Document Pickenscountyga_doc_f0b11a75c8

PICKENS COUNTY, GEORGIA Annual Financial Report For the year ended December 31, 2021 ---PAGE BREAK--- This page intentionally left blank. ---PAGE BREAK--- EXHIBIT PAGE FINANCIAL SECTION Independent Auditor's 1-3 Basic Financial Statements: Government-wide Financial Statements: A-1 Statement of Net 4-5 A-2 Statement of 6 Fund Financial Statements: Governmental Funds: A-3 Balance 7 A-4 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Positio 8 A-5 Statement of Revenues, Expenditures and Changes in Fund Balances………………………… 9 A-6 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of 10 A-7 General Fund - Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and 11-12 Proprietary Funds: A-8 Statement of Net 13 A-9 Statement of Revenues, Expenses, and Changes in Net Position……………………………… 14 A-10 Statement of Cash 15-16 Fiduciary Funds: A-11 Statement of Fiduciary Net 17 A-12 Statement of Changes in Fiduciary Net 18 Component Units: A-13 Combining Statement of Net 19 A-14 Combining Statement of Changes in Net 20 A-15 Notes to the Financial 21-71 Required Supplementary Information: B-1 Schedule of Changes in the Net Pension Liability and Related 72-73 B-2 Schedule of Pension 74-75 B-3 Schedule of Changes in the Net OPEB Liability and Related 76 B-4 Notes to the Required Supplementary 77-79 Combining and Individual Fund Statements and Schedules: C-1 Combining Balance Sheet - Nonmajor Governmental 80 C-2 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental 81 C-3 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Law Library Special Revenue 82 C-4 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Sheriff Law Enforcement Special Revenue 83 C-5 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - E-911 Special Revenue 84 C-6 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Drug Task Force Special Revenue 85 C-7 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Restricted Programs Special Revenue 86 PICKENS COUNTY, GEORGIA ANNUAL FINANCIAL REPORT For the year ended December 31, 2021 TABLE OF CONTENTS ---PAGE BREAK--- EXHIBIT PAGE PICKENS COUNTY, GEORGIA ANNUAL FINANCIAL REPORT For the year ended December 31, 2021 TABLE OF CONTENTS FINANCIAL SECTION (continued) Combining and Individual Fund Statements and Schedules (continued) C-8 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Hotel Motel Special Revenue 87 C-9 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - American Rescue Plan Act Grant Special Revenue 88 D-1 Statement of Fiduciary Net Position - Custodial 89 D-2 Statement of Changes in Fiduciary Net Position - Custodial 90 OTHER REPORTING SECTION Single Audit Section 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 91-98 State Reporting Section E-1 Schedule of Projects Financed with Special Purpose Local Option Sales 99 E-2 Schedule of Completed State Awards Expended - Georgia Department of Human 100 ---PAGE BREAK--- Independent Auditor's Report Honorable Chairman and Members of the Board of Commissioners Pickens County, Georgia Report on the Audit of the Financial Statements Opinions 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 Pickens County, Georgia, as of and for the year ended December 31, 2021, and the related notes to the financial statements, which collectively comprise Pickens County, Georgia’s basic financial statements as listed in the table of contents. In our opinion, based on our audit and the report of the other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Pickens County, Georgia, as of December 31, 2021, and the respective changes in the financial position, where applicable, cash flows thereof, and the budgetary comparison of the General Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. We did not audit the financial statements of the Pickens County Health Department, a discretely presented component unit of Pickens County, Georgia, which represents 31.7% of the assets, 59.3% of the net position, and 89.3% of the revenues of the aggregate discretely presented component units for the year ended December 31, 2021. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for the Pickens County Health Department, is based solely on the reports of the other auditors. Basis for Opinions 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. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Pickens County, Georgia and to meet our ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America; and for 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. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Pickens County, Georgia’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. 1 ---PAGE BREAK--- Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgement made by a reasonable user based on the financial statements. In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we: • Exercise professional judgement and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit 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 Pickens County, Georgia’s internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Pickens County, Georgia’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the required supplementary information on pages 72 through 79 be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. 2 ---PAGE BREAK--- 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. Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise Pickens County, Georgia’s basic financial statements. The combining and individual fund financial statements and schedules, the schedule of projects financed with special purpose local option sales tax, and the schedule of completed state awards expended are presented for purposes of additional analysis and are 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 combining and individual fund financial statements and schedules and the schedule of projects financed with special purpose local option sales tax are fairly stated in all material respects in relation to the financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 28, 2022, on our consideration of Pickens County, Georgia’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Pickens County, Georgia’s internal control over financial reporting and compliance. Rushton, LLC Gainesville, Georgia October 28, 2022 3 ---PAGE BREAK--- This page intentionally left blank. ---PAGE BREAK--- BASIC FINANCIAL STATEMENTS ---PAGE BREAK--- ASSETS Current assets Cash and cash equivalents $ 15,226,068 $ 800 $ 15,226,868 $ 1,274,884 Receivables (net) Accounts 494,905 252,986 747,891 0 Intergovernmental 421,713 0 421,713 164,638 Taxes 2,844,940 0 2,844,940 280,000 Inventories 104,463 103,097 207,560 470 Prepaid items 108,756 0 108,756 0 Restricted assets Cash and cash equivalents 200,375 0 200,375 0 Internal balances 3,957,501 (3,957,501) 0 0 Total current assets 23,358,721 (3,600,618) 19,758,103 1,719,992 Noncurrent assets Notes receivable 0 0 0 2,016,000 Net OPEB asset 0 0 0 9,855 Capital assets Non-depreciable 5,767,645 11,112,221 16,879,866 0 Depreciable (net) 39,932,748 10,831,240 50,763,988 52,688 Total noncurrent assets 45,700,393 21,943,461 67,643,854 2,078,543 Total assets 69,059,114 18,342,843 87,401,957 3,798,535 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows of resources - pension 2,640,510 79,177 2,719,687 74,571 Deferred outflows of resources - OPEB 303,061 12,627 315,688 69,497 Total deferred outflows of resources 2,943,571 91,804 3,035,375 144,068 LIABILITIES Current liabilities Payables Accounts 1,713,146 316,386 2,029,532 1,212 Intergovernmental 130,597 0 130,597 0 Retainages 0 166,922 166,922 0 Interest 0 13,024 13,024 0 Other liabilities 16,756 0 16,756 0 Accrued salaries and expenses 444,624 16,351 460,975 0 Compensated absences 253,495 13,175 266,670 9,577 Due to others 157,341 0 157,341 51,333 Unearned revenue 0 16,177 16,177 0 Notes payable 300,454 0 300,454 0 Capital lease payable 87,601 21,827 109,428 0 Bonds payable 0 884,888 884,888 82,787 Total current liabilities 3,104,014 1,448,750 4,552,764 144,909 PICKENS COUNTY, GEORGIA STATEMENT OF NET POSITION December 31, 2021 Primary Government Governmental Business-type Component Activities Activities Total Units The accompanying notes are an integral part of these financial statements. Exhibit A-1, continued 4 ---PAGE BREAK--- Noncurrent liabilities Compensated absences $ 108,641 $ 5,646 $ 114,287 $ 9,576 Net pension liability 8,674,912 260,028 8,934,940 417,365 Net OPEB liability 1,228,736 51,197 1,279,933 105,551 Claims and judgements payable 152,610 0 152,610 0 Notes payable 2,420,377 1,860,389 4,280,766 0 Capital lease payable 112,831 28,113 140,944 0 Bonds payable 0 9,645,086 9,645,086 1,416,991 Post-closure care costs 450,000 0 450,000 0 Total noncurrent liabilities 13,148,107 11,850,459 24,998,566 1,949,483 Total liabilities 16,252,121 13,299,209 29,551,330 2,094,392 DEFERRED INFLOWS OF RESOURCES Deferred inflows of resources - pension 1,170,648 35,062 1,205,710 690,337 Deferred inflows of resources - OPEB 24,872 1,036 25,908 127,281 Total deferred inflows of resources 1,195,520 36,098 1,231,618 817,618 NET POSITION Net investment in capital assets 42,478,827 9,336,236 51,815,063 52,688 Restricted for: Judicial 767,764 0 767,764 0 Public safety 168,310 0 168,310 0 Health and welfare 0 0 0 530,734 Housing and Development 75,081 0 75,081 0 Capital outlay 9,253,444 0 9,253,444 0 Unrestricted 1,811,618 (4,236,896) (2,425,278) 447,171 Total net position $ 54,555,044 $ 5,099,340 $ 59,654,384 $ 1,030,593 STATEMENT OF NET POSITION PICKENS COUNTY, GEORGIA Activities Activities Total Units December 31, 2021 Primary Government Governmental Business-type Component The accompanying notes are an integral part of these financial statements. Exhibit A-1, continued 5 ---PAGE BREAK--- Operating Charges for Grants and FUNCTIONS/PROGRAMS Expenses Services Contributions Primary government Governmental activities General Government $ 4,777,527 $ 1,071,946 $ 2,371,695 $ 0 $ (1,333,886) Judicial 6,516,918 195,885 3,206,279 0 (3,114,754) Public Safety 17,484,934 2,732,802 484,752 34,739 (14,232,641) Public Works 7,793,817 859,104 371,910 725,962 (5,836,841) Health and Welfare 257,349 0 0 0 (257,349) Culture and Recreation 1,332,941 175,772 11,148 0 (1,146,021) Housing and Development 1,011,310 29,421 68,064 0 (913,825) Interest on long-term debt 28,771 0 0 0 (28,771) Total governmental activities 39,203,567 5,064,930 6,513,848 760,701 (26,864,088) Business-type activities Water and Sewer 3,199,884 2,969,863 0 85,000 (145,021) Airport 1,001,041 740,962 0 13,000 (247,079) Total business-type activities 4,200,925 3,710,825 0 98,000 (392,100) Total primary government 43,404,492 8,775,755 6,513,848 858,701 (27,256,188) Component Units Pickens County Development Authority Housing and Development 34,887 126,000 0 0 91,113 Pickens County Health Department Health and Welfare 648,196 690,751 557,569 0 600,124 Total component units 683,083 816,751 557,569 0 691,237 Change in net position Net (expense) revenue $ (26,864,088) $ (392,100) $ (27,256,188) $ 691,237 General revenues Taxes Property 14,547,046 0 14,547,046 0 Sales 12,338,995 0 12,338,995 0 Intangible 574,757 0 574,757 0 Insurance premium 1,906,424 0 1,906,424 0 Other 902,890 0 902,890 241 Interest and investment earnings 11,706 0 11,706 0 Payments from Pickens County 0 0 0 23,300 Other 457,791 21,790 479,581 0 Transfers (359,980) 359,980 0 0 Total general revenues and transfers 30,379,629 381,770 30,761,399 23,541 Change in net position 3,515,541 (10,330) 3,505,211 714,778 Net position - beginning (original) 49,914,580 5,331,898 55,246,478 315,815 Prior period adjustment 1,124,923 (222,228) 902,695 0 Net position - beginning (restated) 51,039,503 5,109,670 56,149,173 0 Net position - ending $ 54,555,044 $ 5,099,340 $ 59,654,384 $ 1,030,593 Primary Government PICKENS COUNTY, GEORGIA STATEMENT OF ACTIVITIES For the year ended December 31, 2021 Program Revenues Capital Net Grants and (Expense) Contributions Revenue Governmental Business-Type Component Activities Activities Total Units The accompanying notes are an integral part of these financial statements. Exhibit A-2 6 ---PAGE BREAK--- ASSETS Cash and cash equivalents $ 9,894,514 $ 4,358,835 $ 972,719 $ 15,226,068 Receivables (net) Accounts 370,931 0 123,974 494,905 Intergovernmental 87,905 0 333,808 421,713 Taxes 2,091,948 717,569 35,423 2,844,940 Prepaid items 108,756 0 0 108,756 Inventories 104,463 0 0 104,463 Due from other funds 4,305,911 4,378,794 904,726 9,589,431 Restricted assets Cash and cash equivalents 200,375 0 0 200,375 Total assets $ 17,164,803 $ 9,455,198 $ 2,370,650 $ 28,990,651 LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES Liabilities Payables Accounts $ 611,205 $ 71,157 $ 1,030,784 $ 1,713,146 Intergovernmental 0 130,597 0 130,597 Accrued salaries and expenses 427,896 0 16,728 444,624 Other liabilities 0 0 16,756 16,756 Unearned revenue 0 0 0 0 Due to others 0 0 157,341 157,341 Due to other funds 5,417,643 0 214,287 5,631,930 Total liabilities 6,456,744 201,754 1,435,896 8,094,394 Deferred inflows of resources Unavailable revenue - property taxes 221,646 0 0 221,646 Fund balances Nonspendable: Prepaid items 108,756 0 0 108,756 Inventories 104,463 0 0 104,463 Restricted for: Judicial 200,375 0 567,389 767,764 Public Safety 0 0 168,310 168,310 Housing and Development 0 0 75,081 75,081 Capital outlay 0 9,253,444 0 9,253,444 Assigned for: Public Safety 0 0 123,974 123,974 Unassigned 10,072,819 0 0 10,072,819 Total fund balances 10,486,413 9,253,444 934,754 20,674,611 Total liabilities, deferred inflows of resources, and fund balances $ 17,164,803 $ 9,455,198 $ 2,370,650 $ 28,990,651 Nonmajor PICKENS COUNTY, GEORGIA BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2021 Governmental General Funds Totals SPLOST The accompanying notes are an integral part of these financial statements. Exhibit A-3 7 ---PAGE BREAK--- Total fund balance - total governmental funds $ 20,674,611 Amounts reported for governmental activities in the statement of net position are different because: Some assets are not financial resources and, therefore, are not reported in the funds. These are: Capital assets, net of accumulated depreciation 45,700,393 Long-term assets (receivables) are not available to pay current period expenditures and, therefore, are reported as unavailable revenue in the funds. These are property taxes. 221,646 Deferred outflows and inflows of resources related to pensions are applicable to future periods and, therefore, are not reported in the funds. These are: Deferred outflows of resources: Deferred outflows related to pensions $ 2,640,510 Deferred outflows related to other post-employment benefits 303,061 Deferred inflows of resources: Deferred inflows related to pensions (1,170,648) Deferred inflows related to other post-employment benefits (24,872) 1,748,051 Long-term liabilities are not due and payable in the current period and are not reported in the funds. These are: Capital leases $ 200,432 Notes payable 2,720,831 Post-closure care costs 450,000 Compensated absences 362,136 Claims and judgements payable 152,610 Net pension liability 8,674,912 Net OPEB liability 1,228,736 (13,789,657) Net position of governmental activities $ 54,555,044 PICKENS COUNTY, GEORGIA RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION December 31, 2021 The accompanying notes are an integral part of these financial statements. Exhibit A-4 8 ---PAGE BREAK--- Nonmajor Governmental Funds Totals REVENUES Taxes $ 23,768,565 $ 7,257,225 $ 274,760 $ 31,300,550 Licenses and permits 642,024 0 0 642,024 Fines, fees and forfeitures 281,059 0 289,496 570,555 Charges for services 3,092,965 0 1,029,081 4,122,046 Intergovernmental 1,734,301 719,442 4,526,938 6,980,681 Contributions 39,733 0 11,135 50,868 Investment 9,981 6,520 1,725 18,226 Other 456,027 0 1,764 457,791 Total revenues 30,024,655 7,983,187 6,134,899 44,142,741 EXPENDITURES Current General government 4,281,253 0 40,984 4,322,237 Judicial 3,777,784 0 2,671,904 6,449,688 Public safety 12,207,832 0 3,465,339 15,673,171 Public works 3,999,109 0 0 3,999,109 Health and welfare 201,555 0 0 201,555 Culture and recreation 1,215,186 0 0 1,215,186 Housing and development 718,437 0 244,269 962,706 Capital outlay 0 2,938,408 0 2,938,408 Intergovernmental 0 1,320,815 0 1,320,815 Debt service 0 58,031 0 58,031 Total expenditures 26,401,156 4,317,254 6,422,496 37,140,906 Excess (deficiency) of revenues over (under) expenditures 3,623,499 3,665,933 (287,597) 7,001,835 Other financing sources (uses) Transfers in 0 0 643,001 643,001 Transfers out (643,001) (100,028) (259,952) (1,002,981) Total other financing sources (uses) (643,001) (100,028) 383,049 (359,980) Net change in fund balance 2,980,498 3,565,905 95,452 6,641,855 Fund balances, January 1(original) 11,589,433 2,179,448 839,302 14,608,183 Prior period adjustment (4,083,518) 3,508,091 0 (575,427) Fund balances, January 1 (restated) 7,505,915 5,687,539 839,302 14,032,756 Fund balances, December 31 $ 10,486,413 $ 9,253,444 $ 934,754 $ 20,674,611 General SPLOST PICKENS COUNTY, GEORGIA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For the year ended December 31, 2021 The accompanying notes are an integral part of these financial statements. Exhibit A-5 9 ---PAGE BREAK--- Net change in fund balances - total governmental funds $ 6,641,855 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. Capital outlays $ 1,498,371 Depreciation (2,884,272) (1,385,901) Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds These include recognition of unavailable property taxes. (1,030,437) In the statement of activities, the loss on the disposal of capital assets is reported, whereas in the governmental funds, the proceeds from the sale of capital assets increase financial resources. Cost of assets disposed (3,597,238) Related accumulated depreciation 3,560,714 (36,524) The proceeds of debt issuance provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net position. Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position. In addition, interest on long-term debt is not recognized in the governmental funds until due, but is recognized in the statement of activities as it accrues. Debt principal payments 398,129 Governmental funds report pension contributions as expenditures. However, in the statement of activities, the cost of pension benefits earned, net of employee contributions is reported as pension expense. Pension contributions 1,376,153 Cost of benefits earned net of employee contributions (2,411,393) (1,035,240) Other post employment benefits are reported in the statement of activities, but do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. OPEB contributions 51,246 Cost of benefits earned net of employee contributions (106,525) (55,279) Some expenses reported in the statement of activities do not require the use of current financial resources and are not reported as expenditures in governmental funds. Claims and judgements payable (3,542) Compensated absences 22,480 18,938 Change in net position of governmental activities $ 3,515,541 For the year ended December 31, 2021 PICKENS COUNTY, GEORGIA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES The accompanying notes are an integral part of these financial statements. Exhibit A-6 10 ---PAGE BREAK--- REVENUES Taxes $ 21,225,700 $ 21,225,700 $ 23,768,565 $ 2,542,865 Licenses and permits 541,400 541,400 642,024 100,624 Fines, fees and forfeitures 255,900 255,900 281,059 25,159 Charges for services 3,733,800 3,733,800 3,092,965 (640,835) Intergovernmental 1,974,685 1,974,685 1,734,301 (240,384) Investment 10,010 10,010 9,981 (29) Contributions 32,962 32,962 39,733 6,771 Other 262,896 262,896 456,027 193,131 Total revenues 28,037,353 28,037,353 30,024,655 1,987,302 EXPENDITURES Current General Government Administration 772,765 772,765 924,261 (151,496) Commission Board 186,962 186,962 181,603 5,359 County clerk 138,897 138,897 142,568 (3,671) Elections 259,526 259,526 232,405 27,121 Finance 425,159 425,159 422,097 3,062 Legal 180,000 180,000 171,295 8,705 Human Resources 160,693 160,693 162,722 (2,029) Tax Commissioner 737,238 737,238 738,178 (940) Tax Assessor 670,578 670,578 656,005 14,573 Board of Equalization 16,658 16,658 12,260 4,398 Buildings 586,107 586,107 609,190 (23,083) Agencies 30,000 30,000 28,669 1,331 Judicial Administration 209,730 209,730 208,911 819 Superior Court 276,442 276,442 212,732 63,710 Clerk of Superior Court 658,437 658,437 714,618 (56,181) District Attorney 623,704 623,704 643,253 (19,549) Magistrate Court 482,443 482,443 432,308 50,135 Probate Court 515,992 515,992 482,494 33,498 Juvenile Court 405,311 405,311 395,187 10,124 Public Defender 675,398 675,398 688,281 (12,883) Public Safety Sheriff department 4,391,495 4,391,495 3,956,685 434,810 Jail operations 2,674,695 2,674,695 2,995,036 (320,341) Court services 148,148 148,148 121,924 26,224 School resource officers 617,244 617,244 706,740 (89,496) Fire Department 4,735,433 4,735,433 3,705,621 1,029,812 Coroner 53,275 53,275 59,588 (6,313) Animal Control 377,238 377,238 331,746 45,492 Emergency Management 216,548 216,548 213,774 2,774 County Marshall 102,198 102,198 116,718 (14,520) Public Works Roads and walkways 2,387,374 2,387,374 2,592,510 (205,136) Solid waste 1,170,756 1,170,756 1,169,280 1,476 Maintenance and shop 303,020 303,020 237,319 65,701 Health and Welfare Health department 2,750 2,750 862 1,888 Public health and welfare 119,678 119,678 109,692 9,986 Senior center 24,300 24,300 21,313 2,987 Transportation services 140,153 140,153 69,688 70,465 For the year ended December 31, 2021 PICKENS COUNTY, GEORGIA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET (GAAP) AND ACTUAL Budget Variance with Original Final Actual Final Budget The accompanying notes are an integral part of these financial statements. Exhibit A-7, continued 11 ---PAGE BREAK--- EXPENDITURES (continued) Current Culture and Recreation Parks and recreation $ 758,928 $ 758,928 $ 838,214 $ (79,286) Library 377,972 377,972 376,972 1,000 Housing and Development Extension office 73,183 73,183 37,309 35,874 Planning and Zoning 572,072 572,072 539,587 32,485 Economic Development 173,020 173,020 141,541 31,479 Total expenditures 27,431,520 27,431,520 26,401,156 1,030,364 Excess (deficiency) of revenues over (under) expenditures 605,833 605,833 3,623,499 3,017,666 Other financing sources (uses) Transfers in 47,557 47,557 0 47,557 Transfers out (1,343,994) (1,343,994) (643,001) (700,993) Contingency (27,750) (27,750) 0 (27,750) Total other financing sources (uses) (1,324,187) (1,324,187) (643,001) (681,186) Net change in fund balances (718,354) (718,354) 2,980,498 3,698,852 Fund balances, January 1 (original) 718,354 718,354 11,589,433 10,871,079 Prior period adjustment 0 0 (4,083,518) (4,083,518) Fund balances, January 1(restated) 718,354 718,354 7,505,915 6,787,561 Fund balances, December 31 $ 0 $ 0 $ 10,486,413 $ 10,486,413 Budget Variance with Original Final Actual Final Budget For the year ended December 31, 2021 PICKENS COUNTY, GEORGIA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET (GAAP) AND ACTUAL The accompanying notes are an integral part of these financial statements. Exhibit A-7, continued 12 ---PAGE BREAK--- Totals ASSETS Current assets Cash and cash equivalents $ 800 $ 0 $ 800 Receivables Accounts (net) 247,511 5,475 252,986 Due from other funds 134,123 0 134,123 Inventories 49,389 53,708 103,097 Total current assets 431,823 59,183 491,006 Noncurrent assets Capital assets Non-depreciable 1,181,428 9,930,793 11,112,221 Depreciable (net) 9,419,106 1,412,134 10,831,240 Total noncurrent assets 10,600,534 11,342,927 21,943,461 Total assets 11,032,357 11,402,110 22,434,467 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows of resources - pension 79,177 0 79,177 Deferred outflows of resources - OPEB 12,627 0 12,627 Total deferred outflows of resources 91,804 0 91,804 LIABILITIES Current liabilities Payables Accounts 298,892 17,494 316,386 Retainages 0 166,922 166,922 Interest 13,024 0 13,024 Accrued salaries and other payroll liabilities 13,879 2,472 16,351 Compensated absences 11,845 1,330 13,175 Due to other funds 1,908,738 2,182,886 4,091,624 Unearned revenue 0 16,177 16,177 Capital lease payable 21,827 0 21,827 Bonds payable 543,000 341,888 884,888 Total current liabilities 2,811,205 2,729,169 5,540,374 Noncurrent liabilities Compensated absences 5,076 570 5,646 Net pension liability 260,028 0 260,028 Net OPEB liability 51,197 0 51,197 Capital lease payable 28,113 0 28,113 Notes payable 1,850,640 9,749 1,860,389 Bonds payable 4,175,000 5,470,086 9,645,086 Total noncurrent liabilities 6,370,054 5,480,405 11,850,459 Total liabilities 9,181,259 8,209,574 17,390,833 DEFERRED INFLOWS OF RESOURCES Deferred inflows of resources - pension 35,062 0 35,062 Deferred inflows of resources - OPEB 1,036 0 1,036 36,098 0 36,098 NET POSITION Net investment in capital assets 3,981,954 5,354,282 9,336,236 Unrestricted (2,075,150) (2,161,746) (4,236,896) Total net position $ 1,906,804 $ 3,192,536 $ 5,099,340 Sewer Airport PICKENS COUNTY, GEORGIA STATEMENT OF NET POSITION PROPRIETARY FUNDS Business-Type Activities Water and December 31, 2021 The accompanying notes are an integral part of these financial statements. Exhibit A-8 13 ---PAGE BREAK--- Totals OPERATING REVENUES Charges for sales and services $ 2,969,863 $ 740,962 $ 3,710,825 Other 17,273 4,517 21,790 Total operating revenues 2,987,136 745,479 3,732,615 OPERATING EXPENSES Costs of sales and services 1,170,021 545,208 1,715,229 Personal services 1,076,249 101,667 1,177,916 Depreciation 785,707 143,926 929,633 Total operating expenses 3,031,977 790,801 3,822,778 Operating income (loss) (44,841) (45,322) (90,163) Non-operating revenues (expenses) Interest expense (167,907) (210,240) (378,147) Income (loss) before capital contributions and transfers (212,748) (255,562) (468,310) Capital contributions Intergovernmental 0 13,000 13,000 Capital contributions 85,000 0 85,000 Total capital contributions 85,000 13,000 98,000 Net income (loss) before transfers (127,748) (242,562) (370,310) Transfers in (out) Transfers in 359,980 0 359,980 Change in net position 232,232 (242,562) (10,330) Net position, January 1 (original) 1,896,800 3,435,098 5,331,898 Prior period adjustment (222,228) 0 (222,228) Net position, January 1 (restated) 1,674,572 3,435,098 5,109,670 Net position, December 31 $ 1,906,804 $ 3,192,536 $ 5,099,340 PICKENS COUNTY, GEORGIA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION PROPRIETARY FUNDS For the year ended December 31, 2021 Water and Sewer Airport Business-Type Activities The accompanying notes are an integral part of these financial statements. Exhibit A-9 14 ---PAGE BREAK--- Totals Cash flows from operating activities: Receipts from customers $ 3,004,141 $ 744,310 $ 3,748,451 Payments to suppliers (992,745) (589,935) (1,582,680) Payments to employees (1,036,687) (98,928) (1,135,615) Other receipts 17,273 4,517 21,790 Net cash provided (used) by operating activities 991,982 59,964 1,051,946 Cash flows from non-capital financing activities: Receipts from other funds 0 1,302,367 1,302,367 Receipts from other governments 0 13,000 13,000 Payments to other funds (205,075) 0 (205,075) Net cash provided (used) by non-capital financing activities (205,075) 1,315,367 1,110,292 Cash flows from capital and related financing activities: Receipts from other funds 359,980 0 359,980 Acquisition of capital assets (621,152) (2,365,460) (2,986,612) Proceeds from notes payable 182,924 9,749 192,673 Proceeds from bonds payable 0 1,674,447 1,674,447 Principal payments - bonds payable (530,000) (483,828) (1,013,828) Principal payments - capital lease payable (21,250) 0 (21,250) Interest paid (165,161) (210,239) (375,400) Net cash provided (used) by capital and related financing activities (794,659) (1,375,331) (2,169,990) Net increase (decrease) in cash and cash equivalents (7,752) 0 (7,752) Cash and cash equivalents, January 1 8,552 0 8,552 Cash and cash equivalents, December 31 $ 800 $ 0 $ 800 Sewer Airport PICKENS COUNTY, GEORGIA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the year ended December 31, 2021 Business-Type Activities Water and The accompanying notes are an integral part of these financial statements. Exhibit A-10, continued 15 ---PAGE BREAK--- Totals Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) $ (44,841) $ (45,322) $ (90,163) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation expense 785,707 143,926 929,633 (Increase) decrease in accounts receivable 36,461 1,071 37,532 (Increase) decrease in inventories 944 (35,162) (34,218) (Increase) decrease in deferred outflows of resources - pension (79,177) 0 (79,177) (Increase) decrease in deferred outflows of resources - OPEB (12,627) 0 (12,627) Increase (decrease) in accounts payable 176,332 (9,565) 166,767 Increase (decrease) in unearned revenue (2,183) 2,277 94 Increase (decrease) in accrued payroll liabilities 6,271 2,739 9,010 Increase (decrease) in deferred inflows of resources - pension 35,062 0 35,062 Increase (decrease) in deferred inflows of resources - OPEB 1,036 0 1,036 Increase (decrease) in net pension liability 37,800 0 37,800 Increase (decrease) in net OPEB liability 51,197 0 51,197 Total adjustments 1,036,823 105,286 1,142,109 Net cash provided (used) by operating activities $ 991,982 $ 59,964 $ 1,051,946 Noncash capital and related financing activities: Acquisition of capital assets through retainages payable totaled $166,922. Contributions of capital assets from other governments totaled $85,000. PROPRIETARY FUNDS For the year ended December 31, 2021 Sewer Airport Business-Type Activities Water and PICKENS COUNTY, GEORGIA STATEMENT OF CASH FLOWS The accompanying notes are an integral part of these financial statements. Exhibit A-10, continued 16 ---PAGE BREAK--- ASSETS Cash $ 2,044,903 Taxes receivable, net 2,278,722 Total assets 4,323,625 LIABILITIES Due to others 3,125,706 NET POSITION Restricted for individuals, organizations, and other governments $ 1,197,919 Funds PICKENS COUNTY, GEORGIA FIDUCIARY FUNDS STATEMENT OF FIDUCIARY NET POSITION December 31, 2021 Custodial The accompanying notes are an integral part of these financial statements. Exhibit A-11 17 ---PAGE BREAK--- ADDITIONS Taxes collected for other agencies $ 30,531,830 Court fees collected for other agencies 1,824,029 Court individual cases 662,461 Sheriff fees collected 377,252 Sheriff inmate account deposits 284,530 Total additions 33,680,102 DEDUCTIONS Taxes distributed to other agencies 30,643,247 Court fees distributed to other agencies 1,814,000 Payments to others 99,582 Sheriff fees distributed to other agencies 361,162 Payments from inmates to others 280,873 Total deductions 33,198,864 Change in net position 481,238 Net position, January 1 716,681 Net position, December 31 $ 1,197,919 Funds PICKENS COUNTY, GEORGIA FIDUCIARY FUNDS STATEMENT OF CHANGES IN FIDUCIARY NET POSITION For the year ended December 31, 2021 Custodial The accompanying notes are an integral part of these financial statements. Exhibit A-12 18 ---PAGE BREAK--- Totals ASSETS Current assets Cash and cash equivalents $ 299,807 $ 975,077 $ 1,274,884 Receivable (net) Notes 280,000 0 280,000 Intergovernmental 0 164,638 164,638 Inventory 0 470 470 Total current assets 579,807 1,140,185 1,719,992 Noncurrent assets Notes receivable 2,016,000 0 2,016,000 Net OPEB asset 0 9,855 9,855 Capital assets Depreciable (net) 0 52,688 52,688 Total noncurrent assets 2,016,000 62,543 2,078,543 Total assets 2,595,807 1,202,728 3,798,535 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows of resources - pension 0 74,571 74,571 Deferred outflows of resources - OPEB 0 69,497 69,497 Total deferred outflows of resources 0 144,068 144,068 LIABILITIES Current liabilities Accounts payable 0 1,212 1,212 Due to others 0 51,333 51,333 Compensated absences 0 9,577 9,577 Bonds payable 82,787 0 82,787 Total current liabilities 82,787 62,122 144,909 Noncurrent liabilities Compensated absences 0 9,576 9,576 Bonds payable 1,416,991 0 1,416,991 Net pension liability 0 417,365 417,365 Net OPEB liability 0 105,551 105,551 Total noncurrent liabilities 1,416,991 532,492 1,949,483 Total liabilities 1,499,778 594,614 2,094,392 DEFERRED INFLOWS OF RESOURCES Deferred inflows of resources - pension 676,017 14,320 690,337 Deferred inflows of resources - OPEB 0 127,281 127,281 Total deferred inflows of resources 676,017 141,601 817,618 NET POSITION Investment in capital assets 0 52,688 52,688 Restricted for health and welfare 0 530,734 530,734 Unrestricted 420,012 27,159 447,171 Total net position $ 420,012 $ 610,581 $ 1,030,593 Authority Department Pickens County Pickens County Development Health PICKENS COUNTY, GEORGIA COMPONENT UNITS COMBINING STATEMENT OF NET POSITION December 31, 2021 The accompanying notes are an integral part of these financial statements. Exhibit A-13 19 ---PAGE BREAK--- Totals Expenses Health and Welfare $ 0 $ 648,196 $ 648,196 Housing and Development 34,887 0 34,887 Total expenses 34,887 648,196 683,083 Program revenues Charges for services 126,000 690,751 816,751 Operating grants and contributions 0 557,569 557,569 Total program revenues 126,000 1,248,320 1,374,320 Net (expense) revenue 91,113 600,124 691,237 General revenues Payments from Pickens County 23,300 0 23,300 Investment 241 0 241 Total general revenues 23,541 0 23,541 Change in net position 114,654 600,124 714,778 Net position, January 1 305,358 10,457 315,815 Net position, December 31 $ 420,012 $ 610,581 $ 1,030,593 Authority Department Pickens County County Development Health PICKENS COUNTY, GEORGIA COMPONENT UNITS COMBINING STATEMENT OF ACTIVITIES For the year ended December 31, 2021 Pickens The accompanying notes are an integral part of these financial statements. Exhibit A-14 20 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 1. Description of Government Unit Pickens County, Georgia (the County) is a political subdivision of the State of Georgia, located 60 miles north of Atlanta, Georgia, and was created by a legislative act in 1853. The County operates under a Commission-Administrator form of government and is governed by three elected Commissioners, governed by state statutes and regulations. There are certain elected officials whose operations are wholly included within the financial records and financial statements of the County. These elected officials include the Sheriff, Tax Commissioner, Probate Court Judge, Magistrate Court Judge, Juvenile Court Judge, Superior Court Judge and Clerk of the Superior Court. The County’s major services include general government, courts, public safety, public works, health and welfare, parks, recreation and culture and planning and community development. 2. Summary of Significant Accounting Policies A. Description of Government-wide Financial Statements The government-wide financial statements 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. All fiduciary activities are reported only in the fund financial statements. The primary government includes governmental activities, which normally are supported by taxes, intergovernmental revenues, and other nonexchange transactions. The primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. B. Reporting Entity As required by generally accepted accounting principles, the financial statements of the reporting entity include those of Pickens County (the primary government) and material component units. The component units discussed below are included in the County’s reporting entity because of the significance of their operational and financial relationship with the County. 21 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 2. Summary of Significant Accounting Policies (continued) B. Reporting Entity, continued In conformity with generally accepted accounting principles, as set forth in Governmental Accounting Standards Board Statement No. 14, The Financial Reporting Entity, as amended by Statement No. 61, the financial statements of component units have been included either as blended or discretely presented component units. Discretely Presented Component Units – Discretely presented component units are reported in separate columns in the government-wide financial statements to emphasize they are legally separate from the government. Pickens County Health Department – The Health Department works to promote and preserve the health of the citizens of the County. The Health Department’s Board consists of seven members, including a County Commissioner and two of these members are appointed by the County Commissioners. The County has the authority to approve or modify the Health Department’s budgets and the ability to approve environmental health services. The Health Department is reported on a June 30 fiscal year. Complete financial statements for the Health Department may be obtained from its administrative office at 60 Health Jasper Way, Jasper, Georgia, 30143. Pickens County Development Authority – The Development Authority is responsible for promoting industrial and commercial development within Pickens County, Georgia. The Development Authority is governed by a seven-member board. The County Commissioners appoint a voting majority to the Authority’s board and the County has a significant financial relationship with the Authority. Separate financial statements are not prepared for the Pickens County Development Authority. 22 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 2. Summary of Significant Accounting Policies (continued) C. Basis of Presentation – Government-wide Financial Statements While separate government-wide and fund financial statements are presented, they are interrelated. The governmental activities column incorporates data from governmental funds. Separate financial statements are provided for governmental funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. As discussed earlier, the government has two discretely presented component units that are shown in separate columns in the government-wide financial statements. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. D. Basis of Presentation – Fund Financial Statements The fund financial statements provide information about the government’s funds, including its fiduciary funds. Separate statements for each fund category—governmental and fiduciary—are presented. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column. All remaining governmental funds are aggregated and reported as nonmajor funds. The County reports the following major governmental funds: General Fund - The general operating fund of the County is used to account for all financial resources except those required to be accounted for in another fund. Special Purpose Local Option Sales Tax Capital Projects Fund – This fund is used to account for the proceeds of a 1 percent special purpose local option sales tax for funding various long- term projects. 