, we considered Grundy County’s
internal control over compliance with the types of requirements that could have a direct
and material effect on each major federal program to determine the auditing procedures
that are appropriate in the circumstances for the purpose of expressing an opinion on
compliance for each major federal program and to test and report on internal control over
compliance in accordance with the Uniform Guidance, but not for the purpose of expressing
an opinion on the effectiveness of internal control over compliance. Accordingly, we do not
express an opinion on the effectiveness of Grundy County’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 program on a timely basis. A material weakness
in internal control over compliance is a deficiency, or combination of deficiencies, in internal
control over compliance, such that there is a reasonable possibility that material
noncompliance with a type of compliance requirement of a federal program will not be
prevented, or detected and corrected, on a timely basis. A significant deficiency in internal
control over compliance is a deficiency, or a combination of deficiencies, in internal control
over compliance with a type of compliance requirement of a federal program that is less
severe than a material weakness in internal control over compliance, yet important enough
to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described
in the first paragraph of this section and was not designed to identify all deficiencies in
internal control over compliance that might be material weaknesses or significant
deficiencies. We did not identify any deficiencies in internal control over compliance that we
consider to be material weaknesses. However, material weaknesses may exist that have not
been identified.
The purpose of this report on internal control over compliance is solely to describe the scope
of our testing of internal control over compliance and the results of that testing based on
the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any
other purpose.
183
Report on Schedule of Expenditures of Federal Awards Required by the Uniform
Guidance
We have audited the financial statements of the governmental activities, the business-type
activities, the aggregate discretely presented component units, each major fund, and the
aggregate remaining fund information of Grundy County, Tennessee, as of and for the year
ended June 30, 2017, and the related notes to the financial statements, which collectively
comprise Grundy County’s basic financial statements. We issued our report thereon dated
December 18, 2017. Our report on the governmental activities and the aggregate discretely
presented component units’ financial statements was qualified due to not including a liability
for all Tennessee Consolidated Retirement System obligations. Our report on the business-
type activities, each major fund, and the aggregate remaining fund information was
unmodified. Our audit was conducted for the purpose of forming opinions on the financial
statements that collectively comprise the basic financial statements. The accompanying
Schedule of Expenditures of Federal Awards is presented for purposes of additional
analysis as required by the Uniform Guidance and is not a required part of the basic
financial statements. Such information is the responsibility of management and was
derived from and relates directly to the underlying accounting and other records used to
prepare the basic financial statements. The information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and certain additional
procedures, including comparing and reconciling such information directly to the
underlying accounting and other records used to prepare the basic financial statements or
to the basic financial statements themselves, and other additional procedures in accordance
with auditing standards generally accepted in the United States of America. In our opinion,
the Schedule of Expenditures of Federal Awards is fairly stated in all material respects in
relation to the basic financial statements as a whole.
Very truly yours,
Justin P. Wilson
December 18, 2017
JPW/yu
184
Grundy County, Tennessee, and the Grundy County School Department
Schedule of Expenditures of Federal Awards and State Grants (1) (2)
Federal Pass-through
Federal/Pass-through Agency/State CFDA Entity Identifying
Grantor Program Title Number Number Expenditures
U.S. Department of Agriculture:

Passed-through State Department of Education:
Child Nutrition Cluster (4):
School Breakfast Program 10.553 N/A $ 541,323
National School Lunch Program 10.555 N/A 957,000 (5)
Child Nutrition Discretionary Grants Limited Availability 10.579 N/A 25,000
Passed-through State Department of Agriculture:
Child Nutrition Cluster (4):
National School Lunch Program (Commodities - Noncash Assistance) 10.555 N/A 102,046 (5)
Total U.S. Department of Agriculture $ 1,625,369
U.S. Department of Housing and Urban Development:

Passed-through State Department of Economic and Community Development:
Community Development Block Grants/State's Program and Non-Entitlement
Grants in Hawaii 14.228 N/A $ 14,585
Passed-through State Housing Development Agency:
Home Investment Partnerships Program 14.239 HM-13-14 152,054
Total U.S. Department of Housing and Urban Development $ 166,639
U.S. Department of Labor:

Passed-through Workforce Solutions:
WIA Youth Activities 17.259 (3) $ 26,931
Total U.S. Department of Labor $ 26,931
U.S. Department of Transportation:

Passed-through State Department of Transportation:
Alcohol Open Container Requirements 20.607 Z-16-GHS-141 $ 1,701
Passed-through State Department of Safety and Homeland Security:
National Priority Safety Programs 20.616 Z-17-THS-409 8,641
Total U.S. Department of Transportation $ 10,342
U.S. Department of Education:

Title I Grants to Local Educational Agencies 84.010 N/A $ 977,339
Special Education Cluster (4):
Special Education - Grants to States 84.027 N/A 775,766
Special Education - Preschool Grants 84.173 N/A 30,642
Career and Technical Education - Basic Grants to States 84.048 N/A 43,624
Special Education - Grants for Infants and Families 84.181 N/A 84,458
Twenty-first Century Community Learning Centers 84.287 N/A 163,392
Rural Education 84.358 N/A 31,294
Improving Teacher Quality State Grants 84.367 N/A 120,341
Total U.S. Department of Education $ 2,226,856
(Continued)
185
Grundy County, Tennessee, and the Grundy County School Department
Schedule of Expenditures of Federal Awards and State Grants (1) (2) (Cont.)
Federal Pass-through
Federal/Pass-through Agency/State CFDA Entity Identifying
Grantor Program Title Number Number Expenditures
U.S. Department of Health and Human Services:

Child Care and Development Block Grant 93.575 (3) $ 33,643
Passed-through State Department of Health:
Maternal and Child Health Services Block Grant to the States 93.994 GG-14-40860-00 9,692
Total U.S. Department of Health and Human Services $ 43,335
U.S. Department of Homeland Security:

Passed-through State Department of Military:
Emergency Management Performance Grants 97.042 (3) $ 9,600
Total U.S. Department of Homeland Security $ 9,600
Total Expenditures of Federal Awards $ 4,109,072
Contract
State Grants Number
Voluntary Pre-K for Tennessee - State Department of Education N/A (3) $ 305,620
Coordinated School Health - State Department of Education N/A (3) 99,728
Family Resource Center - State Department of Education N/A (3) 29,605
Read to be Ready Coaching Network - State Department of Education N/A (3) 4,760
Safe Schools Act - State Department of Education N/A (3) 13,910
Adverse Childhood Experience (ACEs) Initiative Program - State Department
of Children's Services N/A (3) 14,222
Juvenile Services Program - State Department of Children's Services N/A (3) 9,000
Litter Program - State Department of Transportation N/A (3) 33,564
Access to Health and Active Built Environments - State Department of Health N/A (3) 10,000
Rural Local Health Services - State Department of Health N/A (3) 20,060
Read to be Ready - State Department of Economic and Community Development N/A (3) 26,721
FastTrack Industrial Development Program - State Department
of Economic and Community Development N/A (3) 61,265
Three Star Grant - State Department of Economic and Community Development N/A (3) 10,000
Total State Grants $ 638,455
CFDA = Catalog of Federal Domestic Assistance

N/A = Not Applicable
(1) Presented in conformity with generally accepted accounting principles using the modified accrual
basis of accounting.
(2) Grundy County elected not to use the 10% de minimus cost rate permitted in the Uniform Guidance.
(3) Information not available.
(4) Child Nutrition Cluster total $1,600,369; Special Education Cluster total $806,408.
(5) Total for CFDA No. 10.555 is $1,059,046.
186
Summary Schedule of Prior-year Findings
Government Auditing Standards require auditors to report the status of uncorrected findings from prior audits. In
addition, OMB's Uniform Guidance requires auditees to report the status of all prior-year findings whether corrected
or not. Presented below are financial statement findings along with their current status from the Annual Financial
Report for Grundy County, Tennessee, for the year ended June 30, 2017.
Prior-year Financial Statement Findings
Fiscal Page Finding CFDA

