Lincoln County, Tennessee

For the Year Ended June 30, 2021 Lincoln County, Tennessee

ANNUAL FINANCIAL REPORT

LINCOLN COUNTY, TENNESSEE

FOR THE YEAR ENDED JUNE 30, 2021

COMPTROLLER OF THE TREASURY JASON E. MUMPOWER

DIVISION OF LOCAL GOVERNMENT AUDIT JAMES R. ARNETTE

Director

JEFF BAILEY, CPA, CGFM, CFE Audit Manager

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

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Exhibit Page(s)

Summary of Audit Findings 6

INTRODUCTORY SECTION 7

Lincoln County Officials 8

FINANCIAL SECTION 9

Independent Auditor's Report 10-13BASIC FINANCIAL STATEMENTS: 14

Government-wide Financial Statements:Statement of Net Position A 15-16Statement of Activities B 17-18

Fund Financial Statements:Governmental Funds:

Balance Sheet C-1 19-20Reconciliation of the Balance Sheet of Governmental Funds

to the Statement of Net Position C-2 21Statement of Revenues, Expenditures, and Changes in

Fund Balances C-3 22-23Reconciliation of the Statement of Revenues, Expenditures,

and Changes in Fund Balances of Governmental Fundsto the Statement of Activities C-4 24

Statements of Revenues, Expenditures, and Changes in FundBalances – Actual (Budgetary Basis) and Budget:

General Fund C-5 25-27Other General Government Fund C-6 28Highway/Public Works Fund C-7 29

Proprietary Funds:Statement of Net Position D-1 30-31Statement of Revenues, Expenses, and Changes in Net Position D-2 32Statement of Cash Flows D-3 33-34

Fiduciary Funds:Statement of Net Position E-1 35Statement of Changes in Net Position E-2 36

Index and Notes to the Financial Statements 37-135REQUIRED SUPPLEMENTARY INFORMATION: 136

Schedule of Changes in Net Pension Liability (Asset) and Related Ratios Based on Participation in the Public Employee Pension Planof TCRS – Primary Government – County Plan F-1 137

Schedule of Changes in Net Pension Liability (Asset) and Related Ratios Based on Participation in the Public Employee Pension Planof TCRS – Primary Government – Board of Public Utilities Plan F-2 138

LINCOLN COUNTY, TENNESSEETABLE OF CONTENTS

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Exhibit Page(s)

Schedule of Contributions Based on Participation in the Public EmployeePension Plan of TCRS – Primary Government – County Plan F-3 139

Schedule of Contributions Based on Participation in the Public EmployeePension Plan of TCRS – Primary Government – Board of PublicUtilities Plan F-4 140

Schedule of Contributions Based on Participation in the TeacherRetirement Plan of TCRS – Discretely Presented LincolnCounty School Department F-5 141

Schedule of Contributions Based on Participation in the TeacherLegacy Pension Plan of TCRS – Discretely Presented LincolnCounty School Department F-6 142

Schedule of Proportionate Share of the Net Pension Asset in theTeacher Retirement Plan of TCRS – Discretely PresentedLincoln County School Department F-7 143

Schedule of Proportionate Share of the Net Pension Asset in theTeacher Legacy Pension Plan of TCRS – Discretely PresentedLincoln County School Department F-8 144

Schedule of Changes in the Total OPEB Liability and RelatedRatios - Local Government Plan - Primary Government F-9 145

Schedule of Changes in the Total OPEB Liability and RelatedRatios - Local Education Plan – Discretely PresentedLincoln County School Department F-10 146

Notes to the Required Supplementary Information 147COMBINING AND INDIVIDUAL FUND FINANCIAL

STATEMENTS AND SCHEDULES: 148Nonmajor Governmental Funds: 149

Combining Balance Sheet G-1 150Combining Statement of Revenues, Expenditures, and Changes

in Fund Balances G-2 151Schedules of Revenues, Expenditures, and Changes in Fund

Balances – Actual (Budgetary Basis) and Budget:Solid Waste/Sanitation Fund G-3 152Drug Control Fund G-4 153

Major Governmental Funds: 154Schedule of Revenues, Expenditures, and Changes in Fund

Balance – Actual and Budget:General Debt Service Fund H 155

Fiduciary Funds: 156Combining Statement of Net Position - Custodial Funds I-1 157Combining Statement of Changes in Net Position –

Custodial Funds I-2 158Component Unit:

Discretely Presented Lincoln County School Department: 159Statement of Activities J-1 160Balance Sheet – Governmental Funds J-2 161-162Reconciliation of the Balance Sheet of Governmental Funds

to the Statement of Net Position J-3 163Statement of Revenues, Expenditures, and Changes in Fund

Balances – Governmental Funds J-4 164-165

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Exhibit Page(s)

Reconciliation of the Statement of Revenues, Expenditures,and Changes in Fund Balances of Governmental Fundsto the Statement of Activities J-5 166

Combining Balance Sheet – Nonmajor Governmental Funds J-6 167Combining Statement of Revenues, Expenditures, and Changes

in Fund Balances – Nonmajor Governmental Funds J-7 168-169Schedules of Revenues, Expenditures, and Changes in Fund

Balances – Actual (Budgetary Basis) and Budget:General Purpose School Fund J-8 170-171School Federal Projects Fund J-9 172-173Central Cafeteria Fund J-10 174Extended School Program Fund J-11 175Education Capital Projects Fund J-12 176Other Capital Projects Fund J-13 177

Miscellaneous Schedules: 178Schedule of Changes in Long-term Notes and Bonds K-1 179Schedule of Long-term Debt Requirements by Year K-2 180Schedule of Transfers - Discretely Presented Lincoln County

School Department K-3 181Schedule of Salaries and Official Bonds of Principal Officials –

Primary Government and Discretely Presented LincolnCounty School Department K-4 182

Schedule of Detailed Revenues – All Governmental Fund Types K-5 183-194Schedule of Detailed Revenues – All Governmental Fund Types –

Discretely Presented Lincoln County School Department K-6 195-202Schedule of Detailed Expenditures – All Governmental Fund Types K-7 203-220Schedule of Detailed Expenditures – All Governmental Fund Types –

Discretely Presented Lincoln County School Department K-8 221-233Schedule of Detailed Additions, Deductions, and Changes in

Net Position – City Custodial Fund K-9 234

STATUTORY SECTION Table 235

Demographic and Economic Information:Schedule of Utility Rates and Number of Customers 1 236Schedule of Unaccounted for Water 2 237-238

SINGLE AUDIT SECTION 239

Auditor's Report on Internal Control Over Financial Reporting and onCompliance and Other Matters Based on an Audit of FinancialStatements Performed in Accordance with GovernmentAuditing Standards 240-241

Auditor's Report on Compliance for Every Major Federal Program; Reporton Internal Control Over Compliance; and Report on the Schedule ofExpenditures of Federal Awards Required by Uniform Guidance 242-244

Schedule of Expenditures of Federal Awards and State Grants 245-246Summary Schedule of Prior-year Findings 247Schedule of Findings and Questioned Costs 248-250Management's Corrective Action Plan 251

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Unmodified

Summary of Audit Findings Annual Financial Report

Lincoln County, Tennessee For the Year Ended June 30, 2021

Scope

We have audited the basic financial statements of Lincoln County as of and for the year ended June 30, 2021.

Results Our report on Lincoln County’s financial statements is unmodified. Our audit resulted in one finding, which we have reviewed with Lincoln County management. The finding is included in the Single Audit section of this report.

Finding The following is a summary of the audit finding: OFFICE OF DIRECTOR OF SCHOOLS ♦ Highland Rim School investigation revealed misappropriation of funds totaling at least

$6,127.

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INTRODUCTORY SECTION

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Lincoln County OfficialsJune 30, 2021

Officials

William Newman, County MayorTim Gill, Highway SuperintendentDr. Bill Heath, Director of SchoolsMary Jane Porter, TrusteeTammy Painter, Assessor of PropertyPhyllis Counts, County ClerkLisa Simmons, Circuit and General Sessions Courts ClerkRebecca Bartlett, Clerk and MasterRandy Delap, Register of DeedsMurray Blackwelder, SheriffVicky Trentham, Director of Finance

Board of County Commissioners

William Newman, County Mayor, Chairman Charles HunterR. Stephen Graham Donny OgleRandy Bradford Shirley DangerfieldDarren Holland Steve SprayGrady Reavis Tori YoungDavid Sanders Doug CunninghamBen Brown Ricky BryantAnthony Taylor Stephanie Eady BrittJohn Thorpe Pat HaynesJack Atchley Glen DouglasMark Mitchell Steve GuntherbergKate Guin Danny WalkerRonald Jean

Board of Education

Thomas Stevenson, Chairman Rex DunnVeronica King Jimmy DanielKevin Posey Jennifer HaynesSammy Tucker Jared Bradley

Financial Management Committee Audit Committee

William Newman, County Mayor, Chairman Randy Bradford, ChairmanTim Gill, Highway Superintendent Tori YoungDr. Bill Heath, Director of Schools Ben BrownCharles Hunter David SandersBen Brown Danny WalkerDoug CunninghamKate Guin

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FINANCIAL SECTION

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Independent Auditor's Report Lincoln County Mayor and Board of County Commissioners Lincoln County, Tennessee To the County Mayor and Board of County Commissioners: Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Lincoln County, Tennessee, as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the county’s basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the Lincoln Health System (a major enterprise fund), which represents 50.6 percent, 44.0 percent, and 88.9 percent, respectively, of the assets, net position, and revenues of the business-type activities or the financial statements of the Lincoln County Board of Public Utilities (a major enterprise fund), which represents 49.4 percent, 56.0 percent, and 11.1 percent, respectively, of the assets, net position, and revenues of the business-type activities. Those statements were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for the Lincoln Health System and the Lincoln County Board of Public Utilities is based solely on the reports of other auditors. We also did not audit the financial statements of the Internal School Fund of the Lincoln County School Department (a discretely presented component unit), which represents .9 percent, 1.0 percent, and 2.9 percent, respectively, of the assets, net position, and revenues of the 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 the Internal School Fund of the Lincoln County School Department is based solely on the report of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in

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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 auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, based on our audit and the reports of the other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Lincoln County, Tennessee, as of June 30, 2021, and the respective changes in financial position and, where applicable, cash flows thereof and the respective budgetary comparison for the General, Other General Government, and Highway/Public Works funds for the year then ended in accordance with accounting principles generally accepted in the United States of America. Changes in Accounting Principle As described in Note V.B., Lincoln County has adopted the provisions of Governmental Accounting Standards Board (GASB) Statement No. 84, Fiduciary Activities. GASB 84 defines what is meant by fiduciary activities. It establishes the four types of fiduciary funds for reporting purposes. In addition, GASB 84 changes the title of “Agency” Funds to “Custodial” Funds and requires that Custodial Funds, unlike Agency Funds, should present fund net position. Our opinion is not modified with respect to this matter. Emphasis of Matter We draw attention to Note I.D.10 to the financial statements, which describes restatements to the beginning Custodial Funds net position totaling $2,305,952 on the Statement of Changes in Net Position – Fiduciary Funds and a restatement to the discretely presented Lincoln County School Department’s net position totaling $519,185 on the Government-wide Statement of

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Activities. These restatements were necessary because of the transitional requirements of GASB Statement No. 84, Fiduciary Activities. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Management has omitted the management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information. Accounting principles generally accepted in the United States of America require that the schedules of changes in the county’s net pension liability (asset) and related ratios, schedules of county and school contributions, schedules of school’s proportionate share of the net pension liability (asset), and schedules of county and school changes in the total OPEB liability as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary and Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise Lincoln County’s basic financial statements. The combining and individual nonmajor fund financial statements, budgetary comparison schedules of nonmajor governmental funds and the General Debt Service Fund, combining and individual fund financial statements of the Lincoln County School Department (a discretely presented component unit), miscellaneous schedules, and other information such as the introductory section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedule of expenditures of federal awards is also presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and is not a required part of the basic financial statements.

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The combining and individual nonmajor fund financial statements, budgetary comparison schedules of nonmajor governmental funds and the General Debt Service Fund, combining and individual fund financial statements of the Lincoln County School Department (discretely presented component unit), schedule of expenditures of federal awards, and miscellaneous schedules 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 by us and by other auditors. 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, budgetary comparison schedules of nonmajor governmental funds and the General Debt Service Fund, combining and individual fund financial statements of the Lincoln County School Department (discretely presented component unit), schedule of expenditures of federal awards, and miscellaneous schedules are fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory and statutory sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 10, 2022, on our consideration of Lincoln County’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of Lincoln County’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Lincoln County’s internal control over financial reporting and compliance. Very truly yours, Jason E. Mumpower Comptroller of the Treasury Nashville, Tennessee February 10, 2022 JEM/sl

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BASIC FINANCIAL STATEMENTS

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Exhibit A

Lincoln County, TennesseeStatement of Net PositionJune 30, 2021

Business-Governmental type

Activities Activities Total

ASSETS

Cash and Cash Equivalents $ 0 $ 18,784,612 $ 18,784,612 $ 567,167Equity in Pooled Cash and Investments 19,361,410 0 19,361,410 7,329,082Accounts Receivable 61,317 6,325,776 6,387,093 84,919Allowance for Uncollectible (14,694) (2,184,118) (2,198,812) 0Due from Other Governments 1,263,622 0 1,263,622 1,991,427Property Taxes Receivable 9,663,166 0 9,663,166 5,014,062Allowance for Uncollectible Property Taxes (120,903) 0 (120,903) (62,735)Prepaid Items 0 271,081 271,081 635,740Other Assets 0 860,077 860,077 0Inventories 0 1,026,116 1,026,116 0Net Pension Asset - Agent Plan 609,564 2,337,485 2,947,049 474,106Net Pension Asset - Teacher Retirement Plan 0 0 0 202,363Net Pension Asset - Teacher Legacy Pension Plan 0 0 0 2,787,203Restricted Assets: Restricted Cash 0 192,415 192,415 0 Other Assets 0 11,700,677 11,700,677 0 Amounts Accumulated for Pension Benefits 0 0 0 321,139Capital Assets: Assets Not Depreciated: Land 9,312,266 1,692,450 11,004,716 1,629,077 Construction in Progress 3,949,848 233,032 4,182,880 18,604,341 Assets Net of Accumulated Depreciation: Buildings and Improvements 7,871,209 34,701,101 42,572,310 23,233,003 Ground Improvements 0 914,373 914,373 0 Infrastructure 10,069,362 0 10,069,362 0 Other Capital Assets 5,807,461 3,222,296 9,029,757 3,477,336Total Assets $ 67,833,628 $ 80,077,373 $ 147,911,001 $ 66,288,230

DEFERRED OUTFLOWS OF RESOURCES

Deferred Amount on Refunding $ 0 $ 112,140 $ 112,140 $ 0Pension Changes in Experience 34,893 156,990 191,883 140,614Pension Changes in Investment Earnings 133,820 237,142 370,962 743,060Pension Changes in Assumptions 60,269 164,965 225,234 306,425Pension Changes in Proportion 0 59,362 59,362 61,019Pension Contributions After Measurement Date 352,547 748,119 1,100,666 1,613,984OPEB Changes in Experience 0 0 0 86,750OPEB Changes in Assumptions 55,222 0 55,222 307,181OPEB Changes in Proportion 0 0 0 115,431OPEB Benefits Paid After Measurement Date 12,978 0 0 111,483Total Deferred Outflows of Resources $ 649,729 $ 1,478,718 $ 2,128,447 $ 3,485,947

(Continued)

Component

LincolnCountySchool

Department

Unit Primary Government

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Exhibit A

Lincoln County, TennesseeStatement of Net Position (Cont.)

Business-Governmental type

Activities Activities Total

LIABILITIES

Accounts Payable $ 34,372 $ 1,101,226 $ 1,135,598 $ 12,453Accrued Payroll 236,159 672,142 908,301 1,025,557Accrued Liabilities 0 539,626 539,626 0Contracts Payable 0 0 0 206,725Due to State of Tennessee 1,719 0 1,719 0Due to Cities 18,231 0 18,231 0Due to Other Governments 3,337,596 0 3,337,596 0Accrued Interest Payable 226,488 110,516 337,004 0Unearned Revenue 0 7,420,329 7,420,329 0Other Accrued Liabilities 0 184,616 184,616 0Noncurrent Liabilities: Due Within One Year - Debt 1,195,000 1,294,794 2,489,794 0 Due Within One Year - Other 297,454 974,698 1,272,152 50,108 Due in More Than One Year - Debt 35,202,724 14,150,275 49,352,999 0 Due in More Than One Year - Other 946,082 0 946,082 2,645,711Total Liabilities $ 41,495,825 $ 26,448,222 $ 67,944,047 $ 3,940,554

DEFERRED INFLOWS OF RESOURCES

Deferred Current Property Taxes $ 9,375,184 $ 0 $ 9,375,184 $ 4,864,632Pension Changes in Experience 463,822 925,022 1,388,844 1,751,500Pension Changes in Proportion 0 22,480 22,480 31,891OPEB Changes in Experience 105,653 0 105,653 384,528OPEB Changes in Assumptions 11,696 0 11,696 224,324OPEB Changes in Proportion 0 0 0 35,373Total Deferred Inflows of Resources $ 9,956,355 $ 947,502 $ 10,903,857 $ 7,292,248

NET POSITION

Net Investment in Capital Assets $ 31,685,146 $ 25,419,130 $ 57,104,276 $ 46,943,757Restricted for: General Government 43,066 0 43,066 0 Finance 65,681 0 65,681 0 Administration of Justice 93,478 0 93,478 0 Public Safety 382,973 0 382,973 0 Public Health and Welfare 666,495 0 666,495 0 Highway/Public Works 3,710,565 0 3,710,565 0 Debt Service 0 1,098,515 1,098,515 0 Education 0 0 0 1,728,512 Capital Outlay 0 0 0 793,476 Other Purposes 0 1,338,001 1,338,001 0 Pensions 609,564 235,791 845,355 3,784,811Unrestricted (20,225,791) 26,068,930 5,843,139 5,290,819

Total Net Position $ 17,031,177 $ 54,160,367 $ 71,191,544 $ 58,541,375

The notes to the financial statements are an integral part of this statement.

Component

CountySchool

Department

Unit Primary Government Lincoln

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Exhibit B

Lincoln County, TennesseeStatement of ActivitiesFor the Year Ended June 30, 2021

Charges Operating Capitalfor Grants and Grants and Governmental Business-type

Functions/Programs Expenses Services Contributions Contributions Activities Activities Total

Primary Government: Governmental Activities: General Government $ 2,197,441 $ 641,948 $ 44,461 $ 0 $ (1,511,032) $ 0 $ (1,511,032) $ 0 Finance 1,374,032 1,019,972 0 0 (354,060) 0 (354,060) 0 Administration of Justice 1,399,217 655,864 9,900 0 (733,453) 0 (733,453) 0 Public Safety 7,959,368 342,396 653,097 42,879 (6,920,996) 0 (6,920,996) 0 Public Health and Welfare 3,144,867 1,233,869 647,188 0 (1,263,810) 0 (1,263,810) 0 Social, Cultural, and Recreational Services 211,414 6,225 0 0 (205,189) 0 (205,189) 0 Agriculture and Natural Resources 185,619 0 13,932 0 (171,687) 0 (171,687) 0 Highways 4,396,751 0 2,794,085 361,203 (1,241,463) 0 (1,241,463) 0 Education 2,575 0 0 (2,575) 0 (2,575) 0 Interest on Long-term Debt 1,512,020 0 0 0 (1,512,020) 0 (1,512,020) 0Total Governmental Activities $ 22,383,304 $ 3,900,274 $ 4,162,663 $ 404,082 $ (13,916,285) $ 0 $ (13,916,285) $ 0

Business-type Activities: Lincoln Health System $ 41,892,085 $ 37,523,866 $ 3,890,110 $ 34,565 $ 0 $ (443,544) $ (443,544) $ 0 Lincoln County Board of Public Utilities 4,999,472 5,790,744 435,520 110,676 0 1,337,468 1,337,468 0 Total Business-type Activities $ 46,891,557 $ 43,314,610 $ 4,325,630 $ 145,241 $ 0 $ 893,924 $ 893,924 $ 0

Total Primary Government $ 69,274,861 $ 47,214,884 $ 8,488,293 $ 549,323 $ (13,916,285) $ 893,924 $ (13,022,361) $ 0

Component Unit: Lincoln County School Department $ 38,108,296 $ 1,426,046 $ 4,675,052 $ 40,080 $ 0 $ 0 $ 0 $ (31,967,118)

(Continued)

LincolnCountySchool

Department

Net (Expense) Revenue and Changes in Net PositionComponent Unit

Program RevenuesPrimary Government

17

Exhibit B

Lincoln County, TennesseeStatement of Activities (Cont.)

Charges Operating Capitalfor Grants and Grants and Governmental Business-type

Functions/Programs Expenses Services Contributions Contributions Activities Activities Total

General Revenues: Taxes: Property Taxes Levied for General Purposes $ 7,894,398 $ 0 $ 7,894,398 $ 4,121,053 Property Taxes Levied for Debt Service 2,407,250 0 2,407,250 0 Local Option Sales Tax 2,104,387 0 2,104,387 4,015,088 Other Local Taxes: Wheel Tax 2,398,629 0 2,398,629 0 Business Tax 379,110 0 379,110 0 Hotel/Motel Tax 149,487 0 149,487 0 Litigation Tax - Jail, Workhouse, or Courthouse 108,585 0 108,585 0 Litigation Tax - Special Purpose 90,017 0 90,017 0 Wholesale Beer Tax 0 0 0 123,340 Litigation Tax - General 78,295 0 78,295 0 Litigation Tax - Courtroom Security 77,101 0 77,101 0 Mineral Severance Tax 44,138 0 44,138 0 Grants and Contributions Not Restricted to Specific Programs 2,000,036 9,894,495 11,894,531 24,957,222 Unrestricted Investment Earnings 115,001 120,072 235,073 52,929 Miscellaneous 335,174 65,829 401,003 287,316 Gain on Sale of Capital Assets 9,312 24,236 33,548 0Total General Revenues $ 18,190,920 $ 10,104,632 $ 28,295,552 $ 33,556,948

Change in Net Position $ 4,274,635 $ 10,998,556 $ 15,273,191 $ 1,589,830Net Position, July 1, 2020 12,756,542 43,161,811 55,918,353 56,432,360Restatement - See Note I.D.10. 0 0 0 519,185

Net Position, June 30, 2021 $ 17,031,177 $ 54,160,367 $ 71,191,544 $ 58,541,375


Net (Expense) Revenue and Changes in Net Position

SchoolDepartment

Component UnitProgram Revenues

Primary Government LincolnCounty

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Exhibit C-1

Lincoln County, TennesseeBalance SheetGovernmental FundsJune 30, 2021

Other OtherGeneral Highway / General Govern- Total

Government Public Debt mental GovernmentalGeneral Fund Works Service Funds Funds

ASSETS

Equity in Pooled Cash and Investments $ 8,400,089 $ 3,337,629 $ 3,246,020 $ 3,049,040 $ 1,328,632 $ 19,361,410Accounts Receivable 58,546 82 0 2 2,687 61,317Allowance for Uncollectibles (12,988) 0 0 0 (1,706) (14,694)Due from Other Governments 534,931 0 511,463 0 217,228 1,263,622Property Taxes Receivable 6,856,825 0 1,102,952 1,703,389 0 9,663,166Allowance for Uncollectible Property Taxes (85,791) 0 (13,800) (21,312) 0 (120,903)

Total Assets $ 15,751,612 $ 3,337,711 $ 4,846,635 $ 4,731,119 $ 1,546,841 $ 30,213,918

LIABILITIES

Accounts Payable $ 16,782 $ 0 $ 17,590 $ 0 $ 0 $ 34,372Accrued Payroll 183,472 0 48,398 0 4,289 236,159Due to State of Tennessee 1,719 0 0 0 0 1,719Due to Cities 0 0 0 0 18,231 18,231Due to Other Governments 0 3,337,596 0 0 0 3,337,596Total Liabilities $ 201,973 $ 3,337,596 $ 65,988 $ 0 $ 22,520 $ 3,628,077


Deferred Current Property Taxes $ 6,652,477 $ 0 $ 1,070,082 $ 1,652,625 $ 0 $ 9,375,184Deferred Delinquent Property Taxes 106,352 0 17,107 26,420 0 149,879Other Deferred/Unavailable Revenue 308,134 0 251,923 0 114,175 674,232Total Deferred Inflows of Resources $ 7,066,963 $ 0 $ 1,339,112 $ 1,679,045 $ 114,175 $ 10,199,295

(Continued)

Major FundsNonmajor

Funds

19

Exhibit C-1

Lincoln County, TennesseeBalance SheetGovernmental Funds (Cont.)



FUND BALANCES

Restricted:Restricted for General Government $ 43,066 $ 0 $ 0 $ 0 $ 0 $ 43,066Restricted for Finance 65,681 0 0 0 0 65,681Restricted for Administration of Justice 93,478 0 0 0 0 93,478Restricted for Public Safety 17,407 0 0 0 365,566 382,973Restricted for Public Health and Welfare 95,476 0 0 0 1,044,580 1,140,056Restricted for Highways/Public Works 0 0 3,441,535 0 0 3,441,535

Committed:Committed for General Government 244,363 0 0 0 0 244,363Committed for Public Safety 26,887 0 0 0 0 26,887Committed for Capital Outlay 1,658,267 0 0 0 0 1,658,267Committed for Debt Service 0 0 0 3,052,074 0 3,052,074

Assigned:Assigned for General Government 1,608,615 115 0 0 0 1,608,730Assigned for Administration of Justice 175 0 0 0 0 175Assigned for Public Safety 124,415 0 0 0 0 124,415Assigned for Public Health and Welfare 22,612 0 0 0 0 22,612

Unassigned 4,482,234 0 0 0 0 4,482,234Total Fund Balances $ 8,482,676 $ 115 $ 3,441,535 $ 3,052,074 $ 1,410,146 $ 16,386,546

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 15,751,612 $ 3,337,711 $ 4,846,635 $ 4,731,119 $ 1,546,841 $ 30,213,918


Major FundsNonmajor

Funds

20

Exhibit C-2

Lincoln County, TennesseeReconciliation of the Balance Sheet of Governmental Funds to the Statement of Net PositionJune 30, 2021

Amounts reported for governmental activities in the statementof net position (Exhibit A) are different because:

Total fund balances - balance sheet - governmental funds (Exhibit C-1) $ 16,386,546

(1) Capital assets used in governmental activities are not financialresources and therefore are not reported in the governmental funds. Add: land $ 9,312,266 Add: construction in progress 3,949,848 Add: buildings and improvements net of accumulated depreciation 7,871,209 Add: infrastructure net of accumulated depreciation 10,069,362 Add: other capital assets net of accumulated depreciation 5,807,461 37,010,146

(2) Long-term liabilities are not due and payable in the currentperiod and therefore are not reported in the governmental funds. Less: notes payable $ (525,000) Less: bonds payable (34,500,000) Less: unamortized premium on debt (1,372,724) Less: landfill closure/postclosure care costs (587,736) Less: net OPEB liability (361,572) Less: compensated absences payable (294,228) Less: accrued interest on notes and bonds (226,488) (37,867,748)

(3) Amounts reported as deferred outflows of resources and deferredinflows of resources related to pensions and OPEB will be amortizedand recognized as components of pension expense and OPEB expensein future years. Add: deferred outflows of resources related to pensions $ 581,529 Add: deferred outflows of resources related to OPEB 68,200 Less: deferred inflows of resources related to pensions (463,822) Less: deferred inflows of resources related to OPEB (117,349) 68,558

(4) Net pension assets of the agent plan are not current financialresources and therefore are not reported in the governmental funds. 609,564

(5) Other long-term assets are not available to pay for current periodexpenditures and therefore are deferred in the governmental funds. 824,111

Net position of governmental activities (Exhibit A) $ 17,031,177


21

Exhibit C-3

Lincoln County, TennesseeStatement of Revenues, Expenditures,

and Changes in Fund BalancesGovernmental FundsFor the Year Ended June 30, 2021



RevenuesLocal Taxes $ 10,736,689 $ 0 $ 2,479,303 $ 3,434,532 $ 0 $ 16,650,524Licenses and Permits 393,052 0 0 0 0 393,052Fines, Forfeitures, and Penalties 187,693 0 0 0 51,135 238,828Charges for Current Services 133,218 0 0 0 1,241,395 1,374,613Other Local Revenues 263,801 115 4,758 6,597 1,791 277,062Fees Received From County Officials 1,677,785 0 0 0 0 1,677,785State of Tennessee 1,682,714 0 3,164,723 0 23,663 4,871,100Federal Government 976,814 0 565,662 0 0 1,542,476Other Governments and Citizens Groups 75,160 0 0 0 0 75,160

Total Revenues $ 16,126,926 $ 115 $ 6,214,446 $ 3,441,129 $ 1,317,984 $ 27,100,600

ExpendituresCurrent:

General Government $ 2,065,908 $ 0 $ 0 $ 0 $ 0 $ 2,065,908Finance 1,373,270 0 0 0 27 1,373,297Administration of Justice 1,372,428 0 0 0 11,453 1,383,881Public Safety 7,185,618 0 0 0 39,941 7,225,559Public Health and Welfare 594,412 0 0 0 1,429,300 2,023,712Social, Cultural, and Recreational Services 154,451 0 0 0 0 154,451Agriculture and Natural Resources 171,177 0 0 0 0 171,177Other Operations 1,060,883 0 0 0 0 1,060,883Highways 0 0 8,350,444 0 0 8,350,444

Debt Service:Principal on Debt 0 0 0 2,020,000 0 2,020,000Interest on Debt 0 0 0 1,528,486 0 1,528,486Other Debt Service 0 0 0 62,217 0 62,217

Total Expenditures $ 13,978,147 $ 0 $ 8,350,444 $ 3,610,703 $ 1,480,721 $ 27,420,015

(Continued)

Major FundsNonmajor

Funds

22

Exhibit C-3


and Changes in Fund BalancesGovernmental Funds (Cont.)



Excess (Deficiency) of RevenuesOver Expenditures $ 2,148,779 $ 115 $ (2,135,998) $ (169,574) $ (162,737) $ (319,415)

Net Change in Fund Balances $ 2,148,779 $ 115 $ (2,135,998) $ (169,574) $ (162,737) $ (319,415)Fund Balance, July 1, 2020 6,333,897 0 5,577,533 3,221,648 1,572,883 16,705,961

Fund Balance, June 30, 2021 $ 8,482,676 $ 115 $ 3,441,535 $ 3,052,074 $ 1,410,146 $ 16,386,546


Major FundsNonmajor

Funds

23

Exhibit C-4

Lincoln County, TennesseeReconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of ActivitiesFor the Year Ended June 30, 2021

Amounts reported for governmental activities in the statementof activities (Exhibit B) are different because:

Net change in fund balances - total governmental funds (Exhibit C-3) $ (319,415)

(1) Governmental funds report capital outlays as expenditures. However,in the statement of activities, the cost of these assets is allocated overtheir useful lives and reported as depreciation expense. The differencebetween capital outlays and depreciation is itemized as follows: Add: capital assets purchased in the current period $ 5,257,118 Less: current-year depreciation expense (1,875,231) 3,381,887

(2) The net effect of various miscellaneous transactions involving capitalassets (sales and trade-ins) is to decrease net position. Less: book value of capital assets disposed (8,488)

(3) Revenues in the statement of activities that do not provide currentfinancial resources are not reported as revenues in the funds. Less: deferred delinquent property taxes and other deferred June 30, 2020 $ (1,440,380) Add: deferred delinquent property taxes and other deferred June 30, 2021 824,111 (616,269)

(4) The issuance of long-term debt (e.g., bonds, notes) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmentalfunds. Neither transaction, however, has any effect on net position. Thisamount is the effect of these differences in the treatment of long-termdebt and related items. Add: principal payments on bonds $ 1,940,000 Add: principal payments on notes 80,000 Add: change in premium on debt issuances 182,096 2,202,096

(5) Some expenses reported in the statement of activities do not require

the use of current financial resources and therefore are not reportedas expenditures in the governmental funds. Change in accrued interest payable $ 16,466 Change in landfill closure/postclosure care costs (452,155) Change in net pension asset - agent plan 172,655 Change in deferred outflows of resources related to pensions 92,292 Change in deferred outflows of resources related to OPEB 25,535 Change in deferred inflows of resources related to pensions (166,625) Change in deferred inflows of resources related to OPEB 9,148 Change in net OPEB liability (52,264) Change in compensated absences payable (10,228) (365,176)

Change in net position of governmental activities (Exhibit B) $ 4,274,635


24

Exhibit C-5

Lincoln County, TennesseeStatement of Revenues, Expenditures, and Changes

in Fund Balance - Actual (Budgetary Basis) and BudgetGeneral FundFor the Year Ended June 30, 2021

Actual VarianceRevenues/ with Final

Actual Less: Add: Expenditures Budget -(GAAP Encumbrances Encumbrances (Budgetary PositiveBasis) 7/1/2020 6/30/2021 Basis) Original Final (Negative)

RevenuesLocal Taxes $ 10,736,689 $ 0 $ 0 $ 10,736,689 $ 9,574,722 $ 9,574,722 $ 1,161,967Licenses and Permits 393,052 0 0 393,052 189,300 324,905 68,147Fines, Forfeitures, and Penalties 187,693 0 0 187,693 196,275 196,275 (8,582)Charges for Current Services 133,218 0 0 133,218 114,650 114,650 18,568Other Local Revenues 263,801 0 0 263,801 321,400 352,950 (89,149)Fees Received From County Officials 1,677,785 0 0 1,677,785 1,552,000 1,552,000 125,785State of Tennessee 1,682,714 0 0 1,682,714 1,107,838 2,052,992 (370,278)Federal Government 976,814 0 0 976,814 49,850 1,300,256 (323,442)Other Governments and Citizens Groups 75,160 0 0 75,160 500 44,519 30,641

Total Revenues $ 16,126,926 $ 0 $ 0 $ 16,126,926 $ 13,106,535 $ 15,513,269 $ 613,657

ExpendituresGeneral Government

County Commission $ 164,371 $ 0 $ 0 $ 164,371 $ 192,457 $ 194,857 $ 30,486County Mayor/Executive 203,543 0 0 203,543 213,954 215,154 11,611County Attorney 56,846 0 0 56,846 85,267 85,267 28,421Election Commission 333,410 (11,462) 0 321,948 395,045 418,845 96,897Register of Deeds 236,200 0 0 236,200 248,105 249,305 13,105Planning 247,251 0 68 247,319 253,877 320,457 73,138County Buildings 810,557 (25,318) 2,500 787,739 885,078 1,156,293 368,554Preservation of Records 13,730 (2,500) 0 11,230 19,755 19,756 8,526

FinanceAccounting and Budgeting 409,316 0 0 409,316 462,769 462,768 53,452Property Assessor's Office 240,646 0 0 240,646 258,633 269,133 28,487Reappraisal Program 65,816 0 0 65,816 91,100 80,600 14,784County Trustee's Office 248,628 0 0 248,628 251,090 258,690 10,062County Clerk's Office 299,543 (300) 0 299,243 301,305 302,805 3,562Data Processing 109,321 0 0 109,321 117,374 117,374 8,053

Administration of JusticeCircuit Court 506,961 (230) 37 506,768 530,012 542,287 35,519

(Continued)

Budgeted Amounts

25

Exhibit C-5


in Fund Balance - Actual (Budgetary Basis) and BudgetGeneral Fund (Cont.)



Expenditures (Cont.)Administration of Justice (Cont.)

General Sessions Court $ 192,082 $ 0 $ 0 $ 192,082 $ 188,414 $ 193,589 $ 1,507Chancery Court 246,038 0 138 246,176 254,591 254,591 8,415Juvenile Court 160,416 0 0 160,416 198,263 190,363 29,947Judicial Commissioners 50,764 0 0 50,764 52,243 52,243 1,479Courtroom Security 216,167 0 0 216,167 267,518 267,518 51,351

Public SafetySheriff's Department 3,432,404 (80,722) 66,325 3,418,007 3,173,239 3,618,240 200,233Special Patrols 10,750 0 0 10,750 0 35,306 24,556Jail 3,216,768 (8,270) 41,417 3,249,915 3,588,915 3,672,725 422,810Fire Prevention and Control 298,365 (3,336) 16,614 311,643 288,741 355,425 43,782Civil Defense 227,331 (10,267) 59 217,123 213,451 240,249 23,126

Public Health and WelfareLocal Health Center 400,576 (1,541) 0 399,035 568,728 578,728 179,693Maternal and Child Health Services 37,500 0 0 37,500 37,500 37,500 0Regional Mental Health Center 4,000 0 0 4,000 4,000 4,000 0Other Local Welfare Services 9,158 0 0 9,158 9,158 9,158 0Sanitation Management 143,178 0 0 143,178 156,149 160,649 17,471

Social, Cultural, and Recreational ServicesAdult Activities 14,350 0 0 14,350 14,350 14,350 0Libraries 118,101 0 0 118,101 118,101 118,101 0Parks and Fair Boards 22,000 0 0 22,000 22,000 22,000 0

Agriculture and Natural ResourcesAgricultural Extension Service 109,553 0 0 109,553 112,843 112,843 3,290Forest Service 2,000 0 0 2,000 2,000 2,000 0Soil Conservation 59,624 0 0 59,624 72,829 72,829 13,205

Other OperationsIndustrial Development 102,754 0 0 102,754 102,500 102,754 0Other Economic and Community Development 344,866 0 0 344,866 83,038 445,387 100,521Airport 20,141 0 0 20,141 20,141 20,141 0

(Continued)

Budgeted Amounts

26

Exhibit C-5


in Fund Balance - Actual (Budgetary Basis) and BudgetGeneral Fund (Cont.)



Expenditures (Cont.)Other Operations (Cont.)

Veterans' Services $ 26,043 $ 0 $ 0 $ 26,043 $ 35,193 $ 38,833 $ 12,790Contributions to Other Agencies 10,000 0 0 10,000 10,000 10,000 0COVID-19 Grant #1 76,445 0 21,000 97,445 0 100,000 2,555COVID-19 Grant #2 14,213 (35) 0 14,178 0 28,855 14,677Miscellaneous 466,421 0 0 466,421 501,695 501,695 35,274

Total Expenditures $ 13,978,147 $ (143,981) $ 148,158 $ 13,982,324 $ 14,401,421 $ 15,953,663 $ 1,971,339

Excess (Deficiency) of RevenuesOver Expenditures $ 2,148,779 $ 143,981 $ (148,158) $ 2,144,602 $ (1,294,886) $ (440,394) $ 2,584,996

Net Change in Fund Balance $ 2,148,779 $ 143,981 $ (148,158) $ 2,144,602 $ (1,294,886) $ (440,394) $ 2,584,996Fund Balance, July 1, 2020 6,333,897 (143,981) 0 6,189,916 5,208,108 6,189,916 0

Fund Balance, June 30, 2021 $ 8,482,676 $ 0 $ (148,158) $ 8,334,518 $ 3,913,222 $ 5,749,522 $ 2,584,996


Budgeted Amounts

27

Exhibit C-6


in Fund Balance - Actual and BudgetOther General Government FundFor the Year Ended June 30, 2021

Variancewith FinalBudget -Positive

Actual Original Final (Negative)

RevenuesOther Local Revenues $ 115 $ 0 $ 115 $ 0

Total Revenues $ 115 $ 0 $ 115 $ 0

Total Expenditures $ 0 $ 0 $ 0 $ 0

Excess (Deficiency) of RevenuesOver Expenditures $ 115 $ 0 $ 115 $ 0

Net Change in Fund Balance $ 115 $ 0 $ 115 $ 0Fund Balance, July 1, 2020 0 0 0 0

Fund Balance, June 30, 2021 $ 115 $ 0 $ 115 $ 0


Budgeted Amounts

28

Exhibit C-7


in Fund Balance - Actual (Budgetary Basis) and BudgetHighway/Public Works FundFor the Year Ended June 30, 2021


Actual Add: Expenditures Budget -(GAAP Encumbrances (Budgetary PositiveBasis) 6/30/2021 Basis) Original Final (Negative)

RevenuesLocal Taxes $ 2,479,303 $ 0 $ 2,479,303 $ 2,383,601 $ 2,383,601 $ 95,702Other Local Revenues 4,758 0 4,758 5,000 5,000 (242)State of Tennessee 3,164,723 0 3,164,723 2,224,071 2,645,710 519,013Federal Government 565,662 0 565,662 0 0 565,662

Total Revenues $ 6,214,446 $ 0 $ 6,214,446 $ 4,612,672 $ 5,034,311 $ 1,180,135

ExpendituresHighways

Administration $ 254,174 $ 0 $ 254,174 $ 275,177 $ 279,680 $ 25,506Highway and Bridge Maintenance 3,126,531 3,947 3,130,478 3,276,987 3,610,412 479,934Operation and Maintenance of Equipment 521,905 4,980 526,885 782,290 782,290 255,405Quarry Operations 257,604 0 257,604 351,376 353,978 96,374Other Charges 117,519 0 117,519 145,600 145,600 28,081Employee Benefits 75,441 0 75,441 106,000 106,000 30,559Capital Outlay 3,997,270 772 3,998,042 4,103,050 4,184,159 186,117

Total Expenditures $ 8,350,444 $ 9,699 $ 8,360,143 $ 9,040,480 $ 9,462,119 $ 1,101,976

Excess (Deficiency) of RevenuesOver Expenditures $ (2,135,998) $ (9,699) $ (2,145,697) $ (4,427,808) $ (4,427,808) $ 2,282,111

Net Change in Fund Balance $ (2,135,998) $ (9,699) $ (2,145,697) $ (4,427,808) $ (4,427,808) $ 2,282,111Fund Balance, July 1, 2020 5,577,533 0 5,577,533 5,446,508 5,577,533 0

Fund Balance, June 30, 2021 $ 3,441,535 $ (9,699) $ 3,431,836 $ 1,018,700 $ 1,149,725 $ 2,282,111


Budgeted Amounts

29

Exhibit D-1

Lincoln County, TennesseeStatement of Net Position Proprietary FundsJune 30, 2021

Lincoln County

Lincoln Board ofHealth Public System Utilities Total

ASSETS

Current Assets: Cash and Cash Equivalents $ 10,838,716 $ 7,945,896 $ 18,784,612 Accounts Receivable 6,010,463 315,313 6,325,776 Allowance for Uncollectible (2,181,918) (2,200) (2,184,118) Inventories 630,688 395,428 1,026,116 Prepaid Items 245,888 25,193 271,081 Other Assets 481,375 378,702 860,077Total Current Assets $ 16,025,212 $ 9,058,332 $ 25,083,544

Noncurrent Assets: Restricted Cash $ 22,315 $ 170,100 $ 192,415 Special Funds 11,511,522 0 11,511,522 Net Pension Asset - Agent Plan 1,080,209 1,257,276 2,337,485 Other Assets 188,405 750 189,155 Capital Assets (Net of Accumulated Depreciation): Land 1,152,069 540,381 1,692,450 Construction in Progress 19,731 213,301 233,032 Buildings and Improvements 6,362,376 28,338,725 34,701,101 Ground Improvements 914,373 0 914,373 Other Capital Assets 3,222,296 0 3,222,296Total Noncurrent Assets $ 24,473,296 $ 30,520,533 $ 54,993,829

Total Assets $ 40,498,508 $ 39,578,865 $ 80,077,373

DEFERRED OUTFLOWS OF RESOURCES

Deferred Amount on Refunding $ 112,140 $ 0 $ 112,140Pension Changes in Experience 61,832 95,158 156,990Pension Changes in Earnings on Investments 237,142 0 237,142Pension Changes in Assumptions 106,803 58,162 164,965Pension Changes in Proportion 31,415 27,947 59,362Pension Contributions After Measurement Date 637,249 110,870 748,119Total Deferred Outflows of Resources $ 1,186,581 $ 292,137 $ 1,478,718

(Continued)

Business-type Activities -Major Enterprise Funds

30

Exhibit D-1

Lincoln County, TennesseeStatement of Net Position Proprietary Funds (Cont.)