23 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 2. Summary of Significant Accounting Policies (continued) D. Basis of Presentation – Fund Financial Statements, continued Water and Sewer Enterprise Fund – This fund is used to account for activities connected with the development, operation and maintenance of water and sewer services in Pickens County. Airport Enterprise Fund – This fund is used to account for activities connected with the development, operation, and maintenance of the Pickens County Airport. The Pickens County Airport Authority provides oversight of capital projects and has delegated operations and long- term debt obligations to Pickens County. Additionally, the County reports the following fund types: Governmental Fund Types Special Revenue Funds – accounts for the proceeds of specific revenue sources that are legally or donor restricted to be expended for specified purposes. Capital Projects Funds – accounts for financial resources to be used for the acquisition or construction of specifically planned projects (other than those financed by proprietary funds). Fiduciary Fund Types Custodial Funds - Custodial funds are fiduciary in nature and are accounted for using the accrual basis of accounting. These funds are used to account for assets that are held for others. During the course of operations, the government has activity between funds for various purposes. Any residual balances outstanding at year end are reported as due from/to other funds and advances to/from other funds. While these balances are reported in fund financial statements, certain eliminations are made in the preparation of the government-wide financial statements. 24 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 2. Summary of Significant Accounting Policies (continued) D. Basis of Presentation – Fund Financial Statements, continued Further, certain activity occurs during the year involving transfers of resources between funds. In fund financial statements these amounts are reported at gross amounts as transfers in/out. While reported in fund financial statements, certain eliminations are made in the preparation of the government-wide financial statements. E. Measurement Focus and Basis of Accounting The accounting and financial reporting treatment is determined by the applicable measurement focus and basis of accounting. Measurement focus indicates the type of resources being measured such as current financial resources or economic resources. The basis of accounting indicates the timing of transactions or events for recognition in the financial statements. The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. 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. The governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences, and claims and judgments, are recorded only when payment is due. General capital asset acquisitions are reported as expenditures in governmental funds. Issuance of long-term debt and acquisitions under capital leases are reported as other financing sources. 25 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 2. Summary of Significant Accounting Policies (continued) E. Measurement Focus and Basis of Accounting, continued Property taxes, sales taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Entitlements are recorded as revenues when all eligibility requirements are met, including any time requirements, and the amount is received during the period or within the availability period for this revenue source (within 60 days of year-end). Expenditure-driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other eligibility requirements have been met, and the amount is received during the period or within the availability period for this revenue source (within 60 days of year- end). All other revenue items are considered to be measurable and available only when cash is received by the government. F. Revenues and Expenditures/Expenses Program revenues include: 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. All taxes, including those dedicated for specific purposes, and other internally dedicated resources are reported as general revenues rather than as program revenues. G. Budgetary Information The applicable statues of the State of Georgia require the County to operate under an annual balanced budget adopted by resolution. The County adopts an annual operating budget for all governmental funds except the capital projects funds, which have an adopted project length budget. The budget resolution reflects the total of each department’s appropriation in each fund. The legal level of control (the level at which expenditures may not legally exceed appropriations) for each adopted annual operating budget generally is the department level within each individual fund. Any change in total to a fund or changes between department appropriations within a fund requires approval of the County Commission. 26 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 2. Summary of Significant Accounting Policies (continued) G. Budgetary Information, continued The budget is adopted on a basis consistent with generally accepted accounting principles, and on the same basis of accounting used by each fund to which the budget applies. The County Commission must also approve budget transfers within departments. The current year original budget was amended during the year. All unencumbered annual appropriations lapse at year-end. Encumbered appropriations are carried forward to the subsequent year automatically. H. Cash, Cash Equivalents, and Investments Cash and cash equivalents include cash on hand, demand deposits, certificates of deposits and deposits with the Georgia Fund 1 the local government investment pool) as well as short- term investments with a maturity date within three months of the date acquired by the County. Currently, the County does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. Investments are stated at fair value based on quoted market prices. Georgia law authorizes the County to invest in the following type of obligations:  Obligations of the State of Georgia or of any other states  Obligations of the United States Government  Obligations fully insured or guaranteed by the United States Government or United States Government Agency  Obligations of any corporation of the United States Government  Prime bankers’ acceptances  The State of Georgia local government investment pool Georgia Fund 1)  Repurchase agreements  Obligations of the other political subdivisions of the State of Georgia 27 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 2. Summary of Significant Accounting Policies (continued) I. Intergovernmental Receivables Receivables from state, federal, and local governments are recorded as revenue for the period of the allocation or as earned based on expenditures made for which reimbursement is due. J. Inventories Inventories are valued at cost using the first-in/first out (FIFO) method. The costs of de minimis governmental fund-type inventories are recorded as expenditures at the time of purchase. The County uses the purchase method of accounting for the purchase of materials and supplies or services. These items are charged directly to the expenditure account. K. Prepaid Items Payments made to vendors for services that will benefit periods beyond the current year are recorded as prepaid items. The costs of governmental fund-type prepaid items are recorded as expenditures when consumed rather than when purchased. L. Capital Assets General capital assets are those assets not specifically related to activities reported in the proprietary funds. These assets generally result from expenditures in governmental funds. The County reports these assets in the governmental activities column of the government-wide statement of net position but does not report these assets in the government funds balance sheet. All capital assets are capitalized at cost (or estimated historical cost) and updated for additions and retirements during the year. Donated capital assets are recorded at acquisition value. The County maintains a capitalization threshold of $5,000 and an estimated useful life of two years or more (excluding infrastructure). All infrastructure is capitalized with a cost of $50,000 and an estimated life of two years or more. The County’s infrastructure consists of roads and bridges. 28 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 2. Summary of Significant Accounting Policies (continued) L. Capital Assets, continued The County’s entire infrastructure has been reported regardless of acquisition date. Improvements to capital assets are capitalized. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend an asset’s life are expensed. All reported capital assets are depreciated except for land and construction in progress. Improvements are depreciated over the remaining useful lives of the related capital assets. Useful lives for infrastructure are estimated based on the County’s historical records of necessary improvements and replacement. Depreciation is computed using the straight-line method over the following useful lives: Useful Life in Years Land improvements Site improvements Infrastructure Buildings 12-15 12-15 10-30 25-50 Building improvements Machinery and equipment Furniture and fixtures Intangibles - software Vehicles 10-25 3-15 5-20 5 2-15 M. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The County reports deferred outflows of resources related to their defined benefit pension plan and other postemployment benefit plan. 29 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 2. Summary of Significant Accounting Policies (continued) M. Deferred Outflows/Inflows of Resources continued In addition to liabilities, the statement of financial 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 County has only one type of item, which arises only under a modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from two sources: property taxes and special assessments. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. The County also reports deferred inflows of resources related to their defined benefit pension plan and other postemployment benefit plan. N. Compensated Absences Vacation benefits are accrued as a liability as the benefits are earned if the employees' rights to receive compensation are attributable to services already rendered and it is probable that the employer will compensate the employees for the benefits through paid time off or some other means. All compensated absence liabilities include salary-related payments, where applicable. The total compensated absence liability is reported on the government-wide financial statements. Governmental funds report the compensated absence liability only if the benefit has matured (is, unused reimbursable leave still outstanding following an employee’s resignation or retirement) and is expected to be liquidated with expendable available financial resources. 30 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 2. Summary of Significant Accounting Policies (continued) O. Net Position Flow Assumption Sometimes the County will fund outlays for a particular purpose from both restricted restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted net position and unrestricted net position in the government-wide financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the County’s policy to consider restricted net position to have been depleted before unrestricted net position is applied. P. Fund Balance Flow Assumption Sometimes the County will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the County’s policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last. Q. Restricted Assets and Restricted Net Position Restricted assets represent certain resources restricted by funding source or required to be set aside for the repayment of debt. They are maintained in a separate bank account and their use is limited. Restricted net position is equal to the excess of the restricted assets funded from operations over the liabilities to be paid with restricted assets which are due in one year or less. Restricted assets exclude unspent bond proceeds for calculation of restricted net position. 31 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 2. Summary of Significant Accounting Policies (continued) R. Fund Balances – Governmental Funds Fund equity at the governmental fund financial reporting level is classified as “fund balance.” Fund equity for all other reporting is classified as “net position.” Fund Balance – Generally, fund balance represents the difference between the assets, deferred outflows of resources, liabilities, and deferred inflows of resources under the current financial resources management focus of accounting. In the fund financial statements, governmental funds report fund balance classifications that comprise a hierarchy based primarily on the extent to which the County is bound to honor constraints on the specific purpose for which amounts in those funds can be spent. In the fund financial statements, governmental funds report the following classifications of fund balance: Nonspendable – includes amounts that cannot be spent because they are either not spendable in form or are legally or contractually required to be maintained intact. All amounts reported by the County as nonspendable at the end of the current year are nonspendable in form. The County has not reported any amounts that are legally or contractually required to be maintained intact. Restricted – includes amounts restricted by external sources (creditors, laws of other governments, etc.) or by constitutional provision or enabling legislation. Committed – includes amounts that can only be used for specific purposes. Committed fund balance is reported pursuant to resolutions passed by the County Commissioners, the County’s highest level of decision making authority, which include the language “committed for the purpose of”. Commitments may be modified or rescinded only through adoption of a subsequent resolution, which shall refer to the original resolution by its number. Assigned – includes amounts that are intended to be used by the County for a specific purpose, but do not meet the definition of restricted or committed fund balance. Intent can only be expressed by the County Commissioners or their designee. Assigned Fund Balance differs from Committed Fund Balance in that assignments do not require a resolution. 32 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 2. Summary of Significant Accounting Policies (continued) R. Fund Balances – Governmental Funds, continued Unassigned – includes amounts that do not fall into one of the above four categories. 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 Fund. In addition, any remaining deficits in the County’s governmental funds which remain after all other fund balances have been exhausted are classified as unassigned. S. Net Position Net position represents the difference between assets, deferred outflows of resources, liabilities, and deferred inflows of resources in reporting, which utilizes the economic resources measurement focus. Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowing used the amount that the County has spent) for the acquisition, construction or improvement of those assets. Net position is reported as restricted using the same definition as used for restricted fund balance as described in the section above. All other net position is reported as unrestricted. T. Pensions 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 Pickens County Defined Benefit Plan (the Plan) and additions to/deductions from the Plan’s fiduciary net position have been determined on the same basis as they are reported by the Plan. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. 33 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 2. Summary of Significant Accounting Policies (continued) U. Other Post-employment Benefits (OPEB) For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the Pickens County Other Post-employment Benefits Plan (the Plan) and additions to/deductions from the Plan’s fiduciary net position have been determined on the same basis as they are reported by the Plan. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. V. Long-Term Obligations In the government-wide financial statements long-term debt and other long-term obligations are reported as liabilities under governmental activities. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or discount. Prepaid bond insurance is amortized over the term of the debt. Issuance costs are recognized during the current period. In the fund financial statements, governmental fund types, bond premiums and discounts, as well as issuance costs, are recognized during the current period. The face amount of debt issued is reported as any other financing source. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, even if withheld from the actual net proceeds received, are reported as debt service expenditures. W. Capital Contributions Federal, state and local government assistance in the form of grants that are permanent in nature and restricted for the construction or acquisition of specific property and equipment is recorded as an asset and as program revenue. 34 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 2. Summary of Significant Accounting Policies (continued) X. Management Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates. 3. Deposit and Investment Risk Custodial Credit Risk – Deposits Custodial credit risk is the risk that in the event of a financial institution failure, the County’s deposits may not be returned. The County has no formal policy, but follows the State of Georgia requirement that all deposits be federally insured or fully collateralized. Interest Rate Risk The County does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. Credit Risk State of Georgia law limits investments to include certificates of deposit, prime bankers’ acceptances, repurchase agreements, direct and agency obligations of the United States, obligations of any corporation of the United States government, obligations of the State of Georgia or other states, obligations of other political subdivisions of the State of Georgia, and pooled investment programs of the State of Georgia. The County has no investment policy that would further limit its investment choices. Concentration of Credit Risk The County has no formal policy on the amount the County may invest in any one issuer. Foreign Currency Risk The County has no investments denominated in a foreign currency. 