stanley county audit report for the two...

STANLEY COUNTY

AUDIT REPORT

For the Two Years Ended December 31, 2015

STANLEY COUNTY COUNTY OFFICIALS December 31, 2015

Board of Commissioners: Dana Iversen Dennis Booth

Scott Deal Craig Heller

Sonny Harrowa

Auditor: Philena Edwards

Treasurer:

Peggy Dougherty

State’s Attorney: Tom P. Maher

Register of Deeds:

Bev Stoeser

Sheriff: Brad Rathbun

STANLEY COUNTY TABLE OF CONTENTS

Page Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 1 Schedule of Prior Audit Findings 3 Schedule of Current Audit Findings 3 Independent Auditor’s Report 9 Basic Financial Statements Government-wide Financial Statements: As of December 31, 2015: Statement of Net Position--Modified Cash Basis 11 For the Year Ended December 31, 2015: Statement of Activities--Modified Cash Basis 12 For the Year Ended December 31, 2014: Statement of Activities--Modified Cash Basis 13 Fund Financial Statements: Governmental Funds As of December 31, 2015: Balance Sheet--Modified Cash Basis 14 For the Year Ended December 31, 2015: Statement of Revenues, Expenditures and Changes in Fund Balances--Modified Cash Basis 16 For the Year Ended December 31, 2014: Statement of Revenues, Expenditures and Changes in Fund Balances--Modified Cash Basis 20 Fiduciary Funds As of December 31, 2015: Statement of Fiduciary Net Position--Modified Cash Basis 24 Notes to the Modified Cash Basis Financial Statements 25

Supplementary Information:

For the Year Ended December 31, 2015: Budgetary Comparison Schedule--Modified Cash Basis--General Fund 40 Budgetary Comparison Schedule--Modified Cash Basis--Road and Bridge Fund 42 Budgetary Comparison Schedule--Modified Cash Basis--Courthouse Building Fund 43 For the Year Ended December 31, 2014: Budgetary Comparison Schedule--Modified Cash Basis--General Fund 44 Budgetary Comparison Schedule--Modified Cash Basis--Road and Bridge Fund 46 Budgetary Comparison Schedule--Modified Cash Basis--Courthouse Building Fund 47 Notes to the Supplementary Information – Budgetary Comparison Schedules 48 Schedule of the County’s Proportionate Share of the Net Pension Liability (Asset) 49 Notes to the Supplementary Information – Pension Schedules 50

Schedule of Changes in Long-Term Debt 51

INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

County Commission Stanley County Ft. Pierre, South Dakota We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the modified cash basis of accounting financial statements of the governmental activities, the aggregate discretely presented component unit, each major fund, and the aggregate remaining fund information of Stanley County, South Dakota (County), as of December 31, 2015, and for each of the years in the biennial period then ended, and the related notes to the financial statements, which collectively comprise the County’s basic financial statements and have issued our report thereon dated February 7, 2017. Our report includes a reference to other auditors who audited the financial statements of the Stanley County Law Enforcement, a discretely presented component unit, as described in our report on Stanley 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 the 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 the County’s internal control. Accordingly, we do not express an opinion on the effectiveness of the County’s internal control. Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as described in the accompanying Schedule of Current Audit Findings, we identified certain deficiencies in internal control that we consider to be material weaknesses and other deficiencies that we consider to be significant deficiencies. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the County’s financial statements will not be prevented, or detected and corrected on a timely basis.

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We consider the deficiency described in the accompanying Schedule of Current Audit Findings as item No. 2015-001 to be a material weakness. A significant deficiency is a deficiency or combination of deficiencies in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. We consider the deficiency described in the accompanying Schedule of Current Audit Findings as item No. 2015-002 to be a significant deficiency.

Compliance and Other Matters As part of obtaining reasonable assurance about whether the County’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, and contracts, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed instances of noncompliance or other matters that are required to be reported under Government Auditing Standards and which are described in the accompanying Schedule of Current Audit Findings as items No. 2015-003 and No. 2015-004.

County’s Response to Findings The County’s responses to the findings identified in our audit are described in the accompanying Schedule of Current Audit Findings. The County’s responses were not subjected to the auditing

procedures applied in the audit of the financial statements and, accordingly, we express no opinion on them.

Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the County’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. As required by South Dakota Codified Law 4-11-11, this report is a matter of public record and its distribution is not limited.

Martin L. Guindon, CPA Auditor General February 7, 2017

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STANLEY COUNTY SCHEDULE OF PRIOR AND CURRENT AUDIT FINDINGS

SCHEDULE OF PRIOR AUDIT FINDINGS

Prior Audit Findings: Finding No. 2013-001: Internal accounting controls over financial reporting for the years 2012 and 2013 were inadequate resulting in inaccurate information being presented to users of the annual financial report. This finding has not been resolved and is restated as current audit finding No. 2015-001. Findings No. 2013-002: The County’s unassigned fund balance of the General Fund exceeded the maximum allowed by South Dakota law. This finding has not been resolved and is restated as current audit finding No. 2015-003. Finding No. 2013-003: The County Auditor did not prepare, publish or file with the Auditor General of the Department of Legislative Audit on a timely basis annual financial reports for the years ended December 31, 2012 and December 31, 2013 as required by of South Dakota Codified Law (SDCL) 7-10-4. This finding has not been resolved and is restated as part of current audit finding No. 2015-004.

SCHEDULE OF CURRENT AUDIT FINDINGS

Current Audit Findings: Internal Control-Related Findings – Material Weakness:

Financial Reporting Errors Finding No. 2015-001: Internal accounting controls over financial reporting for the years 2014 and 2015 were inadequate resulting in inaccurate information being presented to users of these reports. This is the sixth consecutive audit in which a similar finding was noted. Analysis: We noted the following significant errors in the County’s annual financial report for the years ended December 31, 2014 and 2015:

a) Net Position classification errors totaling approximately $1,067,000 were noted on the 2015 Statement of Net Position.

b) Revenue and expenditure classification errors totaling approximately $461,000 were noted on the 2014 Statement of Activities and $878,000 were noted on the 2015 Statement of Activities.

c) Fund Balance classification errors totaling approximately $1,420,000 were noted on the 2015 Balance Sheet.

d) The financial activity related to Stanley County’s interest in the multi-use exposition building was not reported on the Governmental Fund financial statements in 2014 or 2015.

e) The financial activity related to Stanley County Law Enforcement was not reported on the Government-Wide Statements.

f) Investment earnings of approximately $16,000 in 2014 and $17,000 in 2015 were reported in the General Fund instead of being reported in the respective fund and offset by a transfer out in the respective fund to the General Fund in the Governmental Fund financial statements.

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Other less significant errors were also noted in the County’s annual financial report. We were able to correct the material reporting errors and therefore have issued an unmodified auditor’s opinion on the financial statements contained in this audit report. However, users of the annual financial reports received information of diminished reliability.

RECOMMENDATION:

1. We recommend the County strengthen internal accounting controls over financial reporting. Management’s Response: Management accepts the written finding and will work toward compliance for future audits. Internal Control-Related Findings - Significant Deficiency:

Stanley County Fairground Events

Finding No. 2015-002: Internal accounting controls over the ticket process and revenue collection process for events held at the Stanley County Fairgrounds were inadequate resulting in diminished reliability that all revenues derived from these events were turned over to the County Treasurer. In addition, procedures were not in place to analyze potential revenues derived from concession stand and beer sales for comparison to amount deposited with the County Treasurer. Analysis: We reviewed the ticket and wristband sales process used at the Stanley County Fairground events and determined that proper reconciliation between the tickets and wristbands ordered, those sold and those remaining reconciled to the event receipts deposited with the County Treasurer were not being performed. A proper reconciliation would enable the County to determine whether or not the County had received all the receipts from the events, such as, the 2014 July 4

th rodeo and concert, the 2014 monster

truck spectacular and the 2015 July 4th rodeo events.

We unable to perform post audit reconciliations due to the fact adequate documentation of tickets ordered and unused tickets and wristbands for the events, if any, was not retained for audit purposes. In addition, the County did not have adequate procedures in place to analyze the potential revenues from the concession stand and beer sales occurring at events held at the Stanley County Fairgrounds. Without adequate monitoring procedures being implemented, the County is unable to assure that it is receiving the appropriate amount of revenue from concession stand and beer sales. The deficiencies in internal controls over these processes diminished reasonable assurance that all the revenue derived from sales were turned over to the County Treasurer for deposit.

RECOMMENDATION: 2. We recommend the County strengthen internal accounting controls over the ticket process by performing a proper and complete reconciliation of tickets ordered, tickets sold, complimentary tickets, and unsold tickets. We recommend unused tickets be accounted for and retained for audit purposes. We recommend adequate procedures and monitoring over concession stand and beer sales be implemented to assure the County receives the appropriate revenues.

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Management’s Response: Management accepts the written finding and will work toward compliance for future audits. Compliance and Other Matters:

Surplus Unassigned Fund Balance Finding No. 2015-003: The unassigned fund balance of the General Fund exceeded the maximum allowed by South Dakota Codified Law (SDCL) 7-21-18.1 by approximately $586,000 as of December 31, 2015. This is the third consecutive audit to contain this finding. Analysis: SDCL 7-21-18.1 states: “The total unreserved, undesignated fund balance of the general fund may not exceed forty percent of the total amount of all general fund appropriations contained in the budget for the next fiscal year….” Governmental Accounting Standards Board (GASB) Statement 54, paragraph 17 states: “Unassigned fund balance is the residual classification for the General Fund. This classification represents fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the general fund.” GASB 54 changed the manner in which fund balance is to be reported by changing unreserved, undesignated fund balance to unassigned fund balance. So while SDCL 7-21-18.1 refers to unreserved, undesignated fund balance and GASB 54 refers to unassigned fund balance these terms are synonymous. Our analysis of the County General Fund indicated an excessive unassigned fund balance existed at December 31, 2015 as follows: Unassigned Fund Balance at December 31, 2015 $ 1,472,574.98 Less: 2016 General Fund Appropriations 2,216,331.00 Percentage of Allowable Retainage 40% Allowable Fund Balance Retainage (886,532.40) Unassigned Surplus Fund Balance at December 31, 2015

in Excess of the Amount Allowed by SDCL 7-21-18.1 $ 586,042.58 RECOMMENDATION:

3. We recommend the unassigned fund balance of the General Fund be limited to 40 percent of the next year’s General Fund appropriations as required by SDCL 7-21-18.1.

Management’s Response: Management accepts the written finding and will work toward compliance for future audits.

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Noncompliance with South Dakota Codified Laws Finding No. 2015-004: The County did not comply with several South Dakota Codified Laws (SDCL) governing the operations of the County. Analysis:

a. SDCL 7-10-4 states:

“The county auditor shall prepare by the first day in March of each year a report of the revenues and expenditures of the previous year and the assets, liabilities, and equity of the county as of December thirty-first of the previous year. The report shall be made in the form prescribed by the auditor-general and shall be published within thirty days in the official newspapers of the county. A copy of the publication shall be filed with the auditor-general.”

The annual financial report for Stanley County for the year ended December 31, 2014 was not published and was not filed with the Department of Legislative Audit until June 29, 2015. This is the second consecutive audit report in which this finding has appeared. In addition to being in violation of SDCL 7-10-4, the County’s failure to prepare and publish the annual financial reports on a timely basis resulted in withholding financial information from the taxpayers of the County.

b. SDCL 7-21-20 and 7-21-25 prohibit a County from incurring expenditures in excess of the amount specified in the appropriations ordinance. We noted the following expenditures in excess of the amount specified in the appropriations ordinance in 2015 and 2014.