LincolnLincoln CountyCounty Board ofHealth Public System Utilities Total

LIABILITIES

Current Liabilities: Accounts Payable $ 908,183 $ 193,043 $ 1,101,226 Accrued Liabilities 672,142 0 672,142 Accrued Interest Payable 68,929 41,587 110,516 Accrued Leave 911,831 62,867 974,698 Current Maturities of Long-term Debt 805,734 489,060 1,294,794 Patient Trust Funds 22,315 0 22,315 Other Liabilities 517,311 14,516 531,827 Customer Deposits 0 170,100 170,100 Unearned Revenue 7,394,529 25,800 7,420,329Total Current Liabilities $ 11,300,974 $ 996,973 $ 12,297,947

Noncurrent Liabilities: Long-term Debt $ 5,684,641 $ 8,465,634 $ 14,150,275Total Noncurrent Liabilities $ 5,684,641 $ 8,465,634 $ 14,150,275

Total Liabilities $ 16,985,615 $ 9,462,607 $ 26,448,222


Pension Changes in Experience $ 821,938 $ 103,084 $ 925,022Pension Changes in Proportion 22,480 0 22,480Total Deferred Inflows of Resources $ 844,418 $ 103,084 $ 947,502

NET POSITION

Net Investment in Capital Assets $ 5,292,610 $ 20,126,520 $ 25,419,130Restricted for Debt Service 1,098,515 0 1,098,515Restricted for Other Purposes 80,725 1,257,276 1,338,001Restricted for Pensions 235,791 0 235,791Unrestricted 17,147,415 8,921,515 26,068,930

Total Net Position $ 23,855,056 $ 30,305,311 $ 54,160,367



31

Exhibit D-2Lincoln County, TennesseeStatement of Revenues, Expenses, and Changes in Net PositionProprietary FundsFor the Year Ended June 30, 2021

Lincoln County


Operating Revenues Charges for Current Services $ 37,523,866 $ 5,790,744 $ 43,314,610 Other Local Revenues 3,890,110 435,520 4,325,630Total Operating Revenues $ 41,413,976 $ 6,226,264 $ 47,640,240

Operating Expenses Public Health and Welfare $ 39,746,334 $ 3,351,025 $ 43,097,359 Depreciation Expense 1,822,923 1,470,553 3,293,476Total Operating Expenses $ 41,569,257 $ 4,821,578 $ 46,390,835Operating Income (Loss) $ (155,281) $ 1,404,686 $ 1,249,405

Nonoperating Revenues (Expenses) Investment Income $ 112,114 $ 7,958 $ 120,072 Interest Expense (289,478) (177,894) (467,372) Tap Fees in Excess of Cost 0 65,829 65,829 Amortization (26,657) 0 (26,657) CARES Act PPP Revenue 4,279,900 0 4,279,900 Provider Relief Fund Revenue 5,414,865 0 5,414,865 Noncapital Grants and Contributions 199,730 0 199,730 Gain (Loss) on Disposal of Capital Assets (6,693) 24,236 17,543Total Nonoperating Revenues (Expenses) $ 9,683,781 $ (79,871) $ 9,603,910

Income Before Grants and Contributions $ 9,528,500 $ 1,324,815 $ 10,853,315Capital Contributions 34,565 110,676 145,241Change in Net Position $ 9,563,065 $ 1,435,491 $ 10,998,556Net Position, July 1, 2020 14,291,991 28,869,820 43,161,811

Net Position, June 30, 2021 $ 23,855,056 $ 30,305,311 $ 54,160,367



32

Exhibit D-3

Lincoln County, TennesseeStatement of Cash FlowsProprietary FundsFor the Year Ended June 30, 2021

Lincoln County


Cash Flows from Operating Activities Receipts from Customers and Users $ 42,194,720 $ 6,234,250 $ 48,428,970 Payments to Employees (23,662,963) (1,261,977) (24,924,940) Payments to Suppliers (17,232,329) (2,260,268) (19,492,597)Net Cash Provided By (Used In) Operating Activities $ 1,299,428 $ 2,712,005 $ 4,011,433

Cash Flows from Capital and Related Financing Activities Acquisition/Construction of Capital Assets $ 1,262,696 $ (973,129) $ 289,567 Proceeds from Sale of Assets (2,225,392) 26,111 (2,199,281) Principal Payments on Long-term Debt (1,004,465) (474,797) (1,479,262) Interest Payments on Long-term Debt (266,708) (206,137) (472,845) Contributions, Grants, and Transfers in Aid of Construction 0 173,005 173,005 Capital Contributions 34,565 0 34,565Net Cash Provided By (Used In) Capital and Related Financing Activities $ (2,199,304) $ (1,454,947) $ (3,654,251)

Cash Flows from Noncapital Financing Activities Noncapital Grants and Contributions $ 199,730 $ 0 $ 199,730 Proceeds (Recoupment) of Medicare Accelerated Payment Advances (369,513) 0 (369,513) Proceeds from Provider Relief Fund Revenue 487,123 0 487,123Net Cash Provided By (Used In) Noncapital Financing Activities $ 317,340 $ 0 $ 317,340

Cash Flows from Investing Activities Investment Income $ 110,346 $ 7,958 $ 118,304 (Increase)/Decrease in Special Funds 309,704 0 309,704Net Cash Provided By (Used In) Investing Activities $ 420,050 $ 7,958 $ 428,008

Net Increase (Decrease) in Cash $ (162,486) $ 1,265,016 $ 1,102,530Cash, July 1, 2020 11,001,202 6,850,980 17,852,182

Cash, June 30, 2021 $ 10,838,716 $ 8,115,996 $ 18,954,712

(Continued)

Major Enterprise FundsBusiness-type Activities -

33

Exhibit D-3

Lincoln County, TennesseeStatement of Cash FlowsProprietary Funds (Cont.)

LincolnLincoln CountyCounty Board ofHealth Public System Utilities Total

Reconciliation of Net Operating Income (Loss) to Net Cash Provided By (Used In) Operating Activities Operating (Loss) Income $ (155,281) $ 1,404,686 $ 1,249,405 Adjustments to Reconcile Net Operating Income to Net Cash Provided By (Used In) Operating Activities: Depreciation Expense 1,822,923 1,470,553 3,293,476 Provision for Bad Debts 5,679,585 0 5,679,585 Amortization of Deferred Pension Adjustments 0 (166,835) (166,835) Investment in Insurance Funds, Net 6,233 0 6,233 (Increase) Decrease in Accounts Receivable (5,582,413) 12,804 (5,569,609) (Increase) Decrease in Inventories (6,947) (18,014) (24,961) (Increase) Decrease in Prepaid Items (47,148) 0 (47,148) (Increase) Decrease in Pension Assets (251,215) 0 (251,215) (Increase) Decrease in Deferred Outflows Related to Pensions (179,163) 0 (179,163) (Increase) Decrease in Other Assets 259,162 (32,137) 227,025 Increase (Decrease) in Accounts Payable (6,936) 21,251 14,315 Increase (Decrease) in Customer Deposits 0 19,710 19,710 Increase (Decrease) in Accrued Payroll 0 9,088 9,088 Increase (Decrease) in Deferred Inflows Related to Pensions 248,517 0 248,517 Increase (Decrease) in Estimated Third-party Payor Settlements, Net (420,582) 0 (420,582) Increase (Decrease) in Accrued Liabilities (67,307) (9,101) (76,408)

Net Cash Provided By (Used In) Operating Activities $ 1,299,428 $ 2,712,005 $ 4,011,433

Reconciliation of Cash With Statement of Net Position Cash Per Net Position $ 10,838,716 $ 7,945,896 $ 18,784,612 Restricted Cash Per Net Position 0 170,100 170,100

Cash, June 30, 2021 $ 10,838,716 $ 8,115,996 $ 18,954,712

Schedule of Noncash Financing and Investing Activities: CARES Act PPP Loan Advance Forgiveness $ 4,279,900 $ 0 $ 4,279,900 Amortization of Bond Premium 0 24,142 24,142



34

Exhibit E-1

Lincoln County, TennesseeStatement of Net PositionFiduciary FundsJune 30, 2021

ASSETS

Cash $ 2,255,583Equity in Pooled Cash and Investments 441,843Accounts Receivable 18,982Due from Other Governments 837,668Property Taxes Receivable 1,278,762Allowance for Uncollectible Property Taxes (16,000)

Total Assets $ 4,816,838

LIABILITIES

Accrued Payroll $ 1,093Due to Other Taxing Units 954,968

Total Liabilities $ 956,061


Deferred Current Property Taxes $ 1,260,486

Total Deferred Inflows of Resources $ 1,260,486

NET POSITION

Restricted for Individuals, Organizations and Other Governments $ 2,600,291

Total Net Position $ 2,600,291


CustodialFunds

35

Exhibit E-2

Lincoln County, TennesseeStatement of Changes in Net PositionFiduciary FundsFor the Year Ended June 30, 2021

CustodialFunds

ADDITIONS

Sales Tax Collections for Other Governments $ 4,614,812ADA - Educational Funds Collected for Cities 1,262,878Fines/Fees and Other Collections 13,189,349Drug Task Force Collections 256,077District Attorney General Collections 13,322

Total Additions $ 19,336,438

DEDUCTIONS

Payment of Sales Tax Collections to Other Governments $ 3,235,115Payments to City School Systems 2,717,954Payments to State 6,052,856Payments to County 4,903,239Payments to City 77,191Payments to Individuals and Others 1,826,680Payment of Drug Task Force Expenses 220,612Payment of District Attorney General Expenses 8,452

Total Deductions $ 19,042,099

Net Increase (Decrease) in Fiduciary in Net Position $ 294,339Net Position, July 1, 2020 0Restatement - See Note I.D.10. 2,305,952

Net Position, June 30, 2021 $ 2,600,291


36

Note Page(s)

I. Summary of Significant Accounting PoliciesA. Reporting Entity 38B. Government-wide and Fund Financial Statements 39C. Measurement Focus, Basis of Accounting, and Financial

Statement Presentation 40D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and

Net Position/Fund Balance1. Deposits and Investments 432. Receivables and Payables 443. Prepaid Items 454. Restricted Assets 455. Capital Assets 456. Deferred Outflows/Inflows of Resources 467. Compensated Absences 478. Long-term Debt and Long-term Obligations 479. Net Position and Fund Balance 48

10. Restatements 50E. Pension Plans 50F. Other Postemployment Benefits (OPEB) Plans 51

II. Reconciliation of Government-wide and Fund Financial StatementsA. Explanation of Certain Differences Between the Governmental Fund

Balance Sheet and the Government-wide Statement of Net Position 51B. Explanation of Certain Differences Between the Governmental Fund

Statement of Revenues, Expenditures, and Changes in Fund Balancesand the Government-wide Statement of Activities 52

III. Stewardship, Compliance, and AccountabilityA. Budgetary Information 52B. Highland Rim School - Misappropriation of Funds 53

IV. Detailed Notes on All FundsA. Deposits and Investments 53B. Capital Assets 58C. Interfund Receivables, Payables, and Transfers 60D. Long-term Debt 61E. Long-term Obligations 63F. On-Behalf Payments 64

V. Other InformationA. Risk Management 65B. Accounting Changes 66C. Contingent Liabilities 67D. Changes in Administration 67E. Landfill Postclosure Care Costs 67F. Joint Ventures 68G. Retirement Commitments

1. Tennessee Consolidated Retirement System (TCRS) 702. Deferred Compensation 87

H. Other Postemployment Benefits (OPEB) 87I. Office of Central Accounting, Budgeting, and Purchasing 96J. Purchasing Law 96

VI. Other Notes - Lincoln Health System (Enterprise Fund) 97VII. Other Notes - Lincoln County Board of Public Utilities (Enterprise Fund) 121

LINCOLN COUNTY, TENNESSEEIndex of Notes to the Financial Statements

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LINCOLN COUNTY, TENNESSEE NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended June 30, 2021 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Lincoln County’s financial statements are presented in accordance with generally accepted accounting principles (GAAP). The Governmental Accounting Standards Board (GASB) is responsible for establishing GAAP for state and local governments. The following are the more significant accounting policies of Lincoln County: A. Reporting Entity

Lincoln County is a public municipal corporation governed by an elected 24-member board. As required by GAAP, these financial statements present Lincoln County (the primary government) and its component units. Although required by GAAP, the financial statements of the Lincoln County Emergency Communications District, a component unit requiring discrete presentation, were excluded from this report due to materiality calculations; therefore, the effect of the omission did not affect the independent auditor’s opinion thereon. The component units discussed below are included in the county's reporting entity because of the significance of their operational or financial relationships with the county.

Discretely Presented Component Units – The following entities meet the criteria for discretely presented component units of the county. They are reported in separate columns in the government-wide financial statements to emphasize that they are legally separate from the county.

The Lincoln County School Department operates the public school system in the county, and the voters of Lincoln County elect its board. The school department is fiscally dependent on the county because it may not issue debt, and its budget and property tax levy are subject to the county commission’s approval. The school department’s taxes are levied under the taxing authority of the county and are included as part of the county’s total tax levy.

The Lincoln County Emergency Communications District provides a simplified means of securing emergency services through a uniform emergency number for the residents of Lincoln County, and the Lincoln County Commission appoints its governing body. The district is funded primarily through a service charge levied on telephone services. Before the issuance of most debt instruments, the district must obtain the county commission’s approval. The financial statements of the Lincoln County Emergency Communications District were not material to the component units’ opinion unit and therefore have been omitted from this report.

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The Lincoln County School Department does not issue separate financial statements from those of the county. Therefore, basic financial statements of the school department are included in this report as listed in the table of contents. Complete financial statements of the Lincoln County Emergency Communications District can be obtained from its administrative office at the following address:

Administrative Office:

Lincoln County Emergency Communications District 414 Jay Street Fayetteville, TN 37334

B. Government-wide and Fund Financial Statements

The government-wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. However, when applicable, interfund services provided and used between functions are not eliminated in the process of consolidation in the Statement of Activities. Governmental activities are normally supported by taxes and intergovernmental revenues. Business-type activities, which rely to a significant extent on fees and charges, are required to be reported separately from governmental activities in government-wide financial statements. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The Lincoln County School Department component unit only reports governmental activities in the government-wide financial statements. The Statement of Activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. Program revenues include (1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function, and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. Taxes and other items not properly included among program revenues are reported instead as general revenues. Lincoln County issues all debt for the discretely presented Lincoln County School Department. There were no debt issues contributed by the county to the school department during the year ended June 30, 2021.

Separate financial statements are provided for governmental funds, proprietary funds (enterprise), and fiduciary funds. The fiduciary funds are excluded from the government-wide financial statements. Major individual

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governmental and enterprise funds are reported as separate columns in the fund financial statements.

C. Measurement Focus, Basis of Accounting, and Financial Statement

Presentation

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary funds and fiduciary funds financial statements. Revenues are recorded when earned, and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Fund financial statements of Lincoln County are organized into funds, each of which is considered to be a separate accounting entity. Each fund is accounted for by providing a separate set of self-balancing accounts that constitute its assets, deferred outflow of resources, liabilities, deferred inflow of resources, fund equity, revenues, and expenditures/expenses. Funds are organized into three major categories: governmental, proprietary, and fiduciary. An emphasis is placed on major funds within the governmental and proprietary categories. Lincoln County reports two proprietary funds (both major enterprise funds). Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds. Major individual governmental and enterprise funds are reported as separate columns in the fund financial statements. All other governmental funds are aggregated into a single column on the fund financial statements. Fiduciary funds in total are reported in a single column. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they become both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the county considers revenues to be available if they are collected within 30 days after year-end. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met and the revenues are available. Lincoln County considers grants and similar revenues to be available if they are collected within 30 days after year-end. Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred. Principal and interest on long-term debt are recognized as fund liabilities when due or when amounts have been accumulated in the General Debt Service Fund for payments to be made early in the following year.

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Property taxes for the period levied, in-lieu-of tax payments, sales taxes, interest, and miscellaneous taxes are all considered to be susceptible to accrual and have been recognized as revenues of the current period. Applicable business taxes, litigation taxes, state-shared excise taxes, fines, forfeitures, and penalties are not susceptible to accrual since they are not measurable (reasonably estimable). All other revenue items are considered to be measurable and available only when the county receives cash.

Fiduciary funds financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recognized when earned, and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Fiduciary fund reporting focuses on net position and changes in net position. The fiduciary fund category includes custodial funds. Lincoln County reports the following major governmental funds:

General Fund – This is the county’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. Other General Government Fund – This special revenue fund accounts for funding related to the Coronavirus State and Local Fiscal Recovery Funds, established by the American Rescue Plan Act of 2021, received by the county to be used to respond to acute pandemic response needs, fill revenue shortfalls, and support communities and populations hit by the COVID-19 crisis. Highway/Public Works Fund – This special revenue fund accounts for transactions of the county’s highway department. Local and state gasoline/fuel taxes are the foundational revenues of this fund. General Debt Service Fund – This fund accounts for the resources accumulated and payments made for principal and interest on long-term general obligation debt of governmental funds.

Lincoln County reports the following major proprietary funds:

Lincoln Health System Fund – This fund accounts for the financial activities of the Lincoln Medical Center (medical center), Lincoln Medical Center EMS (ambulance service), Lincoln Medical Home Health and Hospice (home health care and hospice), Patrick Rehab Center (rehab center), and Donalson Care Center (care center).

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Lincoln County Board of Public Utilities Fund – This fund accounts for water distribution services and wastewater services to areas of the county not served by existing municipal systems.

Additionally, Lincoln County reports the following fund type:

Custodial Funds – These funds account for amounts collected in a custodial capacity by the constitutional officers, local sales taxes received by the state to be forwarded to the various cities in Lincoln County, the city school system’s share of educational revenues, funds held for the benefit of the Judicial District Drug Task Force, and restricted revenues held for the benefit of the Office of District Attorney General.

The discretely presented Lincoln County School Department reports the following major governmental funds:

General Purpose School Fund – This fund is the primary operating fund for the school department. It is used to account for general operations of the school department.

Education Capital Projects Fund – This fund is used to account for the school department building construction and renovations. Other Capital Projects Fund – This fund accounts for the receipt of debt issued by Lincoln County and contributed to the school department for building construction and renovations.

Additionally, the Lincoln County School Department reports the following fund type:

Special Revenue Funds – These funds account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects.

The school department reports a nonmajor special revenue fund (Internal School Fund) which is used to account for funds held at the individual schools for internal school use such as the purchase of supplies, school clubs, and student activities. Collections from students and school activities are the foundational revenues of this fund. The current year (FY 21) report was not available from the auditor of the Internal School Fund in time for inclusion in this report. Therefore, the prior year balances (FY 20) are presented in this report. We do not believe using the prior year balances will affect the independent auditor’s opinion on the Aggregate Discretely Presented Component Units. A more detailed reporting of the fund activities at each individual school may be found at https://www.comptroller.tn.gov/office-functions/la/reports/find-other-audits.html.

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https://www.comptroller.tn.gov/office-functions/la/reports/find-other-audits.html

https://www.comptroller.tn.gov/office-functions/la/reports/find-other-audits.html

Amounts reported as program revenues include (1) charges to customers or applicants for goods, services, or privileges provided; (2) operating grants and contributions; and (3) capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes.

D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net

Position/Fund Balance

1. Deposits and Investments State statutes authorize the government to make direct investments in bonds, notes, or treasury bills of the U.S. government and obligations guaranteed by the U.S. government or any of its agencies; deposit accounts at state and federal chartered banks and savings and loan associations; repurchase agreements; the State Treasurer’s Investment Pool; the State Treasurer’s Intermediate Term investment Fund; bonds of any state or political subdivision rated A or higher by any nationally recognized rating service; nonconvertible debt securities of certain federal government sponsored enterprises; the county’s own legally issued bonds or notes. The county trustee maintains a cash and internal investment pool that is used by all funds (excluding the Lincoln Health System and Lincoln County Board of Public Utilities, enterprise funds) and the discretely presented Lincoln County School Department. Each fund’s portion of this pool is displayed on the balance sheets or statements of net position as Equity in Pooled Cash and Investments. Most income from these pooled investments is assigned to the General and General Purpose School funds. Lincoln County (excluding the Lincoln Health System and Lincoln County Board of Public Utilities, enterprise funds) and the school department have adopted a policy of reporting U.S. Treasury obligations, U.S. agency obligations, and repurchase agreements with maturities of one year or less when purchased on the balance sheet at amortized cost. Certificates of deposit are reported at cost. Investments in the State Treasurer’s Investment Pool are reported at amortized cost using a stable net asset value. The primary oversight responsibility for the investments and operations of the State Treasurer’s Investment Pool rests with the Funding Board of the State of Tennessee (Funding Board). The Funding Board has established an investment policy that is administered by the state treasurer. These policies were designed to comply with generally accepted accounting principles. In addition, state statutes require the state treasurer to administer the pool under the same terms and conditions, including collateral requirements, as prescribed for other funds invested by the state treasurer. Compliance with Funding Board policies is audited by

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the Tennessee Comptroller of the Treasury, Division of State Audit. The latest audit opinion issued by the Division of State Audit concluded that the State Treasurer’s Investment Pool complied with accounting principles generally accepted in the United States of America. Investments in the State Treasurer’s Intermediate Term Investment Fund are reported at amortized cost using a floating net asset value. The primary oversight responsibility for the investments and operations of the State Treasurer’s Intermediate Term Investment Fund rests with the Funding Board of the State of Tennessee (Funding Board). The Funding Board has established an investment policy that is administered by the state treasurer. These policies were designed to comply with generally accepted accounting principles. In addition, state statutes require the state treasurer to administer the pool under the same terms and conditions as prescribed for other funds invested by the state treasurer. Compliance with Funding Board policies is audited by the Tennessee Comptroller of the Treasury, Division of State Audit. The latest audit opinion issued by the Division of State Audit concluded that the State Treasurer’s Intermediate Term Investment Fund complied with accounting principles generally accepted in the United States of America. Lincoln County had no investments in the State Treasurer’s Intermediate Term Investment Fund during the year. All other investments are reported at fair value.

2. Receivables and Payables

Activity between funds for unremitted current collections outstanding at the end of the fiscal year is referred to as due to/from other funds. All property taxes and solid waste receivables are shown with an allowance for uncollectible. Solid waste receivables allowance for uncollectible is based on historical collection data. The allowance for uncollectible property taxes is equal to less than one percent of total taxes levied. Property taxes receivable are recognized as of the date an enforceable legal claim to the taxable property arises. This date is January 1 and is referred to as the lien date. However, revenues from property taxes are recognized in the period for which the taxes are levied, which is the ensuing fiscal year. Since, the receivable is recognized before the period of revenue recognition, the entire amount of the receivable, less an estimated allowance for uncollectible taxes, is reported as a deferred inflow of resources as of June 30.

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Property taxes receivable are also reported as of June 30 for the taxes that are levied, collected, and reported as revenue during the current fiscal year. These property taxes receivable are presented on the balance sheet as a deferred inflow of resources to reflect amounts not available as of June 30. Property taxes collected within 30 days of year-end are considered available and accrued. The allowance for uncollectible taxes represents the estimated amount of the receivable that will be filed in court for collection. Delinquent taxes filed in court for collection are not included in taxes receivable since they are neither measurable nor available. Property taxes are levied as of the first Monday in October. Taxes become delinquent and begin accumulating interest and penalty the following March 1. Suit must be filed in Chancery Court between the following February 1 to April 1 for any remaining unpaid taxes. Additional costs attach to delinquent taxes after a court suit has been filed.

3. Prepaid Items

Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both the government-wide and fund financial statements. The cost of prepaid items is recorded as an expenditure when consumed rather than when purchased. Prepaid items are offset in the nonspendable fund balance account in governmental funds.

4. Restricted Assets Restricted assets consist of amounts held in a pension stabilization trust by the Tennessee Consolidated Retirement System (TCRS) for the benefit of the discretely presented Lincoln County School Department’s Teacher Retirement Plan. The purpose of this trust is to accumulate funds to provide stabilization (smoothing) of retirement costs to the school system in times of fluctuating investment returns and market downturns. These funds are held and invested by TCRS pursuant to an irrevocable agreement and may only be used for the benefit of the Lincoln County School Department to fund retirement benefits upon approval of the TCRS Board of Directors. To date, the Lincoln County School Department has not withdrawn any funds from the trust to pay pension cost. Trust documents provide that the funds are not subject to the claims of general creditors of the school department.

5. Capital Assets

Governmental funds do not capitalize the cost of capital outlays; these funds report capital outlays as expenditures upon acquisition.

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Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, and similar items), are reported in the governmental and business-type columns in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of $25,000 (infrastructure $25,000) or more and an estimated useful life of more than three years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Property, plant, equipment, and infrastructure of the primary government (excluding the Lincoln Health System and Lincoln County Board of Public Utilities, enterprise funds) and the discretely presented school department are depreciated using the straight-line method over the following estimated useful lives:

6. Deferred Outflows/Inflows of Resources

In addition to assets, the Statement of Net Position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The government has items that qualify for reporting in this category. Accordingly, these items are reported in the government-wide Statement of Net Position. These items are for pension changes in experience, investment earnings, assumptions, and proportion; pension contributions after measurement date; OPEB changes in experience, assumptions, and proportion; OPEB benefits paid after measurement date; and deferred charges on refunding. A deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt.

Assets Years

Buildings and Improvements 20 - 40Other Capital Assets 3 - 15Infrastructure: Roads 10 - 15 Bridges 40

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In addition to liabilities, the Statement of Net Position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue, etc.) until that time. The government has items that qualify for reporting in this category. Accordingly, the items are reported in the government-wide Statement of Net Position and the governmental funds balance sheet. These items are from the following sources: current and delinquent property taxes; pension changes in experience and proportion; OPEB changes in experience, assumptions, and proportion; and various receivables for revenues, which do not meet the availability criteria for governmental funds. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available.

7. Compensated Absences

It is the policy of the Lincoln County general government to allow two weeks of vacation after one year of service, with a maximum accumulation of 20 days, which will be paid to employees upon separation from service. Highway department employees are allowed two weeks of vacation after one year of service, with no accumulation of unused vacation days. Support personnel of the discretely presented Lincoln County School Department earn one day of vacation for each 20 days of employment with a maximum accumulation of 15 days, which will be paid to employees upon separation from service. There is no liability for unpaid accumulated sick leave since neither Lincoln County nor the school department has a policy to pay any amounts when employees separate from service with the government. All vacation pay is accrued when incurred in the government-wide financial statements for the county and the discretely presented school department. A liability for vacation pay is reported in governmental funds only if amounts have matured, for example, as a result of employee resignations and retirements.

8. Long-term Debt and Long-term Obligations

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

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component of interest expense in a systematic and rational manner over the remaining life of the refunded debt or the life of the new debt issued, whichever is shorter. In the fund financial statements, governmental funds recognize debt premiums and discounts, as well as debt issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources, while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Only the matured portion (the portion that has come due for payment) of long-term indebtedness, including bonds payable, is recognized as a liability and expenditure in the governmental fund financial statements. Liabilities and expenditures for other long-term obligations, including compensated absences, other postemployment benefits, and landfill postclosure care costs, are recognized to the extent that the liabilities have matured (come due for payment) each period.

9. Net Position and Fund Balance

In the government-wide financial statements and the proprietary funds in the fund financial statements, equity is classified as net position and displayed in three components:

a. Net investment in capital assets – Consists of capital assets, including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets.

b. Restricted net position – Consists of net position with

constraints placed on the use either by (1) external groups such as creditors, grantors, contributors, or laws or regulations of other governments or (2) law through constitutional provisions or enabling legislation.

c. Unrestricted net position – All other net position that does not

meet the definition of restricted or net investment in capital assets.

As of June 30, 2021, Lincoln County had $29,700,000 in outstanding debt for capital purposes for the discretely presented Lincoln County School Department. In accordance with state statutes, certain county school debt proceeds must be shared with other public school systems

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in the county (Fayetteville City School System) based on an average daily attendance proration. This debt is a liability of Lincoln County, but the capital assets acquired are reported in the financial statements of the school department and the Fayetteville City School System. Therefore, Lincoln County has incurred a liability significantly decreasing its unrestricted net position with no corresponding increase in the county’s capital assets. It is the county’s policy that restricted amounts would be reduced first followed by unrestricted amounts when expenditures are incurred for purposes for which both restricted and unrestricted fund balance is available. Also, it is the county’s policy that committed amounts would be reduced first, followed by assigned amounts, and then unassigned amounts when expenditures are incurred for purposes for which amounts in any of these unrestricted fund balance classifications could be used. In the fund financial statements, governmental funds report fund balance in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in these funds can be spent. These classifications may consist of the following:

Nonspendable Fund Balance – includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact.

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

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

Assigned Fund Balance – includes amounts that are constrained by the county’s intent to be used for specific purposes but are neither restricted nor committed (excluding stabilization arrangements). The county commission has by resolution authorized the county’s Financial Management Committee to make assignments for the general government. The Board of Education makes assignments for the school department.

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Unassigned Fund Balance – includes the residual classification of the General and General Purpose School funds. This classification represents fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the General and General Purpose School funds.

10. Restatements

Due to the implementation of GASB Statement 84, a special revenue fund (Internal School Fund) is reflected in the financial statements of the discretely presented Lincoln County School Department. A restatement of $519,185 has been presented to reflect the beginning balance of this fund. In prior years, the custodial funds had no measurement focus. However, due to the implementation of GASB Statement 84, the beginning balance of these funds has been restated by $2,305,952 using the economic measurement focus and the accrual basis of accounting.

E. Pension Plans

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

For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Teacher Retirement Plan and the Teacher Legacy Pension Plan in the Tennessee Consolidated Retirement System, and additions to/deductions from fiduciary net position have been determined on the same basis as they are reported by the TCRS. For this purpose, benefits (including refunds of employee contributions) are recognized when due and payable in accordance with the

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benefit terms of the Teacher Retirement Plan and the Teacher Legacy Pension Plan. Investments are reported at fair value.

F. Other Postemployment Benefit (OPEB) Plans

Primary Government For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, have been determined on the same basis as they are reported by Lincoln County. For this purpose, Lincoln County recognizes benefit payments when due and payable in accordance with benefit terms. Lincoln County’s OPEB plan is not administered through a trust. Discretely Presented Lincoln County School Department

For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, have been determined on the same basis as they are reported by the discretely presented Lincoln County School Department. For this purpose, the school department recognizes benefit payments when due and payable in accordance with benefit terms. The school department’s OPEB plan is not administered through a trust.

II. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL

STATEMENTS

A. Explanation of certain differences between the governmental fund balance sheet and the government-wide Statement of Net Position

Primary Government

Exhibit C-2 includes explanations of the nature of individual elements of items required to reconcile the balance sheet of governmental funds with the government-wide Statement of Net Position. Discretely Presented Lincoln County School Department Exhibit J-3 includes explanations of the nature of individual elements of items required to reconcile the balance sheet of governmental funds with the government-wide Statement of Net Position.

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B. Explanation of certain differences between the governmental fund Statement of Revenues, Expenditures, and Changes in Fund Balances and the government-wide Statement of Activities

Primary Government Exhibit C-4 includes explanations of the nature of individual elements of items required to reconcile the net change in fund balances – total governmental funds with the change in net position of governmental activities reported in the government-wide Statement of Activities.

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

III. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY

A. Budgetary Information

Annual budgets are adopted on a basis consistent with generally accepted accounting principles (GAAP) for all governmental funds except the Constitutional Officers - Fees Fund and the school department’s Internal School Fund (special revenue funds), which are not budgeted and the Other General Government Fund (special revenue fund) which had no expenditures during the year. All annual appropriations lapse at fiscal year-end. The county is required by state statute to adopt annual budgets. Annual budgets are prepared on the basis in which current available funds must be sufficient to meet current expenditures. Expenditures and encumbrances may not legally exceed appropriations authorized by the county commission and any authorized revisions. Unencumbered appropriations lapse at the end of each fiscal year. The budgetary level of control is at the major category level established by the County Uniform Chart of Accounts, as prescribed by the Comptroller of the Treasury of the State of Tennessee. Major categories are at the department level (examples of General Fund major categories: County Commission, County Mayor/Executive, County Attorney, Election Commission, etc.). Management may make revisions within major categories, but only the county commission may transfer appropriations between major categories. During the year, several supplementary appropriations were necessary. The county's budgetary basis of accounting is consistent with GAAP, except instances in which encumbrances are treated as budgeted expenditures. The

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difference between the budgetary basis and GAAP basis is presented on the face of each budgetary schedule. At June 30, 2021, Lincoln County and the Lincoln County School Department reported the following significant encumbrances:

Funds Amount

Primary Government: Major Funds: General $ 148,158 Highway/Public Works 9,699 School Department: Major Funds: General Purpose School 660,538 Education Capital Projects 204,734 Other Capital Projects 10,687 Nonmajor Fund: Central Cafeteria 31,012

B. Highland Rim School - Misappropriation of Funds

On April 22, 2021, the Comptroller’s Division of Investigations issued an investigative report on the Highland Rim School. This report disclosed that the school bookkeeper misappropriated and made unauthorized purchases totaling at least $6,127. This report can be found at https://www.comptroller.tn.gov/ia.

IV. DETAILED NOTES ON ALL FUNDS

A. Deposits and Investments Lincoln County (excluding the Lincoln Health System and Lincoln County Board of Public Utilities, enterprise funds) and the Lincoln County School Department participate in an internal cash and investment pool through the Office of Trustee. The county trustee is the treasurer of the county and in this capacity is responsible for receiving, disbursing, and investing most county funds. Each fund's portion of this pool is displayed on the balance sheets or statements of net position as Equity in Pooled Cash and Investments. Cash reflected on the balance sheets or statements of net position represents nonpooled amounts held separately by individual funds.

Deposits Legal Provisions. All deposits with financial institutions must be secured by one of three methods. One method involves financial institutions that participate in the bank collateral pool administered by the state treasurer. Participating banks determine the aggregate balance of their public fund

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https://www.comptroller.tn.gov/ia

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

In addition, counties may invest in FDIC insured certificates of deposit. The deposit is first made in a bank or savings and loan association, selected by the government entity, with a branch in the state of Tennessee that is authorized to accept county deposits (the depository bank). The depository bank then arranges for the transfer of the moneys into one or more federally insured banks or savings and loan associations, wherever located (secondary depositories), for the account of the county. In turn, the depository bank receives funds from customers of the secondary depositories equal to or greater than the amount initially invested by the county. The balance of county funds with each secondary depository must not exceed FDIC insurance limits so that all funds are fully insured. Under this program, the trustee must provide the depository bank with a listing of all banks and savings and loan associations holding county funds under the same federal employer identification number (FEIN). To prevent deposits from exceeding FDIC coverage, the depository bank is prohibited from using any of those listed banks or savings and loan associations as secondary depositories. The use of this program must be approved by the county investment committee or finance committee as appropriate for the specific county. Further, the investment committee or finance committee must establish policies and procedures for the investments, including the establishment of controls to ensure that full FDIC insurance coverage is obtained. Service providers used by depositories must be approved by the state treasurer upon concurrence by the commissioner of financial institutions and finance and administration. There are currently only two eligible programs that have been approved by the state treasurer: the Certificate of Deposit Account Registry Service (CDARS) and the Insured Cash Sweep (ICS), which operate through IntraFi Network, LLC.

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Investments Legal Provisions. Counties are authorized to make direct investments in bonds, notes, or treasury bills of the U.S. government and obligations guaranteed by the U.S. government or any of its agencies; deposits at state and federal chartered banks and savings and loan associations; bonds of any state or political subdivision rated A or higher by any nationally recognized rating service; nonconvertible debt securities of certain federal government sponsored enterprises; and the county’s own legally issued bonds or notes. These investments may not have a maturity greater than two years. The county may make investments with longer maturities if various restrictions set out in state law are followed. Counties are also authorized to make investments in the State Treasurer’s Investment Pool, the State Treasurer’s Intermediate Term Investment Fund, and in repurchase agreements. The primary oversight responsibility for the investments and operations of the State Treasurer’s Investment Pool rests with the Funding Board of the State of Tennessee (Funding Board). The Funding Board has established an investment policy that is administered by the state treasurer. Investments in the State Treasurer’s Investment Pool are reported both by the pool and the county at amortized cost using a stable net asset value. The primary oversight responsibility for the investments and operations of the Intermediate Term Investment Fund rests with the Funding Board of the State of Tennessee (Funding Board). The Funding Board has established an investment policy that is administered by the state treasurer. Investments in the Intermediate Term Investment Fund are reported both by the pool and the county at amortized cost using a floating net asset value. Repurchase agreements must be approved by the state Comptroller’s Office and executed in accordance with procedures established by the State Funding Board. Securities purchased under a repurchase agreement must be obligations of the U.S. government or obligations guaranteed by the U.S. government or any of its agencies. When repurchase agreements are executed, the purchase of the securities must be priced at least two percent below the fair value of the securities on the day of purchase. Investment Balances. As of June 30, 2021, Lincoln County had the following investments carried at amortized cost using a Stable Net Asset Value. All investments are in the county trustee’s investment pool. Separate disclosures concerning pooling investments cannot be made for Lincoln County and the discretely presented Lincoln County School Department since both pool their deposits and investments through the county trustee.

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WeightedAverageMaturity Amortized

Investment (days) Maturities Cost

Investments at Amortized Cost: State Treasurer's Investment Pool 1 to 68 days N/A $ 2,550,538

Interest Rate Risk. Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. State statutes limit the maturities of certain investments as previously disclosed. Lincoln County does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. Credit Risk. Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. State statutes limit the ratings of certain investments as previously explained. Lincoln County has no investment policy that would further limit its investment choices. Further information concerning the legal provisions, investment policies, investment types, and credit risks for the State Treasurer’s Investment Pool can be obtained by reviewing the State of Tennessee Annual Comprehensive Financial Report at https://www.tn.gov/finance/rd-doa/fa-accfin-ar.html. TCRS Stabilization Trust

Legal Provisions. The Lincoln County School Department is a member of the Tennessee Consolidated Retirement System (TCRS) Stabilization Reserve Trust. The school department has placed funds into the irrevocable trust as authorized by statute under Tennessee Code Annotated (TCA), Title 8, Chapters 34-37. The TCRS Board of Trustees is responsible for the proper operation and administration of the trust. Funds of trust members are held and invested in the name of the trust for the benefit of each member. Each member’s funds are restricted for the payment of retirement benefits of that member’s employees. Trust funds are not subject to the claims of general creditors of the school department. The trust is authorized to make investments as directed by the TCRS Board of Trustees. The Lincoln County School Department may not impose any restrictions on investments placed by the trust on their behalf. It is the intent of the plan trustees to allocate these funds in the future to offset pension costs. On June 30, 2021, the Lincoln County School Department had the following investments held by the trust on its behalf. These funds are recognized as

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restricted assets in the General Purpose School Fund of the school department.

WeightedAverageMaturity Fair

Investment (days) Maturities ValueInvestments at Fair Value: U.S. Equity N/A N/A $ 99,553 Developed Market International Equity N/A N/A 44,959 Emerging Market International Equity N/A N/A 12,846 U.S. Fixed Income N/A N/A 64,228 Real Estate N/A N/A 32,114 Short-term Securities N/A N/A 3,211 NAV - Private Equity and Strategic Lending N/A N/A 64,228

Total $ 321,139

For further information concerning the legal provisions, investment policies, investment types, and credit risks of the school department’s investments with the TCRS Stabilization Reserve Trust, audited financial statements of the Tennessee Consolidated Retirement System may be obtained at https://comptroller.tn.gov/content/dam/cot/sa/advanced-search/disclaimer/2020/ag20045.pdf.

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https://comptroller.tn.gov/content/dam/cot/sa/advanced-search/disclaimer/2020/ag20045.pdf

B. Capital Assets

Capital assets activity for the year ended June 30, 2021, was as follows:

Primary Government

Governmental Activities:Balance Balance7-1-20 Increases Decreases 6-30-21

Capital Assets Not Depreciated:

Land $ 9,312,266 $ 0 $ 0 $ 9,312,266Construction in Progress 354,438 3,815,545 (220,135) 3,949,848Total Capital Assets Not Depreciated $ 9,666,704 $ 3,815,545 $ (220,135) $ 13,262,114

Capital Assets Depreciated:

Buildings and Improvements $ 17,170,444 $ 0 $ 0 $ 17,170,444Infrastructure 30,418,316 1,239,485 0 31,657,801Other Capital Assets 13,241,668 422,223 (60,716) 13,603,175Total Capital Assets Depreciated $ 60,830,428 $ 1,661,708 $ (60,716) $ 62,431,420

Less Accumulated Depreciation For:Buildings and Improvements $ 8,984,321 $ 314,914 $ 0 $ 9,299,235Infrastructure 20,854,448 733,991 0 21,588,439Other Capital Assets 7,021,616 826,326 (52,228) 7,795,714Total Accumulated Depreciation $ 36,860,385 $ 1,875,231 $ (52,228) $ 38,683,388

Total Capital Assets Depreciated, Net $ 23,970,043 $ (213,523) $ (8,488) $ 23,748,032

Governmental Activities Capital Assets, Net $ 33,636,747 $ 3,602,022 $ (228,623) $ 37,010,146

Depreciation expense was charged to functions of the primary government as follows:

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Governmental Activities:

General Government $ 157,539 Administration of Justice 17,474 Public Safety 646,237 Public Health and Welfare 42,743 Highway 1,011,238

Total Depreciation Expense - Governmental Activities $ 1,875,231 Discretely Presented Lincoln County School Department

Governmental Activities:Balance Balance7-1-20 Increases Decreases 6-30-21

Capital Assets Not Depreciated:

Land $ 1,629,077 $ 0 $ 0 $ 1,629,077Construction in Progress 15,634,013 8,680,549 (5,710,221) 18,604,341Total Capital Assets Not Depreciated $ 17,263,090 $ 8,680,549 $ (5,710,221) $ 20,233,418

Capital Assets Depreciated:

Buildings and Improvements $ 48,634,806 $ 5,710,221 $ 0 $ 54,345,027Other Capital Assets 8,681,486 448,332 0 9,129,818Total Capital Assets Depreciated $ 57,316,292 $ 6,158,553 $ 0 $ 63,474,845

Less Accumulated Depreciation For:Buildings and Improvements $ 29,632,951 $ 1,479,073 $ 0 $ 31,112,024Other Capital Assets 5,167,085 485,397 0 5,652,482Total Accumulated Depreciation $ 34,800,036 $ 1,964,470 $ 0 $ 36,764,506

Total Capital Assets Depreciated, Net $ 22,516,256 $ 4,194,083 $ 0 $ 26,710,339

Governmental Activities Capital Assets, Net $ 39,779,346 $ 12,874,632 $ (5,710,221) $ 46,943,757

Depreciation expense was charged to functions of the discretely presented Lincoln County School Department as follows:

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Governmental Activities:

Support Services $ 783,548Operation of Non-instructional Services 1,180,922

Total Depreciation Expense - Governmental Activities $ 1,964,470

C. Interfund Receivables, Payables, and Transfers

The composition of interfund balances as of June 30, 2021, was as follows: Due to/from Other Funds:

Receivable Fund Payable Fund Amount

Discretely Presented School Department:General Purpose School Nonmajor governmental $ 355,956 Nonmajor governmental " 14,526

These balances resulted from the time lag between the dates that interfund goods and services are provided or reimbursable expenditures occur and payments between funds are made.

Interfund Transfers: Interfund transfers for the year ended June 30, 2021, consisted of the

following amounts:

Discretely Presented Lincoln County School Department

NonmajorGovernmental

Transfer Out Funds Purpose

General Purpose School Fund $ 500,000 Cash Flow Purposes

Transfer In

Transfers are used to move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them. and to use unrestricted revenues collected in the General Fund to finance various programs accounted for in other funds in accordance with budgetary authorizations.

