Document Thomson-Mcduffie_doc_8c1cdc9379

ANNUAL FINANCIAL REPORT MCDUFFIE COUNTY, GEORGIA YEAR ENDED DECEMBER 31, 2020 ---PAGE BREAK--- ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2020 TABLE OF CONTENTS Page INDEPENDENT AUDITORS’ REPORT 1 MANAGEMENT’S DISCUSSION AND ANALYSIS 5 BASIC FINANCIAL STATEMENTS 19 Statement of Net Position 20 Statement of Activities 21 Balance Sheets – Governmental Funds 22 Reconciliation of Total Governmental Fund Balance to Net Position of Governmental Activities 23 Statements of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds 24 Reconciliation of the Statements of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 26 Statements of Net Position – Proprietary Funds 27 Statements of Revenues, Expenses, and Changes in Fund Net Position – Proprietary Funds 28 Statements of Cash Flows – Proprietary Funds 29 Statement of Fiduciary Assets and Liabilities – Fiduciary Funds 30 Notes to Financial Statements 31 REQUIRED SUPPLEMENTARY INFORMATION 56 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget (Budgetary Basis) and Actual – General Fund 57 Schedule of Net Pension Liability – ACCG Pension Plan for McDuffie County Employees 60 Schedule of Contributions – ACCG Pension Plan for McDuffie County Employees 61 Schedule of Proportionate Share of the Net Pension Liability 62 ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2019 TABLE OF CONTENTS Page COMBINING AND INDIVIDUAL FUND STATEMENTS 63 General Fund 64 Nonmajor Governmental Funds 65 Combining Balance Sheet – Nonmajor Governmental Funds 66 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Governmental Funds 67 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget (Budgetary Basis) and Actual – Debt Fund 69 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget (Budgetary Basis) and Actual – Jail Fund 70 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget (Budgetary Basis) and Actual – Law Library Fund 71 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget (Budgetary Basis) and Actual – Juvenile Probation Fund 72 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget (Budgetary Basis) and Actual – Drug Task Force Fund 73 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget (Budgetary Basis) and Actual – Hotel/Motel Tax Fund 74 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget (Budgetary Basis) and Actual – Emergency Telephone System Fund 75 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget (Budgetary Basis) and Actual – Landfill Surcharge Fund 76 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget (Budgetary Basis) and Actual – Wireless Emergency Telephone System Fund 77 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget (Budgetary Basis) and Actual – Drug Forfeiture Fund 78 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget (Budgetary Basis) and Actual – LMIG Fund 79 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget (Budgetary Basis) and Actual – Drug Court 80 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget (Budgetary Basis) and Actual – CDBG Fund 81 ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2020 TABLE OF CONTENTS Page Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget (Budgetary Basis) and Actual – Transportation Fund 82 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget (Budgetary Basis) and Actual – Multiple Grant Fund 83 Fiduciary Funds 84 Combining Balance Sheet – Fiduciary Funds 85 Combining Statement of Changes in Assets and Liabilities – Fiduciary Funds 86 SUPPLEMENTARY INFORMATION 88 Schedule of Special Purpose Local Option Sales Tax 2004-2008 89 Schedule of Special Purpose Local Option Sales Tax 2009-2014 90 Schedule of Special Purpose Local Option Sales Tax 2015-2019 92 Schedule of Project Expenditures and Source and Application of Funds for Community Development Block Grants 94 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 96 Schedule of Expenditures of Federal Awards 99 Notes to the Schedule of Expenditures of Federal Awards 100 Report on Compliance for Each Major Program and on Internal Control 101 Findings and Questioned Costs 103 ---PAGE BREAK--- (This page is intentionally left blank.) ---PAGE BREAK--- 1 INDEPENDENT AUDITORS’ REPORT Board of Commissioners McDuffie County, Georgia Report on Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, the discretely presented component units, each major fund, and the aggregate remaining fund information of McDuffie County, Georgia, as of and for the year ended December 31, 2020, and the related notes to the financial statements, which collectively comprise the County’s basic financial statements as listed in the table of contents. We did not audit the financial statements of the McDuffie County Health Department, a discretely presented component unit, whose statements reflect total assets and deferred outflows of $591,859 and total net position of ($195,430) as of June 30, 2020, and total revenues of $658,216 for the year then ended. Those financial statements were audited by other auditors whose report thereon has been furnished to us, and our opinion, insofar as it relates to the amounts included for the McDuffie County Health Department, is based on the report of other auditors. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the McDuffie County Health Department, a discretely presented component unit. 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 McDuffie County, Georgia, is based solely on the report of other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. ---PAGE BREAK--- 2 McDuffie County, Georgia Page 2 Opinions In our opinion, based on our audits and the report of 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 discretely presented component units, each major fund, and the aggregate remaining fund information of McDuffie County, Georgia, as of December 31, 2020, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis (on pages 5 through 18), the Schedule of the Net Pension Liability (on page the Schedule of Contributions (on page 61), the Schedule of Proportionate Share of the Net Pension Liability (on page 62) and budgetary comparison information (on page 57 through 59), be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We and other auditors 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. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise McDuffie County, Georgia’s basic financial statements. The introductory section, combining and individual nonmajor fund financial statements, the Schedule of Special Purpose Local Option Sales Taxes 2004-2008, Schedule of Special Purpose Local Option Sales Taxes 2009-2014, Schedule of Special Purpose Local Option Sales Taxes 2015-2019 and Schedule of Project Expenditures and Source and Application of Funds for Community Development Block Grants are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements, the Schedule of Special Purpose Local Option Sales Taxes 2004-2008, Schedule of Special Purpose Local Option Sales Taxes 2009-2014, Schedule of Special Purpose Local Option Sales Taxes 2015-2019 and Schedule of Project Expenditures and Source and Application of Funds for Community Development Block Grants, and the Schedule of Expenditures of Federal Awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, based on our audit, the procedures performed as described above, and the report of the other auditors, the combining and individual nonmajor fund financial statements, the of Schedule Special Purpose Local Option Sales Taxes 2004-2008, Schedule of Special Purpose Local Option Sales Taxes 2009-2014, Schedule of Special Purpose Local Option Sales Taxes 2015-2019 and Schedule of Project Expenditures and Source and Application of Funds for Community Development Block Grants are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The schedule of expenditures of federal awards is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements of Federal Awards, and is also not a required part of the basic financial statements. ---PAGE BREAK--- 3 McDuffie County, Georgia Page 3 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated June 18, 2021, on our consideration of McDuffie County Georgia's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on 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 McDuffie County Georgia's internal control over financial reporting and compliance. The Baird Audit Group, LLC Certified Public Accountants Augusta, Georgia June 18, 2021 ---PAGE BREAK--- 4 (This page is intentionally left blank.) ---PAGE BREAK--- 5 MANAGEMENT’S DISCUSSION AND ANALYSIS ---PAGE BREAK--- 6 MCDUFFIE COUNTY GOVERNMENT MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2020 As management of McDuffie County, we offer the readers of our financial statements this narrative overview and analysis of the financial activities for the fiscal year ended December 31, 2020. We encourage readers to consider the information presented in this analysis along with the complete financial statements and notes in the 2020 Audit Report to enhance their understanding of McDuffie County’s financial performance. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to McDuffie County Government’s financial statements which include government-wide and fund statements as well as notes to the financial statements. This report also contains other supplementary information in addition to the basic financials that may be of interest to the reader. McDuffie County’s basic financial statements are comprised of three components: The first component is government-wide financial statements, second is fund financial statements and third, notes to the financial statements. The Government-wide financial statements present an overall picture of McDuffie County’s financial position and results of operations. The Fund financial statements present financial information for McDuffie County’s major funds. The Notes to the financial statements provide additional information concerning McDuffie County’s finances that are not disclosed in the Government-wide or Fund financial statements. Government-Wide Financial Statements The government-wide financial statements are designed to provide readers with a broad overview of the County’s finances, in a similar manner to a private-sector business. The statement of net position presents information on all the County’s assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the County is improving or deteriorating. The statement of activities presents information showing how the government’s net position changed during the most recent fiscal year. All current year revenues and expenses are included regardless of when cash is received or paid. The purpose of the design of the statement of activities is to show the financial reliance of the County’s distinct activities or functions on revenues provided by the County’s taxpayers. This statement also presents a comparison between direct expense and program revenues for each function of the government. Both statements attempt to distinguish functions of McDuffie County that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). In the Statement of Net Position and the Statement of Activities, we divide the County into three kinds of activities: • Governmental activities—Most of the County’s basic services are reported here, including general government, public safety, highway and streets, health and welfare, culture and recreation, judicial system and economic development. • Business-type activities—The County charges a fee to customers to help cover the cost of certain services it provides. The County’s solid waste and Raysville Campground operations are reported here. ---PAGE BREAK--- 7 • Component units-- The County includes two separate entities in our report, The Development Authority of McDuffie County and the City of Thomson, and the McDuffie County Health Department. The Development Authority serves to promote, pursue and implement economic development in the County. The Health Department is a public health department serving all citizens and non-citizens of McDuffie County needing the available services provided by the Health Department. The government-wide financial statements can be found on pages 20-21 of this report. Fund Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The County uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the County can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Like other state and local governments, McDuffie County uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements. Governmental Funds Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information is useful in evaluating a government’s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information present for governmental funds with similar information presented for governmental activities in the government-wide financial statements. This will allow readers to better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The County maintains 32 individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures and changes in fund balances for the major funds. McDuffie County reports three major governmental funds – General Fund, SPLOST VI, and Other Governmental Funds. Proprietary Funds The Government has two type of proprietary funds report used to account for activities that operate similar to commercial enterprises found in the private sector. The proprietary funds are the Solid Waste Fund and the EMS Fund. These funds charges fees for services provided to outside customers including other local governments and are known as enterprise funds. The proprietary fund statements can be found on pages 27-28 of this report. Fiduciary Funds Fiduciary Funds are used to account for resources held by the government for private organizations, other governments or other departments inside the government. The government is responsible for ensuring that these assets are used only for their intended purposes and are paid to the intended recipients. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the County’s operation or programs. However, the accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statements can be found on pages 30-31 of this report. ---PAGE BREAK--- 8 Government-wide Financial Analysis Net position may serve over time as useful indicators of a government’s overall financial position to determine if the Government is improving or deteriorating. The Statement of Net Position presents information on all the Government’s assets/deferred outflows and liabilities/deferred inflows, with the difference being reported as net position. Government Assets exceed liabilities by $52 million for December 31, 2020 and December 31, 2019. Management has included comparative data which may be useful in comparing the current year and noting possible changes. The largest portion of McDuffie County’s net position, 73%, reflects its investment in capital assets such as land, buildings, roads and equipment. The balance of unrestricted net position of 12% in 2020 and 13% in 2019 may be used to meet the Government’s obligations to citizens and creditors. The following table provides a summary of the County’s governmental and business-type net position for fiscal year 2020 and 2019. ---PAGE BREAK--- 9 MCDUFFIE COUNTY NET POSITION DECEMBER 31, 2020 AND 2019 2020 2019 2020 2019 2020 2019 Assets Current and other assets 18,504,402 $ 16,650,233 $ 1,334,544 $ 374,891 $ 19,838,946 $ 17,025,124 $ Capital assets, net 39,062,411 42,314,857 6,092,267 758,373 45,154,678 $ 43,073,230 $ Total assets 57,566,813 58,965,090 7,426,811 1,133,264 64,993,624 60,098,354 Deferred Outflows of Resources Deferred outflows related to pension 1,060,716 1,491,544 - - 1,060,716 1,491,544 Total deferred outflows of resources 1,060,716 1,491,544 - - 1,060,716 1,491,544 Total assets and deferred outflows of resources 58,627,529 60,456,634 7,426,811 1,133,264 66,054,340 61,589,898 Liabilities Current and other liabilities 2,859,121 3,008,166 367,567 63,860 3,226,688 3,072,026 Long-term liabilities 1,744,570 4,204,462 182,021 194,229 4,795,740 4,398,691 Total liabilities 4,603,691 7,212,628 549,588 258,089 8,022,428 7,470,717 Deferred Inflows of Resources Deferred inflows related to pension 1,364,050 823,507 - - 1,364,050 823,507 Total deferred inflows of resources 1,364,050 823,507 - - 1,364,050 823,507 Total liabilities and deferred inflows of resources 5,967,741 8,036,135 549,588 258,089 9,386,478 8,294,224 Net Position Invested in capital assets, net related debt 37,242,411 38,694,857 6,092,267 758,373 43,334,678 39,453,230 Restricted - Capital Projects 7,504,775 5,977,631 - - 7,504,775 5,977,631 Restricted - Special Revenues 1,343,100 1,223,593 - - 1,343,100 1,223,593 Restricted - Debt Service 12,286 14,844 - - 12,286 14,844 Unrestricted 6,557,216 6,509,574 784,956 116,802 7,342,172 6,626,376 Total net position 52,659,788 $ 52,420,499 $ 6,877,223 $ 875,175 $ 59,537,011 $ 53,295,674 $ Totals Business-Type Activities Governmental Activities ---PAGE BREAK--- 10 Changes in Net Position Governmental Activities Governmental activities increased the Government’s net position by $239,289. Listed below are some of the key elements of this change: Governmental Revenues: The main source of revenues for governmental activities is property tax collections which represented 49% of the total governmental revenues. Sales tax increased by $326,803 from the previous year along with the franchise, excise taxes, license and permits. Governmental Functional Expenses: As reflected in the changes for net position, the Government increased spending by $205,419 above the previous year. Expenses for public safety increased due to the Emergency medical Services and Fire Department being changed to an enterprise fund and capital assets being transferred. Expenses such as economic development, health and welfare, culture and recreation, and judicial services decreased due to the COVID-19 pandemic. Business-type activities: Business-type activities increased the Government’s net position by approximately $6,002,048. This increase is attributed to the new business type activities being added this year for Big Hart/Raysville Campground and emergency Medical Services. Capital assets for emergency medical services were transferred from general government activities to business-type activities in the amount of $5,636,745 which created this substantial increase in net position. ---PAGE BREAK--- MCDUFFIE COUNTY CHANGES IN NET POSITION 11 2020 2019 2020 2019 2020 2019 Revenues Program Revenues: Charges for Services 903,195 5,555,324 903,195 5,555,324 Solid Waste - - 1,624,287 1,423,125 1,624,287 1,423,125 EMS - - 3,678,060 - 3,678,060 - Campgrounds - - 158,873 92,847 158,873 92,847 Operating Grants & Contributions 2,234,631 1,349,269 2,234,631 1,349,269 Capital Grants & Contributions 7,135,395 5,214,243 - - 7,135,395 5,214,243 Total Program Revenues 10,273,221 12,118,836 5,461,220 1,515,972 15,734,441 13,634,808 General Revenues: Property taxes 4,816,865 5,114,546 - - 4,816,865 5,114,546 Sales taxes 3,573,505 3,246,702 - - 3,573,505 3,246,702 Franchise taxes 83,195 81,250 - - 83,195 81,250 Intangible taxes - - - - - Hotel/motel taxes 195,462 305,427 - - 195,462 305,427 Alcoholic beverage taxes 220,425 198,401 - - 220,425 198,401 Financial institution tax - - - - Real estate transfer tax - - - - Energy Excise Tax 184,636 257,599 - - 184,636 257,599 Timber tax 27,918 64,931 - - 27,918 64,931 Insurance premium tax - 1,004,754 - - - 1,004,754 Interest income 18,463 46,720 6,776,690 - 6,795,153 46,720 Payments in lieu of taxes 40,370 40,504 - - 40,370 40,504 Licences and permits 226,334 186,193 - - 226,334 186,193 Motor Vehicle tax 103,406 128,825 - - 103,406 128,825 Miscellaneous taxes 438,124 438,584 - - 438,124 438,584 Total General Revenues 9,928,703 11,114,436 6,776,690 - 16,705,393 11,114,436 Total Revenue 20,201,924 23,233,272 12,237,910 1,515,972 32,439,834 24,749,244 Expenses: General government 4,196,152 4,046,134 - - 4,196,152 4,046,134 Public Safety 8,664,553 8,155,380 - - 8,664,553 8,155,380 Public Works 3,216,561 3,925,136 - - 3,216,561 3,925,136 Health & welfare 343,360 431,774 - - 343,360 431,774 Solid Waste - - 1,598,030 1,547,769 1,598,030 1,547,769 EMS - - 5,188,001 - 5,188,001 - Campgrounds - - 73,264 42,621 73,264 42,621 Economic Development 1,589,969 453,976 - - 1,589,969 453,976 Culture & recreation 832,248 923,189 - - 832,248 923,189 Judicial 526,359 1,198,194 - - 526,359 1,198,194 Water - - - 189,144 - 189,144 Total Expenses 19,369,202 19,133,783 6,859,295 1,779,534 26,228,497 20,913,317 Transfers Out (623,433) (91,521) 623,433 91,521 - - Totals Governmental Activities Business-Type ---PAGE BREAK--- MCDUFFIE COUNTY GOVERNMENT 12 ---PAGE BREAK--- MCDUFFIE COUNTY GOVERNMENT 13 Business-type activities Business-type activities for Raysville and Big Hart Campgrounds reflected higher expenses and revenues for 2020. The increase in expenses was due to getting Big Hart Campground ready to be opened. Raysville Campground increase rates from $26 to $28 per night which increased revenues. Also, Raysville had an increase in the number of rentals for 2020. The solid waste system incurred a profit of $26,257 for the year. The illustration below compares the revenues and expenses for 2020 and 2019. BUSINESS-TYPE ACTIVITIES 2020 Emergency Medical Services is a new business-type activity for 2020. The total expenses were $5,188,001 and charges for services was $3,678,060. This fund received a total of $711,858 in Cares Act and Cares Act Provider Relief Funds. ---PAGE BREAK--- MCDUFFIE COUNTY GOVERNMENT 14 Financial Analysis of McDuffie County’s Funds As noted earlier, McDuffie County employs fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental Funds Governmental funds provide information on near-term inflows, outflows, and balances of spendable resources. In assessing McDuffie County’s financing requirements, unassigned fund balance is a particularly useful measure of net resources available for spending at the end of the fiscal year. The governmental fund types include the General Fund, Special Revenue Funds and Capital Projects Fund. The major funds are General Fund and SPLOST VI. As of December 31, 2020, McDuffie County governmental funds, which include the major funds and various other funds, reported combined fund balances of $17,277,144. The General Fund is the chief operating fund of the County. At December 31, 2020, total fund balance was $8,416,983. The fund balance of McDuffie County has increased by $292,835 since 2019. Capital Project funds account for the construction of capital improvements with SPLOST VI being the major fund. The SPLOST Capital Project Fund reflects funds collected from the 1% Special Local Option Sales Tax and expended for capital items that are in agreement with the resolution approved by the voters. Because projects often bridge several years and involve design, land acquisition, and construction phases, expenditures may vary widely from year to year. Costs expended yearly in capital projects funds are added to the County’s construction-in-progress until the project is complete, and then depreciated over the assets’ useful lives. Transportation SPLOST is another major fund for the Government. This fund reflects revenues collected from the 1% Special Local Option Sales Tax that is designated for road construction and improvements. $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 Revenue Expenses Emergency Medical Services ---PAGE BREAK--- MCDUFFIE COUNTY GOVERNMENT 15 A Local Maintenance and Improvement Grant was awarded annually by the Georgia Department of Transportation. The Board of Commissioners submits a listing of recommendations along with the estimated costs to the State of Georgia. Once approved by the State, the grant is awarded and funds are disbursed to the County. Any additional funds needed are funded through SPLOST and T-SPLOST known as the Transportation Special Purpose Local Option Sales Tax. Proprietary Funds Proprietary fund statements provide the same information as in the business-type activities column of the government-wide statements, but in greater detail, and on a fund basis for enterprise funds. Enterprise Funds – At December 31, 2020, total net position amounted to $6,877,223 for enterprise funds compared to $875,175 at December 31, 2019. The reason for this dramatic change is delineated below. Net position changes are a result of operations, other non-operating revenues and expenses, capital contributions and donated assets and grants. The solid waste transfer system had a profit of $26,257 for the year. The revenues increased by $201,162 and the expenditures increased by $50,261 for the year. Big Hart and Raysville Campgrounds had a profit $85,609 and Emergency Medical Services had a loss of $1,509,941. Assets were transferred into the Emergency Medical Services fund in the amount of $5,636,745 contributing to the increase in net position. Capital Assets and Debt Administration Capital Assets McDuffie County has invested $39,062,411 in capital assets (net of accumulated depreciation). Approximately 99% of this investment is related to governmental activities and includes infrastructure, land, buildings and machinery and equipment. As always McDuffie County continues to increase capital assets each year to provide the best services to the citizens of McDuffie County. Capital assets are discussed in more detail in Note 7 of the financial statements. The Citizens of McDuffie County voted to pass the T-SPLOST and tax collections began in January, 2013. These additional revenues were used for the resurfacing and paving of roads in the community along with joint projects with other Counties. In 2015, Georgia Department of Transportation approved the expansion of the western bypass. This award was in the amount of $16,987,900. This expansion will be near the new University Hospital McDuffie facility and connect to the other completed portion of the western bypass. This project will be paid from the T-SPLOST proceeds for joint projects with other Counties. During 2021, the County will began receiving collections from SPLOST VII, which is the new six year SPLOST the voters approved in 2020. These funds will assist with many capital assets needed in the community. Capital assets held by the County at the end of the fiscal year are summarized as follows: ---PAGE BREAK--- MCDUFFIE COUNTY GOVERNMENT 16 McDuffie County Capital Assets (net of accumulated depreciation) Governmental Activities Business-Type Activities Totals 2020 2019 2020 2019 2020 2019 Land $3,588,475 $3,595,233 $319,649 $312,891 $3,908,124 $3,908,124 Buildings 38,737,089 41,023,262 2,643,329 212,237 41,380,418 41,235,499 Machinery & equipment 9,476,357 12,358,054 3,592,611 393,716 13,068,968 12,751,770 Infrastructure 48,826,728 47,759,402 48,826,728 47,759,402 Construction in progress 3,329,650 2,132,434 293,843 287,173 3,623,493 2,419,607 Total Assets 103,958,299 106,868,385 6,849,432 1,206,017 110,807,973 108,074,402 Accumulated Depreciation -64,895,888 -64,553,528 -2,630,725 -447,644 -67,526,613 -65,001,172 Net Capital Assets $39,062,411 $42,314,857 $4,218,707 $758,373 $43,281,118 $43,073,230 Listed below are some of the significant capital asset transactions which occurred in 2020: • Capital assets purchased during 2020 included three patrol vehicles totaling $118,524, digital images $15,756, county road equipment $227,201, rescue pumper $386,860 and other capital assets totaling $111,271. • Local maintenance and Improvement Grant funded a portion of road resurfacing in the amount of $500,696. • T-SPLOST funded a portion of road resurfacing in the amount of $508,556. • A western bypass is being constructed to connect to the existing eastern bypass allowing trucks and other traffic to bypass the downtown area. The tentative budget for this project is $16,987,900. Debt Service McDuffie County is a very fiscally conservative government. Debt agreements are used for capital outlay items. McDuffie County continues to have an excellent credit rating with Dunn & Bradstreet and should have no conflicts that would affect the financing of any planned facilities or services. ---PAGE BREAK--- MCDUFFIE COUNTY GOVERNMENT 17 The County entered into a general obligation bond in the amount of $17,655,000 during 2008 to build a new government complex building. Interest and principal payments of $1,877,000 were paid from SPLOST VI collections towards the general obligation bond. During 2016, The County entered into a bond agreement for $5,585,000 with bearing interest rates of 2 – 3% to refund $5,280,000 of the County’s bond which was issued during 2008. This refunding will save the County a present value of $236,386. All payments for this debt will be completed in the year 2021. Standard & Poor’s Rating Services has raised its rating on McDuffie County’s general obligation bond to AA- from The State of Georgia has established a limit on the amount of general obligation debt that a unit of government can issue. The law limits the debt to 10% of the total assessed value of taxable property located with the government’s jurisdiction. The legal debt margin for McDuffie County is approximately $55 million. The following table displays all debt owed by McDuffie County for the current and prior years. This entire amount is backed by full faith and credit of the government. This table presents accrued compensated absences which reflect the liability the county owes the employees for vacation time. Also, the table includes postclosure costs for the landfill. This liability represents the cost for routine water monitoring at the facility. The landfill was closed in 1995 and the county must maintain the landfill for thirty years. The net pension liability listed in the chart below represents the amount the County needs to fund future pension payments. This liability was calculated by the actuarial valuation as of December 31, 2019. Note 9 of the financial statements provide a summary of the long term liability transactions for the year ending 2020. McDuffie County Outstanding Debt Fiscal Years 2020 and 2019 Governmental Activities Business-Type Activities Totals Accrued compensated absences $440,698 $ 347,639 $15,188 $10,207 $ 455,886 $ 357,846 Net pension liability 1,303,872 2,036,823 1,303,872 2,036,823 Bonds payable 1,820,000 3,620,000 1,820,000 3,620,000 Postclosure costs 166,833 184,022 166,833 184,022 Total Debt $3,564,570 $ 6,004,462 $182,021 $194,229 $3,746,591 $ 6,198,691 Economic Factors and Rates McDuffie County Board of Commissioners continues to aggressively address the current and future needs of the County by focusing on sound financial management, the reserve policy, the use of current resources for capital expenditures and the development of capital improvements plans. With a growing population the challenge is to continue to improve the quality of life by concentrating on the demands placed on other infrastructure such as providing residents in the County with water, sewer and many other quality services. McDuffie County continues to strive to seek new developers and industries within the community. During 2020, another Sprint Foods was built near I-20 and a manufacturing company completed a $400,000 expansion. A local developer continued work for the remodeling of a prominent property, where he plans to remodel the restaurant, development a wedding venue and build several townhomes in the rear of the property. The Town of Dearing, which is located within McDuffie County, built the first variety store and ---PAGE BREAK--- MCDUFFIE COUNTY GOVERNMENT 18 a permit was issued for a second store. This is a milestone for the Town of Dearing which has around six hundred residents. McDuffie County is making every effort to keep the unemployment rate low; however, the COVID-19 Pandemic has caused unemployment rates to peak. The unemployment rate as of December, 2020 was 5.7% compared to December, 2019 of 4.5%. Budget Highlights for the Fiscal Year Ending December 31, 2020 • A millage increase of one mill was needed to balance the County budget for 2020. • Big Hart Campground will be underneath the management of the County. This provides a recreational facility for the citizens of McDuffie County, as well as a tourist attraction for those wanting to enjoy the lake and outdoors. During 2020, expenses were incurred to get the McDuffie campground ready to be opened in the summer of 2021. • McDuffie County received Cares Funding in the amount of $746,058. These funds were used to assist with the funding of the McDuffie County Fire & EMS department. Request for Information This financial report is designed to provide a general overview of McDuffie County Government’s finances for anyone interested in our County’s finances. Questions concerning this report or any requests for additional information may be addressed to the McDuffie County Board of Commissioners, 210 Railroad Street, Thomson, GA 30824, and [PHONE REDACTED] or at our Website: www.thomson-mcduffie.com. ---PAGE BREAK--- 19 BASIC FINANCIAL STATEMENTS ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA STATEMENT OF NET POSITION DECEMBER 31, 2020 The notes to the financial statements are an integral part of this statement. 20 Governmental Business-type Development Health Activities Activities Total Authority Department Assets Cash and cash equivalents 13,713,000 $ 451,599 $ 14,164,599 $ 1,517,029 $ 423,717 $ Investments 2,591,240 - 2,591,240 - - Receivables Taxes 1,069,574 - 1,069,574 - - Accounts 397,871 855,206 1,253,077 873,562 33,217 A/R-Dept. of Public Health - - - - 11,897 Intergovernmental 316,044 - 316,044 - - Due from other funds 283,429 - 283,429 - - Due from external parties 133,244 - 133,244 - - Inventory - 27,739 27,739 - - Capital assets not being depreciated: Construction in progress 3,329,650 293,843 3,623,493 - - Land 3,588,475 319,649 3,908,124 3,745,599 - Capital assets (net of accumulated depreciation) Buildings and improvements 24,465,845 1,669,912 26,135,757 1,787,442 - Furniture, fixtures, and equipment 663,002 1,935,303 2,598,305 10,370 - Infrastructure 7,015,439 - 7,015,439 - - Total assets 57,566,813 5,553,251 63,120,064 7,934,002 468,831 Deferred Outflows of Resources Deferred outflows related to pension 1,060,716 - 1,060,716 - 123,028 Total deferred outflows of resources 1,060,716 - 1,060,716 - 123,028 Total assets and deferred outflows of resources 58,627,529 5,553,251 64,180,780 7,934,002 591,859 Liabilities Accounts payable 640,233 315,081 955,314 - 3,621 A/P-DPH - - - - 11,897 Accrued liabilities 120,491 47,454 167,945 - - Due to other funds 278,397 5,032 283,429 - - Noncurrent liabilities Due within one year Bond payable 1,820,000 - 1,820,000 - - Note payable - - - 29,737 - Due in more than one year Note payable - - - 151,849 - Bond payable - - - - - Closure and post closure costs payable - 166,833 166,833 - - Compensated absences payable 440,698 15,188 455,886 - 32,562 Net OPEB liability - - - - 76,584 Net Pension liabilities 1,303,872 - 1,303,872 - 456,271 Total liabilities 4,603,691 549,588 5,153,279 181,586 580,935 Deferred Inflows of Resources Deferred inflows related to pension 1,364,050 - 1,364,050 - 206,354 Total deferred inflows of resources 1,364,050 - 1,364,050 - 206,354 Total liabilities and deferred inflows of resources 5,967,741 549,588 6,517,329 181,586 787,289 Net Position Net investment in capital assets 37,242,411 4,218,707 41,461,118 5,391,562 - Restricted for: Capital projects 7,504,775 - 7,504,775 - - Special revenues 1,343,100 - 1,343,100 - - Debt service 12,286 - 12,286 - - Unrestricted 6,557,216 784,956 7,342,172 2,360,854 (195,430) Total net position 52,659,788 $ 5,003,663 $ 57,663,451 $ 7,752,416 $ (195,430) $ Primary Government Component Units ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2020 The notes to the financial statements are an integral part of this statement. 21 Operating Capital Charges for Grants and Grants and Governmental Business-type Development Health Functions/Programs Expenses Services Contributions Contributions Activities Activities Total Authority Department Primary government: Governmental activities: General government 4,168,709 $ (239,623) $ 2,085,014 $ 7,107,952 $ 4,784,634 $ - $ 4,784,634 $ - $ - $ Public safety 4,901,368 - - - (4,901,368) - (4,901,368) - - Public works 3,216,561 - - - (3,216,561) - (3,216,561) - - Health and welfare - - - - (343,360) - (343,360) - - Culture and recreation 832,248 47,859 - - (784,389) - (784,389) - - Economic development 1,559,969 297,962 - - (1,262,007) - (1,262,007) - - Judicial 526,359 796,997 149,617 - 420,255 - 420,255 - - Total governmental activities 15,548,574 903,195 2,234,631 7,107,952 (5,302,796) - (5,302,796) - - Business-type activities: Solid Waste 1,598,030 1,624,287 - - - 26,257 26,257 - - EMS 5,188,001 3,678,060 71,979 - - (1,437,962) (1,437,962) - - Big Hart & Raysville Campgrounds 73,264 158,873 - - - 85,609 85,609 - - Total business-type activities 6,859,295 5,461,220 71,979 - - (1,326,096) (1,326,096) - - Total primary government 22,407,869 $ 6,364,415 $ 2,306,610 $ 7,107,952 $ (5,302,796) (1,326,096) (6,628,892) - - Component units: Development Authority 276,665 $ 95,183 $ 32,443 $ - $ (149,039) - Health Department 539,125 163,113 495,028 - - 119,016 Total component units 815,790 $ 258,296 $ 527,471 $ - $ (149,039) 119,016 General revenues: Property taxes 4,816,865 - 4,816,865 - - Sales taxes 3,573,505 - 3,573,505 - - Franchise taxes 83,195 - 83,195 - - Insurance premium tax - 1,066,808 1,066,808 - - Hotel/motel taxes 195,462 - 195,462 - - Motor vehicle tax 103,406 - 103,406 - - Alcoholic beverage taxes 220,425 - 220,425 - - Excise tax 184,636 - 184,636 - - Timber tax 27,918 - 27,918 - - Licences and permits 226,334 - 226,334 - - Miscellaneous taxes 438,124 - 438,124 - - Payments in lieu of taxes 40,370 - 40,370 - - Interest - unrestricted 18,463 1,158 19,621 4,960 75 Total general revenues 9,928,703 1,067,966 10,996,669 4,960 75 Asset transfers (3,763,185) 3,763,185 Transfers (623,433) 623,433 - - - Change in net position 239,289 4,128,488 4,367,777 (144,079) 119,091 Net position, beginning of year 52,420,499 875,175 53,295,674 7,896,495 (314,521) Net position, end of year 52,659,788 $ 5,003,663 $ 57,663,451 $ 7,752,416 $ (195,430) $ Component Units Primary Government Net Revenue Expense) and Changes in Net Position Program Revenues ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA BALANCE SHEETS GOVERNMENTAL FUNDS DECEMBER 31, 2020 The notes to the financial statements are an integral part of this statement. 22 Other Total Governmental Governmental General SPLOST VI Funds Funds Cash and cash equivalents 5,253,050 $ 5,465,975 $ 2,993,975 $ 13,713,000 $ Investments 2,591,240 - - 2,591,240 Receivables Property taxes, net allowance 738,022 - - 738,022 Sales tax 100 331,452 - 331,552 Other 307,438 - 90,433 397,871 Due from other funds 181,617 - 101,812 283,429 Intergovernmental receivables - - 316,044 316,044 Due from external parties 133,244 - - 133,244 Total assets 9,204,711 $ 5,797,427 $ 3,502,264 $ 18,504,402 $ Liabilities Accounts payable 413,291 $ 1,189 $ 225,753 $ 640,233 $ Accrued liabilities 86,130 - 34,361 120,491 Due to other funds 100,170 - 178,227 278,397 Total liabilities 599,591 1,189 438,341 1,039,121 Deferred inflows of resources Unavailable revenues - property taxes 188,137 - - 188,137 Total deferred inflows 188,137 - - 188,137 Fund Balances Restricted for: Capital projects - 5,796,238 1,708,537 7,504,775 Special revenues - - 1,343,100 1,343,100 Debt - - 12,286 12,286 Unassigned 8,416,983 - - 8,416,983 Total fund balances 8,416,983 5,796,238 3,063,923 17,277,144 Total liabilities, deferred inflows of resources and fund balances 9,204,711 $ 5,797,427 $ 3,502,264 $ 18,504,402 $ LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES ASSETS ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA RECONCILIATION OF TOTAL GOVERNMENTAL FUND BALANCES TO NET POSITION OF GOVERNMENTAL ACTIVITIES DECEMBER 31, 2020 The notes to the financial statements are an integral part of this statement. 23 Total fund balances - governmental funds 17,277,144 $ Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds. These assets consist of: Construction in process 3,329,650 Land 3,588,475 Infrastructure 48,826,728 Buildings and improvements 38,737,089 Furniture, fixtures, and equipment 9,476,357 Accumulated depreciation (64,895,888) Total capital assets 39,062,411 Some revenues will be collected after year end but are not available soon enough to pay for the current period's expenditures and therefore are deferred in the funds. 