Expenditure in Excess of

Appropriations

Calendar

Year Calendar

Year 2015 2014

General Fund: Health Assistance – County Nurse $ 576.20 Mental Health Services – Mentally Ill $ 294.11 Other Administration – Predatory Animal $ 220.30 Culture – Public Library $ 55.00 Recreation – Exhibition Building $ 4,711.43 $ 3,869.86 Recreation – County Fair $ 42,924.71 Road and Bridge Fund: Highways and Bridges – Highways, Roads and Bridges $ 181,005.82 $ 84,950.52 Emergency Management Fund: Protective and Emergency Services – Emergency and Disaster Services $ 52,526.06 $ 7,943.92 911 Service Fund: Protective and Emergency Services – Communication Center (911) $ 4,763.68

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c. SDCL 32-10-35 requires that the County shall apportion and distribute a portion of the Prorate Registration and Port of Entry Fees to the municipalities of the County pursuant to subdivision 32-11-4.1(3). The County did not distribute the Prorate Registration and Port of Entry Fees to the Municipality of Ft. Pierre for the January 2015 and July 2015 distributions totaling $1,967.40 and $3,014.38 respectively.

d. SDCL 10-36-10 requires that the County apportion and distribute Rural Electric Gross Receipts Tax. The County did not apportion and distribute the Rural Electric Gross Receipts Tax to the Stanley County School District in 2015, in the amount of $15,166.26.

e. The apportionment and distribution of the 2015 Fire Insurance Premium Tax was not properly made as required by SDCL 10-44-9.4, which states that all the funds received shall be divided one-half in the same ratio as the assessed valuation of all property within the service area of the department to the assessed valuation of all property within the service areas of all fire departments within the County, and one-half in the same ratio as the population of the area serviced by the department to the population within the service areas of all fire departments within the County. The County’s calculation was entirely based on assessed valuation resulting in the one fire department being underpaid $2,095.60, and two fire departments being overpaid $1,886.05 and $209.55 respectively.

f. South Dakota Department of Public Safety Administrative Rule 50:02:04:07 states: “Any governing body receiving 911 emergency surcharge funds must deposit all received funds, including all interest earned on fund investment, in the 911 Fund.” The County incorrectly receipted the interest earned on 911 Remittances from the State of South Dakota totaling $354.77 in 2014 and $364.87 in 2015 into the General Fund of the County. In addition, the County has not made an adjustment for $553.69 to move the prior interest receipted to the General Fund to the 911 Fund to resolve the non-compliance found in the prior audit.

g. Internal accounting controls over monitoring of cash balances were inadequate resulting in a negative cash balance during several months of our biennial audit period within the Emergency Management Fund. Statutory authority does not authorize borrowing by the Emergency Management Fund from the General Fund. SDCL 7-21-34 allows borrowing from County funds against anticipated tax collections; however the Emergency Management Fund is not a fund for which a tax levy is collected.

h. SDCL 7-10-3 requires that the County Auditor at the close of each calendar month list all cash and cash items in the hands of the County Treasurer and at the same time verify the balances in the several bank depositories. He shall make a report of the same to the board of County Commissioners at each regular meeting, showing bank balances, the total amount of actual cash, the total amount of checks and drafts which have been in the treasurer's possession not exceeding three days, and he shall make in detail an itemized report of all cash items, checks, and drafts which have been in the treasurer's possession over three days, which report shall be made a part of the County commissioners' proceedings. Procedures were not in place to document compliance with SDCL 7-10-3 and the County Auditor was not making a report to the County Commissioners which showed bank balances, the total amount of actual cash, the total amount of checks and drafts which have been in the treasurer's possession not exceeding three days, and make in detail an itemized report of all cash items, checks, and drafts which have been in the treasurer's possession over three days. RECOMMENDATIONS: 4. We recommend the County Auditor prepare and publish the County annual report within the

timeframe established by SDCL 7-10-4.

5. We recommend that the County not incur any expenditure in excess of the amount appropriated in compliance with SDCL 7-21-25.

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6. We recommend the County distribute Prorate Registration and Port of Entry Fees to the Municipality of Ft. Pierre.

7. We recommend the County distribute Rural Electric Gross Receipts Tax to the Stanley County School District.

8. We recommend the County properly distribute Fire Insurance Premium Tax to the fire departments.

9. We recommend interest earnings within the 911 Service Fund be credited to the 911 Service Fund in accordance with South Dakota Department of Public Safety Administrative Rule 50:02:04:07.

10. We recommend that proper internal accounting controls be implemented to prevent negative cash balances from occurring and that spending in the Emergency Management Fund be limited to funds available or that funds be provided from additional sources to provide for expenditures incurred to fully fund the Emergency Management Fund.

11. We recommend at month end the County Auditor make a presentation to the County Commissioners of a list of all cash and cash items in the hands of the County Treasurer in accordance with SDCL 7-10-3. We also recommend the County Auditor count all cash items in the hands of the Treasurer and verify all bank account balances in accordance with SDCL 7-10-3.

Management’s Response: Management accepts the written finding and will work toward compliance for future audits.

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INDEPENDENT AUDITOR’S REPORT County Commission Stanley County Ft. Pierre, South Dakota

Report on the Financial Statements We have audited the accompanying modified cash basis of accounting financial statements of the governmental activities, the aggregate discretely presented component unit, each major fund, and the aggregate remaining fund information of Stanley County, South Dakota (County), as of December 31, 2015, and for each of the years in the biennial period then ended, 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 The County’s management is responsible for the preparation and fair presentation of these financial statements in accordance with the modified cash basis of accounting described in Note 1.c.; this includes determining that the modified cash basis of accounting is an acceptable basis for the preparation of the financial statements in the circumstances. Management is responsible for the design, implementation, and maintenance of internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatements, whether due to fraud or error.

Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We did not audit the financial statements of the Stanley County Law Enforcement, which represent 100 percent of the assets, net position, revenues, and expenses 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 Stanley County Law Enforcement discretely presented component unit, is based solely on the report of other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of 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 County’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 County’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.

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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 report of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position on a modified cash basis of accounting of the governmental activities, the aggregate discretely presented component unit, each major fund, and the aggregate remaining fund information of Stanley County as of December 31, 2015, and the respective changes in financial position thereof for each of the years in the biennial period then ended in accordance with the modified cash basis of accounting described in Note 1.c. to the financial statements.

Basis of Accounting We draw attention to Note 1.c. of the financial statements, which describes the basis of accounting. The financial statements are prepared on the modified cash basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.

Other Matters

Supplementary Information Our audit was conducted for the purpose of forming opinions on the modified cash basis of accounting financial statements that collectively comprise the County’s basic financial statements. The Budgetary Comparison Schedules, the Schedule of the County’s Proportionate Share of the Net Pension Liability (Asset), and the Schedule of Changes in Long-Term Debt listed in the Table of Contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the 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 information is fairly stated in all material respects in relation to the basic financial statements as a whole.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 7, 2017, on our consideration of the County’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the County’s internal control over financial reporting and compliance.

Martin L. Guindon, CPA Auditor General February 7, 2017

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Primary Government

Governmental Component

Activities Unit

ASSETS:

Cash and Cash Equivalents 3,679,307.61$ 111,341.00$

Restricted Assets:

Cash and Cash Equivalents 16,630.00

TOTAL ASSETS 3,679,307.61$ 127,971.00$

NET POSITION:

Restricted For: (See Note 6)

Road and Bridge Purposes 37,403.19

Courthouse Building Purposes 1,318,443.64

24/7 Sobriety Purposes 16,630.00

Other Purposes 59,290.30

Unrestricted 2,264,170.48 111,341.00

TOTAL NET POSITION 3,679,307.61$ 127,971.00$

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

STANLEY COUNTY

STATEMENT OF NET POSITION - MODIFIED CASH BASIS

December 31, 2015

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Operating Primary Government

Charges for Grants and Governmental Component

Functions/Programs Expenses Services Contributions Activities Unit

Primary Government:

Governmental Activities:

General Government 914,205.32$ 219,453.70$ 5,107.45$ (689,644.17)$ $

Public Safety 575,532.21 116,137.34 (459,394.87)

Public Works 1,267,092.43 3,191.07 1,201,694.30 (62,207.06)

Health and Welfare 98,336.92 9,666.42 (88,670.50)

Culture and Recreation 190,233.65 105,785.06 (84,448.59)

Conservation of Natural Resources 47,226.85 4,815.59 (42,411.26)

Urban and Economic Development 29,066.39 (29,066.39)

Payments to Local Education Agencies 109,635.00 (109,635.00)

*Interest on Long-Term Debt 3,021.63 (3,021.63)

Total Primary Government 3,234,350.40$ 459,049.18$ 1,206,801.75$ (1,568,499.47)

Component Unit:

County-Wide Law Enforcement 515,820.00$ 522,908.00$ 14,170.00$ 21,258.00

General Revenues:

Taxes:

* The County does not have interest expense Property Taxes 1,550,929.64

related to the functions presented above. This Wheel Tax 93,311.80

amount includes indirect interest expense State Shared Revenues 45,538.77

on general long-term debt. Grants and Contributions not Restricted to Specific Programs 237,958.00

Unrestricted Investment Earnings 32,755.59 13.00

Miscellaneous Revenue 64,706.20 28,559.00

Total General Revenues 2,025,200.00 28,572.00

Change in Net Position 456,700.53 49,830.00

Net Position - Beginning 3,222,607.08 78,141.00

NET POSITION - ENDING 3,679,307.61$ 127,971.00$


Program Revenues Changes in Net Position

STANLEY COUNTY

STATEMENT OF ACTIVITIES - MODIFIED CASH BASIS

For the Year Ended December 31, 2015

Net (Expense) Revenue and

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Operating Primary Government

Charges for Grants and Governmental Component

Functions/Programs Expenses Services Contributions Activities Unit

Primary Government:

Governmental Activities:

General Government 803,765.95$ 117,290.03$ 31,437.71$ (655,038.21)$ $

Public Safety 456,610.87 9,689.82 58,300.93 (388,620.12)

Public Works 1,233,477.44 773,452.50 (460,024.94)

Health and Welfare 89,446.23 12,424.54 (77,021.69)

Culture and Recreation 275,831.23 217,981.32 (57,849.91)

Conservation of Natural Resources 68,796.79 21,673.05 6,300.00 (40,823.74)

Urban and Economic Development 28,510.68 9,835.04 (18,675.64)

Payments to Local Education Agencies 113,360.63 (113,360.63)

*Interest on Long-Term Debt 4,499.52 (4,499.52)

Total Primary Government 3,074,299.34$ 388,893.80$ 869,491.14$ (1,815,914.40)

Component Unit:

County-Wide Law Enforcement 535,752.00$ 497,287.00$ 25,372.00$ (13,093.00)

General Revenues:

Taxes:

* The County does not have interest expense Property Taxes 1,510,558.83

related to the functions presented above. This Wheel Tax 92,893.55

amount includes indirect interest expense State Shared Revenues 42,930.49

on general long-term debt. Grants and Contributions not Restricted to Specific Programs 241,473.13

Unrestricted Investment Earnings 30,535.71 9.00

Miscellaneous Revenue 151,921.49 3,137.00

Total General Revenues 2,070,313.20 3,146.00

Change in Net Position 254,398.80 (9,947.00)

Net Position - Beginning 2,968,208.28 88,088.00

NET POSITION - ENDING 3,222,607.08$ 78,141.00$


Program Revenues Changes in Net Position

STANLEY COUNTY

STATEMENT OF ACTIVITIES - MODIFIED CASH BASIS


Net (Expense) Revenue and

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Courthouse Other Total

General Road and Bridge Building Governmental Governmental

Fund Fund Fund Funds Funds

ASSETS:

Cash and Cash Equivalents 1,729,962.98$ 582,289.38$ 1,326,309.95$ 40,745.30$ 3,679,307.61$

TOTAL ASSETS 1,729,962.98$ 582,289.38$ 1,326,309.95$ 40,745.30$ 3,679,307.61$

FUND BALANCES: (See Note 1. j.)