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D. Long-term Debt

Primary Government (excluding the Lincoln Health System and Lincoln County Board of Public Utilities, enterprise funds) General Obligation Bonds and Notes General Obligation Bonds - Lincoln County issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities for the primary government and the discretely presented school department. General obligation bonds are direct obligations and pledge the full faith, credit, and taxing authority of the government. General obligation bonds were issued for original terms of up to 25 years. Repayment terms are generally structured with increasing amounts of principal maturing as interest requirements decrease over the term of the debt. All bonds included in long-term debt as of June 30, 2021, will be retired from the General Debt Service Fund. Direct Borrowing and Direct Placements - Lincoln County issues capital outlay notes to fund capital facilities and other capital outlay purchases, such as equipment. Capital outlay notes are direct obligations and pledge the full faith, credit, and taxing authority of the government. Capital outlay notes were issued for original term of up to 12 years. Repayment terms are generally structured with increasing amounts of principal maturing as interest requirements decrease over the term of the debt. The notes included in long-term debt as of June 30, 2021, will be retired from the General Debt Service Fund. General obligation bonds and capital outlay notes outstanding as of June 30, 2021, for governmental activities are as follows:

OriginalInterest Final Amount Balance

Type Rate Maturity of Issue 6-30-21

General Obligation Bonds 3.25 to 3.67 % 5-1-43 $ 37,470,000 $ 34,500,000Direct Borrowing and Direct Placement: Capital Outlay Notes 2.195 4-1-27 1,000,000 525,000

The annual requirements to amortize all general obligation bonds and the note outstanding as of June 30, 2021, including interest payments, are presented in the following tables:

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Year EndingJune 30 Principal Interest Total

2022 $ 1,110,000 $ 1,426,868 $ 2,536,8682023 1,160,000 1,377,367 2,537,3672024 1,215,000 1,325,567 2,540,5672025 1,270,000 1,271,218 2,541,2182026 1,325,000 1,214,318 2,539,3182027-2031 7,595,000 5,114,510 12,709,5102032-2036 8,350,000 3,460,612 11,810,6122037-2041 8,555,000 1,837,600 10,392,6002042-2043 3,920,000 236,800 4,156,800

Total $ 34,500,000 $ 17,264,860 $ 51,764,860

Year EndingJune 30 Principal Interest Total

2022 $ 85,000 $ 11,524 $ 96,5242023 85,000 9,658 94,6582024 85,000 7,792 92,7922025 90,000 5,926 95,9262026 90,000 3,951 93,9512027 90,000 1,975 91,975

Total $ 525,000 $ 40,826 $ 565,826

Notes - Direct Placement

Bonds

There is $3,052,074 available in the General Debt Service Fund to service long-term debt. Bonded debt per capita totaled $977 based on the 2020 federal census. Total debt per capita, including bonds, notes, and unamortized debt premiums, totaled $1,031 based on the 2020 federal census. Changes in Long-term Debt Long-term debt activity for the primary government (excluding the Lincoln Health System and the Lincoln County Board of Public Utilities, enterprise funds) for the year ended June 30, 2021, was as follows:

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Governmental Activities:Note - Direct

Bonds Placement

Balance, July 1, 2020 $ 36,440,000 $ 605,000Reductions (1,940,000) (80,000)

Balance, June 30, 2021 $ 34,500,000 $ 525,000

Balance Due Within One Year $ 1,110,000 $ 85,000

Analysis of Noncurrent Liabilities for Debt Presented on Exhibit A:

Total Noncurrent Liabilities - Debt, June 30, 2021 $ 35,025,000Less: Balances Due Within One Year - Debt (1,195,000)Add: Unamortized Premium on Debt 1,372,724

Noncurrent Liabilities - Due in More Than One Year - Debt - Exhibit A $ 35,202,724

E. Long-term Obligations

Changes in Long-term Obligations Long-term obligation activity for the year ended June 30, 2021, was as follows:Governmental Activities: Landfill

Postclosure OtherCompensated Care Postemployment

Absences Costs Benefits

Balance, July 1, 2020 $ 284,000 $ 135,581 $ 309,308Additions 205,108 452,155 71,137Reductions (194,880) 0 (18,873)

Balance, June 30, 2021 $ 294,228 $ 587,736 $ 361,572

Balance Due Within One Year $ 264,802 $ 32,652 $ 0

Compensated absences and other postemployment benefits will be paid from the employing funds, primarily the General Fund. Landfill postclosure care costs will be paid from the Solid Waste/Sanitation Fund.

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Analysis of Noncurrent Liabilities for Other Presented on Exhibit A:

Total Noncurrent Liabilities - Other, June 30, 2021 $ 1,243,536Less: Balances Due Within One Year - Other (297,454)

Noncurrent Liabilities - Due in More Than One Year - Other - Exhibit A $ 946,082

Discretely Presented Lincoln County School Department

Changes in Long-term Obligations Long-term obligations activity for the discretely presented Lincoln County School Department for the year ended June 30, 2021, was as follows: Governmental Activities: Other

Compensated PostemploymentAbsences Benefits

Balance, July 1, 2020 $ 55,902 $ 2,229,450Additions 51,836 633,160Reductions (57,630) (216,899)

Balance, June 30, 2021 $ 50,108 $ 2,645,711

Balance Due Within One Year $ 50,108 $ 0

Analysis of Noncurrent Liabilities for Other Presented on Exhibit A:

Total Noncurrent Liabilities - Other, June 30, 2021 $ 2,695,819Less: Balances Due Within One Year - Other (50,108)

Noncurrent Liabilities - Due in More Than One Year - Other - Exhibit A $ 2,645,711

Compensated absences and other postemployment benefits will be paid from the employing funds, primarily the General Purpose School and School Federal Projects funds.

F. On-Behalf Payments – Discretely Presented Lincoln County School Department

The State of Tennessee pays health insurance premiums for retired teachers on-behalf of the Lincoln County School Department. These payments are made by the state to the Local Education Group Insurance Plan and the Medicare Supplement Plan. Both plans are administered by the State of Tennessee and reported in the state’s Annual Comprehensive Financial Report. Payments by

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the state to the Local Education Group Insurance Plan for the year ended June 30, 2021, totaled $67,060. The school department has recognized these on-behalf payments as revenues and expenditures in the General Purpose School Fund.

V. OTHER INFORMATION

A. Risk Management

Primary Government Lincoln County is exposed to various risks related to general liability, property, and casualty losses. The county decided it was more economically feasible to join a public entity risk pool instead of purchasing commercial insurance for general liability, property, and casualty coverage. The county joined the Local Government Property and Casualty Fund (LGPCF), which is a public entity risk pool established by the Tennessee County Services Association, an association of member counties. The county pays an annual premium to the LGPCF for its general liability, property, and casualty insurance coverage. The creation of the LGPCF provides for it to be self-sustaining through member premiums. The LGPCF reinsures through commercial insurance companies for claims exceeding $250,000 for property and $450,000 for liability for each insured event. Lincoln County participates in the Local Government Workers’ Compensation Fund (LGWCF), a public entity risk pool established under provisions of Section 29-20-401, Tennessee Code Annotated, by the Tennessee County Services Association to provide a program of workers’ compensation coverage to employees of local governments. The county pays an annual premium to the LGWCF for its workers’ compensation insurance coverage. The LGWCF is to be self-sustaining through member premiums. The LGWCF reinsures through commercial insurance companies for claims exceeding $500,000. Lincoln County participates in the Local Government Group Insurance Fund (LGGIF), a public entity risk pool established to provide a program of health insurance coverage for employees of local governments and quasi-governmental entities that was established for the primary purpose of providing services for or on behalf of state and local governments. In accordance with Section 8-27-207, Tennessee Code Annotated (TCA), all local governments and quasi-governmental entities described above are eligible to participate. The LGGIF is included in the Annual Comprehensive Financial Report of the State of Tennessee, but the state does not retain any risk for losses by this fund. The state statute provides for the LGGIF to be self-sustaining through member premiums.

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Discretely Presented Lincoln County School Department The discretely presented Lincoln County School Department participates in the Tennessee Risk Management Trust (TN-RMT), which is a public entity risk pool created under the auspices of the Tennessee Governmental Tort Liability Act to provide governmental insurance coverage. The school department pays an annual premium to the TN-RMT for its general liability, property, casualty, and workers’ compensation insurance coverage. The creation of the TN-RMT provides for it to be self-sustaining through member premiums. The school department participates in the Local Education Group Insurance Fund (LEGIF), a public entity risk pool established to provide a program of health insurance coverage for employees of local education agencies. In accordance with Section 8-27-301, TCA, all local education agencies are eligible to participate. The LEGIF is included in the Annual Comprehensive Financial Report of the State of Tennessee, but the state does not retain any risk for losses by this fund. Section 8-27-303, TCA, provides for the LEGIF to be self-sustaining through member premiums.

B. Accounting Changes GASB Statement No. 84, Fiduciary Activities establishes additional guidance for the identification, accounting, and reporting of fiduciary activities. The statement clarifies the four types of fiduciary funds that should be reported, if applicable: (1) pension (and other employee benefit) trust funds, (2) investment trust funds, (3) private-purpose trust funds, and (4) custodial funds. Custodial funds generally should report fiduciary activities that are not held in a trust or equivalent arrangement that meets specific criteria. GASB Statement No. 90, Majority Equity Interest modifies previous guidance and provides guidance for the measurement and reporting of majority equity interest in a legally separate organization. This statement also provides guidance for reporting a component unit if a government acquires a 100 percent equity interest in that component unit. Paragraphs 4 and 5 of GASB Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans became effective during the year. Paragraph 4 establishes certain component unit criteria for a legally separate entity by the primary government in the absence of a governing board. Paragraph 5 clarifies that the financial benefit burden in paragraph 7 of GASB Statement 84 is applicable to only defined benefit pension plans and defined benefit OPEB plans that are administered through certain trusts.

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C. Contingent Liabilities

The county has received various federal and state grants and other assistance for specific purposes that are subject to review and audit by grantor agencies. Such audits could result in reimbursements to the grantor agencies for expenditures disallowed under the terms of the grants. County management is not aware of any potential disallowances and believes that reimbursements, if any, would not be material. The county is involved in several pending lawsuits. The attorney for the county estimates that the potential claims against the county not covered by insurance resulting from such litigation would not materially affect the county’s financial statements

D. Changes in Administration

On August 31, 2020, Paul Braden left the Office of Assessor of Property and was succeeded by Tammy Painter. On February 14, 2021, Cole Bradford left the position of finance director and was succeeded by Vicky Trentham.

E. Landfill Postclosure Care Costs Lincoln County and the city of Fayetteville have an active permit on file with the state Department of Environment and Conservation for a sanitary landfill. The county and city have provided financial assurances for estimated postclosure liabilities as required by the State of Tennessee. These financial assurances are on file with the Department of Environment and Conservation. State and federal laws and regulations require the entities to place a final cover on their sanitary landfill site when it stops accepting waste and to perform certain maintenance and monitoring functions at the site originally for 30 years after closure; however, on April 9, 2021, the postclosure care costs were extended for an additional ten years totaling 40 years for postclosure care cost. Although postclosure care costs will be paid only near or after the date that the landfill stops accepting waste, the county reports a portion of these postclosure care costs as an operating expense in each period based on landfill capacity used as of each balance sheet date. Lincoln County and the city of Fayetteville closed their sanitary landfill in 1995. Lincoln County and the city of Fayetteville each agreed to pay 50 percent of the postclosure costs. The $587,736 reported as postclosure care liability at June 30, 2021, represents the county’s share based on what it would cost to perform all postclosure care in 2021. Actual costs may be higher due to inflation, changes in technology, or changes in regulations.

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F. Joint Ventures

The Fayetteville-Lincoln County Public Library is a joint venture of Lincoln County and the city of Fayetteville and is operated by an appointed board. The board comprises seven members, with one member each selected by the Lincoln County Commission and the city of Fayetteville, and other members selected by the existing board of directors subject to the approval of the city and county. Lincoln County has control over budgeting and financing of the joint venture only to the extent of representation by appointed board members. Lincoln County contributed $118,101 to the operations of the library during the year ended June 30, 2021. The Fayetteville-Lincoln County Regional Airport Authority is jointly owned by Lincoln County and the city of Fayetteville and is governed by a five-member board. Two members are appointed by the city of Fayetteville, two by the Lincoln County Commission, and one is jointly appointed by the other four board members. The airport is operated through a lease with a private vendor. Lincoln County contributed $20,141 to the operations of the airport during the year ended June 30, 2021. The city of Fayetteville and Lincoln County operated a landfill as a joint venture until it closed in February 1995. The operation/closure of the landfill is under the oversight of the Joint City/County Solid Waste Committee, which includes eight members, four each appointed by the city and county. The Interlocal Solid Waste Authority was formed by joint resolution of the counties of Bedford, Franklin, Moore, and Lincoln; and the municipalities of Tullahoma and Fayetteville to develop a solid waste regional plan. Each participating county commission or city council appointed the authority’s board for varying terms of office. Lincoln County made no contribution to the Interlocal Solid Waste Authority for the year ended June 30, 2021. The Industrial Development Board of the City of Fayetteville and Lincoln County is a joint venture of the city of Fayetteville and Lincoln County and is operated by an appointed board. The board comprises seven members. Three members each are appointed by the city and county. The seventh member’s appointment is alternated between the city and county every six years. Lincoln County has control over budgeting and financing the joint venture only to the extent of representation of the board members it appoints. Lincoln County contributed $102,754 to the operations of the Industrial Development Board during the year ended June 30, 2021. The Seventeenth Judicial District Drug Task Force (DTF) is a joint venture formed by an interlocal agreement between the district attorney general of the Seventeenth Judicial District, Marshall, Lincoln, Moore, and Bedford counties, and various cities within these counties. The purpose of the DTF is to provide multi-jurisdictional law enforcement to promote the investigation and prosecution of drug-related activities. Funds for the operations of the

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DTF come primarily from federal grants, drug fines, and the forfeiture of drug-related assets to the DTF. The DTF is overseen by the district attorney general and is governed by a board of directors including the district attorney general, sheriffs, and police chiefs of participating law enforcement agencies within the judicial district. Lincoln County made no contribution to the DTF for the year ended June 30, 2021. Lincoln County does not have an equity interest in any of the above-noted joint ventures. Complete financial statements for the Fayetteville-Lincoln County Public Library, Fayetteville-Lincoln County Regional Airport Authority, Fayetteville-Lincoln County Landfill Fund, Interlocal Solid Waste Authority, Industrial Development Board of the City of Fayetteville and Lincoln County, and Seventeenth Judicial District Drug Task Force can be obtained from their administrative offices at the following addresses:

Administrative Offices:

Fayetteville-Lincoln County Public Library 306 Elk Avenue North Fayetteville, TN 37334

Fayetteville-Lincoln County Regional Airport Authority 37 Airport Road Fayetteville, TN 37334 Fayetteville-Lincoln County Landfill Fund City of Fayetteville 110 Elk Avenue South Fayetteville, TN 37334 Interlocal Solid Waste Authority of Bedford, Franklin, Moore and Lincoln Counties, Tennessee P.O. Box 807 Tullahoma, TN 37388 Industrial Development Board of the City of Fayetteville and Lincoln County 16 Franke Blvd. Fayetteville, TN 37334 Office of District Attorney General Seventeenth Judicial District Drug Task Force 311 East Market St. Fayetteville, TN 37334

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G. Retirement Commitments

1. Tennessee Consolidated Retirement System (TCRS)

Primary Government General Information About the Pension Plan Plan Description. Employees of Lincoln County, employees of the Lincoln County Medical Center (an enterprise fund of the primary government), and non-certified employees of the discretely presented Lincoln County School Department are provided a defined benefit pension plan through the Public Employee Pension Plan, an agent multiple-employer pension plan administered by the TCRS. The Lincoln County employees comprise 28.17 percent, Lincoln County Medical Center employees comprise 49.92 percent, and the non-certified employees of the discretely presented school department comprise 21.91 percent of the plan based on contribution data. The TCRS was created by state statute under Tennessee Code Annotated (TCA), Title 8, Chapters 34-37. The TCRS Board of Trustees is responsible for the proper operation and administration of the TCRS. The Tennessee Treasury Department, an agency in the legislative branch of state government, administers the plans of the TCRS. The TCRS issues a publicly available financial report that can be obtained at https://treasury.tn.gov/Retirement/Boards-and-Governance/Reporting-and-Investment-Policies. In addition, employees of Lincoln County Board of Public Utilities (an enterprise fund of the primary government) are provided, a defined benefit pension plan through the Public Employee Pension Plan, an agent multiple-employer pension plan administered by the TCRS. The details of this plan are disclosed in Note VII.F. Benefits Provided. TCA, Title 8, Chapters 34-37 establish the benefit terms and can be amended only by the Tennessee General Assembly. The chief legislative body may adopt the benefit terms permitted by statute. Members are eligible to retire with an unreduced benefit at age 60 with five years of service credit or after 30 years of service credit regardless of age. Benefits are determined by a formula using the member’s highest five consecutive year average compensation and the member’s years of service credit. Reduced benefits for early retirement are available to vested members at age 55. Members vest with five years of service credit. Service-related disability benefits are provided regardless of length of service. Five years of service is required for nonservice-related disability eligibility. The service-related and nonservice-related disability benefits are determined in the same manner as a service retirement benefit but are reduced ten

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percent and include projected service credits. A variety of death benefits is available under various eligibility criteria. Member and beneficiary annuitants are entitled to an automatic cost of living adjustment (COLA) after retirement. A COLA is granted each July for annuitants retired prior to the second of July of the previous year. The COLA is based on the change in the consumer price index (CPI) during the prior calendar year, capped at three percent, and applied to the current benefit. No COLA is granted if the change in the CPI is less than one-half percent. A one percent COLA is granted if the CPI change is between one-half percent and one percent. A member who leaves employment may withdraw their employee contributions plus any accumulated interest. Employees Covered by Benefit Terms. At the measurement date of June 30, 2020, the following employees were covered by the benefit terms: Inactive Employees or Beneficiaries Currently Receiving Benefits 377Inactive Employees Entitled to But Not Yet Receiving Benefits 809Active Employees 580

Total 1,766

Contributions. Contributions for employees are established in the statutes governing the TCRS and may only be changed by the Tennessee General Assembly. Employees contribute five percent of salary. Lincoln County makes employer contributions at the rate set by the Board of Trustees as determined by an actuarial valuation. For the year ended June 30, 2021, the employer contribution for Lincoln County was $1,224,271 based on a rate of 5.25 percent of covered payroll. By law, employer contributions are required to be paid. The TCRS may intercept Lincoln County’s state shared taxes if required employer contributions are not remitted. The employer’s actuarially determined contributions (ADC) and member contributions are expected to finance the costs of benefits earned by members during the year, the cost of administration, as well as an amortized portion of any unfunded liability. Net Pension Liability (Asset) Pension Liabilities (Asset). Lincoln County’s net pension liability (asset) was measured as of June 30, 2020, and the total pension liability used to calculate net pension liability (asset) was determined by an actuarial valuation as of that date.

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Actuarial Assumptions. The total pension liability as of the June 30, 2020, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:

Inflation 2.5%Salary Increases Graded Salary Ranges from 8.72%

to 3.44% Based on Age, Including Inflation, Averaging 4%

Investment Rate of Return 7.25%, Net of Pension Plan Investment Expenses, Including Inflation

Cost of Living Adjustment 2.25%

Mortality rates were based on actual experience including an adjustment for some anticipated improvement. The actuarial assumptions used in the June 30, 2020, actuarial valuation were based on the results of an actuarial experience study performed for the period July 1, 2012, through June 30, 2016. The demographic assumptions were adjusted to more closely reflect actual and expected future experience. The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees in conjunction with the June 30, 2016, actuarial experience study. A blend of future capital market projections and historic market returns was used in a building-block method in which a best estimate of expected future real rates of return (expected returns, net of pension plan investments expense and inflation) is developed for each major asset class. These best estimates are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by adding expected inflation of 2.5 percent. The best estimates of geometric real rates of return and the TCRS investment policy target asset allocation for each major asset class are summarized in the following table:

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PercentageLong-termExpected PercentageReal Rate Target

Asset Class of Return Allocations

U.S. Equity 5.69 % 31 %Developed Market International Equity 5.29 14Emerging Market International Equity 6.36 4Private Equity and Strategic Lending 5.79 20U.S. Fixed Income 2.01 20Real Estate 4.32 10Short-term Securities 0.00 1

Total 100 %

The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees as 7.25 percent based on a blending of the factors described above. Discount Rate. The discount rate used to measure the total pension liability was 7.25 percent. The projection of cash flows used to determine the discount rate assumes that employee contributions will be made at the current rate and that contributions from Lincoln County will be made at the actuarially determined contribution rate pursuant to an actuarial valuation in accordance with the funding policy of the TCRS Board of Trustees and as required to be paid by state statute. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make projected future benefit payments of current active and inactive members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

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Changes in the Net Pension Liability (Asset)

Total Plan Net PensionPension Fiduciary LiabilityLiability Net Position (Asset)

(a) (b) (a)-(b)

Balance, July 1, 2019 $ 63,362,031 $ 64,913,002 $ (1,550,971)

Changes for the Year: Service Cost $ 2,146,952 $ 0 $ 2,146,952 Interest 4,638,053 0 4,638,053 Differences Between Expected and Actual Experience (2,058,485) 0 (2,058,485) Contributions-Employer 0 1,121,437 (1,121,437) Contributions-Employees 0 1,072,072 (1,072,072) Net Investment Income 0 3,196,705 (3,196,705) Benefit Payments, Including Refunds of Employee Contributions (3,071,682) (3,071,682) 0 Administrative Expense 0 (50,786) 50,786Net Changes $ 1,654,838 $ 2,267,746 $ (612,908)

Balance, June 30, 2020 $ 65,016,869 $ 67,180,748 $ (2,163,879)

Increase (Decrease)

Allocation of Agent Plan Changes in the Net Pension Liability (Asset)

Plan NetTotal Fiduciary Pension

Pension Net LiabilityLiability Position (Asset)

Primary Government 28.17% $ 18,315,252 $ 18,924,816 $ (609,564)Medical Center 49.92% 32,456,421 33,536,630 (1,080,209)School Department 21.91% 14,245,196 14,719,302 (474,106)

Total $ 65,016,869 $ 67,180,748 $ (2,163,879)

Sensitivity of the Net Pension Liability (Asset) to Changes in the Discount Rate. The following presents the net pension liability (asset) of Lincoln County calculated using the discount rate of 7.25 percent, as well as what the net pension liability (asset) would be if it were calculated using a discount rate that is one percentage point lower (6.25%) or one percentage point higher (8.25%) than the current rate:

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Current1% Discount 1%

Decrease Rate IncreaseLincoln County 6.25% 7.25% 8.25%

Net Pension Liability (Asset) $ 6,110,383 $ (2,163,879) $ (8,992,198)

Pension Expense (Negative Pension Expense) and Deferred Outflows of Resources and Deferred Inflows of Resources to Pensions Pension Expense (Negative Pension Expense). For the year ended June 30, 2021, Lincoln County recognized pension expense (negative pension expense) of $902,690. Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2021, Lincoln County reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred DeferredOutflows Inflows

of of Resources Resources

Difference Between Expected and Actual Experience $ 123,865 $ 1,646,511Net Difference Between Projected and Actual Earnings on Pension Plan Investments 475,044 0Changes in Assumptions 213,948 0Contributions Subsequent to the Measurement Date of June 30, 2020 (1) 1,224,271 N/A

Total $ 2,037,128 $ 1,646,511

(1) The amount shown above for “Contributions Subsequent to the

measurement Date of June 30, 2020,” will be recognized as a reduction (increase) to net pension liability (asset) in the following measurement period.

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Allocation of Agent Plan Deferred Outflows of Resources and Deferred Inflows of Resources

Deferred DeferredOutflows of Inflows ofResources Resources

Primary Government $ 581,529 $ 463,822Medical Center 1,043,027 821,938School Department 412,572 360,751

Total $ 2,037,128 $ 1,646,511

Amounts reported as deferred outflows of resources, with the exception of contributions subsequent to the measurement date, and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year EndingJune 30 Amount

2022 $ (531,866)2023 (353,703)2024 (243,248)2025 295,1632026 0Thereafter 0

In the table shown above, positive amounts will increase pension expense while negative amounts will decrease pension expense. Discretely Presented Lincoln County School Department Non-certified Employees General Information About the Pension Plan Plan Description. As noted above under the primary government, employees of Lincoln County, Lincoln Medical Center, and non-certified employees of the discretely presented Lincoln County School Department are provided a defined benefit pension plan through the Public Employee Pension Plan, an agent multiple-employer pension plan administered by the TCRS. The Lincoln County employees comprise 28.17 percent, Lincoln County Medical Center employees comprise 49.92 percent, and the non-certified employees of the discretely presented school department comprise 21.91 percent of the plan based on contribution data.

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Certified Employees Teacher Retirement Plan General Information About the Pension Plan Plan Description. Teachers of the Lincoln County School Department with membership in the TCRS before July 1, 2014, are provided with pensions through the Teacher Legacy Pension Plan, a cost-sharing multiple-employer pension plan administered by the TCRS. The Teacher Legacy Pension Plan is closed to new membership. Teachers with membership in the TCRS after June 30, 2014, are provided with pensions through a legally separate plan referred to as the Teacher Retirement Plan, a cost-sharing multiple-employer pension plan administered by the TCRS. The TCRS was created by state statute under Tennessee Code Annotated (TCA), Title 8, Chapters 34-37. The TCRS Board of Trustees is responsible for the proper operation and administration of all employer pension plans in the TCRS. The Tennessee Treasury Department, an agency in the legislative branch of state government, administers the plans of the TCRS. The TCRS issues a publicly available financial report that can be obtained at https://treasury.tn.gov/Retirement/Boards-and-Governance/Reporting-and-Investment-Policies. Benefits Provided. TCA, Title 8, Chapters 34-37 establish the benefit terms and can be amended only by the Tennessee General Assembly. Members are eligible to retire with an unreduced benefit at age 65 with five years of service credit or pursuant to the rule of 90 in which the member’s age and service credit total 90. Benefits are determined by a formula using the member’s highest five consecutive year average compensation and the member’s years of service credit. A reduced early retirement benefit is available to vested members at age 60 or pursuant to the rule of 80. Members are vested with five years of service credit. Service-related disability benefits are provided regardless of length of service. Five years of service is required for nonservice-related disability eligibility. The service-related and nonservice-related disability benefits are determined in the same manner as a service retirement benefit but are reduced ten percent and include projected service credits. A variety of death benefits is available under various eligibility criteria. Member and beneficiary annuitants are entitled to an automatic cost of living adjustment (COLA) after retirement. A COLA is granted each July for annuitants retired prior to the second of July of the previous year. The COLA is based on the change in the consumer price index (CPI) during the prior calendar year, capped at three percent, and applied to the current benefit. No COLA is granted if the change in the CPI is less than one-half percent. A one percent COLA is granted if the CPI change is between one-half percent and one percent. Members who

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leave employment may withdraw their employee contributions, plus any accumulated interest. Under the Teacher Retirement Plan, benefit terms and conditions, including COLA, can be adjusted on a prospective basis. Moreover, there are defined cost controls and unfunded liability controls that provide for the adjustment of benefit terms and conditions on an automatic basis. Contributions. Contributions for teachers are established in the statutes governing the TCRS and may only be changed by the Tennessee General Assembly or by automatic cost controls set out in law. Teachers are required to contribute five percent of their salary to the plan. The Local Education Agencies (LEAs) make employer contributions at the rate set by the Board of Trustees as determined by an actuarial valuation. Per the statutory provisions governing TCRS, the employer contribution rate cannot be less than four percent, except in years when the maximum funded level, approved by the TCRS Board of Trustees, is reached. By law, employer contributions for the Teacher Retirement Plan are required to be paid. The TCRS may intercept the state shared taxes of the sponsoring governmental entity of the LEA if the required employer contributions are not remitted. Employer contributions for the year ended June 30, 2021, to the Teacher Retirement Plan were $101,035, which is 2.02 percent of covered payroll. In addition, employer contributions of $99,034, which is 1.98 percent of covered payroll were made to the Pension Stabilization Reserve Trust Fund to fund future pension costs. The employer rate, when combined with member contributions and the stabilization reserve trust funds, is expected to finance the costs of benefits earned by members during the year, the cost of administration, as well as an amortized portion of any unfunded liability. Pension Liabilities (Assets), Pension Expense (Negative Pension Expense), and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions Pension Liabilities (Assets). At June 30, 2021, the school department reported a liability (asset) of ($202,363) for its proportionate share of the net pension liability (asset). The net pension liability (asset) was measured as of June 30, 2020, and the total pension liability used to calculate the net pension liability (asset) was determined by an actuarial valuation as of that date. The school department’s proportion of the net pension liability (asset) was based on the school department’s share of contributions to the pension plan relative to the contributions of all participating LEAs. At the measurement date of June 30, 2020, the school department’s proportion was .355869 percent. The proportion as of June 30, 2019, was .353857 percent.

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Pension Expense (Negative Pension Expense). For the year ended June 30, 2021, the school department recognized pension expense (negative pension expense) of $81,494. Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2021, the school department reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:



Difference Between Expected and Actual Experience $ 7,518 $ 50,711Net Difference Between Projected and Actual Earnings on Pension Plan Investments 16,485 0Changes in Assumptions 6,345 0Changes in Proportion of Net Pension Liability (Asset) 4,392 7,056LEA's Contributions Subsequent to the Measurement Date of June 30, 2020 101,035 N/A

Total $ 135,775 $ 57,767

The school department’s employer contributions of $101,035, reported as pension related deferred outflows of resources subsequent to the measurement date, will be recognized as a reduction (increase) of net pension liability (asset) in the year ending June 30, 2022. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year EndingJune 30 Amount

2022 $ (1,987)2023 3952024 1,6092025 1,9552026 (3,628)Thereafter (21,371)

In the table above, positive amounts will increase pension expense, while negative amounts will decrease pension expense.

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Actuarial Assumptions. The total pension liability in the June 30, 2020, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:





Mortality rates are based on actual experience including an adjustment for some anticipated improvement. The actuarial assumptions used in the June 30, 2020, actuarial valuation were based on the results of an actuarial experience study performed for the period July 1, 2012, through June 30, 2016. The demographic assumptions were adjusted to more closely reflect actual and expected future experience. The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees in conjunction with the June 30, 2016, actuarial experience study. A blend of future capital market projections and historic market returns was used in a building-block method in which a best estimate of expected future real rates of return (expected returns, net of pension plan investments expense and inflation) is developed for each major asset class. These best estimates are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by adding expected inflation of 2.5 percent. The best estimates of geometric real rates of return and the TCRS investment policy target asset allocation for each major asset class are summarized in the following table:

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Total 100 %

The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees as 7.25 percent based on a blending of the factors described above. Discount Rate. The discount rate used to measure the total pension liability was 7.25 percent. The projection of cash flows used to determine the discount rate assumes that employee contributions will be made at the current rate and that contributions from all the LEAs will be made at the actuarially determined contribution rate pursuant to an actuarial valuation in accordance with the funding policy of the TCRS Board of Trustees and as required to be paid by state statute. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make projected future benefit payments of current active and inactive members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the Proportionate Share of Net Pension Liability (Asset) to Changes in the Discount Rate. The following presents the school department’s proportionate share of the net pension liability (asset) calculated using the discount rate of 7.25 percent, as well as what the school department’s proportionate share of the net pension liability (asset) would be if it were calculated using a discount rate that is one percentage point lower (6.25%) or one percentage point higher (8.25%) than the current rate:

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School Department's Current Proportionate Share of 1% Discount 1% the Net Pension Decrease Rate Increase Liability (Asset) 6.25% 7.25% 8.25%

Net Pension Liability (Asset) $ 157,404 $ (202,363) $ (467,554)

Pension Plan Fiduciary Net Position. Detailed information about the pension plan’s fiduciary net position is available in a separately issued TCRS financial report. Teacher Legacy Pension Plan General Information About the Pension Plan Plan Description. Teachers of the Lincoln County School Department with membership in the TCRS before July 1, 2014, are provided with pensions through the Teacher Legacy Pension Plan, a cost-sharing multiple-employer pension plan administered by the TCRS. The Teacher Legacy Pension Plan closed to new membership on June 30, 2014, but will continue providing benefits to existing members and retirees. Beginning July 1, 2014, the Teacher Retirement Plan became effective for teachers employed by LEAs after June 30, 2014. The Teacher Retirement Plan is a separate cost-sharing, multiple-employer defined benefit plan. The TCRS was created by state statute under Tennessee Code Annotated (TCA), Title 8, Chapters 34-37. The TCRS Board of Trustees is responsible for the proper operation and administration of all employer pension plans in the TCRS. The Tennessee Treasury Department, an agency in the legislative branch of state government, administers the plans of the TCRS. The TCRS issues a publicly available financial report that can be obtained at https://treasury.tn.gov/Retirement/Boards-and-Governance/Reporting-and-Investment-Policies. Benefits Provided. TCA, Title 8, Chapters 34-37 establish the benefit terms and can be amended only by the Tennessee General Assembly. Members of the Teacher Legacy Pension Plan are eligible to retire with an unreduced benefit at age 60 with five years of service credit or after 30 years of service credit regardless of age. Benefits are determined by a formula using the member’s highest five consecutive year average compensation and the member’s years of service credit. A reduced early retirement benefit is available to vested members at age 55. Members are vested with five years of service credit. Service-related disability benefits are provided regardless of length of service. Five years of service is required for nonservice-related disability eligibility. The service-related and nonservice-related disability benefits are determined in the same manner as a service retirement

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benefit but are reduced ten percent and include projected service credits. A variety of death benefits is available under various eligibility criteria. Member and beneficiary annuitants are entitled to an automatic cost of living adjustment (COLA) after retirement. A COLA is granted each July for annuitants retired prior to the second of July of the previous year. The COLA is based on the change in the consumer price index (CPI) during the prior calendar year, capped at three percent, and applied to the current benefit. No COLA is granted if the change in the CPI is less than one-half percent. A one percent COLA is granted if the CPI change is between one-half and one percent. A member who leaves employment may withdraw their employee contributions, plus any accumulated interest. Contributions. Contributions for teachers are established in the statutes governing the TCRS and may only be changed by the Tennessee General Assembly. Teachers are required to contribute five percent of their salaries. The Local Education Agencies (LEAs) make employer contributions at the rate set by the Board of Trustees as determined by an actuarial valuation. By law, employer contributions for the Teacher Legacy Pension Plan are required to be paid. The TCRS may intercept the state shared taxes of the sponsoring governmental entity of the LEA if the required employer contributions are not remitted. Employer contributions by the Lincoln County School Department for the year ended June 30, 2021, to the Teacher Legacy Pension Plan were $1,278,474, which is 10.63 percent of covered payroll. The employer rate, when combined with member contributions, is expected to finance the costs of benefits earned by members during the year, the cost of administration, as well as an amortized portion of any unfunded liability. Pension Liabilities (Assets), Pension Expense (Negative Pension Expense), and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions

Pension Liability (Assets). At June 30, 2021, the school department reported a pension liability (asset) of ($2,787,203) for its proportionate share of the net pension liability (asset). The net pension asset was measured as of June 30, 2020, and the total pension liability used to calculate the net pension liability (asset) was determined by an actuarial valuation as of that date. The school department’s proportion of the net pension liability (asset) was based on the school department’s share of contributions to the pension plan relative to the contributions of all participating LEAs. At the measurement date of June 30, 2020, the school department’s proportion was .365500 percent. The proportion measured at June 30, 2019, was .381313 percent.

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Pension Expense (Negative Pension Expense). For the year ended June 30, 2021, the school department recognized pension expense (negative pension expense) of ($38,180). Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2021, the school department reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:



Difference Between Expected and Actual Experience $ 105,957 $ 1,340,038Changes in Assumptions 253,204 0Net Difference Between Projected and Actual Earnings on Pension Plan Investments 622,493 0Changes in Proportion of Net Pension Liability (Asset) 56,627 24,835LEA's Contributions Subsequent to the Measurement Date of June 30, 2020 1,278,474 N/A

Total $ 2,316,755 $ 1,364,873

The school department’s employer contributions of $1,278,474 reported as pension related deferred outflows of resources subsequent to the measurement date, will be recognized as a reduction (increase) in net pension liability (asset) in the year ending June 30, 2022. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year EndingJune 30 Amount

2022 $ (681,093)2023 (91,646)2024 33,7912025 412,3562026 0Thereafter 0

In the table above, positive amounts will increase pension expense, while negative amounts will decrease pension expense.

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Actuarial Assumptions. The total pension liability in the June 30, 2020, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:





Mortality rates are based actual experience including an adjustment for some anticipated improvement. The actuarial assumptions used in the June 30, 2020, actuarial valuation were based on the results of an actuarial experience study performed for the period July 1, 2012, through June 30, 2016. The demographic assumptions were adjusted to more closely reflect actual and expected future experience. The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees in conjunction with the June 30, 2016, actuarial experience study. A blend of future capital market projections and historic market returns was used in a building-block method in which a best estimate of expected future real rates of return (expected returns, net of pension plan investments expense and inflation) is developed for each major asset class. These best estimates are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by adding expected inflation of 2.5 percent. The best estimates of geometric real rates of return and the TCRS investment policy target asset allocation for each major asset class are summarized in the following table:

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Total 100 %

The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees as 7.25 percent based on a blending of the factors described above. Discount Rate. The discount rate used to measure the total pension liability was 7.25 percent. The projection of cash flows used to determine the discount rate assumes that employee contributions will be made at the current rate and that contributions from all the LEAs will be made at the actuarially determined contribution rate pursuant to an actuarial valuation in accordance with the funding policy of the TCRS Board of Trustees and as required to be paid by state statute. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make projected future benefit payments of current active and inactive members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the Proportionate Share of Net Pension Liability (Asset) to Changes in the Discount Rate. The following presents the school department’s proportionate share of the net pension liability (asset) calculated using the discount rate of 7.25 percent, as well as what the school department’s proportionate share of the net pension liability (asset) would be if it were calculated using a discount rate that is one percentage point lower (6.25%) or one percentage point higher (8.25%) than the current rate:

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Proportionate Share of 1% Discount 1% the Net Pension Decrease Rate Increase Liability (Asset) 6.25% 7.25% 8.25%

Net Pension Liability (Asset) $ 8,668,140 $ (2,787,203) $ (12,286,374)

Pension Plan Fiduciary Net Position. Detailed information about the pension plan’s fiduciary net position is available in a separately issued TCRS financial report.

2. Deferred Compensation The Lincoln County School Department offers its employees a deferred compensation plan established pursuant IRC Section 403(b). All costs of administering and funding this program are the responsibility of plan participants. The Section 403(b) plan assets remain the property of the contributing employees and are not presented in the accompanying financial statements. IRC Section 403(b) establishes participation, contribution, and withdrawal provisions for the plan. Teachers hired after July 1, 2014, by the school department are required to participate in a hybrid pension plan consisting of a defined benefit portion, which is detailed in the pensions footnote above and is managed by the Tennessee Consolidated Retirement System, and a defined contribution portion which is placed into the state’s 401(k) plan and is managed by the employee. The defined contribution portion of the plan requires that the school department contribute five percent of each teacher’s salary into their deferred compensation plan. In addition, teachers are required to contribute two percent of their salaries into this deferred compensation plan, unless they opt out of the employee portion. During the year, the school department contributed $253,193 and teachers contributed $128,482 to this deferred compensation pension plan.

H. Other Postemployment Benefits (OPEB)

Lincoln County and the discretely presented Lincoln County School Department provide OPEB benefits to its retirees under the state administered public entity risk pools. For reporting purposes, the plans are considered single employer defined benefit OPEB plans based on criteria in Statement No. 75 of the Governmental Accounting Standards Board (GASB). The plans are funded on a pay-as-you-go basis and there are no assets accumulating in a trust that meets the criteria of paragraph 4 of GASB Statement No. 75.

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OPEB Provided through State Administered Public Entity Risk Pools Retirees of Lincoln County are provided healthcare under a Local Government Plan (LGP) until they reach Medicare eligibility. Likewise, the school department provides healthcare benefits to its employees under the Local Education Plan (LEP) until they reach Medicare eligibility. Both certified and noncertified of Lincoln County School Department may then join the Tennessee Plan – Medicare (TNM), which provides supplemental medical insurance for retirees with Medicare. However, the school department does not provide any subsidy (direct or indirect) to this plan and therefore does not recognize any OPEB liability associated with the TNM. The county and school department’s total OPEB liability for each plan was measured as of June 30, 2020, and was determined by an actuarial valuation as of that date.

Actuarial Assumptions and Other Inputs. The total OPEB liability in the June 30, 2020, actuarial valuation of each plan was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified: Actuarial Cost Method Entry Age NormalInflation 2.1%Salary Increases Salary increases used in the July 1, 2020,

TCRS actuarial valuation; 3.44% to 8.72%, including inflation

Discount Rate 2.21%Healthcare Cost Trend Rates Based on the Getzen Model, with trend

starting at 9.02% for pre-65 retirees in the 2021 calendar year, and decreasing annually over a 10-year period to an ultimate trend rate of 4.5%

Retirees Share of Benefit Related Cost Discussed under each plan

The discount rate was 2.21 percent, based on an average rating of AA/Aa as shown the Bond Buyer 20-Year Municipal GO AA index closest to but not later than the measurement date. Mortality rates were based on the results of a statewide experience study undertaken on behalf of the Tennessee Consolidated Retirement System (TCRS). These mortality rates were used in the July 1, 2020, actuarial valuation of the TCRS.

Unless noted otherwise, the actuarial demographic assumptions used in the June 30, 2020, valuations were the same as those employed in the July 1, 2019, Pension Actuarial Valuation of the TCRS. These assumptions were

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developed by TCRS based on the results of an actuarial experience study for the period July 1, 2012 - June 30, 2016. The demographic assumptions were adjusted to more closely reflect actual and expected future experience. Mortality tables are used to measure the probabilities of participants dying before and after retirement. The mortality rates employed in this valuation are taken from the RP-2014 Healthy Participant Mortality Table for Annuitants for non-disabled post-retirement mortality, with mortality improvement projected to all future years using Scale MP-2016. Post-retirement tables are Blue Collar and adjusted with a 2 percent load for males and a -3 percent load for females. Mortality rates for impaired lives are the same as those used by TCRS and are taken from a gender distinct table published in the IRS Ruling 96-7 for disabled lives with a 10 percent load. Changes in Assumptions. The discount rate changed from 3.51 percent as of the beginning of the measurement period to 2.21 percent as of the measurement date of June 30, 2020. This change in assumption increased the total OPEB liability. Other changes in assumptions include adjustments to initial per capita costs and health trend rates. The trend rate applicable to the 2021 plan year was revised from 6.03 percent to 9.02 percent. The assumed long term inflation rate was changed from 2.2 percent to 2.1 percent. Local Government OPEB Plan (Primary Government) Plan Description. Employees of Lincoln County are provided with pre-65 retiree health insurance benefits through the Local Government Plan (LGP) administered by the Tennessee Department of Finance and Administration. All eligible pre-65 retired employees and disability participants of local governments, who choose coverage, participate in the LGP. Benefits Provided. Lincoln County offers the LGP to provide health insurance coverage to eligible pre-65 retirees and disabled participants of local governments. With the exception of a small group of grandfathered individuals, retirees are required to discontinue coverage under the LGP upon obtaining Medicare eligibility. Insurance coverage is the only postemployment benefit provided to retirees. An insurance committee created in accordance with TCA 8-27-701 establishes and amends the benefit terms of the LGP. All members have the option of choosing between the premier preferred provider organization (PPO), standard PPO, limited PPO, or the wellness health savings consumer-driven health plan (CDHP) for healthcare benefits. Retired plan members, of the LGP, receives the same plan benefits as active employees, at a blended premium rate that considers the cost of all participants. This creates an implicit subsidy for retirees. Participating employers determine their own policy related to direct subsidies provided for the retiree premiums. Lincoln County does not provide a direct subsidy and is only subject to the implicit subsidy.

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Employees Covered by Benefit Terms

At the measurement date of June 30, 2020, the following employees were covered by the benefit terms: Inactive Employees Currently Receiving Benefit Payments 2Inactive Employees Entitled to But Not Yet Receiving Benefit Payments 0Active Employees Eligible for Benefits 176

Total 178

An insurance committee, created in accordance with TCA 8-27-701, establishes the required payments to the LGP by member employers and employees through the blended premiums established for active and retired employees. Claims liabilities of the plan are periodically computed using actuarial and statistical techniques to establish premium rates. For the fiscal year ended June 30, 2021, the county paid $12,978 to the LGP for OPEB benefits as they came due.