Year Number Number Title of Finding Number Current Status
2016 183 2016-001 The Highway Department was not N/A Not Corrected - See
Properly Reimbursed for Work Performed Explanation on Corrective
for Other Governmental Entities Action Plan
2016 183 2016-002 County Equipment was not Disposed of in N/A Corrected
Accordance with State Statute
2016 184 2016-003(A,C) The Little Jackets Daycare had N/A Corrected
Deficiencies in Administration
2016 184 2016-003(B) Bank Statements for the Little Jackets N/A Not Corrected - See
Daycare were not Reconciled for the Fiscal Explanation on Corrective
Year Action Plan
2016 185 2016-004(A,D) The School Department had Budget N/A Corrected
Deficiencies
2016 185 2016-004(B,C) The School Department had Budget N/A Not Corrected - See
Deficiencies Explanation on Corrective
Action Plan
2016 186 2016-005 A Certificate of Deposit held for the N/A Corrected
Central Cafeteria Fund was not Recorded
on the Accounting Records of the Fund or
Channeled through the County Office of
Trustee
OFFICES OF COUNTY MAYOR, HIGHWAY SUPERINTENDENT, DIRECTOR OF SCHOOLS;

COUNTY CLERK, AND SHERIFF
2016 187 2016-006 Duties were not Segregated Adequately N/A Corrected
Prior-year Federal Awards Findings

There were no prior-year federal award findings to report.
187
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART I, SUMMARY OF AUDITOR'S RESULTS
Financial Statements:
1. Our report on the governmental activities and the aggregate discretely

presented component units is qualified. Our report on the business-type
activities, each major fund, and the aggregate remaining fund information
is unmodified.
2. Internal Control Over Financial Reporting:
* Material weakness identified? NO
* Significant deficiency identified? YES
3. Noncompliance material to the financial statements noted? YES
Federal Awards:
4. Internal Control Over Major Federal Programs:
* Material weakness identified? NO
* Significant deficiency identified? NONE REPORTED
5. Type of report auditor issued on compliance for major programs. UNMODIFIED
6. Any audit findings disclosed that are required to be reported in

accordance with 2 CFR 200.516(a)? NO
7. Identification of Major Federal Programs:
* CFDA Numbers: 10.553 and 10.555 Nutrition Cluster: School Breakfast

Program and National School Lunch
Program
* CFDA Numbers: 84.027 and 84.173 Special Education Cluster: Special Education -
Grants to States and Special Education -
Preschool Grants
8. Dollar threshold used to distinguish between Type A and Type B Programs. $750,000
9. Auditee qualified as low-risk auditee? YES
188
PART II, FINDINGS RELATING TO THE FINANCIAL STATEMENTS
Findings and recommendations, as a result of our audit, are presented below. We reviewed
these findings and recommendations with management to provide an opportunity for their
response. Written responses for all findings are paraphrased and presented following each
finding and recommendation. Management’s corrective action plans, whether related to the
financial statements or federal awards, are presented separately in the Management’s
Corrective Action Plan in the Single Audit Section of this report. Findings relating
specifically to the audit of federal awards, if any, are separately presented under Part III,
Findings and Questioned Costs for Federal Awards.
FINDING 2017-001 ALL ELIGIBLE EMPLOYEES DO NOT PARTICIPATE IN

THE TENNESSEE CONSOLIDATED RETIREMENT
SYSTEM
(Material Noncompliance Under Government Auditing
Standards)
While performing tests to determine the completeness of county retirement participation

data, we determined that seven full-time employees of Grundy County were eligible for
participation but were not participating in the Tennessee Consolidated Retirement System
(TCRS). Title 8, Chapters 34-37 of Tennessee Code Annotated (TCA), establish and govern the
TCRS. These statutes require mandatory participation in the TCRS for all employees of
participating employers after a probationary period. County officials stated that they were
unaware that participation in TCRS was mandatory; therefore, employees of the county have
been given the option of participating. The provisions of Governmental Accounting Standards
Board (GASB) Statement No. 68 Accounting and Financial Reporting for Pensions (an
amendment of GASB Statement No. 27) became effective for the year ended June 30, 2015.
This statement modifies the presentation and disclosures for pensions. The effects on the
government-wide financial statements and note disclosures are not determinable at this
time. Because of this potential misstatement, we have qualified our opinion on the
governmental activities opinion unit and the aggregate discretely presented component units
opinion unit since the primary government employees and the non-certified employees of the
School Department participate in the same TCRS agent plan. This finding will be reported
to the TCRS.
RECOMMENDATION
Grundy County should present government-wide financial statements and note disclosures
in conformity with generally accepted accounting principles. The county should comply with
provisions of Title 8, Chapters 34-37, TCA, regarding employee participation in the TCRS.
County officials should contact the TCRS to determine a corrective action plan.
MANAGEMENT’S RESPONSE – COUNTY MAYOR
I concur.
_____________________________
189
FINDING 2017-002 EXPENDITURES EXCEEDED APPROPRIATIONS
(Noncompliance Under Government Auditing Standards)
Expenditures exceeded appropriations approved by the county commission in one of 51 major