Restricted $ 37,403.19$ 1,318,443.64$ 59,290.30$ 1,415,137.13$

Assigned 257,388.00 544,886.19 7,866.31 545.68 810,686.18

Unassigned 1,472,574.98 (19,090.68) 1,453,484.30

TOTAL FUND BALANCES 1,729,962.98$ 582,289.38$ 1,326,309.95$ 40,745.30$ 3,679,307.61$


STANLEY COUNTY

BALANCE SHEET - MODIFIED CASH BASIS

GOVERNMENTAL FUNDS

December 31, 2015

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Revenues:

Taxes:

General Property Taxes--Current 1,446,248.83$ 15,970.33$ 9,979.02$ 65,388.99$ 1,537,587.17$

General Property Taxes--Delinquent 6,933.90 29.59 259.30 121.17 7,343.96

Penalties and Interest 4,753.30 44.94 90.54 183.68 5,072.46

Mobile Home Tax 890.08 5.84 6.29 23.84 926.05

Wheel Tax 93,311.80 93,311.80

Licenses and Permits 4,243.10 4,243.10

Intergovernmental Revenue:

Federal Grants 57,927.19 62,531.40 120,458.59

Federal Shared Revenue 1,714.23 1,714.23

Federal Payments in Lieu of Taxes 213,882.15 14,756.87 3,749.52 5,569.46 237,958.00

State Grants 11,087.92 529,127.22 540,215.14

State Shared Revenue:

Bank Franchise 29,586.92 630.66 30,217.58

Motor Vehicle Licenses 121.00 478,494.71 478,615.71

Liquor Tax Reversion 20.30 20.30

State Highway Fund (former 10% game) 13,564.90 13,564.90

Court Appointed Attorney/Public Defender 3,337.68 3,337.68

Prorate License Fees 27,399.79 27,399.79

63 3/4% Mobile Home 7,286.85 7,286.85

Secondary Road Motor Vehicle Remittances 132,193.08 132,193.08

Telecommunications Gross Receipts Tax 15,300.89 15,300.89

Motor Vehicle 1/4% 1,769.77 1,769.77

Motor Fuel Tax 2,418.83 2,418.83

911 Remittances 35,700.07 35,700.07

Charges for Goods and Services:

General Government:

Treasurer's Fees 7,463.50 7,463.50

Register of Deeds' Fees 83,578.66 6,901.30 90,479.96

Legal Services 34,193.32 250.00 34,443.32

STANLEY COUNTY

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - MODIFIED CASH BASIS

GOVERNMENTAL FUNDS


16

Clerk of Courts Fees 4,418.60 4,418.60

Public Safety:

Prisoner Care 5,791.55 5,791.55

Public Works:

Road Maintenance Contract Charges 3,191.07 3,191.07

Health and Welfare:

Economic Assistance:

Poor Lien Recoveries 5,582.56 5,582.56

Health Assistance:

Women, Infants and Children 4,083.86 4,083.86

Culture and Recreation 110,600.66 110,600.66

Fines and Forfeits:

Costs 5,694.32 70.00 5,764.32

Forfeits 6,350.00 6,350.00

Miscellaneous Revenue:

Investment Earnings 20,560.33 11,830.39 364.87 32,755.59

Rent 18,763.80 18,763.80

Other 4,478.30 5,028.00 9,506.30

Total Revenues 2,046,971.23 1,322,274.12 83,842.25 182,763.44 3,635,851.04

Expenditures:

General Government:

Legislative:

Board of County Commissioners 70,007.18 70,007.18

Elections 1,516.00 1,516.00

Judicial System 15,268.72 15,268.72

Financial Administration:

Auditor 79,656.16 79,656.16

Treasurer 107,964.34 107,964.34

Legal Services:

State's Attorney 144,100.15 144,100.15

Court Appointed Attorney 55,066.62 55,066.62

Other Administration:

General Government Building 81,409.60 132,154.01 213,563.61

Director of Equalization 136,000.90 136,000.90

Register of Deeds 71,694.54 8,520.00 80,214.54

Veterans Service Officer 9,237.00 9,237.00

Predatory Animal 1,610.10 1,610.10

Public Safety:

Law Enforcement:

Sheriff 5,108.00 5,108.00

17




County Jail 110,453.52 110,453.52

Coroner 2,124.95 2,124.95

County-Wide Law Enforcement 215,917.00 215,917.00

Juvenile Detention 31,140.00 31,140.00

Protective and Emergency Services:

Fire Protection 103,499.00 103,499.00

Emergency and Disaster Services 74,526.06 74,526.06

Communication Center 32,763.68 32,763.68

Public Works:

Highways and Bridges:

Highways, Roads and Bridges 1,190,447.82 1,190,447.82

Health and Welfare:


Support of Poor 8,236.04 8,236.04

Health Assistance:

County Nurse 47,862.20 47,862.20

Ambulance 18,642.50 18,642.50


Social Services:

Domestic Abuse 845.00 845.00

Mental Health Services:

Mentally Ill 17,794.11 17,794.11

Culture and Recreation:

Culture:

Public Library 350.00 350.00

Historical Museum 3,000.00 3,000.00

Recreation:

Recreational Programs 20,000.00 20,000.00

Exhibition Building 4,711.43 4,711.43

County Fair 162,172.22 162,172.22

GOVERNMENTAL FUNDS


(Continued)

STANLEY COUNTY


18

Conservation of Natural Resources:

Soil Conservation:

County Extension 15,340.72 15,340.72

Weed and Pest Control 31,886.13 31,886.13

Urban and Economic Development:

Urban Development:

Planning and Zoning 1,383.90 1,383.90

Urban and Rural Development 5,000.00 5,000.00

River Cities Transit 16,480.00 16,480.00

Central South Dakota Enhancement District 6,202.49 6,202.49

Debt Service 79,666.24 79,666.24

Payments to Local Education Agencies 109,635.00 109,635.00

Total Expenditures 1,606,820.59 1,270,114.06 132,154.01 225,261.74 3,234,350.40

Excess of Revenues Over (Under) Expenditures 440,150.64 52,160.06 (48,311.76) (42,498.30) 401,500.64

Other Financing Sources (Uses):

Transfers In 11,830.39 200,000.00 211,830.39

Transfers Out (200,000.00) (11,830.39) (211,830.39)

Sale of County Property 14,425.61 40,774.28 55,199.89

Total Other Financing Sources (Uses) (173,744.00) 240,774.28 (11,830.39) 0.00 55,199.89

Net Change in Fund Balance 266,406.64 292,934.34 (60,142.15) (42,498.30) 456,700.53

Fund Balance - Beginning 1,463,556.34 289,355.04 1,386,452.10 83,243.60 3,222,607.08

FUND BALANCE - ENDING 1,729,962.98$ 582,289.38$ 1,326,309.95$ 40,745.30$ 3,679,307.61$


19




Revenues:

Taxes:

General Property Taxes--Current 1,397,397.10$ 15,842.59$ 10,308.67$ 64,729.76$ 1,488,278.12$

General Property Taxes--Delinquent 14,350.43 133.91 754.12 549.03 15,787.49

Penalties and Interest 5,318.44 57.60 184.03 236.53 5,796.60

Mobile Home Tax 670.90 3.78 6.45 15.49 696.62

Wheel Tax 92,893.55 92,893.55

Licenses and Permits 3,689.14 180.00 3,869.14


Federal Grants 2,600.00 26,191.63 28,791.63

Federal Shared Revenue 725.13 725.13

Federal Payments in Lieu of Taxes 206,575.37 23,940.84 4,116.79 6,115.00 240,748.00

State Grants 31,158.88 135,365.58 166,524.46


Bank Franchise 26,232.19 559.15 26,791.34

Motor Vehicle Licenses 104.00 477,841.81 477,945.81

Liquor Tax Reversion 60.04 60.04

State Highway Fund (former 10% game) 13,564.90 13,564.90

Court Appointed Attorney/Public Defender 2,316.24 2,316.24

Prorate License Fees 8,349.26 8,349.26

63 3/4% Mobile Home 9,972.07 9,972.07

Secondary Road Motor Vehicle Remittances 125,835.95 125,835.95

Telecommunications Gross Receipts Tax 16,079.11 16,079.11

Motor Vehicle 1/4% 1,662.59 1,662.59

Motor Fuel Tax 2,418.93 2,418.93

911 Remittances 32,109.30 32,109.30


General Government:

Treasurer's Fees 13,279.50 13,279.50

Register of Deeds' Fees 53,296.68 7,064.86 60,361.54

STANLEY COUNTY


GOVERNMENTAL FUNDS


20

Legal Services 19,709.26 150.00 19,859.26

Clerk of Courts Fees 4,675.89 4,675.89

Public Safety:

Prisoner Care 4,650.60 4,650.60

Health and Welfare:


Poor Lien Recoveries 6,078.13 6,078.13

Health Assistance:


Culture and Recreation 124,743.09 124,743.09

Conservation of Natural Resources 21,673.05 21,673.05

Fines and Forfeits:

Costs 4,889.22 50.00 4,939.22

Forfeits 100.00 100.00


Investment Earnings 17,250.37 12,930.57 354.77 30,535.71

Rent 19,553.31 19,553.31

Refund of Prior Year's Expenditures 40.21 40.21

Other 3,244.34 477.63 3,721.97

Total Revenues 2,008,429.41 906,260.98 28,300.63 138,783.15 3,081,774.17

Expenditures:

General Government:

Legislative:

Board of County Commissioners 81,239.32 81,239.32

Elections 18,335.99 18,335.99

Judicial System 13,376.90 13,376.90


Auditor 99,111.02 99,111.02

Treasurer 100,608.15 100,608.15

Legal Services:

State's Attorney 141,816.92 141,816.92

Court Appointed Attorney 59,330.36 59,330.36


General Government Building 85,193.04 6,218.00 91,411.04

Director of Equalization 139,142.47 139,142.47

Register of Deeds 57,673.48 57,673.48

Predatory Animal 1,720.30 1,720.30

Public Safety:

Law Enforcement:

County Jail 100,142.09 100,142.09

21




Coroner 2,956.36 2,956.36

County-Wide Law Enforcement 210,875.00 210,875.00

Juvenile Detention 2,900.00 2,900.00

Protective and Emergency Services:

Fire Protection 78,500.00 78,500.00

Emergency and Disaster Services 33,691.26 33,691.26

Communication Center 27,546.16 27,546.16

Public Works:


Highways, Roads and Bridges 1,188,478.63 1,188,478.63

Health and Welfare:


Support of Poor 14,454.79 14,454.79

Health Assistance:

County Nurse 44,001.00 44,001.00

Ambulance 19,900.50 19,900.50



Mentally Ill 6,296.05 6,296.05


Culture:

Public Library 455.00 455.00

Recreation:

Recreational Programs 20,000.00 20,000.00

Exhibition Building 3,869.86 3,869.86

County Fair 251,506.37 251,506.37


Soil Conservation:

County Extension 14,561.67 14,561.67

Weed and Pest Control 54,235.12 54,235.12

GOVERNMENTAL FUNDS


(Continued)

STANLEY COUNTY


22


Urban Development:

Planning and Zoning 897.68 897.68

Urban and Rural Development 5,000.00 5,000.00

River Cities Transit 16,480.00 16,480.00

Central South Dakota Enhancement District 6,133.00 6,133.00

Debt Service 49,498.33 49,498.33

Payments to Local Education Agencies 113,360.63 113,360.63

Total Expenditures 1,690,366.96 1,237,976.96 6,218.00 139,737.42 3,074,299.34

Excess of Revenues Over (Under) Expenditures 318,062.45 (331,715.98) 22,082.63 (954.27) 7,474.83


Transfers In 12,930.57 160,000.00 172,930.57

Transfers Out (160,000.00) (12,930.57) (172,930.57)

Insurance Proceeds 98,764.66 98,764.66

Sale of County Property 1,305.79 146,853.52 148,159.31

Total Other Financing Sources (Uses) (46,998.98) 306,853.52 (12,930.57) 0.00 246,923.97

Net Change in Fund Balance 271,063.47 (24,862.46) 9,152.06 (954.27) 254,398.80

Fund Balance - Beginning 1,192,492.87 314,217.50 1,377,300.04 84,197.87 2,968,208.28

FUND BALANCE - ENDING 1,463,556.34$ 289,355.04$ 1,386,452.10$ 83,243.60$ 3,222,607.08$


23

Agency

Funds

ASSETS:

Cash and Cash Equivalents 426,710.57$

TOTAL ASSETS 426,710.57$

NET POSITION:

Net Position Held in Agency Capacity 426,710.57$

TOTAL NET POSITION 426,710.57$


STANLEY COUNTY

STATEMENT OF FIDUCIARY NET POSITION - MODIFIED CASH BASIS

FIDUCIARY FUNDS

December 31, 2015

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STANLEY COUNTY NOTES TO THE MODIFIED CASH BASIS FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

As discussed further in Note 1.c., these financial statements are presented on a modified cash basis of accounting. The modified cash basis of accounting differs from accounting principles generally accepted in the United States of America (GAAP). Generally accepted accounting principles include all relevant Governmental Accounting Standards Board (GASB) pronouncements.

a. Financial Reporting Entity:

The reporting entity of Stanley County (County), consists of the primary government (which includes all of the funds, organizations, institutions, agencies, departments, and offices that make up the legal entity, plus those funds for which the primary government has a fiduciary responsibility); those organizations for which the primary government is financially accountable; and other organizations for which the nature and significance of their relationship with the primary government are such that their exclusion would cause the financial reporting entity’s financial statements to be misleading or incomplete.

Component units are legally separate organizations for which the elected officials of the primary government are financially accountable. The County is financially accountable if its County Commission appoints a voting majority of another organization’s governing body and it has the ability to impose its will on that organization, or there is a potential for that organization to provide specific financial benefits to, or impose specific financial burdens on, the County (primary government). The County may also be financially accountable for another organization if that organization is fiscally dependent on the County. Stanley County Law Enforcement, a separate legal entity under the administration of the Stanley County Sheriff, was formed to provide law enforcement services to the County and the City of Fort Pierre. These services include enforcement of state and federal laws, as well as enforcement of county and city ordinances and regulations. Both the County and the City of Fort Pierre contribute their member share to fund the adopted budget. The activity of the Stanley County Law Enforcement is included in the financial statements of the County as a discretely presented component unit. Separately issued financial statements of the Stanley County Law Enforcement audit report may be obtained from: Stanley County Law Enforcement Board, c/o: City of Fort Pierre, P.O. Box 700, Fort Pierre, SD 57532.

b. Basis of Presentation:

Government-wide Financial Statements:

The Statement of Net Position and Statement of Activities display information about the

reporting entity as a whole. They include all funds of the reporting entity except for fiduciary funds. The statements distinguish between governmental activities and discretely presented component units. Governmental activities generally are financed through taxes, intergovernmental revenues, and other non-exchange revenues. Discretely presented component units are legally separate organizations that meet certain criteria, as described in Note 1.a., above, and may be classified as either governmental or business-type activities. See the discussion of individual component units in Note 1.a., above.

25

The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the County’s governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Program revenues include (a) charges paid by recipients of goods and services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.

Fund Financial Statements: Fund financial statements of the reporting entity 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, liabilities, fund equity, revenues, and expenditures/expenses. Funds are organized into two major categories: governmental and fiduciary. An emphasis is placed on major funds within the governmental category. A fund is considered major if it is the primary operating fund of the County or it meets the following criteria:

1. Total assets, liabilities, revenues, or expenditures/expenses of the individual

governmental or enterprise fund are at least 10 percent of the corresponding total for all funds of that category or type, and

2. Total assets, liabilities, revenues, or expenditures/expenses of the individual governmental or enterprise fund are at least 5 percent of the corresponding total for all governmental and enterprise funds combined, or

3. Management has elected to classify one or more governmental or enterprise funds as major for consistency in reporting from year to year, or because of public interest in the fund’s operations.

The funds of the County financial reporting entity are described below:

Governmental Funds:

General Fund – The General Fund is the general operating fund of the County. It is used to account for all financial resources except those required to be accounted for in another fund. The General Fund is always considered to be a major fund.

Special Revenue Funds – Special revenue funds are used to account for the proceeds of specific revenue sources (other than trusts for individuals, private organizations, or other governments or for major capital projects) that are legally restricted to expenditures for specified purposes.

Road and Bridge Fund – to account for funds credited to the road and bridge fund pursuant to SDCL 32-11-4.2 to be used by the board of county commissioners for grading, constructing, planing, dragging, and maintaining county highways and also for dragging, maintaining, and grading secondary roads. Proper equipment for dragging, grading, and maintaining highways, such as graders, tractors, drags, maintainers, and planers may be purchased from the road and bridge fund. (SDCL 32-11-2 and 32-11-4.2) This is a major fund. Courthouse Building Fund – authorized by SDCL 7-25-1 to account for the accumulation of a special tax levy not to exceed ninety cents per thousand dollars of taxable valuation annually for the acquisition or construction of a courthouse, office, jail building, county extension buildings, grandstands and bleachers, highway maintenance buildings, or public library. This is a major fund.

26

The remaining special revenue funds are not considered major funds: 911 Service, Fire Protection, Emergency Management, Domestic Abuse, and Modernization and Preservation Relief. These funds are reported on the fund financial statements as “Other Governmental Funds.”

Fiduciary Funds:

Fiduciary funds consist of the following sub-category and are never considered to be major

funds: Agency Funds – Agency funds are custodial in nature (assets equal liabilities) and do not

involve measurement of results of operations. Agency funds are used to account for the accumulation and distribution of property tax revenues and various pass-through funds.

c. Measurement Focus and Basis of Accounting:

Measurement focus is a term used to describe “how” transactions are recorded within the various financial statements. Basis of accounting refers to “when” revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements, regardless of the measurement focus. The County’s basis of accounting is the modified cash basis, which is a basis of accounting other than USGAAP. Under USGAAP, transactions are recorded in the accounts when revenues are earned and liabilities are incurred. Under the modified cash basis, transactions are recorded when cash is received or disbursed. Measurement Focus: In the government-wide Statement of Net Position and Statement of Activities, governmental activities are presented using the economic resources measurement focus, applied within the limitations of the modified cash basis of accounting as defined below. In the fund financial statements, the “current financial resources” measurement focus or the “economic resources” measurement focus is used, applied within the limitations of the modified cash basis of accounting. Basis of Accounting: In the government-wide Statement of Net Position and Statement of Activities and the fund financial statements, governmental and component unit activities are presented using a modified cash basis of accounting. The modified cash basis of accounting involves the measurement of cash and cash equivalents and changes in cash and cash equivalents resulting from cash receipt and disbursement transactions. Under the modified cash basis of accounting, the statement of financial position reports only cash and cash equivalents (those investments with terms to maturity of 90 days (three months) or less at the date of acquisition). Under the modified cash basis of accounting, transactions are recorded in the accounts when cash and/or cash equivalents are received or disbursed and assets and liabilities are recognized to the extent that cash has been received or disbursed. The acceptable modification to the cash basis of accounting implemented by the County in these financial statements is:

Recording long-term investments in marketable securities (those with maturities more than 90-days (three months) from the date of acquisition) acquired with cash assets at cost.

27

As a result of the use of this modified cash basis of accounting, certain assets and their related revenues (such as accounts receivable and revenue for billed or provided services not yet collected) and certain liabilities and their related expenses (such as accounts payable and expenses for goods or services received but not yet paid, and accrued expenses and liabilities) are not recorded in these financial statements.

If the County applied USGAAP, the fund financial statements for governmental funds would

use the modified accrual basis of accounting. All government-wide financial statements would be presented on the accrual basis of accounting.

d. Deposits and Investments: For the purpose of financial reporting, “cash and cash equivalents” includes all demand and

savings accounts and certificates of deposit or short-term investments with a term to maturity at date of acquisition of three months or less. Investments in open-end mutual fund shares, or similar investments in external investment pools, are also considered to be cash equivalents.

Investments classified in the financial statements consists primarily of certificates of deposit

whose term to maturity at date of acquisition exceeds three months, and/or those types of investment authorized by South Dakota Codified Law (SDCL) 4-5-6. Under the modified cash basis of accounting, investments are carried at cost. As of December 31, 2015, the County did not have any investments that met these guidelines.

e. Capital Assets: Capital assets include land, buildings, machinery and equipment, and all other tangible or intangible assets that are used in operations and that have initial useful lives extending beyond a single reporting period. Infrastructure assets are long-lived capital assets that normally are stationary in nature and normally can be preserved for significantly greater number of years than most capital assets.

As discussed in Note 1.c. above, the government-wide Statement of Net Position, Statement of Activities, and the fund financial statements, governmental and component unit activities are presented using a modified cash basis of accounting. The County has not elected to modify their cash basis presentation by recording capital assets arising from cash transactions and depreciating those assets where appropriate so any capital assets owned by the County and the related depreciation are not reported on the financial statements of the County.

f. Long-Term Liabilities:

Long-term liabilities include, but are not limited to, General Obligation Bonds, Revenue Bonds, Certificates of Participation, Financing (Capital Acquisition) Leases, and Compensated Absences. As discussed in Note 1.c. above, the government-wide Statement of Net Position and Statement of Activities and the fund financial statements, governmental and component unit activities are presented using a modified cash basis of accounting. The County has not elected to modify their cash basis presentation by recording long-term debt arising from cash transactions so any outstanding indebtedness is not reported on the financial statements of the County. The County does report the principal and interest payments on long-term debt as Debt Service expenditures on the Statement of Revenues, Expenditures and Changes in Fund Balances. On the Statement of Activities the principal portion of these Debt Service payments are reported within the appropriate expense function while the interest portion is reported as Interest on Long-Term Debt.