Changes in the Total OPEB Liability

LincolnCounty

Balance July 1, 2019 $ 309,308Changes for the Year: Service Cost 28,580 Interest 11,675 Difference between Expected and Actuarial Experience (8,275) Changes in Assumption and Other Inputs 30,882

Benefit Payments (10,598)Net Changes $ 52,264

Balance June 30, 2020 $ 361,572

OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2021, the county recognized OPEB expense of $30,559. At June 30, 2021, the county reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

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Difference Between Expected and Actual Experience $ 0 $ 105,653Changes of Assumptions/Inputs 55,222 11,696Benefits Paid After the Measurement Date of June 30, 2020 12,978 0

Total $ 68,200 $ 117,349

The amount shown above for “Benefits Paid After the Measurement Date” will be recognized as a reduction to OPEB liability in the following measurement period. Amounts reported as deferred inflows and deferred outflows of resources (excluding benefits paid after the measurement date) related to OPEB will be recognized in OPEB expense as follows:

Year Ending June 30 Amount

2022 $ (9,696)2023 (9,696)2024 (9,696)2025 (9,696)2026 (9,696)Thereafter (13,647)

In the table shown above positive amounts will increase OPEB expense while negative amounts will decrease OPEB expense. Sensitivity of the Total OPEB Liability to Changes in the Discount Rate. The following presents the total OPEB liability of the county calculated using the current discount rate as well as what the OPEB liability would be if it was calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate:

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Discount Rate Current1% Discount 1%

Decrease Rate Increase1.21% 2.21% 3.21%

Total OPEB Liability $ 391,893 $ 361,572 $ 332,938

Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rate. The following presents the total OPEB liability of the county calculated using the current healthcare cost trend rate, as well as what the OPEB liability would be if it was calculated using a trend rate that is one percentage point lower or one percentage point higher than the current rate: Healthcare Cost Trend Rate Current

1% Trend 1%Decrease Rate Increase

8.02 to 3.5% 9.02 to 4.5% 10.02 to 5.5%

Total OPEB Liability $ 317,626 $ 361,572 $ 413,779

Closed Local Education (LEP) OPEB Plan (Discretely Presented School Department)

Plan Description. Employees of the Lincoln County School Department who were hired prior to July 1, 2015, are provided with pre-65 retiree health insurance benefits through the closed Local Education Plan (LEP) administered by the Tennessee Department of Finance and Administration. All eligible pre-65 retired teachers, support staff, and disability participants of local education agencies, who choose coverage, participate in the LEP. This plan is closed to the employees of all participating employers that were hired on or after July 1, 2015.

Benefits Provided. The Lincoln County School Department offers the LEP to provide health insurance coverage to eligible pre-65 retirees, support staff, and disabled participants of local education agencies. Retirees are required to discontinue coverage under the LEP upon obtaining Medicare eligibility. Insurance coverage is the only postemployment benefit provided to retirees. An insurance committee created in accordance with TCA 8-27-301 establishes and amends the benefit terms of the LEP. All members have the option of choosing between the premier preferred provider organization (PPO), standard PPO, limited PPO, or the wellness health savings consumer-driven health plan (CDHP) for healthcare benefits. Retired plan members of the LEP receive the same plan benefits as active employees at a blended premium rate that considers the cost of all participants. This creates an implicit subsidy for retirees. Participating employers determine their own policy related to direct subsidies provided for the retiree premiums. Lincoln

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County does not provide a direct subsidy and is only subject to the implicit subsidy. Employees Covered by Benefit Terms

At the measurement date of June 30, 2020, the following employees were covered by the benefit terms: Inactive Employees Currently Receiving Benefit Payments 16Inactive Employees Entitled to But Not Yet Receiving Benefit Payments 1Active Employees Eligibile For Benefits 347

Total 364

A state insurance committee, created in accordance with TCA 8-27-301, establishes the required payments to the LEP by member employers and employees through the blended premiums established for active and retired employees. Claims liabilities of the plan are periodically computed using actuarial and statistical techniques to establish premium rates. Administrative costs are allocated to plan participants. Employers contribute towards employee costs based on their own developed policies. During the current reporting period, the school department paid $111,483 to the LEP for OPEB benefits as they came due.

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Changes in the Collective Total OPEB Liability

Lincoln County State ofSchool Department TN Total OPEB

67.02% 32.98% Liability

Balance July 1, 2019 $ 2,229,450 $ 1,219,475 $ 3,448,925Changes for the Year: Service Cost $ 116,618 $ 57,375 $ 173,993 Interest 82,599 40,638 123,237 Difference between Expected and Actuarial Experience (7,306) (3,595) (10,901) Changes in Proportions 82,167 (82,167) 0 Changes in Assumption and Other Inputs 280,114 157,742 437,856

Benefit Payments (137,931) (87,788) (225,719)Net Changes $ 416,261 $ 82,205 $ 498,466

Balance June 30, 2020 $ 2,645,711 $ 1,301,680 $ 3,947,391

Share of Collective Liability

The Lincoln County School Department has a special funding situation related to benefits paid by the State of Tennessee for its eligible retired employees participating in the LEP. The Lincoln County School Department's proportionate share of the collective total OPEB liability was based on a projection of the employer’s long-term share of benefit payments to the OPEB plan relative to the projected share of benefit payments of all participating employers and nonemployer contributing entities, actuarially determined. The school department recognized $71,662 in revenue for subsidies provided by nonemployer contributing entities for benefits paid by the LEP for school department retirees.

During the year, the Lincoln County School Department’s proportionate share of the collective OPEB liability was 67.02 percent and the State of Tennessee’s share was 32.98 percent. OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2021, the school department recognized OPEB expense of $246,324, including the state’s share of the expense. At June 30, 2021, the school department reported deferred outflows of resources and deferred inflows of resources related to its proportionate share of OPEB from the following sources:

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Difference Between Expected and Actual Experience $ 86,750 $ 384,528Changes of Assumptions/Inputs 307,181 224,324Changes in Proportion and Differences Between Amounts Paid as Benefits Came Due and Proportionate Share Amounts Paid by the Employer and Nonemployer Contributors As Benefits Came Due 115,431 35,373Benefits Paid After the Measurement Date of June 30, 2020 111,483 0

Total $ 620,845 $ 644,225

The amount shown above for “Benefits Paid After the Measurement Date” will be recognized as a reduction to OPEB liability in the following measurement period. Amounts reported as deferred inflows and deferred outflows of resources (excluding benefits paid after the measurement date) related to OPEB will be recognized in OPEB expense as follows:

Year Ending SchoolJune 30 Department

2022 $ (24,555)2023 (24,555)2024 (24,555)2025 (24,555)2026 (24,555)Thereafter (12,088)

In the table shown above, positive amounts will increase OPEB expense while negative amounts will decrease OPEB expense. Sensitivity of Proportionate Share of the Collective Total OPEB Liability to Changes in the Discount Rate. The following presents the school department’s proportionate share of the collective total OPEB liability related to the LEP, as well as what the proportionate share of the collective total OPEB liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current discount rate.

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Discount Rate Current1% Discount 1%

Decrease Rate Increase1.21% 2.21% 3.21%

Proportionate Share of the Collective Total OPEB Liability $ 2,841,978 $ 2,645,711 $ 2,456,942

Sensitivity of Proportionate Share of the Collective Total OPEB Liability to Changes in the Healthcare Cost Trend Rate. The following presents the school department’s proportionate share of the collective total OPEB liability related to the LEP, as well as what the proportionate share of the collective total OPEB liability would be if it were calculated using a healthcare cost trend rate that is one percentage point lower or one percentage point higher than the current healthcare cost trend rate.

Healthcare Cost Trend Rate

1% Curent 1%Decrease Rates Increase

8.02 to 3.5% 9.02 to 4.5% 10.02 to 5.5%

Proportionate Share of the Collective Total OPEB Liability $ 2,339,444 $ 2,645,711 $ 3,009,789

I. Office of Central Accounting, Budgeting, and Purchasing

Office of Director of Finance Lincoln County operates under provisions of the County Financial Management System of 1981. This act provides for a central system of accounting, budgeting, and purchasing covering all county departments. This act provides for the creation of a finance department operated under the direction of the finance director.

J. Purchasing Law The County Financial Management System of 1981 provides for the finance director or a deputy appointed by him to serve as the county purchasing agent. The finance director serves as the purchasing agent for Lincoln County. All purchase orders are issued by the finance department. Purchases exceeding $25,000 for the Office of County Mayor, the discretely presented school department, and the Office of Highway Superintendent are required to be competitively bid.

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VI. OTHER NOTES – LINCOLN HEALTH SYSTEM (ENTERPRISE FUND)

A. Summary of Significant Accounting Policies Reporting Entity – The accompanying financial statements present the Lincoln Health System, formerly the Lincoln County Health System. The health system is owned by Lincoln County, Tennessee, and is not a legal entity separate and apart from the primary government. The health system is financially accountable and there is a financial benefit/burden relationship with the county. Accordingly, it is blended as an enterprise fund as part of the financial statements of the primary government. The health system is governed by the Lincoln County Health System Committee consisting of five members appointed from the Lincoln County Board of Commissioners and two physicians appointed from the medical staff. Each committee member serves a three-year rotational term. Principles of Departmental Combination – The health system’s financial statements include the following financial activities also referred to herein as departments: Lincoln Medical Center (medical center), Lincoln Medical Center EMS (ambulance service), Lincoln Medical Home Health and Hospice (home health and hospice care), Patrick Rehab Center (rehab center), and Donalson Care Center (care center). Hospital-based departments include the medical center, ambulance service, home health and hospice care, and rehab center. All significant interdepartmental transactions have been eliminated. The medical center provides general acute health care services for Lincoln County and surrounding areas. The medical center is licensed for 49 acute care beds. The ambulance service provides emergency medical transportation services. The home health and hospice care provide skilled nursing, therapy, personal care, and hospice services. The rehab center provides centralized rehabilitation, health education, therapy and other related programs and services to other departments of the health system and to local businesses, industries, and residents. The care center provides long-term health care services. The Donalson Care Center provides long-term health care services. The care center is licensed for 168 dually certified beds (intermediate and skilled level of care). The medical center’s financial statements include the Lincoln Medical Center Auxiliary Gift Shop (auxiliary). This cost center is not a separate legal entity, and it is financially accountable to the health system. The auxiliary condensed statement of net position includes cash of $74,508, supplies of $6,217, and a restricted net position of $80,725. The condensed statement of revenues, expenses, and changes in net position includes net operating revenue of $11,501, operating expenses of $8,017, nonoperating revenues and (expenses), net of ($6,856), and a change in net position of ($3,372). Basis of Accounting – The health system uses enterprise fund accounting. Revenues and expenses are recognized on the accrual basis using the

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economic resources measurement focus. Accordingly, revenues are recognized when earned, and expenses are recognized when incurred. The accompanying financial statements of the health system conform with generally accepted accounting principles (GAAP) in the United States as applied to governments and general practices of governmental health care entities. The Governmental Accounting Standards Board (GASB) is the standard setting body for establishing governmental GAAP accounting and financial reporting standards. The GASB’s Codification of Governmental Accounting and Financial Reporting Standards document these principles. Use of Estimates – The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates include the provision for contractual allowances and uncollectible accounts, and self-insurance reserves for the group health insurance plan for eligible employees. Custodial Credit Risk – The health system’s cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition, excluding restricted cash held for patient trust funds. The health system’s policies limit deposits and investments to those instruments allowed by applicable state laws. State statutes require that all deposits with financial institutions must be collateralized by securities whose market value is equal to 105 percent of the value of uninsured deposits. The deposits must be collateralized by federal depository insurance or the Tennessee Bank Collateral Pool, by collateral held by the health system’s agent in the health system’s name, or by the Federal Reserve Banks acting as third party agents. State statutes also authorize the health system to invest in bonds, notes, or treasury bills of the United States or any of its agencies, certificates of deposit at Tennessee state chartered banks and savings and loan associations and federally chartered banks and savings and loan associations, repurchase agreements utilizing obligations of the United States or its agencies as the underlying securities, and the state pooled investment fund. Statutes also require that securities underlying repurchase agreements must have a market value of at least equal to the amount of funds invested in the repurchase transaction. As of June 30, 2021, all bank deposits are fully collateralized or insured. Special Funds – Special Funds consist of restricted cash by contributors and special fund investments (primarily bank certificates of deposit and money market mutual funds in compliance with state statutes) held for internally

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designated purposes by the health system, and funds legally restricted for debt service requirements and held by a trustee under an indenture agreement. Supplies – Supplies are stated at cost (first-in, first-out method) that approximates the lower of cost or market. Capital Assets – Capital assets are stated at cost, less accumulated depreciation that is computed on the straight-line method over the estimated useful life of the asset. Equipment under capital lease obligations is amortized on the straight-line method over the shorter period of the lease term or the established useful life of the equipment. Such amortization is included in depreciation and amortization in the financial statements. Contributed capital assets are reported at their estimated fair value at the time of their donation. Major expenditures for property and those that substantially increase useful lives are capitalized. Maintenance, repairs, and minor renewals are expensed as incurred. The health system evaluates the recoverability of the carrying value of long-lived assets whenever events or circumstances indicate the carrying amount may not be recoverable. If a long-lived asset is tested for recoverability and the undiscounted estimated future cash flows expected to result from the use and eventual disposition of the asset is less than the carrying amount of the asset, the asset cost is adjusted to fair value and the impairment loss is recognized as an amount by which the carrying amount of a long-lived asset cost exceeds its fair value. New Accounting Pronouncements – In June 2017, the GASB issued GASB Statement No. 87, Leases (“GASB 87”). GASB 87 increases the usefulness of financial statements by requiring recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. GASB 87 also establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use underlying asset. The adoption of GASB 87 is effective for reporting periods beginning after June 15, 2021. The health system is currently assessing the impact of this statement on the health system’s combined financial statements. Grants and Contributions – The health system receives grants and contributions from individuals and private organizations. Revenues from grants and contributions (including contributions of capital assets and governmental grants) are recognized when all eligibility requirements, including time requirements are met. Governmental grants may be subject to

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audit and acceptance by the granting agency and, as a result of such audit, adjustments could be required. Grants and contributions may be restricted either for specific operating purposes or for capital purposes. When both restricted and unrestricted resources are available for use, the health system uses the restricted resources first, then the unrestricted resources as they are needed. Amounts that are unrestricted or that are restricted to a specific operating purpose are reported as nonoperating revenues. Amounts restricted to capital acquisitions are reported after nonoperating revenues and expenses. Compensated Absences – The health system’s employees earn paid time off (PTO) benefits for vacation, sick, and holiday leave at varying rates that may accumulate up to a specified maximum depending on years of service. In the event of termination, an eligible employee is paid for accumulated PTO benefits, excluding discharged employees. The estimated amount of PTO payable is accrued when earned and reported as a current liability in the accompanying financial statements. Debt Issue Costs – Costs of issuance other than insurance are charged to expense in the period incurred. Premiums and discounts realized on debt issuances are deferred and amortized over the terms of the respective debt using a method which approximates the effective interest method. Charity Care – The health system provides service to eligible patients at reduced or no cost based upon the individual patient’s financial resources. The system’s policy provides for 100 percent charity to patients with income up to 100 percent or less of the federal poverty guidelines, 75 percent to patients with income from 101 to 150 percent, and 50 percent to patients with income from 151 to 200 percent. Records are kept to identify, approve, and monitor those costs that are incurred under the charity care policy. Because the system does not expect payment, estimated charges for charity care are not included in revenue. In addition to the approved charity care described above, the system believes that other uncollected accounts would be approved under its charity care policy if information about the patient’s financial resources were shared with the system. Such amounts are not considered charity care. Income Taxes – The health system, as an instrumentality of Lincoln County, Tennessee, is exempt from federal and state income taxes. Risk Management – The health system is exposed to various risks of losses related to torts; thefts of, damage to, and destruction of assets; errors and omissions; employee injuries and illnesses; natural disasters; medical malpractice; and employee health, dental, and accident benefits. The health system maintains commercial insurance coverage for claims arising from such matters. Settled claims in the past three years have not exceeded

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insurance coverage. There were no significant reductions in coverage compared to the prior year. Deferred Outflows/Inflows of Resources – In addition to assets, the Statement of Net Position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense) until then. The health system has two items that qualify for reporting in this category. The first is the deferred charge on refunding. A deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. The second item is a deferred outflow related to pension, which is described further in Note VI.H. In addition to liabilities, the Statement of Net Position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The health system has one item that qualifies for reporting in this category. It is a deferred inflow related to pension, which is described further in Note VI.H. Unearned Revenue – Unearned revenue is recognized as a liability in the statement of net position in the accounting period in which the revenue does not meet the revenue recognition criteria or, in the case of grants, when the grant advance has not been expended. Unearned revenue related to CARES Act advances is described further in Note VI.O. Net Position – Net position is the difference between assets plus deferred outflows of resources and liabilities plus deferred inflows of resources. Net investment in capital assets represents capital assets reduced by accumulated depreciation and by any outstanding debt related to the acquisition, construction, or improvement of those assets as well as any deferred outflows or inflows of resources attributable to the acquisition, construction, or improvement of those assets. The restricted component of net position consists of restricted assets reduced by liabilities and deferred inflows of resources related to those assets. Restricted assets occur when constraints are placed on the asset by creditors (such as debt covenants), grantors, contributors, laws, regulations (such as pensions and auxiliary), etc. Unrestricted net position is the amount of the assets, deferred outflows of resources, liabilities, and deferred inflows of resources that are not included in the determination of net investment in capital assets or the restricted component of net position. The debt service reserve is presented as a restricted component of net position. The debt service reserve fund held under an indenture agreement is in compliance with the required amount to be maintained by the related long-term debt as described in Note VI.G.

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Operating Revenues and Expenses – The health system’s Statement of Revenues, Expenses, and Changes in Net Position distinguishes between operating and nonoperating revenues and expenses. Operating revenues result from exchange transactions associated with providing patient health care services - the health system’s principal activity. Therefore, no additional segment financial information or disclosures are presented. Patient service revenue is recorded at the estimated net realizable amounts from patients, third-party payors, and others for services rendered. Settlements under reimbursement agreements with third-party payors are estimated and recorded in the period the related services are rendered and are adjusted in future periods as adjustments become known or as years are no longer subject to audit, review, or investigation. Laws governing the third-party programs are extremely complex and subject to interpretation. As a result, there is at least a reasonable possibility that recorded estimates will change by a material amount in the near term. Other operating revenues include charges from services other than to patients such as the sale of medical and pharmaceutical supplies, medical transcripts, cafeteria sales, educational training services, etc. Investment income, nonexchange revenues, grants, contributions, and incentive payments received for purposes other than capital asset acquisition, and insurance claim proceeds are reported as nonoperating revenues. Operating expenses are all expenses incurred to provide health care services, other than financing costs. The health system is eligible to receive payments from an endowment fund for the benefit of eligible patients. The endowment fund is legally separate from the health system and under the control of an independent trustee. Therefore, it is not included in the health system’s financial statements. The health system received $16,609 from this endowment fund for the year ended June 30, 2021. Pensions – For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of Lincoln County Medical Center’s (i.e. Hospital based departments) participation in the Public Employee Retirement Plan of the Tennessee Consolidated Retirement System (TCRS), and additions to/deductions from Lincoln County Medical Center’s fiduciary net position have been determined on the same basis as they are reported by the TCRS for the Public Employee Retirement Plan. For this purpose, benefits (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms of the Public Employee Retirement Plan of TCRS. Investments are reported at fair value.

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B. Special Funds

Special funds are designated by the health system for specific purposes such as future capital improvements, insurance, and debt service, as described in Note VI.E. Such internally designated special funds remain under the control of the health system, which may at its discretion, later use the funds for other purposes.

C. Charity Care

The gross charges excluded from net patient service revenue under the system’s charity policy was $481,503 for the year ended June 30, 2021. The estimated cost of charity care is based upon the ratio of cost to gross charges and then multiplying that ratio by the gross uncompensated charges associated with providing services furnished under the charity care policy totaled $566,459 for the year ended June 30, 2021.

D. Net Patient Service Revenue

A summary of the payment arrangements with major third-party payors follows: Medicare – Medical center inpatient care services rendered to Medicare program beneficiaries are paid at prospectively determined rates per discharge. These rates vary according to a patient classification system that is based on clinical, diagnostic, and other factors. Medical center outpatient services to Medicare beneficiaries are based upon a prospective payment system comprised of a patient’s ambulatory patient classification system, as well as fee schedules for certain ancillary services including ambulance services and hospital rehab services. Beginning in the prior fiscal year, care center Medicare payments for long term skill care are based upon a patient driven payment model that incorporates the patient’s clinical, functional, and service level factors. Beginning in the prior fiscal year, home health and hospice care also have unique Medicare reimbursement methodologies with home health payments for services based on patient driven group model in a thirty-day treatment window. Each department is reimbursed at a tentative rate with final settlement determined after submission of an annual cost report by the department and audit thereof by the Medicare fiscal intermediary. Net patient service revenue increased $129,001, as a result of changes in estimates due to the prior fiscal year’s cost report settlements. The health system’s Medicare cost reports have been audited by the fiscal intermediary through June 30, 2017, at the report date.

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Medicaid – The Medicaid program for acute care services was replaced by a waiver program, TennCare, as approved by the Health Care Financing Administration (HCFA). Services to program beneficiaries are provided under contract with various managed care organizations through the State of Tennessee TennCare program. Payments for medical center inpatient services are paid based either upon a prospective per-diem rate or per discharge rate. Payments for hospital outpatient, ambulance services, and home health and hospice care services are paid based upon a fee schedule. Care center services rendered to Medicaid program beneficiaries are reimbursed at per-diem rates determined by the State of Tennessee Comptroller's Office. The rates for both intermediate care (level I) and skilled care (level II) program beneficiaries are paid on the same prospective per-diem basis subject to a statewide ceiling rate. Beginning July 1, 2019, these rates also incorporate an acuity and quality-based factor. Others – The medical center, ambulance service, and rehab center have entered into payment agreements with certain commercial insurance carriers and managed care health plans. The basis for reimbursement under these agreements includes prospectively determined rates per diems and per discharge rates for hospital inpatient care with hospital outpatient services reimbursed using ambulatory patient classification criteria as well as negotiated rate schedules.

E. Deposits and Special Funds The health system’s carrying amount of deposits was $10,838,716, and the bank balance was $11,506,843 as of June 30, 2021. The health system’s carrying amount for special funds, excluding an amount held under an indenture agreement, was $10,435,322 and the bank balance was $10,431,973 as of June 30, 2021. The bank balance totaling $19,929,327 as of June 30, 2021, is either insured by the Federal Deposit Insurance Corporation or Tennessee Bank Collateral Pool. The remaining balance of $2,009,489 as of June 30, 2021, is collateralized by securities pledged by a financial institution and held by their agent in the name of the system. Interest Rate Risk – For an investment, this is the risk that a change in interest rates will affect the fair market value of investments held. The health system has established a debt service reserve fund under an indenture agreement for repayment of the outstanding Series 2007 and 2013 bonds. The reserve fund consists of a money market fund that normally invests at least 80 percent of its assets in U.S. Treasury securities and repurchase agreements for those securities. Its value as of June 30, 2021, was $1,098,515. Generally, these investments maintain a dollar weighted average maturity at 60 days or less.

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These investments are exposed to declines in fair values due to interest rate changes. The health system’s exposure is mitigated through the limited maturities of the investments. The health system has not adopted formal deposit or investment policies for exposure to various forms of risks associated with its deposit and investment practices, other than to follow state statutes. Special funds are held as follows as of June 30:

Internally Designated for Capital Improvements, Insurance, and Debt Service, and Other Purposes $ 10,338,499Restricted by Contributors 74,508Held Under an Indenture Agreement 1,098,515Held Under Patient Trust Fund Arrangements - Cash 22,315Less: Amounts Reclassified to Meet Current Liabilities (22,315)

Total $ 11,511,522

In the current year, internally designated funds were used for capital and debt service purposes.

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F. Capital Assets

Capital assets activity for the year ended June 30, 2021, was as follows:

Balance Balance7-1-20 Increases 6-30-21

Captial Assets Not Depreciated:Land $ 777,254 $ 300,000 $ 0 $ 1,077,254Property Under Capitalized Lease 300,000 0 (300,000) 0Construction in Progress 0 19,731 0 19,731Property held for sale 74,815 0 0 74,815 Total Capital Assets Not Depreciated $ 1,152,069 $ 319,731 $ (300,000) $ 1,171,800

Capital Assets Depreciated: Ground Improvements $ 2,431,679 $ 0 $ 0 $ 2,431,679 Buildings and Improvements 25,547,440 0 0 25,547,440 Equipment 19,522,612 942,965 (97,771) 20,367,806 Total Capital Assets Depreciated $ 47,501,731 $ 942,965 $ (97,771) $ 48,346,925

Less Accumulated Depreciation For: Ground Improvements $ (1,451,756) $ (65,550) $ 0 $ (1,517,306) Buildings and Improvements (18,418,026) (767,038) 0 (19,185,064) Equipment (16,246,253) (990,335) 91,078 (17,145,510)Total Accumulated Depreciation $ (36,116,035) $ (1,822,923) $ 91,078 $ (37,847,880)

Capital Assets, Net $ 12,537,765 $ (560,227) $ (306,693) $ 11,670,845

Retirements

The general depreciation rates based on the useful lives for depreciable capital assets are five percent for ground improvements, 2.5 to five percent for buildings and improvements, and five to 20 percent for equipment and equipment under capital lease. Depreciation and amortization of capital lease obligation expense for the year ended June 30, 2021, totaled $1,822,923. Accumulated amortization for equipment under capital lease obligations was $449,824 at June 30, 2021. Property held for sale includes the health system’s original Hospital Home Health property totaling $74,815.

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In the prior fiscal year, a Care Center property was sold resulting in a loss on disposal of $84,559 which is reported in the statements of revenues, expenses, and changes in net position. The construction in progress includes ambulance equipment that will be placed in service in the 2022 year.

G. Long-term Debt The following is a schedule of long-term debt and capital lease obligation activity for the year ended June 30, 2021:

DueBalance Balance Within7-1-20 Additions 6-30-21 One Year

Revenue BondsSeries 2007, Hospital Facility Lease Revenue and Tax Refunding Bonds, due in annual installments of $10,000 to $1,040,000 through May 2028, at an interest rate of 4.2% $ 4,815,000 $ 0 $ (10,000) $ 4,805,000 $ 10,000Series 2013, Hospital Facility Lease Revenue and Tax Refunding Bonds, due in annual installments of $710,000 to 730,000 through May 2023, at an interest rate of 2% 2,165,000 0 (710,000) 1,455,000 725,000General Obligation Bonds Series 2007, General Obligation Refunding Bonds, due in annual installments of $220,000 through May 2021, at an interest rate of 3.93% 220,000 0 (220,000) 0 0Notes and Bonds from Direct Borrowings and Direct PlacementRural Economic Development Loan, due in monthly installments of $1,588 through November 2022, without interest but with administrative expenses 45,994 0 (19,056) 26,938 19,056Capital Lease Obligation, due in monthly installments of $2,038 through May 2024, at an interest rate of 5.74% 85,711 0 (18,543) 67,168 22,064Capital Lease Obligation, due in monthly installments of $2,791 through September 2024, at an interest rate of 4.45% 127,611 0 (26,866) 100,745 29,614Payroll Protection Program Loan-LMC, 24 month term, at an interest rate of 1%, forgiven in 2021 3,222,600 0 (3,222,600) 0 0Payroll Protection Program Loan-LMC, 24 month term, at an interest rate of 1%, forgiven in 2021 1,057,300 0 (1,057,300) 0 0Total long-term debt $ 11,739,216 $ 0 $ (5,284,365) $ 6,454,851 $ 805,734Less current maturities of long-term debt (2,245,308) (805,734)Add unamortized bond premium 53,924 35,524

Total noncurrent liabilities $ 9,547,832 $ 5,684,641

Reductions

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Amortization expense includes net debt premium costs of ($18,399) and debt refunding deferred charges of $45,056 for the year ended June 30, 2021. The annual requirements to amortize all long-term debt outstanding as of June 30, 2021, are as follows:

Year EndingJune 30 Principal Interest Principal Interest

2022 $ 735,000 $ 230,910 $ 70,734 $ 6,2652023 740,000 215,990 62,146 3,6792024 880,000 200,970 54,130 1,7762025 915,000 164,010 7,841 5302026 955,000 125,580 0 02027-2028 2,035,000 129,150 0 0

Total $ 6,260,000 $ 1,066,610 $ 194,851 $ 12,250

Notes and Bonds fromDirect Borrowings and

Revenue Bonds Direct Placements

General Obligation and Revenue Bonds - The system had general obligation and revenue bond issues outstanding as June 30, 2021 as follows: Series 2007 – The health system defeased certain outstanding portions of the Series 1998 and Series 2001 bonds by issuance of $4,960,000 Series 2007 Hospital Facility Lease Revenue and Tax Refunding Bonds and $1,905,000 Series 2007 General Obligation Refunding Bonds and placing the proceeds of the bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the health system’s financial statements. Both Series 2007 bonds are the ultimate obligation of Lincoln County, Tennessee. Both Series 2007 bonds are subject to redemption prior to maturity, as a whole or in part, at any time, at the redemption price plus interest accrued to the redemption date for bonds maturing after May 1, 2021. Series 2013 – The Industrial Development Board of the City of Fayetteville and Lincoln County, Tennessee, issued $6,735,000 Series 2013 Hospital Facility Lease Revenue and Tax Refunding Bonds to advance refund $6,795,000 of its Series 2004 bonds. The net proceeds of $6,918,992 (which included a net premium of $183,992) were used to purchase government securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the Series 2004 refunded bonds and Series 1998 bonds. As a result, the Series 2004 and Series 1998 bonds are considered to be

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defeased and the liability for those bonds has been removed from the financial statements. The Series 2013 bonds are the ultimate obligation of Lincoln County, Tennessee. The Series 2013 bonds are subject to redemption prior to maturity, as a whole or in part, at any time, at the redemption price plus interest accrued to the redemption date for bonds maturing after May 1, 2023. The Series 2013 bonds are on a parity lien with the Series 2007 bonds. For the year ended June 30, 2021, the health system did maintain the required debt covenant ratio of 1.15:1 established for the outstanding Series 2007 and Series 2013 bonds. Direct Borrowings and Direct Placements - The system had direct borrowings and direct placements outstanding as June 30, 2021 as follows: In 2016, the health system obtained loan proceeds of $133,334 as a pass-through from the Board of Public Utilities, City of Fayetteville, Tennessee. The Board of Public Utilities entered into a loan agreement with the USDA pursuant to the Rural Electrification Act of 1936 for a Rural Economic Development Loan for the purchase of equipment by the health system. The health system obtained a standby letter of credit to secure repayment of the loan. The capital lease obligations are secured by the related property and equipment. The gross amount of assets recorded under capital leases and the accumulated amortization/depreciation is recorded in the statement of net position and described earlier in Note VI.F. The future minimum lease payments and the net present value of these minimum lease payments are included in the annual requirements to amortize outstanding long-term debt. In the prior fiscal year, Payroll Protection Program loan advances were obtained from a local financial institution in connection with the CARES Act and forgiven in the 2021 year as described further in Note VI.O.

H. Pension Plan Medical Center, Ambulance Service, Home Health and Hospice Care, and Rehab Center Plan Description. Employees of the health system’s hospital-based departments (i.e., Medical Center, Ambulance Service, Home Health and Hospice Care, and Rehab Center), referred to herein as Lincoln County Medical Center, are included in the Lincoln County Courthouse Employees Pension Plan. The Lincoln County Medical Center comprises 49.92 percent of the Lincoln County Employees Pension Plan. This allocation is based upon contributions. Employees of Lincoln County are provided a defined benefit pension plan through the Public Employee Retirement Plan, an agent

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multiple-employer pension plan administered by the TCRS. The TCRS was created by state statute under Tennessee Code Annotated, Title 8, Chapters 34-37. The TCRS Board of Trustees is responsible for the proper operation and administration of the TCRS. The Tennessee Treasury Department, an agency in the legislative branch of state government, administers the plans of the TCRS. The TCRS issues a publicly available financial report that can be obtained at https://treasury.tn.gov/Retirement/Boards-and-Governance/Reporting-and-Investment-Policies.

Benefits Provided. Tennessee Code Annotated, Title 8, Chapters 34-37 establishes the benefit terms and can be amended only by the Tennessee General Assembly. The chief legislative body may adopt the benefit terms permitted by statute. Members are eligible to retire with an unreduced benefit at age 60 with five years of service credit or after 30 years of service credit regardless of age. Benefits are determined by a formula using the member’s highest five consecutive year average compensation and the member’s years of service credit. Reduced benefits for early retirement are available at age 55 and vested. Members vest with five years of service credit. Service related disability benefits are provided regardless of length of service. Five years of service is required for non-service related disability eligibility. The service related and non-service related disability benefits are determined in the same manner as a service retirement benefit but are reduced ten percent and include projected service credits. A variety of death benefits is available under various eligibility criteria.

Member and beneficiary annuitants are entitled to automatic cost of living adjustments (COLAs) after retirement. A COLA is granted each July for annuitants retired prior to the second of July of the previous year. The COLA is based on the change in the consumer price index (CPI) during the prior calendar year, capped at three percent, and applied to the current benefit. No COLA is granted if the change in the CPI is less than one-half percent. A one percent COLA is granted if the CPI change is between one-half percent and one percent. A member who leaves employment may withdraw their employee contributions, plus any accumulated interest. Contributions. Contributions for employees are established in the statutes governing the TCRS and may only be changed by the Tennessee General Assembly. Employees contribute five percent of salary. Lincoln County Medical Center makes employer contributions at the rate set by the Board of Trustees as determined by an actuarial valuation. For the year ended June 30, 2021, the employer contribution for Lincoln County Medical Center was $637,248 based on a rate of 5.25 percent of covered payroll. By law, employer contributions are required to be paid. The TCRS may intercept Lincoln County Courthouse Employees’ state shared taxes if required employer contributions are not remitted. The employer’s ADC and member contributions are expected to finance the costs of benefits earned by members during the year, the cost of administration, as well as an amortized portion of any unfunded liability.

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Net Pension Liability (Asset)

Lincoln County Courthouse Employees’ net pension liability (asset) was measured as of June 30, 2020, and the total pension liability (asset) used to calculate net pension liability (asset) was determined by an actuarial valuation as of that date.

Actuarial Assumptions. The total pension liability as of the June 30, 2020, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:




Cost of Living Adjustment 2.25%Remaining amortization period 1-4 years

Mortality rates were based on actual experience including an adjustment for some anticipated improvement.

The actuarial assumptions used in the June 30, 2020, actuarial valuation were based on the results of an actuarial experience study performed for the period July 1, 2012, through June 30, 2016. The demographic assumptions were adjusted to more closely reflect actual and expected future experience. The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees in conjunction with the June 30, 2016, actuarial experience study. A blend of future capital market projections and historical market returns was used in a building-block method in which a best-estimate of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) is developed for each major asset class. These best-estimates 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 of 2.5 percent. The best-estimates of geometric real rates of return and the TCRS investment policy target asset allocation for each major asset class are summarized in the following table:

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Total 100 %

The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees as 7.25 percent based on a blending of the factors described above.

Discount Rate. The discount rate used to measure the total pension liability was 7.25 percent. The projection of cash flows used to determine the discount rate assumed that employee contributions will be made at the current rate and that contributions from Lincoln County Medical Center will be made at the actuarially determined contribution rate pursuant to an actuarial valuation in accordance with the funding policy of the TCRS Board of Trustees and as required to be paid by state statute. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make projected future benefit payments of current active and inactive members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the Net Pension Liability (Asset) to Changes in the Discount Rate. The following presents the net pension liability (asset) of Lincoln County Medical Center calculated using the discount rate of 7.25 percent, as well as what the net pension liability (asset) would be if it was calculated using a discount rate that is one percentage point lower (6.25%) or one percentage point higher (8.25%) than the current rate:

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Lincoln County Decrease Rate IncreaseMedical Center 6.25% 7.25% 8.25%

Net Pension Liability (asset) $ 3,050,303 $ (1,080,209) $ (4,488,905)

Pension Expense (Negative Pension Expense) and Deferred Outflows/Deferred Inflows of Resources Related to Pensions

Pension Expense (Negative Pension Expense). For the year ended June 30, 2021, Lincoln County Medical Center recognized pension expense of $457,652.

Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2021, Lincoln County Medical Center reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:



Difference Between Expected and Actual Experience $ 61,832 $ 821,938Net Difference Between Projected and Actual Earnings on Pension Plan Investments 237,142 0Changes in assumptions 106,803 0Changes in proportion of net pension liability (asset) 31,415 22,480Contributions Subsequent to the Measurement Date of June 30, 2020 637,249 N/A

Total $ 1,074,441 $ 844,418

The amount shown on the above for “Contributions Subsequent to the measurement date of June 30, 2020,” will be recognized as a reduction (increase) to net pension liability (asset) in the following measurement period.

Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense (negative expense) as follows:

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Year EndedJune 30 Amount

2022 $ (267,171)2023 (175,806)2024 (119,447)2025 155,1982026 0Thereafter 0

In the table shown above, positive amounts will increase pension expense while negative amounts will decrease pension expense.

Payable to the Pension Plan. At June 30, 2021, the Lincoln County Medical Center reported a payable of $93,978 for the outstanding amount of contributions to the pension plan required at year end.

Proportionate Share. At the measurement date of June 30, 2020, the Lincoln County Medical Center proportion was 49.92 percent. Care Center. The care center had a defined contribution pension plan, under Sections 401(a) and 457 of the Internal Revenue Code administered by One America. In 2019, the care center converted this defined contribution pension plan to the State of Tennessee’s 401(k) defined contribution plan, under Sections 401(a) and 414(d) Internal Revenue Code. Benefit terms, including contributions requirements, for the State pension plan are established and may be amended by the TCRS Board. The plan is administrated by the Treasurer, State of Tennessee and can be accessed at https://retirereadytn.empower-retirement.com/. Participants are immediately invested in their own contributions and become fully vested in the employer’s contributions after five years (20 percent after 1 year plus 20 percent for each subsequent year). Participants become eligible to retire at the age of 60. The plan provides for early retirement at the age of 59 1/2. Eligible participants may contribute a portion of their salary, up to the legal limit established by the Internal Revenue Code. The Care Center will match up to 50 percent of the employee’s contribution up to the first 6 percent of gross pay. Forfeitures will be used first to reduce the employer’s matching contribution (if any) and then to offset plan expenses. Forfeitures totaled $2,726 for the year ended June 30, 2021. Employer and employee contributions plans totaled $31,753 and $35,500 for the year ended June 30, 2021. The pension administrative expense is paid by the employees under the plan. At June 30, 2021, there were no outstanding amounts due to the plan.

Deferred Compensation Plan. The health system also converted their Mass Mutual 457 plan to the Treasurer, State of Tennessee administrated plan. This plan is an optional deferred compensation plan offered to its employees

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https://retirereadytn.empower-retirement.com/

created in accordance with Section 457(b) of the Internal Revenue Code. This plan is available to all employees on a voluntary basis and allows participants to defer a portion of their current income until future years to shelter such funds and earnings from federal taxation until withdrawal. The deferred compensation is not available to participants until termination, retirement, death, or unforeseeable emergency. The plan is administered by Treasurer, State of Tennessee. The health system does not perform the investing function and has no fiduciary accountability for the plan. Thus, plan assets and any related liabilities to plan participants have been excluded from the health system’s financial statements.

I. Risk Management

The health system contracts with Blue Cross of Tennessee to provide a self-insured group health insurance plan to eligible employees and their eligible dependents, as defined in the contract. The health system has also purchased reinsurance for claims paid in any one-contract year, in excess of $100,000 per member, which includes employees and their eligible dependents. Claims are paid on a monthly basis by Blue Cross with a settlement at the end of each quarter for the excess or deficit of premiums paid by the health system over or under claims paid by Blue Cross. Claims expense and liabilities are reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. These losses include an estimate of claims that have been incurred but not reported (claims lag). As of June 30, 2021, the health system accrued $249,710 for an estimated claims lag. This total consists of prior quarter net amounts due/ (refunds) from the insurance provider of $51,515 and the accrued estimated lag due of $198,195 as of June 30, 2021. Changes in the reported net liability for 2021 resulted from the following: Balance, July 1, 2020 $ 213,003Current-year Claims and Settlements 2,998,199Claim Payments (2,961,492)

Balance, June 30, 2021 $ 249,710

The health system has internally designated cash to use for payment of future insurance premiums as described in Note VI.E. As of June 30, 2021, this internally designated cash, including interest earned, totaled $150,280.

J. Concentrations of Credit Risk

The health system grants credit without collateral to its patients, most of whom are local residents and are insured under third-party payor

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agreements and managed care health plans. The following is a summary of the mix of accounts receivable from third-party payors and patients as of June 30, 2021: Medicare 33 %Medicaid 19Other Third-party Payors 36Patients 12

Total 100 %

K. Contingencies and Commitments

The healthcare industry is subject to numerous laws and regulations of federal, state, and local governments. These laws and regulations include, but are not necessarily limited to, matters such as licensure, accreditation, government healthcare program participation requirements, reimbursement for patient services, and Medicare and Medicaid fraud and abuse. Governmental activity includes investigations and allegations concerning possible violations of fraud and abuse statutes and regulations by healthcare providers. Violations of these laws and regulations could result in expulsion from government healthcare programs, together with the imposition of significant fines and penalties, as well as significant repayments for patient services previously billed. Compliance with such laws and regulations can be subject to future government review and interpretation as well as regulatory actions unknown or unasserted at this time. The health system is involved in litigation arising in the ordinary course of business. While the ultimate outcome of the litigation is unknown at the present time, management estimates that those matters not covered by insurance will be resolved without material adverse effect on the health system’s financial position or results of operations. Also, in the ordinary course of business, the health system has maintenance and service contract commitments under agreements with various vendors to maintain equipment and provide medical services for terms not to exceed generally a five-year period. Leases that do not meet the criteria for capitalization are classified as operating leases with related rentals charged to operations as incurred. The health system leases various equipment and property under operating leases that can be canceled under terms less than one year. The health system does not have any noncancelable lease payments as of June 30, 2021. Rental expense under all operating leases for 2021 totaled $369,118.

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The health system leases office space in its medical office building to physicians primarily under three-year lease terms. The system did not have any noncancelable leases in effect as of June 30, 2021. Rental income received for 2021 totaled $186,879. Rental income is included in other operating revenue in the accompanying financial statements. The cost and accumulated depreciation related to the medical office building is included in capital assets (see Note VI.F.) as follows: Cost $ 3,724,877Accumulated Depreciation (2,127,652)

Net Book Value $ 1,597,225

L. Lincoln Health System Foundation

The Lincoln Health System Foundation (foundation) is a legally separate, tax-exempt supporting organization closely related to the health system. The health system does not control the timing or amounts of receipts from the foundation or have the ability to access the resources from the foundation. Accordingly, the net assets of the foundation are not reported by the health system. For informational purposes only, a summary of the foundation’s assets, liabilities, net position, results of operations, and changes in net position follows as of June 30, 2021: Assets, Cash, and Cash Equivalents $ 69,099Liabilities $ 0Restricted Net Position $ 59,380

Support and Revenue $ 43,892Expenses (34,173)Excess of Expenses Over Support and Revenue $ 9,719Restricted Net Position, beginning of year 59,380

Restricted Net Position, end of year $ 69,099

M. Related Parties One board member is employed by a financial institution with which the health system transacts business on an arm’s length basis.