appropriation categories (the legal level of control) of the General Fund and one of four major
appropriation categories of the Solid Waste/Sanitation Fund. These over expenditures are
reflected in the following table:
Amount
Fund/Major Appropriation Category Overspent
General:
County Attorney $ 1,045
Solid Waste/Sanitation:
Convienience Centers 3,084
Section 5-9-401, Tennessee Code Annotated, states that “All funds from whatever source
derived, including, but not limited to, taxes, county aid funds, federal funds, and fines, that
are to be used in the operation and respective programs for the various departments,
commissions, institutions, boards, offices, and agencies of county governments shall be
appropriated to such use by the county legislative bodies.” These deficiencies exist because
management failed to hold spending to the limits authorized by the county commission,
which resulted in unauthorized expenditures.
RECOMMENDATION
Expenditures should be held within appropriations approved by the county commission.
MANAGEMENT’S RESPONSE – COUNTY MAYOR
I concur.
_____________________________
FINDING 2017-003 THE HIGHWAY DEPARTMENT WAS NOT PROPERLY

REIMBURSED FOR WORK PERFORMED FOR OTHER
GOVERNMENTAL ENTITIES
During the year, the Highway Department performed road repairs for the cities of Coalmont,
Gruetli-Laager, Altamont, and Tracy City, Tennessee; however, the Highway Department
was reimbursed only the costs of the materials used on the city projects. Section 54-7-202(d),
Tennessee Code Annotated, provides that the county commission has the authority to
authorize the Highway Department to perform work for other governmental entities;
provided, the costs of the projects so authorized is reimbursed to the Highway Department.
Without charging the cities for the Highway Department’s costs of providing labor and
190
equipment, the department is not recovering its actual costs. This deficiency is the result of
management’s failure to correct the finding noted in the prior-year audit report.
RECOMMENDATION
The Highway Department should recover the actual costs of performing work for other
governmental entities.
MANAGEMENT’S RESPONSE – HIGHWAY SUPERINTENDENT
The cities and other government entities cannot afford to reimburse the Highway
Department for the actual costs of the projects. The Highway Department will continue to
charge the cities and other governmental entities the costs of the materials.
_____________________________
FINDING 2017-004 THE SCHOOL FEDERAL PROJECTS FUND HAD A CASH

OVERDRAFT OF $196,953 AT JUNE 30, 2017
(Internal Control – Significant Deficiency Under Government
Auditing Standards)
The School Federal Projects Fund had a cash overdraft of $196,953 at June 30, 2017. This
cash overdraft resulted from the issuance of checks exceeding cash on deposit with the county
trustee. Sound business practices dictate that expenditures be held within available funds.
The cash overdraft was liquidated subsequent to June 30, 2017.
RECOMMENDATION
The School Department should not issue checks exceeding cash on deposit with the county
trustee.
MANAGEMENT’S RESPONSE – DIRECTOR OF SCHOOLS
I concur. The School Department is better aware of the process and will work to improve the
process to not exceed cash on deposit with the county trustee.
_____________________________
FINDING 2017-005 THE LITTLE JACKETS DAYCARE DID NOT PROPERLY

ACCOUNT FOR CASH MAINTAINED IN ITS BANK
ACCOUNT
(Internal Control – Significant Deficiency Under Government
Auditing Standards)
The School Department operates a child care program known as the Little Jackets Daycare,
and the daycare’s financial transactions are channeled through the General Purpose School
Fund. During the year examined, bank statements for the daycare were not reconciled, and
the cash maintained in the daycare bank account was not reflected in the general ledger. The
accurate maintenance of accounting records and the timely reconciliation of bank statements
191
is a necessary procedure to ensure that all cash collections and disbursements are recorded
accurately. This deficiency can be attributed to the failure of management to monitor and
review the daycare operations adequately, management’s failure to correct the finding noted
in the prior-year audit report, and management’s failure to implement their corrective action
plan.
RECOMMENDATION
Cash maintained in the daycare bank account should be properly reflected on the general
ledger. Bank statements should be reconciled with the general ledger monthly, and any
errors discovered should be corrected promptly.
The Little Jackets Daycare closed June 30, 2017.