28

The County has presented as Supplementary Information a Schedule of Changes in Long-Term Debt along with related notes that include details of any outstanding Long-Term Debt.

g. Program Revenues:

Program revenues derive directly from the program itself or from parties other than the County’s taxpayers or citizenry, as a whole. Program revenues are classified into three categories, as follows:

1. Charges for services – These arise from charges to customers, applicants, or others

who purchase, use, or directly benefit from the goods, services, or privileges provided, or are otherwise directly affected by the services.

2. Program-specific operating grants and contributions – These arise from mandatory and voluntary non-exchange transactions with other governments, organizations, or individuals that are restricted for use in a particular program.

3. Program-specific capital grants and contributions – These arise from mandatory and voluntary non-exchange transactions with other governments, organizations, or individuals that are restricted for the acquisition of capital assets for use in a particular program.

h. Equity Classifications:

Government-wide Financial Statements: Equity is classified as Net Position and is displayed in two components:

1. Restricted Net Position – Consists of net position with constraints placed on their use either by (a) external groups such as creditors, grantors, contributors, or laws and regulations of other governments; or (b) law through constitutional provisions or enabling legislation.

2. Unrestricted Net Position – All other net position that do not meet the definition of Restricted Net Position.

Fund Financial Statements: Governmental fund equity is classified as fund balance, and may distinguish between

“Nonspendable”, “Restricted”, “Committed”, “Assigned”, and “Unassigned” components. Agency Funds have no fund equity. The Net Position is reported as Net Position Held in Agency Capacity.

i. Application of Net Position:

It is the County’s policy to first use restricted net position, prior to the use of unrestricted net

position, when an expense is incurred for purposes for which both restricted and unrestricted net positions are available.

j. Fund Balance Classification Policies and Procedures:

In accordance with Government Accounting Standards Board (GASB) No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, the County classifies governmental fund balances as follows: Nonspendable – includes fund balance amounts that cannot be spent either because it is

not in spendable form or because of legal or contractual constraints.

29

Restricted – includes fund balance amounts that are constrained for specific purposes which are externally imposed by providers, such as creditors or amounts constrained due to constitutional provisions or enabling legislation.

Committed – includes fund balance amounts that are constrained for specific purposes that are internally imposed by the government through formal action of the highest level of decision making authority and does not lapse at year-end.

Assigned – includes fund balance amounts that are intended to be used for specific purposes that are neither considered restricted or committed. Fund Balance may be assigned by the County Commissioners.

Unassigned – includes positive fund balance within the General Fund which has not been classified within the above mentioned categories and negative fund balances in other governmental funds.

The County uses restricted/committed amounts first when both restricted and unrestricted fund balance is available unless there are legal documents/contracts that prohibit doing this, such as a grant agreement requiring dollar for dollar spending. Additionally, the Government would first use committed, then assigned, and lastly unassigned amounts of unrestricted fund balance when expenditures are made. The Government does not have a formal minimum fund balance policy. The purpose of each major special revenue fund and revenue source is listed below: Major Special Revenue Fund Revenue Source Road and Bridge Taxes, Federal and State Grants, and Motor Vehicle Licenses Courthouse Building Taxes

30

A schedule of fund balances is provided as follows:

STANLEY COUNTY DISCLOSURE OF FUND BALANCES REPORTED ON BALANCE SHEET

GOVERNMENTAL FUNDS DECEMBER 31, 2015

Road Courthouse

Other

Total

General

and Bridge Building

Governmental

Governmental

Fund

Fund Fund Funds

Funds

Fund Balances:

Restricted For: Road and Bridge Purposes $ $ 37,403.19 $ $ $ 37,403.19 Courthouse Building Purposes 1,318,443.64 1,318,443.64 911 Service Purposes 42,248.72 42,248.72 Domestic Abuse Purposes 1,800.00 1,800.00 Modernization and Preservation Relief Purposes

15,241.58 15,241.58

Assigned To: Applied to Next Year’s Budget 257,388.00 257,388.00 Courthouse Building Purposes 7,866.31 7,866.31 Road and Bridge Purposes 544,886.19 544,886.19 Fire Fighting Purposes 545.68 545.68 Unassigned 1,472,574.98 (19,090.68) 1,453,484.30

Total Fund Balances $ 1,729,962.98 $ 582,289.38 $ 1,326,309.95 $ 40,745.30 $ 3,679,307.61

31

2. VIOLATIONS OF FINANCE-RELATED LEGAL AND CONTRACTUAL PROVISIONS

The County is prohibited by statute from spending in excess of appropriated amounts at the department level. The following represents the significant overdrafts of the expenditures compared to appropriations:

Expenditure in Excess of

Appropriations

Calendar

Year Calendar

Year 2015 2014

General Fund: Health Assistance – County Nurse $ 576.20 Mental Health Services – Mentally Ill $ 294.11 Other Administration – Predatory Animal $ 220.30 Culture – Public Library $ 55.00 Recreation – Exhibition Building $ 4,711.43 $ 3,869.86 Recreation – County Fair $ 42,924.71 Road and Bridge Fund: Highways and Bridges – Highways, Roads and Bridges $ 181,005.82 $ 84,950.52 Emergency Management Fund: Protective and Emergency Services – Emergency and Disaster Services $ 52,526.06 $ 7,943.92 911 Service Fund: Protective and Emergency Services – Communication Center (911) $ 4,763.68

The Board of County Commissioners plans to take the following actions to address these violations: The Board will watch for overdrafts and follow applicable SDCL’s addressing the use of contingency and supplementing the budget.

3. DEFICIT FUND BALANCES / NET POSITION OF INDIVIDUAL NONMAJOR FUNDS

As of December 31, 2015, the following individual nonmajor funds had deficit fund balance/net position in the amounts shown:

Emergency Management Fund $ 19,090.68

The Board of County Commissioners plans to take the following actions to address the deficit fund balance/deficit net position:

The Board will watch for deficits in net position and follow applicable SDCL’s addressing the transfer of money from fund to fund.

32

4. DEPOSITS AND INVESTMENTS CREDIT RISK, CONCENTRATIONS OF CREDIT RISK AND INTEREST RATE RISK

The County follows the practice of aggregating the cash assets of various funds to maximize cash management efficiency and returns. Various restrictions on deposits and investments are imposed by statutes. These restrictions are summarized below: Deposits – The County’s cash deposits are made in qualified public depositories as defined by SDCL 4-6A-1, 7-20-1, 7-20-1.1, and 7-20-1.2, and may be in the form of demand or time deposits. Qualified depositories are required by SDCL 4-6A-3 to maintain at all times, segregated from their other assets, eligible collateral having a value equal to at least 100 percent of the public deposit accounts which exceed deposit insurance such as the FDIC and NCUA. In lieu of pledging eligible securities, a qualified public depository may furnish irrevocable standby letters of credit issued by federal home loan banks accompanied by written evidence of that bank’s public debt rating which may not be less than “AA” or a qualified public depository may furnish a corporate surety bond of a corporation authorized to do business in South Dakota. Investments – In general, SDCL 4-5-6 permits County funds to be invested only in (a) securities of the United States and securities guaranteed by the United States Government either directly or indirectly; or (b) repurchase agreements fully collateralized by securities described in (a) above; or in shares of an open-end, no-load fund administered by an investment company whose investments are in securities described in (a) above and repurchase agreements described in (b) above. Also, SDCL 4-5-9 requires investments to be in the physical custody of the political subdivision or may be deposited in a safekeeping account with any bank or trust company designated by the political subdivision as its fiscal agent. Credit Risk – State law limits eligible investments for the County, as discussed above. The County has no investment policy that would further limit its investment choices.

As of December 31, 2015, the County had the following investments. Credit Fair Investment Rating Value

External Investment Pools: SDFIT Unrated $ 6,012.68

The South Dakota Public Fund Investment Trust (SDFIT) is an external investment pool created for South Dakota local government investing. It is regulated by a nine member board with representation from municipalities, school districts and counties. The net asset value of the SDFIT money market account (GCR) is kept at one dollar per share by adjusting the rate of return on a daily basis. Earnings are credited to each account on a monthly basis.

Concentration of Credit Risk – The County places no limit on the amount that may be invested in any one issuer. Interest Rate Risk – The County does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. Assignment of Investment Income – State law allows income from deposits and investments to be credited to either the General Fund or the fund making the investment. The County’s policy is to credit all income from deposits and investments to the General Fund, except for the 911 Service Fund which retains its investment income. USGAAP, on the other hand, requires income from deposits and investments to be reported in the fund whose assets generated that income. Where

33

the governing board has discretion to credit investment income to a fund other than the fund that provided the resources for investment, a transfer to the designated fund is reported. Accordingly, in the fund financial statements, interfund transfers of investment earnings are reported, while in the government-wide financial statements, they have been eliminated.

5. PROPERTY TAXES

Property taxes are levied on or before October 1, of the year preceding the start of the fiscal year. They attach as an enforceable lien on property, and become due and payable as of the following January 1, the first day of the fiscal year. Taxes are payable in two installments on or before April 30 and October 31 of the fiscal year. The County is permitted by several state statutes to levy varying amounts of taxes per $1,000 of taxable valuation on taxable real property in the County.

6. RESTRICTED NET POSITION Restricted Net Position for the year ended December 31, 2015 was as follows:

Major Purposes:

Road and Bridge Purposes $ 37,403.19

Courthouse Building Purposes 1,318,443.64

Other Purposes:

911 Service Purposes 42,248.72

Domestic Abuse Purposes 1,800.00 Modernization and Preservation Relief Purposes 15,241.58

Total Other Purposes 59,290.30

Total Restricted Net Position $ 1,415,137.13

These balances are restricted due to federal grant and statutory requirements.

7. INTERFUND TRANSFERS Interfund transfers for the year ended December 31, 2015 were as follows:

Transfers To:

Road

General and Bridge

Transfers From: Fund Fund Total

Major Funds:

General Fund $ $ 200,000.00 $ 200,000.00

Courthouse Building Fund 11,830.39 11,830.39

Total $ 11,830.39 $ 200,000.00 $ 211,830.39

34

Interfund transfers for the year ended December 31, 2014 were as follows:

Transfers To:

Road

General and Bridge

Transfers From: Fund Fund Total

Major Funds:

General Fund $ $ 160,000.00 $ 160,000.00

Courthouse Building Fund 12,930.57 12,930.57

Total $ 12,930.57 $ 160,000.00 $ 172,930.57

The County typically budgets transfers to the Road and Bridge Fund to conduct the indispensable functions of the County. The County also transfers earnings on deposits and investments to the General Fund in accordance with the County policy.

8. RETIREMENT PLAN

Plan Information: All employees, working more than 20 hours per week during the year, participate in the South Dakota Retirement System (SDRS), a cost sharing, multiple employer defined benefit pension plan administered by SDRS to provide retirement benefits for employees of the State of South Dakota and its political subdivisions. The SDRS provides retirement, disability, and survivor benefits. The right to receive retirement benefits vests after three years of credited service. Authority for establishing, administering and amending plan provisions are found in SDCL 3-12. The SDRS issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained at http://sdrs.sd.gov/publications.aspx or by writing to the SDRS, P.O. Box 1098, Pierre, SD 57501-1098 or by calling (605) 773-3731. Benefits Provided: SDRS has three different classes of employees, Class A, Class B public safety and Class B judicial. Class A retirement benefits are determined as 1.7 percent prior to 2008 and 1.55 percent thereafter of the employee’s final 3-year average compensation times the employee’s years of service. Employees with 3 years of service are eligible to retire at age 55. Class B public safety benefits are determined as 2.4 percent for service prior to 2008 and 2.0 percent thereafter of employee final average compensation. Class B judicial benefits are determined as 3.733 percent for service prior to 2008 and 3.333 percent thereafter of employee final average compensation. All Class B employees with 3 years of service are eligible to retire at age 45. Employees are eligible for service-related disability benefits regardless of length of service. Three years of service is required for nonservice-related disability eligibility. Disability benefits are determined in the same manner as retirement benefits but are payable immediately without an actuarial reduction. Death benefits are a percent of the employee’s final average salary. The annual increase in the amount of the SDRS benefits payable on each July 1

st is indexed to the

consumer price index (CPI) based on SDRS funded status:

If the SDRS market value funded ratio is 100% or more – 3.1% COLA If the SDRS market value funded ratio is 80.0% to 99.9%, index with the CPI

90.0% to 99.9% funded — 2.1% minimum and 2.8% maximum COLA 80.0% to 90.0% funded — 2.1% minimum and 2.4% maximum COLA

If the SDRS market value funded ratio is less than 80% -- 2.1% COLA

All benefits except those depending on the Member’s Accumulated Contributions are annually increased by the Cost-of-Living Adjustment.