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N. Pledged Revenues

The health system has pledged revenues to secure certain revenue bonds as described in Note VI.G. The current-year revenues, debt service, and future pledge commitment are as follows:

Commitment Percent of Period

Current ThroughRevenue Fiscal Year

$ 41,413,976 $ 965,560 2.3% $ 7,326,610 2028

Remaining PledgeBased on Future

Principaland Interest

RequirementsOperatingRevenues

Current-YearPrincipal and

Interest Paid onRevenue Bonds

O. Net Service Revenue

Accounts receivable is reduced by an allowance for doubtful accounts. In evaluating the collectability of accounts receivable, the health system management analyzes its past collection history utilizing a hindsight review methodology along with identification of collection trends and current status of the existing receivables for each of its major sources of revenue to estimate the allowance for doubtful accounts and provision of bad debts. Management regularly reviews data about these major payer sources of revenue in evaluating the sufficiency of the allowance for doubtful accounts. The difference between the standard rates (or the discounted rates) and the amounts actually collected after all reasonable collection efforts have been exhausted is charged off against the allowance for doubtful accounts. The allowance for doubtful accounts totaled 38.44 percent of accounts receivable at June 30, 2021. Total net write-offs including other adjustments increased $161,205 to $5,482,318 for 2021. The following schedule summarizes total revenues for the fiscal year ended June 30, 2021:

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Medicare $ 19,182,563Medicaid 7,758,116Others 16,262,772Patient Service Revenue (net of contractual allowances and discounts) 43,203,451Provision for Bad Debt (5,679,585) Net Patient Revenue Less Provision for Bad Debt $ 37,523,866Other Operating Revenue 3,890,110 Total Revenue $ 41,413,976

Patient service revenue, before any provision for bad debts, summarized by payor is as follows for the year ended June 30, 2021: Medicare 44 %Medicaid 18Others 38

Total 100 %

P. Coronavirus Relief Funds and Payroll Protection Program

The Coronavirus Aid, Relief, and Economic Security Act (CARES) for Provider Relief Funds (PRF) and Health Care Enhancement Act provided relief funds to hospitals and other healthcare providers on the front lines of the coronavirus (COVID-19) pandemic response. Payments were distributed by the Department of Health and Human Services (HHS). As a condition for receiving distributions, providers agreed to certain terms and conditions, including, among other things, that the funds would be used for lost operating revenues and COVID-19 related costs. Hospitals and providers must report the use of these funds subject to HHS four established reporting portal deadlines determined based on the funds period of availability, which is based on payment date. For funds used as of June 30, 2021, the HHS first reporting period ended November 30, 2021. The health system recognizes the Provider Relief Fund advances as income when there is reasonable assurance of compliance with the conditions associated with these funds. As of June 30, 2021, the health system had received advances totaling $10,723,157 from the Provider Relief Fund and recognized $5,414,865 in nonoperating revenues in the statements of revenues, expenses and changes in net position. Accordingly, the health system calculated the amount payable for unused advances totaling $4,821,169 that is recorded in the statements of net position as Provider Relief Fund advances payable. Period 1 unused advances are required to be returned to the government by December 30, 2021. Likewise, the health system has unrecognized advances for Period 2 ending December 31, 2021, totaling $487,123 that is recorded as Provider Relief Fund unearned revenue in the statements of net position.

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Under the Payroll Protection Program (PPP), established as part of CARES Act, the health system received funds totaling $4,279,900 for certain COVID-19 eligible expenses for payroll, benefits, rent and utilities. The funds received are to be treated as a forgivable loan advance as long as the funds are used for eligible purposes and the entity has been legally released from the debt in accordance with GASB Technical Bulletin No. 2020- 1. The health system has incurred qualifying payroll expenses and received notification for forgiveness in full. The forgiven loan advances totaling $4,279,900 has been recognized in nonoperating revenue in the statements of revenues, expenses, and changes in net position. In addition, the health system received accelerated payment advances totaling $2,455,750 from the Centers for Medicare & Medicaid Services (CMS), intended to increase cash flow for future claims submission to providers of services and suppliers impacted by COVID-19 under the Accelerated Advanced Payment (AAP) Program. As of June 30, 2021, Medicare has recouped $369,513 of the accelerated payment advances. The remaining balance of $2,086,237 is reported in the statements of net position as unearned revenue. Under the Continuing Appropriations Act of 2021, the AAP advances are being recouped at a rate of 25% beginning one year from the date funds were received and continuing for eleven months. After this period, payments will be recouped at a rate of 50% for another six months. After this six-month period any outstanding accelerated payment advance is payable to CMS.

Q. Subsequent Events

In addition, due to the global viral outbreak caused by COVID-19 in 2021, there have been resulting effects which could negatively impact the health system’s financial position, including supply disruptions, and both internal decisions and government mandates to deter elective procedures and other medical treatments as the broader economic impact of COVID-19 develops. The full impact of the public health crisis on the health system cannot be estimated with any degree of certainty at this time and will depend upon the duration of the public health crisis and the response from both state and federal governments. The laws and regulations related to the funds provided by the CARES Act are complex and subject to interpretation, as well as frequent changes. Due to the uncertainty, there is a possibility that government authorities may review the health system’s compliance, which may result in adjustments to funds previously received. The health system’s management will continue to monitor compliance with the terms and conditions of the different relief funds and the impact of the pandemic on the health system’s revenues and expenses.

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VII. OTHER NOTES – LINCOLN COUNTY BOARD OF PUBLIC UTILITIES (ENTERPRISE FUND)

A. Summary of Significant Accounting Policies

Reporting Entity – The Lincoln County Board of Public Utilities is an enterprise fund established under Section 5-16-101, Tennessee Code Annotated, by Lincoln County, Tennessee. The board sells drinking water and provides wastewater service to the residents of Lincoln County not served by municipal systems. The board is operated by a five-member board of commissioners appointed by the Lincoln County Commission. The Board of Commissioners employs a superintendent who is responsible for day-to-day operations of the water and wastewater systems, including hiring its other employees. The board is responsible for generating its own revenue and servicing its debt. The Lincoln County Commission has the authority to approve or reject budgets presented by the board and to approve bonds issued by the board. Bonds issued by the board are secured by a pledge of the taxing authority of Lincoln County. Measurement Focus and Basis of Accounting – The board’s financial statements have been prepared using the economic resources measurement focus and the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America and general practices of the utility industry. Revenues are recognized when earned and expenses are recognized when a liability is incurred, regardless of the timing of related cash flows. The board is intended to operate in a manner whereby the costs of providing water distribution services, wastewater services, and system expansion are recovered through user charges. The board distinguishes operating revenues and expenses from nonoperating items. Operating revenues generally result from charges to customers for the provision of water or wastewater and related services. Operating expenses include the purchased cost of these services as well as costs to operate and maintain the various treatment, storage, transmission, and distribution systems plus general and administrative costs and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

When both restricted and unrestricted resources are available for use, it is the board’s policy to use restricted resources first, then unrestricted resources as they are needed. Cash and Equivalents for General Use – For purposes of the Statement of Cash Flows, the board considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

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Allowance for Doubtful Accounts – The board provides an allowance for uncollectible accounts equal to the estimated losses that may be incurred in collection of water and wastewater sales receivables when it is probable that a customer account will be uncollectible. The current year’s provision is offset against water and wastewater sales revenues. Materials and Supplies Inventories – Inventory of repair and maintenance supplies and extension materials are stated at the lower of average cost or net realizable value. Water and Wastewater Plant and Equipment – The board’s water and wastewater plant assets are capitalized at cost at the time they become part of operations. Donated capital assets are recorded at estimated current cost of construction. Extensions and betterments are capitalized at cost. Depreciation of water and wastewater plant capital cost is provided on a group straight-line basis over the estimated useful lives of the assets. Under the group depreciation method, gains and losses on asset dispositions are applied against accumulated depreciation and are not reflected as gains or losses in the Statement of Revenues, Expenses, and Changes in Net Position. Equipment and buildings are depreciated on the straight line basis over their estimated useful lives as follows: buildings from 15 to 40 years, vehicles, and construction equipment over seven to 15 years, and all other equipment from six to 20 years, water and wastewater distribution plant from 10 to 50 years. The board capitalizes equipment additions with a cost in excess of $500 and plant additions in excess of $2,000. Interest – Net interest cost incurred on borrowed funds during the period of construction of capital assets is recognized as an expense in the period in which the cost is incurred. Debt Issue Costs – Costs of issuance other than insurance are charged to expense in the period incurred. Premiums and discounts realized on debt issuances are deferred and amortized over the terms of the respective debt using a method that approximates the effective interest method. Compensated Absences – The cost of vacation benefits are recorded as expenses when earned. Employees accrue vacation leave from one to three weeks annually based on years of service. Up to 120 hours of vacation leave not used by each employee’s anniversary date can be carried over to the following year. Sick leave benefits are recorded as expenses when used. Employees accrue 12 days sick leave each year with no accumulation limit. Sick leave does not vest, and no liability for unused sick leave is recorded in the financial statements. 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

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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) until then. The board has three items reported in this category – contributions to the pension plan made subsequent to the measurement date of June 30, 2020, the difference between expected and actual experience in the calculation of the total pension liability, and the difference due to actuarial assumption changes. Experience gains or losses and changes in actuarial assumptions are amortized over the average working lifetime of all participants. In addition to liabilities, the Statement of Net Position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, 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 board includes the following items in this category – the difference between expected and actual experience in the calculation of the total pension liability and the difference between projected and actual earnings on plan investments. Investment gains or losses are amortized over five years, while experience gains or losses are amortized over the average working lifetime of all participants. Pensions – For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the board’s participation in the Public Employee Retirement Plan of Tennessee Consolidated Retirement System (TCRS), and additions to/deductions from the board’s fiduciary net position have been determined on the same basis as they are reported by the TCRS for the Public Employee Retirement Plan. For this purpose, benefits (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms of the Public Employee Retirement Plan of TCRS. Investments are reported at fair value. Net Position – Net position is the difference between assets plus deferred outflows of resources and liabilities plus deferred inflows of resources. Net investment in capital assets represents capital assets reduced by accumulated depreciation and by any outstanding debt related to the acquisition, construction, or improvement of those assets as well as any deferred outflows or inflows of resources attributable to the acquisition, construction, or improvement of those assets. The restricted component of net position consists of restricted assets reduced by liabilities related to those assets. Restricted assets occur when constraints are placed on the asset by creditors (such as debt covenants), grantors, contributions, laws, regulations, etc. Unrestricted net position is the amount of the assets, deferred outflows of resources, liabilities, and deferred inflows of resources that are not included in the determination of net investment in capital assets or the restricted component of net position.

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As a general rule, when both restricted and unrestricted resources are available for use, it is the department’s policy to consider restricted – net position to have been depleted before unrestricted – net position is applied. Contributions in Aid of Construction – Connection fees charged to customers (including developers) in excess of the actual cost of installation of new services are reflected as nonoperating revenues in the period of new service installation. Amounts received as contributions or grants related to new line construction are reflected as capital contributions or grants. Income Taxes and Tax Equivalents – The board is an instrumentality of Lincoln County, Tennessee; therefore, it is exempt from the payment of federal and state income taxes. Management Estimates – The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimates relate to the pension plan, depreciation, and the value of distribution lines contributed to the board. Budgets – State law requires the board to adopt a budget for submission to the Lincoln County Board of Commissioners prior to the start of each fiscal year. The board adopts its budget considering all cash receipts and disbursements.

B. Cash and Restricted Funds

The following is a summary of cash and restricted funds as of June 30, 2021:

Cash and Cash Equivalents for General Use $ 7,945,896Special Funds - Restricted for Customer Deposits 170,100

Total $ 8,115,996

Investments in the State Treasurer’s Investment Pool are reported at amortized cost. State statutes require the state treasurer to administer the pool under the same terms and conditions, including collateral requirements, as prescribed for other funds invested by the state treasurer. Board cash consists of deposits in financial institutions or with the State Treasurer’s Investment Pool with bank balances of $8,129,883 and carrying amounts of $8,115,496. Of the amounts on deposit, all is fully insured by the Federal Deposit Insurance Corporation (FDIC) or Tennessee Bank Collateral Pool. The remaining $500 is cash on hand.

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Legal Provisions: All deposits with financial institutions must be secured by one of two methods depending on whether the financial institution participates in the bank collateral pool administered by the state treasurer. Participating banks determine the aggregate balance of their public fund’s accounts for the state of Tennessee and its political subdivisions. The amount of collateral required to secure these public deposits must equal at least 105 percent of the average daily balance of public deposits held. Collateral securities required to be pledged by the participating banks to protect their public fund accounts are pledged to the state treasurer on behalf of the bank collateral pool. The securities pledged to protect these accounts are pledged in the aggregate rather than against each account. The members of the pool may be required by agreement to pay an assessment to cover any deficiency. Under this additional assessment agreement, public fund accounts covered by the pool are considered to be insured for purposes of credit risk disclosure. For deposits with financial institutions that do not participate in the bank collateral pool, state statutes require that all deposits be collateralized with collateral whose market value is equal to 105 percent of the uninsured amount of the deposits. The collateral must be placed by the depository bank in an escrow account in a second bank for the benefit of the board. Types of investments authorized: State statutes authorize the entity to make direct investments in bonds, notes, or treasury bills of the U.S. government and obligations guaranteed by the U.S. government or any of its agencies; bonds of any state or political subdivision rated A or higher by any nationally recognized rating service; the government’s own legally issued bonds or notes; the State Treasurer’s Investment Pool; and repurchase agreements. The board has not adopted policies that would further limit its investments. Restricted Assets: Amounts held for payment of customer deposits are restricted assets.

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C. Capital Assets

The following is a summary of capital assets activity for the year ended June 30, 2021:

Balance Balance7-1-20 Increases 6-30-21

Captial Assets Not Depreciated:Land & Land Rights $ 538,781 $ 1,600 $ 0 $ 540,381Construction in Progress 211,301 2,000 0 213,301 Total Capital Assets Not Depreciated $ 750,082 $ 3,600 $ 0 $ 753,682

Capital Assets Depreciated: Distribution Lines & Tanks $ 42,729,278 $ 578,248 $ 0 $ 43,307,526 Wells & Treatment Plant 4,634,287 0 0 4,634,287 Buildings & Equipment 3,101,554 332,236 (68,047) 3,365,743 Total Capital Assets Depreciated $ 50,465,119 $ 910,484 $ (68,047) $ 51,307,556

Less Accumulated Depreciation For: Distribution Lines & Tanks $ (16,899,290) $ (1,231,779) $ 0 $ (18,131,069) Wells & Treatment Plant (2,183,428) (108,287) 0 (2,291,715) Buildings & Equipment (2,481,732) (130,486) 66,172 (2,546,047)Total Accumulated Depreciation $ (21,564,450) $ (1,470,552) $ 66,172 $ (22,968,831)

Capital Assets, Net $ 29,650,751 $ (556,468) $ (1,875) $ 29,092,407

Retirements

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D. Long-term Debt

Direct borrowings and direct placements: Clean Water State Revolving Loan Fund, due in monthly installments of principal and interest through April, 2037 at an interest rate of 0.75%. $ 482,312

Capitalization Grants for Clean Water State Revolving Loan, due in monthly installments of principal and interest through September, 2036, at an interest rate of 0.91%. 2,632,074

Drinking Water Revolving Loan Fund, due in monthly installments of principal and interest through October 29, 2039, at an interest rate of 0.82% 282,594

Drinking Water Revolving Loan Fund, due in monthly installments of principal and interest through March 20, 2040, at an interest rate of 0.82% 288,437

Total direct borrowings and direct placements debt $ 3,685,417

A schedule of annual maturities of direct borrowing and direct placements debt as of June 30, 2021, are as follows: Year Ending June 30 Principal Interest Total

2022 $ 219,060 $ 31,380 $ 250,4402023 220,992 29,448 250,4402024 222,936 27,504 250,4402025 224,904 25,536 250,4402026 226,884 23,556 250,4402027-2031 1,164,756 87,444 1,252,2002032-2036 1,217,004 35,196 1,252,2002037-2041 188,881 1,902 190,783

Total $ 3,685,417 $ 261,966 $ 3,947,383

All direct borrowings and direct placements debt are secured by the revenues of the board and the state shared taxes of Lincoln County, Tennessee. In the event of default by the board, the state shared revenues of Lincoln County, Tennessee will be withheld by the State of Tennessee.

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Other Debt:Revenue and tax bonds: Water Revenue and Tax Bonds, Series 2015, issued August 26, 2015. The bonds mature serially at annual interest rates ranging from 2.20% to 4% with final maturity in 2036. The bonds are subject to redemption prior to maturity on or after April 1, 2025, at a redemption price of 100%. $ 5,115,000Plus: unamortized bond premium 154,277

Total other debt $ 5,269,277

A schedule of annual maturities of other debt outstanding as of June 30, 2021, follows: Year Ending June 30 Principal Interest Total

2022 $ 270,000 $ 162,861 $ 432,8612023 280,000 152,061 432,0612024 290,000 140,861 430,8612025 305,000 129,261 434,2612026 315,000 117,061 432,0612027-2031 1,695,000 464,344 2,159,3442032-2036 1,960,000 200,175 2,160,175

Total $ 5,115,000 $ 1,366,624 $ 6,481,624

The bonds are payable from revenues of the board and are also secured by Lincoln County property taxes. In the event of default by the board, the county would have to increase property taxes in order to meet the obligations of the bonds. Long-term liability activity for the year ended June 30, 2021, was as follows:

Balance Due

Amount at Amount at WithinJune 30, 2020 Reductions June 30, 2021 One Year

Direct Borrowings $ 3,900,214 $ 214,797 $ 3,685,417 $ 219,060Other Debt 5,375,000 260,000 5,115,000 270,000

Total Long-Term Debt $ 9,275,214 $ 474,797 $ 8,800,417 $ 489,060

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Scheduled principal and interest payments for this long-term debt as a percentage of pledged revenues totaled 10.82 percent for the year. Interest totaled $177,893 for the year.

E. Pledged Revenues

The board has pledged its revenues to secure its revenue bonds described in Note VII.D. The current year revenues, debt service, and future pledge commitment are presented as follows:

Commitment Percent of Period

Current ThroughRevenue Fiscal Year

$ 6,292,092 $ 680,934 10.82% $ 10,429,007 2041

OperatingRevenues

Current-YearPrincipal and

Interest Paid onRevenue Bonds

Remaining PledgeBased on Future

Principaland Interest

Requirements

F. Pension Plan

General Information About the Pension Plan

Plan Description. Employees of Lincoln County Board of Public Utilities are provided a defined benefit pension plan through the Public Employee Retirement Plan, an agent multiple-employer pension plan administered by the TCRS. The TCRS was created by state statute under Tennessee Code Annotated (TCA), Title 8, Chapters 34-37. The TCRS Board of Trustees is responsible for the proper operation and administration of the TCRS. The Tennessee Treasury Department, an agency in the legislative branch of state government, administers the plans of the TCRS. The TCRS issues a publicly available financial report that can be obtained at https://treasury.tn.gov/Retirement/Boards-and-Governance/Reporting-and-Investment-Policies. Benefits Provided. TCA, Title 8, Chapters 34-37 establish the benefit terms and can be amended only by the Tennessee General Assembly. The chief legislative body may adopt the benefit terms permitted by statute. Members are eligible to retire with an unreduced benefit at age 60 with five years of service credit or after 30 years of service credit regardless of age. Benefits are determined by a formula using the member’s highest five consecutive year average compensation and the member’s years of service credit. Reduced benefits for early retirement are available to vested members at age 55. Members vest with five years of service credit. Service-related disability benefits are provided regardless of length of service. Five years of service is required for nonservice-related disability eligibility. The service-related and nonservice-related disability benefits are determined in the same manner as a service retirement

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benefit but are reduced ten percent and include projected service credits. A variety of death benefits are available under various eligibility criteria.

Employees Covered by Benefit Terms. At the measurement date of June 30, 2019, the following employees were covered by the benefit terms:

Inactive Employees or Beneficiaries Currently Receiving Benefits 4Inactive Employees Entitled to But Not Yet Receiving Benefits 7Active Employees 26

Total 37

Contributions. Contributions for employees are established in the statutes governing the TCRS and may only be changed by the Tennessee General Assembly. Employees contribute five percent of salary. The board makes employer contributions at the rate set by the Board of Trustees as determined by an actuarial valuation. For the year ended June 30, 2021, the employer contributions for the board were $110,870 based on a rate of 8.7 percent of covered payroll. By law, employer contributions are required to be paid. The TCRS may intercept the board’s state shared taxes if required employer contributions are not remitted. The employer’s actuarially determined contribution (ADC) and member contributions are expected to finance the costs of benefits earned by members during the year, the cost of administration, as well as an amortized portion of any unfunded liability.

Net Pension Liability (Asset)

The board’s net pension liability (asset) was measured as of June 30, 2020, and the total pension liability used to calculate net pension liability (asset) was determined by an actuarial valuation as of that date. Actuarial Assumptions. The total pension liability as of the June 30, 2020, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:




Mortality rates were based on actual including an adjustment for some anticipated improvement.

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The actuarial assumptions used in the June 30, 2020, actuarial valuation were based on the results of an actuarial experience study performed for the period July 1, 2012, through June 30, 2016. The demographic assumptions were adjusted to more closely reflect actual and expected future experience. The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees in conjunction with the June 30, 2016, actuarial experience study. A blend of future capital market projections and historical market returns was used in a building-block method in which a best estimate of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) is developed for each major asset class. These best estimates 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 of 2.5 percent. The best estimates of geometric real rates of return and the TCRS investment policy target asset allocation for each major asset class are summarized in the following table:

PercentageLong-termExpectedReal Rate

Asset Class of Return


Total 100 %

AllocationsTarget

Percentage

The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees as 7.25 percent based on a blending of the factors described above.

Discount Rate. The discount rate used to measure the total pension liability was 7.25 percent. The projection of cash flows used to determine the discount rate assumed that employee contributions will be made at the current rate and that contributions from the board will be made at the actuarially determined contribution rate pursuant to an actuarial valuation in

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accordance with the funding policy of the TCRS Board of Trustees and as required to be paid by state statute. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make projected future benefit payments of current active and inactive members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Changes in the Net Pension Liability (Asset)

Total Plan NetPension Fiduciary Pension

Liability (Asset) Net Position Liability (Asset)(a) (b) (a)-(b)

Balance, July 1, 2019 $ 2,321,381 $ 3,584,954 $ (1,263,573)

Changes for the Year: Service Cost $ 92,286 $ 0 $ 92,286 Interest 171,573 0 171,573 Differences Between Expected and Actual Experience 87,446 0 87,446 Contributions-Employer 0 106,554 (106,554) Contributions-Employees 0 61,238 (61,238) Net Investment Income 0 179,581 (179,581) Benefit Payments, Including Refunds of Employee Contributions (94,298) (94,298) 0 Administrative Expense 0 (2,365) 2,365Net Changes $ 257,007 $ 250,710 $ 6,297

Balance, June 30, 2020 $ 2,578,388 $ 3,835,664 $ (1,257,276)

Increase (Decrease)

Sensitivity of the Net Pension Liability (Asset) to Changes in the Discount Rate. The following presents the net pension liability (asset) of the board calculated using the discount rate of 7.25 percent, as well as what the net pension liability (asset) would be if it was calculated using a discount rate that is one percentage point lower (6.25%) or one percentage point higher (8.25%) than the current rate:


Lincoln County Board Decrease Rate Increaseof Public Utilities 6.25% 7.25% 8.25%

Net Pension Liability (Asset) $ (889,724) $ (1,257,276) $ (1,564,149)

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Pension Expense (Negative Pension Expense) and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions

Pension Expense (Negative Pension Expense) - For the year ended June 30, 2021, the board recognized pension expense (negative pension expense) of ($49,668). Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2021, the board reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:



Difference Between Expected and Actual Experience $ 95,158 $ 103,084Net Difference Between Projected and Actual Earnings on Pension Plan Investments 27,947 0Changes in assumptions 58,162 0Contributions Subsequent to the Measurement Date of June 30, 2020 110,870 0

Total $ 292,137 $ 103,084

The amount shown above for “Contributions Subsequent to the Measurement Date of June 30, 2020,” will be recognized as a reduction (increase) to net pension liability (asset) in the following measurement period.

Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Year EndingJune 30 Amount

2022 $ (17,633)2023 23,1262024 29,7392025 27,1522026 18,261Thereafter (2,466)

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In the table shown above, positive amounts will increase pension expense while negative amounts will decrease pension expense. Payable to the Pension Plan At June 30, 2021, the board reported a payable of $16,781 (included in accounts payable on the Statement of Net Position) for the outstanding amount of contributions to the pension plan required at the year ended June 30, 2021.

G. Risk Management

The board 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. During 2021, the board participated in a public entity risk pool for coverage of general liability, property, and workers’ compensation losses. The board participated in the Local Government Fund, a public entity risk pool established by an association of Tennessee local governments. The board pays an annual premium to the pool for the insurance coverage. The pool is created to be self-sustaining through member premiums. The board is self-insured for employee health claims between $250 and $5,000 per year per covered individual. Employees are responsible for the first $250 of covered claims, with commercial insurance responsible for amounts over $5,000. The plan liability at year end is determined based on subsequent payments. The change in the liability for medical benefits for the year ended June 30, 2021, is as follows:

Balance, June 30, 2020 $ 0Payments Made 31,902Incurred Claims (31,719)

Balance, June 30, 2021 $ 183

The board continues to carry commercial insurance for other risks of loss, including employee bonds and employee health and accident losses above the $5,000 level. Settled claims in the past three years have not exceeded the coverage.

H. Water Sources

The board’s primary sources of water are the Taft and Flintville well fields with additional sources being the Elora well field and the city of Fayetteville, Tennessee. The city of Fayetteville is the sole supplier of water to nine percent of the board’s customers and is a supplemental and primary back-up source of water for the remaining customers.

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I. Related-party Transactions

The board provides water and wastewater services to Lincoln County related entities at the same billing rate as other customers. For the year ended June 30, 2021, these sales totaled $47,440 for water and wastewater and accounts receivable related to these sales were $3,430 at June 30, 2021.

J. Current and Planned Projects

The board is requesting permits from the State of Tennessee that would allow for the construction of a water treatment plant on the Elk River. The plant would enhance the water available from the board’s current wells that are the primary source of water to 91 percent of the board’s customers. At June 30, 2021, the board had purchased land for $202,000, and had recorded construction in progress cost of $213,301 related to the roadway, other site development costs, and engineering and permitting costs. The estimated cost of the treatment plant and related distribution lines is $18,000,000. No significant costs are anticipated to be incurred in the near-term and actual plant construction is not expected to begin within the next three years.

K. Contingency

During the year ended June 30, 2014, the Tennessee Comptroller's Office issued a report that concluded that unauthorized pension contributions were made for both active and currently retired employees. No further communication has been received by the board concerning what action, if any, will be required due to the unauthorized pension contributions. The board’s facilities and operations are subject to a wide range of environmental protection laws related to the use and disposal of hazardous materials. As a result, there is the possibility that environmental conditions may arise, which would require the board to incur cleanup costs. As in prior years, management continues its efforts to comply, and to determine compliance, with all applicable environmental protection laws and does not believe such costs, if any, would materially affect the board’s financial position or its future cash flows.

L. Subsequent Events

In December 2019, a novel strain of coronavirus was reported in Wuhan, China. The World Health Organization has declared the outbreak to constitute a “Public Health Emergency of International Concern”. The COVID-19 outbreak is disrupting supply chains and affecting production and sales across a range of industries. Potential financial impact and duration cannot be reasonably estimated at this time.

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REQUIRED SUPPLEMENTARY INFORMATION

136

Exhibit F-1

Lincoln County, TennesseeSchedule of Changes in Net Pension Liability (Asset) and Related Ratios Based on Participation in the Public Employee Pension Plan of TCRSPrimary Government - County PlanFor the Fiscal Year Ended June 30

2014 2015 2016 2017 2018 2019 2020

Total Pension LiabilityService Cost $ 1,678,947 $ 1,671,820 $ 1,699,206 $ 2,009,800 $ 2,325,979 $ 2,264,847 $ 2,146,952Interest 3,271,086 3,523,331 3,664,827 3,871,795 4,098,023 4,388,649 4,638,053Differences Between Actual and Expected Experience 254,576 (1,346,469) (750,316) 18,256 300,534 (205,295) (2,058,485)Changes in Assumptions 0 0 0 1,069,744 0 0 0Benefit Payments, Including Refunds of Employee Contributions (1,849,190) (1,819,228) (2,159,695) (2,169,775) (2,600,733) (2,708,816) (3,071,682)Net Change in Total Pension Liability $ 3,355,419 $ 2,029,454 $ 2,454,022 $ 4,799,820 $ 4,123,803 $ 3,739,385 $ 1,654,838Total Pension Liability, Beginning 42,860,128 46,215,547 48,245,001 50,699,023 55,498,843 59,622,646 63,362,031

Total Pension Liability, Ending (a) $ 46,215,547 $ 48,245,001 $ 50,699,023 $ 55,498,843 $ 59,622,646 $ 63,362,031 $ 65,016,869

Plan Fiduciary Net PositionContributions - Employer $ 1,145,798 $ 601,764 $ 594,431 $ 647,113 $ 701,475 $ 1,018,497 $ 1,121,437Contributions - Employee 937,568 926,755 923,579 1,008,589 1,046,868 1,132,508 1,072,072Net Investment Income 7,103,007 1,536,071 1,350,375 5,851,321 4,710,434 4,519,622 3,196,705Benefit Payments, Including Refunds of Employee Contributions (1,849,190) (1,819,228) (2,159,695) (2,169,775) (2,600,733) (2,708,816) (3,071,682)Administrative Expense (23,285) (29,352) (42,837) (50,840) (55,825) (53,324) (50,786)Other 0 0 16,241 0 0 0 0Net Change in Plan Fiduciary Net Position $ 7,313,898 $ 1,216,010 $ 682,094 $ 5,286,408 $ 3,802,219 $ 3,908,487 $ 2,267,746Plan Fiduciary Net Position, Beginning 42,703,886 50,017,784 51,233,794 51,915,888 57,202,296 61,004,515 64,913,002

Plan Fiduciary Net Position, Ending (b) $ 50,017,784 $ 51,233,794 $ 51,915,888 $ 57,202,296 $ 61,004,515 $ 64,913,002 $ 67,180,748

Net Pension Liability (Asset), Ending (a - b) $ (3,802,237) $ (2,988,793) $ (1,216,865) $ (1,703,453) $ (1,381,869) $ (1,550,971) $ (2,163,879)

Plan Fiduciary Net Position as a Percentage of Total Pension Liability 108.23% 106.20% 102.40% 103.07% 102.32% 102.45% 103.33%Covered Payroll $ 18,722,223 $ 18,688,322 $ 18,449,895 $ 20,060,385 $ 20,788,204 $ 22,482,268 $ 21,360,690Net Pension Liability (Asset) as a Percentage of Covered Payroll (20.31)% (15.99)% (6.60)% (8.49)% (6.65)% (6.90)% (10.13)%

Note 1: Ten-year information will be presented when available.

Note 2: The agent plan is a single plan that is participated in by the primary government, the health system (business-type activity), and non-certified employees of the discretely presented school department.

137

Exhibit F-2

Lincoln County, TennesseeSchedule of Changes in Net Pension Liability (Asset) and Related Ratios Based on Participation in the Public Employee Pension Plan of TCRSPrimary Government - Board of Public Utilities PlanFor the Fiscal Year Ended June 30

2014 2015 2016 2017 2018 2019 2020

Total Pension LiabilityService Cost $ 74,745 $ 64,598 $ 77,693 $ 80,252 $ 88,024 $ 85,717 $ 92,286Interest 138,371 132,868 144,409 150,013 165,112 170,519 171,573Differences Between Actual and Expected Experience (156,724) 35,235 (69,206) 15,227 (1,386) (66,621) 87,446Changes in Assumptions 0 0 0 104,694 0 0 0Benefit Payments, Including Refunds of Employee Contributions (136,129) (103,109) (80,727) (80,727) (80,727) (269,005) (94,298)Net Change in Total Pension Liability $ (79,737) $ 129,592 $ 72,169 $ 269,459 $ 171,023 $ (79,390) $ 257,007Total Pension Liability, Beginning 1,838,265 1,758,528 1,888,120 1,960,289 2,229,748 2,400,771 2,321,381

Total Pension Liability, Ending (a) $ 1,758,528 $ 1,888,120 $ 1,960,289 $ 2,229,748 $ 2,400,771 $ 2,321,381 $ 2,578,388

Plan Fiduciary Net PositionContributions - Employer $ 89,791 $ 87,393 $ 90,392 $ 98,122 $ 99,400 $ 100,999 $ 106,554Contributions - Employee 52,509 50,226 51,949 56,392 57,126 58,261 61,238Net Investment Income 353,248 77,098 69,676 312,986 261,232 252,327 179,581Benefit Payments, Including Refunds of Employee Contributions (136,129) (103,109) (80,727) (80,727) (80,727) (269,005) (94,298)Administrative Expense (1,066) (1,289) (2,001) (2,432) (2,688) (2,561) (2,365)Net Change in Plan Fiduciary Net Position $ 358,353 $ 110,319 $ 129,289 $ 384,341 $ 334,343 $ 140,021 $ 250,710Plan Fiduciary Net Position, Beginning 2,128,288 2,486,641 2,596,960 2,726,249 3,110,590 3,444,933 3,584,954

Plan Fiduciary Net Position, Ending (b) $ 2,486,641 $ 2,596,960 $ 2,726,249 $ 3,110,590 $ 3,444,933 $ 3,584,954 $ 3,835,664

Net Pension Liability (Asset), Ending (a - b) $ (728,113) $ (708,840) $ (765,960) $ (880,842) $ (1,044,162) $ (1,263,573) $ (1,257,276)

Plan Fiduciary Net Position as a Percentage of Total Pension Liability 141.40% 137.54% 139.07% 139.50% 143.49% 154.43% 148.76%Covered Payroll $ 1,050,185 $ 1,004,520 $ 1,038,984 $ 1,127,834 $ 1,142,526 $ 1,165,218 $ 1,224,758Net Pension Liability (Asset) as a Percentage of Covered Payroll (69.33)% (70.57)% (73.72)% (78.10)% (91.39)% (108.44)% (102.66)%

Note: Ten-year information will be presented when available.

138

Exhibit F-3

Lincoln County, TennesseeSchedule of Contributions Based on Participation in the Public Employee Pension Plan of TCRSPrimary Government - County PlanFor the Fiscal Year Ended June 30

2014 2015 2016 2017 2018 2019 2020 2021

Contractually Determined Contribution $ 1,145,798 $ 601,764 $ 594,431 $ 647,113 $ 701,475 $ 1,018,497 $ 1,121,437 $ 1,224,271Less Contributions in Relation to the Contractually Determined Contribution (1,145,798) (601,764) (594,431) (647,113) (701,475) (1,018,497) (1,121,437) (1,224,271)

Contribution Deficiency (Excess) $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0

Covered Payroll $ 18,722,223 $ 18,688,322 $ 18,449,895 $ 20,060,385 $ 20,788,204 $ 22,482,268 $ 21,360,690 $ 23,319,448

Contributions as a Percentage of Covered Payroll 6.12% 3.22% 3.22% 3.22% 3.37% 4.53% 5.25% 5.25%

Note 1: Ten-year information will be presented when available.

Note 2: The agent plan is a single plan that is participated in by the primary government, the health system (business-type activity), and non-certified employees of the discretely presented school department.

139

Exhibit F-4

Lincoln County, TennesseeSchedule of Contributions Based on Participation in the Public Employee Pension Plan of TCRSPrimary Government - Board of Public Utilities PlanFor the Fiscal Year Ended June 30

2014 2015 2016 2017 2018 2019 2020 2021

Contractually Determined Contribution $ 89,791 $ 87,393 $ 90,392 $ 31,805 $ 34,276 $ 0 $ 0 $ 0Less Contributions in Relation to the Contractually Determined Contribution (89,791) (87,393) (90,392) (98,122) (99,400) (100,999) (106,554) (110,870)

Contribution Deficiency (Excess) $ 0 $ 0 $ 0 $ (66,317) $ (65,124) $ (100,999) $ (106,554) $ (110,870)

Covered Payroll $ 1,050,185 $ 1,004,520 $ 1,038,984 $ 1,127,834 $ 1,142,526 $ 1,165,218 $ 1,224,758 $ 1,274,366



140

Exhibit F-5

Lincoln County, TennesseeSchedule of Contributions Based on Participation in the Teacher Retirement Plan of TCRSDiscretely Presented Lincoln County School DepartmentFor the Fiscal Year Ended June 30

2015 2016 2017 2018 2019 2020 2021

Contractually Required Contribution $ 25,754 $ 54,382 $ 93,022 $ 127,662 $ 72,644 $ 91,163 $ 101,035Less Contributions in Relation to the Contractually Required Contribution (25,754) (54,382) (93,022) (127,662) (72,644) (91,163) (101,035)

Contribution Deficiency (Excess) $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0

Covered Payroll $ 643,863 $ 1,359,555 $ 2,288,662 $ 3,191,549 $ 3,744,517 $ 4,490,814 $ 5,001,717

Contributions as a Percentage of Covered Payroll 4.00% 4.00% 4.00% 4.00% 1.94% 2.03% 2.02%

Note 1: Ten years of data will be presented when available.

Note 2: Beginning in FY 2019, the school department placed the actuarially determined contribution rate of covered payroll into the pension plan and placed the remainder of the four percent contractually required contribution into the Pension Stabilization Reserve Trust (SRT). 2019: Pension - 1.94%, SRT - 2.02% 2020: Pension - 2.03%, SRT - 1.97% 2021: Pension - 2.02%, SRT - 1.98%

141

Exhibit F-6

Lincoln County, TennesseeSchedule of Contributions Based on Participation in the Teacher Legacy Pension Plan of TCRSDiscretely Presented Lincoln County School DepartmentFor the Fiscal Year Ended June 30

2014 2015 2016 2017 2018 2019 2020 2021

Contractually Required Contribution $ 1,327,053 $ 1,309,860 $ 1,308,473 $ 1,252,725 $ 1,215,979 $ 1,337,413 $ 1,293,115 $ 1,278,474Less Contributions in Relation to the Contractually Required Contribution (1,327,053) (1,309,860) (1,308,473) (1,252,725) (1,215,979) (1,337,413) (1,293,115) (1,278,474)

Contribution Deficiency (Excess) $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0

Covered Payroll $ 14,944,287 $ 14,489,626 $ 14,474,266 $ 13,894,489 $ 13,391,813 $ 12,785,963 $ 12,164,755 $ 12,057,037



142

Exhibit F-7

Lincoln County, TennesseeSchedule of Proportionate Share of the Net Pension Liability (Asset) in the Teacher Retirement Plan of TCRSDiscretely Presented Lincoln County School DepartmentFor the Fiscal Year Ended June 30

2015 2016 2017 2018 2019 2020

School Department's Proportion of the Net Pension Liability (Asset) 0.309886% 0.308985% 0.354321% 0.365217% 0.353857% 0.355869%

School Department's Proportionate Share of the Net Pension Liability (Asset) $ (12,467) $ (32,166) $ (93,483) $ (165,636) $ (199,747) $ (202,363)

Covered Payroll $ 643,863 $ 1,359,555 $ 2,288,662 $ 3,191,549 $ 3,744,517 $ 4,490,814

School Department's Proportionate Share of the Net Pension Liability (Asset) as a Percentage of its Covered Payroll (1.94)% (2.37)% (4.08)% (5.19)% (5.33)% (4.51)%

Plan Fiduciary Net Position as a Percentage of the Total Pension Liability (Asset) 127.46% 121.88% 126.81% 126.97% 123.07% 116.52%


143

Exhibit F-8

Lincoln County, TennesseeSchedule of Proportionate Share of the Net Pension Liability (Asset) in the Teacher Legacy Pension Plan of TCRSDiscretely Presented Lincoln County School DepartmentFor the Fiscal Year Ended June 30

2014 2015 2016 2017 2018 2019 2020

School Department's Proportion of the Net Pension Liability (Asset) 0.380747% 0.387060% 0.400971% 0.392016% 0.382441% 0.381313% 0.365500%

School Department's Proportionate Share of the Net Pension Liability (Asset) $ (61,870) $ 158,553 $ 2,505,848 $ (128,261) $ (1,345,777) $ (3,920,585) $ (2,787,203)

Covered Payroll $ 14,944,287 $ 14,489,626 $ 14,474,266 $ 13,894,489 $ 13,391,813 $ 12,785,963 $ 12,164,755

School Department's Proportionate Share of the Net Pension Liability (Asset) as a Percentage of its Covered Payroll (.41)% 1.09% 17.31% (.92)% (10.05)% (30.66)% (22.91)%

Plan Fiduciary Net Position as a Percentage of the Total Pension Liability (Asset) 100.08% 99.81% 97.14% 100.14% 101.49% 104.28% 103.09%


144

Exhibit F-9

Lincoln County, TennesseeSchedule of Changes in the Total OPEB Liability and Related Ratios - Local Government PlanPrimary Government For the Fiscal Year Ended June 30

2017 2018 2019 2020Total OPEB LiabilityService Cost $ 26,157 $ 24,461 $ 30,729 $ 28,580 Interest 10,162 12,703 13,929 11,675 Differences Between Actual and Expected Experience 0 (30,712) (99,794) (8,275)Changes in Assumptions or Other Inputs (19,244) 23,333 15,095 30,882Benefit Payments (6,140) (6,953) (9,331) (10,598) Net Change in Total OPEB Liability $ 10,935 $ 22,832 $ (49,372) $ 52,264 Total OPEB Liability, Beginning 324,913 335,848 358,680 309,308

Total OPEB Liability, Ending $ 335,848 $ 358,680 $ 309,308 $ 361,572

Covered Employee Payroll $ 6,117,200 $ 6,314,608 $ 6,940,045 $ 6,969,847 Net OPEB Liability as a Percentage of Covered Employee Payroll 5.49% 5.68% 4.46% 5.19%


Note 2: Changes in assumptions. (a) The following are the discount rates used in each period:

2016 2.92% 2017 3.56% 2018 3.62% 2019 3.51%

2020 2.21% (b) The assumed initial trend rate applicable to plan years was revised as follows:

For the 2019 plan year - from 5.4% to 6.75% For the 2020 plan year - from 6.75% to 6.03% For the 2021 plan year - from 6.03% to 9.02%

Note 3: No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75.

145

Exhibit F-10

Lincoln County, TennesseeSchedule of Changes in the Total OPEB Liability and Related Ratios - Local Education PlanDiscretely Presented Lincoln County School DepartmentFor the Fiscal Year Ended June 30

2017 2018 2019 2020Total OPEB LiabilityService Cost $ 227,756 $ 212,678 $ 186,189 $ 173,993 Interest 123,879 148,020 128,780 123,237 Differences Between Actual and Expected Experience 0 (786,604) 163,806 (10,901)Changes in Assumptions or Other Inputs (194,714) 93,846 (275,723) 437,856Benefit Payments (215,553) (237,293) (248,606) (225,719) Net Change in Total OPEB Liability $ (58,632) $ (569,353) $ (45,554) $ 498,466 Total OPEB Liability, Beginning 4,122,464 4,063,832 3,494,479 3,448,925

Total OPEB Liability, Ending $ 4,063,832 $ 3,494,479 $ 3,448,925 $ 3,947,391

Nonemployer Contributing Entity Proportionate Share of the Total OPEB Liability $ 1,460,232 $ 1,203,502 $ 1,219,475 $ 1,301,680 Employer Proportionate Share of the Total OPEB Liability 2,603,600 2,290,977 2,229,450 2,645,711

Covered Employee Payroll $ 20,159,458 $ 20,254,516 $ 20,053,557 $ 20,665,314 Net OPEB Liability as a Percentage of Covered Employee Payroll 12.92% 11.31% 11.12% 12.80%


Note 2: Changes in assumptions. (a) The following are the discount rates used in each period:

2016 2.92% 2017 3.56% 2018 3.62% 2019 3.51%

2020 2.21% (b) The assumed initial trend rate applicable to plan years was revised as follows:

For the 2019 plan year - from 5.4% to 6.75% For the 2020 plan year - from 6.75% to 6.03% For the 2021 plan year - from 6.03% to 9.02%

Note 3: No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75.