35 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 4. Accounts Receivable Net accounts receivable at the end of the current year consist of the following: 5. Intergovernmental Receivables Intergovernmental receivables at the end of the current year consist of the following: Primary Government: Major Funds General Fund 87,905 $ Nonmajor Funds Special Revenue Funds Restricted Programs 333,808 Total primary government 421,713 $ Component Units Pickens County Health Department 164,638 $ Primary Government: Major Funds General Fund 370,931 $ Water and Sewer Fund 255,415 $ Less: Allowance for Uncollectible (7,904) 247,511 Airport Fund 5,475 Nonmajor Funds E911 123,974 Total primary government 747,891 $ 36 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 6. Property Taxes The County Commissioners levied property taxes on August 30, 2021. Property taxes attach as an enforceable lien on property as of January 1. Property taxes were billed on September 13, 2021, and are due on November 15, 2021. The County bills and collects its own property taxes and also collects property taxes for the County Board of Education and the State of Georgia. The County also collects vehicle and mobile home taxes for the cities located in the County and the State of Georgia. Collection of the County’s taxes and for the other governmental agencies is the responsibility of the Tax Commissioner’s Office, which is accounted for in a custodial fund. 7. Interfund Receivables, Payables, and Transfers The balances reported as Due to/Due from resulted from timing differences between the dates that transactions are recorded in the accounting system and payments between the funds are made. A summary of interfund receivables and payables at the end of the current year is as follows: Receivable Fund Payable Fund Amount General Water and Sewer 1,908,738 $ Airport 2,182,886 Nonmajor governmental 214,287 SPLOST General 4,378,794 Water and Sewer General 134,123 Nonmajor governmental General 904,726 Total 9,723,554 $ 37 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 7. Interfund Receivables, Payables, and Transfers A summary of interfund transfers for the current year is as follows: Interfund balances at the end of the current year represent charges for services or reimbursable expenses. These remaining balances resulted from the time lag between the dates that interfund goods or services are provided or reimbursable expenditures occur, transactions are recorded in the accounting period, and payments between funds are made. The County expects to repay all interfund balances within one year. Any residual balances outstanding between the governmental activities and the business-type activities are reported in the government-wide financial statements as “internal balances”. The interfund receivables in the SPLOST Capital Project Fund are for intergovernmental revenues recorded in the General Fund in prior years. The County recorded a prior period adjustment for this amount in the current year. See Note 21 “Changes in Beginning Balances” for additional details. The County expects to repay this balance in the subsequent budget year. Transfer Out Fund Transfer In Fund Amount General Nonmajor Governmental 643,001 $ SPLOST Water and Sewer 100,028 Nonmajor Governmental Water and Sewer 259,952 1,002,981 $ 38 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 8. Capital Assets Capital asset activity for the primary government for the current year was as follows: Governmental activities Non-depreciable assets Land $ 5,681,996 $ 10,000 $ 0 $ 5,691,996 Construction in progress 0 75,649 0 75,649 Total non-depreciable assets 5,681,996 85,649 0 5,767,645 Depreciable assets Land improvements 1,554,005 25,010 (7,919) 1,571,096 Buildings and improvements 40,349,045 13,870 (11,819) 40,351,096 Machinery and equipment 8,995,514 342,583 0 9,338,097 Vehicles 11,195,214 1,031,259 (3,577,500) 8,648,973 Infrastructure 10,547,196 0 0 10,547,196 Total depreciable assets 72,640,974 1,412,722 (3,597,238) 70,456,458 Less accumulated depreciation Land improvements (674,110) (59,777) 6,210 (727,677) Buildings and improvements (10,152,979) (937,761) 9,465 (11,081,275) Machinery and equipment (6,276,637) (692,666) 0 (6,969,303) Vehicles (8,797,634) (684,061) 3,545,039 (5,936,656) Infrastructure (5,298,792) (510,007) 0 (5,808,799) Total accumulated depreciation (31,200,152) (2,884,272) 3,560,714 (30,523,710) Total depreciable assets, net 41,440,822 (1,471,550) (36,524) 39,932,748 Governmental activities capital assets, net $ 47,122,818 $ (1,385,901) $ (36,524) $ 45,700,393 Beginning Balance Increases Decreases Ending Balance The beginning balance of capital assets in the Governmental Activities was restated to correct the beginning balance in the amount of $715,994 cost and accumulated depreciation in the amount of $148,931. See Note 21 “Changes in Beginning Balances” for additional details. 39 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 8. Capital Assets (continued) Business-type Activities Non-depreciable assets Land $ 1,716,865 $ 0 $ 0 $ 1,716,865 Construction in progress 6,410,445 2,984,911 0 9,395,356 Total non-depreciable assets 8,127,310 2,984,911 0 11,112,221 Depreciable assets Land improvements 865,080 0 0 865,080 Buildings and improvements 1,842,926 0 0 1,842,926 Machinery and equipment 1,520,469 128,740 (120,071) 1,529,138 Vehicles 419,821 0 0 419,821 Infrastructure 18,318,318 124,883 0 18,443,201 Total depreciable assets 22,966,614 253,623 (120,071) 23,100,166 Less accumulated depreciation Land improvements (601,196) (38,398) 0 (639,594) Buildings and improvements (9,051,813) (86,298) 0 (9,138,111) Machinery and equipment (555,655) (135,022) 0 (690,677) Vehicles (978,348) (42,720) 120,071 (900,997) Infrastructure (272,352) (627,195) 0 (899,547) Total accumulated depreciation (11,459,364) (929,633) 120,071 (12,268,926) Total depreciable assets, net 11,507,250 (676,010) 0 10,831,240 Business-type activities capital assets, net $ 19,634,560 $ 2,308,901 $ 0 $ 21,943,461 Beginning Balance Increases Decreases Ending Balance 40 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 8. Capital Assets (continued) Capital asset activity for the discretely presented component units for the respective year ends was as follows: Depreciation expense was charged to functions/programs as follows: Pickens County Health Department Depreciable assets Site improvements $ 74,694 $ 0 $ 0 $ 74,694 Machinery and equipment 52,002 5,944 (9,887) 48,059 Furniture and fixtures 11,030 0 0 11,030 Vehicles 20,011 0 0 20,011 Total depreciable assets 157,737 5,944 (9,887) 153,794 Less accumulated depreciation Site improvements (28,194) 0 0 (28,194) Machinery and equipment (40,187) (5,274) 9,887 (35,574) Furniture and fixtures (11,030) 0 0 (11,030) Vehicles (20,011) (6,297) 0 (26,308) Total accumulated depreciation (99,422) (11,571) 9,887 (101,106) Total depreciable assets, net 58,315 (5,627) 0 52,688 Pickens County Health Department capital assets, net $ 58,315 $ (5,627) $ 0 $ 52,688 Balance Ending Balance Beginning Increases Decreases Primary Government Governmental activities General Government 522,575 $ Judicial 1,114 Public Safety 993,488 Public Works 1,170,901 Health and Welfare 49,093 Culture and Recreation 74,200 Housing and Development 72,901 Total depreciation expense for governmental activities 2,884,272 $ Business-type activities Water and Sewer 785,707 $ Airport 143,926 Total depreciation expense for business-type activities 929,633 $ Component units Pickens County Health Department 11,571 $ 41 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 9. Capital Lease Agreements The County entered into a lease agreement to finance the acquisition of certain equipment. The terms of the agreement meet the criteria of a capital lease as defined by Statement of Financial Accounting Standards No. 13, which defines a capital lease generally as one which transfers benefits and risk of ownership to the lessee. The lease bears interest at 2.33% and requires annual payments through 2024. The balances of the lease at the end of the current year are $200,432 and $49,940 for governmental and business-type activities, respectively. This year $79,785 and $22,953 was included in depreciation expense for governmental and business-type activities, respectively. Total assets leased under capital leases are $430,101 and $114,766 for governmental activities and business-type activities, respectively, and are comprised of the following: Machinery and Equipment $ 114,766 $ 41,001 $ 114,766 $ 41,001 Vehicles 315,335 86,344 0 0 Total assets under capital leases $ 430,101 $ 127,345 $ 114,766 $ 41,001 Accumulated Depreciation Governmental Activities Business-type Activities Cost Cost Accumulated Depreciation The following is a schedule of the future minimum lease payments together with the present value of the net minimum lease payments at the end of the current year: Year Ending Governmental Business-type December 31, Activities Activities 2022 92,080 $ 22,943 $ 2023 92,076 22,947 2024 23,024 5,731 Total minimum lease payments 207,180 51,621 Less amounts representing interest (6,748) (1,681) Present value of minimum lease payments 200,432 $ 49,940 $ The County’s lease agreements, other than such agreements described above, are relatively minor commitments and are in compliance with state law. 42 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 10. Short-Term Debt On June 18, 2021, the County entered into a $500,000 tax anticipation line of credit for cash flow purposes. The line of credit bore interest at a rate of 0.99% and was paid on December 17, 2021 from 2021 property tax revenues collected between September and December. Principal and interest amounts repaid were $501,230. The borrowings were allocated to the General Fund. The short-term borrowings interest incurred and expensed for the current year was $1,230. Short-term debt activity for the current year is as follows: Tax anticipation note $ 0 $ 500,000 $ (500,000) $ 0 Deductions Beginning Balance Additions Ending Balance 11. Long-Term Debt Governmental Activities Notes from Direct Borrowings The County has entered into an agreement with Association of County Commissioner of Georgia to finance the purchase of land to be used to build a Public Works department facility in the original amount of $1,030,000 ($842,633 outstanding). The agreement is secured by the Public Works building. Payments of $58,031 are due semiannually, interest at 3.33% The agreement matures in 2029. The County has entered into an agreement with Association of County Commissioner of Georgia to finance the purchase of land to be used to build a recycling facility in the original amount of $2,077,308 ($1,878,198 outstanding). The agreement is secured by the recycling facility property. Payments of $121,607 are due semiannually, interest at 2.18% The agreement matures in 2030. 43 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 11. Long-Term Debt (continued) Governmental Activities, continued Notes from Direct Borrowings, continued The annual requirements to amortize notes from direct borrowings at the end of the current year are as follows: Year Ending December 31, Principal Interest Total 2022 300,454 $ 58,822 $ 359,276 $ 2023 307,175 52,099 359,274 2024 314,049 45,226 359,275 2025 321,076 38,198 359,274 2026 328,260 31,014 359,274 2027-2030 1,149,817 49,616 1,199,433 Totals 2,720,831 $ 274,975 $ 2,995,806 $ Business-type Activities The County entered into borrowings with the Georgia Environmental Finance Authority (GEFA) for expansion of the County’s water and sewer system. These notes, including original balances, are as follows as of the end of the current year: Interest Rate Term Due Date Original Balance 2.39% 10 Years 2027 2,300,000 $ 1.89% 20 Years 2040 1,413,000 1.63% 20 Years 2040 525,000 4,238,000 $ 44 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 11. Long-Term Debt (continued) Business-type Activities, continued Notes from Direct Borrowings, continued During 2018, the County entered into two note agreements with GEFA to borrow up to $4,013,000, interest from 1.89% to 2.39%, to finance the construction of water distribution lines and related appurtenances, a new 0.325 million gallon per day water treatment plant, a 100,000- gallon ground storage tank, and the purchase of water rights from the Grandview Lake Company including the water withdrawal permits and water treatment plant. At of the end of the current year, the note had a balance of $1,850,640 and was still in draw down phase. Therefore, a future payment schedule has not been established. The note requires interest only payments until the earlier of August 1, 2023, the completion date, or the date that the loan is fully disbursed. During 2021, the County entered into a note agreement with GEFA to borrow up to $525,000 to finance the costs of acquiring, constructing, and installing a sewer main and pump station at the County airport. At of the end of the current year, the note had a balance of $9,749 and was still in the draw down phase. Therefore, a future payment schedule has not been established. The note requires interest only payments until the earlier of August 1, 2023, the completion date, or the date that the loan is fully disbursed. The note bears an interest rate of 1.63%. All of the County’s notes from direct borrowing are still in drawdown phase; therefore, no amortization schedule is presented, and all balances are classified as noncurrent. 45 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 11. Long-Term Debt (continued) Business-type Activities, continued Revenue Bonds Revenue bonds have been issued for business-type activities and are comprised of the following individual issues as of the end of the current year: Water and Sewer Revenue Refunding Bonds, Series 2015: The County issued Water and Sewer Bonds in the amount of $8,090,000, due in annual installments of $184,000 to $1,190,000 through 2029, with an interest rate of 2.35% ($4,718,000 outstanding). All proceeds were used to advance payment on previously issued debts of the County which had been issued to finance the acquisition and construction of waterline infrastructure and secured by collateral of water service infrastructure. The refunding was undertaken to reduce total future debt service payments. The refunding resulted in an economic gain of $3,599,055. Development Authority of Pickens County Revenue Bonds, Series 2014: The County entered into an agreement with the Development Authority of Pickens County to issue revenue bonds in the amount of $3,966,969 due in installments of $33,447 through 2029, with an interest rate of 3.25% ($2,898,996 outstanding). All proceeds were used to finance the construction of an airport taxiway. During 2014, the agreement was modified due to additional project costs. Development Authority of Pickens County Revenue Bonds, Series 2018: The County entered into an agreement with the Development Authority of Pickens County to issue revenue bonds in the amount of $1,500,000 due in installments of $11,179 through 2035, with an interest rate of 6.00% ($1,238,531 outstanding). All proceeds were used to finance the acquisition and construction of an airport hangar. 46 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 11. Long-Term Debt (continued) Business-type Activities, continued Revenue Bonds, continued Development Authority of Pickens County Revenue Bonds, Series 2021: The County entered into an agreement with the Development Authority of Pickens County to issue revenue bonds in the amount of $5,800,000 due in installments through 2040, with an interest rate of Wall Street Journal Prime Rate plus .75% with a minimum interest rate of 4% and a maximum interest rate of 8% ($1,674,447 outstanding). The bonds are interest only until 2026 when installment of principal and interest will commence. The bonds are currently in draw down phase. Therefore, a future payment schedule has not been established and the payment schedule of the bonds is not included in the annual debt service requirement schedule below. The bonds are interest only until 2026. All proceeds were used to finance the costs of acquisition and construction of the Pickens County Airport expansion. The County’s outstanding Airport bonds are secured by a pledge by the Development Authority and contain a provision that if the County is unable to make its schedule debt service payments, all outstanding amounts become due immediately. The annual requirements to amortize bonds payable as of the end of the current year are as follows: Year Ending December 31, Principal Interest Total 2022 884,888 $ 256,694 $ 1,141,582 $ 2023 941,132 244,244 1,185,376 2024 969,339 216,912 1,186,251 2025 997,913 187,896 1,185,809 2026 1,027,734 158,316 1,186,050 2027-2031 3,603,505 353,345 3,956,850 2032-2035 431,016 49,177 480,193 Totals 8,855,527 $ 1,466,584 $ 10,322,111 $ 47 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 11. Long-Term Debt (continued) Development Authority of Pickens County Revenue Bonds During 2015, the Development Authority issued $1,960,000 of revenue bonds to fully refund a loan agreement with Restaurant Interiors to finance the purchase of an industrial building in the original amount of $1,249,206 ($1,499,778 outstanding). The refunding was undertaken to reduce total future debt service payments. Payments are due in installments with annual principal of $60,447 through $143,831 with a variable interest rate. The interest rate at December 31, 2021 is 2.20%. The annual requirements to amortize bonds payable as of the end of the current year are as follows: Year Ending December 31, Principal Interest Total 2022 82,787 $ 33,330 $ 116,117 $ 2023 86,688 31,490 118,178 2024 90,601 29,564 120,165 2025 95,042 27,550 122,592 2026 99,520 25,438 124,958 2027-2031 572,382 91,864 664,246 2032-2035 472,758 23,194 495,952 Totals 1,499,778 $ 262,430 $ 1,762,208 $ 48 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 12. Long-Term Liabilities Changes in Long - Term Liabilities The following is a summary of changes in long-term liabilities of the County for the current year: In prior years, long-term liabilities, such as compensated absences and landfill closure and post- closure care costs were liquidated by the General Fund. Total interest incurred and expensed in the governmental activities and the business-type activities for the current fiscal year was $28,771 and $378,147, respectively. Long-term liability activity for the Pickens County Health Department, a discretely presented component unit, for the respective fiscal year was as follows: Due Within One Year Pickens County Health Department Compensated absences $ 15,874 $ 11,261 $ 7,982 $ 19,153 $ 9,577 Ending Balance Beginning Balance Additions Deductions Governmental activities Compensated absences $ 384,616 $ 92,905 $ 115,385 $ 362,136 $ 253,495 Notes from direct borrowings 3,014,710 0 293,879 2,720,831 300,454 Capital leases payable 304,682 0 104,250 200,432 87,601 Totals $ 3,704,008 $ 92,905 $ 513,514 $ 3,283,399 $ 641,550 Business-type activities Compensated absences $ 14,571 $ 8,621 $ 4,371 $ 18,821 $ 13,175 Notes from direct borrowings 1,667,716 192,673 0 1,860,389 0 Capital leases payable 71,190 0 21,250 49,940 21,827 Bonds payable 9,869,355 1,674,447 1,013,828 10,529,974 884,888 Totals $ 11,622,832 $ 1,875,741 $ 1,039,449 $ 12,459,124 $ 919,890 Beginning Balance Additions Deductions One Year Due Within Ending Balance 49 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 12. Long-Term Liabilities (continued) Changes in Long - Term Liabilities, continued Long-term liability activity for the Pickens County Development Authority, a discretely presented component unit, for the respective fiscal year was as follows: Due Within One Year Pickens County Development Authority Bonds payable $ 1,578,840 $ 0 $ 79,062 $ 1,499,778 $ 82,787 Ending Balance Beginning Balance Additions Deductions 13. Landfill Post-Closure Care Costs State and Federal laws and regulations require that the County place a final cover on its landfill when officially closed as well as perform certain maintenance and monitoring functions at the landfill site for a period of thirty years after such closure. In addition to operating expenses related to current activities of the landfill, an expense provision and related liability are being recognized based on the future closure and post closure care costs that will be incurred near or after the date the landfill no longer accepts waste. The recognition of these landfill closure and post closure care costs is based on the amount of the landfill capacity used during the year. The County has recorded a liability in the amount of $450,000 for its solid waste landfill at the end of the current year which represents the estimated closure and postclosure costs based on 100% of landfill capacity used to date. All estimated liability for these costs has been recognized since the landfill is closed. These amounts are based on what it would cost to perform all closure and postclosure care in 2021. Actual costs may be higher due to inflation, changes in technology, or changes in regulations. The County is also required to demonstrate financial assurance that the closure and postclosure care cost can be paid in the future. The County is in compliance at the end of the current year, based requirements issued by the EPA. 50 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 14. Net Investment in Capital Assets The net investment in capital assets reported on the government-wide statement of net position is calculated as follows at the end of the current year: Governmental Business-Type Activities Activities Cost of capital assets 76,224,103 $ 34,212,387 $ Accumulated depreciation (30,523,710) (12,268,926) Book value 45,700,393 21,943,461 Capital-related accounts payable (300,303) 0 Retainages payable 0 (166,922) Capital leases payable (200,432) (49,940) Notes payable (2,720,831) (1,860,389) Bonds payable 0 (10,529,974) Net investment in capital assets 42,478,827 $ 9,336,236 $ 15. Retirement Plans County Defined Benefit Pension Plan Plan Description. The Pickens County Defined Benefit Pension Plan and Trust, (the “Plan”), is affiliated with the Association of County Commissioners of Georgia Defined Benefit Plan (ACCG), an agent multiple-employer public employee retirement system that acts as a common investment and administrative agent for participating counties in Georgia. The authority for the Plan, benefits, vesting and contributions are established by the Board of Commissioners. The Plan is administered by the Government Employee Benefits Corporation of Georgia (GEB Corp). GEB Corp issues a publicly available financial report that includes financial statements and required supplementary information for ACCG. The Plan is a defined benefit pension plan that provides retirement, disability and death benefits to Plan members and beneficiaries. All full-time employees are eligible to participate in the Plan after completing three years of service. 