35

Contributions: Per SDCL 3-12, contribution requirements of the active employees and the participating employers are established and may be amended by the SDRS Board. Covered employees are required by state statute to contribute the following percentages of their salary to the plan; Class A Members, 6.0% of salary; Class B Judicial Members, 9.0% of salary; and Class B Public Safety Members, 8.0% of salary. State statute also requires the employer to contribute an amount equal to the employee’s contribution. State statute also requires the employer to make an additional contribution in the amount of 6.2 percent for any compensation exceeding the maximum taxable amount for social security for general employees only. The County’s share of contributions to the SDRS for the calendar years ended December 31, 2015, 2014, and 2013 were $60,961.63, $58,150.66, and $53,974.65, respectively, equal to the required contributions each year.

Pension Liabilities (Assets): At June 30, 2015, SDRS is 104.1% funded and accordingly has a net pension asset. The

proportionate shares of the components of the net pension asset of South Dakota Retirement System, for the County as of June 30, 2015 are as follows:

Proportionate share of net position restricted for pension benefits

$ 5,806,320.88

Less proportionate share of total pension liability 5,577,803.37

Proportionate share of net pension liability (asset) $ (228,517.51)

The net pension liability (asset) was measured as of June 30, 2015 and the total pension liability

(asset) used to calculate the net pension liability (asset) was based on a projection of the County’s share of contributions to the pension plan relative to the contributions of all participating entities. At June 30, 2015, the County’s proportion was .0538793%, which is an increase of .0008540% from its proportion measured as of June 30, 2014.

Actuarial Assumptions: The total pension liability (asset) in the June 30, 2015 actuarial valuation was determined using the

following actuarial assumptions, applied to all periods included in the measurement: Inflation 3.25 percent Salary Increases 5.83 percent at entry to 3.87 percent after 30 years of service Investment Rate of Return 7.25 percent through 2016 and 7.50 percent thereafter, net of

pension plan investment expense Mortality rates were based on the RP-2000 Employee Mortality Table for males and females, as

appropriate. The actuarial assumptions used in the June 30, 2015 valuation were based on the results of an

actuarial experience study for the period July 1, 2005 through June 30, 2011. The mortality assumptions were revised based on an extension of the experience study including mortality experience through June 30, 2013.

Investment portfolio management is the statutory responsibility of the South Dakota Investment

Council (SDIC), which may utilize the services of external money managers for management of a portion of the portfolio. SDIC is governed by the Prudent Man Rule (i.e., the council should use the same degree of care as a prudent man). Current SDIC investment policies dictate limits on the percentage of assets invested in various types of vehicles (equities, fixed income securities, real estate, cash, private equity, etc.). The long-term expected rate of return on pension plan investments was determined using a method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term

36

expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of real rates of return for each major asset class included in the pension plan’s target asset allocation as of June 30, 2015 (see the discussion of the pension plan’s investment policy) are summarized in the following table using geometric means:

Asset Class

Target Allocation

Long-Term Expected Real Rate of Return

Global Equity 61.0% 4.5% Fixed Income 27.0% 1.8% Real Estate 10.0% 5.2% Cash 2.0% 0.0%

Total 100%

Discount Rate: The discount rate used to measure the total pension liability (asset) was 7.25 percent through 2016

and 7.50% thereafter. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that matching employer contributions from will be made at rates equal to the member rate. Based on these assumptions, the pension plan’s fiduciary net position was projected to be available to make all future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability (asset).

Sensitivity of liability (asset) to changes in the discount rate: The following presents the County’s proportionate share of net pension liability (asset) calculated

using the discount rate of 7.25 percent through 2016 and 7.50 percent thereafter, as well as what the County’s proportionate share of the net pension liability (asset) would be if it were calculated using a discount rate that is 1-percentage point lower (6.25/6.50%) or 1-percentage point higher (8.25/8.50%) than the current rate:

1% Decrease

Current Discount

Rate

1%

Increase

County’s proportionate share of the net pension liability (asset)

$ 575,176.00

$ (228,517.51)

$ (883,860.35)

Pension Plan Fiduciary Net Position: Detailed information about the plan’s fiduciary net position is available in the separately issued

SDRS financial report. 9. SIGNIFICANT CONTINGENCIES – LITIGATION

At December 31, 2015 the County was not involved in any significant litigation. 10. EXPOSITION BUILDING

The Exposition Building is an undivided interest, or joint operation, between the County, Hughes County, City of Pierre, and City of Fort Pierre for the construction and operation of a multiple use exposition building, located at the Stanley County Fairgrounds in Fort Pierre, South Dakota. The

37

primary use of the facility during the winter months will be for hockey with multiple uses during other times. Interest in the facility is as follows:

Stanley County 15% Hughes County 35% City of Pierre 35% City of Fort Pierre 15%

Construction started in 1998 and was completed in 1999. The County’s interest in the daily operation of the facility is reported within the General Fund. Hughes County acted in the capacity of fiscal agent during the construction of the facility and continues as fiscal agent for the daily operation.

11. SUBSEQUENT EVENTS

The County is currently involved in a U.S. Department of Homeland Security/Federal Emergency Management Agency (FEMA) “deobligation” of $145,105.03 controversy concerning a highway department culvert project on War Creek Road, which is pending. FEMA and the State of South Dakota Department of Public Safety has demanded that the County return $145,105.03 in funds ($128,033.85 Federal and $17,071.18 State) previously paid for the project due to the County being non-compliant to the program rules of the Public Assistance Program.

12. RISK MANAGEMENT

The County is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. During the period ended December 31, 2015, the County managed its risks as follows: Employee Health Insurance:

The County purchases health insurance for its employees from a commercial insurance carrier. Settled claims resulting from these risks have not exceeded the liability coverage during the past three years.

Liability Insurance:

The County joined the South Dakota Public Assurance Alliance (SDPAA), a public entity risk pool currently operating as a common risk management and insurance program for South Dakota local government entities. The objective of the SDPAA is to administer and provide risk management services and risk sharing facilities to the members and to defend and protect the members against liability, to advise members on loss control guidelines and procedures, and provide them with risk management services, loss control and risk reduction information and to obtain lower costs for that coverage. The County’s responsibility is to promptly report to and cooperate with the SDPAA to resolve any incident which could result in a claim being made by or against the County. The County pays an annual premium, to provide liability coverage detailed below, under a claims-made policy and the premiums are accrued based on the ultimate cost of the experience to date of the SDPAA member, based on their exposure or type of coverage. The County pays an annual premium to the pool to provide coverage for:

Automobile Liability, General Liability, and Property Liability

38

The agreement with the SDPAA provides that the above coverages will be provided to a $5,000,000.00 limit. Member premiums are used by the pool for payment of claims and to pay for reinsurance for claims in excess of $250,000 for property coverage and $500,000 for liability coverage to the upper limit. A portion of the member premiums are also allocated to a cumulative reserve fund. The County would be eligible to receive a refund for a percentage of the amount allocated to the cumulative reserve fund on the following basis:

End of County’s First Full Year 50% End of County’s Second Full Year 60% End of County’s Third Full Year 70% End of County’s Fourth Full Year 80% End of County’s Fifth Full Year 90% End of County’s Sixth Full Year and Thereafter 100%

As of December 31, 2015, the County has vested balance in the cumulative reserve fund of $42,146.52. The County carries a $2,000 deductible for the Law Enforcement coverage and a $500 deductible for the Wrongful Acts coverage. The County does not carry additional insurance to cover claims in excess of the upper limit. Settled claims resulting from these risks have not exceeded the liability coverage during the past three years. Worker's Compensation: The County joined the South Dakota Municipal League Worker's Compensation Fund (Fund), a public entity risk pool currently operating as a common risk management and insurance program for South Dakota local government entities. The objective of the Fund is to formulate, develop, and administer, on behalf of the member organizations, a program of worker’s compensation coverage, to obtain lower costs for that coverage, and to develop a comprehensive loss control program. The County’s responsibility is to initiate and maintain a safety program to give its employees safe and sanitary working conditions and to promptly report to and cooperate with the Fund to resolve any worker’s compensation claims. The County pays an annual premium, to provide worker's compensation coverage for its employees, under a self-funded program and the premiums are accrued based on the ultimate cost of the experience to date of the Fund members. Coverage limits are set by state statute. The pool pays the first $650,000 of any claim per individual. The pool has reinsurance which covers up to statutory limits in addition to a separate combined employer liability limit of $2,000,000 per incident.

The County does not carry additional insurance to cover claims in excess of the upper limit. Settled claims resulting from these risks have not exceeded the liability coverage over the past three years. Unemployment Benefits: The County provides coverage for unemployment benefits by paying into the Unemployment Compensation Fund established by state law and managed by the State of South Dakota. During the two years ended December 31, 2015, one claim was filed for unemployment benefits. This claim resulted in the payment of benefits in the amount of $1,789.00. At December 31, 2015, no claims had been filed and were outstanding. It is not anticipated that any additional claims for unemployment benefits will be filed in the next year.