146

LINCOLN COUNTY, TENNESSEE NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION

For the Year Ended June 30, 2021

TENNESSEE CONSOLIDATED RETIREMENT SYSTEM Valuation Date: Actuarially determined contribution rates for fiscal year 2021 were calculated based on the June 30, 2019, actuarial valuation. Methods and assumptions used to determine contribution rates:

Actuarial Cost Method Entry Age NormalAmortization Method Level Dollar, Closed (Not to Exceed 20 Years)Remaining Amortization Period Varies by YearAsset Valuation 10-Year Smoothed Within a 20%

Corridor to Market ValueInflation 2.5%Salary Increases Graded Salary Ranges from 8.72% to

3.44% Based on Age, Including Inflation, Averaging 4%

Investment Rate of Return 7.25%, Net of Investment Expense, Including Inflation

Retirement Age Pattern of Retirement Determined by Experience Study

Mortality Customized Table Based on Actual Experience Including an Adjustment for Some Anticipated Improvement


Changes of assumptions. In 2017, the following assumptions were changed: decreased inflation rate from 3.00 percent to 2.50 percent; decreased the investment rate of return from 7.50 percent to 7.25 percent; decreased the cost-of-living adjustment from 2.50 percent to 2.25 percent; decreased salary growth graded ranges from an average of 4.25 percent to an average of 4.00 percent; and modified mortality assumptions.

147

COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES

148

Nonmajor Governmental Funds

Special Revenue Funds ____________________________

Special Revenue Funds are used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects.

____________________________ Solid Waste/Sanitation Fund – The Solid Waste/Sanitation Fund is used to account for the county’s convenience center operations and transfer fees for hauling solid waste. Drug Control Fund – The Drug Control Fund is used to account for revenues received from drug-related fines, forfeitures, and seizures. Constitutional Officers - Fees Fund – The Constitutional Officers - Fees Fund is used to account for operating expenses paid directly from the fee and commission accounts of the trustee, clerks, register of deeds, and sheriff.

149

Exhibit G-1

Lincoln County, TennesseeCombining Balance SheetNonmajor Governmental FundsJune 30, 2021

TotalSolid Nonmajor

Waste / Drug GovernmentalSanitation Control Funds

ASSETS

Equity in Pooled Cash and Investments $ 963,691 $ 364,941 $ 1,328,632Accounts Receivable 2,062 625 2,687Allowance for Uncollectibles (1,706) 0 (1,706)Due from Other Governments 217,228 0 217,228

Total Assets $ 1,181,275 $ 365,566 $ 1,546,841

LIABILITIES

Accrued Payroll $ 4,289 $ 0 $ 4,289Due to Cities 18,231 0 18,231Total Liabilities $ 22,520 $ 0 $ 22,520


Other Deferred/Unavailable Revenue $ 114,175 $ 0 $ 114,175Total Deferred Inflows of Resources $ 114,175 $ 0 $ 114,175

FUND BALANCES

Restricted:Restricted for Public Safety $ 0 $ 365,566 $ 365,566Restricted for Public Health and Welfare 1,044,580 0 1,044,580

Total Fund Balances $ 1,044,580 $ 365,566 $ 1,410,146

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 1,181,275 $ 365,566 $ 1,546,841

Special Revenue Funds

150

Exhibit G-2

Lincoln County, TennesseeCombining Statement of Revenues, Expenditures,

and Changes in Fund BalancesNonmajor Governmental FundsFor the Year Ended June 30, 2021

Constitu - TotalSolid tional Nonmajor

Waste / Drug Officers - GovernmentalSanitation Control Fees Funds

RevenuesFines, Forfeitures, and Penalties $ 0 $ 51,135 $ 0 $ 51,135Charges for Current Services 1,229,915 0 11,480 1,241,395Other Local Revenues 1,791 0 0 1,791State of Tennessee 23,663 0 0 23,663

Total Revenues $ 1,255,369 $ 51,135 $ 11,480 $ 1,317,984


Finance $ 0 $ 0 $ 27 $ 27Administration of Justice 0 0 11,453 11,453Public Safety 0 39,941 0 39,941Public Health and Welfare 1,429,300 0 0 1,429,300

Total Expenditures $ 1,429,300 $ 39,941 $ 11,480 $ 1,480,721

Excess (Deficiency) of RevenuesOver Expenditures $ (173,931) $ 11,194 $ 0 $ (162,737)

Net Change in Fund Balances $ (173,931) $ 11,194 $ 0 $ (162,737)Fund Balance, July 1, 2020 1,218,511 354,372 0 1,572,883

Fund Balance, June 30, 2021 $ 1,044,580 $ 365,566 $ 0 $ 1,410,146


151

Exhibit G-3

Lincoln County, TennesseeSchedule of Revenues, Expenditures, and Changes

in Fund Balance - Actual (Budgetary Basis) and BudgetSolid Waste/Sanitation FundFor the Year Ended June 30, 2021


Actual Less: Expenditures Budget -(GAAP Encumbrances (Budgetary PositiveBasis) 7/1/2020 Basis) Original Final (Negative)

RevenuesCharges for Current Services $ 1,229,915 $ 0 $ 1,229,915 $ 1,219,000 $ 1,219,000 $ 10,915Other Local Revenues 1,791 0 1,791 11,000 11,000 (9,209)State of Tennessee 23,663 0 23,663 30,000 30,000 (6,337)

Total Revenues $ 1,255,369 $ 0 $ 1,255,369 $ 1,260,000 $ 1,260,000 $ (4,631)

ExpendituresPublic Health and Welfare

Sanitation Management $ 45,100 $ 0 $ 45,100 $ 86,100 $ 86,100 $ 41,000Convenience Centers 232,516 (2,500) 230,016 244,377 244,377 14,361Other Waste Disposal 1,079,799 (34) 1,079,765 1,099,651 1,099,651 19,886Postclosure Care Costs 71,885 0 71,885 60,000 100,000 28,115

Total Expenditures $ 1,429,300 $ (2,534) $ 1,426,766 $ 1,490,128 $ 1,530,128 $ 103,362

Excess (Deficiency) of RevenuesOver Expenditures $ (173,931) $ 2,534 $ (171,397) $ (230,128) $ (270,128) $ 98,731

Net Change in Fund Balance $ (173,931) $ 2,534 $ (171,397) $ (230,128) $ (270,128) $ 98,731Fund Balance, July 1, 2020 1,218,511 (2,534) 1,215,977 1,259,201 1,215,977 0

Fund Balance, June 30, 2021 $ 1,044,580 $ 0 $ 1,044,580 $ 1,029,073 $ 945,849 $ 98,731

Budgeted Amounts

152

Exhibit G-4


in Fund Balance - Actual and BudgetDrug Control FundFor the Year Ended June 30, 2021



RevenuesFines, Forfeitures, and Penalties $ 51,135 $ 13,500 $ 13,500 $ 37,635

Total Revenues $ 51,135 $ 13,500 $ 13,500 $ 37,635

ExpendituresPublic Safety

Drug Enforcement $ 39,941 $ 95,924 $ 95,924 $ 55,983Total Expenditures $ 39,941 $ 95,924 $ 95,924 $ 55,983

Excess (Deficiency) of RevenuesOver Expenditures $ 11,194 $ (82,424) $ (82,424) $ 93,618

Net Change in Fund Balance $ 11,194 $ (82,424) $ (82,424) $ 93,618Fund Balance, July 1, 2020 354,372 324,602 354,372 0

Fund Balance, June 30, 2021 $ 365,566 $ 242,178 $ 271,948 $ 93,618

Budgeted Amounts

153

Major Governmental Fund

General Debt Service Fund ____________________________

The General Debt Service Fund is used to account for and report financial resources that are restricted, committed, or assigned to expenditure for principal and interest.

____________________________

154

Exhibit H


in Fund Balance - Actual and BudgetGeneral Debt Service FundFor the Year Ended June 30, 2021



RevenuesLocal Taxes $ 3,434,532 $ 3,309,240 $ 3,309,240 $ 125,292Other Local Revenues 6,597 50,000 50,000 (43,403)

Total Revenues $ 3,441,129 $ 3,359,240 $ 3,359,240 $ 81,889

ExpendituresPrincipal on Debt

General Government $ 511,125 $ 375,000 $ 511,125 $ 0Education 1,508,875 1,645,000 1,508,875 0

Interest on DebtGeneral Government 186,410 181,060 186,410 0Education 1,342,076 1,347,426 1,342,076 0

Other Debt ServiceGeneral Government 59,673 70,000 70,000 10,327Education 2,544 5,000 5,000 2,456

Total Expenditures $ 3,610,703 $ 3,623,486 $ 3,623,486 $ 12,783

Excess (Deficiency) of RevenuesOver Expenditures $ (169,574) $ (264,246) $ (264,246) $ 94,672

Net Change in Fund Balance $ (169,574) $ (264,246) $ (264,246) $ 94,672Fund Balance, July 1, 2020 3,221,648 3,173,654 3,221,648 0

Fund Balance, June 30, 2021 $ 3,052,074 $ 2,909,408 $ 2,957,402 $ 94,672

Budgeted Amounts

155

Custodial Funds ____________________________

Custodial Funds are used to account for assets held by the county in a custodial capacity or as an agent for individuals, private organizations, other governments, and/or other funds. Custodial Funds are reported using the economic resources measurement focus and the accrual basis of accounting. Custodial fund reporting focuses on net position and changes in net position. Custodial funds are distinguished from trust funds by the absence of a trust agreement or equivalent arrangement.

____________________________

Cities - Sales Tax Fund – The Cities - Sales Tax Fund is used to account for the second half of the sales tax revenues collected inside incorporated cities of the county. These revenues are received by the county from the state of Tennessee and forwarded to the various cities on a monthly basis. City School ADA - Fayetteville Fund – The City School ADA - Fayetteville Fund is used to account for the city school system’s share of education revenues collected by the county that must be apportioned between the city and county school systems on an average daily attendance basis. These collections are remitted to the city school system on a monthly basis. Constitutional Officers - Custodial Fund – The Constitutional Officers - Custodial Fund is used to account for amounts collected in a custodial capacity by the county clerk, circuit and general sessions courts clerk, juvenile court clerk, clerk and master, register of deeds, and sheriff. Such collections include amounts due the state, cities, other county funds, litigants, heirs, and others. Judicial District Drug Fund – The Judicial District Drug Fund is used to account for grants and other restricted revenues for the benefit of the multi-jurisdictional drug task force, which was created by contract (mutual aid agreement) between the participating city and county governments. District Attorney General Fund – The District Attorney General Fund is used to account for restricted revenue held in trust for the benefit of the Office of District Attorney General.

156

Exhibit I-1

Lincoln County, TennesseeCombining Statement of Net PositionCustodial FundsJune 30, 2021

City Constitu-Cities - School tional Judicial DistrictSales ADA - Officers - District AttorneyTax Fayetteville Custodial Drug General Total

ASSETS

Cash $ 0 $ 0 $ 2,255,567 $ 16 $ 0 $ 2,255,583Equity in Pooled Cash and Investments 0 131,080 0 261,372 49,391 441,843Accounts Receivable 0 0 9,745 9,237 0 18,982Due from Other Governments 566,408 255,204 0 16,056 0 837,668Property Taxes Receivable 0 1,278,762 0 0 0 1,278,762Allowance for Uncollectible Property Taxes 0 (16,000) 0 0 0 (16,000)

Total Assets $ 566,408 $ 1,649,046 $ 2,265,312 $ 286,681 $ 49,391 $ 4,816,838

LIABILITIES

Accrued Payroll $ 0 $ 0 $ 0 $ 1,093 $ 0 $ 1,093Due to Other Taxing Units 566,408 388,560 0 0 0 954,968

Total Liabilities $ 566,408 $ 388,560 $ 0 $ 1,093 $ 0 $ 956,061


Deferred Current Property Taxes $ 0 $ 1,260,486 $ 0 $ 0 $ 0 $ 1,260,486

Total Deferred Inflows of Resources $ 0 $ 1,260,486 $ 0 $ 0 $ 0 $ 1,260,486

NET POSITION

Restricted for Individuals, Organizations, and Other Governments $ 0 $ 0 $ 2,265,312 $ 285,588 $ 49,391 $ 2,600,291

Total Net Position $ 0 $ 0 $ 2,265,312 $ 285,588 $ 49,391 $ 2,600,291

Custodial Funds

157

Exhibit I-2

Lincoln County, TennesseeCombining Statement of Changes in Net PositionCustodial FundsFor the Year Ended June 30, 2021

City Constitu -Cities - School tional Judicial DistrictSales ADA - Officers - District AttorneyTax Fayetteville Custodial Drug General Total

Additions

Sales Tax Collections for Other Governments $ 3,235,115 $ 1,379,697 $ 0 $ 0 $ 0 $ 4,614,812 ADA - Educational Funds Collected for Cities 0 1,262,878 0 0 0 1,262,878 Fines/Fees and Other Collections 0 0 13,189,349 0 0 13,189,349 Drug Task Force Collections 0 0 0 256,077 0 256,077 District Attorney General Collections 0 0 0 0 13,322 13,322

Total Additions $ 3,235,115 $ 2,642,575 $ 13,189,349 $ 256,077 $ 13,322 $ 19,336,438

Deductions

Payment of Sales Tax Collections to Other Governments $ 3,235,115 $ 0 $ 0 $ 0 $ 0 $ 3,235,115 Payments to City School Systems 0 2,717,954 0 0 0 2,717,954 Payments to State 0 0 6,052,856 0 0 6,052,856 Payments to County 0 25,841 4,877,398 0 0 4,903,239 Payments to City 0 0 77,191 0 0 77,191 Payments to Individuals and Others 0 0 1,826,680 0 0 1,826,680 Payment of Drug Task Force Expenses 0 0 0 220,612 0 220,612 Payment of District Attorney General Expenses 0 0 0 0 8,452 8,452

Total Deductions $ 3,235,115 $ 2,743,795 $ 12,834,125 $ 220,612 $ 8,452 $ 19,042,099

Change in Net Position $ 0 $ (101,220) $ 355,224 $ 35,465 $ 4,870 $ 294,339Net Position July 1, 2020 0 0 0 0 0 0Restatement - See Note I.D.10. 0 101,220 1,910,088 250,123 44,521 2,305,952

Net Position June 30, 2021 $ 0 $ 0 $ 2,265,312 $ 285,588 $ 49,391 $ 2,600,291

Custodial Funds

158

Lincoln County School Department________________________________________

This section presents combining and individual fund financial statements for the Lincoln County School Department, a discretely presented component unit. The school department uses a General Fund, four Special Revenue Funds, and two Capital Projects Funds.

________________________________________

General Purpose School Fund – The General Purpose School Fund is used to account for general operations of the school department.

School Federal Projects Fund – The School Federal Projects Fund is used to account for restricted federal revenues, which must be expended on specific education programs.

Central Cafeteria Fund – The Central Cafeteria Fund is used to account for the cafeteria operations in each of the schools.

Extended School Program Fund – The Extended School Program Fund is used to account for before- and after-school programs in the individual schools.

Internal School Fund – The Internal School Fund is used to account for funds held at the individual schools for internal school use such as the purchase of supplies, school clubs, and student activities.

Education Capital Projects Fund – The Educational Capital Projects Fund is used to account for resources accumulated to be used for the acquisition, construction, and/or renovation projects for the school department.

Other Capital Projects Fund – The Other Capital Projects Fund is used to account for resources accumulated to be used for the acquisition, construction, and/or renovation projects for the school department.

159

Exhibit J-1

Lincoln County, TennesseeStatement of ActivitiesDiscretely Presented Lincoln County School DepartmentFor the Year Ended June 30, 2021

Net (Expense)Revenue andChanges in

Operating Capital Net PositionCharges Grants Grants Total

for and and GovernmentalFunctions/Programs Expenses Services Contributions Contributions Activities

Governmental Activities: Instruction $ 21,965,481 $ 0 $ 2,653,548 $ 40,080 $ (19,271,853) Support Services 12,032,190 26,148 249,945 0 (11,756,097) Operation of Non-instructional Services 4,110,625 1,399,898 1,771,559 0 (939,168)

Total Governmental Activities $ 38,108,296 $ 1,426,046 $ 4,675,052 $ 40,080 $ (31,967,118)

General Revenues: Taxes: Property Taxes Levied for General Purposes $ 4,121,053 Local Option Sales Tax 4,015,088 Wholesale Beer Tax 123,340 Grants and Contributions Not Restricted to Specific Programs 24,957,222 Unrestricted Investment Earnings 52,929 Miscellaneous 287,316Total General Revenues $ 33,556,948

Change in Net Position $ 1,589,830Net Position, July 1, 2020 56,432,360Restatement - See Note I.D.10. 519,185

Net Position, June 30, 2021 $ 58,541,375

Program Revenues

160

Exhibit J-2

Lincoln County, TennesseeBalance Sheet - Governmental FundsDiscretely Presented Lincoln County School DepartmentJune 30, 2021

OtherGeneral Education Other Govern- TotalPurpose Capital Capital mental GovernmentalSchool Projects Projects - Funds Funds

ASSETS

Cash $ 0 $ 0 $ 0 $ 567,167 $ 567,167Equity in Pooled Cash and Investments 5,296,754 919,517 11,143 1,101,668 7,329,082Accounts Receivable 10,664 67,367 0 6,888 84,919Due from Other Governments 1,407,417 0 0 584,010 1,991,427Due from Other Funds 355,956 0 0 14,526 370,482Property Taxes Receivable 3,792,692 1,221,370 0 0 5,014,062Allowance for Uncollectible Property Taxes (47,453) (15,282) 0 0 (62,735)Prepaid Items 635,740 0 0 0 635,740Restricted Assets 321,139 0 0 0 321,139

Total Assets $ 11,772,909 $ 2,192,972 $ 11,143 $ 2,274,259 $ 16,251,283

LIABILITIES

Accounts Payable $ 12,004 $ 0 $ 0 $ 449 $ 12,453Accrued Payroll 910,854 0 0 114,703 1,025,557Contracts Payable 0 206,725 0 0 206,725Due to Other Funds 0 0 0 370,482 370,482Total Liabilities $ 922,858 $ 206,725 $ 0 $ 485,634 $ 1,615,217


Deferred Current Property Taxes $ 3,679,662 $ 1,184,970 $ 0 $ 0 $ 4,864,632Deferred Delinquent Property Taxes 58,826 18,944 0 0 77,770Other Deferred/Unavailable Revenue 358,689 0 0 0 358,689Total Deferred Inflows of Resources $ 4,097,177 $ 1,203,914 $ 0 $ 0 $ 5,301,091

(Continued)

Nonmajor Funds

Major Funds

161

Exhibit J-2

Lincoln County, TennesseeBalance Sheet - Governmental FundsDiscretely Presented Lincoln County School Department (Cont.)


FUND BALANCES

Nonspendable:Prepaid Items $ 635,740 $ 0 $ 0 $ 0 $ 635,740

Restricted:Restricted for Education 109,669 0 0 983,103 1,092,772Restricted for Capital Projects 0 782,333 11,143 0 793,476Restricted for Hybrid Retirement Stabilization Funds 321,139 0 0 0 321,139

Committed:Committed for Education 23,951 0 0 805,522 829,473

Assigned:Assigned for Education 2,090,631 0 0 0 2,090,631

Unassigned 3,571,744 0 0 0 3,571,744Total Fund Balances $ 6,752,874 $ 782,333 $ 11,143 $ 1,788,625 $ 9,334,975

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 11,772,909 $ 2,192,972 $ 11,143 $ 2,274,259 $ 16,251,283

Nonmajor Funds

Major Funds

162

Exhibit J-3

Lincoln County, TennesseeReconciliation of the Balance Sheet of Governmental Funds to the Statement of Net PositionDiscretely Presented Lincoln County School DepartmentJune 30, 2021

Amounts reported for governmental activities in the statementof net position (Exhibit A) are different because:

Total fund balances - balance sheet - governmental funds (Exhibit J-2) $ 9,334,975

(1) Capital assets used in governmental activities are not financialresources and therefore are not reported in the governmental funds. Add: land $ 1,629,077 Add: construction in progress 18,604,341 Add: buildings and improvements net of accumulated depreciation 23,233,003 Add: other capital assets net of accumulated depreciation 3,477,336 46,943,757

(2) Long-term liabilities are not due and payable in the current periodand therefore are not reported in the governmental funds. Less: net OPEB liability $ (2,645,711) Less: compensated absences payable (50,108) (2,695,819)

(3) Amounts reported as deferred outflows of resources and deferredinflows of resources related to pensions and OPEB will be amortizedand recognized as components of pension expense and OPEB expensein future years. Add: deferred outflows of resources related to pensions $ 2,865,102 Add: deferred outflows of resources related to OPEB 620,845 Less: deferred inflows of resources related to pensions (1,783,391) Less: deferred inflows of resources related to OPEB (644,225) 1,058,331

(4) Net pension assets of the agent and cost-sharing plans are not current financial resources and therefore are not reported in the governmental funds. Add: net pension asset - agent plan $ 474,106 Add: net pension asset - teacher retirement plan 202,363 Add: net pension asset - teacher legacy pension plan 2,787,203 3,463,672

(5) Other long-term assets are not available to pay for current periodexpenditures and therefore are deferred in the governmental funds. 436,459

Net position of governmental activities (Exhibit A) $ 58,541,375

163

Exhibit J-4


and Changes in Fund Balances - Governmental Funds

Discretely Presented Lincoln County School DepartmentFor the Year Ended June 30, 2021


RevenuesLocal Taxes $ 7,847,871 $ 384,054 $ 0 $ 0 $ 8,231,925Licenses and Permits 1,664 0 0 0 1,664Charges for Current Services 32,419 0 0 235,946 268,365Other Local Revenues 125,870 155,338 1,031 1,146,123 1,428,362State of Tennessee 24,529,286 0 0 18,236 24,547,522Federal Government 100,332 0 0 5,011,117 5,111,449Other Governments and Citizens Groups 55,489 0 0 0 55,489

Total Revenues $ 32,692,931 $ 539,392 $ 1,031 $ 6,411,422 $ 39,644,776


Instruction $ 19,835,216 $ 0 $ 0 $ 2,566,957 $ 22,402,173Support Services 10,043,554 0 0 565,668 10,609,222Operation of Non-Instructional Services 1,214,208 0 0 3,032,719 4,246,927Capital Outlay 370,867 1,483,510 0 75,949 1,930,326

Capital Projects 0 0 7,368,909 0 7,368,909Total Expenditures $ 31,463,845 $ 1,483,510 $ 7,368,909 $ 6,241,293 $ 46,557,557

Excess (Deficiency) of RevenuesOver Expenditures $ 1,229,086 $ (944,118) $ (7,367,878) $ 170,129 $ (6,912,781)

Other Financing Sources (Uses)Insurance Recovery $ 5,927 $ 0 $ 94,614 $ 0 $ 100,541Transfers In 0 0 0 500,000 500,000Transfers Out (500,000) 0 0 0 (500,000)

Total Other Financing Sources (Uses) $ (494,073) $ 0 $ 94,614 $ 500,000 $ 100,541

(Continued)

Nonmajor Funds

Major Funds

164

Exhibit J-4


and Changes in Fund Balances - Governmental Funds

Discretely Presented Lincoln County School Department (Cont.)


Net Change in Fund Balances $ 735,013 $ (944,118) $ (7,273,264) $ 670,129 $ (6,812,240)Restatement - See Note I.D.10. 0 0 0 519,185 519,185Fund Balance, July 1, 2020 6,017,861 1,726,451 7,284,407 599,311 15,628,030

Fund Balance, June 30, 2021 $ 6,752,874 $ 782,333 $ 11,143 $ 1,788,625 $ 9,334,975

Nonmajor Funds

Major Funds

165

Exhibit J-5

Lincoln County, TennesseeReconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of ActivitiesDiscretely Presented Lincoln County School DepartmentFor the Year Ended June 30, 2021

Amounts reported for governmental activities in the statementof activities (Exhibit B) are different because:

Net change in fund balances - total governmental funds (Exhibit J-4) $ (6,812,240)

(1) Governmental funds report capital outlays as expenditures. However,in the statement of activities, the cost of these assets is allocated overtheir useful lives and reported as depreciation expense. The differencebetween capital outlays and depreciation is itemized as follows: Add: capital assets purchased in the current period $ 9,128,881 Less: current-year depreciation expense (1,964,470) 7,164,411

(2) Revenues in the statement of activities that do not provide currentfinancial resources are not reported as revenues in the funds. Less: deferred delinquent property taxes and other deferred June 30, 2020 $ (555,312) Add: deferred delinquent property taxes and other deferred June 30, 2021 436,459 (118,853)

(3) Some expenses reported in the statement of activities do not requirethe use of current financial resources and therefore are not reportedas expenditures in the governmental funds. Change in net OPEB liability $ (416,261) Change in compensated absences payable 5,794 Change in net pension asset - agent plan 189,038 Change in net pension asset - teacher retirement plan 2,616 Change in net pension asset - teacher legacy pension plan (1,133,382) Change in deferred outflows of resources related to pensions 328,116 Change in deferred outflows of resources related to OPEB 297,061 Change in deferred inflows of resources related to pensions 2,027,509 Change in deferred inflows of resources related to OPEB 56,021 1,356,512

Change in net position of governmental activities (Exhibit B) $ 1,589,830

166

Exhibit J-6

Lincoln County, TennesseeCombining Balance Sheet - Nonmajor Governmental FundsDiscretely Presented Lincoln County School DepartmentJune 30, 2021

TotalSchool Extended Nonmajor

Federal Central School Internal GovernmentalProjects Cafeteria Program School Funds

ASSETS

Cash $ 0 $ 2,305 $ 0 $ 564,862 $ 567,167Equity in Pooled Cash and Investments 544,676 407,590 149,402 0 1,101,668Accounts Receivable 141 627 6,120 0 6,888Due from Other Governments 563,905 20,105 0 0 584,010Due from Other Funds 0 14,526 0 0 14,526

Total Assets $ 1,108,722 $ 445,153 $ 155,522 $ 564,862 $ 2,274,259

LIABILITIES

Accounts Payable $ 0 $ 449 $ 0 $ 0 $ 449Accrued Payroll 80,750 33,953 0 0 114,703Due to Other Funds 370,482 0 0 0 370,482Total Liabilities $ 451,232 $ 34,402 $ 0 $ 0 $ 485,634

FUND BALANCES

Restricted:Restricted for Education $ 7,490 $ 410,751 $ 0 $ 564,862 $ 983,103

Committed:Committed for Education 650,000 0 155,522 0 805,522

Total Fund Balances $ 657,490 $ 410,751 $ 155,522 $ 564,862 $ 1,788,625

Total Liabilities and Fund Balances $ 1,108,722 $ 445,153 $ 155,522 $ 564,862 $ 2,274,259


167

Exhibit J-7


and Changes in Fund Balances - Nonmajor Governmental Funds

Discretely Presented Lincoln County School DepartmentFor the Year Ended June 30, 2021



RevenuesCharges for Current Services $ 0 $ 164,120 $ 71,826 $ 0 $ 235,946Other Local Revenues 0 10,175 0 1,135,948 1,146,123State of Tennessee 0 18,236 0 0 18,236Federal Government 3,287,406 1,723,711 0 0 5,011,117

Total Revenues $ 3,287,406 $ 1,916,242 $ 71,826 $ 1,135,948 $ 6,411,422


Instruction $ 2,566,957 $ 0 $ 0 $ 0 $ 2,566,957Support Services 565,668 0 0 0 565,668Operation of Non-Instructional Services 87,280 1,784,703 70,465 1,090,271 3,032,719Capital Outlay 75,949 0 0 0 75,949

Total Expenditures $ 3,295,854 $ 1,784,703 $ 70,465 $ 1,090,271 $ 6,241,293

Excess (Deficiency) of RevenuesOver Expenditures $ (8,448) $ 131,539 $ 1,361 $ 45,677 $ 170,129

Other Financing Sources (Uses)Transfers In $ 500,000 $ 0 $ 0 $ 0 $ 500,000

Total Other Financing Sources (Uses) $ 500,000 $ 0 $ 0 $ 0 $ 500,000

(Continued)


168

Exhibit J-7


and Changes in Fund Balances - Nonmajor Governmental Funds

Discretely Presented Lincoln County School Department (Cont.)



Net Change in Fund Balances $ 491,552 $ 131,539 $ 1,361 $ 45,677 $ 670,129Restatement - See Noe I.D.10. 0 0 0 519,185 519,185Fund Balance, July 1, 2020 165,938 279,212 154,161 0 599,311

Fund Balance, June 30, 2021 $ 657,490 $ 410,751 $ 155,522 $ 564,862 $ 1,788,625


169

Exhibit J-8


in Fund Balance - Actual (Budgetary Basis) and BudgetDiscretely Presented Lincoln County School DepartmentGeneral Purpose School FundFor the Year Ended June 30, 2021



RevenuesLocal Taxes $ 7,847,871 $ 0 $ 0 $ 7,847,871 $ 6,663,662 $ 6,663,662 $ 1,184,209Licenses and Permits 1,664 0 0 1,664 1,600 1,600 64Charges for Current Services 32,419 0 0 32,419 100,338 100,338 (67,919)Other Local Revenues 125,870 0 0 125,870 35,164 63,282 62,588State of Tennessee 24,529,286 0 0 24,529,286 23,075,315 25,022,618 (493,332)Federal Government 100,332 0 0 100,332 0 125,000 (24,668)Other Governments and Citizens Groups 55,489 0 0 55,489 17,440 94,469 (38,980)

Total Revenues $ 32,692,931 $ 0 $ 0 $ 32,692,931 $ 29,893,519 $ 32,070,969 $ 621,962

ExpendituresInstruction

Regular Instruction Program $ 15,995,579 $ (159,304) $ 120,909 $ 15,957,184 $ 15,955,819 $ 16,759,372 $ 802,188Alternative Instruction Program 147,763 0 0 147,763 146,165 148,615 852Special Education Program 2,378,075 0 0 2,378,075 2,518,007 2,484,257 106,182Career and Technical Education Program 1,253,938 (42) 15,098 1,268,994 1,346,361 1,359,861 90,867Student Body Education Program 59,861 0 0 59,861 101,588 168,833 108,972

Support ServicesAttendance 240,672 0 0 240,672 248,623 248,623 7,951Health Services 383,557 (2,780) 0 380,777 265,280 402,693 21,916Other Student Support 774,103 (54,374) 31,372 751,101 695,434 811,873 60,772Regular Instruction Program 970,874 (12,524) 4,552 962,902 1,064,083 1,084,614 121,712Special Education Program 251,169 0 0 251,169 220,471 259,221 8,052Career and Technical Education Program 112,791 0 0 112,791 152,355 152,355 39,564Technology 38,089 0 0 38,089 51,720 51,720 13,631Other Programs 67,060 0 0 67,060 0 67,060 0Board of Education 692,438 0 0 692,438 855,340 856,995 164,557Director of Schools 316,632 0 0 316,632 372,756 372,756 56,124Office of the Principal 1,611,642 0 0 1,611,642 1,600,901 1,688,216 76,574Operation of Plant 1,858,116 0 7,567 1,865,683 2,132,043 2,181,143 315,460

(Continued)

Budgeted Amounts

170

Exhibit J-8


in Fund Balance - Actual (Budgetary Basis) and BudgetDiscretely Presented Lincoln County School DepartmentGeneral Purpose School Fund (Cont.)



Expenditures (Cont.)Support Services (Cont.)

Maintenance of Plant $ 1,016,044 $ (46,627) $ 54,020 $ 1,023,437 $ 1,150,318 $ 1,130,318 $ 106,881Transportation 1,710,367 (355,906) 304,548 1,659,009 1,880,120 2,052,694 393,685

Operation of Non-Instructional ServicesFood Service 122,002 0 0 122,002 96,214 126,528 4,526Community Services 258,416 0 0 258,416 17,400 364,948 106,532Early Childhood Education 833,790 (2,806) 11,921 842,905 163,129 855,604 12,699

Capital OutlayRegular Capital Outlay 370,867 (96,145) 110,551 385,273 398,000 398,000 12,727

Total Expenditures $ 31,463,845 $ (730,508) $ 660,538 $ 31,393,875 $ 31,432,127 $ 34,026,299 $ 2,632,424

Excess (Deficiency) of RevenuesOver Expenditures $ 1,229,086 $ 730,508 $ (660,538) $ 1,299,056 $ (1,538,608) $ (1,955,330) $ 3,254,386

Other Financing Sources (Uses)Insurance Recovery $ 5,927 $ 0 $ 0 $ 5,927 $ 0 $ 5,927 $ 0Transfers Out (500,000) 0 0 (500,000) 0 (500,000) 0

Total Other Financing Sources $ (494,073) $ 0 $ 0 $ (494,073) $ 0 $ (494,073) $ 0

Net Change in Fund Balance $ 735,013 $ 730,508 $ (660,538) $ 804,983 $ (1,538,608) $ (2,449,403) $ 3,254,386Fund Balance, July 1, 2020 6,017,861 (730,508) 0 5,287,353 3,709,415 5,287,353 0

Fund Balance, June 30, 2021 $ 6,752,874 $ 0 $ (660,538) $ 6,092,336 $ 2,170,807 $ 2,837,950 $ 3,254,386

Budgeted Amounts

171

Exhibit J-9


in Fund Balance - Actual (Budgetary Basis) and BudgetDiscretely Presented Lincoln County School DepartmentSchool Federal Projects FundFor the Year Ended June 30, 2021



RevenuesFederal Government $ 3,287,406 $ 0 $ 3,287,406 $ 3,155,527 $ 5,857,995 $ (2,570,589)

Total Revenues $ 3,287,406 $ 0 $ 3,287,406 $ 3,155,527 $ 5,857,995 $ (2,570,589)

ExpendituresInstruction

Regular Instruction Program $ 1,685,370 $ 0 $ 1,685,370 $ 1,617,207 $ 2,141,661 $ 456,291Special Education Program 807,110 0 807,110 761,471 848,109 40,999Career and Technical Education Program 74,477 (13,778) 60,699 35,995 60,699 0

Support ServicesAttendance 799 0 799 0 815 16Health Services 64,182 0 64,182 71,969 73,642 9,460Other Student Support 42,225 0 42,225 53,454 44,397 2,172Regular Instruction Program 32,700 0 32,700 157,784 232,669 199,969Special Education Program 174,251 0 174,251 263,736 230,564 56,313Career and Technical Education Program 787 0 787 8,182 844 57Technology 44,422 0 44,422 44,422 44,422 0Director of Schools 1,597 0 1,597 0 2,620 1,023Office of the Principal 19,792 0 19,792 0 49,753 29,961Operation of Plant 23,550 0 23,550 0 30,664 7,114Maintenance of Plant 14,062 0 14,062 0 15,035 973Transportation 147,301 0 147,301 99,500 184,135 36,834

Operation of Non-Instructional ServicesFood Service 86,480 0 86,480 46,870 119,041 32,561Community Services 800 0 800 0 875 75

(Continued)

Budgeted Amounts

172

Exhibit J-9


in Fund Balance - Actual (Budgetary Basis) and BudgetDiscretely Presented Lincoln County School DepartmentSchool Federal Projects Fund (Cont.)



Expenditures (Cont.)Capital Outlay

Regular Capital Outlay $ 75,949 $ 0 $ 75,949 $ 0 $ 1,780,000 $ 1,704,051Total Expenditures $ 3,295,854 $ (13,778) $ 3,282,076 $ 3,160,590 $ 5,859,945 $ 2,577,869

Excess (Deficiency) of RevenuesOver Expenditures $ (8,448) $ 13,778 $ 5,330 $ (5,063) $ (1,950) $ 7,280

Other Financing Sources (Uses)Transfers In $ 500,000 $ 0 $ 500,000 $ 8,486 $ 500,010 $ (10)Transfers Out 0 0 0 (5,364) 0 0

Total Other Financing Sources $ 500,000 $ 0 $ 500,000 $ 3,122 $ 500,010 $ (10)

Net Change in Fund Balance $ 491,552 $ 13,778 $ 505,330 $ (1,941) $ 498,060 $ 7,270Fund Balance, July 1, 2020 165,938 (13,778) 152,160 150,000 650,000 (497,840)

Fund Balance, June 30, 2021 $ 657,490 $ 0 $ 657,490 $ 148,059 $ 1,148,060 $ (490,570)

Budgeted Amounts

173

Exhibit J-10


in Fund Balance - Actual (Budgetary Basis) and BudgetDiscretely Presented Lincoln County School DepartmentCentral Cafeteria FundFor the Year Ended June 30, 2021



RevenuesCharges for Current Services $ 164,120 $ 0 $ 0 $ 164,120 $ 765,138 $ 765,138 $ (601,018)Other Local Revenues 10,175 0 0 10,175 6,000 6,000 4,175State of Tennessee 18,236 0 0 18,236 19,000 19,000 (764)Federal Government 1,723,711 0 0 1,723,711 1,535,000 1,535,000 188,711

Total Revenues $ 1,916,242 $ 0 $ 0 $ 1,916,242 $ 2,325,138 $ 2,325,138 $ (408,896)

ExpendituresOperation of Non-Instructional Services

Food Service $ 1,784,703 $ (27,012) $ 31,012 $ 1,788,703 $ 2,323,334 $ 2,381,603 $ 592,900Total Expenditures $ 1,784,703 $ (27,012) $ 31,012 $ 1,788,703 $ 2,323,334 $ 2,381,603 $ 592,900

Excess (Deficiency) of RevenuesOver Expenditures $ 131,539 $ 27,012 $ (31,012) $ 127,539 $ 1,804 $ (56,465) $ 184,004

Net Change in Fund Balance $ 131,539 $ 27,012 $ (31,012) $ 127,539 $ 1,804 $ (56,465) $ 184,004Fund Balance, July 1, 2020 279,212 (27,012) 0 252,200 162,822 252,200 0

Fund Balance, June 30, 2021 $ 410,751 $ 0 $ (31,012) $ 379,739 $ 164,626 $ 195,735 $ 184,004

Budgeted Amounts

174

Exhibit J-11


in Fund Balance - Actual and BudgetDiscretely Presented Lincoln County School DepartmentExtended School Program FundFor the Year Ended June 30, 2021



RevenuesCharges for Current Services $ 71,826 $ 113,000 $ 113,000 $ (41,174)

Total Revenues $ 71,826 $ 113,000 $ 113,000 $ (41,174)

ExpendituresOperation of Non-Instructional Services

Community Services $ 70,465 $ 113,000 $ 113,000 $ 42,535Total Expenditures $ 70,465 $ 113,000 $ 113,000 $ 42,535

Excess (Deficiency) of RevenuesOver Expenditures $ 1,361 $ 0 $ 0 $ 1,361

Net Change in Fund Balance $ 1,361 $ 0 $ 0 $ 1,361Fund Balance, July 1, 2020 154,161 153,806 154,161 0

Fund Balance, June 30, 2021 $ 155,522 $ 153,806 $ 154,161 $ 1,361

Budgeted Amounts

175

Exhibit J-12


in Fund Balance - Actual (Budgetary Basis) and BudgetDiscretely Presented Lincoln County School DepartmentEducation Capital Projects FundFor the Year Ended June 30, 2021



RevenuesLocal Taxes $ 384,054 $ 0 $ 0 $ 384,054 $ 372,222 $ 373,044 $ 11,010Other Local Revenues 155,338 0 0 155,338 0 87,972 67,366

Total Revenues $ 539,392 $ 0 $ 0 $ 539,392 $ 372,222 $ 461,016 $ 78,376

ExpendituresCapital Outlay

Regular Capital Outlay $ 1,483,510 $ (674,421) $ 204,734 $ 1,013,823 $ 586,603 $ 1,492,988 $ 479,165Total Expenditures $ 1,483,510 $ (674,421) $ 204,734 $ 1,013,823 $ 586,603 $ 1,492,988 $ 479,165

Excess (Deficiency) of RevenuesOver Expenditures $ (944,118) $ 674,421 $ (204,734) $ (474,431) $ (214,381) $ (1,031,972) $ 557,541

Net Change in Fund Balance $ (944,118) $ 674,421 $ (204,734) $ (474,431) $ (214,381) $ (1,031,972) $ 557,541Fund Balance, July 1, 2020 1,726,451 (674,421) 0 1,052,030 214,381 1,052,030 0

Fund Balance, June 30, 2021 $ 782,333 $ 0 $ (204,734) $ 577,599 $ 0 $ 20,058 $ 557,541

Budgeted Amounts

176

Exhibit J-13


in Fund Balance - Actual (Budgetary Basis) and BudgetDiscretely Presented Lincoln County School DepartmentOther Capital Projects FundFor the Year Ended June 30, 2021



RevenuesOther Local Revenues $ 1,031 $ 0 $ 0 $ 1,031 $ 0 $ 1,032 $ (1)

Total Revenues $ 1,031 $ 0 $ 0 $ 1,031 $ 0 $ 1,032 $ (1)

ExpendituresCapital Projects

Education Capital Projects $ 7,368,909 $ (11,143) $ 10,687 $ 7,368,453 $ 0 $ 7,368,909 $ 456Total Expenditures $ 7,368,909 $ (11,143) $ 10,687 $ 7,368,453 $ 0 $ 7,368,909 $ 456

Excess (Deficiency) of RevenuesOver Expenditures $ (7,367,878) $ 11,143 $ (10,687) $ (7,367,422) $ 0 $ (7,367,877) $ 455

Other Financing Sources (Uses)Insurance Recovery $ 94,614 $ 0 $ 0 $ 94,614 $ 0 $ 94,614 $ 0

Total Other Financing Sources $ 94,614 $ 0 $ 0 $ 94,614 $ 0 $ 94,614 $ 0

Net Change in Fund Balance $ (7,273,264) $ 11,143 $ (10,687) $ (7,272,808) $ 0 $ (7,273,263) $ 455Fund Balance, July 1, 2020 7,284,407 (11,143) 0 7,273,264 0 7,273,263 1

Fund Balance, June 30, 2021 $ 11,143 $ 0 $ (10,687) $ 456 $ 0 $ 0 $ 456

Budgeted Amounts

177

MISCELLANEOUS SCHEDULES

178

Exhibit K-1

Lincoln County, TennesseeSchedule of Changes in Long-term Notes and BondsFor the Year Ended June 30, 2021

Paid and/orOriginal Date Last MaturedAmount Interest of Maturity Outstanding During Outstanding

Description of Indebtedness of Issue Rate Issue Date 7-1-20 Period 6-30-21

NOTES PAYABLE Payable through General Debt Service Fund Jail Renovations $ 1,000,000 2.195 % 4-14-15 4-1-27 $ 605,000 $ 80,000 $ 525,000

Total Notes Payable $ 605,000 $ 80,000 $ 525,000

BONDS PAYABLE Payable through General Debt Service Fund General Obligation School Refunding 14,765,000 4 to 5.25 8-1-01 3-26-21 $ 500,000 $ 500,000 $ 0 General Obligation Refunding 6,470,000 3.9 6-12-07 4-26-21 375,000 375,000 0 General Obligation 7,000,000 3.25 3-6-14 6-1-34 5,095,000 295,000 4,800,000 General Obligation 30,470,000 3.67 11-20-18 5-1-43 30,470,000 770,000 29,700,000

Total Bonds Payable $ 36,440,000 $ 1,940,000 $ 34,500,000

179

Exhibit K-2

Lincoln County, TennesseeSchedule of Long-term Debt Requirements by Year

GOVERNMENTAL ACTIVITIES

YearEndingJune 30 Principal Interest Total

2022 $ 85,000 $ 11,524 $ 96,5242023 85,000 9,658 94,6582024 85,000 7,792 92,7922025 90,000 5,926 95,9262026 90,000 3,951 93,9512027 90,000 1,975 91,975

Total $ 525,000 $ 40,826 $ 565,826

YearEndingJune 30 Principal Interest Total

2022 $ 1,110,000 $ 1,426,868 $ 2,536,8682023 1,160,000 1,377,367 2,537,3672024 1,215,000 1,325,567 2,540,5672025 1,270,000 1,271,218 2,541,2182026 1,325,000 1,214,318 2,539,3182027 1,385,000 1,154,867 2,539,8672028 1,450,000 1,092,179 2,542,1792029 1,515,000 1,026,251 2,541,2512030 1,585,000 957,063 2,542,0632031 1,660,000 884,150 2,544,1502032 1,720,000 829,187 2,549,1872033 1,790,000 761,962 2,551,9622034 1,860,000 691,463 2,551,4632035 1,460,000 618,200 2,078,2002036 1,520,000 559,800 2,079,8002037 1,580,000 499,000 2,079,0002038 1,640,000 435,800 2,075,8002039 1,710,000 370,200 2,080,2002040 1,775,000 301,800 2,076,8002041 1,850,000 230,800 2,080,8002042 1,920,000 156,800 2,076,8002043 2,000,000 80,000 2,080,000

Total $ 34,500,000 $ 17,264,860 $ 51,764,860

Bonds

Notes

180

Exhibit K-3

Lincoln County, TennesseeSchedule of TransfersDiscretely Presented Lincoln County School DepartmentFor the Year Ended June 30, 2021

From Fund To Fund Purpose Amount

DISCRETELY PRESENTED LINCOLN COUNTY SCHOOL DEPARTMENT

General Purpose School School Federal Projects Cash Flow Purposes $ 500,000

Total Transfers Discretely Presented Lincoln County School Department $ 500,000

181

Exhibit K-4

Lincoln County, TennesseeSchedule of Salaries and Official Bonds of Principal OfficialsPrimary Government and Discretely Presented Lincoln County School DepartmentFor the Year Ended June 30, 2021

SalaryPaid

DuringOfficial Authorization for Salary Period Bond Surety

County Mayor Section 8-24-102, TCA $ 93,170 $ 400,000 Local Government Property and Casualty FundHighway Superintendent Section 8-24-102, TCA 88,735 400,000 "Director of Schools State Board of Education and

Local Board of Education 154,912 (1) 400,000 Tennessee Risk Management TrustTrustee Section 8-24-102, TCA 80,668 1,319,120 RLI Insurance CompanyAssessor of Property: Paul Braden (7-1-20 through 8-31-20) Section 8-24-102, TCA 13,445 400,000 Local Government Property and Casualty Fund Tammy Painter (9-1-20 through 6-30-21) Section 8-24-102, TCA 67,223 400,000 "County Clerk Section 8-24-102, TCA 80,668 400,000 "Circuit and General Sessions Courts Clerk Section 8-24-102, TCA 80,668 400,000 "Clerk and Master Section 8-24-102, TCA, and

Chancery Judge 80,668 (2) (5) 100,000 RLI Insurance CompanyRegister of Deeds Section 8-24-102, TCA 80,668 400,000 Local Government Property and Casualty FundSheriff Section 8-24-102, TCA 88,735 (3) 400,000 "Director of Finance: Cole Bradford (7-1-2020 through 2-14-2021) County Commission 62,906 (4) 400,000 " Vicky Trentham (2-15-2021 through 6-30-2021) County Commission 25,819 400,000 "

Employee Blanket Bonds: Public Employee Dishonesty - County Departments 400,000 Local Government Property and Casualty Fund Public Employee Dishonesty - School Departments 400,000 Tennessee Risk Management Trust

(1) Does not include a chief executive officer training supplement of $1,000, a travel allowance of $800 per month, accrued vacation pay of $12,880, $280 for middle school basketball tournament coordinator, or $500 employee bonus.(2) Does not include special commissioner fees of $11,453.(3) Does not include a law enforcement training supplement of $800.(4) Does not include $10,885 for serving as the solid waste administrative officer.(5) Clerk and Master is additionally covered by the county's public employee dishonesty blanket bond pursuant to Section 8-19-101, TCA.