51 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 15. Retirement Plans (continued) County Defined Benefit Pension Plan, continued Participant counts as of January 1, 2020 (the most recent actuarial valuation) are as follows: Retirees, beneficiaries, and disablees currently receiving benefits 94 Terminated participants entitled to but not yet receiving benefits 113 Active employees participating in the plan 150 Total number of participants 357 Benefits Provided. Benefits vest after five years of service. Participants become eligible to retire with unreduced benefits at age 65 with three years of plan participation. Upon eligibility to retire, participants are entitled to an annual benefit in the amount of 2% of annual average compensation plus $36 for each year of service payable as a life annuity. Compensation is average over a five-year period prior to retirement or termination. The Plan also provides benefits in the event of death or disability. These benefit provisions were established by an adoption agreement executed by the County Commission. Contributions. County employees are not required to contribute to the Plan. The County contributes the entire cost of the Plan, using the actuarial basis described in the annual valuation report. The County’s contributions to the Plan for the current year totaled $1,418,719, or 18.75% of covered payroll. The County Commissioners provide for the benefits and funding policy through County ordinance and maintains the authority to change the policy. The administrative expenses set by contract between the ACCG and GEBCorp are in addition to the state-required annual funding requirement. The Georgia Constitution enables the governing authority of the County, the County Commissioners, to establish, and amend from time-to-time contribution rates for the County and its Plan participants. 52 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 15. Retirement Plans (continued) County Defined Benefit Pension Plan, continued Pension Liabilities, Pension Expense, Deferred Outflows of Resources, and Deferred Inflows of Resources Related to Pensions. At the end of the current year, the County reported a net pension liability of $8,934,940. The net pension liability was measured as of December 31, 2020, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of January 1, 2020. For the current year, the County recognized pension expense of $2,484,952. For governmental activities, the net pension liability is liquidated by the General Fund. The components of the net pension liability are as follows: Total Plan Net Pension Fiduciary Pension Liability Net Position Liability Balances at December 31, 2019 20,790,658 $ 11,236,809 $ 9,553,849 $ Changes for the year: Service cost 639,263 0 639,263 Interest 1,426,797 0 1,426,797 Liability experience (gain) / loss (205,361) 0 (205,361) Assumption change 37,588 0 37,588 Plan Change 744,132 0 744,132 Employer contributions 0 1,346,566 (1,346,566) Employee contributions 364,175 (364,175) Net investment income 0 1,681,747 (1,681,747) Benefit payments (815,684) (815,684) 0 Administrative expense 0 (49,350) 49,350 Other changes 0 (81,810) 81,810 Net changes 1,826,735 2,445,644 (618,909) Balances at December 31, 2020 22,617,393 $ 13,682,453 $ 8,934,940 $ Plan fiduciary net position as a percentage of the total pension liability 60.50% Covered payroll 6,914,445 $ Net pension liability as a percentage of covered payroll 129.22% 53 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 15. Retirement Plans (continued) County Defined Benefit Pension Plan, continued At the end of the current year, the County reported deferred outflows of resources and deferred inflows of resources related to the Plan from the following sources: County contributions subsequent to the measurement date $ 1,418,720 $ 0 Net difference between projected and actual earnings on pension plan investments 0 (1,052,080) Differences between expected and actual experience 551,762 (153,630) Changes of assumptions 749,205 0 Totals $ 2,719,687 $ (1,205,710) Deferred Outflows of Resources Deferred Inflows of Resources The $1,418,720 of deferred outflows of resources resulting from the County’s contributions subsequent to measurement date will be recognized as a reduction of the net pension liability in the subsequent year. Other amounts reported as deferred outflows and deferred inflows of resources will be recognized in pension expense as follows: Year Ending December 31 2022 642,592 $ 2023 8,900 2024 (383,105) 2025 (173,130) Totals 95,257 $ 54 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 15. Retirement Plans (continued) County Defined Benefit Pension Plan, continued Actuarial Assumptions. The total pension liability in the January 1, 2020 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation 3.00% Future salary increases 4.50% per year with an age based scale Cost of living adjustments N/A Net investment rate of return 7.00% Healthy mortality rates were based on the Pub-2010 Amount Weighted Mortality Table with a blend of 50% of the General Employees Table and 50% of the Public Safety Employees Table with Scale AA to 2020. Disabled rates were derived from the 1985 CIDA Table Class I. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The pension plan’s target asset allocation as of December 31, 2020, is summarized in the following table: Target Allocation Range Fixed Income 30% 25%-35% Large Cap 30% 25%-35% Mid Cap 5% 2.5%-10% Small Cap 5% 2.5%-10% REIT 5% 2.5%-10% International 15% 10%-20% Multi Cap 5% 2.5%-10% Global Allocation 5% 2.5%-10% 55 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 15. Retirement Plans (continued) County Defined Benefit Pension Plan, continued Discount Rate. The discount rate used to measure the total pension liability was 7.00 percent. The discount rate is determined using the estimated 65th percentile return based on UBS Capital Market Assumptions (6.10%) and five-year performance in excess of benchmarks The projection of cash flows used to determine the discount rate assumed that contributions from employer will be made at contractually required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on Plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the Net Pension Liability to Changes in the Discount Rate. The following presents what the net pension liability would be if it were calculated using a discount rate that is one percentage-point lower (6.00 percent) or one percentage-point higher (8.00 percent) than the current rate: Discount Net Pension Rate Liability 1% decrease 6.00% 12,156,184 $ Current discount rate 7.00% 8,934,940 1% increase 8.00% 6,275,757 Plan Fiduciary Net Position. Detailed information about the Plan’s fiduciary net position is available in the separately issued Association County Commissioners of Georgia GEBCorp financial report. 56 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 15. Retirement Plans (continued) County Defined Contribution Plan The County provides retirement benefits for its employees through a deferred compensation, defined contribution plan with the Association of County Commissioners of Georgia Defined Contribution Plan. The Plan was created under Internal Revenue Code Sections 457 and 401(a). The Plan is administered by the Government Employee Benefits Corporation of Georgia (GEBCORP) as the third party service provider and The Charles Schwab Trust Company serves as the trustee of the trust fund under the Plan. Under the terms of the Plan, employees can make voluntary contributions to the 457 and the County will match ½% for each 1% voluntarily contributed by employee up to a total County match of 2.5%. Employee contributions are vested 100% at the time of contribution. Employer contributions vest 0% prior to four full years of employee service, 100% after four full years of employee service. Amounts held in the Plan are not available to the employees until termination, retirement, death, or unforeseeable emergency. During the current year, County and employee contributions to the Plan totaled $88,583 and $134,522, respectively. The County has no fiduciary relationship with the plan, and plan assets are not available to the County or its general creditors. The Plan assets are held in trust by the administrator for the exclusive benefit of the participants of the Plan. The County Commissioners provide the funding policy though a County ordinance and maintains the authority to change the policy. Separate financial statements are not issued for the Plan. 57 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 15. Retirement Plans (continued) Deferred Compensation Plan The County offers its employees an optional deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan is available to all County employees and permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. All amounts of compensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property, or rights are (until paid or made available to the participant or other beneficiary) solely the property and rights of a Trust created by the County for the benefit of the participants. The County has adopted the provisions of GASB Statement No. 32 which required the removal of plan assets and liabilities from the financial statements of the County. Other County Plans In addition to the plans above, various County employees are covered under the following plans: Georgia Firefighters’ Pension Fund, Georgia State Employees’ Retirement System (ERS), Magistrates’ Retirement Fund of Georgia, Peace Officers’ Annuity and Benefit Fund of Georgia, Probate Judges’ Retirement Fund of Georgia, Sheriffs’ Retirement Fund of Georgia, and Superior Court Clerks’ Retirement Fund of Georgia. Further information regarding these plans can be obtained from the plans’ annual reports. These plans are immaterial to the financial statements. Pickens County Health Department Retirement Plan Eligible employees of the Pickens County Health Department participate in the Georgia State Employees’ Retirement System (ERS), a statewide multiple-employer public employee retirement system. During the fiscal year ended June 30, 2021, the Department contributed $57,218. As of June 30, 2021, the Department reported a liability in the amount of $417,365 for its proportionate share (0.009902%) of the net pension liability. The Department recognized pension expense of $84,261 for the fiscal year ended June 30, 2021. Additional information regarding the plan can be obtained from Department’s annual audit report by contacting Pickens County Health Department, 60 Health Way, Jasper, Georgia 30143. 58 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 16. Post-Employment Benefits Other Than Pensions County Plan Plan Description. Pickens County administers a single-employer defined benefit health care plan, the “The Pickens County Other Postemployment Benefits Plan.” The OPEB financial statements are included in this report. No stand-alone financial report is issued. At January 1, 2020, the date of the most recent actuarial valuation, membership consisted of the following: Inactive members or beneficiaries currently receiving benefits 2 Inactive members entitled to but not yet receiving benefits 0 Active employees 24 Total membership 26 Benefits Provided. Coverage under the plan includes medical, prescription drug and dental benefits for retirees and dependents. Eligible retirees must be a minimum age of 55 with 15 or more years of consecutive full-time service, enrolled in the medical insurance plan for a minimum of 3 years prior to retirement, and hired prior to January 1, 2002, to retire and continue medical coverage. Employees hired after March 1, 2002 are not eligible to participate in the plan. Contributions. The County has not elected to advance fund the OPEB Plan, but rather maintains the OPEB Plan on a “pay-as-you-go” basis, in that claims are paid as they arise, rather than establishing an irrevocable trust to accumulate restricted funds. The County Commission authorizes participation in the OPEB plan and sets the contribution rates and benefits and maintains the authority to change the policy. The cost of coverage is paid in part by the employer and in part by the retiree. Eligible retirees and former employees are offered the same health coverage as active employees. Retirees contribute an average of $777 per month towards the actuarial calculated rates. The County contributes the remainder of the required contributions. For the measurement period ended December 31, 2020, plan members receiving benefits contributed $5,874 through their required contributions and the County contributed $55,961 to the plan. 59 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 16. Post-Employment Benefits Other Than Pensions (continued) County Plan, continued OPEB Liabilities, OPEB Expense, Deferred Outflows of Resources, and Deferred Inflows of Resources Related to OPEB. At the end of the current year, the County reported a net OPEB liability of $1,279,933. The net OPEB liability was measured as of December 31, 2020, and the total OPEB liability used to calculate the net OPEB liability was determined and measured from actuarial valuations using data as of January 1, 2020. During the current year, the County recognized OPEB expense of $122,244. The components of the net OPEB liability are as follows: Balances at December 31, 2019 $ 1,192,973 $ 0 $ 1,192,973 Changes for the year: Service cost 31,896 0 31,896 Interest 32,534 0 32,534 Differences between expected and actual experience 39,451 0 39,451 Contributions-employer 0 75,407 (75,407) Changes of assumptions or other inputs 58,486 0 58,486 Benefit payments (75,407) (75,407) 0 Net changes 86,960 0 86,960 Balances at December 31, 2020 $ 1,279,933 $ 0 $ 1,279,933 Plan fiduciary net position as a percentage of the total OPEB liability Covered-employee payroll Plan net OPEB liability as a percentage of covered employee payroll 1,328,504 $ 0.00% 96.34% Liability OPEB Net Liability OPEB Total Plan Fiduciary Net Position 60 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 16. Post-Employment Benefits Other Than Pensions (continued) County Plan, continued At the end of the current year, the County reported deferred outflows of resources and deferred inflows of resources related to the OPEB Plan from the following sources: Differences between expected and actual experience $ 132,293 $ (1,647) Changes of assumptions 130,013 (24,261) Contributions subsequent to the measurement date 53,382 0 Totals $ 315,688 $ (25,908) Deferred Outflows of Resources Deferred Inflows of Resources The $53,382 of deferred outflows of resources resulting from the County’s contributions subsequent to the measurement date will be recognized as a reduction of the net OPEB liability in the subsequent year. Other amounts reported as deferred outflows and deferred inflows of resources will be recognized in OPEB expense as follows: Year Ending December 31 2022 57,813 $ 2023 56,303 2024 54,119 2025 54,076 2026 14,087 Totals 236,398 $ 61 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 16. Post-Employment Benefits Other Than Pensions (continued) County Plan, continued Actuarial Assumptions. The total OPEB liability in the January 1, 2020 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation 3.00% Projected salary increases 5.50% per year, with adjustments by age Actuarial cost method Entry age normal Discount rate 2.12%, 2.74% at prior measurement date Healthcare cost trend rates Pre-Medicare: 7.00% trended down to 4.50% over 10 years Mortality rates Mortality rates were based on the Pub-2010 GE (50%) & PS (50%) Amount-Weighted gender distinct and projected generationally with Scale AA to 2020. Amortization method Closed level dollar for remaining unfunded liability Remaining amortization period Remaining amortization period varies for the bases, with a net effective amortization period of 15 years. The demographic actuarial assumptions for retirement, disability incidence, withdrawal, and salary increases used in the January 1, 2020 actuarial valuation were based on the pension valuation prepared by GEBCorp as of January 1, 2020. The remaining actuarial assumptions initial per capita costs, health care cost trends, etc.) used in the January 1, 2020 actuarial valuation were based on a review of recent plan experience performed concurrently with the January 1, 2020 valuation. 