39

Variance with

Final Budget

Original Final Actual Amounts Positive (Negative)

Revenues:

Taxes:

General Property Taxes--Current 1,457,870.00$ 1,457,870.00$ 1,446,248.83$ (11,621.17)$

General Property Taxes--Delinquent 15,000.00 15,000.00 6,933.90 (8,066.10)

Penalties and Interest 4,000.00 4,000.00 4,753.30 753.30

Mobile Home Tax 900.00 900.00 890.08 (9.92)

Licenses and Permits 4,150.00 4,150.00 4,243.10 93.10


Federal Grants 200.00 200.00 0.00 (200.00)

Federal Shared Revenue 800.00 800.00 1,714.23 914.23

Federal Payments in Lieu of Taxes 200,000.00 200,000.00 213,882.15 13,882.15

State Grants 5,000.00 5,000.00 11,087.92 6,087.92


Bank Franchise 28,000.00 28,000.00 29,586.92 1,586.92

Motor Vehicle Licenses 0.00 0.00 121.00 121.00

Liquor Tax Reversion 0.00 0.00 20.30 20.30

Court Appointed Attorney/Public Defender 4,000.00 4,000.00 3,337.68 (662.32)

Telecommunications Gross Receipts Tax 19,300.00 19,300.00 15,300.89 (3,999.11)

Motor Vehicle 1/4% 0.00 0.00 1,769.77 1,769.77


General Government:

Treasurer's Fees 6,425.00 6,425.00 7,463.50 1,038.50

Register of Deeds' Fees 50,150.00 50,150.00 83,578.66 33,428.66

Legal Services 20,100.00 20,100.00 34,193.32 14,093.32

Clerk of Courts Fees 2,500.00 2,500.00 4,418.60 1,918.60

Public Safety:

Prisoner Care 5,000.00 5,000.00 5,791.55 791.55

Health and Welfare:


Poor Lien Recoveries 4,500.00 4,500.00 5,582.56 1,082.56

Health Assistance:

Women, Infants and Children 4,500.00 4,500.00 4,083.86 (416.14)

Culture and Recreation 172,000.00 172,000.00 110,600.66 (61,399.34)

Fines and Forfeits:

Fines 500.00 500.00 0.00 (500.00)

Costs 5,500.00 5,500.00 5,694.32 194.32

Forfeits 200.00 200.00 6,350.00 6,150.00


Investment Earnings 30,000.00 30,000.00 20,560.33 (9,439.67)

Rent 31,150.00 31,150.00 18,763.80 (12,386.20)

Other 5,000.00 5,000.00 0.00 (5,000.00)

Total Revenues 2,076,745.00 2,076,745.00 2,046,971.23 (29,773.77)

Expenditures:

General Government:

Legislative:

Board of County Commissioners 73,763.00 73,763.00 70,007.18 3,755.82

Contingency 100,000.00 100,000.00

Amount Transferred (78,600.00) 21,400.00

Elections 3,290.00 3,290.00 1,516.00 1,774.00

Judicial System 15,600.00 15,600.00 15,268.72 331.28


Auditor 114,973.00 114,973.00 79,656.16 35,316.84

Treasurer 110,310.00 110,310.00 107,964.34 2,345.66

Legal Services:

State's Attorney 147,301.00 147,301.00 144,100.15 3,200.85

Court Appointed Attorney 58,700.00 58,700.00 55,066.62 3,633.38

Abused and Neglected Child Defense 500.00 500.00 0.00 500.00


General Government Building 92,876.00 92,876.00 81,409.60 11,466.40

Director of Equalization 162,808.00 170,068.00 136,000.90 34,067.10

Register of Deeds 66,134.00 73,394.00 71,694.54 1,699.46

Veterans Service Officer 9,237.00 9,237.00 9,237.00 0.00

Predatory Animal 1,610.00 1,610.00 1,610.10 (0.10)

SUPPLEMENTARY INFORMATION

Budgeted Amounts

STANLEY COUNTY

BUDGETARY COMPARISON SCHEDULE - MODIFIED CASH BASIS

GENERAL FUND


40

Variance with

Final Budget



Budgeted Amounts

STANLEY COUNTY


GENERAL FUND


(Continued)

Public Safety:

Law Enforcement:

County Jail 175,000.00 175,000.00 110,453.52 64,546.48

Coroner 10,000.00 10,000.00 2,124.95 7,875.05

County-Wide Law Enforcement 215,917.00 215,917.00 215,917.00 0.00

Juvenile Detention 10,100.00 35,100.00 31,140.00 3,960.00

Other Law Enforcement 100.00 100.00 0.00 100.00

Health and Welfare:


Support of Poor 16,550.00 16,550.00 8,236.04 8,313.96

Health Assistance:

County Nurse 47,286.00 47,286.00 47,862.20 (576.20)

Ambulance 21,880.00 21,880.00 18,642.50 3,237.50

Women, Infants and Children 5,379.00 5,379.00 4,957.07 421.93


Mentally Ill 7,500.00 17,500.00 17,794.11 (294.11)


Culture:

Public Library 420.00 420.00 350.00 70.00

Historical Museum 3,000.00 3,000.00 3,000.00 0.00

Recreation:

Recreational Programs 20,000.00 20,000.00 20,000.00 0.00

Exhibition Building 0.00 0.00 4,711.43 (4,711.43)

County Fair 305,975.00 311,975.00 162,172.22 149,802.78


Soil Conservation:

County Extension 10,000.00 15,341.00 15,340.72 0.28

Weed and Pest Control 64,462.00 64,462.00 31,886.13 32,575.87


Urban Development:

Planning and Zoning 2,465.00 2,465.00 1,383.90 1,081.10

Urban and Rural Development 5,000.00 5,000.00 5,000.00 0.00

River Cities Transit 16,480.00 16,480.00 16,480.00 0.00

Central South Dakota Enhancement District 6,203.00 6,203.00 6,202.49 0.51

Payments to Local Education Agencies 120,000.00 120,000.00 109,635.00 10,365.00

Total Expenditures 2,020,819.00 2,003,080.00 1,606,820.59 396,259.41

Excess of Revenues Over (Under) Expenditures 55,926.00 73,665.00 440,150.64 366,485.64


Transfers In 0.00 0.00 11,830.39 11,830.39

Transfers Out (250,000.00) (250,000.00) (200,000.00) 50,000.00

Sale of County Property 12,500.00 12,500.00 14,425.61 1,925.61

Total Other Financing Sources (Uses) (237,500.00) (237,500.00) (173,744.00) 63,756.00

Net Change in Fund Balance (181,574.00) (163,835.00) 266,406.64 430,241.64

Fund Balance - Beginning 1,463,556.34 1,463,556.34 1,463,556.34 0.00

FUND BALANCE - ENDING 1,281,982.34$ 1,299,721.34$ 1,729,962.98$ 430,241.64$

41

Variance with

Final Budget


Revenues:

Taxes:

General Property Taxes--Current 16,023.00$ 16,023.00$ 15,970.33$ (52.67)$

General Property Taxes--Delinquent 100.00 100.00 29.59 (70.41)

Penalties and Interest 50.00 50.00 44.94 (5.06)

Mobile Home Tax 5.00 5.00 5.84 0.84

Wheel Tax 98,000.00 98,000.00 93,311.80 (4,688.20)


Federal Payments in Lieu of Taxes 16,000.00 16,000.00 14,756.87 (1,243.13)

State Grants 135,000.00 135,000.00 529,127.22 394,127.22


Motor Vehicle Licenses 485,000.00 485,000.00 478,494.71 (6,505.29)

State Highway Fund (former 10% game) 0.00 0.00 13,564.90 13,564.90

Prorate License Fees 22,000.00 22,000.00 27,399.79 5,399.79

63 3/4% Mobile Home 10,000.00 10,000.00 7,286.85 (2,713.15)

Secondary Road Motor Vehicle Remittances 115,000.00 115,000.00 132,193.08 17,193.08

Motor Fuel Tax 0.00 0.00 2,418.83 2,418.83

Charges for Good and Services:

Public Works:

Road Maintenance Contract Charges 0.00 0.00 3,191.07 3,191.07


Other 0.00 0.00 4,478.30 4,478.30

Total Revenues 897,178.00 897,178.00 1,322,274.12 425,096.12

Expenditures:

Public Works:


Highways, Roads and Bridges 1,009,442.00 1,009,442.00 1,190,447.82 (181,005.82)

Debt Service 82,800.00 82,800.00 79,666.24 3,133.76

Total Expenditures 1,092,242.00 1,092,242.00 1,270,114.06 (177,872.06)

Excess of Revenues Over (Under) Expenditures (195,064.00) (195,064.00) 52,160.06 247,224.06


Transfers In 250,000.00 250,000.00 200,000.00 (50,000.00)

Sale of County Property 500.00 500.00 40,774.28 40,274.28

Total Other Financing Sources (Uses) 250,500.00 250,500.00 240,774.28 (9,725.72)

Net Change in Fund Balance 55,436.00 55,436.00 292,934.34 237,498.34

Fund Balance - Beginning 289,355.04 289,355.04 289,355.04 0.00

FUND BALANCE - ENDING 344,791.04$ 344,791.04$ 582,289.38$ 237,498.34$


Budgeted Amounts

STANLEY COUNTY


ROAD AND BRIDGE FUND


42

Variance with

Final Budget


Revenues:

Taxes:

General Property Taxes--Current 10,000.00$ 10,000.00$ 9,979.02$ (20.98)$

General Property Taxes--Delinquent 400.00 400.00 259.30 (140.70)

Penalties and Interest 100.00 100.00 90.54 (9.46)

Mobile Home Tax 25.00 25.00 6.29 (18.71)


Federal Grants 0.00 0.00 57,927.19 57,927.19

Federal Payments in Lieu of Taxes 4,200.00 4,200.00 3,749.52 (450.48)


Investment Earnings 0.00 0.00 11,830.39 11,830.39

Total Revenues 14,725.00 14,725.00 83,842.25 69,117.25

Expenditures:

General Government:




Recreation:

County Fair 45,000.00 45,000.00 0.00 45,000.00

Total Expenditures 1,000,000.00 1,000,000.00 132,154.01 867,845.99

Excess of Revenues Over (Under) Expenditures (985,275.00) (985,275.00) (48,311.76) 936,963.24


Transfers Out 0.00 0.00 (11,830.39) (11,830.39)

Net Change in Fund Balance (985,275.00) (985,275.00) (60,142.15) 925,132.85


FUND BALANCE - ENDING 401,177.10$ 401,177.10$ 1,326,309.95$ 925,132.85$


Budgeted Amounts

STANLEY COUNTY


COURTHOUSE BUILDING FUND


43

Variance with

Final Budget


Revenues:

Taxes:

General Property Taxes--Current 1,407,056.00$ 1,407,056.00$ 1,397,397.10$ (9,658.90)$

General Property Taxes--Delinquent 10,000.00 10,000.00 14,350.43 4,350.43

Penalties and Interest 1,800.00 1,800.00 5,318.44 3,518.44

Mobile Home Tax 800.00 800.00 670.90 (129.10)

Licenses and Permits 3,900.00 3,900.00 3,689.14 (210.86)


Federal Grants 0.00 0.00 2,600.00 2,600.00

Federal Shared Revenue 2,000.00 2,000.00 725.13 (1,274.87)


State Grants 4,000.00 4,000.00 31,158.88 27,158.88


Bank Franchise 17,500.00 17,500.00 26,232.19 8,732.19

Motor Vehicle Licenses 0.00 0.00 104.00 104.00

Liquor Tax Reversion 0.00 0.00 60.04 60.04

Court Appointed Attorney/Public Defender 0.00 0.00 2,316.24 2,316.24

Telecommunications Gross Receipts Tax 20,000.00 20,000.00 16,079.11 (3,920.89)

Motor Vehicle 1/4% 1,300.00 1,300.00 1,662.59 362.59


General Government:

Treasurer's Fees 6,100.00 6,100.00 13,279.50 7,179.50

Register of Deeds' Fees 40,150.00 40,150.00 53,296.68 13,146.68

Legal Services 30,100.00 30,100.00 19,709.26 (10,390.74)

Clerk of Courts Fees 0.00 0.00 4,675.89 4,675.89

Public Safety:

Prisoner Care 5,000.00 5,000.00 4,650.60 (349.40)

Health and Welfare:


Poor Lien Recoveries 3,000.00 3,000.00 6,078.13 3,078.13

Health Assistance:

Women, Infants and Children 4,000.00 4,000.00 6,346.41 2,346.41

Culture and Recreation 0.00 0.00 124,743.09 124,743.09

Conservation of Natural Resources 0.00 0.00 21,673.05 21,673.05

Fines and Forfeits:

Fines 4,500.00 4,500.00 0.00 (4,500.00)

Costs 5,500.00 5,500.00 4,889.22 (610.78)