182

Exhibit K-5

Lincoln County, TennesseeSchedule of Detailed Revenues -

All Governmental Fund TypesFor the Year Ended June 30, 2021

Other Constitu -Solid General tional Highway /

Waste / Drug Government Officers - PublicGeneral Sanitation Control Fund Fees Works

Local TaxesCounty Property Taxes

Current Property Tax $ 6,502,453 $ 0 $ 0 $ 0 $ 0 $ 1,045,951Trustee's Collections - Prior Year 175,334 0 0 0 0 28,061Trustee's Collections - Bankruptcy 22,831 0 0 0 0 3,815Circuit Clerk/Clerk and Master Collections - Prior Years 56,474 0 0 0 0 9,084Interest and Penalty 31,099 0 0 0 0 5,022Payments in-Lieu-of Taxes - T.V.A. 2,733 0 0 0 0 0Payments in-Lieu-of Taxes - Local Utilities 289,217 0 0 0 0 0Payments in-Lieu-of Taxes - Other 391,691 0 0 0 0 0

County Local Option TaxesLocal Option Sales Tax 2,075,785 0 0 0 0 0Hotel/Motel Tax 149,487 0 0 0 0 0Wheel Tax 207,881 0 0 0 0 1,343,232Litigation Tax - General 78,295 0 0 0 0 0Litigation Tax - Special Purpose 90,017 0 0 0 0 0Litigation Tax - Jail, Workhouse, or Courthouse 32,883 0 0 0 0 0Litigation Tax - Courthouse Security 77,101 0 0 0 0 0Business Tax 381,517 0 0 0 0 0Mineral Severance Tax 0 0 0 0 0 44,138

Statutory Local TaxesBank Excise Tax 171,891 0 0 0 0 0

Total Local Taxes $ 10,736,689 $ 0 $ 0 $ 0 $ 0 $ 2,479,303

Licenses and PermitsLicenses

Cable TV Franchise $ 104,881 $ 0 $ 0 $ 0 $ 0 $ 0

(Continued)


183

Exhibit K-5


All Governmental Fund Types (Cont.)



Licenses and Permits (Cont.)Permits

Beer Permits $ 3,899 $ 0 $ 0 $ 0 $ 0 $ 0Building Permits 284,227 0 0 0 0 0Other Permits 45 0 0 0 0 0

Total Licenses and Permits $ 393,052 $ 0 $ 0 $ 0 $ 0 $ 0

Fines, Forfeitures, and PenaltiesCircuit Court

Fines $ 3,263 $ 0 $ 0 $ 0 $ 0 $ 0Officers Costs 9,380 0 0 0 0 0Drug Control Fines 3,082 0 5,964 0 0 0Jail Fees 4,274 0 0 0 0 0DUI Treatment Fines 348 0 0 0 0 0Data Entry Fee - Circuit Court 2,789 0 0 0 0 0Courtroom Security Fee 344 0 0 0 0 0

General Sessions CourtFines 27,484 0 0 0 0 0Officers Costs 48,568 0 0 0 0 0Game and Fish Fines 1,122 0 0 0 0 0Drug Control Fines 18,435 0 10,656 0 0 0Drug Court Fees 1,354 0 0 0 0 0Jail Fees 26,655 0 0 0 0 0Judicial Commissioner Fees 3,532 0 0 0 0 0DUI Treatment Fines 10,860 0 0 0 0 0Data Entry Fee - General Sessions Court 11,295 0 0 0 0 0Courtroom Security Fee 5,339 0 0 0 0 0

(Continued)


184

Exhibit K-5





Fines, Forfeitures, and Penalties (Cont.)Juvenile Court

Fines $ 2,408 $ 0 $ 0 $ 0 $ 0 $ 0Officers Costs 139 0 0 0 0 0

Chancery CourtOfficers Costs 1,272 0 0 0 0 0Data Entry Fee - Chancery Court 2,793 0 0 0 0 0Courtroom Security Fee 7 0 0 0 0 0

Other Courts - In-countyFines 2,950 0 0 0 0 0

Judicial District Drug ProgramDrug Task Force Forfeitures and Seizures 0 0 3,052 0 0 0

Other Fines, Forfeitures, and PenaltiesProceeds from Confiscated Property 0 0 31,463 0 0 0

Total Fines, Forfeitures, and Penalties $ 187,693 $ 0 $ 51,135 $ 0 $ 0 $ 0

Charges for Current ServicesGeneral Service Charges

Commercial and Industrial Waste Collection Charge $ 0 $ 101,794 $ 0 $ 0 $ 0 $ 0Residential Waste Collection Charge 0 1,128,121 0 0 0 0Patient Charges 3,137 0 0 0 0 0Zoning Studies 14,600 0 0 0 0 0

FeesCopy Fees 457 0 0 0 0 0Archives and Records Management Fee 5,075 0 0 0 0 0Greenbelt Late Application Fee 1,150 0 0 0 0 0Telephone Commissions 80,232 0 0 0 0 0

(Continued)


185

Exhibit K-5





Charges for Current Services (Cont.)Fees (Cont.)

Constitutional Officers' Fees and Commissions $ 0 $ 0 $ 0 $ 0 $ 27 $ 0Special Commissioner Fees/Special Master Fees 0 0 0 0 11,453 0Data Processing Fee - Register 14,918 0 0 0 0 0Data Processing Fee - Sheriff 2,306 0 0 0 0 0Sexual Offender Registration Fee - Sheriff 6,150 0 0 0 0 0Data Processing Fee - County Clerk 3,920 0 0 0 0 0

Education ChargesOther Charges for Services 1,273 0 0 0 0 0

Total Charges for Current Services $ 133,218 $ 1,229,915 $ 0 $ 0 $ 11,480 $ 0

Other Local RevenuesRecurring Items

Investment Income $ 108,289 $ 0 $ 0 $ 115 $ 0 $ 0Lease/Rentals 86,400 0 0 0 0 0Sale of Materials and Supplies 24 1,618 0 0 0 4,630Commissary Sales 2,719 0 0 0 0 0Miscellaneous Refunds 64,315 173 0 0 0 128

Nonrecurring ItemsSale of Equipment 100 0 0 0 0 0Sale of Property 1,954 0 0 0 0 0

Total Other Local Revenues $ 263,801 $ 1,791 $ 0 $ 115 $ 0 $ 4,758

Fees Received From County OfficialsFees In-Lieu-of Salary

County Clerk $ 595,587 $ 0 $ 0 $ 0 $ 0 $ 0

(Continued)


186

Exhibit K-5





Fees Received From County Officials (Cont.)Fees In-Lieu-of Salary (Cont.)

Circuit Court Clerk $ 110,963 $ 0 $ 0 $ 0 $ 0 $ 0General Sessions Court Clerk 207,953 0 0 0 0 0Clerk and Master 116,857 0 0 0 0 0Register 217,227 0 0 0 0 0Sheriff 8,760 0 0 0 0 0Trustee 420,438 0 0 0 0 0

Total Fees Received From County Officials $ 1,677,785 $ 0 $ 0 $ 0 $ 0 $ 0

State of TennesseeGeneral Government Grants

Juvenile Services Program $ 4,500 $ 0 $ 0 $ 0 $ 0 $ 0Public Safety Grants

Law Enforcement Training Programs 31,200 0 0 0 0 0Health and Welfare Grants

Health Department Programs 217,670 0 0 0 0 0Other Health and Welfare Grants 26,168 0 0 0 0 0

Public Works GrantsState Aid Program 0 0 0 0 0 389,080Litter Program 485 0 0 0 0 0Other Public Works Grants 0 0 0 0 0 93,478

Other State RevenuesVehicle Certificate of Title Fees 8,294 0 0 0 0 0Alcoholic Beverage Tax 104,813 0 0 0 0 0State Revenue Sharing - Telecommunications 54,973 0 0 0 0 0State Shared Sports Gaming Privilege Tax 9,665 0 0 0 0 0

(Continued)


187

Exhibit K-5





State of Tennessee (Cont.)Other State Revenues (Cont.)

Contracted Prisoner Boarding $ 242,229 $ 0 $ 0 $ 0 $ 0 $ 0Gasoline and Motor Fuel Tax 0 0 0 0 0 2,658,094Petroleum Special Tax 0 0 0 0 0 24,071Registrar's Salary Supplement 15,164 0 0 0 0 0State Shared Sales Tax - Cities 5,257 0 0 0 0 0Other State Grants 958,781 0 0 0 0 0Other State Revenues 3,515 23,663 0 0 0 0

Total State of Tennessee $ 1,682,714 $ 23,663 $ 0 $ 0 $ 0 $ 3,164,723

Federal GovernmentFederal Through State

Civil Defense Reimbursement $ 49,850 $ 0 $ 0 $ 0 $ 0 $ 0Disaster Relief 0 0 0 0 0 565,662Homeland Security Grants 18,078 0 0 0 0 0Law Enforcement Grants 10,216 0 0 0 0 0COVID-19 Grant #2 15,938 0 0 0 0 0COVID-19 Grant #3 511,755 0 0 0 0 0Other Federal through State 370,977 0 0 0 0 0

Total Federal Government $ 976,814 $ 0 $ 0 $ 0 $ 0 $ 565,662

Other Governments and Citizens GroupsOther Governments

Contributions $ 31,016 $ 0 $ 0 $ 0 $ 0 $ 0Citizens Groups

Donations 44,144 0 0 0 0 0Total Other Governments and Citizens Groups $ 75,160 $ 0 $ 0 $ 0 $ 0 $ 0

Total $ 16,126,926 $ 1,255,369 $ 51,135 $ 115 $ 11,480 $ 6,214,446

(Continued)


188

Exhibit K-5



GeneralDebt

Service Total


Current Property Tax $ 2,405,708 $ 9,954,112Trustee's Collections - Prior Year 64,580 267,975Trustee's Collections - Bankruptcy 8,781 35,427Circuit Clerk/Clerk and Master Collections - Prior Years 20,907 86,465Interest and Penalty 11,338 47,459Payments in-Lieu-of Taxes - T.V.A. 0 2,733Payments in-Lieu-of Taxes - Local Utilities 0 289,217Payments in-Lieu-of Taxes - Other 0 391,691

County Local Option TaxesLocal Option Sales Tax 0 2,075,785Hotel/Motel Tax 0 149,487Wheel Tax 847,516 2,398,629Litigation Tax - General 0 78,295Litigation Tax - Special Purpose 0 90,017Litigation Tax - Jail, Workhouse, or Courthouse 75,702 108,585Litigation Tax - Courthouse Security 0 77,101Business Tax 0 381,517Mineral Severance Tax 0 44,138

Statutory Local TaxesBank Excise Tax 0 171,891

Total Local Taxes $ 3,434,532 $ 16,650,524


Cable TV Franchise $ 0 $ 104,881

(Continued)

Debt Service Fund

189

Exhibit K-5



GeneralDebt

Service Total

Licenses and Permits (Cont.)Permits

Beer Permits $ 0 $ 3,899Building Permits 0 284,227Other Permits 0 45

Total Licenses and Permits $ 0 $ 393,052

Fines, Forfeitures, and PenaltiesCircuit Court

Fines $ 0 $ 3,263Officers Costs 0 9,380Drug Control Fines 0 9,046Jail Fees 0 4,274DUI Treatment Fines 0 348Data Entry Fee - Circuit Court 0 2,789Courtroom Security Fee 0 344

General Sessions CourtFines 0 27,484Officers Costs 0 48,568Game and Fish Fines 0 1,122Drug Control Fines 0 29,091Drug Court Fees 0 1,354Jail Fees 0 26,655Judicial Commissioner Fees 0 3,532DUI Treatment Fines 0 10,860Data Entry Fee - General Sessions Court 0 11,295Courtroom Security Fee 0 5,339

(Continued)

Debt Service Fund

190

Exhibit K-5



GeneralDebt

Service Total

Fines, Forfeitures, and Penalties (Cont.)Juvenile Court

Fines $ 0 $ 2,408Officers Costs 0 139

Chancery CourtOfficers Costs 0 1,272Data Entry Fee - Chancery Court 0 2,793Courtroom Security Fee 0 7

Other Courts - In-countyFines 0 2,950

Judicial District Drug ProgramDrug Task Force Forfeitures and Seizures 0 3,052

Other Fines, Forfeitures, and PenaltiesProceeds from Confiscated Property 0 31,463

Total Fines, Forfeitures, and Penalties $ 0 $ 238,828


Commercial and Industrial Waste Collection Charge $ 0 $ 101,794Residential Waste Collection Charge 0 1,128,121Patient Charges 0 3,137Zoning Studies 0 14,600

FeesCopy Fees 0 457Archives and Records Management Fee 0 5,075Greenbelt Late Application Fee 0 1,150Telephone Commissions 0 80,232

(Continued)

Debt Service Fund

191

Exhibit K-5



GeneralDebt

Service Total

Charges for Current Services (Cont.)Fees (Cont.)

Constitutional Officers' Fees and Commissions $ 0 $ 27Special Commissioner Fees/Special Master Fees 0 11,453Data Processing Fee - Register 0 14,918Data Processing Fee - Sheriff 0 2,306Sexual Offender Registration Fee - Sheriff 0 6,150Data Processing Fee - County Clerk 0 3,920

Education ChargesOther Charges for Services 0 1,273

Total Charges for Current Services $ 0 $ 1,374,613


Investment Income $ 6,597 $ 115,001Lease/Rentals 0 86,400Sale of Materials and Supplies 0 6,272Commissary Sales 0 2,719Miscellaneous Refunds 0 64,616

Nonrecurring ItemsSale of Equipment 0 100Sale of Property 0 1,954

Total Other Local Revenues $ 6,597 $ 277,062

Fees Received From County OfficialsFees In-Lieu-of Salary

County Clerk $ 0 $ 595,587

(Continued)

Debt Service Fund

192

Exhibit K-5



GeneralDebt

Service Total

Fees Received From County Officials (Cont.)Fees In-Lieu-of Salary (Cont.)

Circuit Court Clerk $ 0 $ 110,963General Sessions Court Clerk 0 207,953Clerk and Master 0 116,857Register 0 217,227Sheriff 0 8,760Trustee 0 420,438

Total Fees Received From County Officials $ 0 $ 1,677,785


Juvenile Services Program $ 0 $ 4,500Public Safety Grants

Law Enforcement Training Programs 0 31,200Health and Welfare Grants

Health Department Programs 0 217,670Other Health and Welfare Grants 0 26,168

Public Works GrantsState Aid Program 0 389,080Litter Program 0 485Other Public Works Grants 0 93,478

Other State RevenuesVehicle Certificate of Title Fees 0 8,294Alcoholic Beverage Tax 0 104,813State Revenue Sharing - Telecommunications 0 54,973State Shared Sports Gaming Privilege Tax 0 9,665

(Continued)

Debt Service Fund

193

Exhibit K-5



GeneralDebt

Service Total

State of Tennessee (Cont.)Other State Revenues (Cont.)

Contracted Prisoner Boarding $ 0 $ 242,229Gasoline and Motor Fuel Tax 0 2,658,094Petroleum Special Tax 0 24,071Registrar's Salary Supplement 0 15,164State Shared Sales Tax - Cities 0 5,257Other State Grants 0 958,781Other State Revenues 0 27,178

Total State of Tennessee $ 0 $ 4,871,100


Civil Defense Reimbursement $ 0 $ 49,850Disaster Relief 0 565,662Homeland Security Grants 0 18,078Law Enforcement Grants 0 10,216COVID-19 Grant #2 0 15,938COVID-19 Grant #3 0 511,755Other Federal through State 0 370,977

Total Federal Government $ 0 $ 1,542,476


Contributions $ 0 $ 31,016Citizens Groups

Donations 0 44,144Total Other Governments and Citizens Groups $ 0 $ 75,160

Total $ 3,441,129 $ 27,100,600

Debt Service Fund

194

Exhibit K-6


All Governmental Fund TypesDiscretely Presented Lincoln County School DepartmentFor the Year Ended June 30, 2021

General School Extended EducationPurpose Federal Central School Internal CapitalSchool Projects Cafeteria Program School Projects


Current Property Tax $ 3,596,807 $ 0 $ 0 $ 0 $ 0 $ 367,893Trustee's Collections - Prior Year 96,100 0 0 0 0 9,880Trustee's Collections - Bankruptcy 12,514 0 0 0 0 1,287Circuit Clerk/Clerk and Master Collections - Prior Years 31,341 0 0 0 0 3,182Interest and Penalty 17,303 0 0 0 0 1,812

County Local Option TaxesLocal Option Sales Tax 3,970,466 0 0 0 0 0

Statutory Local TaxesWholesale Beer Tax 123,340 0 0 0 0 0

Total Local Taxes $ 7,847,871 $ 0 $ 0 $ 0 $ 0 $ 384,054


Marriage Licenses $ 1,664 $ 0 $ 0 $ 0 $ 0 $ 0Total Licenses and Permits $ 1,664 $ 0 $ 0 $ 0 $ 0 $ 0


Other General Service Charges $ 200 $ 0 $ 0 $ 0 $ 0 $ 0Education Charges

Lunch Payments - Children 0 0 36,781 0 0 0Lunch Payments - Adults 0 0 23,161 0 0 0Income from Breakfast 0 0 7,570 0 0 0A la Carte Sales 0 0 96,608 0 0 0

(Continued)


Capital Projects Funds

195

Exhibit K-6


All Governmental Fund TypesDiscretely Presented Lincoln County School Department (Cont.)


Charges for Current Services (Cont.)Education Charges (Cont.)

Receipts from Individual Schools $ 26,148 $ 0 $ 0 $ 0 $ 0 $ 0Community Service Fees - Children 0 0 0 71,826 0 0Other Charges for Services 6,071 0 0 0 0 0

Total Charges for Current Services $ 32,419 $ 0 $ 164,120 $ 71,826 $ 0 $ 0


Investment Income $ 52,143 $ 0 $ 786 $ 0 $ 0 $ 0Lease/Rentals 21,933 0 0 0 0 0Sale of Materials and Supplies 73 0 0 0 0 0Rebates 8,429 0 0 0 0 99,238Miscellaneous Refunds 42,336 0 9,389 0 0 0

Nonrecurring ItemsSale of Equipment 525 0 0 0 0 0Sale of Property 0 0 0 0 0 56,100Damages Recovered from Individuals 431 0 0 0 0 0

Other Local RevenuesOther Local Revenues 0 0 0 0 1,135,948 0

Total Other Local Revenues $ 125,870 $ 0 $ 10,175 $ 0 $ 1,135,948 $ 155,338


On-behalf Contributions for OPEB $ 67,060 $ 0 $ 0 $ 0 $ 0 $ 0

(Continued)



196

Exhibit K-6




State of Tennessee (Cont.)State Education Funds

Basic Education Program $ 22,006,352 $ 0 $ 0 $ 0 $ 0 $ 0Early Childhood Education 687,683 0 0 0 0 0School Food Service 0 0 18,236 0 0 0Driver Education 16,097 0 0 0 0 0Other State Education Funds 545,147 0 0 0 0 0Coordinated School Health 105,000 0 0 0 0 0Family Resource Centers 29,612 0 0 0 0 0Career Ladder Program 65,701 0 0 0 0 0

Other State RevenuesIncome Tax 82,300 0 0 0 0 0Beer Tax 13,642 0 0 0 0 0State Revenue Sharing - T.V.A. 812,383 0 0 0 0 0Safe Schools 92,120 0 0 0 0 0Other State Revenues 6,189 0 0 0 0 0

Total State of Tennessee $ 24,529,286 $ 0 $ 18,236 $ 0 $ 0 $ 0


USDA School Lunch Program $ 0 $ 0 $ 1,078,192 $ 0 $ 0 $ 0USDA - Commodities 0 0 134,947 0 0 0Breakfast 0 0 510,572 0 0 0Vocational Education - Basic Grants to States 0 66,099 0 0 0 0Title I Grants to Local Education Agencies 0 872,825 0 0 0 0Special Education - Grants to States 0 948,571 0 0 0 0

(Continued)



197

Exhibit K-6




Federal Government (Cont.)Federal Through State (Cont.)

Special Education Preschool Grants $ 0 $ 42,528 $ 0 $ 0 $ 0 $ 0English Language Acquisition Grants 0 6,051 0 0 0 0Eisenhower Professional Development State Grants 0 61,208 0 0 0 0COVID-19 Grant #1 0 535,794 0 0 0 0COVID-19 Grant #3 0 60,000 0 0 0 0COVID-19 Grant #4 0 89,211 0 0 0 0COVID-19 Grant B 0 563,905 0 0 0 0Other Federal through State 100,332 41,214 0 0 0 0

Total Federal Government $ 100,332 $ 3,287,406 $ 1,723,711 $ 0 $ 0 $ 0


Contributions $ 14,343 $ 0 $ 0 $ 0 $ 0 $ 0Citizens Groups

Donations 41,146 0 0 0 0 0Total Other Governments and Citizens Groups $ 55,489 $ 0 $ 0 $ 0 $ 0 $ 0

Total $ 32,692,931 $ 3,287,406 $ 1,916,242 $ 71,826 $ 1,135,948 $ 539,392

(Continued)



198

Exhibit K-6



OtherCapital

Projects - Total


Current Property Tax $ 0 $ 3,964,700Trustee's Collections - Prior Year 0 105,980Trustee's Collections - Bankruptcy 0 13,801Circuit Clerk/Clerk and Master Collections - Prior Years 0 34,523Interest and Penalty 0 19,115

County Local Option TaxesLocal Option Sales Tax 0 3,970,466

Statutory Local TaxesWholesale Beer Tax 0 123,340

Total Local Taxes $ 0 $ 8,231,925


Marriage Licenses $ 0 $ 1,664Total Licenses and Permits $ 0 $ 1,664


Other General Service Charges $ 0 $ 200Education Charges

Lunch Payments - Children 0 36,781Lunch Payments - Adults 0 23,161Income from Breakfast 0 7,570A la Carte Sales 0 96,608

(Continued)

Capital Projects Fund

199

Exhibit K-6



OtherCapital

Projects - Total

Charges for Current Services (Cont.)Education Charges (Cont.)

Receipts from Individual Schools $ 0 $ 26,148Community Service Fees - Children 0 71,826Other Charges for Services 0 6,071

Total Charges for Current Services $ 0 $ 268,365


Investment Income $ 0 $ 52,929Lease/Rentals 0 21,933Sale of Materials and Supplies 0 73Rebates 0 107,667Miscellaneous Refunds 1,031 52,756

Nonrecurring ItemsSale of Equipment 0 525Sale of Property 0 56,100Damages Recovered from Individuals 0 431

Other Local RevenuesOther Local Revenues 0 1,135,948

Total Other Local Revenues $ 1,031 $ 1,428,362


On-behalf Contributions for OPEB $ 0 $ 67,060

(Continued)


200

Exhibit K-6



OtherCapital

Projects - Total

State of Tennessee (Cont.)State Education Funds

Basic Education Program $ 0 $ 22,006,352Early Childhood Education 0 687,683School Food Service 0 18,236Driver Education 0 16,097Other State Education Funds 0 545,147Coordinated School Health 0 105,000Family Resource Centers 0 29,612Career Ladder Program 0 65,701

Other State RevenuesIncome Tax 0 82,300Beer Tax 0 13,642State Revenue Sharing - T.V.A. 0 812,383Safe Schools 0 92,120Other State Revenues 0 6,189

Total State of Tennessee $ 0 $ 24,547,522


USDA School Lunch Program $ 0 $ 1,078,192USDA - Commodities 0 134,947Breakfast 0 510,572Vocational Education - Basic Grants to States 0 66,099Title I Grants to Local Education Agencies 0 872,825Special Education - Grants to States 0 948,571

(Continued)


201

Exhibit K-6



OtherCapital

Projects - Total

Federal Government (Cont.)Federal Through State (Cont.)

Special Education Preschool Grants $ 0 $ 42,528English Language Acquisition Grants 0 6,051Eisenhower Professional Development State Grants 0 61,208COVID-19 Grant #1 0 535,794COVID-19 Grant #3 0 60,000COVID-19 Grant #4 0 89,211COVID-19 Grant B 0 563,905Other Federal through State 0 141,546

Total Federal Government $ 0 $ 5,111,449


Contributions $ 0 $ 14,343Citizens Groups

Donations 0 41,146Total Other Governments and Citizens Groups $ 0 $ 55,489

Total $ 1,031 $ 39,644,776


202

Exhibit K-7

Lincoln County, TennesseeSchedule of Detailed Expenditures -

All Governmental Fund TypesFor the Year Ended June 30, 2021

General FundGeneral Government

County CommissionBoard and Committee Members Fees $ 121,656Social Security 6,913Employer Medicare 1,764Contributions 9,343Data Processing Services 5,424Dues and Memberships 3,187Legal Notices, Recording, and Court Costs 9,104Postal Charges 232Travel 6,748

Total County Commission $ 164,371

County Mayor/ExecutiveCounty Official/Administrative Officer $ 93,170Secretary(ies) 24,132Clerical Personnel 33,308Other Salaries and Wages 3,979Social Security 9,084Pensions 6,640Medical Insurance 19,973Employer Medicare 2,132Communication 540Dues and Memberships 3,053Legal Notices, Recording, and Court Costs 50Postal Charges 317Travel 1,696Duplicating Supplies 1,767Office Supplies 2,559Periodicals 645In Service/Staff Development 399Office Equipment 99

Total County Mayor/Executive 203,543

County AttorneyCounty Official/Administrative Officer $ 27,837Social Security 1,726Employer Medicare 404Legal Notices, Recording, and Court Costs 1,262Other Contracted Services 24,117Other Charges 1,500

Total County Attorney 56,846

Election CommissionCounty Official/Administrative Officer $ 72,602Deputy(ies) 62,984Election Commission 10,900Election Workers 78,441Social Security 10,363

(Continued)

203

Exhibit K-7



General Fund (Cont.)General Government (Cont.)

Election Commission (Cont.)Pensions $ 7,410Medical Insurance 8,094Employer Medicare 2,424Communication 4,695Data Processing Services 6,002Legal Notices, Recording, and Court Costs 9,599Maintenance Agreements 13,211Maintenance and Repair Services - Office Equipment 319Postal Charges 2,677Printing, Stationery, and Forms 10,787Other Contracted Services 16,925Duplicating Supplies 2,382Office Supplies 3,063Other Supplies and Materials 4,089In Service/Staff Development 758Office Equipment 670Other Equipment 5,015

Total Election Commission $ 333,410

Register of DeedsCounty Official/Administrative Officer $ 80,668Deputy(ies) 82,359Social Security 9,308Pensions 7,854Medical Insurance 30,765Employer Medicare 2,193Data Processing Services 17,600Dues and Memberships 878Postal Charges 428Duplicating Supplies 1,260Office Supplies 1,845In Service/Staff Development 1,042

Total Register of Deeds 236,200

PlanningCounty Official/Administrative Officer $ 58,266Secretary(ies) 26,563Other Salaries and Wages 49,487Board and Committee Members Fees 5,400Social Security 7,892Pensions 7,049Medical Insurance 18,895Employer Medicare 1,846Communication 520Contracts with Private Agencies 780Data Processing Services 35,000Dues and Memberships 754

(Continued)

204

Exhibit K-7



General Fund (Cont.)General Government (Cont.)

Planning (Cont.)Engineering Services $ 12,580Legal Notices, Recording, and Court Costs 994Maintenance and Repair Services - Buildings 3,876Maintenance and Repair Services - Vehicles 1,348Postal Charges 256Rentals 7,200Duplicating Supplies 1,467Gasoline 2,475Office Supplies 2,100Uniforms 741In Service/Staff Development 1,762

Total Planning $ 247,251

County BuildingsCounty Official/Administrative Officer $ 49,740Custodial Personnel 13,702Social Security 3,825Pensions 2,487Employer Medicare 916Communication 3,467Engineering Services 7,500Janitorial Services 94,099Maintenance and Repair Services - Buildings 71,513Maintenance and Repair Services - Equipment 37,302Maintenance and Repair Services - Vehicles 53Pest Control 1,807Disposal Fees 1,200Custodial Supplies 10,041Electricity 77,909Gasoline 405Natural Gas 10,669Water and Sewer 5,038Building and Contents Insurance 370,914Site Development 9,586Vocational Instruction Equipment 886Other Construction 37,498

Total County Buildings 810,557

Preservation of RecordsBoard and Committee Members Fees $ 5,950Social Security 369Employer Medicare 86Other Contracted Services 7,225Office Supplies 100

Total Preservation of Records 13,730

(Continued)

205

Exhibit K-7



General Fund (Cont.)Finance

Accounting and BudgetingCounty Official/Administrative Officer $ 88,725Accountants/Bookkeepers 178,847Social Security 15,301Pensions 13,552Medical Insurance 54,365Employer Medicare 3,578Contracts with Government Agencies 13,344Data Processing Services 17,287Dues and Memberships 744Legal Notices, Recording, and Court Costs 2,404Maintenance Agreements 2,088Postal Charges 5,184Printing, Stationery, and Forms 5,599Duplicating Supplies 2,205Office Supplies 4,128Other Supplies and Materials 367In Service/Staff Development 408Office Equipment 1,190

Total Accounting and Budgeting $ 409,316

Property Assessor's OfficeCounty Official/Administrative Officer $ 80,668Deputy(ies) 60,969Other Salaries and Wages 25,641Board and Committee Members Fees 2,772Social Security 9,746Pensions 7,216Medical Insurance 28,370Employer Medicare 2,289Contracts with Private Agencies 4,950Data Processing Services 4,510Dues and Memberships 1,700Legal Notices, Recording, and Court Costs 547Maintenance Agreements 1,845Maintenance and Repair Services - Vehicles 590Postal Charges 2,677Travel 233Duplicating Supplies 1,931Gasoline 706Office Supplies 2,313In Service/Staff Development 500Office Equipment 473

Total Property Assessor's Office 240,646

Reappraisal ProgramSecretary(ies) $ 19,207Other Salaries and Wages 30,075

(Continued)

206

Exhibit K-7



General Fund (Cont.)Finance (Cont.)

Reappraisal Program (Cont.)Social Security $ 2,968Pensions 1,062Medical Insurance 8,094Employer Medicare 694Contracts with Government Agencies 3,716

Total Reappraisal Program $ 65,816

County Trustee's OfficeCounty Official/Administrative Officer $ 80,668Deputy(ies) 78,661Other Salaries and Wages 6,118Social Security 9,634Pensions 7,915Medical Insurance 24,103Employer Medicare 2,278Contracts with Government Agencies 8,463Data Processing Services 10,705Dues and Memberships 998Legal Notices, Recording, and Court Costs 118Maintenance Agreements 4,240Maintenance and Repair Services - Office Equipment 420Postal Charges 8,199Duplicating Supplies 614Office Supplies 3,205In Service/Staff Development 1,789Office Equipment 500

Total County Trustee's Office 248,628

County Clerk's OfficeCounty Official/Administrative Officer $ 80,668Deputy(ies) 115,875Part-time Personnel 6,835Social Security 12,060Pensions 10,319Medical Insurance 33,451Employer Medicare 2,825Data Processing Services 7,487Dues and Memberships 1,083Maintenance Agreements 12,228Postal Charges 7,343Printing, Stationery, and Forms 1,900Duplicating Supplies 679Office Supplies 1,237In Service/Staff Development 833Other Charges 1,913Data Processing Equipment 1,507Office Equipment 1,300

Total County Clerk's Office 299,543

(Continued)

207

Exhibit K-7



General Fund (Cont.)Finance (Cont.)

Data ProcessingCounty Official/Administrative Officer $ 58,216Social Security 3,591Pensions 3,056Employer Medicare 840Communication 1,840Contracts with Government Agencies 6,094Data Processing Services 7,239Licenses 8,190Maintenance Agreements 2,120Other Contracted Services 6,986Gasoline 718Office Supplies 339In Service/Staff Development 50Data Processing Equipment 10,042

Total Data Processing $ 109,321

Administration of JusticeCircuit Court

County Official/Administrative Officer $ 80,668Clerical Personnel 245,590Overtime Pay 371Other Salaries and Wages 1,050Jury and Witness Expense 4,325Social Security 18,953Pensions 15,010Medical Insurance 52,121Employer Medicare 4,500Communication 1,771Data Processing Services 24,198Dues and Memberships 1,043Legal Notices, Recording, and Court Costs 1,811Maintenance Agreements 25,347Postal Charges 4,481Printing, Stationery, and Forms 5,611Duplicating Supplies 1,502Office Supplies 8,478In Service/Staff Development 2,496Data Processing Equipment 7,093Office Equipment 542

Total Circuit Court 506,961

General Sessions CourtJudge(s) $ 148,255Social Security 8,513Pensions 7,783Medical Insurance 11,879Employer Medicare 2,061

(Continued)

208

Exhibit K-7



General Fund (Cont.)Administration of Justice (Cont.)

General Sessions Court (Cont.)Dues and Memberships $ 625Evaluation and Testing 12,400Travel 200Office Supplies 366

Total General Sessions Court $ 192,082

Chancery CourtCounty Official/Administrative Officer $ 80,668Deputy(ies) 101,637Social Security 11,071Pensions 9,534Medical Insurance 16,189Employer Medicare 2,602Data Processing Services 11,655Dues and Memberships 1,118Maintenance Agreements 454Maintenance and Repair Services - Office Equipment 68Postal Charges 1,467Printing, Stationery, and Forms 926Duplicating Supplies 1,223Office Supplies 3,849In Service/Staff Development 3,577

Total Chancery Court 246,038

Juvenile CourtAssistant(s) $ 46,574Youth Service Officer(s) 45,834Salary Supplements 10,000Other Salaries and Wages 2,924Social Security 6,304Pensions 5,523Medical Insurance 15,678Employer Medicare 1,474Communication 480Postal Charges 296Travel 535Other Contracted Services 22,413Office Supplies 2,381

Total Juvenile Court 160,416

Judicial CommissionersOther Salaries and Wages $ 45,000Social Security 2,790Employer Medicare 652Communication 1,872In Service/Staff Development 450

Total Judicial Commissioners 50,764

(Continued)

209

Exhibit K-7



General Fund (Cont.)Administration of Justice (Cont.)

Courtroom SecurityDeputy(ies) $ 149,000Overtime Pay 11,957Social Security 9,675Pensions 8,452Medical Insurance 25,840Employer Medicare 2,263Communication 457Maintenance and Repair Services - Buildings 2,902Other Contracted Services 5,621

Total Courtroom Security $ 216,167

Public SafetySheriff's Department

County Official/Administrative Officer $ 88,735Assistant(s) 114,935Deputy(ies) 628,285Investigator(s) 186,445Captain(s) 14,910Lieutenant(s) 14,470Sergeant(s) 292,939Accountants/Bookkeepers 46,156Salary Supplements 30,400Temporary Personnel 13,506Part-time Personnel 20,470School Resource Officer 266,185Overtime Pay 63,741Other Salaries and Wages 6,200Social Security 105,788Pensions 90,237Medical Insurance 247,864Employer Medicare 25,069Communication 33,076Contracts with Government Agencies 463,007Contributions 5,000Dues and Memberships 11,730Maintenance and Repair Services - Equipment 3,626Maintenance and Repair Services - Vehicles 94,143Medical and Dental Services 56,130Postal Charges 933Towing Services 551Travel 1,118Duplicating Supplies 1,397Gasoline 108,570Law Enforcement Supplies 23,926Office Supplies 5,788Uniforms 44,679Other Supplies and Materials 2,500

(Continued)

210

Exhibit K-7



General Fund (Cont.)Public Safety (Cont.)

Sheriff's Department (Cont.)In Service/Staff Development $ 7,472Other Charges 10,425Communication Equipment 2,671Motor Vehicles 275,320Office Equipment 1,109Other Equipment 22,898

Total Sheriff's Department $ 3,432,404

Special PatrolsOvertime Pay $ 9,546Social Security 571Pensions 500Employer Medicare 133

Total Special Patrols 10,750

JailAssistant(s) $ 40,660Supervisor/Director 42,204Lieutenant(s) 34,495Sergeant(s) 121,916Guards 947,733Secretary(ies) 35,103Cafeteria Personnel 92,934Maintenance Personnel 71,870Overtime Pay 126,922Other Salaries and Wages 167,490Social Security 99,536Pensions 73,843Medical Insurance 271,572Employer Medicare 23,462Ambulance Services 26,168Communication 9,691Data Processing Services 97,700Legal Services 2,827Maintenance Agreements 15,732Maintenance and Repair Services - Buildings 67,930Maintenance and Repair Services - Equipment 61,761Maintenance and Repair Services - Vehicles 8,323Medical and Dental Services 230,172Pest Control 1,480Postal Charges 233Transportation - Other than Students 6,480Disposal Fees 3,360Custodial Supplies 47,349Drugs and Medical Supplies 25,090Duplicating Supplies 1,670Electricity 81,224

(Continued)

211

Exhibit K-7




Jail (Cont.)Food Supplies $ 202,380Gasoline 11,764Natural Gas 25,416Office Supplies 9,180Prisoners Clothing 8,911Uniforms 18,761Water and Sewer 55,504Other Supplies and Materials 5,372In Service/Staff Development 5,964Other Charges 1,938Communication Equipment 1,981Office Equipment 3,316Other Construction 29,351

Total Jail $ 3,216,768

Fire Prevention and ControlContributions $ 55,000Data Processing Services 660Dues and Memberships 740Maintenance and Repair Services - Buildings 23,403Maintenance and Repair Services - Equipment 23,136Maintenance and Repair Services - Vehicles 36,312Electricity 15,388Gasoline 5,771Natural Gas 9,718Uniforms 17,868Water and Sewer 5,055Other Supplies and Materials 11,780Liability Insurance 4,375In Service/Staff Development 4,928Other Equipment 984Other Capital Outlay 83,247

Total Fire Prevention and Control 298,365

Civil DefenseSupervisor/Director $ 62,398Deputy(ies) 30,225Secretary(ies) 25,662Social Security 7,201Pensions 6,210Medical Insurance 10,859Employer Medicare 1,684Architects 10,000Communication 5,310Data Processing Services 11,362Dues and Memberships 278Maintenance and Repair Services - Buildings 598

(Continued)

212

Exhibit K-7




Civil Defense (Cont.)Maintenance and Repair Services - Equipment $ 1,506Maintenance and Repair Services - Vehicles 5,563Pest Control 348Postal Charges 76Other Contracted Services 3,966Duplicating Supplies 1,788Electricity 5,490Gasoline 2,738Natural Gas 1,824Office Supplies 624Road Signs 464Uniforms 90Water and Sewer 1,044Other Supplies and Materials 1,346Other Charges 15Office Equipment 2,233Other Construction 7,908Other Capital Outlay 18,521

Total Civil Defense $ 227,331

Public Health and WelfareLocal Health Center

Other Salaries and Wages $ 227,671Social Security 12,767Pensions 9,905Medical Insurance 40,547Employer Medicare 3,131Communication 2,733Contracts with Government Agencies 39,825Janitorial Services 41,056Maintenance and Repair Services - Equipment 5,308Pest Control 216Travel 1,874Disposal Fees 480Electricity 9,660Natural Gas 1,551Office Supplies 101Water and Sewer 1,594Other Supplies and Materials 1,957In Service/Staff Development 200

Total Local Health Center 400,576

Maternal and Child Health ServicesContracts with Other Public Agencies $ 37,500

Total Maternal and Child Health Services 37,500

(Continued)

213

Exhibit K-7



General Fund (Cont.)Public Health and Welfare (Cont.)

Regional Mental Health CenterContributions $ 4,000

Total Regional Mental Health Center $ 4,000

Other Local Welfare ServicesContracts with Other Public Agencies $ 9,158

Total Other Local Welfare Services 9,158

Sanitation ManagementSalary Supplements $ 1,200Other Salaries and Wages 32,384Social Security 1,748Pensions 1,554Medical Insurance 11,294Employer Medicare 409Contracts with Private Agencies 78,895Instructional Supplies and Materials 15,657Other Charges 37

Total Sanitation Management 143,178

Social, Cultural, and Recreational ServicesAdult Activities

Contributions $ 14,350Total Adult Activities 14,350

LibrariesContributions $ 118,101

Total Libraries 118,101

Parks and Fair BoardsContributions $ 22,000

Total Parks and Fair Boards 22,000

Agriculture and Natural ResourcesAgricultural Extension Service

Board and Committee Members Fees $ 750Communication 2,256Contracts with Other Public Agencies 101,029Travel 4,000Duplicating Supplies 1,518

Total Agricultural Extension Service 109,553

Forest ServiceContributions $ 2,000

Total Forest Service 2,000

Soil ConservationSecretary(ies) $ 18,997

(Continued)

214

Exhibit K-7



General Fund (Cont.)Agriculture and Natural Resources (Cont.)