188,137 The net pension liability is not due and payable in the current period and, therefore, it and the related deferred outflows of resources and deferred inflows of resources are not reported in the funds. (1,607,206) Long-term liabilities, including bonds payable are not due and payable in the current period and therefore are not reported in the funds General obligations (1,820,000) Compensated absences (440,698) Total long-term liabilities (2,260,698) Net position of governmental activities 52,659,788 $ ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – GOVERNMENTAL FUNDS DECEMBER 31, 2020 The notes to the financial statements are an integral part of this financial statement. 24 Other Total Governmental Governmental General SPLOST VI Funds Funds REVENUES Taxes $ 9,488,444 $ 3,846,120 $ 1,160,996 $ 14,495,560 Licenses and permits 226,334 - - 226,334 Intergovernmental 1,150,329 - 3,380,100 4,530,429 Fines and forfeitures 698,540 - 84,650 783,190 Charges for services (254,185) - 28,369 (225,816) Contributions and donations from private sources 500 - - 500 Rentals 47,859 - - 47,859 Telephone commissions - - - - Commissary - - - - Other revenue 133,039 - 164,923 297,962 Other financing sources - - - - Interest - 13,760 4,703 18,463 Total revenues 11,490,860 3,859,880 4,823,741 20,174,481 EXPENDITURES Current expenditures: General government 3,339,794 - 82,174 3,421,968 Public safety 3,637,292 - 775,771 4,413,063 Public works 1,406,438 - 352,926 1,759,364 Health and welfare 270,238 - 38,309 308,547 Culture and recreation 715,410 - - 715,410 Judicial 515,411 - 10,948 526,359 Housing and development 1,119,181 - 177,295 1,296,476 Intergovernmental - - - - Lawn care - - - - Other - - 12,959 12,959 Capital outlay: ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – GOVERNMENTAL FUNDS DECEMBER 31, 2020 The notes to the financial statements are an integral part of this financial statement. 25 General government 9,989 11,657 - 21,646 Public safety 147,074 390,543 - 537,617 Judicial - - - - Health and welfare - - - - Culture and recreation - - - - Public works 13,153 451,105 2,245,553 2,709,811 Economic development - - - - Debt service: Principal 18,300 - 1,800,000 1,818,300 Interest - - 72,600 72,600 Total expenditures 11,192,280 853,305 5,568,535 17,614,120 Excess (deficiency) of revenues over expenditures 298,580 3,006,575 (744,794) 2,560,361 OTHER FINANCING SOURCES (USES) Transfer in 72,635 - 2,000,664 2,073,299 Transfer out (78,380) (1,872,600) (745,752) (2,696,732) Total other financing sources (uses) (5,745) (1,872,600) 1,254,912 (623,433) CHANGE IN FUND BALANCES 292,835 1,133,975 510,118 1,936,928 FUND BALANCES, BEGINNING OF YEAR 8,124,148 4,662,263 2,553,805 15,340,216 FUND BALANCES, END OF YEAR $ 8,416,983 $ 5,796,238 $ 3,063,923 $ 17,277,144 ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA RECONCILIATION OF THE STATEMENTS OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2020 The notes to the financial statements are an integral part of this statement. 26 Amounts reported for governmental activities in the statement of activities are different because: Net change in fund balances - governmental funds 1,936,928 $ Capital outlays are reported as expenditures in governmental funds. However, in the statement of activities, the costs of capital assets are allocated over their estimated useful lives as depreciation expense. For the current year, these amounts were: Capital outlay 3,269,074 Depreciation expense (3,038,900) Net change in capital assets 230,174 Because some revenues will not be collected for several months after the County's fiscal year end, they are not considered "available" revenues and are deferred in the governmental funds. 86,286 The issuance of long-term debt (e.g. bonds, leases) provides current financial resources to governmental funds, the repayment of the principal of long- term debt consume the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Net change in debt 1,800,000 Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. Changes in McDuffie's proportionate share of the net pension liability, deferred outflows of resources, and deferred inflows of resources for the current year are not reported in the governmental funds but are reported in the Statement of Activities (238,420) Compensated absences (93,059) (331,479) Change in net position of governmental activities 239,289 $ ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA STATEMENTS OF NET POSITION PROPRIETARY FUNDS DECEMBER 31, 2020 The notes to the financial statements are an integral part of this statement. 27 Big Hart & Raysville Solid Waste EMS Campgrounds Fund Total Current assets Cash 9,636 $ 164,155 $ 277,808 $ 451,599 $ Accounts receivable 725,797 7,500 121,909 855,206 Inventory 27,739 - - 27,739 Total current assets 763,172 171,655 399,717 1,334,544 Noncurrent assets Capital assets not being depreciated: Construction in progress - - 293,843 293,843 Land 6,758 - 312,891 319,649 Capital assets (net of accumulated depreciation) Buildings and improvements 1,598,671 - 71,241 1,669,912 Furniture, fixtures, and equipment 1,877,191 - 58,112 1,935,303 Total noncurrent assets 3,482,620 - 736,087 4,218,707 Total assets 4,245,792 $ 171,655 $ 1,135,804 $ 5,553,251 $ Liabilities Current liabilities Accounts payable 138,049 10,775 166,257 315,081 Due to other funds 5,032 - - 5,032 Accrued liabilities 44,234 785 2,435 47,454 Total current liabilities 187,315 11,560 168,692 367,567 Noncurrent liabilities Compensated absences - 1,013 14,175 15,188 Closure and post closure costs payable - - 166,833 166,833 Total noncurrent liabilities - 1,013 181,008 182,021 Total liabilities 187,315 12,573 349,700 549,588 Net Position Net investment in capital assets 3,482,620 - 736,087 4,218,707 Restricted - - - - Unrestricted 575,857 159,082 50,017 784,956 Total net position 4,058,477 159,082 786,104 5,003,663 Total liabilties and net position 4,245,792 $ 171,655 $ 1,135,804 $ 5,553,251 $ Business-type Activities - Enterprise Funds ASSETS LIABILITIES AND NET POSITION ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2020 The notes to the financial statements are an integral part of this statement. 28 Big Hart & Solid Raysville Waste EMS Campgrounds Fund Total OPERATING REVENUES Charges for services 3,678,060 $ 158,873 $ 1,624,287 $ 5,461,220 $ Total operating revenues 3,678,060 158,873 1,624,287 5,461,220 OPERATING EXPENSES Personnel services 3,521,596 12,165 266,655 3,800,416 Operations 1,385,840 61,099 1,302,419 2,749,358 Depreciation 280,565 - 28,956 309,521 Total operating expenses 5,188,001 73,264 1,598,030 6,859,295 Operating income (1,509,941) 85,609 26,257 (1,398,075) NON-OPERATING REVENUES (EXPENSES) Interest income - - 1,158 1,158 Insurance premium tax 1,066,808 - - 1,066,808 Grants 59,641 - - 59,641 Contributions and donations from private sources 12,338 - - 12,338 Total non-operating revenues (expenses) 1,138,787 - 1,158 1,139,945 Income (loss) before capital contributions and transfers (371,154) 85,609 27,415 (258,130) Capital contributions 3,763,185 - - 3,763,185 Transfers in (out) 666,446 (14,945) (28,068) 623,433 Change in net position 4,058,477 70,664 (653) 4,128,488 NET POSITION, BEGINNING OF YEAR - 88,418 786,757 875,175 NET POSITION, END OF YEAR 4,058,477 $ 159,082 $ 786,104 $ 5,003,663 $ Business-type Activities - Enterprise Funds ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA STATEMENTS OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2020 The notes to the financial statements are an integral part of this statement. 29 Big Hart & Raysville Solid Waste EMS Campgrounds Fund Total CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers 2,924,524 158,873 1,502,378 4,585,775 Payments to suppliers (1,242,759) (58,610) (1,137,993) (2,439,362) Payment to employees (3,477,362) (12,165) (266,655) (3,756,182) Net cash provided by operating activities (1,795,597) 88,098 97,730 (1,609,769) CASH INFLOWS FROM NONCAPITAL FINANCING ACTIVITIES Cash received from property and other taxes 1,805,233 (14,945) (29,226) 1,761,062 Net cash provided by provided by noncapital financing activities 1,805,233 (14,945) (29,226) 1,761,062 CASH INFLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Construction of capital assets - - (6,670) (6,670) Net cash used by capital and related financing activities - - (6,670) (6,670) CASH OUTFLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchase of capital assets - - - - Net cash used by capital and related financing activities - - - - NET CASH PROVIDED BY INVESTING ACTIVITIES - - 1,158 1,158 Net increase (decrease) in cash 9,636 73,153 62,992 145,781 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR - 91,002 214,816 305,818 CASH AND CASH EQUIVALENTS, END OF YEAR 9,636 $ 164,155 $ 277,808 $ 451,599 $ Reconciliation of net operating income (loss) to net cash provided (used) by operating activities: Operating income (1,509,941) $ 85,609 $ 27,415 $ (1,116,352) $ Adjustments to reconcile net operating income (loss) to net cash provided by operating activities: Depreciation 280,565 - 28,956 309,521 Change in accounts receivable (725,797) (7,500) (52,836) (786,133) Change in accounts payable 143,081 8,191 112,627 263,899 Change in accrued postclosure - - (17,189) (17,189) Change in accrued liabilities 44,234 785 (5,211) 39,808 Inventory (27,739) - - (27,739) Change in compensated absences - 1,013 3,968 4,981 Total adjustments (285,656) 2,489 70,315 72,804 Net cash provided by operating activities (1,795,597) $ 88,098 $ 97,730 $ (1,609,769) $ Business-type Activities - Enterprise Funds ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES FIDUCIARY FUNDS DECEMBER 31, 2020 The notes to the financial statements are an integral part of this statement. 30 . Agency Funds ASSETS Cash and cash equivalents 830,161 $ Total assets 830,161 $ LIABILITIES Due to others 830,161 $ Total liabilities 830,161 $ ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 31 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Introduction The financial statements of McDuffie County, Georgia (the County) have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. As permitted by accounting principles generally accepted in the United States of America, the County has elected to apply only applicable Financial Accounting Standards Board (FASB) Statements and Interpretations issued on or before November 30, 1989, that do not contradict GASB pronouncements in its accounting and reporting practices for its government-wide and proprietary operations. The County’s more significant accounting policies are described in the following: B. The Financial Reporting Entity McDuffie County, Georgia, (the County), is located in the Central Savannah River Area of Georgia, west of Augusta, Georgia. It was created from Columbia and Warren counties in 1872, the one-hundred thirty-second county created in Georgia. The County was named for George McDuffie, who was born in Georgia, served as governor and senator from South Carolina, and was a notable orator throughout the South. The County operates under an elected Commission, appointed manager, form of government. The accompanying summary of the County’s more significant accounting policies is presented to assist the reader in interpreting the financial statements and other data in this report. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. These policies conform to accounting principles generally accepted in the United States of America as applicable to governmental units. A board of five elected County Commissioners (the Board) governs McDuffie County, Georgia. They appoint a County Manager who is the Chief Administrative Officer and is responsible for day to day operations and implementation of the policy decisions made by the Board. As required by generally accepted accounting principles, these financial statements present McDuffie County, Georgia, (the primary government) and its component units. The component units are included in the County’s reporting entity because of the significance of their operational or financial relationships with the County. C. Individual Component Unit Disclosures Development Authority of McDuffie County and the City of Thomson - The Authority was created for the purpose of promoting and developing trade, commerce, industry, and employment opportunities within the County. A Board of Directors appointed by the County Board of Commissioners governs the Authority. The Authority is funded and administered by the County. Separate financial statements have not been prepared for the Development Authority of McDuffie County and the City of Thomson. McDuffie County Health Department – The Health Department receives funding from McDuffie County. The McDuffie County Board of Commissioners appoints Board members. The McDuffie County Board of Health has a June 30, year-end, and the financial statements included herein are as of and for the year ended June 30, 2020. Separate financial statements have been issued, and are available from the McDuffie County Board of Health. The address is: McDuffie County Health Department, 300 Greenway Street, Thomson, GA 30824. Discretely presented component units are presented in separate columns on the government-wide statement of net position and statement of activities to emphasize legal separation from the County. ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 32 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued Certain County elected officials collect and disburse taxes, fees, fines, etc. Separate records of accountability are maintained for such transactions, which are recorded in the agency funds of the County. Receipts transferred from these funds to the County’s General Fund, and Special Revenue Funds are included as revenue in these funds. Operating costs for these officials are included as expenditures in the General Fund. These elected officials are: Tax Commissioner Probate Court Judge Magistrate Court Judge Clerk of Superior Court Sheriff D. Basic Financial Statements The basic financial statements consist of the following: Government-wide financial statements Fund financial statements Notes to the basic financial statements Government-wide 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. Eliminations have been made to minimize the double counting of internal activities. These statements distinguish between the governmental and business-type activities of the County. Governmental activities generally are financed through taxes, intergovernmental revenues, and other non-exchange transactions. Business-type activities are financed in whole or in part by fees charged to external parties. The statement of activities presents a comparison between direct expenses and program revenues for the different business-type activities of the County and for each function of the County’s governmental activities. Direct expenses are those that are specifically associated with the program or function of the County’s governmental activities. Indirect expense allocations that have been made in the funds have been reversed for the statement of activities. Program revenues include fees and charges paid by the recipients of goods or services offered by the programs and grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. Fund financial statements – The fund financial statements provide information about the County’s funds. Separate statements for each fund category – governmental, proprietary, and fiduciary – are presented, although the latter is excluded from the government-wide financial statements. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds. E. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements and the fiduciary fund statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual when they are “measurable and available”). “Measurable” means the amount of the transaction can be determined and “available” means collectible within the current period or soon enough thereafter to pay liabilities of the current period. The County considers all revenues available if they are collected within sixty days after year end. Expenditures are recorded when the related fund liability is incurred, except for unmatured interest on general long-term debt which is recognized when due, and certain compensated absences and claims and judgments which are recognized when the obligations are expected to be liquidated with expendable available financial resources. ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 33 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued Property taxes, franchise taxes, licenses, interest and special assessments are susceptible to accrual. Sales taxes collected and held by the state at year end on behalf of the County are also recognized as revenue. Other receipts and taxes become measurable and available when cash is received by the County and are recognized as revenue at that time. Entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to accrual criteria is met. Expenditure driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been met. The accounts of the County are organized on the basis of funds. A fund is an independent fiscal and accounting entity with a self-balancing set of accounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with financial related legal and contractual provisions. The minimum number of funds is maintained consistent with legal and managerial requirements. The County reports the following major governmental funds: General Fund – The General Fund is the general operating fund of the County. The General Fund accounts for all financial resources except those that are required to be accounted for in another fund. The primary revenue sources are ad valorem taxes, state grants, and various other taxes and licenses. The primary expenditures are for general administration, public safety, highways and streets, health and welfare, and culture and recreation. SPLOST VI Fund - The SPLOST VI Fund is used to account for proceeds from SPLOST VI. The County reports the following major enterprise funds: EMS Fund - EMS Fund is used to account for emergency medical services EMS was part of the General Fund in prior years. In fiscal year 2020, McDuffie County has decided to create a separate fund for EMS in order to properly account for its revenues and expenses. Big Hart & Raysville Campgrounds Fund– The Big Hart and Raysville Campgrounds Fund is used to account for the cost of operating and maintaining the campsites. Big Hart Campground is a new acquisition for McDuffie County in fiscal year 2020. Solid Waste Fund – The Solid Waste Fund is used to account for the cost of operating and maintaining the landfill facility. Additionally, the County reports the following fund types: Fiduciary Funds – Fiduciary Funds are custodial in nature and do not involve the measurement of operating results. Such funds have no equity accounts since all assets are due to individuals or entities at some future time. These funds account for assets held by the County in an agency capacity for individuals and other government units. Fiduciary funds include all trust funds which account for assets held by the County as a trustee for individuals or other government units. The accounting used for fiduciary funds is accrual basis, much like that used for proprietary funds. The County has adopted GASB Statement No. 20, Accounting and Financial Reporting of Proprietary Funds and Other Governmental Entities that use Proprietary Fund Accounting and has elected to follow GAAP prescribed by GASB and all Financial Accounting Standard Board (FASB) standards issued prior to November 30, 1989. Subsequent to this date, the County accounts for its proprietary funds as presented by GASB. ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 34 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued Proprietary funds are accounted for using the accrual basis of accounting and distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues are charges to customers for sales and services. Operating expenses for enterprise funds include costs of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the County’s policy to use restricted resources first, then unrestricted resources as they are needed. F. Budgets and Budgetary Accounting Annual appropriated budgets are adopted by the Board of Commissioners for the General, Debt Services and Special Revenue Funds on a total revenues and total expenditures basis. The following are the statutory procedures followed by the Board in establishing a budget: 1. Prior to July 20, the County Manager receives budget requests from County Departments for the fiscal year commencing January 1. 2. Prior to the first Wednesday in August, the County Manager presents the proposed budget to the Board of Commissioners. 3. The Board of Commissioners holds public hearings. 4. Prior to October 20, the Board of Commissioners formally adopts the budget for the fiscal year commencing January 1. 5. The legal level of budgetary control is the departmental level. 6. All appropriations lapse at year end. 7. The operating budgets originally adopted may be revised or amended throughout the year as presented below: a. The County Manager may authorize transfers (revisions) within the departments, except for substantive salary amendments. b. The Board approves transfers (amendments) between departments or between funds. c. Increases or decreases in the total fund appropriation are by authority of the Board. d. Increases or decreases within any department are by authority of the Board. e. Appropriation of fund balances in excess of established reserve requirements are by authority of the Board. The County’s legally adopted budget is on the cash basis. The County adopted fiscal year 2020 budgets for the General Fund, Debt Services and Special Revenue Funds. A reconciliation of cash basis to generally accepted accounting principles (GAAP) is included in the financial statements. A project-length balanced budget was adopted for each capital project fund. G. Encumbrance Accounting Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary integration in the General Fund, Special Revenue Funds and Capital Projects Funds. Encumbrances outstanding at year end are reported as reservations of fund balances and do not constitute expenditures or liabilities because the commitments will be honored during the subsequent year. At December 31, 2020, the County reported no reserve for encumbrances. ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 35 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued H. Assets, Liabilities and Fund Equity Cash and Investments The County’s cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments that mature within three months of the date acquired. The County follows GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools. Nonparticipating interest-earning investment contracts (investments whose value is not affected by interest rates or other market changes), including savings accounts, certificates of deposit, repurchase agreements, money market investments (short-term, highly liquid debt instruments including commercial paper, banker’s acceptances and U.S. Treasury and agency obligations) and participating interest-bearing investment contracts, that have a remaining maturity, at purchase, of one year or less are reported at cost or amortized cost assuming their fair value has not been impacted by changes in the credit worthiness of the issuer or similar factors. All other investments are reported at fair value (the amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale). “Georgia Fund created by OCGA 36-83-8, is a stable net asset value investment pool which follows Standard and Poor’s criteria for AAA rated money market funds. However, Georgia Fund 1 operates in a manner consistent with Rule 2a-7 of the Investment Company Act of 1940 and is considered to be a 2a-7 like pool. The pool is not registered with the SEC as an investment company. The pool’s primary objectives are safety of capital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a basis and determines participant’s shares sold and redeemed based on a $1.00 per share. The Office of the State Treasurer is the regulatory oversight agency for Georgia Fund 1. Receivables All receivables are reported at their net realizable value. Inventories Inventories are valued at cost using the first-in/first-out (FIFO) or specific identification methods. The costs of governmental fund-type inventories are recorded as expenditures when consumed rather than when purchased. Prepaid Expenses Certain payments to vendors reflect costs applicable to future accounting periods and are recorded in the year of purchase in both government-wide and fund financial statements. Interfund Receivables and Payables During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. These receivables and payables are classified as interfund receivables and payables on the balance sheet of the fund financial statements and as “internal balances” on the statement of net position in the government-wide financial statements. ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 36 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets roads, bridges and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the County as assets with an initial individual cost of more than $2,500 (amount not rounded) and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. Infrastructure acquired prior to June 30, 1980 is not reported. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as the projects are constructed. Interest incurred during the construction phase of proprietary assets is included as part of the capitalized value of the assets constructed. All reported capital assets are depreciated. Improvements are depreciated over the remaining useful lives of the related capital assets. Depreciation is computed using the straight-line method over the following useful lives: Years Buildings 25–50 Building improvements 20–25 Infrastructure 20–50 Furniture, fixtures and equipment 5–15 Vehicles 3–5 Specialized use equipment 2–10 Water system additions 15–40 Deferred Outflows/Inflows of Resources In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period and so will not be recognized as an outflow of resources (expense/expenditure) until then. The County had outflow of resources related to net pension liability. In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period 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 property taxes and resources related to net pension liability. Compensated Absences It is the County’s policy to permit employees to accumulate earned but unused leave benefits. Employees are allowed to accumulate a maximum of 320 hours’ vacation time; there are no limits on the accumulation of sick time. The County’s government-wide and proprietary funds include an accrual for the estimated compensation costs attributable to employee earned but unused leave benefits. Compensated absences are liquidated through the General Fund. Long-Term Obligations In the government-wide financial statements and proprietary funds financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities or proprietary funds statement of net position. ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 37 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued Fund Equity Fund equity at the government fund financial reporting level is classified as "fund balance". Fund equity for all other reporting is classified as "net position". Fund balance reported in the governmental funds financial statements generally represents the difference between current assets and current liabilities. Fund balance classifications represent a hierarchy based primarily on the extent to which the County is bound to honor constraints on specific purposes for which amounts in those funds can be spent. These classifications may consist of the following: a. Nonspendable - Fund balances are classified as nonspendable when amounts cannot be spent because they are either i) in nonspendable form or ii) they are legally contractually required to be maintained intact. The County includes items that are not expected to be converted to cash such as inventories and prepaid amounts. b. Restricted - Fund balances are reported as restricted when their use is restricted for specific purposes including i) constraints on funds externally imposed by creditors, grantors, contributors, or laws or regulations of other governments, or ii) constraints imposed by law through constitutional provisions or enabling legislation. c. Committed - Fund balances are reported as committed if their use is for a specific purpose as approved by formal action by the County Council (resolution). Amounts committed cannot be used for any other purpose unless Council removes or changes the specific use by approving such action through resolution at a Council meeting. Budget resolutions are considered a plan for specific use. d. Assigned - Fund balances are reported as assigned when constrained by the County's intent to use the funds for specific purposes that are neither restricted nor committed. Assigned fund balances include i) all remaining amounts (except negative balances) reported in governmental funds, other than the General fund, that are not classified as nonspendable, restricted or committed, and ii) amounts in the General Fund intended for a specific use identified by either the County Manager or Finance Director, and iii) amounts appropriated to eliminate a projected budget deficit in the subsequent year. e. Unassigned - Fund balances are reported as unassigned when the balances do not meet any of the above four criteria for classification. The County reports positive unassigned fund balance in only the General Fund. Negative unassigned fund balances may be reported in all governmental funds. For purposes of fund balance disbursement, unless otherwise approved by the County Council, the County will expend restricted fund balance when an expenditure is incurred for which both restricted and unrestricted fund balance is available. Next the County will expand committed fund balance when an expenditure is paid for which unrestricted fund balance is available. The County would next disburse fund balance assigned for purposes of the fund before disbursing other assigned fund balance amounts. In the General Fund, the County would disburse unassigned fund balance prior to disbursing fund balance assigned for financial policy reserve levels or amounts assigned to eliminate subsequent year's budget deficit. Net position is classified in three components in the government-wide financial statements. a. Invested in capital assets, net of related debt consists of capital assets including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets. b. Restricted net position consists of net position with constraints placed on the use either by external groups such as creditors, grantors, contributions, or laws or regulations of other governments; or law through constitutional provisions or enabling legislation. c. Unrestricted net position consists of all other net position that does not meet the definition of "restricted" or "invested in capital assets". ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 38 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued I. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues, expenses and expenditures during the reporting period. Actual results could differ from those estimates. J. Property Taxes Property taxes are an enforceable lien on property as of January 1 of the current tax year. Generally, taxes are levied in September and are due and payable on or before November 15. Since the tax digest, which is prepared by the McDuffie County Tax Appraiser, has to be approved by the Georgia Department of Revenue, the tax levy may be delayed later than September. In such cases, the taxes are due within 60 days after levy. The County bills and collects its property taxes. County property tax revenues are recognized when levied. An allowance is established for delinquent taxes to the extent that their collectability is improbable based on management's estimate of the amount to be collectible. Current year property taxes were levied September 11, 2020 and were due November 20, 2020. K. Local Option Sales Tax The County receives sixty-seven percent (67%) of a one percent local option sales tax on all retail sales within the County. The proceeds of this tax are used to reduce, on a dollar-for-dollar basis, the millage equivalent amount of property taxes to be levied in the subsequent year. Insurance premium taxes collected must also reduce the ensuing property tax levy. The County has established a fiscal policy to designate that portion of the General Fund’s fund balance, if available, for subsequent years’ expenditures. NOTE 2 – MCDUFFIE COUNTY/CITY OF THOMSON, GEORGIA WATER AND SEWER COMMISSION The City of Thomson, Georgia and McDuffie County, Georgia have established the McDuffie County/City of Thomson, Georgia, Water and Sewer Commission to operate, maintain and extend the water and sewerage system for the City/County area. The Commission assumed the ownership and operations of the City of Thomson Water and Sewer Enterprise Fund in 1988, in conjunction with funding for expansion with the one percent Special Purpose Local Option Sales Tax. The Commission has seven members, three each from the City and County, and the seventh appointed by the Commission. The Commission was established for a term of fifty years. The City and County are equally responsible for the ownership of and the future maintenance and improvements to the System. The System is a closed system whereby all funds derived from the operation of the System must be used for the purposes of operating, maintaining, improving, or expanding the System. Based on the standards established by Statement No. 14 of the Governmental Accounting Standards Board, the Commission is a legally separate governmental organization classified as a joint venture. A joint venture is a legal entity or other organization that results from a contractual arrangement and that is owned, operated, or governed by two or more participants in a separate and specific activity subject to joint control, in which the participants retain an ongoing financial interest or an ongoing financial responsibility. Generally, the purpose of a joint venture is to pool resources and share the costs, risks, and rewards of providing goods or services to the venture participants directly, or for the benefit of the general public or specific service recipients. Joint control means that no single participant has the ability to unilaterally control the financial or operating policies of the joint venture. An ongoing financial interest in a joint venture includes an equity interest when the agreement stipulates that the participating governments have a present or future claim on the net resources of the joint venture. A participating government has an ongoing financial responsibility for a joint venture if it is obligated in some manner for the debts of the joint venture, or if the joint venture’s continued existence depends on continued funding by the government. ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 39 NOTE 2 – MCDUFFIE COUNTY/CITY OF THOMSON, GEORGIA WATER AND SEWER COMMISSION- Continued Each participating government of the Commission has final authority for establishing rules and water and sewer rates, fees, standards and any other policy matters as are appropriate for the efficient delivery of water and sewer services. As such, each participating government has an indirect financial responsibility for the System, as defined by GASB Statement No. 14. The City and County share certain responsibilities with respect to the Commission. The City is responsible for operations, maintenance and customer billing for the System. The County is responsible for administering construction funds obtained through the Special Purpose Local Option Sales Tax. The City and County jointly or individually administer grant and other funds, depending on the terms of such funding. The basic financial statements of the Commission are presented in a manner consistent with primary governments. Operating transfers to the Commission by the participating governments are accounted for as intergovernmental transfers. Federal and state grant funds transferred to the Commission by the participating governments are accounted for as sub-recipient grant funds. Financial information for the year ended December 31, 2020, is summarized as follows: These amounts are unaudited as a result of the Commission receiving a hardship extension under the COVID-19 regulations included in the governor’s executive order. The Commission has issued a separate financial report that may be obtained from: City of Thomson P. O. Box 1017 Thomson, Georgia 30824 NOTE 3 – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY Compliance with Bonds Payable As of December 31, 2020, the County is in compliance, in all material respects, with requirements under covenants relating to its bonds payable. Credit Risk – State statutes authorize the County to invest in obligations of the State of Georgia or other states; obligations issued by the U.S. government; obligations fully insured or guaranteed by the U.S. government or by a government agency of the United States; obligations of any corporation of the U.S. government; prime banker’s acceptances; the local government investment pool established by state law; repurchase agreements; and obligations of other political subdivisions of the State of Georgia. Custodial Credit Risk – Deposits – Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, the County will not be able to recover deposits or will not be able to recover collateral securities that are in the possession of an outside party. State statutes require all deposits (other than federal or state government instruments) to be collateralized by depository insurance, obligations of the U.S. government, or bonds of public authorities, counties, or municipalities. Joint Ventures: Operating revenues 5,657,557 $ Depreciation and amortization expense 1,451,714 Operating income (loss) 4,666 Change in net position 968,593 Capital asset change 360,581 Net working capital 3,697,108 Total assets 40,194,773 Deferred outflows of resources 492,741 Long-term liabilities 9,616,441 Deferred inflows of resources 73,269 Total net position 30,062,096 $ ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 40 NOTE 3 – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY- Continued Custodial Credit Risk – Investments – Custodial credit risk for investments is the risk that, in the event of failure of the counterparty, the County will not be able to recover the value of the investments or collateral securities that are in the possession of an outside party. State statutes require all investments (other than federal or state government instruments) to be collateralized by depository insurance, obligations of the U.S. government, or bonds of public authorities, counties, or municipalities. NOTE 4 – CASH AND TEMPORARY INVESTMENTS As of December 31, 2019, the County had the following investments: Weighted Avg Credit Investments Maturities Fair Value Rating Primary Government: Various Certificates of Deposit 43 days 2,591,240 $ AAAm Total fair value 2,591,240 $ 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. NOTE 5 – TAXES RECEIVABLE The County's Tax Commissioner bills and collects property taxes, then remits to the County its respective share of property taxes. Current year property taxes were levied September 11, 2020 and were due November 20, 2020. Property taxes become a lien on the first day of the levy year. Unpaid property taxes received within 60 days of year end are recognized and recorded as revenue (considered measurable and available), and property taxes unpaid 60 days after year end are recorded as unearned revenue. A summary of the 2020 tax levy follows: General Fund 2020 millage rate - Incorporated 8.50 Unincorporated 8.50 Net property tax levy 4,857,329 $ Property tax receivable 738,022 $ Property Tax collected in 2021 (549,885) Property tax receivable, net allowance 188,137 $ Unearned property tax revenues 188,137 $ ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 41 NOTE 6 – EXCISE TAX In accordance with the provisions of O.C.G.A. § 48-13-110 et seq., there is imposed within the territorial limits of the special district created pursuant to O.C.G.A. § 48-13-111, an excise tax on the sale, use, storage, or consumption of energy when such sale, use, storage, or consumption would have constituted a taxable event for purposes of sales and use tax under O.C.G.A. § 48-8-1 et seq. but for the exemption in O.C.G.A. § 48-8-3.2. Such excise tax shall be levied and collected by the governing authority of McDuffie County pursuant to O.C.G.A. 48-13-112 and 48-13-114 and as provided in this section. Energy tax revenue for the year ended December 31, 2020, was as follows: MCDUFFIE COUNTY BOARD OF COMMISSIONERS ENERGY EXCISE TAX 2020 AND 2019 MONTH COLLECTION CITY OF GEORGIA FERRELL JEFFERSON GAS 2019 RECEIVED MONTH THOMSON POWER GAS ENERGY SOUTH TOTAL TOTALS VARIANCE 1/31/2020 DECEMBER 1,201 $ 11,580 $ 76 $ 2,791 $ - $ 15,647 $ 23,133 $ (7,486) $ 2/28/2020 JANUARY 1,213 9,851 92 3,031 - 14,186 21,948 (7,762) 3/31/2020 FEBRUARY 1,188 10,888 70 2,986 - 15,133 22,703 (7,570) 4/30/2020 MARCH 1,237 8,752 92 2,739 - 12,820 21,112 (8,292) 5/31/2020 APRIL 721 10,152 76 3,238 - 14,187 21,639 (7,452) 6/30/2020 MAY 860 8,937 72 2,729 - 12,599 24,095 (11,496) 7/31/2020 JUNE 805 9,134 122 2,567 - 12,628 18,732 (6,104) 8/31/2020 JULY 746 11,959 101 2,826 - 15,633 18,760 (3,127) 9/30/2020 AUGUST 902 15,112 146 2,768 - 18,927 25,595 (6,668) 10/31/2020 SEPTEMBER 1,211 14,886 33 2,869 - 18,999 25,250 (6,251) 11/30/2020 OCTOBER 1,208 12,678 127 2,888 - 16,900 20,880 (3,980) 12/31/2020 NOVEMBER 1,441 12,631 117 3,076 - 17,264 21,238 (3,974) YTD Totals 12,733 $ 136,559 $ 1,123 $ 34,508 $ - $ 184,924 $ 265,085 $ (80,161) $ ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 42 NOTE 7 – CAPITAL ASSETS Governmental capital assets activity for the year ended December 31, 2020, was as follows: Depreciation expense was charged to functions as follows: General Government 746,741 $ Public Safety 768,870 Highways and Streets 1,371,638 Health and Welfare 34,813 Culture and Recreation 116,838 Totals 3,038,900 $ Balance Transfers/ Balance 1/1/2020 Additions Deletions 12/31/2020 Capital assets not being depreciated Construction in process 2,132,434 $ 1,197,216 $ - $ 3,329,650 $ Land 3,595,233 - (6,758) 3,588,475 Total capital assets not being depreciated 5,727,667 1,197,216 (6,758) 6,918,125 Capital assets being depreciated Infrastructure 47,759,402 1,067,326 - 48,826,728 Buildings and improvements 41,023,262 144,919 (2,431,092) 38,737,089 Furniture, fixtures, and equipment 12,358,054 859,613 (3,741,310) 9,476,357 Total capital assets being depreciated 101,140,718 2,071,858 (6,172,402) 97,040,174 Less accumulated depreciation: Infrastructure (40,609,878) (1,201,411) - (41,811,289) Buildings and improvements (14,090,987) (1,012,678) 832,421 (14,271,244) Furniture, fixtures, and equipment (9,852,663) (824,811) 1,864,119 (8,813,355) Less accumulated depreciation (64,553,528) (3,038,900) 2,696,540 (64,895,888) Net capital assets being depreciated 36,587,190 (967,042) (3,475,862) 32,144,286 Governmental activities capital assets - net 42,314,857 $ 230,174 $ (3,482,620) $ 39,062,411 $ ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 44 NOTE 7 – CAPITAL ASSETS - Continued Business-type capital assets activity for the year ended December 31, 2020, was as follows: Big Hart & Raysville Campgrounds: Big Hart & Raysville Campgrounds are leased from the corps of engineer and do not have any capital assets. The County is just managing the properties. Said premises are hereby leased for a term of five years, beginning March 20, 2015, and ending March 19, 2020. The lease has been renewed for another ten years, beginning March 20, 2020 and ending March 19, 2030. Solid Waste Fund: ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 44 Balance Transfers/ Balance 1/1/2020 Additions Deletions 12/31/2020 Capital assets not being depreciated Construction in process 287,173 $ 6,670 $ - $ 293,843 $ Land 312,891 - - 312,891 Total capital assets not being depreciated 600,064 6,670 - 606,734 Capital assets being depreciated Buildings and improvements 212,237 - - 212,237 Furniture, fixtures, and equipment 393,716 - - 393,716 Total capital assets being depreciated 605,953 - - 605,953 Less accumulated depreciation: Buildings and improvements (135,690) (5,306) - (140,996) Furniture, fixtures, and equipment (311,954) (23,650) - (335,604) Less accumulated depreciation (447,644) (28,956) - (476,600) Net capital assets being depreciated 158,309 (28,956) - 129,353 Business-type activities capital assets - net 758,373 $ (22,286) $ - $ 736,087 $ ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 44 Depreciation expense on capital assets of the Proprietary Funds was $309,521 for the year ended December 31, 2020. Capitalization of Interest Costs requires that interest expenditures incurred during construction of assets be capitalized. Capitalization of Interest Costs in Situations Involving Certain Tax-Exempt Borrowings and Certain Gifts and Grants concludes that constructed assets financed with the proceeds of tax-exempt debt (if those funds are externally restricted to finance the acquisitions of the asset or used to service the related debt) should include capitalized interest only to the extent that interest costs exceed interest earned on related interest-bearing borrowing. There were no construction period interest costs capitalized in the Water and Sewer Fund during the year ended December 31, 2020. Balance Transfers/ Transfers/ Balance EMS Fund 1/1/2020 Additions Deletions 12/31/2020 Capital assets not being depreciated Construction in process - $ - $ - $ - $ Land - 6,758 - 6,758 Total capital assets not being depreciated - 6,758 - 6,758 Capital assets being depreciated Buildings and improvements - 2,431,092 - 2,431,092 Furniture, fixtures, and equipment - 3,198,895 - 3,198,895 Total capital assets being depreciated - 5,629,987 - 5,629,987 Less accumulated depreciation: Buildings and improvements - (832,421) - (832,421) Furniture, fixtures, and equipment - (1,321,704) - (1,321,704) Less accumulated depreciation - (2,154,125) - (2,154,125) Net capital assets being depreciated - 3,475,862 - 3,475,862 Business-type activities capital assets - net - $ 3,482,620 $ - $ 3,482,620 $ EMS Fund was established as an Enterprise Fund in 2020. Assets were transferred in at their net carrying value. ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 45 NOTE 7 – CAPITAL ASSETS – Continued Capital assets of the Discretely Presented Component Units consist of the following: Depreciation expense on capital assets of the Development Authority was $86,355 for the year ended December 31, 2020. NOTE 8 – NOTES RECEIVABLE At December 31, 2020, the Development Authority of McDuffie County and the City of Thomson (a discretely presented component unit) had the following notes receivable outstanding. The notes were collateralized by real estate. Balance Transfers/ Balance Development Authority 1/1/2020 Additions Deletions 12/31/2020 Capital assets not being depreciated Land and land improvements 3,745,599 $ - $ - $ 3,745,599 $ Property, plant and equipment Buildings and improvements 2,444,760 - - 2,444,760 Equipment and furniture 57,001 - - 57,001 Total property, plant and equipment 2,501,761 - - 2,501,761 Less accumulated depreciation Buildings (571,819) (85,499) - (657,318) Equipment and furniture (45,775) (856) - (46,631) Total accumulated depreciation (617,594) (86,355) - (703,949) Net capital assets being depreciated 1,884,167 (86,355) - 1,797,812 Component unit capital assets - net 5,629,766 $ (86,355) $ - $ 5,543,411 $ Note receivable bearing interest at 2.75%, due in installments of $1,697, including principal and interest, maturing in 2024. (Reliant Medical Note) 64,774 $ Note receivable bearing interest at 2.50%, due in installments of $5,656, including principal and interest, maturing in 2026. (Augusta Coatings Note) 363,172 Note receivable bearing interest at 2.50%, due in installments of $2,768, including principal and interest, maturing in 2025. (Two State Note) 126,302 Note receivable bearing interest at 2.250%, due in installments of $2,125, including principal and interest, maturing in 2027. (Two State Note) 165,000 Note receivable bearing interest at 3.00%, due in installments of $1,209, including principal and interest, maturing in 2033. (Chardan Note) 154,314 873,562 $ ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 46 NOTE 9 – LONG TERM DEBT The following is a summary of the long-term liability transactions for the year ended December 31, 2020: Balance Balance Due within 1/1/2020 Additions Deletions 12/31/2020 One Year Governmental Activities 2016 Bonds payable 3,620,000 $ - $ (1,800,000) $ 1,820,000 $ 1,820,000 $ Accrued compensated absences 347,639 93,059 - 440,698 - Total debt - governmental activities 3,967,639 $ 93,059 $ (1,800,000) $ 2,260,698 $ 1,820,000 $ Business-type Activities Accrued compensated absences Raysville Campground - $ 1,013 $ - $ 1,013 $ - $ Accrued compensated absences Solid Waste 10,207 3,968 - 14,175 - Accrued closure and postclosure costs 184,022 - (17,189) 166,833 - Total debt - business-type activities 194,229 $ 4,981 $ (17,189) $ 182,021 $ - $ Bonds Payable In August 2018, the County entered into a bond agreement for $5,585,000 bearing interest rates of 2.00% - 3.00% for the purpose to refund $5,280,000 of the County’s General Obligation Bonds, Series 2008. Annual debt service requirements to maturity for these bonds are as follows: For the year ending Total December 31, Principal Interest Debt Service 2021 1,820,000 27,300 1,847,300 Total 1,820,000 $ 27,300 $ 1,847,300 $ ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 47 NOTE 9 – LONG TERM DEBT - Continued Long Term Debt-Discretely Presented Component Units The following is a summary of the Discretely Presented Component Units’ long-term debt: Balance Balance Due within Health Department 7/1/2019 Additions Deletions 6/30/2020 One Year Accrued compensated absences 19,866 23,747 (11,051) 32,562 - Total debt 19,866 $ 23,747 $ (11,051) $ 32,562 $ - $ Balance Balance Due within Development Authority 1/1/2020 Additions Deletions 12/31/2020 One Year Note payable 210,589 $ - $ (29,003) $ 181,586 $ 29,737 $ NOTE 10 – RETIREMENT PLAN Defined Benefit Pension Plan The County sponsors the Association County Commissioners of Georgia Restated Pension Plan for McDuffie County Employees (The Plan), which is a defined benefit pension plan. The Plan provides retirement, disability, and death benefits to plan participants and beneficiaries. The Plan, through execution of the adoption agreement, is affiliated with the Association County Commissioners of Georgia Third Restated Defined Benefit Plan (an agent multiple-employer pension plan, administered by GEB Corp. The ACCG, in its role as the Plan Sponsor, has the sole authority to amend the provisions of the ACCG Plan, as provided in Section 19.03 of the ACCG Plan document. The County has the authority to amend the adoption agreement, which defines the specific benefit provisions of The Plan, as provided in Section 19.02 of the ACCG Plan document. The Plan issues a publicly available financial report that includes financial statements and required supplementary information for the Plan. That report may be obtained by writing Government Employees Benefits Corporation of Georgia, 400 Galleria Parkway, Suite 1250, Atlanta, Georgia 30339. All full-time County employees are eligible to participate in the Plan after completing three years of service with benefits vesting after five years of service. Participants become eligible to retire with unreduced benefits at the earlier of age 65 with 5 years of participation in the Plan, or by age 62 with 35 years of service. Upon eligibility to retire, participants are entitled to a benefit in the amount of 1% of average annual compensation up to $10,000 plus 1.5% of average annual compensation in excess of $10,000, plus $36 for each year of service up to 35 years, payable as a ten-year certain and life annuity. Average annual compensation is calculated based on the highest five-year period during the ten years 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 Board of Commissioners. Participant counts as of December 31, 2020, (the most recent actuarial valuation date) and covered compensation (based on covered earnings for the preceding year) are shown below: Retirees and beneficiaries receiving benefits 57 Terminated Plan participants entitled to, but not yet receiving benefits 74 Active employees participating in the Plan 114 Total number of Plan participants 245 Part-time active employees not participating in the plan 20 Covered compensation for active participants 4,150,892 $ ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 48 NOTE 10 – RETIREMENT PLAN- Continued Contributions The County is required to contribute an actuarially determined rate. The contribution amount is determined using actuarial methods and assumptions approved by the ACCG Plan trustees and must satisfy the minimum contribution requirement contained in the State of Georgia Statutes. Section 47-20 of the Georgia Code sets forth the funding standards for state and local governmental pension plans. Net Pension Liability The County’s 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 that date. This date was used due to the timing of the actuarial valuation reports. The actuarial valuation reports are available after the subsequent year end. The total pension liability as of December 31, 2020, valuation was determined by an actuarial valuation using the following actuarial assumptions, applied to all periods included in the measurement: Inflation 3.00% Future Salary Increases 3.00% per year with an age based scale Investment rate of return 7.00% per year Mortality rates were based on the RP-2000 Combined Mortality Table for Males and Females set back two years for males and set back three years for females. The actuarial assumptions used in the 2020 valuation were based on the results of an actuarial experience study for the period January 1, 1988 – January 1, 2020. The long-term expected rate of return on pension plan investments was determined using a lognormal distribution analysis in which best-estimate ranges of expected future real rates of return (expected nominal returns, net of pension plan investment expense and the assumed rate of inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: Target Asset Class Allocation Fixed income: 30% 25% - 35% Equities: 70% 65% - 75% Domestic large equities 30% 25% - 35% Domestic mid equities 5% 2.5% - 10% Domestic small equities 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% TOTAL 100% *Rates shown are net of the 3.0% assumed rate of inflation Range The discount rate used to measure the total pension liability was 7.00%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 49 NOTE 10 – RETIREMENT PLAN – Continued Change in the Net Pension Liability Pension Liability Fiduciary Net Position Net Pension Liability Balance at December 31, 2019 12,264,465 $ 10,562,061 $ 1,702,404 $ Changes for the year: Service cost 237,555 - 237,555 Interest 838,048 - 838,048 Liability experience (gain)/loss 204,046 204,046 Assumption change 29,745 29,745 Contribution-employer - 397,889 (397,889) Net investment income - 1,392,089 (1,392,089) Benefit payments (584,700) (584,700) - Administrative expense - (36,858) 36,858 Other changes - (45,194) 45,194 Net changes 724,694 1,123,226 (398,532) Balance at December 31, 2020 12,989,159 $ 11,685,287 $ 1,303,872 $ For the year ended December 31, 2020, the County recognized pension expense of $416,807. The required contribution for the year ended December 31, 2020 was $390,358. The following presents the County’s net pension liability calculated using the discount rate of 7.00%, as well as what the County’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (6.00%) or 1-percentage-point higher (8.00%) than the current rate: 1% Decrease Current Discount 1% Increase 6.00% Rate 7.00% 8.00% County's Pension Liability 2,811,289 $ 1,303,872 $ 37,560 $ Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions For the year ended December 31, 2020, the County recognized pension expense of $416,807. At December 31, 2020, the County reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred outflows/inflows of resources related to pensions: Deferred Outflows of Deferred Inflows of Resources Resources Asset (Gain)/Loss 459,958 $ (1,351,510) $ Liability (Gain)/Loss 309,734 (12,540) (Gain)/Loss due to Assumpution Change 291,024 - Total 1,060,716 $ (1,364,050) $ ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 50 NOTE 10 – RETIREMENT PLAN – Continued Amounts report as deferred outflows of resources and deferred inflows of resources related to pension will be amortized in pension expense as follows: 2021 96,045 2022 96,045 2023 96,045 Thereafter 15,198 Deferred Outflows/(Inflows) Recognized in Future Years Other State of Georgia Pension Plans The Sheriff, Clerk of Superior Court, Probate Judge, Tax Commissioner, and various other employees of the County are covered by the State of Georgia retirement plans and are not included as a part of the County’s plan described above. These State Plans are funded, in part, through County fines and forfeiture collections. Information on the Sheriffs Retirement plan may be found at the following: Georgia Sheriffs Association Retirement Fund P.O. Box 1000 Stockbridge, GA 30281 Information on the Clerk of Superior Court Retirement plan may be found at the following: Superior Court Clerk’s Retirement Fund of Georgia 124 N. McDonough St., #3 Jonesboro, GA 30236 Information on the Probate Judge Retirement plan may be found at the following: Probate Retirement Fund of Georgia P.O. Box 56 Griffin, GA 30224 Information on the Tax Commissioners Retirement plan may be found at the following: Employee Retirement System Two Northside 75, Suite 300 Atlanta, GA 30318 Deferred Compensation Plans The County has adopted deferred compensation plans in accordance with Section 457 of the Internal Revenue Code. The plans allow any employee participant to voluntarily defer the lesser of 100% of the participant’s gross compensation or $15,000 per year. All administrative costs of the plans are deducted from the participants’ accounts. Benefit payments are payable upon termination of employment, unforeseeable emergency, retirement or death. The Custodial Account Agreement requires the County set aside assets and income from the plan in trust for the exclusive benefit of the participants and their beneficiaries. The County is in compliance with the agreement. Information about the GEBCorp Deferred Compensation plan may be found at the following: The Charles Schwab Trust 425 Market Street, 7th Floor San Francisco, CA 94105 ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 51 NOTE 10 – RETIREMENT PLAN – Continued The County believes that it has no liability for losses under the plans but does have the duty of due care that would be required of an ordinary prudent investor. The investments are managed by the Plan Administrator in one of three investment options or a combination thereof. The available options include fixed annuity, variable annuity and universal life insurance. The participant makes the choice of investment option(s). At December 31, 2020, 13.3%, or 49, of the County’s 368 employees, were participants in the deferred compensation plans. The employees of the County contributed $105,026, respectively, to GEBCorp deferred compensation plan during the year ended December 31, 2020. GASB Statement No. 2, Financial Reporting of Deferred Compensation Plans Adopted under the provisions of Internal Revenue Code Section 457, established reporting requirements for IRC Section 457 plans. Based on the laws in effect at the time of its passage, that Statement required that all amounts deferred by the plan participants be reported as assets of the employer until made available to the participants or their beneficiaries. The laws governing these plans were changed to state that, as of August 20, 1996, new plans will not be considered eligible plans “unless all assets and income of the plan described in subsection are held in trust for the exclusive benefit of the participants and their beneficiaries”. In the case of an existing plan, a trust need not be established before January 1, 1999. Since the County amended its plan to comply with the requirements of subsection of Internal Revenue Code Section 457, it has adopted GASB Statement No. 32, Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans. NOTE 11 – RISK MANAGEMENT, LITIGATION, AND CONTINGENCIES 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; injuries to employees; and natural disasters for which the government is a member of a public entity risk pool currently operating as a common risk management and insurance program for member local governments. The County has joined other municipalities in the state as part of the Georgia Inter-Local Risk Management Agency Property and Liability Insurance Fund and the Association County Commissioners of Georgia Group Self-Insurance Workers’ Compensation Fund (ACCG-GSIWCF). As part of these risk pools, the Government is obligated to pay all contributions and assessments as prescribed by the pools, to cooperate with the pool’s 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. The County is also to allow the pool’s agents and attorneys to represent the County in investigation, settlement discussions and all levels of litigation arising out of any claim made against the County within the scope of loss protection furnished by the funds. The funds are to defend and protect members of the funds against liability or loss as prescribed in the member government contract and in accordance with the worker’s compensation law of Georgia. The funds are to pay all cost taxed against members in any legal proceeding defended by the members, all interest accruing after entry of judgment, and all expenses incurred for investigation, negotiation, or defense. Liabilities are reported when it is probable that a loss has occurred, and the amount of the loss can be reasonably estimated. An excess coverage insurance policy covers individual claims. Liabilities include amounts that have been incurred but not reported. Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amount of payouts and other economic and social factors. The liability for claims and judgments is reported as long-term debt because it is not expected that it will be liquidated from expendable available financial resources. As of December 31, 2020, the County had recorded no liability for claims. ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 52 NOTE 11 – RISK MANAGEMENT, LITIGATION, AND CONTINGENCIES – CONTINUED The change in the balances of the workers’ compensation pool claims during fiscal year 2020 is as follows: Workers compensation 2020 Unpaid claims, beginning of fiscal year 562,115 $ Incurred claims 282,265 Claim payments (79,753) Unpaid claims, end of fiscal year 764,627 $ General, property, and vehicle liabilities are provided for by commercial insurance coverage. Insurance bonding in amounts proportionate to employee exposure provides surety coverage. The County is liable for the $1,000 deductible. The change in the property and liability claims during the year 2020 is as follows: General, property, and vehicle liabilities 2020 Unpaid claims, beginning of fiscal year 604,005 $ Incurred claims 94,370 Claim payments (46,081) Unpaid claims, end of fiscal year 652,294 $ Contingent Liabilities Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies, principally the Federal Government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures, which may be disallowed by the grantor, cannot be determined at this time although the County expects such amounts, if any, to be immaterial. The County is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, it is the opinion of the County’s management and counsel that resolution of these matters will not have a material effect on the financial condition of the County. NOTE 12 – INTERFUND TRANSACTIONS Due From/To Other Funds Interfund receivables and payables account for loans between funds for cash management purposes. Interfund receivables and payables as of December 31, 2020 were as follows: Non-major General Govt Receivable Fund Fund Funds EMS Total Hotel/Motel 78,598 $ - $ - $ 78,598 $ Multiple Grant Fund 17,974 208 5,032 23,214 General Fund 3,598 178,019 - 181,617 Total 100,170 $ 178,227 $ 5,032 $ 283,429 $ Payable Fund Transfers To/From Other Funds Transfers between the General Fund and other governmental funds were primarily to support the operations of the funds. ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 53 NOTE 13 – NET POSITION/FUND EQUITY Non-major Solid General Govt Waste Total Transfers out Fund Funds EMS Landfill Transfers Out General Fund - $ 78,380 $ - $ - $ 78,380 $ SPLOST VI - 1,872,600 - - 1,872,600 Raysville Campground - 14,945 - - 14,945 Solid Waste - 34,739 - - 34,739 Non-major Govt Funds 72,635 - 666,446 6,671 745,752 Total- Transfers In 72,635 $ 2,000,664 $ 666,446 $ 6,671 $ 2,746,416 $ Transfers in Reservations of net position/fund equity are created to either satisfy legal covenants that require a portion of the fund balance be segregated or identify the portion of the fund balance that is not appropriated for future expenditures. Specific reservations of the fund balance accounts are summarized as follow: Restricted for encumbrances – This reserve was created to represent encumbrances outstanding at the end of the year based on purchase orders and contracts signed by the County but not completed as of the close of the fiscal year. Restricted for designated purposes – This reserve represents the portion of net position that is legally restricted for specified purposes. Unrestricted – This represents the portion of net position that is not restricted and not designated for other purposes. The McDuffie County Health Department had a deficit in unrestricted net position totaling $195,430 as of June 30, 2020. The deficit will be funded through operations of the Department. NOTE 14 – SOLID WASTE FUND The County maintains a solid waste landfill facility, which was established as an enterprise fund as of January 1, 1993. The current landfill was closed during 1994, to avoid the thirty-year post-closure monitoring for leaks into the ground water and removal and treatment of leachate, as required by regulations issued by the U.S. Environmental Protection Agency. By closing the facility, the County is required to monitor the facility. The licensure process for a new landfill has been completed, and the permit has been extended until completion. The Solid Waste Fund is expected ultimately to be self-supporting. All revenues related to the collection and disposal of solid waste, and the expenses related to the operation are reported in this fund. Government Accounting Standards Board Statement No. 18 (GASB-18) was issued effective June 15, 1993, to establish accounting standards for reporting the liabilities associated with required closure and post-closure costs. The standard states that the total estimated current cost of closure and post-closure monitoring is to be recognized as a liability as the landfill’s usable area is consumed. The estimated total current cost includes: the cost of equipment expected to be installed and facilities expected to be constructed, the cost of the final earth cover to be applied when the landfill is full, and the estimated costs of monitoring and maintaining the landfill in the post closure period. The accrued closure and post-closure costs liability totaled $166,833* as of December 31, 2020. Costs for closure and post-closure care are based on engineering estimates and are subject to change based on various factors some of which include inflation, deflation, changes in technology, and changes in laws and regulations. These costs are to be funded by collection fees and by tonnage costs. Costs incurred during 2020 totaled $17,189. *Estimated to be $382,805 per Georgia EPD in 2020 ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 54 NOTE 15 –BIG HART AND RAYSVILLE CAMPGROUNDS FUND Raysville Campground is located on Georgia's Little River, section of Clarks Hill Lake, the largest U.S. Corps of Engineers lake east of the Mississippi River. The 70,000 acre lake and its 1,000+ miles of shoreline provide excellent boating, water skiing, swimming, fishing, and hiking. The campground is situated in a wooded area on the waterfront and consists of 55 family campsites, all with 50-amp electrical hookups. Amenities include restrooms, showers, a dump station, boat ramp and dock. Big Hart Campground is situated in a wooded area on the waterfront of Clarks Hill Lake. One group campsite and 31 family campsites are available, all with 50-amp electrical hookups. Amenities include flush and vault toilets, showers, drinking water, a dump station, playground, beach, boat ramp and dock. The Big Hart and Raysville Campgrounds Fund is expected ultimately to be self-supporting. All revenues related to the rental and the expenses related to the operation are reported in this fund. NOTE 16 – HOTEL/MOTEL LODGING TAX McDuffie County has levied a 5% lodging tax pursuant to O.C.G.A. 48-13-51. At least 40% of the tax is to be used for tourism related purposes. During 2020, approximately 60% of receipts were allocated for tourism. Transactions for the year ended December 31, 2020 were as follows: Balance as of December 31, 2019 120,797 $ Tax Collections during 2020 195,462 Reimbursement received during 2020 1,720 Disbursements for promotion of tourism (177,295) Transfer to General Fund (60,783) Balance as of December 31, 2020 79,901 $ NOTE 17 – JOINT VENTURE Under Georgia law, the County in conjunction with other cities and counties in the Central Savannah River Area, is a member of the Central Savannah River Area Regional Commission (RC) and is required to pay annual dues thereto. During its year ended December 31, 2019, the County paid $14,548 in such dues. Membership in the RC is required by the Official Code of Georgia Annotated (OCGA) Section 50-8-34, which provides for the organizational structure of the RC in Georgia. The RC board membership includes the chief elected official of each county and municipality of the area. OCGA 50-8-39.1 provides that the member governments are liable for any debts or obligations of the RC. Separate financial statements may be obtained from: Central Savannah River Area Regional Commission 3023 Riverwatch Parkway, Suite A Augusta, Georgia 30907-2018 NOTE 18 – RELATED PARTY TRANSACTIONS There were no material related party transactions during the year ended December 31, 2020. ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 55 NOTE 19- Constitutional Officers and Firefighters Pension Plans The County’s Constitutional Officers and some of their staff and firefighters belong to one of six pension’s plans, listed below, established by the Georgia General Assembly for providing retirement benefits for these participants. These plans are cost sharing multiple employer defined benefit plans. Plan Website Employees Retirement System of Georgia - Tax Commissioner ers.ga.gov Judges of the Probate Courts Retirement Fund of Georgia pjrf.georgia.gov Sheriffs' Retirement Fund of Georgia georgiasheriffs.org Peace Officers' Annuity & Benefit Fund of Georgia poab.georgia.gov Georgia Firefighters' Pension Fund gfpf.org Georgia Judicial Retirement System ers.ga.gov Name of Pension Plan Pension liabilities and pension expense with all plans above combined and summarized as follows: McDuffie County's proportionate share of net pension liability - $ 459,917 Total 459,917 $ McDuffie recognized pension expense 105,925 $ McDuffie recognized revenue from State of Georgia support 105,925 $ State of Georgia's proportionate share of net pension liability associated with McDuffie County These plans are considered special funding situations; and 100% of the collective net pension liabilities are allocated to the State of Georgia. The County does not contribute to any of these plans. Pension plan descriptions, assumptions and related disclosures may be found in separately issued reports at June 30, 2020 for each of these plans and are available at the websites listed above. NOTE 20 - SUBSEQUENT EVENTS In preparing the financial statements, the County has evaluated events and transactions for potential recognition or disclosure through June 18, 2020. Management has not identified any items requiring recognition or disclosure. Big Hart & Raysville Campgrounds are leased from the Corps of Engineer and do not have any capital assets. The County is just managing the properties. Said premises are hereby leased for a term of five years, beginning March 20, 2015, and ending March 19, 2020. The lease has been renewed for another ten years, beginning March 20, 2020 and ending March 19, 2030. On March 11, 2020 the World Health Organization declared the coronavirus (COVID-19) outbreak a pandemic. The COVID-19 outbreak in the United States has resulted in a significant impact on the economy and the financial markets. If this pandemic continues for a sustained period of time, the County may experience significant decreases in its growth-oriented revenues (i.e. business licenses, building permits, hospitality taxes, etc.), charges for services (i.e. utility charges, recreation charges, etc.), and property tax revenues (i.e. business closures/failures, foreclosures, less vehicle purchases/taxes, etc.). ---PAGE BREAK--- 56 REQUIRED SUPPLEMENTARY INFORMATION ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET (BUDGETARY BASIS) AND ACTUAL GENERAL FUND FOR THE YEAR ENDED DECEMBER 31, 2020 57 Variance Original Final Over Budget Budget Actual (Under) REVENUES Taxes Property tax 4,530,031 $ 4,530,031 $ 4,115,917 $ (414,114) $ Property tax penalties 45,000 45,000 25,812 (19,188) Prior year property tax 126,330 464,850 878,963 414,113 Local option sales tax 2,400,000 2,559,074 2,559,074 - LOST-TAVT - - - - TAVT 820,000 991,951 991,951 - TAV - administration 35,000 35,000 24,705 (10,295) SPLOST - TAVT - - - - Alcohol beverage tax 220,000 220,000 220,425 425 Insurance premium tax - - - - Excise tax 270,000 150,000 184,924 34,924 Franchise tax 92,662 92,662 83,195 (9,467) Motor vehicle tax 108,346 108,346 79,715 (28,631) AAVT tax 9,000 15,700 15,668 (32) True up tax - - - - Mobile home tax 60,371 60,371 63,102 2,731 Mobile home tax penalties 11,000 11,000 7,424 (3,576) Timber tax 33,840 33,840 36,507 2,667 Light district 30,000 30,000 30,389 389 Railroad tax 8,000 8,000 10,367 2,367 Payments in lieu of tax 42,000 42,000 40,370 (1,630) Commissions 285,000 285,000 282,226 (2,774) FIFA 30,000 30,000 22,417 (7,583) Motor vehicle late fee tax 43,000 43,000 4,875 (38,125) BK lic tax 40,000 40,000 39,513 (487) Equipment tax 100 100 39 (61) Penalties and fines 29,250 29,250 14,473 (14,777) Total taxes 9,268,930 9,825,175 9,732,051 (93,124) Licenses and permits Beer and wine licenses 8,500 8,500 2,400 (6,100) Alcohol licenses 20,000 20,000 12,275 (7,725) Business licenses 70,000 70,000 82,033 12,033 Penalties and fines 500 500 - (500) Building permits and licenses 99,100 128,137 129,626 1,489 Total licenses and permits 198,100 227,137 226,334 (803) Intergovernmental Reimbursements 1,060,678 1,114,989 974,512 (140,477) Government center - City of Thomson 114,700 114,700 113,571 (1,129) Home delivered meals 9,500 9,500 3,751 (5,749) Grants 48,238 48,238 42,570 (5,668) Tax assessor 2,000 4,350 3,526 (824) Total intergovernmental 1,235,116 1,291,777 1,137,930 (153,847) Charges for services Recreation fees 88,880 83,460 51,752 (31,708) Senior citizens fees 20,000 8,000 4,219 (3,781) Rent 169,466 169,466 197,189 27,723 Animal shelter 7,500 13,010 11,171 (1,839) Sheriff 359,200 375,551 369,574 (5,977) Sheriff administration 198,920 198,920 114,070 (84,850) Transportation - - - - Public works 4,025 6,025 5,125 (900) EMS 19,446 19,446 19,446 - Vending machine - - 106 106 Fire fees - - - - Total charges for services 867,437 873,878 772,652 (101,226) Cash Basis ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET (BUDGETARY BASIS) AND ACTUAL GENERAL FUND FOR THE YEAR ENDED DECEMBER 31, 2020 58 Variance Original Final Over Budget Budget Actual (Under) REVENUES - Continued Fines and forfeitures Superior court fines and fees 230,500 $ 280,587 $ 276,809 $ (3,778) $ Probate court fines and fees 630,010 630,010 351,025 (278,985) Magistrate court fines and fees 86,000 86,000 52,408 (33,592) Total fines and forfeitures 946,510 996,597 680,242 (316,355) Other Flood control 2,000 2,000 1,791 (209) Interest 58,000 58,000 21,479 (36,521) Surplus sales 5,000 93,683 93,683 - Scrap 5,000 5,000 1,529 (3,471) Election qual 1,000 7,000 6,513 (487) Airport-GA 1,000 1,000 - (1,000) Bad check 100 100 - (100) Employee relations 9,000 9,000 60 (8,940) Miscellaneous 10,000 10,000 7,985 (2,015) Total other 91,100 185,783 133,040 (52,743) Total revenues 12,607,193 13,400,347 12,682,249 (718,098) EXPENDITURES General government Governing body 262,962 279,693 278,339 (1,354) County manager 293,512 306,512 306,336 (176) Elections office 285,073 363,513 362,441 (1,072) Administration 1,075,116 1,616,490 691,175 (925,315) Government center complex 118,327 118,327 109,828 (8,499) Finance 304,888 304,888 298,882 (6,006) Technical support 350,074 350,074 297,848 (52,226) Tax commissioner 357,164 357,164 345,644 (11,520) Tax assessor 390,529 390,529 356,714 (33,815) Board of equalization 4,921 4,921 3,653 (1,268) General government buildings 447,509 447,509 301,525 (145,984) Superior court 132,740 145,826 121,048 (24,778) Clerk of superior court 382,224 382,224 356,391 (25,833) District attorney 93,133 111,983 106,239 (5,744) Child support 6,000 6,000 4,864 (1,136) Magistrate court 165,699 171,199 170,840 (359) Probate court 204,783 204,783 203,797 (986) Juvenile court 135,104 135,104 123,119 (11,985) Public defender 87,424 87,424 87,308 (116) Planning and zoning 308,814 308,814 265,635 (43,179) Total general government 5,405,996 6,092,977 4,791,626 (1,301,351) Cash Basis ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET (BUDGETARY BASIS) AND ACTUAL GENERAL FUND FOR THE YEAR ENDED DECEMBER 31, 2020 59 Variance Original Final Over Budget Budget Actual (Under) EXPENDITURES - Continued Public safety Sheriff 4,246,222 $ 4,246,222 $ 3,884,540 $ (361,682) $ Sheriff administrative 198,920 198,920 42,916 (156,004) Fire - - (280) (280) Emergency management - - 280 280 Inmate workforce 54,870 54,870 51,482 (3,388) Coroner 33,637 35,637 35,459 (178) Total public safety 4,533,649 4,535,649 4,014,397 (521,252) Highways and streets Vehicle and equipment maintenance 228,405 228,405 187,136 (41,269) Public works 1,142,209 1,177,209 1,176,804 (405) Total highways and streets 1,370,614 1,405,614 1,363,940 (41,674) Health and welfare Family and children services 40,527 40,527 33,900 (6,627) Health department 118,450 147,432 146,851 (581) Rural transportation - - - - Senior citizens 117,243 117,243 84,883 (32,360) Soil & waste conservation 500 500 350 (150) Home delivered meals 60,331 60,331 40,008 (20,323) Total health and welfare 337,051 366,033 305,992 (60,041) Culture and recreation Library 93,278 93,278 93,278 - Boys and Girls Club 5,400 7,784 7,703 (81) Rockhouse 5,626 5,626 4,206 (1,420) Recreation 743,420 743,420 650,350 (93,070) Main Street Gym 9,552 9,752 9,225 (527) Tourism - - 40 40 Development Authority 100,154 100,154 69,181 (30,973) Total culture and recreation 957,430 960,014 833,983 (126,031) Other Cooperative extension service 134,775 134,775 100,422 (34,353) Airport 94,808 115,458 113,225 (2,233) Forestry 8,820 8,820 8,820 - Lawn care services - - - - Employee relations 9,000 9,000 6,468 (2,532) Recycling center 71,364 71,364 40,801 (30,563) Animal shelter 113,056 113,056 86,354 (26,702) Total other 431,823 452,473 356,090 (96,383) Total Expenditures 13,036,563 13,812,760 11,666,028 (2,146,732) Other financing sources Transfer out 44,257 7,354 54,032 46,678 Net change in fund balance (385,113) $ (405,059) $ 1,070,253 $ 1,475,312 $ RECONCILIATION TO GAAP BASIS To record effect of changes in receivables and other assets and payables and other