_____________________________
FINDING 2017-006 THE SCHOOL DEPARTMENT HAD BUDGET

DEFICIENCIES
We noted the following deficiencies in the budget operations of the School Department:
A. Expenditures exceeded appropriations in the following major appropriation

categories (the legal level of control) of the General Purpose School Fund:
Amount
Major Appropriation Category Overspent
Principal on Debt $ 4,041

Interest on Debt 1,353
B. Expenditures in several salary accounts exceeded line-item appropriations in

the General Purpose School and School Federal Projects funds by amounts
ranging from $30 to $4,575.
Section 5-9-401, Tennessee Code Annotated, states that “All funds from whatever source
derived, including, but not limited to, taxes, county aid funds, federal funds, and fines, that
are to be used in the operation and respective programs for the various county departments,
commissions, institutions, boards, offices, and agencies of county governments shall be
appropriated to such use by the county legislative bodies.”
Also, the budget resolution approved by the county commission states that “the salary, wages,
or remuneration of each officer, employee, or agent of the county shall not be in excess of the
amounts set forth in the estimate of expenditures that accompanies this resolution”.
Therefore, the salaries that exceeded line-item appropriations were expenditures not
approved by the county commission.
192
These deficiencies exist because management failed to hold spending to the limits
authorized by the county commission and Board of Education, which resulted in
unauthorized expenditures, management’s failure to correct the finding noted in the
prior-year audit report, and management’s failure to implement their corrective action
plan.
RECOMMENDATION
Expenditures should be held within appropriations approved by the county commission

and Board of Education.
I concur. The School Department is better aware of the process and will work to improve
the process to hold expenditures within appropriation approved by the county commission
and Board of Education.
_____________________________
OFFICE OF TRUSTEE
FINDING 2017-007 THE CHECKING SYSTEM HAS NOT BEEN
IMPLEMENTED PROPERLY
In prior years, the Trustee’s Office adopted the checking system as authorized by Section 5-
8-210, Tennessee Code Annotated (TCA), to pay county obligations. However, the Trustee’s
Office does not operate the checking system in compliance with state statute. This statute
provides that the issuance of checks by county departments shall be certified by the trustee
either by the list certification method, the check signing/validation method, a combination
method, or other certification method requested by the trustee and approved by the
Comptroller of the Treasury. The trustee does not use any of the specific methods noted
above. In Grundy County, the County Mayor’s Office, the School Department, and the
Highway Department do not furnish the trustee lists of checks issued. Therefore, the trustee
is not certifying the availability of cash on deposit. In addition, the trustee has one check
clearing account for county funds and School Department funds to process payroll and
nonpayroll checks. The trustee does not transfer monies into this check clearing account from
the county master account. Instead, as checks clear the bank, the trustee’s bank charges the
paid checks automatically to the check clearing account and then automatically transfers
monies out of the trustee’s county master account to the check clearing account to cover those
checks. Therefore, the trustee is allowing the bank complete authority to automatically take
funds out of the county master account without the trustee knowing the amount of the
transfers until after the fact. This system resulted in checks being drawn and paid on the
School Federal Projects Fund even though funds were not available to honor the checks. This
deficiency is noted in Finding 2017-008.
193
RECOMMENDATION
The trustee should implement one of the methods provided by Section 5-8-210, TCA,
regarding the issuance of checks. The trustee should require the County Mayor’s Office, the
School Department, and the Highway Department to submit lists of checks issued by fund,
and the trustee should take these lists and certify that funds are available for payment of
those checks. The trustee should make the appropriate transfers from the county master
account to the check clearing accounts from the lists provided. The trustee should not allow
the bank to automatically access the county master account.
MANAGEMENT’S RESPONSE – TRUSTEE
When I implemented the checking system I spoke with CTAS and our software vendor about
the process and neither advised me that I needed to receive anything from the other offices.
I began this process in 2014 and I have not been advised until today that I was doing it
incorrectly. I feel this finding is inappropriate considering I have gone through two previous
audits without any findings. If I had been advised I was doing them incorrectly, I would have
made the change immediately due to the fact I take pride in having no findings.
AUDITOR’S COMMENT
Certain procedures of the Grundy County Trustee’s Office are guided by state statute. Section
5-8-210 (h)(1)(2), Tennessee Code Annotated (TCA), “…requires each department… to submit
a list by fund to the county trustee of the checks being issued showing the date of the check,
check number, payee and amount. The county trustee verifies the department's fund balance
and certifies that funds are available or will be available in the "check clearing account" for
payment of those checks.” This deficiency was noted by auditors when the trustee paid checks
issued by the School Federal Projects Fund that exceeded available funds in June, 2017 (see
Finding 2017-008).
_____________________________
FINDING 2017-008 THE TRUSTEE PAID CHECKS ISSUED BY THE SCHOOL