Soil Conservation (Cont.)Other Salaries and Wages $ 23,980Social Security 2,579Pensions 1,603Medical Insurance 9,988Employer Medicare 603Other Charges 1,874

Total Soil Conservation $ 59,624

Other OperationsIndustrial Development

Contributions $ 102,754Total Industrial Development 102,754

Other Economic and Community DevelopmentContracts with Other Public Agencies $ 60,538Contributions 12,500Other Charges 271,828

Total Other Economic and Community Development 344,866

AirportAirport Improvement $ 20,141

Total Airport 20,141

Veterans' ServicesClerical Personnel $ 16,088Employer Medicare 233Communication 1,812Contributions 1,500Maintenance and Repair Services - Vehicles 580Transportation - Other than Students 4,724Gasoline 400Office Supplies 12Other Charges 694

Total Veterans' Services 26,043

Contributions to Other AgenciesContributions $ 10,000

Total Contributions to Other Agencies 10,000

COVID-19 Grant #1Other Charges $ 76,445

Total COVID-19 Grant #1 76,445

COVID-19 Grant #2Office Supplies $ 35Other Charges 14,178

Total COVID-19 Grant #2 14,213

(Continued)

215

Exhibit K-7



General Fund (Cont.)Other Operations (Cont.)

MiscellaneousUnemployment Compensation $ 3,767Dues and Memberships 5,458Medical and Dental Services 18,000Trustee's Commission 185,406Workers' Compensation Insurance 224,860Other Charges 28,930

Total Miscellaneous $ 466,421

Total General Fund $ 13,978,147

Solid Waste/Sanitation FundPublic Health and Welfare

Sanitation ManagementMaintenance and Repair Services - Buildings $ 1,178Internet Connectivity 54Other Contracted Services 42,000Electricity 1,639Natural Gas 34Water and Sewer 195

Total Sanitation Management $ 45,100

Convenience CentersPart-time Personnel $ 89,111Social Security 5,525Employer Medicare 1,292Communication 724Contracts with Other Public Agencies 122,025Maintenance and Repair Services - Equipment 7,973Electricity 4,355Water and Sewer 748Other Supplies and Materials 763

Total Convenience Centers 232,516

Other Waste DisposalCounty Official/Administrative Officer $ 16,648Clerical Personnel 34,556Social Security 2,964Pensions 2,688Medical Insurance 8,622Employer Medicare 693Contracts with Government Agencies 108,968Contracts with Other Public Agencies 804,416Legal Services 300Legal Notices, Recording, and Court Costs 15Travel 36Disposal Fees 83,631Office Supplies 314

(Continued)

216

Exhibit K-7



Solid Waste/Sanitation Fund (Cont.)Public Health and Welfare (Cont.)

Other Waste Disposal (Cont.)Trustee's Commission $ 11,437Other Charges 960Administration Equipment 3,551

Total Other Waste Disposal $ 1,079,799

Postclosure Care CostsContracts for Postclosure Care Costs $ 71,885

Total Postclosure Care Costs 71,885

Total Solid Waste/Sanitation Fund $ 1,429,300

Drug Control FundPublic Safety

Drug EnforcementConfidential Drug Enforcement Payments $ 20,000Towing Services 1,660Animal Food and Supplies 5,665Law Enforcement Supplies 721Trustee's Commission 672In Service/Staff Development 11,223

Total Drug Enforcement $ 39,941

Total Drug Control Fund 39,941

Constitutional Officers - Fees FundFinance

County Clerk's OfficeBank Charges $ 27

Total County Clerk's Office $ 27

Administration of JusticeChancery Court

Special Commissioner Fees/Special Master Fees $ 11,453Total Chancery Court 11,453

Total Constitutional Officers - Fees Fund 11,480

Highway/Public Works FundHighways

AdministrationCounty Official/Administrative Officer $ 88,735Assistant(s) 51,936Accountants/Bookkeepers 47,130Longevity Pay 1,000Overtime Pay 1,200Social Security 11,591Pensions 9,975

(Continued)

217

Exhibit K-7



Highway/Public Works Fund (Cont.)Highways (Cont.)

Administration (Cont.)Medical Insurance $ 20,517Employer Medicare 2,739Communication 2,947Dues and Memberships 4,576Janitorial Services 2,400Legal Services 503Maintenance and Repair Services - Office Equipment 898Postal Charges 414Printing, Stationery, and Forms 163Travel 1,279Electricity 5,409Office Supplies 314Water and Sewer 448

Total Administration $ 254,174

Highway and Bridge MaintenanceForemen $ 82,430Equipment Operators 141,768Truck Drivers 105,608Laborers 87,660Longevity Pay 5,500Overtime Pay 4,987Social Security 25,858Pensions 22,223Medical Insurance 69,435Employer Medicare 6,062Rentals 600Other Contracted Services 111,911Asphalt 340,530Asphalt - Hot Mix 1,996,389Crushed Stone 11,024General Construction Materials 553Pipe - Metal 94,452Road Signs 19,541

Total Highway and Bridge Maintenance 3,126,531

Operation and Maintenance of EquipmentMechanic(s) $ 120,406Longevity Pay 1,000Overtime Pay 2,962Social Security 7,562Pensions 6,198Medical Insurance 17,653Employer Medicare 1,769Laundry Service 1,252Maintenance and Repair Services - Equipment 32,244Diesel Fuel 79,806

(Continued)

218

Exhibit K-7



Highway/Public Works Fund (Cont.)Highways (Cont.)

Operation and Maintenance of Equipment (Cont.)Equipment and Machinery Parts $ 172,806Garage Supplies 1,041Gasoline 25,058Lubricants 10,810Propane Gas 2,701Tires and Tubes 38,300Other Supplies and Materials 337

Total Operation and Maintenance of Equipment $ 521,905

Quarry OperationsForemen $ 44,308Equipment Operators 65,538Truck Drivers 32,395Longevity Pay 2,000Overtime Pay 1,709Social Security 9,181Pensions 8,001Medical Insurance 22,090Employer Medicare 2,147Maintenance and Repair Services - Equipment 43,205Electricity 24,485Water and Sewer 1,226In Service/Staff Development 1,319

Total Quarry Operations 257,604

Other ChargesTrustee's Commission $ 62,519Vehicle and Equipment Insurance 55,000

Total Other Charges 117,519

Employee BenefitsUnemployment Compensation $ 441Workers' Compensation Insurance 75,000

Total Employee Benefits 75,441

Capital OutlayEngineering Services $ 41,171Bridge Construction 270,031Building Construction 3,375,413Highway Construction 81,109Highway Equipment 229,546

Total Capital Outlay 3,997,270

Total Highway/Public Works Fund $ 8,350,444

(Continued)

219

Exhibit K-7



General Debt Service FundPrincipal on Debt

General GovernmentPrincipal on Bonds $ 431,125Principal on Notes 80,000

Total General Government $ 511,125

EducationPrincipal on Bonds $ 1,508,875

Total Education 1,508,875

Interest on DebtGeneral Government

Interest on Bonds $ 173,130Interest on Notes 13,280

Total General Government 186,410

EducationInterest on Bonds $ 1,342,076

Total Education 1,342,076

Other Debt ServiceGeneral Government

Trustee's Commission $ 59,673Total General Government 59,673

EducationOther Debt Issuance Charges $ 2,544

Total Education 2,544

Total General Debt Service Fund $ 3,610,703

Total Governmental Funds - Primary Government $ 27,420,015

220

Exhibit K-8


All Governmental Fund TypesDiscretely Presented Lincoln County School DepartmentFor the Year Ended June 30, 2021

General Purpose School FundInstruction

Regular Instruction ProgramTeachers $ 10,498,252Career Ladder Program 32,500Educational Assistants 300,837Bonus Payments 400,117Certified Substitute Teachers 17,636Non-certified Substitute Teachers 85,875Social Security 657,345Pensions 933,780Employee and Dependent Insurance 96,745Medical Insurance 1,367,106Unemployment Compensation 19,183Employer Medicare 153,584Retirement - Hybrid Stabilization 100,579Data Processing Services 121,907Operating Lease Payments 340,220Maintenance and Repair Services - Equipment 54,698Other Contracted Services 18,218Instructional Supplies and Materials 143,026Textbooks - Bound 370,544Fee Waivers 29,055Furniture and Fixtures 15,574Regular Instruction Equipment 238,798

Total Regular Instruction Program $ 15,995,579

Alternative Instruction ProgramTeachers $ 112,014Career Ladder Program 1,000Social Security 6,684Pensions 11,607Medical Insurance 14,895Employer Medicare 1,563

Total Alternative Instruction Program 147,763

Special Education ProgramTeachers $ 1,163,431Career Ladder Program 5,000Homebound Teachers 2,525Educational Assistants 400,694Speech Pathologist 98,995Certified Substitute Teachers 3,052Non-certified Substitute Teachers 25,800Social Security 97,866Pensions 124,351Employee and Dependent Insurance 144,931Medical Insurance 192,212Employer Medicare 23,092

(Continued)

221

Exhibit K-8



General Purpose School Fund (Cont.)Instruction (Cont.)

Special Education Program (Cont.)Contracts with Other Public Agencies $ 63,052Contracts with Private Agencies 20,410Maintenance and Repair Services - Equipment 151Instructional Supplies and Materials 4,777Other Supplies and Materials 2,788Special Education Equipment 4,948

Total Special Education Program $ 2,378,075

Career and Technical Education ProgramTeachers $ 884,360Career Ladder Program 3,000Non-certified Substitute Teachers 200Social Security 51,590Pensions 83,104Medical Insurance 112,783Employer Medicare 12,127Maintenance and Repair Services - Equipment 5,917Instructional Supplies and Materials 32,934Other Charges 44,535Vocational Instruction Equipment 23,388

Total Career and Technical Education Program 1,253,938

Student Body Education ProgramSalary Supplements $ 30,857Other Salaries and Wages 22,162Social Security 3,172Pensions 2,928Employer Medicare 742

Total Student Body Education Program 59,861

Support ServicesAttendance

Supervisor/Director $ 86,165Career Ladder Program 1,000Other Salaries and Wages 48,350Social Security 8,260Pensions 11,490Employee and Dependent Insurance 6,956Medical Insurance 6,599Employer Medicare 1,932Travel 750Other Contracted Services 69,170

Total Attendance 240,672

Health ServicesSupervisor/Director $ 75,373

(Continued)

222

Exhibit K-8



General Purpose School Fund (Cont.)Support Services (Cont.)

Health Services (Cont.)Medical Personnel $ 200,660Clerical Personnel 20,109Social Security 15,865Pensions 19,175Employee and Dependent Insurance 28,111Medical Insurance 11,420Employer Medicare 3,754Drugs and Medical Supplies 9,090

Total Health Services $ 383,557

Other Student SupportGuidance Personnel $ 507,888Other Salaries and Wages 295Social Security 29,959Pensions 36,163Employee and Dependent Insurance 3,474Medical Insurance 44,824Employer Medicare 7,034Evaluation and Testing 12,548Other Contracted Services 2,350Other Supplies and Materials 2,318In Service/Staff Development 11,024Other Charges 5,421Other Equipment 110,805

Total Other Student Support 774,103

Regular Instruction ProgramSupervisor/Director $ 297,646Career Ladder Program 4,000Librarians 319,999Instructional Computer Personnel 78,967Other Salaries and Wages 17,715Social Security 42,385Pensions 69,911Medical Insurance 72,944Employer Medicare 9,912Travel 6,525Instructional Supplies and Materials 3,513Library Books/Media 14,165In Service/Staff Development 8,713Other Charges 24,479

Total Regular Instruction Program 970,874

Special Education ProgramSupervisor/Director $ 37,477Psychological Personnel 59,024

(Continued)

223

Exhibit K-8




Special Education Program (Cont.)Secretary(ies) $ 29,065Other Salaries and Wages 60,220Social Security 9,966Pensions 17,621Employee and Dependent Insurance 7,082Medical Insurance 20,186Employer Medicare 2,349Travel 2,196Other Supplies and Materials 738In Service/Staff Development 245Other Charges 5,000

Total Special Education Program $ 251,169

Career and Technical Education ProgramSupervisor/Director $ 68,251Clerical Personnel 18,447Social Security 4,737Pensions 4,381Employee and Dependent Insurance 7,012Medical Insurance 8,853Employer Medicare 1,110

Total Career and Technical Education Program 112,791

TechnologyData Processing Services $ 3,500Internet Connectivity 34,589

Total Technology 38,089

Other ProgramsOn-behalf Payments to OPEB $ 67,060

Total Other Programs 67,060

Board of EducationSecretary to Board $ 2,000Board and Committee Members Fees 40,621Social Security 2,325Pensions 105Employer Medicare 617Audit Services 12,900Data Processing Services 2,273Dues and Memberships 12,812Legal Services 16,281Travel 479Liability Insurance 330,489Trustee's Commission 65,227Workers' Compensation Insurance 183,686

(Continued)

224

Exhibit K-8




Board of Education (Cont.)Criminal Investigation of Applicants - TBI $ 5,611Other Charges 17,012

Total Board of Education $ 692,438

Director of SchoolsCounty Official/Administrative Officer $ 154,912Career Ladder Program 1,000Secretary(ies) 73,455Other Salaries and Wages 12,880Social Security 12,192Pensions 20,109Employee and Dependent Insurance 6,956Medical Insurance 8,853Employer Medicare 3,556Communication 8,879Travel 10,388Office Supplies 3,452

Total Director of Schools 316,632

Office of the PrincipalAssistant(s) $ 214,411Principals 643,700Career Ladder Program 3,000Assistant Principals 5,625Secretary(ies) 1,400Clerical Personnel 303,935Social Security 66,719Pensions 95,762Employee and Dependent Insurance 79,895Medical Insurance 49,612Employer Medicare 15,762Communication 11,000Contributions 40,000Duplicating Supplies 80,821

Total Office of the Principal 1,611,642

Operation of PlantCustodial Personnel $ 411,337Social Security 24,146Pensions 19,216Employee and Dependent Insurance 87,202Employer Medicare 5,708Other Contracted Services 9,568Custodial Supplies 79,899Electricity 944,393Natural Gas 150,565

(Continued)

225

Exhibit K-8




Operation of Plant (Cont.)Water and Sewer $ 86,346Other Charges 39,736

Total Operation of Plant $ 1,858,116

Maintenance of PlantSupervisor/Director $ 81,269Maintenance Personnel 261,604Other Salaries and Wages 237,033Social Security 34,824Pensions 34,272Employee and Dependent Insurance 52,690Medical Insurance 13,198Employer Medicare 8,195Maintenance and Repair Services - Buildings 101,161Maintenance and Repair Services - Equipment 112,159Maintenance and Repair Services - Vehicles 9,351General Construction Materials 7,357Other Supplies and Materials 25,978Other Charges 19,468Heating and Air Conditioning Equipment 17,485

Total Maintenance of Plant 1,016,044

TransportationSupervisor/Director $ 83,153Mechanic(s) 86,897Bus Drivers 643,038Secretary(ies) 29,693Other Salaries and Wages 57,897Social Security 51,937Pensions 48,650Employee and Dependent Insurance 34,883Medical Insurance 9,894Employer Medicare 12,860Communication 4,359Medical and Dental Services 7,172Gasoline 166,807Lubricants 7,192Tires and Tubes 23,840Vehicle Parts 67,125Other Supplies and Materials 13,913Other Charges 5,151Transportation Equipment 355,906

Total Transportation 1,710,367

(Continued)

226

Exhibit K-8



General Purpose School Fund (Cont.)Operation of Non-Instructional Services

Food ServiceSupervisor/Director $ 69,645Clerical Personnel 14,996Cafeteria Personnel 21,938Social Security 5,660Pensions 8,222Employer Medicare 1,541

Total Food Service $ 122,002

Community ServicesTeachers $ 155,112Educational Assistants 19,432Other Salaries and Wages 35,974Social Security 13,008Pensions 16,656Employer Medicare 3,053Travel 605Other Supplies and Materials 3,321In Service/Staff Development 10,384Other Charges 871

Total Community Services 258,416

Early Childhood EducationSupervisor/Director $ 40,014Teachers 422,610Medical Personnel 12,581Educational Assistants 124,974Other Salaries and Wages 9,354Certified Substitute Teachers 1,128Non-certified Substitute Teachers 5,595Social Security 35,437Pensions 55,224Medical Insurance 101,300Employer Medicare 8,338Communication 940Travel 120Instructional Supplies and Materials 10,754In Service/Staff Development 515Other Equipment 4,906

Total Early Childhood Education 833,790

Capital OutlayRegular Capital Outlay

Other Construction $ 370,867Total Regular Capital Outlay 370,867

Total General Purpose School Fund $ 31,463,845

(Continued)

227

Exhibit K-8



School Federal Projects FundInstruction

Regular Instruction ProgramTeachers $ 663,612Educational Assistants 107,756Bonus Payments 78,479Certified Substitute Teachers 302Non-certified Substitute Teachers 925Social Security 48,729Pensions 73,806Medical Insurance 93,386Employer Medicare 11,967Data Processing Services 48,158Maintenance and Repair Services - Equipment 973Instructional Supplies and Materials 46,367Software 131,872Other Supplies and Materials 14,866Regular Instruction Equipment 364,172

Total Regular Instruction Program $ 1,685,370

Special Education ProgramTeachers $ 14,143Educational Assistants 427,799Speech Pathologist 166,264Social Security 33,913Pensions 39,693Medical Insurance 111,985Employer Medicare 8,012Other Supplies and Materials 150Special Education Equipment 5,151

Total Special Education Program 807,110

Career and Technical Education ProgramMaintenance and Repair Services - Equipment $ 2,545Instructional Supplies and Materials 17,774Vocational Instruction Equipment 54,158

Total Career and Technical Education Program 74,477

Support ServicesAttendance

Other Salaries and Wages $ 709Social Security 43Pensions 37Employer Medicare 10

Total Attendance 799

Health ServicesMedical Personnel $ 6,911Other Salaries and Wages 709

(Continued)

228

Exhibit K-8



School Federal Projects Fund (Cont.)Support Services (Cont.)

Health Services (Cont.)Social Security $ 440Pensions 400Employer Medicare 103Other Supplies and Materials 37,627Health Equipment 17,992

Total Health Services $ 64,182

Other Student SupportGuidance Personnel $ 1,869Social Workers 19,611Social Security 1,140Pensions 1,222Medical Insurance 3,558Employer Medicare 267Evaluation and Testing 550Travel 710Other Contracted Services 5,400Other Charges 7,898

Total Other Student Support 42,225

Regular Instruction ProgramSupervisor/Director $ 4,549Clerical Personnel 8,566Other Salaries and Wages 709Social Security 857Pensions 542Employer Medicare 200In Service/Staff Development 17,277

Total Regular Instruction Program 32,700

Special Education ProgramPsychological Personnel $ 1,489Clerical Personnel 709Social Security 123Pensions 190Employer Medicare 29Contracts with Other Public Agencies 133,500Evaluation and Testing 7,425Travel 3,792Other Contracted Services 18,000Other Supplies and Materials 613In Service/Staff Development 3,221Other Charges 240Other Equipment 4,920

Total Special Education Program 174,251

(Continued)

229

Exhibit K-8




Career and Technical Education ProgramClerical Personnel $ 709Social Security 33Pensions 37Employer Medicare 8

Total Career and Technical Education Program $ 787

TechnologyOther Supplies and Materials $ 5,607Other Equipment 38,815

Total Technology 44,422

Director of SchoolsSecretary(ies) $ 1,417Social Security 86Pensions 74Employer Medicare 20

Total Director of Schools 1,597

Office of the PrincipalAssistant Principals $ 3,505Clerical Personnel 13,977Social Security 987Pensions 1,092Employer Medicare 231

Total Office of the Principal 19,792

Operation of PlantCustodial Personnel $ 20,991Social Security 1,274Pensions 987Employer Medicare 298

Total Operation of Plant 23,550

Maintenance of PlantMaintenance Personnel $ 6,313Other Salaries and Wages 6,233Social Security 719Pensions 617Employer Medicare 180

Total Maintenance of Plant 14,062

TransportationMechanic(s) $ 3,118Bus Drivers 98,727Clerical Personnel 1,773Other Salaries and Wages 20,228

(Continued)

230

Exhibit K-8




Transportation (Cont.)Social Security $ 7,275Pensions 5,582Employer Medicare 1,775Contracts with Parents 72Gasoline 5,315Lubricants 1,936Tires and Tubes 1,500

Total Transportation $ 147,301

Operation of Non-Instructional ServicesFood Service

Supervisor/Director $ 6,245Clerical Personnel 789Cafeteria Personnel 38,807Social Security 2,710Pensions 2,543Employer Medicare 655Food Preparation Supplies 4,776Other Supplies and Materials 1,944Other Charges 3,841Food Service Equipment 24,170

Total Food Service 86,480

Community ServicesOther Salaries and Wages $ 709Social Security 44Pensions 37Employer Medicare 10

Total Community Services 800

Capital OutlayRegular Capital Outlay

Architects $ 75,949Total Regular Capital Outlay 75,949

Total School Federal Projects Fund $ 3,295,854

Central Cafeteria FundOperation of Non-Instructional Services

Food ServiceCafeteria Personnel $ 506,896Bonus Payments 15,500Other Salaries and Wages 7,832Social Security 31,008Pensions 26,314Employee and Dependent Insurance 130,673

(Continued)

231

Exhibit K-8



Central Cafeteria Fund (Cont.)Operation of Non-Instructional Services (Cont.)

Food Service (Cont.)Employer Medicare $ 7,394Contracts with Other Public Agencies 816,365Maintenance and Repair Services - Equipment 49,493Travel 980Other Contracted Services 6,778Food Preparation Supplies 125Office Supplies 4,712USDA - Commodities 134,947Other Supplies and Materials 1,247Refunds 2,125Trustee's Commission 8Workers' Compensation Insurance 8,363In Service/Staff Development 640Other Charges 2,755Food Service Equipment 30,548

Total Food Service $ 1,784,703

Total Central Cafeteria Fund $ 1,784,703

Extended School Program FundOperation of Non-Instructional Services

Community ServicesOther Salaries and Wages $ 50,898Social Security 2,785Pensions 2,478Employer Medicare 738Retirement - Hybrid Stabilization 166Trustee's Commission 657Other Charges 12,743

Total Community Services $ 70,465

Total Extended School Program Fund 70,465

Internal School FundOperation of Non-Instructional Services

Community ServicesOther Charges $ 1,090,271

Total Community Services $ 1,090,271

Total Internal School Fund 1,090,271

Education Capital Projects FundCapital Outlay

Regular Capital OutlayTrustee's Commission $ 7,669Other Capital Outlay 1,475,841

Total Regular Capital Outlay $ 1,483,510

Total Education Capital Projects Fund 1,483,510

(Continued)

232

Exhibit K-8



Other Capital Projects #1 FundCapital Projects

Education Capital ProjectsArchitects $ 74,751Building Construction 7,294,158

Total Education Capital Projects $ 7,368,909

Total Other Capital Projects #1 Fund $ 7,368,909

Total Governmental Funds - Lincoln County School Department $ 46,557,557

233

Exhibit K-9

Lincoln County, TennesseeSchedule of Detailed Additions, Deductions, and Changes in Net Position - City Custodial FundsFor the Year Ended June 30, 2021

CitySchool

Cities - ADA -Sales Tax Fayetteville

Fund Fund Total

Additions Current Property Taxes $ 0 $ 1,212,546 $ 1,212,546 Trustee's Collections - Prior Years 0 33,581 33,581 Trustee's Collections - Bankruptcy 0 4,373 4,373 Circuit/Clerk & Master Collections - Prior Years 0 6,544 6,544 Interest and Penalty 0 5,834 5,834 Local Option Sales Tax 3,235,115 1,324,413 4,559,528 Wholesale Beer Tax 0 40,539 40,539 Marriage Licenses 0 541 541 Income Tax 0 9,477 9,477 Beer Tax 0 4,727 4,727

Total Additions $ 3,235,115 $ 2,642,575 $ 5,877,690

DeductionsRemittance of Revenues Collected $ 3,235,115 $ 2,717,954 $ 5,953,069Trustee's Commission 0 25,841 0

Total Deductions $ 3,235,115 $ 2,743,795 $ 5,953,069

Excess of Additions Over (Under) Deductions $ 0 $ (101,220) $ (101,220)Net Position, July 1, 2020 0 0 0Restatement - See Note I.D.10. 0 101,220 101,220

Net Position, June 30, 2021 $ 0 $ 0 $ 0

234

STATUTORY SECTION

This part of Lincoln County’s annual financial report presents detailed information required by state statute for the Lincoln County Board of Public Utilities. This information is presented solely for the purposes of statutory compliance and additional analysis and is not a required part of the financial statements. This information is unaudited. It has not been subjected to any auditing procedures.

Table(s) Page(s) Demographic and Economic Information:

These schedules offer water rates and water loss reports required by state statute to help the reader understand how well the utility is performing. 1-2 236-238

Source: Lincoln County Board of Public Utility Management.

235

Table 1

Lincoln County, TennesseeSchedule of Utility Rates and Number of CustomersLincoln County Board of Public UtilitiesJune 30, 2021

Number ofMeter Type Customers

Water Customers:Residential and Commercial 9,586 Service Charge $ 24.19

Per 1,000 gallons 5.46

Multi-User (Total 167 users. 585 Service Charge $ 24.19 Rates are based on usage per Per 1,000 gallons 5.46 each unit.)

Industrial 2 Service Charge $ 50.00 Per 1,000 gallons 5.70

Wastewater Customers:Residential 136 Service Charge $ 25.88

Per 1,000 gallons after 750 10.53

Commercial 103 Service Charge $ 35.00 Per 1,000 gallons after 750 11.59

Industrial 1 Service Charge $ 50.00 Per 1,000 gallons after 750 9.50

Other Charges

Water Customers:Tap Fee - Individual - 3/4 inch $ 1,600 Tap Fee - Individual - 1 inch 2,000

Wastewater Customers:Tap Fee - Individual - 1 1/2 inch force main tap $ 1,800 Tap Fee - Individual - 6 inch gravity sewer tap 2,000

236

Table 2

Lincoln County, TennesseeSchedule of Unaccounted for WaterLincoln County Board of Public UtilitiesFor the Year Ended June 30, 2021

Water Audit Report for:Reporting Year:

All volumes to be entered as: MILLION GALLONS (US) PER YEAR

Master Meter and Supply Error Adjustments

WATER SUPPLIED Pcnt: Value:Volume from own sources: 8 698.600 MG/Yr 3 -0.20% MG/Yr

Water imported: 10 109.366 MG/Yr 3 -0.20% MG/YrWater exported: n/a 0.000 MG/Yr MG/Yr

Enter negative % or value for under-registrationWATER SUPPLIED: 809.585 MG/Yr Enter positive % or value for over-registration

.AUTHORIZED CONSUMPTION

Billed metered: 9 494.836 MG/YrBilled unmetered: n/a 0.000 MG/YrUnbilled metered: 10 2.500 MG/Yr Pcnt: Value:

Unbilled unmetered: 10.120 MG/Yr 1.25% MG/Yr

AUTHORIZED CONSUMPTION: 507.456 MG/Yr

WATER LOSSES (Water Supplied - Authorized Consumption) 302.129 MG/Yr

Apparent Losses Pcnt: Value:Unauthorized consumption: 2.024 MG/Yr 0.25% MG/Yr

Customer metering inaccuracies: 9 0.498 MG/Yr 0.10% MG/YrSystematic data handling errors: 1.237 MG/Yr 0.25% MG/Yr

Apparent Losses: 3.759 MG/Yr

Real Losses (Current Annual Real Losses or CARL)Real Losses = Water Losses - Apparent Losses: 298.370 MG/Yr

WATER LOSSES: 302.129 MG/Yr

NON-REVENUE WATERNON-REVENUE WATER: 314.749 MG/Yr

= Water Losses + Unbilled Metered + Unbilled Unmetered

SYSTEM DATA

Length of mains: 9 738.0 milesNumber of active AND inactive service connections: 10 10,362

Service connection density: 14 conn./mile main

YesAverage length of customer service line: ft

Average operating pressure: 7 75.0 psi

COST DATA

Total annual cost of operating water system: 10 $5,051,119 $/YearCustomer retail unit cost (applied to Apparent Losses): 9 $11.32

Variable production cost (applied to Real Losses): 10 $6,899.93 $/Million gallons

WATER AUDIT DATA VALIDITY SCORE:

PRIORITY AREAS FOR ATTENTION:

1: Volume from own sources

2: Unauthorized consumption

3: Systematic data handling errors

Based on the information provided, audit accuracy can be improved by addressing the following components:

$/1000 gallons (US)

<----------- Enter grading in column 'E' and 'J' ---------->

Default option selected for unauthorized consumption - a grading of 5 is applied but not displayed

*** YOUR SCORE IS: 85 out of 100 ***

A weighted scale for the components of consumption and water loss is included in the calculation of the Water Audit Data Validity Score

Default option selected for Systematic data handling errors - a grading of 5 is applied but not displayed

Average length of customer service line has been set to zero and a data grading score of 10 has been applied

Are customer meters typically located at the curbstop or property line?

AWWA Free Water Audit Software: Reporting Worksheet

Default option selected for Unbilled unmetered - a grading of 5 is applied but not displayed

2021 7/2020 - 6/2021Lincoln County Board of Public Utilities (0000764 & 0000884)

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?

?

?

? Click to access definition

??

?

?

?

?

Please enter data in the white cells below. Where available, metered values should be used; if metered values are unavailable please estimate a value. Indicate your confidence in the accuracy of the input data by grading each component (n/a or 1-10) using the drop-down list to the left of the input cell. Hover the mouse over the cell to obtain a description of the grades

?

??

?

?

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(length of service line, beyond the property boundary, that is the responsibility of the utility)

Use buttons to selectpercentage of water

suppliedOR

value

?Click here: for help using option buttons below

?

?

?

?

+

+ Click to add a comment

WAS v5.0

++

++

++

American Water Works Association.Copyright © 2014, All Rights Reserved.

???

+

++

+

+

+

+

+

+

+

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++ Use Customer Retail Unit Cost to value real losses

?

To select the correct data grading for each input, determine the highest grade where the utility meets or exceeds all criteria for that grade and all grades below

237

Table 2a

Lincoln County, TennesseeSchedule of Unaccounted for WaterLincoln County Board of Public UtilitiesFor the Year Ended June 30, 2021

Water Audit Report for: Lincoln County Board of Public Utilities (0000764 & 0000884)Reporting Year:

System Attributes:Apparent Losses: 3.759 MG/Yr

+ Real Losses: 298.370 MG/Yr= Water Losses: 302.129 MG/Yr

Unavoidable Annual Real Losses (UARL): 151.85 MG/Yr

Annual cost of Apparent Losses: $42,551Annual cost of Real Losses: $2,058,735 Valued at Variable Production Cost

Performance Indicators:Non-revenue water as percent by volume of Water Supplied: 38.9%

Non-revenue water as percent by cost of operating system: 43.3% Real Losses valued at Variable Production Cost

Apparent Losses per service connection per day: 0.99 gallons/connection/day

Real Losses per service connection per day: N/A gallons/connection/day

Real Losses per length of main per day*: 1,107.66 gallons/mile/day

Real Losses per service connection per day per psi pressure: N/A gallons/connection/day/psi

From Above, Real Losses = Current Annual Real Losses (CARL): 298.37 million gallons/year

1.96

* This performance indicator applies for systems with a low service connection density of less than 32 service connections/mile of pipeline

Infrastructure Leakage Index (ILI) [CARL/UARL]:

2021 7/2020 - 6/2021

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Financial:

Operational Efficiency:

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SINGLE AUDIT SECTION

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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

Independent Auditor’s Report Lincoln County Mayor and Board of County Commissioners Lincoln County, Tennessee To the County Mayor and Board of County Commissioners: We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Lincoln County, Tennessee, as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise Lincoln County’s basic financial statements as listed in the table of contents, and have issued our report thereon dated February 10, 2022. Our report includes a reference to other auditors who audited the financial statements of the Lincoln Health System (a major enterprise fund), the Lincoln County Board of Public Utilities (a major enterprise fund), and the Internal School Fund of the Lincoln County School Department (a discretely presented component unit) as described in our report on Lincoln County’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 Lincoln County’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Lincoln County’s internal control. Accordingly, we do not express an opinion on the effectiveness of Lincoln County’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to

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prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. Compliance and Other Matters As part of obtaining reasonable assurance about whether Lincoln County’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statements 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 an instance of noncompliance or other matter that is required to be reported under Government Auditing Standards and is described in the accompanying Schedule of Findings and Questioned Costs as item: 2021-001. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the result of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Lincoln County’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Very truly yours, Jason E. Mumpower Comptroller of the Treasury Nashville, Tennessee February 10, 2022 JEM/sl

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Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; and Report on the Schedule of Expenditures of

Federal Awards Required by the Uniform Guidance

Independent Auditor’s Report

Lincoln County Mayor and Board of County Commissioners Lincoln County, Tennessee To the County Mayor and Board of County Commissioners: Report on Compliance for Each Major Federal Program We have audited Lincoln County’s compliance with the types of compliance requirements

described in the OMB Compliance Supplement that could have a direct and material effect on each of Lincoln County’s major federal programs for the year ended June 30, 2021. Lincoln County’s major federal programs are identified in the summary of auditor's results section of the accompanying Schedule of Findings and Questioned Costs. Lincoln County’s basic financial statements include the operations of the Lincoln Health System (an enterprise fund of the primary government), which expended $5,623,346, in federal awards, which are not included in the Schedule of Expenditures of Federal Awards for the year ended June 30, 2021. Our audit, described below, did not include the Lincoln Health System because the entity engaged other auditors to perform an audit in accordance with 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). Management's Responsibility Management is responsible for compliance with the federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditor's Responsibility Our responsibility is to express an opinion on compliance for each of Lincoln County’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the

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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 Lincoln County’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 Lincoln County’s compliance. Opinion on Each Major Federal Program In our opinion, Lincoln County complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2021. Report on Internal Control Over Compliance Management of Lincoln County is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered Lincoln County’s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of Lincoln County’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in

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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. Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Lincoln County, Tennessee, as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise Lincoln County’s basic financial statements. We issued our report thereon dated February 10, 2022, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Schedule of Expenditures of Federal Awards is fairly stated in all material respects in relation to the basic financial statements as a whole. Very truly yours, Jason E. Mumpower Comptroller of the Treasury Nashville, Tennessee February 10, 2022 JEM/sl

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Lincoln County, Tennessee, and the Lincoln County School DepartmentSchedule of Expenditures of Federal Awards and State Grants (1) (2) (3) (10) (11)For the Year Ended June 30, 2021

FederalAssistance Pass-through

Federal/Pass-through Agency/State Listing Entity IdentifyingGrantor Program Title Number Number Expenditures

U.S. Department of Agriculture: Passed-through State Department of Agriculture: Child Nutrition Cluster: (5) National School Lunch Program (Commodities - Noncash Assistance) 10.555 (4) $ 134,947 (7) National School Lunch Program (Commodity Rebate- Food Storage) 10.555 (4) 11,907 (7) Passed-through State Department of Education: Child Nutrition Cluster: (5) School Breakfast Program 10.553 (4) 510,572 National School Lunch Program 10.555 (4) 1,066,285 (7) Passed-through State Department of Health: Special Supplemental Nutrition Program for Women, Infants, and Children 10.557 GG-21-67004-00 53,161Total U.S. Department of Agriculture $ 1,776,872

U.S. Department of Housing and Urban Development: Passed-through Tennessee Housing Development Agency: Home Investment Partnerships Program 14.239 HM 17-19 $ 271,828Total U.S. Department of Housing and Urban Development $ 271,828

U.S. Department of Justice: Passed-through State Commission on Children and Youth: Juvenile Justice and Delinquency Prevention 16.540 (4) $ 900Total U.S. Department of Justice $ 900

U.S. Department of Transportation: Passed-through State Department of Transportation: Alcohol Open Container Requirements 20.607 (6) $ 10,751Total U.S. Department of Transportation $ 10,751

U.S. Department of Treasury: Passed-through State Department of Education: COVID-19 - Coronavirus Relief Fund 21.019 (4) $ 149,211 (8) Passed-through State Department of Finance and Administration: COVID-19 - Coronavirus Relief Fund 21.019 (4) 511,755 (8)Total U.S. Department of Treasury $ 660,966

U.S. Department of Education: Passed-through State Department of Education: Title I Grants to Local Educational Agencies 84.010 (4) $ 872,782 Special Education Cluster: (5) Special Education - Grants to States 84.027 (4) 947,721 Special Education - Preschool Grants 84.173 (4) 42,541 Career and Technical Education - Basic Grants to States 84.048 (4) 66,099 Supporting Effective Instruction State Grants 84.367 (4) 56,759 Student Support and Academic Enrichment Program 84.424 (4) 41,214 COVID 19 - Education Stabilization Fund Program - Elementary and Secondary School Emergency Relief Fund (ESSER I) 84.425D (4) 535,794 (9) COVID 19 - Education Stabilization Fund Program - Elementary and Secondary School Emergency Relief Fund (ESSER II) 84.425D (4) 563,905 (9) Passed-through Giles County, Tennessee, Board of Education: English Language Acquisition State Grants 84.365 (4) 6,051Total U.S. Department of Education $ 3,132,866

U.S. Election Assistance Commission: Passed-through Tennessee Secretary of State: COVID-19 - 2020 Supplemental Election Security Grants 90.404 30501-03020-52 $ 14,213Total U.S. Election Assistance Commission $ 14,213

(Continued)

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Lincoln County, Tennessee, and the Lincoln County School DepartmentSchedule of Expenditures of Federal Awards and State Grants (1) (2) (3) (10) (11) (Cont.)

FederalAssistance Pass-through

Federal/Pass-through Agency/State Listing Entity IdentifyingGrantor Program Title Number Number Expenditures

U.S. Department of Health and Human Services: Passed-through State Department of Health: 477 Cluster: (5) COVID-19 - Temporary Assistance for Needy Families 93.558 (4) $ 100,332 Preventive Health and Health Services Block Grant 93.991 GG-21-67004-00 7,005 Maternal and Child Health Services Block Grant to the States 93.994 GG-21-67004-00 38,083Total U.S. Department of Health and Human Services $ 145,420

U.S. Department of Homeland Security: Passed-through State Department of Military: Disaster Grants - Public Assistance (Presidentially Declared Disasters) 97.036 (4) $ 416,816 Emergency Management Performance Grants 97.042 34101-11821 49,850 Homeland Security Grant Program 97.067 34101-18120 18,078Total U.S. Department of Homeland Security $ 484,744

Total Expenditures of Federal Awards $ 6,498,560

ContractNumber

State Grants Health Department Programs - State Department of Health N/A GG-21-67004-00 $ 203,776 Early Childhood Education - State Department of Education N/A (4) 687,683 Lottery for Education Afterschool Program - State Department of Education N/A (4) 207,944 Coordinated School Health - State Department of Education N/A (4) 105,000 Family Resource Center - State Department of Education N/A (4) 29,612 Safe Schools Act - State Department of Education N/A (4) 92,120 Mental Health Transport Grant - State Department of Finance and Administration N/A (4) 26,168 State Direct Appropriations Grant FY 2020 - State Department of Finance and Administration N/A (4) 958,781 Juvenile Justice - State Commission on Children and Youth N/A (4) 9,000 Litter Grant - State Department of Transportation N/A (4) 15,695 Disaster Grants - Public Assistance (Presidentially Declared Disasters) - State Department of Military N/A (4) 69,470 PPE (Noncash Assistance) - State Department of Military N/A (4) 78,737 Summer Learning Camps - State Department of Education N/A (4) 166,894 STREAM Mini Camps - State Department of Education N/A (4) 47,922 Bridge Camps - State Department of Education N/A (4) 81,760 Transportation Grant - State Department of Education N/A (4) 40,627

Total State Grants $ 2,821,189

FAL - Federal Assistance ListingN/A - Not Applicable

(1) Presented in conformity with generally accepted accounting principles using the modified accrual basis of accounting.(2) Lincoln County elected not to use the 10% de minimis cost rate permitted in the Uniform Guidance.(3) No amounts ($0) were passed-through to subrecipients.(4) Information not available.(5) Child Nutrition Cluster total $1,723,711; Special Education Cluster total $990,262; 477 Cluster total $100,332.(6) Z-20THS142 $4,706; Z-21THS167 $6,045.(7) Total for FAL No. 10.555 is $1,213,139.(8) Total for FAL No. 21.019 is $660,966.(9) Total for FAL No. 84,425D is $1,099,699.

(10) For the year ended June 30, 2021, Lincoln County received donated PPE valued at $314,947 ($236,210 federal and $78,737 state) from the Tennessee Department of Military. These donations were unaudited.

(11) CONSOLIDATED ADMINISTRATION The following amounts were consolidated for administration purposes: Federal Amount

Assistance Provided toListing Consolidated

Program Title Number Administration Title 1 Grants to Local Educational Agencies 84.010 $ 7,300 Supporting Effective Instruction State Grants 84.367 1,191 Total amounts consolidated for administration purposes $ 8,491

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Lincoln County, TennesseeSummary Schedule of Prior-year FindingsFor the Year Ended June 30, 2021

Fiscal Page Finding FALYear Number Number Number

OTHER FINDINGS AND RECOMMENDATIONS

2020 239 2020-001 N/A Corrected

There were no prior-year federal award findings to report.

Government Auditing Standards require auditors to report the status of uncorrected findings from prior audits. In addition, OMB's Uniform Guidance requires auditees to report the status of all prior-year findings whethercorrected or not. Presented below are financial statement findings along with their current status from theAnnual Financial Report for Lincoln County, Tennessee, for the year ended June 30, 2021.

Prior-year Federal Awards Findings

Title of Finding Current Status

Prior-year Financial Statement Findings

A county commissioner and a school board member had indirect conflicts of interest.

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Financial Statements:

1. Our report on the financial statements of Lincoln County is unmodified.

2. Internal Control Over Financial Reporting:

* Material weakness identified? NO

* Significant deficiency identified? NONE REPORTED

3. Noncompliance material to the financial statements noted? NO

Federal Awards:

4. Internal Control Over Major Federal Programs:

* Material weakness identified? NO

* Significant deficiency identified? NONE REPORTED

5. Type of report auditor issued on compliance for major programs. UNMODIFIED

6. Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? NO

7. Identification of Major Federal Programs:

* Assistance Listings Numbers: 10.553 and 10.555 Child Nutrition Cluster: School Breakfast Program and National School Lunch Program

* Assistance Listings Number: 84.425D COVID 19 - Education Stabilization Fund Program - Elementary and Secondary School Emergency Relief Fund(ESSER I and II)

8. Dollar threshold used to distinguish between Type A and Type B Programs. $750,000

9. Auditee qualified as low-risk auditee? YES

LINCOLN COUNTY, TENNESSEE

SCHEDULE OF FINDINGS AND QUESTIONED COSTS


PART I, SUMMARY OF AUDITOR'S RESULTS

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PART II, FINDINGS RELATING TO THE FINANCIAL STATEMENTS A finding and recommendation, as a result of our audit, is presented below. We reviewed this finding and recommendation with management to provide an opportunity for their response. Findings relating specifically to the audit of federal awards, if any, are separately presented under Part III, Findings and Questioned Costs for Federal Awards. OFFICE OF DIRECTOR OF SCHOOLS FINDING 2021-001 HIGHLAND RIM SCHOOL INVESTIGATION

REVEALED MISAPPROPRIATION OF FUNDS TOTALING AT LEAST $6,127 (Noncompliance Under Government Auditing Standards)

On April 22, 2021, the Comptroller’s Division of Investigations issued an investigative report on the Highland Rim School. This report disclosed that the school bookkeeper misappropriated and made unauthorized purchases totaling at least $6,127. This report is available at http://www.comptroller.tn.gov/ia.

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http://www.comptroller.tn.gov/ia

PART III, FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS There were no findings and questioned costs related to federal awards for the year ended June 30, 2021.

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The audit of Lincoln County did not report any findings and recommendations that require a corrective action plan.

Lincoln County, TennesseeManagement's Corrective Action Plan


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Lincoln County, Tennessee

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