liabilities (777,418) FUND BALANCE, BEGINNING OF YEAR 8,124,148 FUND BALANCE, END OF YEAR 8,416,983 $ Cash Basis ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF THE NET PENSION LIABILITY- ACCG PENSION PLAN FOR MCDUFFIE COUNTY EMPLOYEES FOR THE YEAR ENDED DECEMBER 31, 2020 60 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Contractually Required Contribution N/A N/A N/A N/A 422,092 $ 439,023 $ 435,778 $ 390,773 $ 296,675 $ 390,358 $ Contribution in Relation to the Contractually Required Contribution N/A N/A N/A N/A 422,092 439,023 435,778 390,773 296,675 390,358 Contributions Deficiency (Excess) - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ Covered-Employee Payroll N/A N/A N/A N/A 4,008,169 $ 3,943,434 $ 3,706,447 $ 3,821,798 $ 3,916,301 $ 4,150,892 $ Contribution as a Percentage of Covered- Employee Payroll N/A N/A N/A N/A 10.5% 11.1% 11.8% 10.2% 7.6% 9.4% ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CONTRIBUTIONS- ACCG PENSION PLAN FOR MCDUFFIE COUNTY EMPLOYEES FOR THE YEAR ENDED DECEMBER 31, 2020 61 For the Year Ended December 31, 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Net pension liability N/A N/A N/A N/A 1,111,156 $ 1,679,221 $ 1,808,471 $ 602,704 $ 2,036,823 $ 1,303,872 $ Covered-employee payroll N/A N/A N/A N/A 4,008,169 $ 3,810,081 $ 3,581,137 $ 3,821,798 $ 3,916,301 $ 4,150,892 $ Net pension liability as a percentage of covered-employee payroll N/A N/A N/A N/A 27.70% 44.10% 50.50% 15.80% 52.00% 31.40% Plan fiduciary net position as a percentage of the total pension liability N/A N/A N/A N/A 87.70% 82.50% 82.40% 94.10% 81.50% 90.00% ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY FOR THE YEAR ENDED DECEMBER 31, 2020 (JUNE 30, 2020 MEASUREMENT DATE) 62 Employees Retirement System of Georgia - Tax Commissioner Georgia Judicial Retirement System Peace Officers' Annuity & Benefit Fund of Georgia Judges of the Probate Courts Retirement Fund of Georgia Sheriffs' Retirement Fund of Georgia Georgia Firefighters' Pension Fund McDuffie County's proportion of net pension liability 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% McDuffie County's proportionate share of net pension liability - $ - $ - $ - $ - $ - $ State of Georgia's proportionate share of net pension liability associated with McDuffie 159,368 (38,811) (10,757) (135,060) 360,080 125,097 Total 159,368 (38,811) (10,757) (135,060) 360,080 125,097 McDuffie County's covered-employee payroll 138,498 $ 84,661 $ 1,721,951 $ 60,850 $ 98,789 $ 1,770,013 $ McDuffie County's proportionate share of net pension liability as percentage of its covered-employee payroll Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Plan fiduciary net position as a percentage of the total pension liability 76.21% 57.38% 102.93% 127.65% 62.83% 84.67% ---PAGE BREAK--- 63 COMBINING AND INDIVIDUAL FUND STATEMENTS ---PAGE BREAK--- 64 GENERAL FUND The General Fund is used to account for resources traditionally associated with the County that are not required legally, or by sound financial management, to be accounted for in another fund. ---PAGE BREAK--- 65 MCDUFFIE COUNTY NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS Special revenue funds are used to account for specific revenues that are legally restricted to expenditure for particular purposes. Jail Fund – to account for fines charged by the County that are to be used for jail improvements. Drug Task Force Fund – to account for add-on fees received from fines to be used to assist with drug enforcement needs. Drug Court Fund – to account for add-on fees received from fines to be used to assist with drug treatment needs. Wireless Emergency Telephone System Fund – to account for collection of wireless 911 phone surcharges used for operation and maintenance of the 911-phone system. Landfill Surcharge Fund – to account for fees received from Solid Waste. Hotel/Motel Fund – to account for tax to be used for tourism-related purposes. Law Library Fund– to account for receipt of fee revenue generated to support the legal library for the McDuffie County court system. Juvenile Probation Fund – to account for fee revenue generated for juvenile probation. Emergency Telephone System Fund – is used to account for the collection of 911 phone surcharges used for operation and maintenance of the 911-telephone system. Drug Forfeiture Fund – to account for funds received as a result of property and cash seizures by the Sheriff’s Department. Transportation Fund – to account for fee revenue generated for transportation. Multiple Grant Fund – to account for funds received as a result of multiple grants. CAPITAL PROJECTS FUNDS Capital projects funds are used to account for the acquisition and construction of major capital facilities other than those financed by proprietary funds and trust funds. Special Purpose Local Option Sales Tax IV Fund – to account for property acquisition and construction of projects designated to be funded by revenue from local option sales tax collections for the years 2004 – 2008. Special Purpose Local Option Sales Tax V Fund – to account for property acquisition and construction of projects designated to be funded by revenue from local option sales tax collections for the years 2009-2013. TSPLOST Fund – The TSPLOST Fund is used to account for the construction of transportation related projects funded by TPLOST. Bond Fund – to account for the cost of the acquisition and furnishing of the City of Thomson/McDuffie County government center. LMIG Fund – to account for the construction of transportation related projects funded by the LMIG. CDBG Fund – to account for the construction related to projects funded by the CDBG grant. ---PAGE BREAK--- 66 MCDUFFIE COUNTY NONMAJOR GOVERNMENTAL FUNDS DEBT SERVICE FUND Debt Service Fund – to account for the resources accumulated and payments made for principal and interest on long- term debt of governmental funds. INTERNAL SERVICE FUND Lawn Care Services – to account for lawn care services rendered internally instead of outsourcing those services. ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS DECEMBER 31, 2020 67 Internal Service Fund Wireless Total Hotel/ Emergency Emergency Lawn Nonmajor Law Juvenile Multiple Transportation Drug Task Motel Telephone Landfill Drug Telephone Care Governmental Jail Library Probation Grant Grant Force Drug Court Tax System Surcharge Forfeiture System LMIG SPLOST IV SPLOST V SPLOST VII TSPLOST CDBG Bond Fund Debt Service Services Funds Assets Assets Cash 251,582 $ 17,435 $ 47,215 $ 4,806 $ - $ 325,160 $ 24,729 $ - $ 51,545 $ 61,703 $ 228,225 $ 191,277 $ 14,870 $ 123,608 $ 60,952 $ 100 $ 1,495,278 $ 79,913 $ - $ 15,577 $ - $ 2,993,975 $ Investments - - - - - - - - - - - - - - - - - - - - - - Due from other funds - - - 23,214 - - - 78,598 - - - - - - - - - - - - - 101,812 Other receivables - - - 1,454 - - - 14,132 - - - 74,847 - - - - - - - - - 90,433 Intergovernmental receivables 3,661 - - - 66,325 450 62,000 - - 8,479 - - - - - - 175,129 - - - - 316,044 Total Assets 255,243 $ 17,435 $ 47,215 $ 29,474 $ 66,325 $ 325,610 $ 86,729 $ 92,730 $ 51,545 $ 70,182 $ 228,225 $ 266,124 $ 14,870 $ 123,608 $ 60,952 $ 100 $ 1,670,407 $ 79,913 $ - $ 15,577 $ - $ 3,502,264 $ Liabilities and Fund Balances Liabilities Accounts payable 796 $ - $ - $ 1,454 $ 9,922 $ 100 $ 9,268 $ 12,199 $ 100 $ 65 $ - $ 27,412 $ 14,870 $ 390 $ 412 $ - $ 145,628 $ 300 $ - $ - $ 2,837 $ 225,753 $ Accrued liabilities - - - - 28,556 - - 631 - - - 4,720 - - - - - - - - 454 34,361 Unearned revenue - - - - - - - - - - - - - - - - - - - - - - Due to other funds - 108 - - 30,902 - - - - - - - - - - 100 - 147,117 - - - 178,227 Total Liabilities 796 108 - 1,454 69,380 100 9,268 12,830 100 65 - 32,132 14,870 390 412 100 145,628 147,417 - - 3,291 438,341 Fund balances Capital Projects - - - - - - - - - - - - - 123,218 60,540 - 1,524,779 - - - - 1,708,537 Special Revenues 254,447 17,327 47,215 28,020 (3,055) 325,510 77,461 79,900 51,445 70,117 228,225 233,992 - - - - - (67,504) - - - 1,343,100 Debt Service - - - - - - - - - - - - - - - - - - - 15,577 (3,291) 12,286 Total Fund Balances 254,447 17,327 47,215 28,020 (3,055) 325,510 77,461 79,900 51,445 70,117 228,225 233,992 - 123,218 60,540 - 1,524,779 (67,504) - 15,577 (3,291) 3,063,923 Total Liabilities and Fund Balances 255,243 $ 17,435 $ 47,215 $ 29,474 $ 66,325 $ 325,610 $ 86,729 $ 92,730 $ 51,545 $ 70,182 $ 228,225 $ 266,124 $ 14,870 $ 123,608 $ 60,952 $ 100 $ 1,670,407 $ 79,913 $ - $ 15,577 $ - $ 3,502,264 $ Special Revenue Funds Capital Projects Funds ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED DECEMBER 31, 2020 68 Internal Service Fund Wireless Total Hotel/ Emergency Emergency Lawn Nonmajor Law Juvenile Multiple Transportation Drug Task Motel Telephone Landfill Drug Telephone Care Governmental Jail Library Probation Grant Grant Force Drug Court Tax System Surcharge Forfeiture System LMIG SPLOST IV SPLOST V SPLOST VII TSPLOST CDBG Bond Fund Debt Service Services Funds Revenues Fees for services - $ - $ 90 $ - $ 14,562 $ - $ 13,717 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 28,369 $ Fines and forfeitures 48,505 11,978 - - - 24,167 - - - - - - - - - - - - - - - 84,650 Intergovernmental - - - 37,875 286,402 - 149,617 - - - - 609,908 500,696 - (27,443) - 1,052,453 770,592 - - - 3,380,100 Interest income - 8 - - - - - - - - 6 - - 428 279 - 3,249 - - 733 - 4,703 Other - - - - - - - 1,720 - - - 116,653 - - - - 46,550 - - - - 164,923 Taxes - - - - - - - 195,462 - - - - - - - - 965,534 - - - - 1,160,996 Total Revenues 48,505 11,986 90 37,875 300,964 24,167 163,334 197,182 - - 6 726,561 500,696 428 (27,164) - 2,067,786 770,592 - 733 - 4,823,741 Expenditures Current Intergovernmental - - - - - - - - - - - - - - - - - - - - - - General government - - - - - - - - - 1,495 - - - - - - 2,666 - - - 78,013 82,174 Public safety 17,903 - - - - - 110,605 - - - - 647,263 - - - - - - - - - 775,771 Public works - - - 23,929 305,903 - - - - - - - - - - - - 23,094 - - - 352,926 Culture and recreation - - - - - - - - - - - - - - - - - - - - - - Other - - - - - - - - - - - - - 390 312 - 12,257 - - - - 12,959 Health and welfare - - - - - - - - - - 38,309 - - - - - - - - - - 38,309 Economic development - - - - - - - 177,295 - - - - - - - - - - - - - 177,295 Judicial - 10,948 - - - - - - - - - - - - - - - - - - - 10,948 Capital outlay - - General government - - - - - - - - - - - - - - - - - - - - - - Public works - - - - - - - - - - 500,696 - - - 1,632,256 112,601 - - - 2,245,553 Public safety - - - - - - - - - - - - - - - - - - - - - - Health and welfare - - - - - - - - - - - - - - - - - - - - - - Culture and recreation - - - - - - - - - - - - - - - - - - - - - - Economic development - - - - - - - - - - - - - - - - - - - - - - Debt Service: - Principal - - - - - - - - - - - - - - - - - - - 1,800,000 - 1,800,000 Interest - - - - - - - - - - - - - - - - - - - 72,600 - 72,600 Total Expenditures 17,903 10,948 - 23,929 305,903 - 110,605 177,295 - 1,495 38,309 647,263 500,696 390 312 - 1,647,179 135,695 - 1,872,600 78,013 5,568,535 Excess (deficiency) of revenues over expenditures 30,602 1,038 90 13,946 (4,939) 24,167 52,729 19,887 - (1,495) (38,303) 79,298 - 38 (27,476) - 420,607 634,897 - (1,871,867) (78,013) (744,794) - Transfers in - - - - - - - - - 34,739 18,603 - - - - - - - - 1,872,600 74,722 2,000,664 Transfers out - - - - - - (11,852) (60,783) - (6,671) - - - - - - - (666,446) - - - (745,752) Net Change 30,602 1,038 90 13,946 (4,939) 24,167 40,877 (40,896) - 26,573 (19,700) 79,298 - 38 (27,476) - 420,607 (31,549) - 733 (3,291) 510,118 FUND BALANCES, BEGINNING OF YEAR 223,845 16,289 47,125 14,074 1,884 301,343 36,584 120,796 51,445 43,544 247,925 154,694 - 123,180 88,016 - 1,104,172 (35,955) - 14,844 - 2,553,805 FUND BALANCES, END OF YEAR 254,447 $ 17,327 $ 47,215 $ 28,020 $ (3,055) $ 325,510 $ 77,461 $ 79,900 $ 51,445 $ 70,117 $ 228,225 $ 233,992 $ - $ 123,218 $ 60,540 $ - $ 1,524,779 $ (67,504) $ - $ 15,577 $ (3,291) $ 3,063,923 $ Special Revenue Funds Capital Projects Funds ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET (BUDGETARY BASIS) AND ACTUAL DEBT SERVICE FUND FOR THE YEAR ENDED DECEMBER 31, 2020 69 Variance Original Final Over Budget Budget Actual (Under) Revenues Interest 2,200 $ 2,200 $ 733 $ (1,467) $ Prior year - - - - Total Revenues 2,200 2,200 733 (1,467) Expenditures General government 1,872,600 1,872,600 1,872,600 - Total Expenditures 1,872,600 1,872,600 1,872,600 - Other Financing Sources Transfers 1,870,400 1,870,400 1,872,600 2,200 Net Change in Fund Balance - $ - $ 733 733 $ Fund Balance, beginning of year 14,844 Fund Balance, end of year 15,577 $ ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET (BUDGETARY BASIS) AND ACTUAL JAIL FUND FOR THE YEAR ENDED DECEMBER 31, 2020 70 Variance Original Final Over Budget Budget Actual (Under) Revenues Fines and forfeitures 47,400 $ 47,400 $ 47,535 $ 135 $ Prior year - - - - Total Revenues 47,400 47,400 47,535 135 Expenditures Public safety 40,400 40,400 18,219 (22,181) Capital outlay 7,000 7,000 - (7,000) Total Expenditures 47,400 47,400 18,219 (29,181) Net Change in Fund Balance - $ - $ 29,316 29,316 $ Reconciliation to GAAP Basis To record effect of changes in receivables and other assets and payables and other liabilities 1,286 Fund Balance, beginning of year 223,845 Fund Balance, end of year 254,447 $ ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET (BUDGETARY BASIS) AND ACTUAL LAW LIBRARY FUND FOR THE YEAR ENDED DECEMBER 31, 2020 71 Variance Original Final Over Budget Budget Actual (Under) Revenues Fines and forfeitures 13,000 $ 13,000 $ 11,978 $ (1,022) $ Interest income 10 10 8 Other - - - - Prior year 3,282 3,282 - (3,282) Total Revenues 16,292 16,292 11,986 (4,306) Expenditures General government 16,292 16,292 10,968 (5,324) Total Expenditures 16,292 16,292 10,968 (5,324) Net Change in Fund Balance - $ - $ 1,018 1,018 $ Reconciliation to GAAP Basis To record effect of changes in receivables and other assets and payables and other liabilities 20 Fund Balance, beginning of year 16,289 Fund Balance, end of year 17,327 $ ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET (BUDGETARY BASIS) AND ACTUAL JUVENILE PROBATION FUND FOR THE YEAR ENDED DECEMBER 31, 2020 72 Variance Original Final Over Budget Budget Actual (Under) Revenues Fees for services 1,000 $ 1,000 $ 90 $ (910) $ Total Revenues 1,000 1,000 90 (910) Expenditures Public safety 1,000 1,000 - (1,000) Total Expenditures 1,000 1,000 - (1,000) Net Change in Fund Balance - $ - $ 90 90 $ Reconciliation to GAAP Basis To record effect of changes in receivables and other assets and payables and other liabilities - Fund Balance, beginning of year 47,125 Fund Balance, end of year 47,215 $ ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET (BUDGETARY BASIS) AND ACTUAL DRUG TASK FORCE FUND FOR THE YEAR ENDED DECEMBER 31, 2020 73 Variance Original Final Over Budget Budget Actual (Under) Revenues Fines and forfeitures 15,000 $ 15,000 $ 24,904 $ 9,904 $ Total Revenues 15,000 15,000 24,904 9,904 Expenditures Capital outlay - - - - Public safety 15,000 15,000 - (15,000) Total Expenditures 15,000 15,000 - (15,000) Other Financing Sources Transfers - - - - Net Change in Fund Balance - $ - $ 24,904 24,904 $ Reconciliation to GAAP Basis To record effect of changes in receivables and other assets and payables and other liabilities (737) Fund Balance, beginning of year 301,343 Fund Balance, end of year 325,510 $ ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET (BUDGETARY BASIS) AND ACTUAL HOTEL/MOTEL TAX FUND FOR THE YEAR ENDED DECEMBER 31, 2020 74 Variance Original Final Over Budget Budget Actual (Under) Revenues Taxes 290,500 $ 200,000 $ 197,832 $ (2,168) $ Other - - 1,720 1,720 Prior year - 31,000 - (31,000) Total Revenues 290,500 231,000 199,552 (31,448) Expenditures General government 183,867 161,270 169,844 8,574 Total Expenditures 183,867 161,270 169,844 8,574 Other Financing Sources Transfers (106,633) (69,730) (60,783) 8,947 Net Change in Fund Balance - $ - $ (31,075) (31,075) $ Reconciliation to GAAP Basis To record effect of changes in receivables and other assets and payables and other liabilities (9,821) Fund Balance, beginning of year 120,796 Fund Balance, end of year 79,900 $ ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET (BUDGETARY BASIS) AND ACTUAL EMERGENCY TELEPHONE SYSTEM FUND FOR THE YEAR ENDED DECEMBER 31, 2020 75 Variance Original Final Over Budget Budget Actual (Under) Revenues Fees for services 377,000 $ 377,000 $ 463,842 $ 86,842 $ Intergovernmental 389,450 389,450 234,206 (155,244) Total Revenues 766,450 766,450 698,048 (68,402) Expenditures Public safety 766,450 766,450 659,843 (106,607) Total Expenditures 766,450 766,450 659,843 (106,607) Other Financing Sources Transfers from General Fund (300,000) (300,000) - 300,000 Net Change in Fund Balance (300,000) $ (300,000) $ 38,205 38,205 $ Reconciliation to GAAP Basis To record effect of changes in receivables and other assets and payables and other liabilities 41,093 Fund Balance, beginning of year 154,694 Fund Balance, end of year 233,992 $ ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET (BUDGETARY BASIS) AND ACTUAL LANDFILL SURCHARGE FUND FOR THE YEAR ENDED DECEMBER 31, 2020 76 Variance Original Final Over Budget Budget Actual (Under) Revenues Fees for services - $ - $ - $ Prior year - - - - Total Revenues - - - - Expenditures Other - - 1,495 1,495 Capital outlay 75,000 75,000 7,439 (67,561) Total Expenditures 75,000 75,000 8,934 (66,066) Other Financing Sources Transfers 75,000 75,000 26,260 (48,740) Net Change in Fund Balance - - 17,326 17,326 Reconciliation to GAAP Basis To record effect of changes in receivables and other assets and payables and other liabilities 9,247 Fund Balance, beginning of year 43,544 Fund Balance, end of year 70,117 $ ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET (BUDGETARY BASIS) AND ACTUAL WIRELESS EMERGENCY TELEPHONE SYSTEM FUND FOR THE YEAR ENDED DECEMBER 31, 2020 77 Variance Original Final Over Budget Budget Actual (Under) Revenues Prior year 7,063 $ 7,063 $ - $ (7,063) $ Total Revenues 7,063 7,063 - (7,063) Expenditures Capital outlay 7,063 7,063 - (7,063) Total Expenditures 7,063 7,063 - (7,063) Net Change in Fund Balance - $ - $ - - $ Reconciliation to GAAP Basis To record effect of changes in receivables and other assets and payables and other liabilities - Fund Balance, beginning of year 51,445 Fund Balance, end of year 51,445 $ ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET (BUDGETARY BASIS) AND ACTUAL DRUG FORFEITURE FUND FOR THE YEAR ENDED DECEMBER 31, 2020 78 Variance Original Final Over Budget Budget Actual (Under) Revenues Federal 1,500 $ 1,500 $ - $ (1,500) $ State 5,000 19,000 18,603 (397) Interest 10 10 6 Prior year 15,690 19,999 - (19,999) Total Revenues 22,200 40,509 18,609 (21,900) Expenditures Public safety 22,200 40,509 38,309 (2,200) Total Expenditures 22,200 40,509 38,309 (2,200) Net Change in Fund Balance - $ - $ (19,700) (19,700) $ Reconciliation to GAAP Basis To record effect of changes in receivables and other assets and payables and other liabilities - Fund Balance, beginning of year 247,925 Fund Balance, end of year 228,225 $ ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET (BUDGETARY BASIS) AND ACTUAL LMIG FUND FOR THE YEAR ENDED DECEMBER 31, 2020 79 Variance Original Final Over Budget Budget Actual (Under) Revenues Intergovernmental 465,000 $ 547,250 $ 500,696 $ (46,554) $ Total Revenues 465,000 547,250 500,696 (46,554) Expenditures Public works 465,000 547,250 532,476 (14,774) Total Expenditures 465,000 547,250 532,476 (14,774) Net Change in Fund Balance - $ - $ (31,780) (31,780) $ Reconciliation to GAAP Basis To record effect of changes in receivables and other assets and payables and other liabilities 31,780 Fund Balance, beginning of year - Fund Balance, end of year - $ ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET (BUDGETARY BASIS) AND ACTUAL DRUG COURT FOR THE YEAR ENDED DECEMBER 31, 2020 80 Variance Original Final Over Budget Budget Actual (Under) Revenues Fines and forfeitures 159,900 $ 159,900 $ 101,334 $ (58,566) $ Other - - - - Prior year - - - - Total Revenues 159,900 159,900 101,334 (58,566) Expenditures Capital outlay - - - - Public safety 153,900 153,900 108,432 (45,468) Total Expenditures 153,900 153,900 108,432 (45,468) Other Financing Sources Transfers (6,000) (6,000) (11,851) (5,851) Net Change in Fund Balance - $ - $ (18,949) (18,949) $ Reconciliation to GAAP Basis To record effect of changes in receivables and other assets and payables and other liabilities 59,826 Fund Balance, beginning of year 36,584 Fund Balance, end of year 77,461 $ ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET (BUDGETARY BASIS) AND ACTUAL CDBG FUND FOR THE YEAR ENDED DECEMBER 31, 2020 81 Variance Original Final Over Budget Budget Actual (Under) Revenues Intergovernmental 1,000,000 $ 1,790,958 $ 770,592 $ (1,020,366) $ Total Revenues 1,000,000 1,790,958 770,592 (1,020,366) Expenditures Capital outlay 1,000,000 1,790,958 809,492 (981,466) Total Expenditures 1,000,000 1,790,958 809,492 (981,466) Net Change in Fund Balance - $ - $ (38,900) (38,900) $ Reconciliation to GAAP Basis To record effect of changes in receivables and other assets and payables and other liabilities 7,351 Fund Balance, beginning of year (35,955) Fund Balance, end of year (67,504) $ ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET (BUDGETARY BASIS) AND ACTUAL TRANSPORTATION FUND FOR THE YEAR ENDED DECEMBER 31, 2020 82 Variance Original Final Over Budget Budget Actual (Under) Revenues Fees for services 188,160 $ 248,198 $ 269,011 $ 20,813 $ Intergovernmental 109,876 64,838 10,158 (54,680) Total Revenues 298,036 313,036 279,169 (33,867) Expenditures Health and welfare 298,036 313,036 310,280 (2,756) Total Expenditures 298,036 313,036 310,280 (2,756) Other Financing Sources Transfers from General Fund - - - - Net Change in Fund Balance - $ - $ (31,111) (31,111) $ Reconciliation to GAAP Basis To record effect of changes in receivables and other assets and payables and other liabilities 26,172 Fund Balance, beginning of year 1,884 Fund Balance, end of year (3,055) $ ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET (BUDGETARY BASIS) AND ACTUAL MULTIPLE GRANT FUND FOR THE YEAR ENDED DECEMBER 31, 2020 83 Variance Original Final Over Budget Budget Actual (Under) Revenues Grant revenues 49,716 $ 56,823 $ 49,409 $ (7,414) $ Total Revenues 49,716 56,823 49,409 (7,414) Expenditures Capital outlay - - - - Grant expenditures 49,716 56,823 24,410 (32,413) Total Expenditures 49,716 56,823 24,410 (32,413) Net Change in Fund Balance - $ - $ 24,999 24,999 $ Reconciliation to GAAP Basis To record effect of changes in receivables and other assets and payables and other liabilities (11,053) Fund Balance, beginning of year 14,074 Fund Balance, end of year 28,020 $ ---PAGE BREAK--- 84 FIDUCIARY FUNDS Agency funds are used to account for assets that are held by the government as the agent for individuals, private organizations, other governments and/or other funds. Clerk of Court – to account for the receipt and disbursement of court ordered fines and fees made on behalf of third parties. Probate Court – to account for the receipt and disbursement of funds held on behalf of others and fees for services provided under State law. Sheriff – to account for the receipt and disbursement of fees and services provided under State law. Tax Commissioner - to account for tax billings, collections, and remittances held by the Tax Commissioner on behalf of other governmental agencies. Magistrate’s Court – to account for the receipt and disbursement of bonds and court ordered fines and fees made on behalf of third parties. ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA COMBINING BALANCE SHEET FIDUCIARY FUNDS DECEMBER 31, 2020 85 Clerk of Probate Tax Magistrate Court Court Sheriff Commissioner Court Total Assets Cash 398,551 $ 52,536 $ 36,541 $ 317,053 $ 25,480 $ 830,161 $ Total Assets 398,551 $ 52,536 $ 36,541 $ 317,053 $ 25,480 $ 830,161 $ Liabilities Due to General Fund 25,545 $ 25,134 $ - $ 78,287 $ 4,278 $ 133,244 $ Due to others 373,006 27,402 36,541 238,766 21,202 696,917 Total Liabilities 398,551 $ 52,536 $ 36,541 $ 317,053 $ 25,480 $ 830,161 $ Agency Funds Assets Liabilities ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FIDUCIARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2020 86 Clerk of Probate Tax Magistrate Court Court Sheriff Commissioner Court Total Cash Balance at beginning of year 272,069 $ 36,661 $ 53,814 $ 268,043 $ 26,531 $ 657,118 $ Additions 882,991 704,835 503,254 22,216,146 147,148 24,454,374 Deletions 756,509 688,960 520,527 22,167,136 148,199 24,281,331 Balance at end of year 398,551 52,536 36,541 317,053 25,480 830,161 Total Assets 398,551 $ 52,536 $ 36,541 $ 317,053 $ 25,480 $ 830,161 $ Due to others Balance at beginning of year 272,069 $ 36,661 $ 53,814 $ 268,043 $ 26,531 $ 657,118 $ Additions 882,991 704,835 503,254 22,216,146 147,148 24,454,374 Deletions 756,509 688,960 520,527 22,167,136 148,199 24,281,331 Balance at end of year 398,551 52,536 36,541 317,053 25,480 830,161 Total Liabilities 398,551 $ 52,536 $ 36,541 $ 317,053 $ 25,480 $ 830,161 $ Agency Funds Assets Liabilities ---PAGE BREAK--- 87 This page left blank intentionally. ---PAGE BREAK--- 88 SUPPLEMENTARY INFORMATION ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA SCHEDULE OF SPECIAL PURPOSE LOCAL OPTION SALES TAX 2004-2008 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2020 89 Project: SPLOST IV McDuffie County/City of Thomson, Georgia Town of Dearing, Georgia Street and Capital Outlay Projects Estimated Percentage Estimated Revised Prior Current of Purpose (in funding sequence) Cost Cost Years Year Total Completion Funded simultaneously City of Thomson Ladder truck 517,000 517,000 517,000 - 517,000 100% Breathing appartus 65,000 64,242 64,242 - 64,242 100% T/E Project 260,000 260,000 259,212 259,212 100% Big Creek 2,515,000 3,370,550 3,370,550 3,370,550 100% Scada 175,000 143,273 143,273 143,273 100% Other city water/sewer projects 721,000 130,032 213,469 213,469 164% Development Authority Economic Development 1,900,000 1,710,250 1,369,504 1,369,504 80% Thomson Company 500,000 689,750 932,966 932,966 135% McDuffie County Boys & Girls Club 117,909 116,894 - 116,894 99% Water and Sewer 2,906,998 768,145 633,380 633,380 82% Airport 8,240 10,443 10,443 127% Road Construction and Improvements 2,721,482 2,795,178 2,748,493 2,748,493 98% Recreation 2,500,000 2,453,644 2,512,123 2,512,123 102% Technology 50,000 - - - Land 25,621 25,709 25,709 100% Public Safety Pumpers 243,992 34,440 - - 0% Fire Station #1 1,044,114 1,086,477 1,179,433 - 1,179,433 109% Fire Station #6 - - - - Brush trucks - 61,340 61,340 - 61,340 100% Rescue Truck 61,340 - - - Information Technology 50,000 - - - Gear 520 47,810 59,938 59,938 125% Government Complex 1,600,000 2,514,038 2,524,871 2,524,871 100% Government Complex 100,000 101,552 97,255 - 97,255 96% Senior Citizens Center Senior Citizens Center 23,397 23,685 23,685 101% Department Family & Children Improvements 3,999 3,999 3,999 100% Advertising Costs 1,170 390 1,560 McDuffie County Hospital Ambulances 270,000 234,630 234,630 234,630 100% Cardiac monitor 41,928 41,928 41,928 100% Hospital Expansion 1,000,000 1,000,000 1,000,000 1,000,000 100% Town of Dearing Fire Station 25,000 25,000 25,000 100% Gym Renovations 78,331 78,331 78,331 100% Totals 19,201,446 $ 18,306,776 $ 18,248,838 $ 390 $ 18,249,228 $ ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA SCHEDULE OF SPECIAL PURPOSE LOCAL OPTION SALES TAX 2009-2014 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2020 90 Estimated Original Revised Percentage Estimated Estimated Prior Current of Purpose (in funding sequence) Cost Cost Years Year Total Completion Funded simultaneously City of Thomson City Street Resurfacing 700,000 630,000 624,385 624,385 99% City Fire Engine 300,000 283,997 283,997 283,997 100% City Station #2 improvements 100,000 50,000 - - 0% Skate Park 300,000 198,554 198,554 198,554 100% Walking Track 25,000 23,523 23,523 23,523 100% Water/Sewer Water Line Replacement 120,000 98,918 98,917 98,917 100% Sewer Plant Improvement 1,000,000 1,000,468 1,022,409 1,022,409 102% Usry Pond Improvement 750,000 - - - 0% Augusta Road Plant Project 1,250,000 255,481 224,739 224,739 88% Raising Usry Pond Dam 690,000 - - - 0% Big Creek 34,590 34,590 34,590 100% De-watering Project 988,276 988,278 988,278 100% Development Authority Land Development 250,000 75,000 81,349 27,443 108,792 145% Land Acquisition 250,000 75,000 - - 0% Thomson Company Redevelopment 250,000 150,000 126,430 126,430 84% Infrastructure 150,000 240,000 293,917 293,917 122% Information Technology 50,000 50,000 68,174 68,174 136% Landscaping/Signage 50,000 10,000 - - 0% McDuffie County Government Center Complex Government Center 11,510,428 12,229,377 10,189,507 10,189,507 83% Roads & Streets County Road Resurfacing 1,800,000 1,620,000 1,608,562 1,608,562 99% ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA SCHEDULE OF SPECIAL PURPOSE LOCAL OPTION SALES TAX 2009-2014 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2020 91 (Continued) Original Revised Estimated Estimated Prior Current Purpose (in funding sequence) Cost Cost Years Year Total Airport Runway Overlay 200,000 160,000 169,269 169,269 106% Recreation Restrooms @ Sweetwater Park Football 75,000 71,712 71,712 71,712 100% Bleachers for Gym @ Sweetwater Park 57,000 42,594 42,594 42,594 100% Outdoor Bleachers Cover for Shade 75,000 - 0% Walking Track Improvements @ Sweetwater 60,000 14,709 14,709 14,709 100% Recreation other 690,000 150,673 167,927 167,927 111% Land Acquisition for City Parks 108,000 91,081 91,200 91,200 100% Information Technology New Computer Applications & Improvements 500,000 500,000 500,000 500,000 100% Public Safety EMS, 2 Ambulances 225,000 225,000 225,000 225,000 100% County Fire Engine 300,000 291,621 291,621 291,621 100% County Brush Truck 100,000 105,452 100,673 100,673 95% County Fire Service Truck 150,000 59,809 64,588 64,588 108% County Station #4 150,000 176,622 176,788 176,788 100% Advertising Costs 1,268 312 1,580 Banking fees 50 50 McDuffie County Hospital New Inpatient Unit (Partial for Debt Service) 3,000,000 500,000 500,000 500,000 100% Town of Dearing City Hall Playground Area & 78,816 78,816 78,816 100% Bill Eubanks Improvement 150,000 5,913 5,913 5,913 100% Totals 25,385,428 $ 20,487,186 $ 18,369,459 $ 27,755 $ 18,397,214 $ ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA SCHEDULE OF SPECIAL PURPOSE LOCAL OPTION SALES TAX 2015-2019 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2020 92 Project: SPLOST VI McDuffie County/City of Thomson, Georgia Town of Dearing, Georgia Street and Capital Outlay Projects Estimated Original Revised Percentage Estimated Estimated Prior Current of Purpose (in funding sequence) Cost Cost Years Year Total Completion Funded simultaneously CITY OF THOMSON City HVAC, Lighting, Plumbing 96,000 96,000 0% City shop improvements 150,000 150,000 0% City fire protection equipment 400,000 400,000 0% Capital Equipment - City 140,000 140,000 0% Grant Match for storm water improvements 75,000 75,000 0% City Street Improvements/Equipment 715,040 715,040 244,406 4,500 248,906 35% Fire station facilities improvements 350,000 350,000 3,683 3,683 1% Water/Sewer Capital Equipment, Water and Sewer Distribution 80,000 80,000 29,850 29,850 37% Sewer Main Improvements and Grant Match 250,000 250,000 248,779 248,779 100% Vacuum Truck for clearing 150,000 150,000 125,142 125,142 83% Sewer plant improvements 0% Sludge Dewatering 750,000 750,000 0% Headworks Improvements 350,000 350,000 0% Generator 75,000 75,000 0% DEVELOPMENT AUTHORITY Industrial Capital Improvements 500,000 500,000 0% Rock House Improvements 450,000 450,000 12,032 12,032 3% 0% MCDUFFIE COUNTY 0% Airport Airport Infrastructure improvements and grant match 150,000 150,000 147,250 5,445 152,695 102% Energy Efficiency Imporvement Projects County HVAC, Lighting, Plumbing 204,000 204,000 64,200 64,200 31% Government Center Complex Government Center Debt 11,556,151 11,556,151 5,589,324 1,872,600 7,461,924 65% Information Technology SCADA Upgrades 75,000 75,000 1,147 1,147 2% Computer applications and improvements 100,000 100,000 162,547 11,306 173,853 174% County Maintenance Shop County shop improvements 160,000 160,000 0% ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA SCHEDULE OF SPECIAL PURPOSE LOCAL OPTION SALES TAX 2015-2019 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2020 93 Public Safety Law enforcement center improvements 1,900,000 1,900,000 1,900,000 1,900,000 100% Fire stations 100,000 100,000 100,000 100,000 100% County Fire Protection equipment 800,000 800,000 386,860 386,860 48% Ambulances 250,000 250,000 210,454 210,454 84% Animal Shelter 40,000 40,000 0% Air Compressor 45,000 45,000 0% Recreation Recreation Facilities 400,000 400,000 412,660 412,660 103% Recreation Equipment 215,000 215,000 44,073 44,073 20% Roads/Streets Capital Equipment - County 300,000 300,000 0% County Road Improvements/Equipment 1,781,960 1,781,960 143,781 285,021 428,802 24% Solid Waste Current station replacement 100,000 100,000 0% Inert landfill improvements 200,000 200,000 0% TOWN OF DEARING Dearing fire equipment 15,000 15,000 0% Dearing recreation 77,000 77,000 0% Advertising Costs 1,370 351 1,721 TOTALS 23,000,151 $ 23,000,151 $ 9,280,876 $ 2,725,904 $ 12,006,781 $ ---PAGE BREAK--- MCDUFFIE COUNTY, GEORGIA SCHEDULE OF SPECIAL PURPOSE LOCAL OPTION SALES TAX 2015-2019 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2020 94 Project: Public Facilities: Grant Number: Commencement of Project : Estimated Original Percentage Estimated Prior Current of Purpose Cost Years Year Total Completion Improvements 45,000 $ - $ 30,534 $ 30,534 $ 68% Community Development Block Grant Community Housing Investment Program CH16YMCDU-05 September 2008 ---PAGE BREAK--- 95 This page left blank intentionally. ---PAGE BREAK--- 97 INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Board of Commissioners McDuffie 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 discretely presented component units, each major fund, and the aggregate remaining fund information of McDuffie County, Georgia, as of and for the year ended December 31, 2020, and the related notes to the financial statements, which collectively comprise McDuffie County, Georgia ’s basic financial statements and have issued our report thereon dated June 18, 2021. Our report includes a reference to other auditors who audited the financial statements of McDuffie County Health Department, as described in our report on the McDuffie 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 are reported on separately by those auditors. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered McDuffie 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 McDuffie County, Georgia’s internal control. Accordingly, we do not express an opinion on the effectiveness of the McDuffie County, Georgia’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether McDuffie County, Georgia’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. ---PAGE BREAK--- 97 McDuffie County, Georgia Page 2 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 the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. The Baird Audit Group, LLC Certified Public Accountants Augusta, Georgia June 18, 2021 ---PAGE BREAK--- 98 COMPLIANCE SECTION ---PAGE BREAK--- MCDUFFIE COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED DECEMBER 31, 2020 99 Federal Grantor/ Federal Grantor/ Pass Thru Grantor/ CFDA Contract Program Title Number Number Expenditures Expenditures U.S. Department of Transportation (Passed through Georgia Department of Transportation) Transit Operating Assistance 20.509 2086-00-25-8202.0452 $166,195 Transit Operating Assistance 20.509 2086-00-25-8202.0452 $139,708 $305,903 Transportation Services 20.509 T0066181- FY20 $6,348 Transportation Services 20.509 T0066181- FY21 $0 $6,348 Total U.S. Department of Transportation $312,251 U.S. Department of Health & Human Services (Passed through CSRA Regional Development Center) Title III/Social Service Block Grant 93.044 19-08-0452 $7,778 $7,778 (Passed through Economic Opportunities Authority) Community Block Grant/EOA Nutrition 93.569 FY21 $5,916 Community Block Grant/EOA Nutrition 93.569 FY20 $8,195 $14,111 COVID 19 -CARES Act 21.019 14816-CRF-2020 $666,446 COVID 19 - CARES Act Provider Relief Fund 93.498 P3-36730975999 $45,412 $711,858 Total U.S. Department of Health & Human Services $733,747 (Passed through Department of Housing & Urban Development) Special Project Appropriations 14.239 CH16YMCDU-05 $30,534 Total U.S. Department of Housing & Urban Development $30,534 $1,076,532 Total Expenditures of Federal Awards ---PAGE BREAK--- MCDUFFIE COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED DECEMBER 30, 2020 100 NOTE 1 BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of McDuffie County, Georgia (the County) under programs of the federal government for the year ended December 31, 2020. The information in the schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the County, it is not intended to and does not present the financial position, changes in net position, or cash flows of the County. NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the Schedule are reported on the cash basis of accounting. Such expenditures are recognized following the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures may or may not be allowable or may be limited as to reimbursement. NOTE 3 NON-CASH AWARDS The County did not receive any non-cash federal awards during the year ended December 31, 2020. ---PAGE BREAK--- 101 INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE To the Board of Commissioners McDuffie County, Georgia Report on Compliance for Each Major Federal Program We have audited McDuffie County, Georgia’s compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of McDuffie County, Georgia’s major federal programs for the year ended December 31, 2020. McDuffie County, Georgia’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditors’ Responsibility Our responsibility is to express an opinion on compliance for each of McDuffie County, Georgia’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about McDuffie County, Georgia’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of McDuffie County, Georgia’s compliance. Opinion on Each Major Federal Program In our opinion, McDuffie County, Georgia complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended December 31, 2020. Report on Internal Control over Compliance Management of McDuffie County, Georgia is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered McDuffie County, Georgia’s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of McDuffie County, Georgia’s internal control over compliance. ---PAGE BREAK--- 102 McDuffie County, Georgia Page 2 A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. The Baird Audit Group, LLC Certified Public Accountants Augusta, Georgia June 18, 2021 ---PAGE BREAK--- 103 MCDUFFIE COUNTY, GEORGIA SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED DECEMBER 31, 2020 I. Summary of Auditors' Results A. The auditors' report expresses an unmodified opinion on the financial statements of McDuffie County, Georgia. B. No significant deficiencies were disclosed during the audit of the financial statements. C. No instances of noncompliance material to the financial statements of McDuffie County, Georgia, which would be required to be reported in accordance with Government Auditing Standards, were disclosed during the audit. D. No significant deficiencies in internal controls over major federal award programs were disclosed during the audit. E. The auditors' report on compliance for the major federal award programs for McDuffie County, Georgia expresses an unmodified opinion on all major federal programs. F. Audit findings that are required to be reported in accordance with the Uniform Guidance are reported in this schedule. G. Major federal program for McDuffie County, Georgia for the fiscal year ended December 31, 2020, are: Program Name CFDA# Covid 19 - Cares Act 21.019 H. The threshold for determining Type A programs for McDuffie County, Georgia is $750,000. The program listed above was a type B program. I. McDuffie County qualified as a low- risk auditee but high-risk auditee for the major federal program.