FEDERAL PROJECTS FUND THAT EXCEEDED
AVAILABLE FUNDS
Throughout the fiscal year, the trustee paid checks issued from the School Federal Projects
Fund that exceeded the available cash balance on deposit. At June 30, 2017, the paid checks
exceeded the available cash on deposit by $197,579. Section 8-11-104(5), Tennessee Code
Annotated, prohibits the trustee from paying a check if sufficient funds are not available.
Paying checks that exceed available cash is the result of a lack of management oversight and
the failure to properly implement the checking system. This deficiency exits because the
School Department continued to issue checks exceeding cash on deposit with the trustee, and
the trustee kept honoring the checks.
RECOMMENDATION
The trustee should not pay checks that exceed available cash as required by state statute.
194
Under the current way that I had been advised to operate the checking system, I had no way
to control the spending. I went to the School Department and told the BOE to stop spending
and I was advised there were funds in transit from federal programs they were due in
refunds.
_____________________________
FINDING 2017-009 COMMISSIONS WERE NOT PAID TO THE COUNTY

MONTHLY
The county trustee did not pay commissions to the county monthly. The trustee did not pay
any commissions to the county from July 2016 to January 2017 or in April 2017. Section 8-
22-104, Tennessee Code Annotated, requires fees, including commissions, be paid to the
county monthly. This deficiency was the result of a lack of management oversight. As a result,
the county received the trustee’s commissions at a later date.
RECOMMENDATION
Commissions should be paid to the county monthly.
I concur with this finding.

_____________________________
FINDING 2017-010 MONTHLY REPORTS OF TAXES COLLECTED WERE

NOT MADE ON OR BEFORE THE TENTH OF THE
FOLLOWING MONTH
The trustee did not provide the county mayor with reports of taxes collected by the tenth day
of the month as required by state statute. Section 67-5-1902(a), Tennessee Code Annotated
states “On or before the tenth day in each month, the trustee shall report to and make
settlement for all taxes collected during the preceding month, with the county mayor…”.
During the year examined, all monthly reports of taxes collected by the trustee were issued
from two to 73 days after the tenth day of the month. This deficiency is the result of a lack of
management oversight.
RECOMMENDATION
Reports should be furnished to the appropriate officials on or before the tenth of the month
in compliance with state statute.
I concur with this finding.
195
PART III, FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS
There were no findings and questioned costs related to federal awards for the year ended
June 30, 2017.
196
Management's Corrective Action Plan
We reviewed the financial statement and federal award findings and recommendations with management to provide
an opportunity for their response as required by the auditee requirements within Title 2 U.S. Code of Federal
Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal
Awards (Uniform Guidance). Management’s corrective action plans for all financial statement findings and federal
award findings are presented in this section and have been indexed below. The corrective action plans were prepared
by management and have been presented as they were submitted.
Finding Corrective Action

Number Title of Finding Plan Page Number
2017-001 All Eligible Employees do not Participate in the Tennessee Consolidated

Retirement System 198
2017-002 Expenditures Exceeded Appropriations 198-199
2017-003 The Highway Department was not Properly Reimbursed for Work
Performed for Other Governmental Entities 200
2017-004 The School Federal Projects Fund had a Cash Overdraft of $196,953 at
June 30, 2017 201-202
2017-005 The Little Jackets Daycare did not Properly Account for Cash
Maintained in its Bank Account 202
2017-006 The School Department had Budget Deficiencies 203
OFFICE OF TRUSTEE
2017-007 The Checking System has not been Implemented Properly 204
2017-008 The Trustee Paid Checks Issued by the School Federal Projects Fund
that Exceeded Available Funds 204-205
2017-009 Commissions were not Paid to the County Monthly 206
2017-010 Monthly Reports of Taxes Collected were not made on or Before the
Tenth of the Following Month 207
197
198
199
200
201
202
203
204
205
206
207
BEST PRACTICE
Accounting literature describes a best practice as a recommended policy, procedure, or