62 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 16. Post-Employment Benefits Other Than Pensions (continued) County Plan, continued Development of Long-Term Rate. Since the County funds this plan on a pay-as-you-go basis, GASB requires the discount rate be based on a yield or index rate for 20-year, tax-exempt municipal bonds with an average rating of AA/Aa or higher (or equivalent quality on another rating scale). The Municipal Bond Index Rate selected by the County for this purpose is the Bond Buyer General Obligation 20-year Municipal Bond Index published at the last Thursday of December by The Bond Buyer (www.bondbuyer.com). The Municipal Bond Index Rate as of the measurement date was 2.12%. Sensitivity of the Net OPEB Liability to Changes in the Discount Rate. The following presents what the net OPEB liability would be if it were calculated using a discount rate that is one percentage-point lower (1.12%) or one percentage-point higher (3.12%) than the current rate. Also, shown is the net OPEB liability as if it were calculated using healthcare cost trend rates that were one percentage point lower or one percentage point higher than the current healthcare trend rates: Net OPEB Discount Rate Liability 1% decrease 1.12% 1,145,397 $ Current discount rate 2.12% 1,279,933 1% increase 3.12% 1,433,645 Net OPEB Healthcare Cost Trend Rates Liability 1% decrease 1,376,498 $ Current trend rate 1,279,933 1% increase 1,187,009 OPEB Plan Fiduciary Net Position. Detailed information about the Plan’s fiduciary net position is available in the separately issued GASB Statement No. 75 Report for The Pickens County Other Postemployment Benefits Plan. 63 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 16. Post-Employment Benefits Other Than Pensions (continued) Pickens County Health Department Component Unit Eligible employees of the Pickens County Health Department are provided OPEB through the State of Georgia OPEB Fund, a cost-sharing multiple-employer defined benefit post-employment healthcare plan and life insurance through the SEAD-OPEB Fund, a cost-sharing multiple- employer defined benefit other post-employment benefit plan. During the fiscal year ended June 30, 2021, the Department contributed $14,019. As of June 30, 2021, the Department reported a net OPEB asset in the amount of $9,855 and net OPEB liability in the amount of $105,551 for its proportionate share (0.000437% for the SEAD-OPEB Fund and 0.0093799% for the State of Georgia OPEB Fund) of the net OPEB asset and liability. The Department recognized OPEB expense of ($36,779) for the fiscal year ended June 30, 2021. Additional information regarding the plan can be obtained from Department’s annual audit report by contacting Pickens County Health Department, 60 Health Way, Jasper, Georgia 30143. 17. Hotel/Motel Lodging Tax The County has levies a 5% lodging tax in accordance with OCGA 48-13-51. A summary of the transactions for the current year follows: Lodging Tax Receipts $ 274,760 Disbursements for trade and tourism $ 215,032 78% of tax receipts 64 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 18. Joint Ventures The County, in conjunction with cities and counties in the thirteen-county northwest Georgia area are members of the Northwest Georgia Regional Commission (RC). Membership in an RC is automatic for each municipality and county in the state. The official Code of Georgia Section 50- 8-34 (Georgia Planning Act of 1989) provides for the organizational structure of the RC's. Each county and municipality in the state is required by law to pay minimum annual dues to the RC. The RC Board membership includes the chief elected official of each county and the chief elected official of each municipality. The County board members and municipal board members from the same county elect one member of the Board who is a resident (but not an elected or appointed official or employee of the County or municipality) to serve as the non-public Board member from a County. The Georgia Planning Act of 1989 (O.C.G.A. 50-8-34) defines RC's as "public agencies" and instrumentalities of their members. Georgia laws also provide that the member governments are liable for any debts or obligations of an RC beyond its resources (O.C.G.A. 50- 8-39.1). Separately issued financial statements are available at the RC’s administrative office. On January 4, 1995, Pickens County entered into an agreement with Bartow County, Georgia, establishing a Joint Development Authority. The County Commissioners of Pickens County, Georgia and the County Commissioner of Bartow County, Georgia signed an agreement whereby the Joint Development Authority of Pickens County and Bartow County was established for the promotion of business development in each county as well as expanding industry, trade, and employment opportunities for the citizens of Bartow and Pickens Counties. The Board of Directors of the Joint Development Authority consists of seven members. Three members of the board are appointed by the Bartow County Commissioner and four members are appointed by the Pickens County Commission. At the end of the current year, the Joint Development Authority owned no assets and had no liabilities. There were no financial transactions conducted by the Joint Development Authority in the current year; therefore, no balance sheet or income statement is presented in the current year financial statements. 65 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 19. Risk Management The County is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; and natural disasters for which, except as described in the following paragraph, the County carries commercial insurance in amounts deemed prudent by County management. Workers’ Compensation The County participates in the Association of County Commissioners of Georgia Group Self- Insurance Workers Compensation Fund, a self-insured cooperative public entity risk pool currently operating among its members to finance workers’ compensation insurance coverage. The fund is owned by its members and is managed by a seven-member Board of Trustees who a representative from participating counties. Settled claims resulting from these risks have not exceeded insurance coverage in any of the past three years. As part of these risk pools, the County is obligated to pay all contributions and assessments as prescribed by the pools, to cooperate with the pools’ agents and attorneys, to follow loss reduction procedures established by the funds, and to report as as possible, and in accordance with any coverage descriptions issued, all incidents which could result in the funds being required to pay any claim of loss. Group Health Insurance The County maintains a self-insured group health insurance plan through Cigna Health and Life Insurance Company, the County’s third-party administrator, that carries a $100,000 aggregate individual claim stop loss. Claims up to that amount are paid by the County through the Pickens County Benefits account. The insurer absorbs any amounts in excess of this claims level. The insurer agreement also has a maximum contractual obligation in the event of termination for the incurred but not reported claims. Reserves are established for the medical insurance liabilities based on information provided by the plan administrator. The third-party administrator reviews and approves all claims on behalf of the County. 66 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 19. Risk Management (continued) Liabilities Liabilities of the funds are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported (IBNR). Changes in the County’s balance of health and dental claims reserve liability is as follows: Beginning Balance 149,064 $ Incurred claims, net of any changes 3,508,935 Payments (3,505,389) Ending Balance 152,610 $ 20. Contingencies The County has received federal and state grants for specific purposes that are subject to review and audit by the grantor agencies or their designee. These audits could result in a request for reimbursement to the grantor agency for costs disallowed under the terms of the grant. Based on prior experience, the County believes such disallowances, if any, will be immaterial. The County was a defendant in several lawsuits at the end of the current year. In the opinion of County management, the outcome of these contingencies will not have a material effect on the financial position of the County. 21. Changes in Beginning Balances Governmental Activities General Fund A prior period adjustment has been made to correct the beginning balance of property tax receivable and related allowance for doubtful accounts. This adjustment increased beginning fund balance by $256,901. 67 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 21. Changes in Beginning Balances (continued) Governmental Activities, continued General Fund, continued A prior period adjustment has been made to reclass intergovernmental revenue incorrectly recorded in the General Fund. The intergovernmental revenue was moved to the SPLOST Capital Projects Fund to match the expenditures in SPLOST Capital Projects Fund. This adjustment decreased beginning fund balance by $3,617,032. A prior period adjustment has been made to correct the recording of prepaid items in the prior year. This adjustment decreased beginning fund balance by $723,387. The net effect of these adjustments decreased beginning fund balance in the General Fund by $4,083,518. SPLOST Capital Projects Fund A prior period adjustment has been made to record intergovernmental revenue in the correct fund. The intergovernmental revenue was incorrectly recorded in the General Fund in prior periods. This adjustment increased beginning fund balance by $3,617,032. A prior period adjustment has been made to record intergovernmental payables that were unrecorded in the prior year. This adjustment increased beginning fund balance by $108,941. The net effect of these adjustments increased beginning fund balance in the SPLOST Capital Projects Fund by $3,508,091. Governmental Activities A prior period adjustment has been made to correct the allocation of the beginning balance of net pension liability and related deferred inflows and outflows of resources between the Governmental Activities and the Business-type Activities. This adjustment increased beginning net position by $1,531,489. 68 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 21. Changes in Beginning Balances (continued) Governmental Activities, continued Governmental Activities, continued The beginning balance of capital assets in the Governmental Activities was restated to correct the beginning balance in the amount of $715,994 cost and accumulated depreciation in the amount of $148,931. This adjustment increased beginning net position by $567,063. A prior period adjustment has been made to record net other postemployment benefits other than pension (OPEB) liability and deferred inflows and outflows of resources related to the net OPEB liability in the Governmental Activities. This adjustment decreased beginning net OPEB liability in the amount of $47,719, deferred outflows – OPEB in the amount of $11,829, and deferred inflows – OPEB in the amount of $1,413. This adjustment increased beginning net position by $37,303. A prior period adjustment has been made to correct the recording of prepaid items in the prior year. This adjustment decreased beginning net position by $723,387. A prior period adjustment has been made to correct the recording of unavailable property tax revenue in the prior year. This adjustment decreased beginning net position by $286,441. A prior period adjustment has been made to correct the beginning balance of property tax receivable and related allowance for doubtful accounts. This adjustment increased beginning net position by $256,901. A prior period adjustment has been made to correct the recording of prepaid items in the prior year. This adjustment decreased beginning net position by $149,064. A prior period adjustment has been made to record intergovernmental payables not recorded in the prior year. This adjustment increased beginning fund balance by $108,941. The net effect of these adjustments increased beginning net position in the Governmental Activities by $1,124,923. 69 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 21. Changes in Beginning Balances (continued) Business-type Activities Water and Sewer Enterprise Fund A prior period adjustment has been made to record net pension liability and deferred inflows and outflows of resources related to the net pension liability in the Water and Sewer Enterprise Fund. This adjustment increased beginning net pension liability in the amount of $278,019, deferred outflows – pension in the amount of $107,634, and deferred inflows – pension in the amount of $14,540. This adjustment decreased beginning net position by $184,925. A prior period adjustment has been made to record net other postemployment benefits other than pension (OPEB) liability and deferred inflows and outflows of resources related to the net OPEB liability in the Water and Sewer Enterprise Fund. This adjustment increased beginning net OPEB liability in the amount of $47,719, deferred outflows – OPEB in the amount of $11,829, and deferred inflows – OPEB in the amount of $1,413. This adjustment decreased beginning net position by $37,303. The net effect of these adjustments decreased beginning net position in the Water and Sewer Enterprise Fund by $222,228. Fiduciary Activities Tax Commissioner Custodial Fund A prior period adjustment has been made to correct beginning taxes receivable in the Tax Commissioner Custodial Fund that was unrecorded at December 31, 2020. This adjustment increased beginning taxes receivable and due to other agencies by $2,668,800. This adjustment had no net effect on fiduciary net position. 70 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE FINANCIAL STATEMENTS December 31, 2021 Exhibit A-15, continued 22. Excess of Expenditures over Appropriations in Individual Governmental Funds During the current fiscal year, the County incurred expenditures in the following departments that were materially in excess of the amounts appropriated. Department Budget Actual Variance General Fund Administration 772,765 $ 924,261 $ (151,496) $ Buildings 586,107 609,190 (23,083) Clerk of Superior Court 658,437 714,618 (56,181) District Attorney 623,704 643,253 (19,549) Jail Operations 2,674,695 2,995,036 (320,341) School resources officers 617,244 706,740 (89,496) Coroner 53,275 59,588 (6,313) County Marshall 102,198 116,718 (14,520) Roads and walkways 2,387,374 2,592,510 (205,136) Parks and Recreation 758,928 838,214 (79,286) Law Library Special Revenue Fund 0 13,676 (13,676) Sheriff Law Enforcement Special Revenue Fund 0 149,119 (149,119) E-911 Special Revenue Fund 0 1,321,010 (1,321,010) Hotel/Motel Special Revenue Fund 0 215,032 (215,032) American Rescue Plan Act Grant Special Revenue Fund 0 2,065,431 (2,065,431) Management concurs with these findings. Management has elected to not make any budget adjustments to the current year’s budget since the current year’s budget was adopted by former management prior to the current fiscal year. 23. Subsequent Events In May 2022, the County received $3.1 million in federal grant funding appropriated by Congress in the American Rescue Plan Act. 71 ---PAGE BREAK--- This page intentionally left blank. ---PAGE BREAK--- REQUIRED SUPPLEMENTARY INFORMATION ---PAGE BREAK--- Total pension liability Service cost $ 639,263 $ 645,330 $ 563,685 Interest 1,426,797 1,292,096 1,099,774 Liability experience (gain) / loss (205,361) 197,356 1,029,288 Assumption change 37,588 880,753 895,492 Plan change 744,132 0 0 Benefit payments, including refunds of employee contributions (815,684) (683,385) (598,066) Net change in total pension liability 1,826,735 2,332,150 2,990,173 Total pension liability - beginning 20,790,658 18,458,508 15,468,335 Total pension liability - ending $ 22,617,393 $ 20,790,658 $ 18,458,508 Plan fiduciary net position Contributions - employer $ 1,346,566 $ 1,238,819 1,077,733 Contributions - employee 364,175 375,521 334,523 Net investment income 1,681,747 1,725,926 (369,268) Benefit payments, including refunds of employee contributions (815,684) (660,275) (598,066) Administrative expense (49,350) (54,658) (37,089) Other (81,810) (92,775) (80,874) Net change in plan fiduciary net position 2,445,644 2,532,558 326,959 Plan fiduciary net position - beginning 11,236,809 8,704,251 8,377,292 Plan fiduciary net position - ending $ 13,682,453 $ 11,236,809 $ 8,704,251 Net pension liability - ending : - $ 8,934,940 $ 9,553,849 $ 9,754,257 Plan's fiduciary net position as a percentage of the total pension liability 60.50% 54.05% 47.16% Covered payroll $ 6,914,445 $ 6,813,847 $ 6,761,050 Net pension liability as a percentage of covered payroll 129.22% 140.21% 144.27% Note: Fiscal year 2015 was the first year of implementation. Therefore, years prior to 2015 are not reported. Fiscal Year End 2021 2020 2019 PICKENS COUNTY, GEORGIA SCHEDULE OF NET PENSION LIABILITY (ASSET) AND RELATED RATIOS LAST TEN FISCAL YEARS December 31, 2021 (Unaudited) The accompanying notes to the required supplementary information are an integral part of this schedule. Exhibit B-1, continued 72 ---PAGE BREAK--- $ 516,229 $ 485,085 $ 253,346 $ 264,362 976,033 634,742 578,687 538,805 742,096 148,184 (79,204) 0 36,116 471,061 312,106 0 0 3,698,277 0 0 (529,326) (346,769) (288,319) (254,487) 1,741,148 5,090,580 776,616 548,680 13,727,187 8,636,607 7,859,991 7,311,311 $ 15,468,335 $ 13,727,187 $ 8,636,607 $ 7,859,991 990,265 866,021 576,852 604,422 349,920 329,750 0 0 1,046,254 429,014 27,148 319,652 (529,326) (346,769) (288,319) (254,487) (34,798) (38,193) (32,894) (33,048) (58,529) (44,922) (53,498) (37,331) 1,763,786 1,194,901 229,289 599,208 6,613,506 5,418,605 5,189,316 4,590,108 $ 8,377,292 $ 6,613,506 $ 5,418,605 $ 5,189,316 $ 7,091,043 $ 7,113,681 $ 3,218,002 $ 2,670,675 54.16% 48.18% 62.74% 66.02% $ 6,732,730 $ 6,261,763 $ 6,455,121 $ 7,234,670 105.32% 113.61% 49.85% 36.91% 2015 Fiscal Year End 2016 2017 2018 The accompanying notes to the required supplementary information are an integral part of this schedule. Exhibit B-1, continued 73 ---PAGE BREAK--- Actuarially determined contribution $ 1,233,511 $ 1,137,984 $ 986,766 Contributions in relation to the actuarially determined contribution (1,418,719) (1,238,819) (1,077,733) Contribution deficiency (excess) $ (185,208) $ (100,835) $ (90,967) Covered payroll $ 7,568,433 $ 7,261,035 $ 6,813,847 Contributions as a percentage of covered payroll 18.75% 17.06% 15.82% Note: Fiscal year 2015 was the first year of implementation. Therefore, years prior to 2015 are not reported. Fiscal Year End 2021 2020 2019 PICKENS COUNTY, GEORGIA SCHEDULE OF CONTRIBUTIONS LAST TEN FISCAL YEARS December 31, 2021 (Unaudited) The accompanying notes to the required supplementary information are an integral part of this schedule. Exhibit B-2, continued 74 ---PAGE BREAK--- $ 865,930 $ 726,960 $ 556,622 $ 565,792 (990,265) (866,021) (576,852) (604,422) $ (124,335) $ (139,061) $ (20,230) $ (38,630) $ 6,761,050 $ 6,732,730 $ 6,261,763 $ 6,455,121 14.65% 12.86% 9.21% 9.36% 2015 2016 Fiscal Year End 2018 2017 The accompanying notes to the required supplementary information are an integral part of this schedule. Exhibit B-2, continued 75 ---PAGE BREAK--- Total OPEB liability Service cost $ 31,896 $ 22,883 $ 25,288 $ 22,750 Interest 32,534 36,447 32,082 34,339 Differences between expected and actual experience 39,451 147,839 (3,444) 7,844 Changes of assumptions or other inputs 58,486 111,532 (50,730) 26,958 Benefit payments (75,407) (12,165) (36,498) (44,902) Implicit subsidy credit 0 (16,900) (27,900) (26,000) Net change in total OPEB liability 86,960 289,636 (61,202) 20,989 Total OPEB liability - beginning 1,192,973 903,337 964,539 943,550 Total OPEB liability - ending $ 1,279,933 $ 1,192,973 $ 903,337 $ 964,539 Plan fiduciary net position Contributions - employer $ 75,407 $ 12,165 $ 36,498 $ 44,902 Benefit payments (75,407) (12,165) (36,498) (44,902) Net change in plan fiduciary net position 0 0 0 0 Plan fiduciary net position - beginning 0 0 0 0 Plan fiduciary net position - ending $ 0 $ 0 $ 0 $ 0 Net OPEB liability - ending : - $ 1,279,933 $ 1,192,973 $ 903,337 $ 964,539 Plan's fiduciary net position as a percentage of the total OPEB liability 0.00% 0.00% 0.00% 0.00% Covered-employee payroll $ 1,328,504 $ 1,328,504 $ 1,239,011 $ 1,239,011 Net OPEB liability as a percentage of covered-employee payroll 96.34% 89.80% 72.91% 77.85% Note: Fiscal year 2018 was the first year of implementation. Therefore, years prior to 2018 are not reported. 