Forfeits 1,000.00 1,000.00 100.00 (900.00)


Investment Earnings 40,000.00 40,000.00 17,250.37 (22,749.63)

Rent 29,650.00 29,650.00 19,553.31 (10,096.69)

Other 3,500.00 3,500.00 3,244.34 (255.66)

Total Revenues 1,840,856.00 1,840,856.00 2,008,429.41 167,573.41

Expenditures:

General Government:

Legislative:

Board of County Commissioners 82,263.00 82,263.00 81,239.32 1,023.68

Contingency 100,000.00 100,000.00

Amount Transferred (17,928.43) 82,071.57

Elections 19,765.00 19,765.00 18,335.99 1,429.01

Judicial System 15,050.00 15,050.00 13,376.90 1,673.10


Auditor 109,475.00 109,475.00 99,111.02 10,363.98

Treasurer 101,553.00 104,853.00 100,608.15 4,244.85

Legal Services:

State's Attorney 140,045.00 142,045.00 141,816.92 228.08

Court Appointed Attorney 61,200.00 61,200.00 59,330.36 1,869.64

Abused and Neglected Child Defense 500.00 500.00 0.00 500.00



Director of Equalization 147,627.00 147,627.00 139,142.47 8,484.53

Register of Deeds 61,798.00 61,798.00 57,673.48 4,124.52

Veterans Service Officer 8,775.00 8,775.00 0.00 8,775.00

Predatory Animal 1,500.00 1,500.00 1,720.30 (220.30)


Budgeted Amounts

STANLEY COUNTY


GENERAL FUND


44

Variance with

Final Budget



Budgeted Amounts

STANLEY COUNTY


GENERAL FUND


(Continued)

Public Safety:

Law Enforcement:

County Jail 176,200.00 176,200.00 100,142.09 76,057.91

Coroner 7,900.00 7,900.00 2,956.36 4,943.64

County-Wide Law Enforcement 200,000.00 210,975.00 210,875.00 100.00

Juvenile Detention 15,100.00 15,100.00 2,900.00 12,200.00

Other Law Enforcement 100.00 100.00 0.00 100.00

Health and Welfare:


Support of Poor 14,050.00 17,550.00 14,454.79 3,095.21

Health Assistance:

County Nurse 44,001.00 44,001.00 44,001.00 0.00

Ambulance 21,880.00 21,880.00 19,900.50 1,979.50

Women, Infants and Children 5,030.00 5,030.00 4,793.89 236.11


Mentally Ill 7,300.00 7,300.00 6,296.05 1,003.95


Culture:

Public Library 400.00 400.00 455.00 (55.00)

Historical Museum 3,000.00 3,000.00 0.00 3,000.00

Recreation:

Recreational Programs 20,000.00 20,000.00 20,000.00 0.00

Exhibition Building 0.00 0.00 3,869.86 (3,869.86)

County Fair 89,817.00 208,581.66 251,506.37 (42,924.71)


Soil Conservation:

County Extension 18,880.00 18,880.00 14,561.67 4,318.33

Weed and Pest Control 48,450.00 101,281.93 54,235.12 47,046.81


Urban Development:

Planning and Zoning 2,025.00 2,025.00 897.68 1,127.32

Urban and Rural Development 5,000.00 5,000.00 5,000.00 0.00

River Cities Transit 16,480.00 16,480.00 16,480.00 0.00

Central South Dakota Enhancement District 6,200.00 6,200.00 6,133.00 67.00

Payments to Local Education Agencies 120,000.00 120,000.00 113,360.63 6,639.37

Total Expenditures 1,760,849.00 1,934,292.16 1,690,366.96 243,925.20

Excess of Revenues Over (Under) Expenditures 80,007.00 (93,436.16) 318,062.45 411,498.61


Transfers In 0.00 0.00 12,930.57 12,930.57

Transfers Out (181,712.00) (181,712.00) (160,000.00) 21,712.00

Insurance Proceeds 0.00 0.00 98,764.66 98,764.66


Total Other Financing Sources (Uses) (181,712.00) (181,712.00) (46,998.98) 134,713.02



FUND BALANCE - ENDING 1,090,787.87$ 917,344.71$ 1,463,556.34$ 546,211.63$

45

Variance with

Final Budget


Revenues:

Taxes:

General Property Taxes--Current 15,800.00$ 15,800.00$ 15,842.59$ 42.59$

General Property Taxes--Delinquent 85.00 85.00 133.91 48.91

Penalties and Interest 50.00 50.00 57.60 7.60

Mobile Home Tax 5.00 5.00 3.78 (1.22)

Wheel Tax 95,000.00 95,000.00 92,893.55 (2,106.45)



State Grants 0.00 0.00 135,365.58 135,365.58


Motor Vehicle Licenses 200,000.00 200,000.00 477,841.81 277,841.81

State Highway Fund (former 10% game) 0.00 0.00 13,564.90 13,564.90

Prorate License Fees 22,000.00 22,000.00 8,349.26 (13,650.74)

63 3/4% Mobile Home 10,000.00 10,000.00 9,972.07 (27.93)

Secondary Road Motor Vehicle Remittances 400,000.00 400,000.00 125,835.95 (274,164.05)

Motor Fuel Tax 4,125.00 4,125.00 2,418.93 (1,706.07)


Refund of Prior Year's Expenditures 0.00 0.00 40.21 40.21

Total Revenues 762,565.00 762,565.00 906,260.98 143,695.98

Expenditures:

Public Works:


Highways, Roads and Bridges 950,179.00 1,103,528.11 1,188,478.63 (84,950.52)

Debt Service 51,500.00 51,500.00 49,498.33 2,001.67

Total Expenditures 1,001,679.00 1,155,028.11 1,237,976.96 (82,948.85)

Excess of Revenues Over (Under) Expenditures (239,114.00) (392,463.11) (331,715.98) 60,747.13


Transfers In 160,000.00 160,000.00 160,000.00 0.00


Total Other Financing Sources (Uses) 160,000.00 160,000.00 306,853.52 146,853.52

Net Change in Fund Balance (79,114.00) (232,463.11) (24,862.46) 207,600.65

Fund Balance - Beginning 314,217.50 314,217.50 314,217.50 0.00

FUND BALANCE - ENDING 235,103.50$ 81,754.39$ 289,355.04$ 207,600.65$


Budgeted Amounts

STANLEY COUNTY


ROAD AND BRIDGE FUND


46

Variance with

Final Budget


Revenues:

Taxes:

General Property Taxes--Current 10,000.00$ 10,000.00$ 10,308.67$ 308.67$

General Property Taxes--Delinquent 300.00 300.00 754.12 454.12

Penalties and Interest 50.00 50.00 184.03 134.03

Mobile Home Tax 25.00 25.00 6.45 (18.55)


Federal Payments in Lieu of Taxes 3,900.00 3,900.00 4,116.79 216.79


Investment Earnings 0.00 0.00 12,930.57 12,930.57

Total Revenues 14,275.00 14,275.00 28,300.63 14,025.63

Expenditures:

General Government:




Recreation:

County Fair 45,000.00 45,000.00 0.00 45,000.00

Total Expenditures 1,000,000.00 1,000,000.00 6,218.00 993,782.00

Excess of Revenues Over (Under) Expenditures (985,725.00) (985,725.00) 22,082.63 1,007,807.63


Transfers Out 0.00 0.00 (12,930.57) (12,930.57)



FUND BALANCE - ENDING 391,575.04$ 391,575.04$ 1,386,452.10$ 994,877.06$


Budgeted Amounts

STANLEY COUNTY


COURTHOUSE BUILDING FUND


47

STANLEY COUNTY NOTES TO THE SUPPLEMENTARY INFORMATION

Schedules of Budgetary Comparisons for the General Fund and for each major Special Revenue Fund with a legally required budget

Note 1. Budgets and Budgetary Accounting:

The County follows these procedures in establishing the budgetary data reflected in the financial statements:

1. Between the fifteenth and thirtieth days of July in each year the Board of County

Commissioners prepares and files with the County Auditor a provisional budget for the following year, containing a detailed estimate of cash balances, revenues, and expenditures.

2. Prior to the first Tuesday in September in each year a notice of budget hearing is

published once each week for two successive weeks, and the text of the provisional budget is published with the first publication.

3. The Board of County Commissioners holds a meeting for the purpose of considering

the provisional budget on or prior to the first Tuesday in September in each year. Such hearings must be concluded by October first. Changes made to the provisional budget are entered at length in the minutes of the Board of County Commissioners.

4. Before October first of each year the Board of County Commissioners adopts an

annual budget for the ensuing year. The adopted budget is filed in the office of the County Auditor.

5. After adoption by the Board of County Commissioners, the operating budget is legally

binding and actual expenditures for each purpose cannot exceed the amounts budgeted, except as indicated in number 7.

6. A line item for contingencies may be included in the annual budget. Such a line item

may not exceed 5 percent of the total county budget.

7. If it is determined during the year that sufficient amounts have not been budgeted, state statute allows the adoption of supplemental budgets.

8. Unexpended appropriations lapse at year end unless encumbered by resolution of the

Board of County Commissioners.

9. Formal budgetary integration is employed as a management control device during the year for the General Fund and special revenue funds.

48

2015 2014

County's proportion of the net pension

liability (asset) 0.0538793% 0.0530253%

County's proportionate share of net

pension liability (asset) (228,518)$ (382,026)$

County's covered-employee payroll 922,222$ 869,708$

County's proportionate share of the net

pension liability (asset) as a percentage

of its covered-employee payroll -24.78% -43.93%

Plan fiduciary net position as a

percentage of the total pension

liability (asset) 104.1% 107.3%


SCHEDULE OF THE COUNTY'S PROPORTIONATE SHARE OF THE NET PENSION

LIABILITY (ASSET)

* The amounts presented for each fiscal year were determined as of the measurement

date of the collective net pension liability (asset) which is 6/30. Until a full 10-year trend

is compiled, the County will present information for those years for which information is

available.

South Dakota Retirement System

*Last 10 Fiscal Years

STANLEY COUNTY

49

STANLEY COUNTY NOTES TO THE SUPPLEMENTARY INFORMATION

Schedule of the Proportionate Share of the Net Pension Liability (Asset)

Changes of benefit terms:

No significant changes.

Changes of assumptions: No significant changes.

50

Long-Term Add Less Long-Term

Debt New Debt Debt

Indebtedness January 1, 2014 Debt Retired December 31, 2015

Governmental Long-Term Debt:

Financing (Capital Acquisition) Leases 138,790.77$ 318,038.82$ 117,523.87$ 339,305.72$

Note 1 - Long-Term Debt:

Debt payable at December 31, 2015 is comprised of the following:

Financing (Capital Acquisition) Leases:

2014 Freightliner Financing Capital Acquisition Lease, Final Maturity - June 2017, Interest Rate - 3.16%, Paid 47,315.26$

from Road and Bridge Fund

2014 Caterpillar 140M2 Motor Grader Financing Capital Acquisition Lease, Final Maturity - February 2019, 112,191.46$

Interest Rate - 2.98%, Paid from Road and Bridge Fund

2015 Caterpillar 140M3 Motor Grader Financing Capital Acquisition Lease, Final Maturity - August 2020, Interest 179,799.00$

Rate - 2.85%, Paid from the Road and Bridge Fund


STANLEY COUNTY

SCHEDULE OF CHANGES IN LONG-TERM DEBT

For the Two Years Ended December 31, 2015

51

stanley county audit report for the two...

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