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

OF ACCOUNTING, BUDGETING, AND PURCHASING
Grundy County does not have a central system of accounting, budgeting, and purchasing.
Sound business practices dictate that establishing a central system would significantly
improve internal controls over the accounting, budgeting, and purchasing processes. The
absence of a central system of accounting, budgeting, and purchasing has been a
management decision by the county commission resulting in decentralization and some
duplication of effort. The Division of Local Government Audit strongly believes that the
adoption of a central system of accounting, budgeting, and purchasing is a best practice that
would significantly improve accountability and the quality of services provided to the citizens
of Grundy County. Therefore, we recommend the adoption of the County Financial
Management System of 1981 or a private act, which would provide for a central system of
accounting, budgeting, and purchasing covering all county departments.
208

TN Comptroller's FY2017 Audit of Grundy County

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TN Comptroller's FY2017 Audit of Grundy County

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ANNUAL FINANCIAL REPORT

GRUNDY COUNTY, TENNESSEE

DIVISION OF LOCAL GOVERNMENT AUDIT

GRUNDY COUNTY, TENNESSEE

FOR THE YEAR ENDED JUNE 30, 2017

COMPTROLLER OF THE TREASURY

DIVISION OF LOCAL GOVERNMENT AUDIT

STEVE REEDER, CPA, CGFM, CFE

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

Summary of Audit Findings 6-7

Grundy County Officials 9

Independent Auditor's Report 11-15

Schedule of Contributions Based on Participation in the Teacher

Schedules of Revenues, Expenditures, and Changes in Fund

SINGLE AUDIT SECTION 179

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

The following are summaries of the audit findings:

OFFICE OF COUNTY MAYOR

♦ All eligible employees do not participate in the Tennessee Consolidated Retirement

OFFICE OF HIGHWAY SUPERINTENDENT

OFFICE OF DIRECTOR OF SCHOOLS

♦ The checking system has not been implemented properly.

Michael Brady, County Mayor

Board of County Commissioners

Daniel Crabtree, Chairman

Robert Foster Jr, Chairman

Brenda Andy, Chairman

Grundy County Mayor and

To the County Mayor and Board of County Commissioners:

Report on the Financial Statements

Management's Responsibility for the Financial Statements

Opinion Unit Type of Opinion

Governmental Activities Qualified

Aggregate Discretely Presented Component Units Qualified

Business-type Activities Unmodified

General Fund Unmodified

Solid Waste/Sanitation Fund Unmodified

Highway/Public Works Fund Unmodified

General Debt Service Fund Unmodified

Aggregate Remaining Fund Information Unmodified

Basis for Qualified Opinions on Governmental Activities and the Aggregated

Required Supplementary Information

Supplementary and Other Information

Very truly yours,

December 18, 2017

Grundy County, Tennessee

Cash $ 602 $ 0 $ 602 $ 0

DEFERRED OUTFLOWS OF RESOURCES

Pension Changes in Experience $ 25,892 $ 0 $ 25,892 $ 93,933

Accounts Payable $ 0 $ 0 $ 0 $ 41,422

DEFERRED INFLOWS OF RESOURCES

Deferred Current Property Taxes $ 3,835,308 $ 0 $ 3,835,308 $ 1,503,123

Grundy County, Tennessee

Net Investment in Capital Assets $ 4,900,043 $ 1,147,244 $ 6,047,287 $ 12,189,900

Total Net Position $ 9,419,092 $ 1,172,593 $ 10,591,685 $ 14,372,277

Grundy County, Tennessee

Net (Expense) Revenue and Changes in Net Position

Total Component Unit $ 19,912,992 $ 156,145 $ 3,590,924 $ 0 $ 0 $ 0 $ 0 $ (16,165,923)

Grundy County, Tennessee

Net (Expense) Revenue and Changes in Net Position

Change in Net Position $ 1,673,302 $ (60,640) $ 1,612,662 $ 863,148

Net Position, June 30, 2017 $ 9,419,092 $ 1,172,593 $ 10,591,685 $ 14,372,277

Grundy County, Tennessee