2021 Fiscal Year End 2020 2019 2018 PICKENS COUNTY, GEORGIA SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS LAST TEN YEARS December 31, 2021 (Unaudited) The accompanying notes to the required supplementary information are an integral part of this schedule. Exhibit B-3 76 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION December 31, 2021 Exhibit B-4, continued Pension Plan 1. Valuation Date The actuarially determined contribution rate was determined as of January 1, 2020, with an interest adjustment to the fiscal year. Contributions in relation to this actuarially determined contribution rate will be reported for the year ending December 31, 2022. 2. Methods and Assumptions Used to Determine Contribution Rates Actuarial cost method = Entry Age Normal Amortization method = Level percentage of payroll, open Remaining amortization period = 30 years Asset valuation method = Smoothed market value with a 5-year smoothing period Net investment rate of return = 7.00%, net of pension plan investment expense, including inflation Future salary increases = 4.00%-6.50%, including inflation Cost of living adjustments = N/A Normal retirement age = 65 Mortality = Healthy mortality rates were based on the Pub-2010 Amount Weighted Mortality Table with a blend of 50% of the General Employees Table and 50% of the Public Safety Employees Table with Scale AA to 2020. 3. Changes in Benefits There have been no substantive changes since the last actuarial valuation. 77 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION December 31, 2021 Exhibit B-4, continued Pension Plan (continued) 4. Changes of Assumptions The mortality table was changed from the RP-2000 with Scale AA projected to 2018 to the Pub- 2010 Amount Weighted Mortality Table with a blend of 50% of the General Employees Table and 50% of the Public Safety Employees Table with Scale AA to 2020 instead of to 2019. OPEB Plan 1. Valuation Date The net OPEB liability was measured as of January 1, 2020, and the total OPEB liability used to calculate the net OPEB liability was determined and measured from actuarial valuations using data as of December 31, 2020. 2. Methods and Assumptions Used to Determine Contribution Rates No assets are accumulated in a trust to pay benefits. Actuarial cost method = Entry age normal Amortization method = Closed level dollar for remaining unfunded liability Remaining amortization period = Remaining amortization period varies for the bases, with a net effective amortization period of 15 years. Asset valuation method = Fair value Projected salary increases = 5.50% per year with adjustments by age Inflation = 3.00% 78 ---PAGE BREAK--- PICKENS COUNTY, GEORGIA NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION December 31, 2021 Exhibit B-4, continued OPEB Plan (continued) 2. Methods and Assumptions Used to Determine Contribution Rates (continued) Discount rate = 2.12%, 2.74% at prior measurement date Healthcare cost trend rates = Pre-Medicare: 7.00% trended down by 0.25% over 10 years to an ultimate rate of 4.50%; Medicare: 4.50%; Prescription Drug: 8.00% trended down by 0.25% over 14 years to an ultimate rate of 4.50%; Dental: 3.00% Mortality = Mortality rates were based on the the Pub-2010 GE (50%) & PS (50%) Amount- Weighted gender distinct and projected generationally with Scale AA from 2020. 3. Changes in Benefits There have been no benefit changes for the past two years. 4. Changes of Assumptions The discount rate changed from 2.74% to 2.12%. Healthcare claims costs and trends were updated to reflect the most recent experience. Mortality rates were updated to use Pub-2010 GE(50%) & PS(50%) Amt-Weighted with Scale AA to 2022 study. 79 ---PAGE BREAK--- This page intentionally left blank. ---PAGE BREAK--- COMBINING STATEMENTS Nonmajor Governmental Funds ---PAGE BREAK--- Nonmajor Governmental Funds ASSETS Cash and cash equivalents $ 44,879 $ 129,149 $ 0 $ 161,881 $ 487,227 $ 149,583 $ 0 $ 972,719 Receivable Accounts 0 0 123,974 0 0 0 0 123,974 Intergovernmental 0 0 0 0 333,808 0 0 333,808 Taxes receivable 0 0 0 0 0 35,423 0 35,423 Due from other funds 229 0 0 34,621 0 0 869,876 904,726 Total assets $ 45,108 $ 129,149 $ 123,974 $ 196,502 $ 821,035 $ 185,006 $ 869,876 $ 2,370,650 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ 998 $ 0 $ 0 $ 0 $ 49,985 $ 109,925 $ 869,876 $ 1,030,784 Accrued salaries and expenses 0 0 0 0 16,728 0 0 16,728 Other liabilities 0 0 0 0 16,756 0 0 16,756 Due to other funds 0 0 0 0 214,287 0 0 214,287 Due to other agencies 0 0 0 157,341 0 0 0 157,341 Total liabilities 998 0 0 157,341 297,756 109,925 869,876 1,435,896 Fund balances Restricted for: Judicial 44,110 0 0 0 523,279 0 0 567,389 Public safety 0 129,149 0 39,161 0 0 0 168,310 Housing and Development 0 0 0 0 0 75,081 0 75,081 Assigned for: Public safety 0 0 123,974 0 0 0 0 123,974 Total fund balances 44,110 129,149 123,974 39,161 523,279 75,081 0 934,754 Total liabilities and fund balances $ 45,108 $ 129,149 $ 123,974 $ 196,502 $ 821,035 $ 185,006 $ 869,876 $ 2,370,650 PICKENS COUNTY, GEORGIA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31, 2021 Total Special Revenue American Sheriff Library E-911 Law Law Enforcement Act Grant Hotel/Motel Rescue Plan Force Tax Drug Task Restricted Programs Exhibit C-1 80 ---PAGE BREAK--- Nonmajor Governmental Funds REVENUES Taxes $ 0 $ 0 $ 0 $ 0 $ 0 $ 274,760 $ 0 $ 274,760 Intergovernmental 0 0 0 0 2,201,555 0 2,325,383 4,526,938 Charges for services 0 110,104 722,256 0 196,721 0 0 1,029,081 Fines, fees, and forfeitures 17,966 0 0 0 271,530 0 0 289,496 Contributions 0 8,931 0 0 2,204 0 0 11,135 Investment 119 295 0 162 1,060 89 0 1,725 Other 0 0 414 0 1,350 0 0 1,764 Total revenues 18,085 119,330 722,670 162 2,674,420 274,849 2,325,383 6,134,899 EXPENDITURES Current General government 0 0 0 0 0 0 40,984 40,984 Judicial 13,676 0 0 0 2,658,228 0 0 2,671,904 Public safety 0 149,119 1,321,010 0 0 0 1,995,210 3,465,339 Housing and development 0 0 0 0 0 215,032 29,237 244,269 Total expenditures 13,676 149,119 1,321,010 0 2,658,228 215,032 2,065,431 6,422,496 Excess (deficiency) of revenues over (under) expenditures 4,409 (29,789) (598,340) 162 16,192 59,817 259,952 (287,597) Other financing sources (uses) Transfers in 0 0 605,244 0 37,757 0 0 643,001 Transfers out 0 0 0 0 0 0 (259,952) (259,952) Total other financing sources 0 0 605,244 0 37,757 0 (259,952) 383,049 Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses 4,409 (29,789) 6,904 162 53,949 59,817 0 95,452 Fund balances, Jan 1 39,701 158,938 117,070 38,999 469,330 15,264 0 839,302 Fund balances, December 31 $ 44,110 $ 129,149 $ 123,974 $ 39,161 $ 523,279 $ 75,081 $ 0 $ 934,754 PICKENS COUNTY, GEORGIA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES Total NONMAJOR GOVERNMENTAL FUNDS For the year ended December 31, 2021 Special Revenue Library E-911 Enforcement Restricted Programs Sheriff Law Law Rescue Plan American Act Grant Drug Task Force Hotel/Motel Tax Exhibit C-2 81 ---PAGE BREAK--- This page intentionally left blank. ---PAGE BREAK--- NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS Special revenue funds are used to account for specific revenues that are legally or donor restricted or committed to expenditure for particular purposes. Law Library Fund – This fund is used to account for the fines and forfeitures received that are restricted for providing a County Law Library. Sheriff Law Enforcement Fund – This fund is used to account for inmate welfare funds received, donations, and confiscated seizures restricted for law enforcement. E-911 Fund – This fund is used to account for receipt of fees imposed on land and wireless telephone lines in the County used to offset the operation and personnel costs of providing emergency services. Drug Task Force Fund – This fund is used to account for monies confiscated under Federal and Georgia law by the Pickens County Sheriff’s Office related to controlled substances offenses. Such monies are restricted to defray the cost of complex investigations and to purchase equipment relating to said investigations. Restricted Programs Fund – This fund is used to account for multiple court administered reimbursement grant monies received from various Federal and State agencies and the expenditure of these monies for the purposes intended. Hotel Motel Fund – This fund is used to account for hotel/motel tax collections that are restricted for tourism in the County. American Rescue Plan Act Fund – This fund is used to account for revenues and expenditures of the American Rescue Plan Act Coronavirus State and Local Fiscal Recovery Fund. ---PAGE BREAK--- Variance REVENUES Fines and forfeitures $ 0 $ 17,966 $ 17,966 Investment 0 119 119 Total revenues 0 18,085 18,085 EXPENDITURES Current Public Safety 0 13,676 (13,676) Total expenditures 0 13,676 (13,676) Excess (deficiency) of revenues over (under) expenditures 0 4,409 4,409 Fund balances, January 1 0 39,701 39,701 Fund balances, December 31 $ 0 $ 44,110 $ 44,110 Final Budget Actual For the year ended December 31, 2021 PICKENS COUNTY, GEORGIA LAW LIBRARY SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET (GAAP BASIS) AND ACTUAL Exhibit C-3 82 ---PAGE BREAK--- Variance REVENUES Charges for service $ 0 $ 110,104 $ 110,104 Investment 0 295 295 Contributions 0 8,931 8,931 Total revenues 0 119,330 119,330 EXPENDITURES Current Public Safety Contract services 0 44,925 (44,925) Materials and supplies 0 59,096 (59,096) Capital outlay 0 45,098 (45,098) Total expenditures 0 149,119 (149,119) Excess (deficiency) of revenues over (under) expenditures 0 (29,789) (29,789) Fund balances, January 1 0 158,938 158,938 Fund balances, December 31 $ 0 $ 129,149 $ 129,149 Final Budget Actual For the year ended December 31, 2021 PICKENS COUNTY, GEORGIA SHERIFF LAW ENFORCEMENT SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET (GAAP BASIS) AND ACTUAL Exhibit C-4 83 ---PAGE BREAK--- Variance REVENUES Charges for services $ 0 $ 722,256 $ 722,256 Other 0 414 414 Total revenues 0 722,670 722,670 EXPENDITURES Current Public Safety Personal services 0 1,132,230 (1,132,230) Contract services 0 186,657 (186,657) Materials and supplies 0 2,123 (2,123) Total expenditures 0 1,321,010 (1,321,010) Excess (deficiency) of revenues over (under) expenditures 0 (598,340) (598,340) Other financing sources (uses) Transfers in (out) General Fund 0 605,244 605,244 Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses 0 6,904 6,904 Fund balance, January 1 0 117,070 117,070 Fund balance, December 31 $ 0 $ 123,974 $ 123,974 For the year ended December 31, 2021 PICKENS COUNTY, GEORGIA E-911 SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET (GAAP BASIS) AND ACTUAL Final Budget Actual Exhibit C-5 84 ---PAGE BREAK--- Variance REVENUES Investment $ 0 $ 162 $ 162 Total revenues 0 162 162 EXPENDITURES Current Public Safety 0 0 0 Total expenditures 0 0 0 Excess (deficiency) of revenues over (under) expenditures 0 162 162 Fund balances, January 1 0 38,999 38,999 Fund balances, December 31 $ 0 $ 39,161 $ 39,161 Final Budget Actual For the year ended December 31, 2021 PICKENS COUNTY, GEORGIA DRUG TASK FORCE SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET (GAAP BASIS) AND ACTUAL Exhibit C-6 85 ---PAGE BREAK--- Variance REVENUES Intergovernmental $ 2,174,101 $ 2,201,555 $ 27,454 Charges for services 209,740 196,721 (13,019) Fines and forfeitures 242,092 271,530 29,438 Contributions 15,000 2,204 (12,796) Investment 1,158 1,060 (98) Other 39,929 1,350 (38,579) Total revenues 2,682,020 2,674,420 (7,600) EXPENDITURES Current Judicial Personal services 1,143,698 1,146,945 (3,247) Contract services 884,089 833,619 50,470 Materials and supplies 272,930 246,492 26,438 Payments to others 357,137 431,172 (74,035) Total expenditures 2,657,854 2,658,228 (374) Excess (deficiency) of revenues over (under) expenditures 24,166 16,192 (7,974) Other financing sources (uses) Transfers in (out) General Fund 19,366 37,757 18,391 Contingency (43,532) 0 43,532 Total other financing sources (24,166) 37,757 61,923 Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses 0 53,949 53,949 Fund balance, January 1 0 469,330 469,330 Fund balance, December 31 $ 0 $ 523,279 $ 523,279 For the year ended December 31, 2021 PICKENS COUNTY, GEORGIA RESTRICTED PROGRAMS SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET (GAAP BASIS) AND ACTUAL Final Budget Actual Exhibit C-7 86 ---PAGE BREAK--- Variance REVENUES Taxes $ 0 $ 274,760 $ 274,760 Investment 0 89 89 Total revenues 0 274,849 274,849 EXPENDITURES Current Housing and Development Contract services 0 9,445 (9,445) Materials and supplies 0 10,414 (10,414) Payments to others 0 195,173 (195,173) Total expenditures 0 215,032 (215,032) Excess (deficiency) of revenues over (under) expenditures 0 59,817 59,817 Fund balances, January 1 0 15,264 15,264 Fund balances, December 31 $ 0 $ 75,081 $ 75,081 Budget Actual For the year ended December 31, 2021 Final PICKENS COUNTY, GEORGIA HOTEL/MOTEL TAX SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET (GAAP BASIS) AND ACTUAL Exhibit C-8 87 ---PAGE BREAK--- REVENUES Intergovernmental $ 0 $ 2,325,383 $ 2,325,383 EXPENDITURES Current General Government Contract services 0 13,134 (13,134) Materials and supplies 0 27,850 (27,850) Public Safety Personal services 0 1,995,210 (1,995,210) Housing and Development Contract services 0 29,237 (29,237) Total expenditures 0 2,065,431 (2,065,431) Excess (deficiency) of revenues over (under) expenditures 0 259,952 259,952 Other financing sources (uses) Transfers out 0 (259,952) (259,952) Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses 0 0 0 Fund balances, January 1 0 0 0 Fund balances, December 31 $ 0 $ 0 $ 0 For the year ended December 31, 2021 PICKENS COUNTY, GEORGIA AMERICAN RESCUE PLAN ACT GRANT SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET (GAAP) AND ACTUAL Budget Actual Variance Final Exhibit C-9 88 ---PAGE BREAK--- CUSTODIAL FUNDS These funds are used to account for assets held by the County as a custodian to be expended in accordance with the conditions of its custodial capacity. Clerk of Superior Court, Probate Court, Juvenile Court and Magistrate Court - These funds account for assets and related liabilities for the collection of court related fees. Sheriff - This fund accounts for deposits held for incarcerated inmates. Tax Commissioner - This fund accounts for assets and related liabilities for the collection of taxes and tag and title fees. ---PAGE BREAK--- Total Custodial Funds ASSETS Cash $ 670,332 $ 260,416 $ 49,140 $ 1,003,487 $ 61,528 $ 2,044,903 Taxes receivable, net 2,278,722 0 0 0 0 2,278,722 Total assets 2,949,054 260,416 49,140 1,003,487 61,528 4,323,625 LIABILITIES Due to other agencies 2,949,054 6,312 15,715 147,699 6,926 3,125,706 NET POSITION Restricted for individuals, organizations, and other governments $ 0 $ 254,104 $ 33,425 $ 855,788 $ 54,602 $ 1,197,919 Department Tax Probate Sheriff Commissioner Court Magistrate Court Court Superior Clerk of PICKENS COUNTY, GEORGIA CUSTODIAL FUNDS STATEMENT OF FIDUCIARY NET POSITION December 31, 2021 Exhibit D-1 89 ---PAGE BREAK--- ADDITIONS Taxes collected for other agencies $ 30,531,830 $ 0 $ 0 $ 0 $ 0 $ 30,531,830 Court fees collected for other agencies 0 111,693 295,727 1,416,609 0 1,824,029 Court individual cases 0 0 0 662,461 0 662,461 Sheriff fees collected 0 0 0 0 377,252 377,252 Sheriff inmate account deposits 0 0 0 0 284,530 284,530 Total additions 30,531,830 111,693 295,727 2,079,070 661,782 33,680,102 DEDUCTIONS Taxes distributed to other agencies 30,643,247 0 0 0 0 30,643,247 Court fees distributed to other agencies 0 100,976 296,416 1,416,608 0 1,814,000 Payments to others 0 0 2,600 96,982 0 99,582 Sheriff fees distributed to other agencies 0 0 0 0 361,162 361,162 Payments from inmates to others 0 0 0 0 280,873 280,873 Total deductions 30,643,247 100,976 299,016 1,513,590 642,035 33,198,864 Change in net position (111,417) 10,717 (3,289) 565,480 19,747 481,238 Net position, January 1 111,417 243,387 36,714 290,308 34,855 716,681 Net position, December 31 $ 0 $ 254,104 $ 33,425 $ 855,788 $ 54,602 $ 1,197,919 PICKENS COUNTY, GEORGIA CUSTODIAL FUNDS STATEMENT OF CHANGES IN FIDUCIARY NET POSITION For the year ended December 31, 2021 Sheriff Tax Department Total Custodial Funds Magistrate Court Commissioner Clerk of Superior Court Probate Court Exhibit D-2 90 ---PAGE BREAK--- This page intentionally left blank. ---PAGE BREAK--- OTHER REPORTING SECTION ---PAGE BREAK--- This page intentionally left blank. ---PAGE BREAK--- 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 Honorable Chairman and Members of the Board of Commissioners Pickens County, Georgia 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 Pickens County, Georgia, as of and for the year ended December 31, 2021, and the related notes to the financial statements, which collectively comprise Pickens County, Georgia’s basic financial statements and have issued our report thereon dated October 28, 2022. Our report includes a reference to other auditors who audited the financial statements of the Pickens County Health Department, as described in our report on Pickens County, Georgia’s financial statements. This report does not include the results of the other auditors’ testing of internal control over financial reporting or compliance and other matters that were reported on separately by those auditors. Report on Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered Pickens County, Georgia’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 Pickens County, Georgia’s internal control. Accordingly, we do not express an opinion on the effectiveness of Pickens County, Georgia’s internal control. Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that have not been identified. However, as described below, we did identify certain deficiencies in internal control that we consider to be material weaknesses and significant deficiencies. 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. We consider the following deficiencies to be material weaknesses: 2021-001 Condition: The County lacks sufficient controls and procedures regarding year-end close to ensure timely and accurate financial reporting. This included material adjustments during the audit process. Criteria: Internal controls should be in place to ensure the County can perform timely and accurate year-end close procedures for the County to be able to produce its annual financial statements timely. 91 ---PAGE BREAK--- 2021-001, continued Effect: Failure to properly design and implement internal controls over year-end close procedures may lead to financial statements that are materially misstated and lead to delays in financial reporting. Cause: Various posting and classification errors led to account balances not agreeing to subsidiary ledgers. Recommendation: We recommend that the County’s Finance Department continue to implement and/or strengthen internal controls over the year-end closeout procedures. We also recommend management reconcile account balances to the subsidiary ledgers to ensure proper and timely recording. Management Response: Management concurs with this finding. County management has hired finance personnel proficient in the application and implementation of proper internal controls over the year-end close procedures are designed and implemented. The Finance Department implement policies and procedures that will ensure that account balances are reconciled to the subsidiary ledgers. This action was taken immediately upon receipt of the comment from our auditors. 2021-002 Condition: The 2020 financial statements were restated for errors and incorrectly reported amounts in the Governmental Activities, General Fund, SPLOST Capital Projects Fund, Water and Sewer Enterprise Fund, and Tax Commissioner Custodial Fund. Criteria: Generally accepted accounting principles require that accruals be properly calculated and recorded. Effect: Failure to properly apply generally accepted accounting principles led to financial statements that were materially misstated. Cause: County staff lack the proper training to ensure accruals are properly calculated and recorded. Recommendation: Management should review their year-end procedures for recording assets and liabilities. Management Response: Management concurs with this finding. Accounting staff will receive training to properly calculate and record year-end accruals and adjustments. County management has hired finance personnel proficient in the application of generally accepted accounting principles. Management expects this comment to be removed during next year’s audit due to the hiring of well training finance personnel in the current year. This action was taken immediately upon receipt of the comment from our auditors. 92 ---PAGE BREAK--- 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. We consider the following deficiencies to be significant deficiencies: 2021-003 Condition: County personnel may require additional training in the application of generally accepted accounting principles and the preparation of financial statements. Currently, the County relies on the external auditors for technical assistance in applying generally accepted accounting principles and the preparation of the financial statements. This is common for governments of similar size and structure to Pickens County. Under current auditing standards, providing technical assistance does not impair the independence of the external auditor. However, changes to auditing standards by standards setting boards could state that providing technical assistance would impair the independence of the external auditor. This does not indicate that the Finance Department is not trained to perform the daily accounting functions, but that the County has elected as a cost benefit to outsource this expertise to their auditors. Criteria: Effective internal control requires that the County accept responsibility and understanding of the audited financial report. Effect: Failure to understand the financial statements may lead to material misstatements. Cause: County personnel do not have the necessary training in the application of generally accepted accounting principles and the preparation of financial statements. Recommendation: County personnel should continue to receive training in the identification and application of generally accepted accounting principles and the preparation of the County’s financial statements. Management Response: Management concurs with this finding. County management has hired finance personnel proficient in the application of generally accepted accounting principles. Management expects this comment to be removed during next year’s audit due to the hiring of well training finance personnel in the current year. This action was taken immediately upon receipt of the comment from our auditors. 2021-004 Condition: Appropriate segregation of duties does not exist among recording, distribution, and reconciliation of cash accounts and other operational functions in the various funds maintained by the County. This is especially prominent in the offices of the Tax Commissioner, Sheriff, Clerk of Courts, Probate Court, and Magistrate Court. Criteria: Segregation of employees’ duties is a common practice in an effective internal control structure. Segregation of duties is when specific employee functions related to important accounting areas (such as cash receipting and cash disbursements) are separated among different individuals to significantly reduce the risk that any one individual could intentionally or unintentionally misappropriate assets. Effect: Failure to maintain adequate segregation of duties exposes the assets of the County to greater risk of misappropriation. Cause: There are several departments and constitutional offices of the County in which the segregation of duties could be improved. Recommendation: We recommend that each County office review its policies and procedures to determine where it can adequately segregate duties to alleviate the segregation of duties issues. 93 ---PAGE BREAK--- 2021-004, continued Management Response: Management has provided a copy of this finding to the appropriate Elected Officials and Department Heads, and they concur with this finding. Action was taken immediately upon receipt of this comment from our auditors. 2021-005 Condition: During audit procedures on journal entries, we noted that journal entries did not have evidence of approval. All journal entries reviewed during audit procedures appeared appropriate. Criteria: Proper internal controls require that journal entries have supporting documentation with evidence of proper approval. Effect: Failure to approve journal entries increases the County’s risk of loss due to fraud. Cause: The County does not have a policy that requires the approval of journal entries. Recommendation: We recommend the County implement a policy that requires approval of all journal entries and supporting documentation evidencing approval be retained. Management Response: Management concurs with this finding. County finance personnel has a plan to implement proper approval procedures over manual journal entries. Action was taken immediately upon receipt of the comment from our auditors. 2021-006 Condition: While performing audit procedures on building permits, we noted that building permits fees were not properly documented, and we were unable to recalculate the accuracy of the building permit fees charged to customers. Criteria: Proper internal controls require that licenses and permits such as building permits are accurately calculated and documented. Effect: Failure to properly design and implement internal controls over building permits increases the County exposure to asset misappropriation and fraud. Cause: County personnel are not adequately documenting permits fees charged to customers. Recommendation: The County should implement a policy that all licenses and permits are properly documented before they are charged to a customer. Management Response: Management concurs with this finding. Action was taken immediately upon receipt of the comment from our auditors. 2021-007 Condition: While performing audit procedures on deposits at the Accountability Court, we noted that deposits were not made timely. Further, we noted that deposits on hand were not adequately stored in a safe secure location such as a lock box or safe. Criteria: Proper internal controls require that cash receipts be deposited, and transactions recorded in a timely manner. Cause: Deposits are delivered to the Commissioner’s Office for deposit weekly and deposits on hand are not stored in safe or lockbox while awaiting deposit. Effect: Failure to deposit cash receipts in a timely manner exposes the County’s assets to a greater risk of loss due to fraud. Failure to store deposits on hand in a secure location increased the County assets to greater risk of loss due to fraud. 94 ---PAGE BREAK--- 2021-007, continued Recommendation: At a minimum, deposits should be made weekly. Also, deposits on hand should be stored in safe or lockbox. Management Response: Management concurs with this finding. Management will direct the appropriate Department Head to implement the recommendation. This action was taken immediately upon receipt of the comment from our auditors. 2021-008 Condition: While performing procedures at the Accountability Court, we noted that appropriate segregation of duties does not exist among recording, distribution, and reconciliation of cash accounts and other operational functions. Criteria: Segregation of employees’ duties is a common practice in an effective internal control structure. Segregation of duties is when specific employee functions related to important accounting areas (such as cash receipting and cash disbursements) are separated among different individuals to significantly reduce the risk that any one individual could intentionally or unintentionally misappropriate assets. Effect: Failure to maintain adequate segregation of duties exposes the assets of the County to greater risk of misappropriation. Cause: There is no segregation of financial duties at the Accountability Court. Recommendation: We recommend that the Accountability Court review its policies and procedures to determine where it can adequately segregate duties to alleviate the segregation of duties issues. Management Response: Management has provided a copy of this finding to the appropriate Department Head, and they concur with this finding. Action was taken immediately upon receipt of this comment from our auditors. 2021-009 Condition: While performing audit procedures at the Clerk of Courts, we were unable to sight approval for 8 of 15 (40%) voided transactions selected for testing. Criteria: Proper internal controls require that all voided transactions are properly approved. Effect: Failure to maintain proper supporting documentation with evidence of approval for voided transactions subjects the assets of the County to greater risk of misappropriation. Cause: Management is not approving or evidencing approval of voided transactions. Recommendation: Supporting documentation with evidence of approval should be retained at the Clerk of Court’s office. Management Response: Management has provided a copy of this finding to the appropriate Elected Official, and they concur with this finding. This action was taken immediately upon receipt of the comment from our auditors. 95 ---PAGE BREAK--- 2021-010 Condition: While performing audit procedures at the Clerk of Courts, we noted instances where deposits were not made timely. Receipts were held for more than seven days before depositing in 3 of 15 of receipts tested. Criteria: Proper internal controls require that cash receipts be deposited and transactions recorded in a timely manner. Cause: Clerk of Court staff is not delivering deposits to the bank weekly. Effect: Failure to deposit cash receipts in a timely manner exposes the County to a greater risk of loss due to fraud. Recommendation: At a minimum, deposits should be made weekly. Management Response: Management concurs with this finding. Management will advise the appropriate Elected Official to implement the recommendation. This action was taken immediately upon receipt of the comment from our auditors. 2021-011 Condition: While performing audit procedures at the Magistrate Court, we were unable to sight approval for any voided transactions selected for testing. Criteria: Proper internal controls require that all voided transactions are properly approved. Effect: Failure to maintain proper supporting documentation with evidence of approval for voided transactions subjects the assets of the County to greater risk of misappropriation. Cause: Management is not approving or evidencing approval of voided transactions. Recommendation: Supporting documentation with evidence of approval should be retained at the Court’s office. Management Response: Management has provided a copy of this finding to the appropriate Elected Official, and they concur with this finding. This action was taken immediately upon receipt of the comment from our auditors. 2021-012 Condition: While performing audit procedures at the Probate Court, we were unable to sight approval for any voided transactions selected for testing. Criteria: Proper internal controls require that all voided transactions are properly approved. Effect: Failure to maintain proper supporting documentation with evidence of approval for voided transactions subjects the assets of the County to greater risk of misappropriation. Cause: Management is not approving or evidencing approval of voided transactions. Recommendation: Supporting documentation with evidence of approval should be retained at the Court’s office. Management Response: Management has provided a copy of this finding to the appropriate Elected Official, and they concur with this finding. This action was taken immediately upon receipt of the comment from our auditors. 96 ---PAGE BREAK--- Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether Pickens County, Georgia’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grants 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 the following instances of noncompliance or other matters that is required to be reported under Government Auditing Standards: 2021-013 Condition: The County experienced a material excess of expenditures over appropriations in the General Fund. Also, an annual budget was not adopted for the Law Library Special Revenue Fund, Sheriff Law Enforcement Special Revenue Fund, E-911 Special Revenue Fund, Drug Task Force Special Revenue Fund, Hotel/Motel Tax Special Revenue Fund, and American Rescue Plan Act Grant Special Revenue Fund, as required by state law. Criteria: OCGA Code Section 36-81-3 requires local governments to operate under an approved annual budget for the General Fund, each Special Revenue Fund, and each Debt Service Fund. Effect: Failure to maintain expenditures within the balanced budgets and failure to adopt annual budgets as required by OCGA Code Section 36-81-3 will place the County in violation of state law. Cause: The County did not amend the General Fund budget to ensure resources were available for the material overbudget expenditures and did not adopt an annual budget for the for the Law Library Special Revenue Fund, Sheriff Law Enforcement Special Revenue Fund, E-911 Special Revenue Fund, Drug Task Force Special Revenue Fund, Hotel/Motel Tax Special Revenue Fund, and American Rescue Plan Act Grant Special Revenue Fund, as required by state law. Recommendation: County management should ensure that annual operating budgets are adopted for the General Fund, each Special Revenue Fund, and each Debt Service Fund as required by state law. Budget to actual comparisons should be periodically reviewed by County management and budgets amended as needed to ensure that the County remains in compliance with state law. Management Response: Management concurs with this finding. Management will ensure that an annual budget is adopted for the General Fund, each Special Revenue Fund, and each Debt Service Fund, and will review the budget to actual comparisons and recommend any necessary budget revisions to the County Commission. This action was taken immediately upon receipt of the comment from our auditors. 97 ---PAGE BREAK--- 2021-014 Condition: The County deposited grant proceeds used to finance portions of SPLOST projects in the General Fund in prior years. Criteria: OCGA Code Section 48-8-121 requires that SPLOST proceeds shall not be commingled with other funds of the County. Effect: Failure to comply with OCGA Code Section 48-8-121 places the County in violation of state law. Cause: County staff did not deposit grant proceeds used to finance portions of SPLOST projects into SPLOST Fund. Recommendation: All revenues and expenditures should be accounted for within the appropriate fund. The amounts due from the General Fund should be deposited into this account Management Response: Management concurs with this finding. The County recorded an amount due to the SPLOST Fund and will make the appropriate transfers to correct. County management will also make sure that future amounts are correctly deposited and reported in the correct fund. Pickens County, Georgia’s Response to Findings Government Auditing Standards requires the auditor to perform limited procedures on Pickens County, Georgia’s response to the findings identified in our audit and described previously. Pickens County, Georgia’s response was not subjected to the other auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion the response. 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 results of that testing, and not to provide an opinion on the effectiveness of Pickens County, Georgia’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Rushton, LLC Gainesville, Georgia October 28, 2022 98 ---PAGE BREAK--- STATE REPORTING SECTION This section contains additional reports required by the State of Georgia. ---PAGE BREAK--- This page intentionally left blank. ---PAGE BREAK--- Prior Current Project Current Years** Year Total SPLOST 2014 Road Improvements $ 14,418,000 $ 14,418,000 $ 9,802,950 $ 2,648 $ 9,805,598 Capital Improvements Public Safety 5,987,000 5,987,000 5,834,345 151,075 5,985,420 Library 2,000,000 2,000,000 1,891,402 0 1,891,402 Water and Sewer 800,000 800,000 425,874 22,701 448,575 City of Jasper 6,000,000 6,000,000 5,183,643 0 5,183,643 City of Nelson 729,000 729,000 629,812 0 629,812 City of Talking Rock 66,000 66,000 60,512 0 60,512 Total SPLOST 2014 $ 30,000,000 $ 30,000,000 $ 23,828,538 $ 176,424 $ 24,004,962 * Estimated cost represents the portion of these projects to be financed with Special Purpose Local Option Sales Tax. Actual costs that are in excess of these amounts have been financed through alternative funds. The prior years column caption Road Improvements was decreased by $3,617,031 to remove expenditures financed with intergovernmental revenue in prior years. Expenditures Estimated Cost * Prior Project Years Year Total SPLOST 2020 Road Improvements $ 16,039,500 $ 16,039,500 $ 475,248 $ 1,144,404 $ 1,619,652 Water and Sewer Facilities 1,110,000 1,110,000 0 168,413 168,413 Airport Debt Service 3,496,500 3,496,500 133,787 133,787 Capital Improvements Public Safety 2,960,000 2,960,000 0 170,849 170,849 Sheriff 2,960,000 2,960,000 0 678,920 678,920 Parks and Recreations 3,700,000 3,700,000 0 38,014 38,014 City of Jasper 5,002,400 5,002,400 386,325 981,177 1,367,502 City of Nelson 1,650,200 1,650,200 127,442 323,672 451,114 City of Talking Rock 81,400 81,400 2,794 15,967 18,761 $ 37,000,000 $ 37,000,000 $ 1,125,596 $ 3,521,416 $ 4,647,012 Transfers to the Water and Sewer Fund (100,028) Total 2020 SPLOST Expenditures $ 3,421,388 Total 2014 SPLOST Expenditures 176,424 $ 3,597,812 Total Expenditures SPLOST Capital Projects Fund $ 4,317,254 Roads Improvement Expenditures Financed by Intergovernmental Revenues and Contributions (719,442) $ 3,597,812 * Estimated cost represents the portion of these projects to be financed with Special Purpose Purpose Local Option Sales Tax. Actual costs that are in excess of these amounts have been financed through alternative funds. PICKENS COUNTY, GEORGIA SCHEDULE OF PROJECTS FINANCED WITH SPECIAL PURPOSE LOCAL OPTION SALES TAX For the year ended December 31, 2021 Original Current Expenditures Estimated Cost * Original Current Exhibit E-1 99 ---PAGE BREAK--- Grant Name Grant Period Contract Number DHS Operating Grant - Family Connection 07/01/20 to 06/30/21 42700-93-202000133 $ 50,000 $ 24,104 $ 24,104 $ 0 DHS Operating Grant - Family Connection 07/01/21 to 06/30/22 42700-93-202100133 50,000 24,287 24,287 19,181 Total $ 100,000 $ 48,391 $ 48,391 $ 19,181 PICKENS COUNTY, GEORGIA SCHEDULE OF COMPLETED STATE AWARDS EXPENDED GEORGIA DEPARTMENT OF HUMAN SERVICES For the year ended December 31, 2021 Amount Awarded State Revenues State Expenditures Amount Due from State Exhibit E-2 100